Introduction
At the start of 2019, I had set about the long task of portraying for this series of columns the systematic delineation of a strategic road map for both the “getting and spending” of Guyana’s expected Government Take, arising from its fast-emerging oil and gas sector. The “getting” of its petroleum revenues has centred on six principal guideposts or indicators. These are: the fiscal rules of the Production Sharing Agreement (PSA); oil and gas discoveries; existential threats that could strand Guyana’s petroleum assets; the capabilities of the oil blocks’ Contractors; crude oil and gas prices; and the profitability of the enterprises involved in the sector.
By parity of reasoning, the “spending” of Guyana’s oil and gas revenues are revealed in five indicators or guideposts. These are: the overall size of the Government Take ratio or percentage; the Government of Guyana (GoG) declared spending priorities for its oil and gas revenues; the macroeconomic challenges that are likely to accompany Government’s “windfall earnings/ profits”; downstream value-added spending; and two specific proposals of mine. These latter proposals of mine are: 1) sustained strategic investment in Guyana’s renewable energy resources; and 2) cash transfers to Guyanese households — now widely recognised as my Buxton Proposal.
Today’s column addresses the very last item on the last guidepost; which is the Buxton Proposal. Some readers may be surprised to find out that, this is my very first effort to present in writing, for broad mass consumption, the elements of the Buxton Proposal. Upfront, therefore, I should declare at this point, that this will take several columns to complete, particularly because due regard must be paid to all readers as they have legitimate expectations and rights to benefit from Guyana’s newly found petroleum wealth.
However, the present sad reality is that there is in the public sphere an over-abundance of misinformation, deception, obfuscation, and downright public mischief surrounding this topic. One is not certain, though, whether all this is willful, deliberate, or otherwise motivated. As a consequence, this situation makes the task of educating the broad mass of Guyanese on cash transfers all the more urgent, as a public duty and obligation. The “distortions” that currently abound on this topic has made lack of information and knowledge a quite severe impediment to productive public discourse. Most readers are aware that access to knowledge is necessary for securing access to power and participation in decision-making. And, since the broad mass of Guyanese “owns” the oil and gas finds, they are, as owners, entitled to a fair sharing of their benefits.
Method
In the middle of this year (June 23, 2019) I had taken time out from the on-going presentation of Guyana’s Petroleum Road Map, to observe two of its distinctive features: The first of these is that the Map does not seek to offer itself as a detailed plan or programme for implementing the coming of Guyana’s oil and gas sector. The second is that it is also not simply a wish list of to do-actions for the future! This observation on method also holds true, particularly for the Buxton Proposal. My proposal does not constitute a detailed plan or programme for bringing cash transfers on-stream. Simultaneously, it is not also offered here as an item I wish the GoG would implement. As readers will observe as I proceed, I shall be offering strategic guidance on a “line of march” towards its implementation, with stipulated goals and targets detailed!
It should also be recalled at this juncture that, in that same column, I had identified four inescapable development challenges, which Guyana’s imminent First Oil poses. These are: 1) maximising petroleum earnings and Government Take from Guyana’s sale of crude oil and gas; 2) spending the Government Take effectively (in brief, by promoting broad-based sustained growth and development); 3) ensuring the effective capabilities of the oil blocks Contractors, under an appropriate legal and legitimate governance framework; and 4) operationalising petroleum exploration, production, and sale, including its governance, regulation, monitoring, oversight, periodic review and consistent advancement in best-practices.
It is entirely because of my limited skills that I have, in this series, focused largely on the first two inescapable development challenges indicated above.
Timeline
My first presentation of the cash transfers to household’s proposal came as a result of an invitation from the Buxton, First of August Movement (B-FAM) to address a Seminar, held to commemorate Emancipation Day, 2018. About a year later (September 23, 2019) the Working People’s Alliance invited me to speak on the topic at a Symposium, which they held at Critchlow Labour College. After the Symposium, two gatherings hosted further presentations on the topic; namely, an A Partnership for National Unity (APNU) Executive Meeting and a Queen’s College Alumni gathering. Today’s contribution, as I have indicated above, is my first public effort to spell out, in some detail, the reasoning which frames the Buxton Proposal.
Going Forward
I plan to proceed by addressing the following four issues, as listed in the order given below. First, in a couple of columns or so, I shall identify and delineate the key features or elements, which comprise the Buxton Proposal, including a formal summary description. Second, I shall portray the major scheduling/implementing and execution/operating dimensions of the proposed cash transfers proposal. Third, I shall make a careful summary of the literature on cash transfers to establish its theoretical and practical pedigree. Finally, as this completes my presentation of the Road Map I shall offer a summary of the petroleum financial metrics that undergird the Buxton Proposal.
Conclusion
Next week I advance the discussion by focusing on the key components of the Buxton Proposal.
