September 19, 2019 / 6:05 PM / a month ago

Diplomats declare Guyana government in breach of constitution as first oil looms

GEORGETOWN, Sept 19 (Reuters) - U.S. and European diplomats on Thursday declared Guyana’s government in breach of the country’s constitution until new elections are held and called on Guyanese President David Granger to “set an elections date immediately” or possibly face a cutoff of development funding.

Guyana’s independent electoral body on Thursday advised Granger that it would be ready to hold elections in February, about the time offshore wells are expected to begin producing oil that promises to transform the country’s economy.

The South American country plunged into a political crisis late last year when a member of the ruling coalition sided with the opposition in a no-confidence vote in Granger. That vote was upheld in court in June, requiring the government to hold an election within three months.

“The situation comes at great cost to the people of Guyana. The prevailing political uncertainty undermines Guyanese institutions, compromises economic opportunities and delays development,” the diplomats, from the United States, Britain and the European Union, said in a statement. “It also hinders our ability to support Guyana’s development needs.”

Granger’s government did not issue a response to the statement. He had previously said the electoral body needed more time to create a new registry of voters in the country of 750,000.

The uncertainty comes as oil companies including Exxon Mobil and Tullow Oil have made a string of offshore crude discoveries off Guyana’s coast in recent years, promising a windfall of revenue and a boost in growth for a small economy with no history of oil production.

The opposition has accused Granger’s government of mismanaging the country’s oil resources and granting Exxon overly generous contract terms.

Exxon expects crude to begin flowing next year. The oil sector is expected to account for 40% of the country’s gross domestic product by 2024, the International Monetary Fund said in a report this week.

The United States provides $5.4 million in aid to Guyana in areas including HIV/AIDS, education and health, according to the U.S. Agency for International Development. (Reporting by Neil Marks Writing by Luc Cohen; Editing by Steve Orlofsky)

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