Dear Editor,
Within recent times, there have been calls for a referendum on the oil contract driven in large measure by public concerns over the terms and conditions of the agreements made by government with foreign oil companies. The Production Sharing Agreements (PSAs) particularly with companies like ExxonMobil, Hess and CNOOC have been controversial. Whilst the call for a referendum does appear to be a good thing, on the surface level, in a deep political and economic sense it is a very nebulous and risky exercise. Let us distill the call for a referendum. Perhaps, we might be able to locate the pure political and economic realities and the accompanying risks upon which it turns and the hidden implications to the enhancement of our democracy.
First, we must admit or agree that our country is ethnically and politically fragmented. Therefore, holding a referendum on a significant national issue like the oil contract could be an extremely perilous path. This is not to say that the idea must be dismissed, not at all. Referendums are good. In fact, they can be considered a form of direct democracy. However, they can be fraught with risks, particularly, in societies that are deeply divided along ethnic and political lines. And in this country where the two largest groups, Indo- Guyanese and Afro- Guyanese, have historically clashed over power and resources, a referendum on the oil contract could in fact worsen existing tensions, deepen divisions, and undermine the very democratic principles it seeks to enhance and promote.
When one considers the fact that, Guyana’s political landscape is rigidly and distinctly divided between the two major ethnic groups, and that the ruling party- PPP/C has a strong base in the Indo- Guyanese community and the PNC/R draws its support predominantly from the Afro- Guyanese population one will see that this ethnic polarisation has historically resulted in a zero-sum game for political power. Therefore, it is quite simple, actually, to see that a referendum on the oil contract would most likely be framed through this ethnic lens.
In reality, given the massive sums of money involved and certain perceptions, justified or unjustified, about agreements between government and foreign oil corporations, a referendum could devolve into a contest of ethnic loyalty rather than rational debate. Each group may view the issue through the prism of “us” vs “them” with accusations of corruption or betrayal flowing freely from both sides. Instead of uniting the country in the context of the national interest, such a referendum could sharply deepen the already entrenched divisions, with each group believing that their ethnic identity is under threat if the oil contract is sustained.
Again, understanding the polarised nature of Guyana’s political environment, the campaign leading up to a referendum on the oil contract would almost certainly be dominated by disinformation and political manipulation. Both sides would seek to frame the issue to their advantage, using hyperbole and selective facts to influence and shape public opinion. Disinformation campaigns could exploit historical grievances, amplifying fears and fostering resentment among different ethnic and political groups. More, the political elite may exploit existing traditional media and new social media platforms to advance their own agendas, making it difficult for voters to discern truth from manipulation.
Then, the apparent lack of trust in traditional political processes could allow a referendum to deteriorate into a battleground for competing political interests, with very little focus on the substance of the oil deal itself. The result could be a referendum that reflects the political realities of the moment, rather than an informed and rational judgement on the merits of the oil contract.
Looking beyond the political and ethnic challenges, there is also legal concerns subtly revolving in both the frame and substance of such a referendum in Guyana. The first point on that is that Guyana’s constitution does not explicitly provide for referendums on issues such as contracts with foreign entities. Therefore, a referendum would require significant constitutional and legal adjustments, potentially opening numerous paths that would facilitate new challenges and interpretations. This could lead to protracted legal battles, further undermining the legitimacy of the entire process. The second thing is the answer to these questions: what would happen if the referendum were to fail? What would the government do? Would it renegotiate the terms with the oil companies? Would it revoke the contract entirely, potentially inviting legal action from international partners and investors? The lack of clarity in this regard could result in economic uncertainty, economic instability and diplomatic fallout. Also, foreign investors may become wary of a government willing to put such major deals up to popular vote.
Even beyond all, I think that a referendum could put us in the path of a certain danger of oversimplification. The complex nature of the oil contract, encrusted in a nuanced agreement that involves international companies, global commercial and business standards, environmental concerns, and long- term economic consequences, cannot be reduced to a simple yes or no vote. The details of such contracts require very careful scrutiny and proper analysis from experts in economics, law, environmental science and other appropriate fields of study such as finance. To put such an intricate issue to a referendum, is to risk reducing a complex decision into a binary choice that is poorly suited for meaningful public engagement. In effect, this oversimplification could undermine the integrity of the decision- making process, leaving the country with a result that is more about political symbolism that sound national policy.
The answer could not be a referendum. It has to approach aligned with a more structural democratic path that allows for good environmental stewardship, good national oversight and good governance. The last one is critical. It requires a quality of political activism characterised by education and awareness, advocacy for broad public participation in decision- making processes, active engagement with policymakers and a collective push for institutional reforms. I believe that this would deliver solid results that would benefit all of us, as a nation, and leave a good legacy for the next generation of Guyanese.
Sincerely,
Royston King
