Land ownership, use and some distribution considerations

Several weeks ago I started a series of columns on the ethnic security dilemmas (ESDs). I also briefly reviewed Minister Carl Greenidge’s book on land settlements, and discussed the issues of income and wealth (asset) distribution. All these issues are connected. Before I close the series, I want to share some findings on land ownership (and control or use) in Guyana.

One of the ways to store wealth is in land. Wealth managers would tell you land might not be the best store of wealth, but that does not take away from the fact that many Guyanese see land as a source of future streams of income. Another store of wealth would be the embodied education, skills and imaginative talents of individuals. Would such an embodied asset produce a greater stream of future incomes compared with owning ten acres of land in Guyana? I think it does, assuming the education and training are not for the purpose of Dr. Politics.

It should also be noted that there are three core features of the ESDs. The first has to do with the failure to cooperate to achieve a greater outcome for everyone. The ESDs are social dilemmas because we find it impossible – given the present constitution and electoral systems – to cooperate across groups and, therefore, achieve a lower state of development. As many have argued, the constitution incentivises resource conflict and non-cooperation. Determining the failure to cooperate is the limited trust (uncertainty) regarding the strategies or choices of the other group. We have no system in place to make sure each core group feels a winner after an election. In other words, there has never been democratic consolidation in Guyana since October 5th, 1992 to the present day.

The second feature of the ESDs is the fact that they are highly likely to produce the persistence of income and asset inequality in Guyana. The ESDs are not the only cause, but the source of entrenched persistence. To understand many of the causes we have to go back into history. But there is merit in the view that Guyana’s ethno-political configuration after independence – starting primarily from the Jagdeo years – was a new source of inequality.

The third feature is the perpetuation of economic underdevelopment compared with Guyana’s peers. The ESDs do not necessarily cause underdevelopment, but enable the persistence of an underdevelopment trap. Given the latter, we can be fairly certain that Guyana is driving into the resource curse, not around it as I hoped.

On that note, let us take into consideration some present patterns in land ownership and use in Guyana. We are all aware that the populated area is the coastal plain of Guyana, which accounts for 4.3% or 3,524 square miles of the entire 83,000 square miles. About 88% of the population lives on 4.3% of the land area. Most of the country is comprised of forested high lands (74%). These areas are not suitable for large-scale agriculture, but do host minerals. About 80% of the coastal plain is arable land. The total arable land, including those in the hinterland, amounts to about 8.5% of the entire land area. Easy access to the sea made the coastal arable land more attractive for cotton and sugar plantations by the Dutch and British plantations. Hence, we are where we are today. It will be costly, but hinterland arable lands are yet to be fully utilised.

About 84% of all land in Guyana is owned by government. A substantial portion of the 84% is leased for mining minerals and for logging. I was able to assemble some data on land uses by looking at several academic papers, notably from published works by Dr. Janette Bulkan and the IDB. For example, Guyanese nationals presently use (not own) approximately 5.6% of the entire land area for forest concessions. This represents 4,633 square miles. This is the largest share of forest concessions for which we cannot say much about ethnic distribution. Guyanese nationals became the largest users of forest concessions after Barama pulled out and Bai Shan Lin’s concession was revoked after the 2015 election. The APNU+AFC government says as a matter of policy it will distribute concessions to a mixture of small and large forest holders. This seems reasonable to me.

After Guyanese, nationals from China have about 2,973 square miles of concessions or 3.6% of total area. Nationals from India have 956 square miles or 1.2% of the land area. Nationals from other countries use 347 square miles or 0.42%. For perspective, remember that Barbados is 166 square miles and the largest English-speaking Island in the Caribbean, Jamaica, is 4,244 square miles.

Much of the contestation or misunderstanding over land occurs on the coastal plain. For example, 187,000 hectares or 722 square miles of land is used for rice cultivation. This represents 0.87% of total land area of Guyana. Not all the lands used for rice cultivation are owned by the people planting rice. Rice lands are owned by farmers and leased from government or other private freeholds. One must also consider that just about 2% of all land in Guyana is privately owned. This means the owner can freely dispose of land or use for any purpose once the legal codes are met. It should also be noted that the government sugar corporation owns 42,782 hectares or 165 square miles of land. Amerindian lands amounts to approximately 15% of the land area – about 12,450 square miles. But these are not the same as private lands. They are communal lands.

By just taking land as an example, it demonstrates the absurdity of speculating which ethnic group owns the wealth of the country. Given that 2% of land is privately owned and 5.6% of forest concessions are held by Guyanese, we cannot say that a single ethnic group owns 95% of the wealth. The largest part of land wealth is owned by government and the Amerindian reservations are communal, not private freehold.

It is true that the private land, forest concessions and mining concessions produce streams of incomes which can be approximated by GDP. Let us consider a few examples. In 2018, forestry production contributed G$17 billion to GDP, which amounted to G$689 billion. In other words, 2.5% of the incomes (GDP) generated in 2018 came for the forest sector. I don’t know for certain which groups shared this portion of GDP because I don’t have complete knowledge of who owns the production in this sector.

Let us consider a sector in which we know East Indians tend to be the largest producers, but not the total. This would be the rice sector, which contributed G$41 billion to GDP in 2018 or 6% of GDP. This means that East Indians would have likely earned a large share of that 6% of GDP.

Mining and quarrying accounted for G$141 billion. There is a significant foreign ownership of production in the mining and quarrying sector. Wholesale and retail production amounts to G$88 billion in 2018. Public administration or government produced G$62 billion, while Finance and Insurance produced G$28 billion. The big financial and insurance companies are publicly traded. Hence, ownership of that G$28 billion production is quite diffused.

Another interesting production or income sector would be Other Service Activities, which also amounted to about G$28 billion. This would include your lawyers and other private professionals. Transportation and Storage produced G$51 billion. The latter would include your minibus and taxis, as well as the owners of storage facilities. Two of the biggest storage facilities in Guyana are owned by publicly traded conglomerates – Banks DIH and Demerara Distillers Limited.

I hope one day we can have accurate data on wealth and income distribution. This is crucial for dealing with the uncertainty and inter-group distrust inherent in the ESDs.

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