By: Seetal Patra, Research Analyst, GSDN
“There is nothing that prevents Guyana from exercising its rights to its internationally recognized land and marine space”, said Robert Persaud, Guyana’s Foreign Secretary. This statement further amplified and fanned the statement of “We are not going anywhere”, made by Alistair Routledge, President of ExxonMobil.
These are of primary importance to the regional politics and diplomacy of Latin America, as the region of Essequibo has yet again been brought to limelight by Venezuela in December, 2023, which continues to remain in news owing to regular developments. On December 4, 2023 Venezuelan voters were reported to have approved a referendum to annex Essequibo. And on December 5, 2023 Venezuelan President Nicolas Maduro ordered his government to “immediately” explore and exploit the oil, gas, mines in the disputed region.
But the history of this dispute goes back to 1814, when Great Britain assumed control of the future British Guyana (including Essequibo) via a treaty with the Dutch. With the discovery of gold, the claims of Britain and newly independent Venezuela started becoming aggressive, ultimately both the parties agreeing to submit to an international tribunal, with the USA representing Venezuela. January 2024 saw the statement given by Maduro as, “Our [Essequibo] has been de facto occupied by the British Empire and its heirs and they have destroyed the area”, with the criticism pointed towards the 1899 tribunal. Upon the independence of Guyana in 1966 and the prescription under the 1966 Geneva Agreement, recognized Venezuela’s position, as to the 1899 tribunal as null and void, but the territorial dispute remained status quo.
Essequibo has remained an issue like that of a dormant volcano. It erupts as and when the contentions of resources and its utilization comes to the fore. In the mid-2010s discovery of a massive offshore oil deposits in Guyanese waters again got Venezuela interested, instructing the state oil company PDVSA to begin planning and extraction of oil in Essequibo. It went an extra mile to directing the legislature to nullify offshore oil contracts granted by Guyana, and increasing its military presence along the disputed border.
The issue of Essequibo is nothing new. Neither for the Venezuelans, nor for the Guyanese. Because the specter of Essequibo looms large in Venezuela. The region continues to remain marked in red in the school textbooks as the “zone in reclamation” and this claim resonates with maximum population in Venezuela as well. The fact of the matter is Venezuela in all probability is set to go to polls in 2024, and Maduro is flattering its options to get rid of the anti-sentiment against him in the country.
Venezuela and Guyana are perhaps the most diametrically opposite economies who are neighbors to each other. Guyana’s economy has expanded by 62% (as per 2022 data), making it the highest real GDP growth in the world in 2022. While the right next-door neighbor, Venezuela is suffering from ballooning inflation to around 360 percent in 2023, and also the highest in the world. The fueling of the current escalation by the Venezuelan President, is seen to have felt a limited success in diverting the attention away from the domestic political Opposition and the upcoming elections. The Venezuelans are more concerned about the domestic issues like violent crime, and spiraling inflation.
Despite the reemergence of this issue, we have good reasons to believe that a full-scale invasion is not knocking the doors. This reasoning can be attributed to the fact that, the referendum was announced prior to the opposition primary. Even though the opposition in Venezuela is divided as to the occurrence of referendum, but their views with respect to Essequibo aligns overwhelmingly. With general elections ahead in 2024, the possible reasons for bringing this up by an unpopular Maduro sitting on a heap of precarious economic conditions, was to rally the nationalists around his platform, and brand the opposition as the puppets of foreign interests. Maduro might not want to jeopardize as to what appears as an improved reputational standing in the region. Many see Washington’s ‘maximum pressure’ regime change campaign as a failure experiment, as governments are more willing to engage with Venezuela. Colombian President Gustavo Petro hosted negotiations to resolve the Venezuelan political crisis and partnered with Maduro to achieve ceasefires with Colombia’s armed groups. Even the United States forged an agreement with Venezuela to lift some oil sanctions in return for political concessions, and Washington is permitting Chevron to again pump Venezuelan oil. Venezuela is no longer the outcast it was, and Maduro has survived several overlapping challenges to his rule.
Brazil has been showing interest and has also been the one to be the mediator and find out a resolution to this issue. This interest stems out of the fact of being an active partner in regional integration, and the demand to be considered for UNSC permanent seat. Such a stance goes for the Caribbean Community (CARICOM) as well. They have shown support for Guyana despite the fact of receiving energy subsidies from Venezuela for years. Next comes in line is China. China cannot afford to be an ally to this dispute flaring up to a conflict. It has to take a neutral stance considering it has strong relations with both these countries, and at the same time has a vested interest in ensuring the prevention of war. It has a 25 percent stake in the Exxon-Mobil led consortium controlling the Stabroek oil fields, located offshore Essequibo region.
The story does not end only with the regional disparity and the vested interests of other players. The fact of the matter is, if this runs into a full-fledged conflict (war), then the military capability comes into question. The ratio of military strength of Venezuela to that of Guyana stands as 100:1. Not overlooking the fact, Venezuela’s military contingency suffers from absolute corruption and lack of proper maintenance, which has grounded majority of the air force. On the other hand, Guyana with Washington’s clear vested interests in place, shall come to the rescue of its Latino brother. Although the bigger question that looms is, is this a war that Washington should poke its nose in? Wisdom says, Washington should not. This should percolate well within the capitalist lobbyists in the USA, and the fanning of the event should be checked at any cost. That part of the world which has not seen war in the last 150 years, should avoid this uncalled for resource war. The world is already reeling under two precarious resource wars at two ends of the world.
All said and done. But what matters to us as Indians/Bharatiyas; as Dr. S Jaishankar has recently said in Munich Security Conference, ‘We cannot be castigated or called out because we keep our options open. Rather this is being smart.’ Smart negotiations can only align India/ Bharat as a Vishwa Guru and not get boxed as non-aligned, non-west, and anti-west. Whether this conflict fizzles out or no, New Delhi needs to keep itself on toes. The primary reason being, Venezuela was one of the primary exporters of oil to India, amounting to somewhere around, 12% some years back before Venezuela was embroiled in economic mayhem. Guyana has not yet been listed among the exporters for oil in India, but soon that day shall come. Then India must be ready for a diplomatic balancing act. Apart from the oil business between India and Guyana, the relations run deeper, with the largest ethnic group in Guyana being the Indo-Guyanese. It is this global south which has the potential to churn up a balancing act as and when the global north faulters.
