By Remi Piet and Arthur Deakin
On Sunday night, Chief Justice Roxane George ruled that the High Court of Georgetown has the jurisdiction to review the controversial election results that will determine the next president of Guyana.
Four days after the election on March 2, the Guyana Electoral Commission (GECOM) prematurely released unverified results from the capital region that propelled the ruling coalition into a narrow victory. Soon after, the opposing People’s Progressive Party (PPP) filed an injunction to block GECOM from declaring a winner until the Region 4 votes were completely verified. The hearing began Tuesday and the decision will likely be made shortly.
After the release of unverified results, the Organization of American States (OAS), the Carter Center and several ambassadors questioned the credibility of the GECOM announcement and called for the proper verification of the vote count. As millions of people across the globe eagerly wait for the final election results in Guyana, the hope is that a non-partisan, transparent decision will be made to ensure the election of the next legitimate president. One potential solution would be the verification of the results through a third-party accredited international organization, such as the Electoral Observation Mission of the OAS.
Guyanese will likely exercise their right to freedom of speech, hopefully in a peaceful, and effective manner. Violent protests tend to cause more harm than good and would likely exacerbate existing ethnic tensions. An 18-year-old protestor was shot dead in a clash with the police this past weekend, signaling the urgent need for a quick and clear communication from the High Court on how the judiciary and political parties will ensure a legitimate and honest electoral result.
Looking ahead regardless of the government that takes over in the coming months, important steps need to be taken to responsibly manage the fiscal revenues from oil. By 2025, Guyana is expected to extract 750,000 barrels of oil per day, making it the 4th largest oil producer in Latin America. Now, with the collapse of oil prices across the globe, there will be a decrease in profits and an even greater temptation to take shortcuts to ensure profitability in the sector. Therefore, it is vital that the upcoming administration implement transparent and accountable fiscal measures to prevent the mismanagement of resources.
Some steps have already been taken to ensure the proper governance of fiscal revenues. In January 2019, the Granger government approved a bill that created an offshore sovereign wealth fund (NRF) to manage the profit generated from oil production. The fund will transfer a calculated percentage of oil revenues to the national budget each year, increasing capital spending on infrastructure and skilled labor, while simultaneously avoiding inflation. This is a positive sign when compared to the failed petrol-state of Venezuela—which lacks a fund of this type—or Trinidad and Tobago, which took two decades to set up a fund after the discovery of oil reserves in the 1970s.
Positive actions from the government have continued since then, for example, with the introduction of a local content framework that will facilitate Guyanese labor in the petroleum sector. Environmentally, Guyanese government agencies, in conjunction with the US Department of Defense, presented the final draft of the Oil Spill Contingency Plan.
Guyana also needs to open up its immigration policies even further, ensuring not only free movement among CARICOM countries but also eliminating long-term visa requirements for all foreign workers. Offering tax incentives, improving the rule of law and developing research institutions will be fundamental in incentivizing Guyanese living abroad—including the over 280,000 in the United States—to return home. Locally, the government needs to develop higher-learning institutions, favorable work benefits, and free specialized training to lure skilled people into the workplace.
Equally important will be improving the country’s infrastructure at an efficient but gradual pace to avoid inflation and an overload of projects. The government needs to continue developing roads and electricity networks to narrow the rural-urban divide. With the government receiving nearly $300 million in oil revenue funds in 2020 and up to U$5 billion annually by the middle of the next decade, it will need to spread out projects to avoid creating a bottleneck. A bottleneck would delay the completion of projects, cause additional costs and create opportunities for corruption.
This could perhaps be the most important week in Guyana’s history. The decisions made by the judiciary branch will set the tone for the type of governance and transparency that will be carried out in the years to come. The votes in Region 4 need to be checked quickly, but prudently, and then double-checked to ensure that the next president has been legitimately elected.
Any other scenario would be disastrous for Guyana’s reputation as an oil jurisdiction and would jeopardize billions in foreign investment. The sooner the political controversy is swiftly resolved, the quicker Guyana can focus on implementing the institutional changes it needs to adequately manage its oil revenues. The right decision is simple: the party who received the most votes needs to be the one in charge of Guyana’s State House.
Dr Remi Piet is a Senior Director at Americas Market Intelligence (AMI) and leader of the firm’s Natural Resources and Infrastructure Practice.
Arthur Deakin is an Analyst at Americas Market Intelligence where he conducts political, economic and other risk analysis activities for the mining, energy and infrastructure sectors in both Latin America and Africa.
