THE WORLD IS NOT WAITING ON GUYANA TO SOLVE ITS POLITICAL PROBLEMS
For many years, political divisions were blamed for the problems in Guyana. But on closer examination, the real problem was the lack of proper models and the lack of talent to effectively manage the economy.
Guyana’s political problems have been overstated when it comes to the underperformance of the economy. But right now, it is the political divisions and the present unworkable arrangement that exists in parliament that is creating headaches for the economy.
The reason for these headaches is quite simple. Guyana is now an open economy and is integrated into the global economy in a way that makes it very dependent on external markets and external capital. And if there are problems that affect markets and access to capital, Guyana is doomed.
The Low Carbon Development Strategy is part of the plan to link Guyana to external markets and capital. This is a plan that is reliant on the sale of carbon credits to Norway and the use of the funds earned from such sales to be put to specified purposes, in keeping with the objective of achieving a low carbon economy.
Guyana could have gone another route. It could have invited East Asian companies and the Brazilians to come and plunder our forests and excavate our gold. We would have also made billions that way.
But what would have happened to future generations? They would have lived in a wasteland.
The government chose another route. They opted to sell carbon credits to Norway, which has reduced emission targets to meet. Guyana sells the carbon credits to Norway which used these credits to meet its targets and in return pays Guyana some $250M over a period of time. This is a good deal since it does not require us to reduce our present rate of deforestation or reduce gold mining below what exists at the moment.
Guyana is taking this money and using it to develop hydroelectricity so that we do not have to import fuel for electricity purposes. This new energy source would be sustainable.
It is therefore simplistic to argue that the only link between the Amaila Falls Hydroelectric Project and the LCDS is a financing link. This is not so. The hydroelectric project is part of a grand scheme to have a low carbon economy which will avoid Guyana having to do like some other countries and burn down its forests or open up its mining districts to rapid destruction.
Political problems between the government and the opposition now place this entire strategy in doubt. Sadly, while the world is not waiting on Guyana.
The opposition parties had impressed upon the Norwegian government the need to ensure transparency and accountability for the funds being provided.
As such, the disbursement of funds under the Norwegian deal is linked to the readiness of these projects. The end use of the funds is integral to the deal.
Those responsible for the funds cannot release the monies into the hands of the government without some assurances that these funds will be put to the uses to which they are intended.
Once, therefore, the opposition begins to hold up these projects, it jeopardizes the entire Norwegian deal and by extension the LCDS. There are other funds which will come from elsewhere for other projects under the LCDS. The Chinese are likely to come on board some of these other projects under the LCDS, but the Chinese are not going to wait on Guyana to solve its political problems.
There are countries lining up to ask the Chinese to invest. The Chinese themselves have a fair stake in Guyana with proposed investments in a hotel, the extension to the airport, plus in the running of a cable from Brazil. The Chinese are not going to wait on us to solve our problems. They are searching for resources and investment opportunities. Latin America is knocking on their door.
So the opposition can play their silly games. The country as a whole will suffer and the people will know that Guyana did not get on the fast track to development because of the opposition’s antics in parliament.
Everyone says that hydroelectricity is needed. There were concerns about the deal the government entered into during the Jagdeo administration. The Donald Ramotar administration invited the opposition to a briefing on the project and released all the agreements. The opposition indicated that they were pleased by the briefing. And despite having the agreements, which were previously much criticized by the opposition, there has been little criticism since being made public. So it does seem as if most of the deals signed under President Jagdeo has passed muster and are reasonable deals.
So why then hold up the monies for the LCDS and by implication the Amaila Falls Hydroelectric Project? Do the opposition really believe that the investors are going to sit and wait for them to make up their mind? Do they really believe that Guyana is so important to the Blackstone Group which is putting together the investments that the grouping is going to wait on them? Not in today’s world. And not with so many other investment destinations around.
So the opposition can play its games. Except that if they continue, they will be the only ones left on the field, because the people of Guyana do not have to waste with silliness.