Head of US Southern Command said Guyana could develop its oil industry with confidence

Dear Editor,

Last Wednesday I participated in the Association of American Chambers of Commerce in Latin America and the Caribbean’s   (AACCLA) Outlook on the Americas Conference at the Biltmore Hotel, Coral Gables, Florida, which brought together government ministers, private sector and non-governmental organization representatives to discuss trade, investment, commercial and other development issues in the Americas. Among the keynote speakers was Admiral Kurt Tidd, Commander, US Southern Command. I raised the issue of Venezuela’s claim to Guyana’s territory and maritime space and President Maduro’s sometimes provocative military manoeuvres towards Guyana, especially against the backdrop of the recent discovery of significant oil reserves within Guyana’s geographic space. I questioned whether such manoeuvres on the part of Venezuela might not constitute a threat to the peace and stability of the region.

Further, I alluded to the fact that not only the Maduro administration, but other groups in and out of Venezuela, including its opposition party, maintain that the claim is valid and have said that they count any oil reserves in Guyana’s geographic space as Venezuela’s.

Admiral Tidd responded that Venezuela’s actions, in his view, are intended more to divert its population  away from the myriad domestic issues confronting the country than to threaten Guyana. However, he said that Guyana has solid partners in the hemisphere on its side and could pursue the development of its oil industry with confidence. This is an encouraging response as I am sure that Guyana could count the United States among those solid partners to which the Admiral referred.

On another note, it was the consensus of the conference that the private sector has a critical role to play in the future development of the Latin American and Caribbean region, and governments have begun to ensure that an enabling environment, including appropriate incentives are in place to facilitate an expanded role for the private sector. Governments which fail to so do would be risking their own peril.  One example of the extent to which governments in the region are going to support their private sectors is that of Honduras, according to its Minister of Economic Development, Arnaldo Castillo, who explained that his government pays a portion of certain private sector workers’ salaries for up to a period of six months.

While I don’t expect this type of incentive to be offered to the private sector in Guyana, I am of the view that the Government of Guyana needs to heighten its engagement with the private sector as a collective, not only through the Private Sector Commission, but with participation of all the regional chambers, other private sector organizations including those in the Diaspora with a view to hammering out a clear development strategy for the country over the short, medium and long term. This strategy should include agreement on, among other things, acceptable levels of taxation including VAT, investment incentives for both local and foreign investors, foreign currency management and identification of the relevant education and training for the current and future workforce. Such a strategy is critical if meaningful private sector led development is to take place in Guyana. From my gleaning of what is happening in many other countries in the region, the train has left the station and Guyana, notwithstanding its significant oil and gas reserves, must run, catch the train and get onboard.

President David Granger has been speaking of the need for more Guyanese to become involved in entrepreneurship. He is right. But the production of plantain chips, etc, on a sustainably profitable basis needs to be part of a plan that includes export markets. Here is where a well-coordinated and communicated private/public sector development strategy is critical. Finally, the conference also discussed US relations with Latin America and the Caribbean. It was generally felt that the United States must ensure a heightened strategic relationship with LA&C that would promote investment in, and trade with the region. Responding to a comment that President Trump had not pronounced on CAFTA/DR (Central America/ Dominican Republic Free Trade Agreement) as he has on NAFTA, Nicaragua’s Minister of Development, Industry and Trade, Orlando Salvador Solorzano, noted that CAFTA/DR “is an agreement that has worked to the mutual benefit of the US and Central American countries.” The meeting also discussed the growing influence of China and Russia in the region and suggested that the US heighten its engagement with countries of the region including increased bilateral and multilateral assistance as well as private sector participation through investment and trade. Ministers of government from Argentina, Peru, Nicaragua, Honduras, Guatemala and the Dominican Republic as well as private sector representatives from Trinidad and Tobago and Jamaica were among the participants.

As I have said in previous letters, the Caribbean needs to step up its lobby in the US and involve its Diaspora as part of that effort. Guyana can perhaps play a leading role in the Caricom effort in this regard since the US now has a Secretary State who knows of Guyana, knows where it is and can find it on a map. Secretary Tillerson’s maiden address to his staff at the State Department is very encouraging, especially in light of some of the tweets that have come from his boss.

Yours faithfully,

Wesley Kirton