Guyana: The Next Economic Tiger? – commentary

Guyana: The Next Economic Tiger?

Guyana map

   By  on November 9, 2013   – e-International Relations Blog

Guyana is the third smallest country in South America, located on the north-eastern coast of the continent. Its total population is also small at around 800,000 (giving Guyana one of the lowest population densities in the Americas), with 90 per cent living within 10 miles of the coast. Although Guyana is the third poorest country in the Americas it has a tremendous stock of natural resources, and there is great hope that Guyana’s economy has reached take-off phase and high growth and sustained development are now possible.

Agriculture, the traditional economic sector, remains strong, while mining and forestry are expanding quickly. Mining, mainly of bauxite and gold, contributes around one-fifth of GDP and Guyana has seen healthy growth in these industries in recent years. The mining of manganese, uranium, and rare earths is also being explored. In addition, it is expected that significant quantities of oil will soon be found in the Suriname-Guyana basin.

Meanwhile, logging in the tropical rainforest that covers around 75 per cent of the country’s land area has increased appreciably with the granting of concessions to several Asian companies. Due to the growth in the gold sector, in particular, the national economy has strengthened. Guyana grew by an estimated 5.4 per cent in 2011 and 4.8 per cent in 2012, and it is predicted to grow by 5.5 per cent in 2013 and 6.0 per cent in 2014.

The strengthening domestic economy is being well supported by Guyana’s increasingly vibrant set of foreign relations. The relationship that Guyana has with Brazil is important and efforts have been made in recent years to strengthen ties between them. For instance, a partial abolition of visas was agreed in 2003; a new border-crossing was established in 2009 when a bridge was built over the Takutu River; and in February 2013 a joint Working Infrastructure Group met for the first time to discuss a series of projects to aid economic integration. Relations with Venezuela and Suriname are also deepening, despite continuing border and maritime disputes with both countries. Venezuela provides significant opportunities through Petrocaribe (the oil supply and development programme), while there is significant ‘back-track’ or informal trade with Suriname. Guyana also has growing interests in several regional organisations that incorporate Latin America including the Union of South American Nations (UNASUR).

UNASUR, which from within the Caribbean only includes Guyana and Suriname, was created in 2008 and has a mandate to bring the countries of the region closer together via infrastructural development. Other initiatives include plans for a single market by 2019 and the promotion of regional security. Due to the clear policy agenda of UNASUR, a deepening institutional structure, and a substantial allocation of funds, the organization could provide an important means by which Guyana extends its links into South America as well as affording Guyana the privileged role of the bridge between South America and the Caribbean.

Beyond the region, Guyana maintains close ties with the United States. Guyana trades more with the US than with any other country. Further, China and India are both taking an increasing interest in Guyana, with growing levels of trade, aid, and foreign direct investment.

However, there are concerns that Guyana’s development is being undermined by its internal problems of weak state capacity, corruption, and discrimination. For example, Transparency International’s 2012 Corruption Perceptions Index ranks Guyana 133 out of 174 countries assessed (the second most corrupt country in the Caribbean after Haiti). While, the World Economic Forum’s Global Competitiveness Report 2012-2013, identified corruption as the second largest barrier, after crime and theft, for doing business in Guyana. In addition, Ralph Ramkarran a former stalwart of the governing People’s Progressive Party/Civic (PPP/C) claimed an awareness ‘of enough verifiable cases of corruption’ to be satisfied that it is ‘pervasive’.

The associated threat of drug trafficking is also a concern. In its 2013 International Narcotics Control Strategy Report, the US Department of State noted, ‘The influence of narcotics trafficking is evident in the political and criminal justice systems … Traffickers are attracted by the country’s poorly monitored ports, remote airstrips, intricate river networks, porous land borders, and weak security sector capacity’. Another problem is human trafficking, particularly sex trafficking and forced labour, including child labour. A further concern is the marginalisation of the indigenous Amerindian community whose land is being exploited. So, the governing class in Guyana has much work to do to improve the quality of governance in the country. If these changes are not made the vast potential of the country will be squandered.

Dr Peter Clegg is Senior Lecturer in Politics at the University of the West of England, Bristol. Read more from Peter, and others, in UWE Bristol’s Politics in Action blog.

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Comments

  • Rosaliene Bacchus  On 11/17/2013 at 1:37 am

    Will Guyanese rise to the challenge? Only time will tell.

  • de castro compton  On 11/17/2013 at 3:44 am

    Rosaliene
    Although forever the optimist I must be realistic…..
    Only way change that is necessary will come is
    “Politically” …the status quo in politricks remains
    safe haven with the hidden agendas of the political class
    intact….unfortunately economic change does not automatically bring
    about political change….more so the opposite.
    65 individuals democratically elected but rather selected
    cannot and will not bring about the change necessary.
    A political reformation is necessary….
    Power must remain at local level….local elections held yearly
    ….taxes an issue.
    TAXES collected locally must be spent locally…
    any unspent/underspent locally used nationally.
    TAXES collected nationally remain the budget
    for national development…infrastructure /administration etc
    How efficiently these are collected and spent will determine
    Guyana s success or failure.
    Questions on public financing must be open to public scrutiny
    and/or exposed by the media if corruption exists.
    A powerful press is part and parcel in democratic societies.
    There are many other issues but it would take pages
    to address…hence my sceptisism.
    Hope I am wrong….in my predictions.
    Guyana’s change may be too little too late.

    Kamptan

  • Ron. Persaud  On 11/17/2013 at 10:04 am

    “… it has a tremendous stock of natural resources,… ”
    I have been hearing that statement ever since I was in fourth standard (Mr. Straughn. Carmel R.C. school).
    Yet, British Guianese used to pay more for aluminium pots and pans; than Canadians; in whose country said pots and pans were produced… from bauxite … from British Guiana… the source of the richest ore outside of Canada itself!
    Dr. Clegg’s article mentions “… logging in the tropical rainforest…”
    The following article from TIME casts a different perspective.

    “Chain Saws Invade Eden”.
    Vast, pristine forests in South America’s sparsely populated Guyanas ought to be safe. Not so.
    By Eugene Linden/Paramaribo Monday, Aug. 29, 1994
    Read more: Chain Saws Invade Eden – TIME http://content.time.com/time/magazine/article/0,9171,981327,00.html#ixzz2ktVxMyHP
    IMHO, any foreign investment in the timber industry should be funneled into, or channeled through Toolsie Persaud Ltd. (Not related to me in any way.)
    It has been the bane of the country’s economic development ever since it was a colony – this almost predatory exploitation of its “stock of natural resources”.
    And the saddest aspect of the whole thing is that Guyanese politicians have been party to it all.

  • de castro compton  On 11/17/2013 at 11:46 am

    Ron
    Continue to do what you do best….write about your vision for your country.
    Expose if it is necessary and fear not those who may oppose your critique.
    Sadly and too often “fear and intimidation” gags the media…not to mention
    the “conspiracy” theory…..mostly speculative.
    UK has only recently had its fair share of “media” expose…phone tapping
    etc …..fortunately conspirators may receive a jail sentence for it.
    There are MP serving time in goal that were elected to serve the people who
    Voted them in…..one bad apple does not spoil the whole crate in short
    term…our decision making is enhanced with the technological advancenpments
    we take for granted today…..
    Don’t wish to “over react” politically but the decisions made yesterday/today/tomorrow will make or break the deadlock
    and political stagnation that exist today.
    Guyana and guyanesee must think global and act local
    at grassroot levels if we are to move forward.
    Will get off my soap box so that others may have a say…

    I do enjoy reading your comments so keepde coming.

    Kamptan in cold damp overcast UK

  • Winston Yaw  On 11/17/2013 at 3:29 pm

    I heartily agree with all the comments above. The people’s perception of pervasive corruption by the top power players in Guyana, has a trickle (make that flood) down effect on everyone in the public and private sectors, including the judiciary and criminal justice institutions Everyone seems to think that they can monetize their service, be it public or private due to the afore-mentioned perception, and the inflationary forces in the economy. I am nevertheless extremely proud of my countrymen, women because they have adjusted their lifestyles to fit the realities of their existence in the present environment. The sad thing is that whole generations of Guyanese will grow up accepting this situation as the norm, and of course they are the future pols and business people. The saying that “We are the children of our environment” really rings true. I read that somewhere, but am unable quote its origin

  • de castro compton  On 11/17/2013 at 11:11 pm

    Winston
    We are the victims of our own making….no sympathy from me.

    Kamptan

  • walter  On 11/18/2013 at 1:56 am

    Guyana was always the sleeping tiger.Pandering to the Caribbean and their unreasonable demands,for so many years,kept the country back.Guyanese always rise to the top,regardless of their problems.Increase in agricultural and other economic start ups can only offer a chance of employment to many involved in other illegal operations.All my money was and is on the country to take its rightful place in the Caribbean, South America, and the world.

  • de castro compton  On 11/18/2013 at 6:44 am

    Walter
    I share your sentiments but not your enthusiasm.
    I also share your ambitions but not your nationalism.
    I am too much a realist.

    No nation that followed the path of nationalistism politically has survived
    to become world leader.

    However I do admire your “gusto” and belief in Guyanese peoples.
    Until Guyanese believe in themselves and are given the opportunities
    in Guyana they will walk the talk…..a tom Jones song comes to
    mind……green green grass of home.
    The youths of Guyana must be encouraged to remain/return to build
    the Guyana that is but a dream….make that dream come true.
    I remain optimistic for the future….

    As attitudes change one begins to see the light at the end of the tunnel…
    Unfortunately demographically Guyana is disadvantaged too small to
    succeed but in today’s world where the borders of progress are being
    broken down Guyana and Guyanese have the opportunity of a lifetime…..
    with a little help from their friends and neighbours….
    USA an example of how a nation was expanded by mass migration
    post slavery….Guyana experienced similar similar influences in its
    short history until independence from its colonial masters….only to
    be replaced with its political masters.
    The world has changed
    The world will change
    The world must change
    Guyana and Guyanese have their part to play in the global village our world
    will become….peoples if our planet want the change …hopefully for a better world.

    I remain optimistic for the future of our beautiful planet and its peoples.
    I also remain optimistic for the future of Guyana and Guyanese to make it happen
    I share their sentiments…my first love will be my last.

    Kamptan

  • Brian Walks  On 11/18/2013 at 3:16 pm

    I agree with Ron Persaud, I have been hearing about the Natural resources viability since I was in third standard at St. Stephens school in 1959, and my uncle said he heard that from his father as a young boy, and that his father (my grandfather) heard that when he was a little boy. I am now 63, lets not fool ourselves. The third poorest country in the Americas and it wont change.

  • de castro compton  On 11/18/2013 at 5:34 pm

    Natural resources do not make a nation state….people do…..
    Elected representatives and the people who elect them.
    If the 65 elected representatives (too many for less than half million voters)
    are not making the right decisions you vote them out….replace them.
    no one is indispensable to the organatisation neither should they think
    they are….vote them out…..a week a month a year is a long time in politricks…
    4/5 years is a lifetime today. The status quo exists today Guyana’s dilemma.
    A government is as good as its opposition…no one should feel complacent.

    Let’s see how things develop….the jury is out.

    Kamptan

  • Ron. Persaud  On 11/19/2013 at 12:06 am

    There are 4 factors of production; Land, Labor, Capital and Entrepreneurship.
    Guyana has the land (Natural Resources) and, labor (Skilled and Unskilled).
    Capital is there but it probably is under mattresses and in pillow cases.
    Guyanese have exhibited Entrepreneurship but IMHO it has been “selfish” or self serving – for want of better terms
    Mr. Peter D’Aguiar is perhaps the most well-known example. A & M Fredericks, A H & L Kissoon and Toolsie Persaud are other Guyanese entrepreneurs who put the other three factors together for the production of desirable goods and services.
    I am sure that there are others – unsung heroes and heroines – of a fledgling economic system.
    The FCH program could have brought out the best in all of us … if we could put aside our prejudices; and put our minds and efforts to making it succeed.
    I remember eating sardines in the home of Lalta Persaud – workshop Suptd. at Albion. I refused to believe that it was home made until Mrs. Persaud showed my wife and me how she did it.
    So whose role is it to provide the leadership, to motivate a people to achieve a better life for their and succeeding generations?
    Where is the present day Munoz Marin and his Operation Bootstrap?

  • de castro compton  On 11/19/2013 at 12:24 am

    Ron
    65 elected misfits who enjoy their status quo ….political elite status…
    For less than 500.000 voters to have 65 elected representatives
    is gross unpropositional representation…..
    Mayor of London makes all the decisions for the majority 6 million
    voters who vote him in for a second year running in yearly elections.
    He would be lucky to have a third term of office…..but if he does
    he must be getting most his decisions correct…..democracy in action.
    BORIS JOHNSON can be described politically as a “maverick” but
    he predecessor KEN LIVINGSTONE was complacement ….

    moral

    No matter how good we are…there is always someone better.
    Vote them out if they have passed their sell by date…
    Kamptan

  • walter  On 11/19/2013 at 12:48 am

    I cannot believe that many Guyanese have given up on the country,we were the bounce back kids on the block,do you really think that the resilent qualty we had was lost in a few generations.Trust me it is alive and well,the size of the country is not a problem on the contrary,when the industries kick in,the small islanders,will come back,as in the past,job hunting.Here in Toronto,there are many people from “dirt eating countries” they all think that they have it all in their homeland.I learnt a lot from them,we have a better chance for a great future,so i am backing Guyana.Sorry

  • de castro compton  On 11/19/2013 at 4:45 am

    Walter
    If my mayor was a redneck coke sniffing tax evader I would also back Guyana.

    Joking ! sincerely sincerely sincerely. ha. ha…

    Most of the Guyanese who went to Canada are still in Canada
    their children and grandchildren born there…..cannot see any
    of those in masse returning to Guyana to do business.
    Most of the educated youths of Guyana think that the grass is
    greener outside Guyana…..brain drain.!!
    Now where will the entrepreneurship come from…
    I share your sentiment but not your dream.

    Guyana needs a political transformation / land reformation to
    encourage entrepreneurship in its remaining residents or they
    will also look elsewhere…..east west north or south.
    People must be encouraged to remain and develop their
    country or they will walk the talk….especially the educated youth.
    Tax breaks and tax incentives offered to Guyanese for start-ups
    businesses and not offered to multinationals as incentives for
    exploitation ….rape and plunder ..of the natural resources.

    The solution is more political than it is economic….get the politics right
    and the economic will follow…..and not the other way around.
    Strong sneezy clean openness in politics/leadership will bring about the changes
    necessary for progress.
    With the “party politricks” saber rattling that is being demonstrated today
    in the political arenas of the planet…..the electorate must be seen as fools in the
    minds of the political eliteists…the status quo in politricks removed.

    Vote them out

    Kamptan

  • de castro compton  On 11/19/2013 at 6:34 am

    Ron
    A bit of demographic fact…..
    RORAIMA state in Brazil larger than Guyana with a population of
    500.000 inhabitants…..don’t see these people migrating en-masse
    into to Guyana in 100 years…..looking west don’t see Venezuelans
    migrating to Guyana in masse either.Looking east don’t see Surinamese
    in masse enter ring Guyana.
    Guess that leaves the north peoples carribean in particular entering Guyana
    to elivate Guyana to its former glory.

    I always ponderr this statement ……
    ASK NOT WHAT YOUR COUNTRY CAN DO FOR YOU
    BUT WHAT YOU CAN DO FOR YOUR COUNTRY….JFK

    The dynasty perished with the man …..never recovered its former glory.

    Guyana needs the leadership of a Kennedy to take it into the 21st century
    Unfortunately I don’t see that happening soon…..hope I am wrong.
    Any progress Guyana makes must come from within influenced by what happens
    outside its borders….that leadership exists within its shores but it is
    stagnating in indecisiveness and corruption….
    Sometimes I despair….
    Forever the optimist
    Kamptan

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