Guyana Focus
Apparently, Guyana lost some US$30M-$40M in foreign exchange earnings from rice, sugar, bauxite and forestry last year – which is partially the cause of the problem. And export earnings are not expected to improve this year.
While the official Bank of Guyana (BOG) exchange rate for the US dollar has remained relatively stable for the past 10 years at around 1US$=GYD$206.50, the booming currency black market currently commands a rate that is as high as 1US$ = GYD$230, with some transactions settling at a much higher rate of 1US$ = GYD$250.
Incidentally, not since the “dark days” of the late 1970s and early 1980s - under the leadership of the late former President Forbes Burnham - has the shortage of foreign currency reached such crisis proportions. The current foreign currency shortage was simmering beneath the surface for several months now but only recently boiled over into the open market, creating widespread speculation that the Guyana dollar could slide even further - raising concerns about the potential impact on the economy, businesses, and individuals.
Although foreign exchange controls have not been instituted, businesses could very well face challenges paying for imports, creating shortages of goods and supplies. As well, manufacturers who use foreign inputs will face an increase in the cost of production which would lead to higher prices for goods. This will, in turn, contribute to an increase in inflation, eroding the value of the disposable incomes of the population and affecting the poor, in particular.
At a macro level the decline in the value of the GYD$ could result in several other problems: the value of foreign debt could rise in local currency terms; a larger share of government revenues would have to be allocated to servicing the country’s foreign debt; and businesses with loans in foreign currencies could find themselves with a relatively higher debt burden.
Individuals would also be impacted by having to shell out more for foreign currency transactions. Currently, individuals must apply to purchase foreign currency at commercial banks and are not assured of getting their requests fulfilled – affecting those travelling abroad, in particular.
To provide some perspective on variations in exchange rates, the local press reported that purchases of Dynamic Airlines’ tickets were being calculated at GYD$250 to US$1, up from GYD$230; while Travelspan has upped its rate to GYD$220 from GYD$216. Incidentally, Caribbean Airlines is the only airline that is supposedly using the posted BOG rate for transactions, which, on April 3, was GYD$205.98, although some travel agencies reported that the airline’s rate was hovering around $218-$220. Fly Jamaica’s rate is around $216.
Shipping companies are also using varying currency conversion rates, with DHL using a low rate of GYD$200, Laparkan GYD$218, Fedex GYD$221, and PasPak GYD$240. Local press reports also noted that Republic Bank will be using a rate of GYD$230 for wiring large sums.
More important, the shortage of foreign currency could lead to an explosion in the black market and create perfect conditions for the re-emergence of the underground economy, increased criminal activity, and money laundering.
While on-the-ground evidence indicates the seriousness of the problem, the BOG has denied the existence of a foreign currency shortage. “The BOG continues to reiterate that there is sufficient foreign currency in the market to meet legitimate demand. The patience and co-operation of stakeholders are needed, therefore, to ensure that there is no undue speculation and further deterioration in the rate,” the BOG stated.
BOG Governor, Dr. Gobind Ganga also accused the media of sensationalizing the problem, resulting in a flood of requests by local commercial banks for foreign currencies – some of which were not legitimate. He also claims that no requests for foreign currency by local banks have been turned down. Incidentally, commercial banks must submit invoices to back up their demand for foreign currency.
To curtail the black market, the government passed regulations limiting the spread between the buying and selling rates of the bank and cambios at a maximum of $3, which means commercial banks and cambios cannot sell currency for more than $3 higher than their existing buying rate. However, indications are that the new regulation has been ineffective at preventing a plunge in the value of the Guyana dollar.
The BOG also attributed the shortage to exporters hoarding large sums of foreign currencies in their bank accounts and making unnecessary purchases on the market, instead of using foreign currency from their own bank accounts. This has put pressure on availability by reducing the supply of foreign currency.
To deal with this problem, the BOG is considering closing the retention accounts of exporters to stem foreign exchange hoarding. Finance Minister, Winston Jordan noted that this was an option available to the government but said it will initially use moral suasion to get businesses to co-operate. “We don’t want to use a heavy hammer to kill an ant really but what I’m saying it is a tool that is available to you.” It would only be used if moral suasion does not work.
The BOG has also halted trading in Barbados and Trinidad dollars after it was found that traders from those countries were buying up US dollars. The BOG’s Governor noted that foreign exchange shortage in Trinidad is now reflecting on Guyana’s system and that is one of the main reasons why Guyana has temporarily stopped the purchasing of Trinidad and Tobago and Barbados currencies from local cambios.
Unconfirmed reports also suggest that Cuban traders are purchasing on average almost US$5M in goods from Chinese businesses in Georgetown each week but the money is not recirculated in the economy. These same businesses are also buying US currency unofficially and hoarding it. The government said it was unaware of the actions of Chinese businesses.
The BOG noted that the remittance of profits by some foreign-owned companies was putting pressure on the exchange rate.
In the meantime, the Central Bank claimed that it has pumped about US$30 million into the market to satisfy foreign exchange demand.
To ensure stability, the government has called on commercial banks to “weed out” the illegitimate need for foreign currency. Minister Jordan hopes that the banks could collectively trust each other to fix the exchange rate.
But the International Monetary Fund (IMF) has pointed out that there is a great need for more transparency within the inter-bank foreign exchange market. The international watchdog said that the “inter-bank foreign exchange market appears segmented and illiquid.” This suggests that the banks do not collectively decide on an exchange rate. It also notes that the inter-bank foreign exchange market can be further developed “by enhancing the transparency of market activity” and recommends that official foreign exchange purchases and sales use a market mechanism similar to the one used for auctioning treasury bills.
The bottom line is that unless Guyana can take action to fix its foreign currency shortage, the economy will deteriorate further. Waiting on oil revenues to resolve the problem in 2020 – as suggested - is a long stretch.
It is Exxon’s third such find in the Stabroek Block and the second this year, coming on the heels of oil discoveries in Liza in 2015 and Payara in January.
This time, the positive results came from the Snoek well, as the international oil and gas giant targeted similar aged reservoirs that were proven successful in its previous two discoveries.
The Snoek well, located about five miles southeast of ExxonMobil’s Liza discovery, hit more than 82 feet (25 metres) of oil-bearing sandstone reservoirs, the company said in a statement.
“The latest discovery at Snoek demonstrates the continued success we have achieved in this technically complex play, which is just part of the significant exploration province offshore Guyana,” said Steve Greenlee, president of ExxonMobil Exploration Company.
ExxonMobil affiliate Esso Exploration and Production Guyana Ltd. commenced drilling of the Snoek well on February 22, 2017 and was safely drilled to 16,978 feet (5,175 metres) in 5,128 feet (1,563 metres) of water on March 18.
Following completion of the Snoek well, the Stena Carron drillship has moved back to the Liza area to drill the Liza-4 well.
“As we continue to evaluate the full potential of the broader Stabroek Block, we are also taking the necessary steps to ensure the safe, cost-efficient and responsible development of this world-class resource, which can provide long-term, sustainable benefits to the people of Guyana,” said Greenlee.
The Stabroek Block is 6.6 million acres (26,800 square kilometers). Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Nexen Petroleum Guyana Limited holds 25 percent interest.
Reacting to the latest discovery, the Guyana Government said it was satisfied with the steady and safe progress being made.
“The news of another find offshore Guyana is a source of great pride and pleasure for all Guyanese,” it said.
for wife's murder
The 45-year old accused allegedly killed his wife Lilwantie Balack aka ‘Darling’, 39, between September 6, 2016 and March 31, 2017. He was represented by attorney Chandra Sohan and was not required to plead to the indictable charge.
The accused was remanded to prison until May 2, 2017 when he will make his next court appearance.
According to reports, Balack was previously placed on a six-month bond earlier in the year when he appeared to answer to an assault charge committed on Oma Devi Nathoo. The matter was later dismissed after Nathoo decided not to continue with it.
Balack was arrested on Wednesday last after relatives of Lilwantie Balack made a report to the police that she has been missing since September 2016. Initial reports were that during his time in custody he was interrogated by detectives in Berbice where he reportedly confessed to being responsible for the disappearance of his wife.
Balack told detectives that he had an argument with his wife that escalated into a physical fight when he choked her until she suffocated and died. He then removed the woman’s jewellery and clothing before proceeding to drag her lifeless body to the backyard of the home they shared at Mibicuri and buried her corpse in a six-foot grave some 100 meters away from the premises and a foot away from his vegetable plants.
Relatives claimed that when they inquired from Balack about the woman’s whereabouts he would claim that she had left the country and would not be returning. After some months had passed without a trace of Lilwantie Balack, the man struck up a new relationship with 21-year-old Oma Nathoo. Nathoo moved in with him on December 14, 2016. She stayed with him up until the time he was arrested. She was also taken into custody for questioning.
On Friday March 31, 2017, ranks from the Major Crimes Unit travelled to Berbice and together with the detectives in Berbice were led by Sunildat Balack to the spot where the woman was buried. Digging commenced at just about 8:45 am that morning and concluded two hours later with the discovery of bones and a skull believed to be that of Lilwantie, in a six-foot deep grave. The bones were taken away and subsequently sent for testing in neighboring Brazil.
Just recently Oma Devi Nathoo related what she endured while living with Balack for a few months. She revealed that he was abusive to her physically and emotionally, and even gave her his dead wife’s wedding ring to wear along with her clothes. Nathoo denied any knowledge about the murder. She was released on $25,000 station bail last Friday night. She is currently back at home with her parents at Albion, Corentyne, Berbice.
According to Chelsea (only name given), she and a group of friends purchased food from the Kamboat Chinese restaurant on Sheriff Street at around 12:30pm on Monday as they normally do. She had ordered chowmein.
The student related that while eating the food, she noticed a dead roach, which appeared to have been cooked in the food.
“While eating, I noticed the roach in my food,” Chelsea said, adding that her instinctive response was to vomit. However, the teen said she immediately spat, and tried to cleanse her mouth.
“I was so disgusted! My friend who ordered the same food as I did threw up, since our food was probably cooked together,” the form five student said.
She explained that after this would have occurred, the group made contact with the restaurant, and the cashier who was taking orders advised them to return the food and they would be refunded.
She noted that after purchasing food from the restaurant for the last two years, this experience was “disappointing and appalling”, and has forced them to make a decision never to eat from Kamboat again.
Th Guyana Chronicle reported contacting the restaurant to have one of its managers respond to the allegation but was advised that no manager was available to offer a comment.
Just recently, another popular city Chinese restaurant came in for harsh criticism after a customer found what was later identified as a human tooth in his food.
Commonwealth SG urges
Sir Shridath’s warning comes in the wake of recent announcements of substantial oil finds here; the ongoing border controversy between Guyana and its western neighbour, Venezuela; and the coming of age of the UN-brokered Good Offices Process, which was agreed between the two countries more than 25 years ago to find a peaceful solution to their centuries-old squabble.
In this regard, newly-appointed United Nations (UN) Personal Representative on the border controversy, Mr. Dag Halvor Nylander, a Norwegian diplomat, is expected to arrive in Guyana next week to meet with officials here, Sir Shridath and Guyana’s Permanent Representative to the United Nations, Ambassador Michael Ten-Pow confirmed to the media.
Sir Shridath reminded that the recently extended Good Offices Process only holds good up to the end of 2017: “By the end of the year, if it doesn’t yield satisfactory progress of a solution, then we go to the ICJ [International Court of Justice]. So we can look ahead to 2018 seeing us in the court, which we hope will put an end to this evil.”
On the sidelines of the 2017 Heads of Missions conference on Monday at the Pegasus Hotel, Sir Shridath told the Guyana Chronicle that while the Good Offices Process would not have an immediate impact on oil explorations here, it is important to have the border controversy between Guyana and Venezuela resolved as soon as possible.
“Well, it wouldn’t have an impact now… The oil is not now; production is years away.
But what we should do now is prepare for it; and because it is not a good time economically, people are impatient, inevitably,” Sir Shridath said, adding:
“But we have to prepare properly; we have to secure that oil. We have to get rid of the Venezuela issue, and we have to do all that, as the lawyers say, seriatim; one after the other.”
That aside, Sir Shridath, who is also an advisor to the Foreign Affairs Ministry on the Guyana-Venezuela border controversy, said the government is “on the right track” where preparatory works for the up-and-coming petroleum industry are concerned.
This foundational process, he posited, includes the initiation of legislative and regulatory frameworks that would pave the way for a safe, productive and transparent petroleum sector.
“I am satisfied that the government is pursuing the course that it should be,” Sir Shridath said.
“It will take time, but preparing for an oil discovery of the magnitude that is involved in Guyana inevitably requires worldwide skills,” he posited, noting that the government of the day should capitalise on the experiences of other oil-producing countries.
He noted, too, that the establishment of a Sovereign Wealth Fund, as shown by Canada and Norway, is also critical to Guyana’s future development. “It is not just to the advantage of this generation. We have to secure benefits for the next generation, the generation beyond me and the generation beyond you, and into the far future,” the veteran career diplomat and lawyer said.
Already, the government is consulting on the Petroleum Commission Bill. Similar consultations will commence soon on the Guyana Sovereign Wealth Fund Bill. A Sovereign Wealth Fund (SWF) is a state-owned investment fund that is made up of surpluses from official foreign currency operations, the proceeds of privatisations, governmental transfer payments, fiscal surpluses and/or receipts resulting from resource exports.
These monies can be used for investment purposes to benefit the country’s economy and citizens. Guyana’s Sovereign Wealth Fund Bill was drafted by the Commonwealth Secretariat, with input from the government. The Bill is fashioned after international model, particularly Norway, with emphasis on the Santiago Principles, which promote transparency, good governance, accountability and prudent investment practices.
Additionally, Guyana is putting the necessary systems in place to become a member of the Extractive Industries Transparency Initiative (EITI). The EITI is a global organisation of 51 member countries, which have subscribed to establishing, upholding and promoting the standards and tenets of good governance, transparency and accountability in the management of extractive industries. At its core the EITI promotes the belief that natural resources belong to the people and are to be extracted and managed on behalf of the people; both for current and future generations. The MSG consists of a tripartite of government, civil society and industries stakeholders. Establishing a MSG is an important requirement of EITI.
“We are open to any discussion about constitutional reform or constitutional changes but right now we have a major issue; there are daily breaches of our current constitution…” Jagdeo said on Monday at the press conference held at Freedom House.
He alluded to several instances where he claims the government is guilty of breaching the law. “…From the Carvil Duncan case to the case where the government has so far disregarded the advice of the JSC, to the President and the Attorney General ascribing to their own interpretation to the constitutional provisions related to the appointment of the chairman of GECOM.”
Jagdeo said he is still confused as to which external agency the government has requested to work with on the process. A United Nations Development Programme (UNDP) expert team was in Guyana to explore how constitutional reform could be realised while the Carter Center also came on board as a partner in the process.
Jagdeo also expressed concern on the government treating the process as a task from the executive rather than using independent bodies such as representatives of civil society.
The Opposition Leader also claimed that the international agencies cannot give clear answers as to which section of the constitution the government is seeking to change, hence it is difficult for them to be involved with the lack of clarity given.
Despite these, Jagdeo said that the PPP will continue to be open-minded with the process.
“We remain open, we are always open-minded, if there are things that can change for the better of all Guyanese, but there needs to be condemnation with these daily breaches…”
Before taking office in May 2015, the coalition had vowed to have the establishment of a Constitutional Reform Committee with a mandate to complete consultations, draft amendment and present same to the National Assembly for approval within nine months of holding office. This, however, was materialised in August of 2016 when Prime Minister Moses Nagamootoo appointed a Steering Committee on Constitutional Reform (SCCR) which was tasked with drafting a work programme and make recommendations for constitutional reform.
The SCCR later presented a report to the Prime Minister in which several recommendations were made.
Last month a UNDP expert team was in Guyana to explore how constitutional reform could be realized. The terms of reference (ToR) between the Government of Guyana, the United Nations Development Programme and the United Nations Department of Political Affairs (UNDPA), has outlined the scope of the constitutional reform needs assessment mission.
It covers assessment of the political environment in Guyana and the legal and institutional framework governing the constitutional reform process; review past reform processes; evaluate the interest, capacity and roles of the various civil and political stakeholders in engaging in the constitutional reform process; and assess the potential role of UNDP-UNDPA in assisting this process and resources required. Subsequent to this the Carter Center came on board as a partner in the constitutional reform process.
after leaving bank
LaRose, who serves as the Programme Administrator at the Amerindian People’s Association (APA), shared her experience via a Facebook post following the incident.
According to her, she was “traced from the ATM [automatic teller machine]” by a man who pushed his way past three other customers in the line waiting to transact their business. She said that the man entered the room with the ATMs, but even after she had completed her transaction, he was still in the room.
“He was not at any machine when I noticed him, but appeared to be doing something just a bit off. I’m recalling all of this in hindsight,” LaRose related.
She said that once she made her way out of the ATM, she drove off, and subsequently stopped to make a purchase.
“While reaching for my bag on the car floor after parking to make a purchase, a man pushed a gun at my temple and told me he was going to shoot me if I did not let go of the bag which I was holding on to,” she recounted.
Fearful and terrified, she said she let go of the bag, while the man continued pointing the gun at her and saying he would shoot her if she only screamed.
The woman said she did eventually scream when he hopped into a car that was parked just behind hers and drove off.
“Everything happened so fast! I’m still shaken!” Ms LaRose said, adding: “I’m posting this so you people can be even more careful.”
She later told the media that all of her personal belongings, including her house keys, work information, various cards and an undisclosed sum of money were in the bag.
With the loss of these personal items, Ms LaRose said she’s now left feeling very vulnerable.
Ms LaRose, who has been a prominent leader in the Indigenous Peoples struggle for their rights, is also a former chair of the Board of Directors of the Guyana National Newspapers Limited.
The bandits pounced on 64-year-old Mahadeo Shiwpal, along with his wife and daughter in front of their lot 36 Good Hope, ECD home at about 9:30pm Sunday night and escaped with millions of dollars in cash, along with the family’s Prado Jeep.
The jeep was subsequently found abandoned two streets away on the Good Hope Line Top. The elderly businessman and his wife own a stall in the Mon Repos and Plaisance Markets. The wife, Mrs Shiwpal, told the press that the family had just returned from the Mandir and she was about to open the gate, when four masked men emerged from a silver Toyota Primo and rushed into the yard. The driver of the Primo was waiting on the gunmen outside.
The distraught woman said that her gold rings and watch were taken away by one of the gunmen, while her 23-year-old daughter and husband were physically assaulted. According to the businesswoman, two of the gunmen then jumped into her husband’s jeep and drove away with it while the other two bandits joined the waiting Premio and escaped.
This is the first time that the family has been robbed at home but they were attacked on six other occasions by bandits at their market outlets. Mrs Shiwpal said that her husband applied for a firearm license but the process has been unsuccessful thus far. The Shiwpals have been operating their business since 1987.
bank fraud
The 34-year old businessman was released on $3 million bail after he appeared before Chief Magistrate Ann McLennan in a Georgetown court on six charges.
Rasul, the owner of SSS Minerals Trading, pleaded not guilty to all six of the charges that were read to him.
It was alleged that between March 21 and March 22, at Bartica, with intent to defraud, Rasul obtained from Guyana Bank of Trade and Industry (GBTI) $96 million, $290 million, $89 million, $45 million, $298 million and $138 million by falsely pretending that he had cash in a Citizens Bank account to honour corresponding Citizens Bank cheques.
Police Prosecutor Arwin Moore objected to bail being granted to Rasul since he is still under investigations for another matter of a similar nature. Moore added that a female manager at the GBTI branch, who dealt with the cheques and did not follow the bank’s protocols, is currently on the run from the police and a wanted bulletin has since been issued for her. The prosecutor told the court that four persons whose names are on the cheques tendered to the bank cannot be located and if the defendant is placed on bail he could potentially tamper with the witnesses.
However, Rasul’s lawyer, Sandil Kissoon, noted that his client, who is a licensed gold dealer and owns several dredges and mining pits, has been criminalised for the negligence of GBTI, where he has his personal account. The defence argued that there is no criminal conduct with the transactions and the problem rests solely with GBTI. Kissoon said that the bank paid out the monies without verifying with his client’s Citizens Bank account, which he uses for business transactions. The lawyer told the court that prior to Rasul being charged, he and his wife had been in discussions with GBTI about having the matter resolved.
Chief Magistrate McLennan, after listening to the arguments, granted Rasul $500,000 bail on each charge. Additionally, as part of the conditions for his release on bail, Rasul is to report to the Criminal Investigation Department every Friday and to lodge his passport. The matter was adjourned until April 21, when it will be called at the Bartica Magistrate’s Court.
According to reports, the police are making efforts to locate six persons in whose names Rasul allegedly wrote the cheques as well as the bank manager for questioning. After the alleged fraud was unearthed, the bank manager was relieved of her duties.
Reports indicate that staff of the bank issued payments to Rasul without the cheques, which came from another bank, being cleared.
It is alleged that the bank manager was involved in allowing Rasul to withdraw the millions of dollars in cash. The cheques later bounced owing to insufficient funds and the police were called in.
“In addition to the apparent breach of contract, doctors are now being taxed on allowance for on Call services, which fall under overtime services,” the association said.
The steering committee called on government to withdraw plans to abolish the agreement with the doctors, most of whom were trained in Cuba under a scholarships programme.
Government has in recent months reiterated the need to reduce the number of contract employees such as those doctors are, and for them to be included in the pensionable establishment of the public service. The end to the contractual arrangement would mean that the doctors would lose lucrative periodic gratuities in favour of retirement pensions.
The oppositon People’s Progressive Party, under whose administration the contracts with government and the young doctors had been inked, has already flayed government for the move, saying it would result in a brain-drain of much needed doctors.
Following is the full text of the statement issued by the Guyana Medical Association.
The Guyana Medical Association notes with concern the recent breakdown in communication between the Government and the Young Doctors that have regrettably affected the public health care delivery system.
The GMA has maintained contact with the young doctors many of whom are members of the Association.
They have informed the steering Committee of their recent woes that they are experiencing at the hands of the Government of Guyana, through the Ministry of Public Health.
These grievances have crystallised, in the face of the recent ultimata declared by the Government, that have abolished the five (5) year contract for service as bonded employee of the Government .
As such they have lost their status as Contract Employees, along with contractual benefits.
Important among which is the provision of their monthly gratuity payment.
Currently, the Young Doctors are being forced by the Government to join the Public Service as pensionable Public Servant, during the five (5) years of obligatory bonded service.
In addition to the apparent breach of contract, doctors are now being taxed on allowance for on Call services, which fall under overtime services.
This betrayal of their reasonable expectations is unilateral, thus further compounding the sentiment of distrust and resentment that prevails among the affected young doctors.
The GMA will not support unconscionable and unilateral acts of the Ministry of Public Health in the absence of reasonable explanation particularly by the authority, to the predicament of Young Doctors.
The Ministry of Public Health has remained silent and adamant in seeking to enforce their unilateral and oppressive measure.
The GMA remains steadfast in solidarity with the young doctors as they face an uphill battle that impinges on their means of survival.
The GMA urges the Government of Guyana to withdraw its ultimata and urgently meet with representative of the Young Doctors to address mutual concern and conclude mutually agreeable solutions.
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