The World Bank has undermined the rule of law in Guyana, and must accept some responsibility for the current constitutional crisis in which an unlawful government is trying to hold on to power fraudulently, as the Bank has lent money to a government that had no lawful authority to borrow.
The World Bank allowed an individual to sign the Financing Agreement as Minister of Finance, in direct violation of the Constitution. That is direct political interference in Guyana by the World Bank.
The Bank has so far provided a total of $55 million to Guyana, consisting of a $35 million development policy loan approved in 2018 to reform the country’s financial sector in anticipation of the oil boom, and a $20 million technical assistance loan approved in 2019 to improve governance and management of Guyana’s oil and gas development.
The technical assistance loan includes support for an “update of Guyana’s legal and regulatory frameworks for the governance and oversight of the O&G [oil and gas] sector.” Guyanese groups are concerned this will dilute legal environmental protections in Guyana, which are considered a regional gold standard and inspired many elements of the Escazú Agreement.
Despite the Bank’s aims at improving governance in Guyana, the country has slipped into political chaos since agreeing World Bank support. Following criticism of the ruling APNU-AFC Coalition and their handling of the petroleum contract for the Stabroek block, the coalition lost a vote of no confidence in December 2018, and became an unconstitutional government in September 2019 following their refusal to hold elections.
A subsequent election in March 2020 favoured the Opposition PPP/C party, but this has been contested by the incumbent APNU-AFC Coalition, despite them being unable to produce any evidence, in a move which has been widely condemned by all international observers.
More than 100 environmental and human rights organizations and eminent persons from around the world issued an urgent statement expressing solidarity with the people of Guyana in light of the country’s recent elections saga, and calling for David Granger and the APNU/AFC caretaker Government to step aside, and to uphold the integrity of the March 2 election outcomes according to applicable law, and for a peaceful transition now that the recount results and outcome are verified.
These statements also drew attention to the critical role of Guyana’s nascent oil industry in exacerbating the political crisis, and it called on Exxon and other oil companies to declare unequivocally that they will conduct business only with a lawfully installed government.
Following the discovery of oil off the coast of Guyana, major oil companies are racing to open up the country as the newest extractive frontier.
However, the oil rush has contributed to threats to human rights and democracy, and threatens to reward corruption and repression, with the fraught elections’ results being the most recent example. The turmoil of recent days bears all the hallmarks of the oil curse that has plagued countries and peoples around the world, as the promise of oil wealth turns government into a prize to be captured rather than a duty to be fulfilled. For the vast majority of people in these countries, oil extraction brings not greater development, but greater threats to their freedom, their rights, and their environment. Right now, this false promise is putting democracy and the safety of people across Guyana at risk.” For this reason, we call on oil companies and those financing the oil boom in Guyana to join the international community in the call for legitimate electoral process and results, and for all involved to heed those calls and ensure a safe, peaceful transition of power.”
Finally, the statement highlighted the role of the financial sector, including the World Bank and the Inter-American Development Bank, in financing Guyana’s conversion from a net carbon sink into a fossil-dependent economy and a significant source of global emissions. With its involvement in Guyana’s oil and gas development, the World Bank has contributed to the critical situation we now see after the election.
Under the World Bank’s assistance, contracts were made between the oil companies and a government that – after a vote of no confidence – should have left office a year ago. Rather than striving for ‘good governance,’ the World Bank has created more instability in an already precarious political situation