America’s useful idiot

In their hurry to get rich quick in Essequibo, Guyana’s elites are blindly handing the keys of their country to the US. By Gavin O'Toole

Photo by Dinesh Chandrapal on Unsplash 

Gunboat diplomacy worked when Britain was an imperial power—but that was a long century ago when it was not the sclerotic shadow of its former self and Washington’s poodle that it is today.

Indeed, dispatching a rust-bucket with limp cannons to the coast of South America in an effort to assert vigour was always going to appear like an expiring pensioner on Viagra confronting a younger man over a pointless slight.

In short, it was far more likely to irk than to deter—which is precisely what has happened in the dispute between Venezuela and Guyana over the Essequibo region.

These quarrelsome neighbours had almost reached an understanding about an understanding over the future of the resource-rich area—or at least the future of their posturing about it—until the deluded realm stuck its nose in.

The arrival of the Royal Navy’s HMS Trent off the coast of Guyana on 29 December was meant to demonstrate muscular support for this “independent” country’s claim in its spat with Venezuela.

After all, Guyana is in the Commonwealth—the ragtag assembly of post-colonial, mostly neo-colonial, hangers on that affect nostalgic fealty to their former imperial master. Perhaps Britain’s ancien regime has forgotten that Guyana is no longer, formally, a colony?

The warship’s arrival however, simply poked the beehive. It made a difficult situation worse.

Venezuela’s president Nicolás Maduro called its presence “an act of hostile provocation and a violation of the recent peace declaration”—a reference to talks between the two countries to de-escalate tension—then ordered military exercises near the border with Guyana.

A shaky Georgetown dissembled, insisting that the British ship’s arrival was part of “routine exercises that have been planned for a long time”—a clear lie, presumably hastily drafted by a press officer at the defence ministry in London.

Britain’s dishonesty persisted, referring to the ship’s visit “as part of a series of engagements in the region during her Atlantic Patrol task deployment”, even though on a quick jaunt to Guyana the UK foreign office minister David Rutley made London’s intentions clear with characteristic hypocrisy: “The border issue has been settled for over 120 years. Sovereign borders must be respected wherever they are in the world.”

While Britain stands to gain from Guyana’s exploitation of Essequibo, however, it is the US that is calling the tune.

Like a useful idiot with bad eyesight, Guyana has played the short game in its rush to get rich, snapping up scraps from its new master’s table with no consideration for its neighbours or its own future.

It is turning itself blindly into a classic enclave for Anglo-American capital operating against the interests of regional integration. The big loser from its greed will be Latin America. 

Background to the bluster

Tensions have risen since last September when Guyana held an auction for oil exploration licences in the waters off Essequibo’s coast.

Venezuela has a longstanding claim on the disputed territory rich in oil and minerals which, if consummated, would give it control of the coastal waters. In early December Maduro’s government held a referendum seeking public backing to claim sovereignty over the region.

The border dispute has a lengthy history but escalated after this performative act. However, amid international concern and pressure from regional partners, the referendum forced Guyana to talk. Two weeks later the two countries signed an agreement promising not to use force and to continue talking—the so-called “Argyle Declaration”. Then Britain’s Captain Ahab sailed in.

Venezuela’s claim to Essequibo is neither trivial nor unsubstantiated, carrying with it a lot of historical baggage. The dispute harks back to 1814 when His Britannic Majesty George III assumed control of what would become British Guiana, including Essequibo, through a treaty with the Dutch. The agreement did not define a boundary, so in 1835 Britain drew its own (the Schomburgk line) which, predictably, claimed an additional 30,000 square miles for the monarch du jour King William IV.

Venezuela’s claim stems from this period of British colonial expansion and is not concocted by a populist leader hated by Western governments. As assumed heir to Spanish claims going back to the 16th century, Venezuela has claimed Essequibo since its own independence in 1824, soon after which it began to press its claim. Indeed, the Liberator himself, Simón Bolívar, wrote to the British government warning against it settling colonists in Essequibo. Disputes over the borders were exacerbated by the discovery of gold in the contested territory. Britain and Venezuela squabbled repeatedly over the Schomburgk line.

De facto British control of Essequibo was eventually secured through a classic colonial stitch up. In 1876, Venezuela began asking the US for help by putting pressure on Britain to arbitrate, but it was not until 1895 that a newly assertive Washington—poised to inaugurate its own empire in the Caribbean—demanded the British do so.

Under pressure in South Africa with the anti-colonial campaign of the Boers, the UK submitted to a US boundary commission, which promptly ratified … the Schomburgk line. No Venezuelan citizen participated in or represented their country's interests at the arbitration tribunal in Paris, and 50 years later in 1949 a memorandum by the secretary of the US delegation representing Venezuela in Paris was published retrospectively confirming what everyone had suspected—a stitch up between the British Crown and the Russian Tsar.

This memorandum sparked bitter complaints by Venezuela which argued, reasonably, that it made the 1899 declaration awarding the territory to British Guiana null and void. Angry, frustrated, and weak, in 1958 the then Venezuelan dictator Marcos Pérez Jiménez planned an invasion of Essequibo before he was overthrown. Subsequent Venezuelan pressure resulted in the Geneva Agreement at the UN in 1962, signed with the UK in 1966 just months before Guyana’s independence after 152 years as a colony, which outlines the steps needed to resolve the territorial dispute. This means that the state of Guyana proper has only had formal control of the region for 57 years.

The Geneva Agreement pertains today, but has always been temporary, pending a permanent solution, and is often described as an “agreement to reach an agreement”. With textbook ambiguity, it is a classic British fudge. First, it sought to maintain the status quo since 1899 that the disputed region will remain under Guyana’s authority until a permanent resolution. Second, it did not question British Guiana’s claim, which has yet to be resolved in an appropriate forum. Third, it acknowledged Venezuela’s insistence that the 1899 tribunal decision was null and void without explicitly supporting it.

Neither Venezuela nor Guyana came away happy, and squabbling has continued since—with the main beneficiary being the country that caused the problem in the first place, Britain. The former imperial power was able to solve a colonial headache without ever having to negotiate directly with Venezuela and dumping the problem on the newly “independent” Guyana. Meanwhile, neither country was able to exploit the potential of Essequibo as a result—until now.

Guyana insists on solving the issue at the International Court of Justice, but Caracas rejects this, arguing correctly that the Geneva Agreement remains the binding instrument to solve the dispute. Its hostility to the ICJ will not have been helped by pre-emptive warnings by the court in bombastic instructions just days before its referendum not to do anything that upsets the applecart—a charge that can better be levelled against Guyana. Nor will Venezuela’s confidence have been boosted by the fact that the ICJ’s current president is, guess what, its US member, Judge Joan Donoghue. A key criticism levelled at the ICJ is the political nature of its judges, who are elected by the UN General Assembly and the Security Council, which some observers believe leads to perceived or real bias.

If the ICJ’s intervention was an effort to forestall any attempt by Venezuela to use military force to seize Essequibo, in Caracas it was interpreted as an unwarranted political interference aimed at delegitimising a referendum that foreign states and media were already working overtime to do using well-established machinery.

Regardless of its apparent commitment to the ICJ, diplomatic protocols, and the fact that Maduro has clearly signalled he is willing to share, Guyana has jumped the gun and has hurriedly been signing deals carving up the spoils with US oil giants.

Oil, as ever

It goes without saying that the resurgence of this dispute is due to oil—and Guyana’s scramble to get rich overnight. The country’s political class believes it has won the lottery.

In 2015, ExxonMobil discovered large quantities of oil off the coast of Essequibo within a stone’s throw of the shoreline and mostly in the zone Guyana claims as its own by virtue of Essequibo. Since then, the US multinational has been busy seeking to monopolise this resource. There have been numerous oil discoveries in the sea and on land since, offering potentially more than 11 billion barrels of recoverable oil and gas. Independent analysts believe there could be more than 20 billion barrels. The estimates just keep rising.

Inevitably, this could generate billions of dollars for Guyana. According to the Economic Commission for Latin America and the Caribbean, it positions the country to become the world’s fourth-largest offshore oil producer by 2035, ahead of the US itself. Given the country’s tiny population—just 800,000 people—this would set it up to become the richest nation in Latin America on a per capita basis.

Guyana’s economy is booming, already mostly due to offshore oil reserves. Oil already generates $1bn annually for its government and will produce an estimated $7.5bn by 2040. It appears that no one has yet informed Georgetown about climate change.

But the party that will gain most will be … Exxon, which cannot believe its luck after securing a sweetheart deal with naïve Guyanese ministers that was so shoddy it left many observers believing they were hoodwinked. It would appear that Georgetown’s great and good are already putting the interests of US oil corporations before those of their own citizens. They unilaterally authorised concessions to the US company that give it unprecedented incentives to control what happens next.

This deal was signed after Exxon had confirmed the existence of oil, meaning Guyana had no excuse that it lacked information about what was there, or that the oil major could claim the favourable terms reflected a burden of exploration risk that it alone was carrying. The agreement massively favours the US corporation by guaranteeing a 50–50 split of revenues from oil, considerably lower than the 75% most governments negotiate. It also gives Exxon a huge lease area of 10,350 square miles, nine times larger than usual. Exxon already has a track record of walking over Guyana in their dealings over its environmental obligations.

Guyana’s concessions have understandably angered Venezuela, and Georgetown twisted the knife in September when it offered the 14 offshore oil and gas exploration blocks in its first auction—apparently as a sop to criticism that it had handed its oil on a platter to US interests. Nonetheless, it is the American giants that are swallowing it up. One of the corporations bidding as part of the Exxon-led consortium in September’s auction was Hess, for example, which in October was simply ingested lock, stock and barrel by Chevron for $53bn.

Guyana is showing all the signs of making the same mistakes as other US oil enclaves—the first thing its president Irfaan Ali did after Venezuela’s referendum was to reassure the American corporations that their investments were safe. His country lacks the technical expertise to exploit the oil, so will be almost totally dependent on foreign partners. The absence of legal and regulatory frameworks needed to control them mean they will have free rein to do as they please.

A recent overview of how Guyana is handling its black gold in the Harvard International Review suggests that it could be poorly placed to cope. Apart from the familiar economic phenomena of the “resource curse” and “Dutch disease” that afflicts many countries throughout Latin America and beyond—whereby sudden resource wealth actually harms the overall economy—the review points to the clear danger of corruption in a country that simply lacks the legal infrastructure to oversee the management of its vast new funds. Oil revenues already risk stoking ethnic tension between the Indo-Guyanese PPP holding the balance of power, and able to dictate where oil revenues go, and the rival Afro-Guyanese APNU. It is hardly a shock to learn that Guyana is already labelled a “flawed democracy” by the Economist Intelligence Unit and its rating on the Corruption Perceptions Index is low. Watch this space.

US imperialism

The least surprising aspect of this sorry saga is that mighty US multinationals like Exxon and Chevron are jostling Guyana to hand over its resources—backed by their government. Indeed, some commentators already brand Guyana a “puppet state”—not unrealistic given the strategic and economic interest the US has in controlling it.

And it is very easy to control. Guyana is in the “Caribbean Basin” sphere of influence that Washington claims unilateral security over, it is one of the least densely populated countries on Earth with a tiny population, it is South America’s only English-speaking state and, as a member of the Commonwealth, it has the added advantage of coming under the sway of British diplomatic pressure. The cowardly and ungrateful Caribbean Community, also under the thumb of the US and Britain, backed Guyana despite having received energy subsidies from Venezuela under the PetroCaribe initiative for years until this began to dry out under the heavy weight of US hostility.

Indeed, Guyana displays all the attributes of a useful idiot serving at the whim of its new imperial master, offering Washington a convenient asset in its lengthy siege of neighbouring Venezuela. Georgetown has increasingly been submitting to US security demands and, just after Venezuela’s referendum, conducted joint flight drills with the US air force—a provocation denounced by Caracas.

Venezuela has been enduring a deep crisis in the face of a US economic war, exacerbated by consistent American efforts to interfere in its politics to engineer regime change. Even the easing of sanctions under Sleepy Joe Biden exposes Washington’s continuing determination to bring Caracas to heel behind tiresome “democratic” rhetoric that conceals its real aims: short-term oil strategy following the global supply problems caused by America’s other conflict in Ukraine, and easing Venezuelan migration at the southern US border. In the longer term, Washington is plotting to instal a regime in Caracas favourable to American interests.

Other actors

While the British poodle is almost certainly coordinating its activities with the US, it also stands to cash in on Guyana’s oil bonanza, firming up a major gas deal with its former colonial serf in 2022 as energy prices skyrocketed. In November, Guyana awarded contracts to market crude from floating production vessels to British companies. Britain also sees business opportunities in a Guyana awash with oil under American tutelage. The country is already the UK’s largest trading partner in the Caribbean and last March a UK jobsworth, under-secretary of state for the Americas and Caribbean David Rutley, took a junket to inaugurate the British Chamber of Commerce in Guyana. Politics also plays a role in an election year, with the modus operandi of the UK’s failing Conservatives being to spin an illusion that they can still act internationally without everyone laughing at the country.

Compare this to the role played by Brazil, the regional power and a dedicated peacemaker which has long borders with both Venezuela and Guyana. Brazil was instrumental in bringing the two countries together for talks and has made it clear, while noting the result of the Venezuelan vote, that there is no place for bellicose rhetoric. Brasilia was angered at Britain’s Pythonesque display of force.

Doubtless there is posturing going on in Venezuela itself, enabling British and American policymakers to feed their compliant media the “distraction thesis” which postulates that Maduro’s behaviour is geared towards creating a nationalist groundswell in elections scheduled this year. The distraction thesis holds that the referendum on Guyana’s Essequibo region was supposed to serve as a convenient distraction from Maduro’s unpopularity, but also to galvanise feeling across the country that he could then exploit at the polls.

There is no doubt the Venezuelan president faces a tough election—after all, the country’s economy has been sabotaged comprehensively by the US through its control of international capital. A large body of opinion exists that Washington has engaged in unprecedented economic warfare against Venezuela since the period of Hugo Chávez. Such is the consensus that even the Bolivarian Revolution’s most virulent critics on the pages of such unsympathetic organs as Forbes agree. Last year the respected Centre for Economic and Policy Research published a comprehensive study that concluded Western sanctions were heavily responsible for Venezuela’s humanitarian crisis.

Guyana would do well to take note—this is what happens if you do not do as you are told.

Learn the lesson

Yet when all is said and done, several factors suggest conflict is not likely—Venezuela has weathered the storm of US economic warfare and may not wish to risk further damage inflicted by Washington on its economy and society. Chevron has also been permitted to pump Venezuelan oil, and will not want to gamble this against its stake off Essequibo. Senile and globally isolated, Biden does not have the wherewithal to deal with a Caracas that is successfully forging Latin American friendships. Brazil has a vested interest in regional integration, is wooing Venezuela to join the Brics and, with one eye on gaining UN Security Council permanent member status, consolidating its global role as a peacemaker. Colombia remains grateful to Venezuela for helping in peace talks.

Moreover, Venezuela has been open about its intention to find a peaceful resolution through a shared way to explore energy resources in Essequibo—the most likely outcome if the US and Britain were to stop interfering. Venezuela commands huge experience in oil and gas exploration, and has the commercial and regional infrastructure that makes a collaborative deal with Guyana far more logical. As a potential model for this, its state-owned giant major PDVSA has recently firmed an agreement with Trinidad and Tobago to exploit gas.

While there would undoubtedly be some political gain to Maduro by securing a deal with Georgetown, this is likely to be more limited than Western propagandists make out. Essequibo was looming large in the Venezuelan nationalist imaginary nearly 150 years before independent Guyana came into existence, and the strength of popular feeling in support of the country’s claim is high. More importantly, even Maduro’s opponents agree with the country’s claim on the territory, with the key opposition figure María Corina Machado posting after the referendum: “We Venezuelans know that Essequibo belongs to Venezuela and we are determined to defend it.”

Post-colonial resentment still seethes over the imperial trickery of London and Washington. Following the December referendum result, Venezuela’s government said: “The United States, supported by its nefarious Monroe Doctrine, is the architect, together with British imperialism, of the 1899 fraud and of the recent attempts to strip Venezuela of its historical rights over Guayana Esequiba.”

The Guyanese people should take a leaf from this book to learn from Venezuela’s own experience of US double dealing. With weary predictability and the heavy weight of history, the fate of Essequibo is more likely to be determined in Washington than it is in Georgetown.