Updated: March 13, 2020 3:54:59 pm
On Wednesday (March 11), several prime ministers of Caribbean countries travelled to Guyana to resolve the election crisis in the South American country, where vast reserves of oil have recently been discovered. The national polls, held on March 2, were marred by accusations of fraud, and the country’s High Court on Sunday (March 8) upheld an injunction blocking the election commission from proclaiming a winner.
The former British colony, where ethnic divisions among voters are prominent, is among South America’s poorest countries — but is expecting massive oil revenues in the years to come.
The contested election
The major ethnic groups in Guyana are the Afro-Guyanese, descendants of enslaved black people, and the Indo-Guyanese, who descend from indentured labourers brought here from India during the colonial era after slavery was abolished.
Voting largely occurs on ethnic lines, with the Afro-Guyanese primarily supporting the People’s National Congress (PNC), and the Indo-Guyanese the People’s Progressive Party (PPP).
After the March 2 polls, the PNC-led coalition, which runs the government, declared victory despite objections from the Opposition, judges, and international observers. PPP supporters launched protests, and violent demonstrations led to the death of one protester.
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Critics questioned the election commission’s decision to release election results on March 5 without verifying the votes at more than half the polling stations, allegedly helping the ruling coalition move slightly ahead in the vote count. The decision was criticised by international observers and many Western countries. Opposition supporters have since sought a recount of the votes.
Guyana’s newly-found oil wealth
In 2015, ExxonMobil discovered massive offshore deposits of oil, estimated to be among the world’s largest at more than 8 million barrels, in Guyana. According to Reuters, the expected revenue generation is an estimated $ 168 billion over the life of the project, representing 120 times Guyana’s annual budget.
The country is expected to earn $ 300 million from its share of oil sales this year, receiving 52 per cent of profits as per its 2016 deal with ExxonMobil.
According to The Economist, the oil money could more than triple the income of Guyana’s 7.8-lakh population over the next four years alone. The International Monetary Fund has predicted an economic growth rate of 85 per cent this year.
The 2020 elections are the first to be held since the oil discovery, and thus have high stakes involved. The ruling government has decided to put the oil revenues into a sovereign wealth fund, which the Opposition has alleged is ‘too politicised’.
As the next government would be managing the first proceeds from the oil boom, there is concern among supporters of both the ruling coalition and the Opposition that they would be unable to benefit from public spending if their party loses.
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