Guyana: Synergies with Brazil – commentary

brazil_mapGuyana: Synergies with Brazil – Editorial

SEPTEMBER 9, 2013 | BY  |

At the commemoration of the 191st anniversary of the independence of Brazil, both President Ramotar and Brazilian Ambassador Luiz Seixas DeAndrade emphasised the mutual benefits of improving the transportation linkages between our two countries. We have products such as rice that can be exported to northern Brazil, while the Brazilians have for decades been stressing their desire for an overland passage to the North Atlantic for their goods produced in Manaus and other northern locales.

Such benefits have long been recognized as having positive implications for trade and commerce within a far wider circle, and indeed, encompassing all South America. Back in late 2000, as a matter of fact, at a meeting of UNASUR (Union of South American Nations), President Bharat Jagdeo was one of 12 South American Heads of State that launched the “Initiative for the Integration of Regional Infrastructure in South America” (IIRSA). This unprecedented multinational, multi-sectoral, and multi-disciplinary initiative’s main objective, as the name suggests, was to develop the region’s infrastructure. 

Because of the contingency of historical happenstance, the geographical reality on the ground as far as resources are concerned, is definitely not in sync with the geopolitical and socio-economic realities of the continent. The Heads of state agreed to the organization of South American space “in multinational strips that concentrate populations, present and potential regional production and commercial flow that would gradually converge towards common quality standard of infrastructure services in transportation, energy and telecommunications.” These multinational strips were given the name Integration and Development Axes (EID). We were included in the Guyana Shield Axis (Venezuela-Brazil-Guyana-Suriname), of which the north-south Guyana-Brazil linkages were always seen as most feasible. The second component is a link from Caracas to their border and through Region 8 to Linden, continuing and connecting Suriname and then French Guiana.

As early as 2003, on an official visit to Brazil, then Presidents Jagdeo and Lula reiterated their commitment to the heavy duty road linking Georgetown and Boa Vista, the capital of Roraima; the construction of a deep water harbour; a hydro-electricity facility in Guyana and the development of an industrial area in Boa Vista-as part of the Guyana Shield Axis initiative under IIRSA. Lula kept their side of the bargain and six years later, the Bridge across the Takatu was formally opened.
But for reasons that have never been made clear, the initiative has not moved from the border since then, even though during his visit to Guyana in 2007, Lula had reiterated the urgency of the project to Brazil. For Guyana, the benefits were enormous: fees for goods passing through to the Coast; harbour and storage fees etc. and even possibly assembly of products from components bulk-shipped from Brazil.

The financing of the project does not appear to pose a major hurdle. Apart from government sourced funding there are the multilateral funding institutions like IDB, CAF, and FONPLATA that have been integrally involved with IIRSA. For the Brazil-Guyana linkages and infrastructural development, Brazil has always indicated they were willing to play a major role in funding. After President Lula’s visit to Guyana, the proposal for the construction of a hydro-electric facility that would supply electricity far in excess of Guyana’s needs with the surplus exported to Northern Brazil was floated. With Brazil also signing a Power Purchase Agreement (PPA) with the hydro-facility, the funding should not face the hurdles confronting Amaila Hydro.

Since last December, pursuant to a Memorandum of Understanding (MOU), a bilateral working group collaborated on the modalities for the Highway, deep water harbour and the Hydro Project. This was presented to the Presidents of Brazil and Guyana last month and according to the Brazilian Ambassador, a Joint Commission was established and is scheduled to meet later this month.
The scuttling of the Amaila Falls Hydro Project adds a special urgency to the other components of the initiative that have been dragging on for decades. We hope that the matter is given the greatest urgency.

Also read:  Lethem road paving the way for hydro project…Guyana, Brazil leaders to receive key report this month     JULY 7, 2013 | BY  | 

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  • Clyde Duncan  On 09/10/2013 at 9:02 am

    I honestly believe that Guyana could benefit from being a neighbour of Brazil, [a BRICS nation – Brazil-Russia-India-China-South Africa] as much as Canada has benefitted from being a neighbour of the USA, economically speaking. The highway; the deep-water harbour with modern ship-to-shore cranes; and a source of hydro-electric power on-stream, would go a long way to realizing the foundation for our future economic expansion. We are at the precipice of that economic boom, I believe.

    • Thinker  On 09/10/2013 at 10:47 am

      While Guyana lives in hope, Surinam is getting on with real economic cooperation with Brazil. Check out the facts.

  • Clyde Duncan  On 09/10/2013 at 5:39 pm

    I was commenting on the foregoing article. There is no mention of Surinam. But there is mention of a bi-lateral working group, since last December; and a Joint Commission to meet later this month. The article mentions ‘hope’ in relation to ‘urgency’. Powerhouse Brazil is working with nations all over the planet, including Guyana.

  • Clyde Duncan  On 09/10/2013 at 5:46 pm

    Okay! Surinam is mentioned in relation to the Guyana Shield Axis and the linkage.

  • Thinker  On 09/11/2013 at 9:28 am

    I understand that your focus was on the article. No problem. I was trying to show that Surinam may now be the preferred partner for Brazil especially now that there are about 20,000 Brazilians living there.

  • Clyde Duncan  On 09/11/2013 at 5:03 pm

    Look: A deal for a deep-sea harbour; sea defence; highway link to Brazil and hydro-electric power source with Surinam does NOT preclude a deal with Guyana. I see that China signed the Memorandum of Agreement in Surinam, and that is okay.

    Where I live in Vancouver, Canada we have several container ports competing with each other in Canada and with the USA container ports in Washington State and California.

    About a decade ago, or so, there was a labour dispute and work stoppage at the Vancouver ports. The customers’ vessels were diverted to Seattle and Tacoma in Washington State. Canada never recovered from the blow, in the sense that those vessels never returned to Vancouver ports – that’s competition.

    I did not say we [Canada] lost! Here is what happens in business competition: The American ports approached the owners of the vessels and informed them that they would like to keep their business. ‘So, what can we do to satisfy your business needs?’ they ask. The owners of the vessels state their case and an agreement is signed. Translation: The vessels do not return to Canadian ports in the immediate future.

    Next, the customers of the shipping companies – the companies with the containers full of product intransit to their destination at the marketplace – inform the shipping companies that they want the containers shipped into Canada once they are unloaded in Washington State [Tacoma and Seattle].

    I started with a simple explanation, but I have to enlighten you and the readers with the complete picture, before I go any further: Canada is a land-bridge! We compete with the Panama Canal and other trade routes. A client in Europe, say, Denmark would ship their containers to Canada – to be unloaded at Halifax, Nova Scotia or Montreal, Quebec then on a train to a Vancouver port for shipping to, say, Japan; and vise-versa for Japanese clients to Europe.

    A labour dispute, work stoppage or labour strike, interrupts this order of shipping; and there is a mad scramble to find an alternative to getting the goods to the marketplace. The other railroads, ports, and trucking companies are in high gear scrambling to jump in the gap and win the business in Canada and the USA.

    The Americans would say we could ship the containers on our railroads to Chicago and north to Toronto; or New York or Maine north to Halifax, and so on. Get the picture? Opportunity out of Chaos!

    So, what actually happened is the containers from, say, Japan were unloaded in Washington State; then moved by trucks north to Vancouver for loading on to trains for the Toronto hub; and the Montreal and Halifax ports in Canada; and even south from Toronto to the Chicago hub for distribution in the USA.

    What Canada developed out of this was new highways and upgraded other highways to ease congestion and allow the containers to flow back and forth from the train to the ports; and developed our ports to increase the capacity. To this day, trains are unloaded in Vancouver with traffic from Europe and shipped by truck to the USA – truck traffic has increased. [What happened before this occurrence was the trains would go straight to the port for unloading to vessels. The truck drivers tell me that if you mention, to the sales people when buying a truck, that you are signing a contract with the railway; the price goes up] The railway terminals have expanded and operate like a port – the trucks are paid extra to go to the port, so they are paid extra to drive to the railway terminal at Vancouver, as opposed to an in-land terminal like Toronto.

    Although there is no labour dispute, containers from Europe are unloaded at the rail terminal, as opposed to the ports; then forwarded by trucks to Washington State. Conversely, the trucks would return with containers unloaded at Washington State, with containers from, say, Japan to the rail terminal for forwarding to Eastern Canada for loading on to vessels for Europe.

    To make a long story short: There is no harm in Surinam competing with Guyana. All is not lost. They could build their infrastructure, while we plan ours. If they have another military coup – who knows? It might help us! That’s competition.

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