By Dr Terrence Blackman and David Roberts
The war in Russia and the attendant geopolitical energy issues plaguing Europe and the rest of the world bear directly on the energy and food security of the Caribbean and Latin America. Against this backdrop of global anxiety, the president of the Cooperative Republic of Guyana, the world’s newest petroleum powerhouse, His Excellency Mohamed Irfaan Ali, delivered the keynote address for the Guyana Investment Seminar at the prestigious Carlton House.
The Caribbean Council, a well-established investment and trade membership organization, committed to supporting sustainable and responsible private-sector-driven development and investment in Cuba, the Caribbean, and Central America, organized the event. President Ali shared his government’s vision for managing the world’s fastest-growing economy. In addition, he outlined human resources and infrastructural developments his government is making to attract Foreign Direct Investment (FDI).
President Ali centered his presentation around the question: “How do we transform the country, protect the environment and ensure a positive transformation in the lives of the Guyanese people?” He defined his government’s “People’s Transformation” as a plan “to seek prosperity for every Guyanese, to ensure that every Guyanese citizen has access to the best housing, health, and education services. A plan to see the next generation of Guyanese growing up wanting to be part of the country’s development. A plan to see women and youth integrally engaged in the country’s development trajectory, to see women, youth and students playing a key role in formulating policies and programs that will affect their future and their lives.”
In addressing the unexpected, increased interest in the other traditional sectors since the discovery of Oil and Gas in Guyana, president Ali identified possible previous barriers to interest: the government’s inefficient bureaucracy, an ailing and, at times, dysfunctional democratic system; and Guyana’s relatively small population size; none of which seem to matter now that the oil and gas exploration in Guyana’s waters has proven successful.
President Ali is betting on Guyana’s natural resource bounty to support his government’s economic development plan for transforming the country and people. He highlighted Guyana’s minuscule deforestation rate and its competitive advantage in agriculture over the other countries in South America. In addition, president Ali noted that Guyana is the country in the region with the most significant likelihood of becoming the breadbasket of the Caribbean. Finally, the president pointed the audience to a strategic joint venture with Barbados on food production.
President Ali assured the gathering that he and his team are mindful of the ever-present challenges of avoiding the many obvious pitfalls on the development journey. He reiterated that his government is steadfast in its resolve to beat the odds, including the adverse effects of the Russian-Ukraine war on commodity prices: a war he categorically stated he and his government are against.
President Ali also noted for the gathering that despite Guyana’s abundance of environmental and natural resources, it has the highest energy cost in the region. His government, he said, is committed to reducing electricity costs by 50 percent by 2025, in part through a major new gas-to-power plant.
President Ali said that his government is bringing in natural gas, setting up a hydroelectric project, and adding off-grid solar systems to hinterland communities to allow citizens access to resources that will help them improve their lives.
He also noted his government’s exploring a regional energy policy that would include Northern Brazil, Suriname, and French Guyana. This unique initiative, which could lead to Guyana combining its energy resources with those of Suriname, could potentially give rise to a new energy hub with a real possibility of supplying Northern Brazil. Essentially this energy policy would be premised on regional energy demand and facilitated by advancing the connectivity between Guyana and Brazil through the new Guyana/Brazil highway recently commissioned and underwritten by Caribbean Development Bank. The United Kingdom notionally earmarked seven hundred and fifty million pounds to the venture.
President Ali referred to the difference in attitude by certain suitors keen on mutually beneficial relationships with Guyana and commented that “aggression” was the clincher. However, Chinese “aggression” is waning as the global interest in Guyana, post the Oil and Gas phenomenon, has increased. To some degree, more substantial offers are being suggested from the UK and European Union, and the United States of America. The president shared confirmation of financing of a new Children and Maternal Hospital from the EU at better terms than the Chinese.
He left two questions lingering in the room: would Guyana have been so rigorously pursued had it not been for Oil and Gas? What will we do if we shut down new oil and gas production based on present-day world trends?
In closing, president Ali spoke of some of his government’s challenges. These include the management of sea defenses and drainage and irrigation. He juxtaposed these challenges against Guyana’s natural bounty by citing the four billion dollar valuation of Guyana’s freshwater resources. The Guiana Shield stores around 18 percent of the world’s tropical forest carbon and 20% of the world’s freshwater. This juxtaposition did much to help the investors better understand the potential, the promise, and the reality of the country his government is fortunate to manage.
Supported by Oneidge Walrond, minister of tourism, industry, and commerce, and Dr Peter Ramsaroop, CIO and CEO, Guyana Office for Investment, president Ali formed part of the first panel on Guyana investment opportunities which took several questions from the floor. These questions included plans for port development in Guyana, the government’s timeline for developing Oil and Gas, and its engagement with the Guyanese Diaspora.
The president noted the diaspora’s tremendous potential to aid in Guyana’s development and committed to doing everything possible to remove obstacles for members of the diaspora to return to Guyana and contribute to the country’s development. He reiterated that there must be an understanding by the diaspora that they have a role, and they too have a responsibility to pursue the emerging opportunities aggressively.
President Ali’s summary of Guyana’s socio-economic and political climate was fitting. His speech juxtaposed the bonanza of the oil and gas opportunities against the realities on the ground. This pragmatic and hopeful posture likely instilled confidence among the prospective investors as he acknowledged the challenges, setting out programs designed to address them over realistic timeframes.
His commitment to reducing Guyana’s energy bill by 50 percent in 2025 is laudable, but if current geopolitics is anything to go by, his government has its work cut out for it for the next three years. The theme of ‘people transformation’ and his commitment that Guyana will not leave the citizenry behind as the Oil and Gas resources are exploited while protecting Guyana’s environmental and natural resources is challenging. Actualizing this vision will require a cadre of forward-thinking stakeholders to work collaboratively across the various fissures, particularly those of race and class that characterize Guyanese society.
President Ali’s recognition of the importance of the diaspora to the development of Guyana resonated with the audience, particularly with the investors present in logistics and travel businesses. In addition, his plea for diasporas’ to organize themselves to participate in the tendering process was well received.
In assessing investment seminars and conferences, getting the right people to ask the right questions of the right person in the right atmosphere is a success. Many of the right people were at this unique seminar organized by the Caribbean Council.
President Ali’s hopeful rhetoric is on target. Guyana indeed offers foreign and domestic investors investment opportunities in agriculture, oil and gas, construction, wholesale and retail, health, transportation, and agro-processing. Opportunities also exist within the services sector such as renewable energy, business process outsourcing (BPO), call centers, information technology services, hospitality, and tourism. Guyana is the only English-speaking country in South America, creating a unique competitive for call centers and other service industries. However, perceptions of corruption persist in Guyana. Transparency International’s 2021 report scored Guyana at 87 out of 180 ranked economies. One key concern for Investors is the insufficient response to a high crime rate.
According to the latest World Bank annual ratings, Guyana is ranked 134 among 190 economies in the ease of doing business. The rank of Guyana remained unchanged at 134 in 2019 from 134 in 2018. The major shortcomings are a weak judicial system, lack of intellectual property protection, corruption, and a stultifying bureaucracy. It is by substantively meeting these concrete challenges that the Ali-led government will succeed in increasing, in a sustainable manner, foreign direct investment in Guyana.