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Guyana: Economic Prospects and Political Uncertainties

Despite uncertainties that mar the Guyana political scene, the country’s economic prospects appear to be brighter than they have been in three decades. Several developments account for this and they bring hope to a country that has been blighted by political turmoil and economic setbacks.

Amongst the developments is the considerable reduction in the ratio of debt to gross domestic product. Guyana has moved from being one of the world’s highly indebted poor countries to a situation in which the Government is managing its debt and has more breathing space in which to take policy decisions of social and economic benefit to the Guyanese people. It is an accomplishment for which Guyana’s President Bharrat Jagdeo deserves full credit.
Epitomizing the new economic optimism for Guyana is the formal opening, scheduled for September 14, of a bridge over the Takutu River, the narrowest point at which Guyana and its sprawling neighbour, Brazil, connect. Both Guyana’s President and Brazil’s President Iancio Lula Da Silva will be part of the opening ceremony.
Guyana's President Jagdeo (left) and Brazil's President Lula (right) with an interpreter
The Brazilian government, with the full agreement of the Guyanese government, has built the bridge capable of carrying heavy vehicles to transport containers with a wide variety of commodities as well as people. The bridge is the first step in infrastructure that would allow businessmen from Brazil's Northern-most State of Roaraima to truck commodities through Guyana to a port on Guyana's Atlantic coast and then to markets in North America and Europe.
What has to follow is a dry-weather road from the bridge on the Guyana side to the town of Linden which is already connected by a highway to Guyana’s capital, Georgetown, on the Atlantic Coast. Then a deep water harbour has to be constructed. But even without the harbour immediately, the bridge and road would give Roraima businesses the access to the Atlantic they now need. The system would be considerably cheaper for businesses that now have to transport goods across the vastness of Brazil to its far-away ports. The Brazilians have a vested interest in financing the building of the harbour.
Guyanese businesses would also be able to use the bridge for transporting goods for sale in Brazil provided they are able to establish markets. At the moment, while Brazilian goods are increasing in the Guyana market, largely due to the influx of Brazilians into Guyana, Guyanese exports have been limited to wood, wood products and bauxite. But, there is every reason to believe that exports of rice in particular would be possible. 
It is estimated that there are about 3,000 Brazilians now operating gold mines in Guyana and making a good living from it while contributing to the economy.  They have brought in new technology and are getting higher production yields.  Consequently, the government is getting more taxes, and the Guyana Gold Board which purchases the production is selling it on the international market at a profit.
Once traffic starts between Roraima and Georgetown, several forms of new economic activity will spring from it, including new villages in areas that are now sparsely populated.  The road points the way not only for a cheaper outlet for Northern Brazil to the Atlantic and therefore to Europe and North America, but for a considerable boost to the economy of Guyana.
The construction of the road and the harbour will increase employment and production in the Guyanese economy in the near term. Given the sustained economic activity that they will generate, new and lasting employment will also be created.
The Takutu Bridge seen from the Guyana side
Aligned to the business links to Brazil is the Guyana government’s decision to designate Ogle, an area on the Atlantic Coast of Guyana, as a second International Airport. The arrangements for this are almost complete.  Ogle will accommodate flights on aircraft such as those operated in the Caribbean by LIAT and Caribbean Airways as well as the Brazilian airline, Mehta.   Ogle is 15 minutes from Georgetown and less than 10 minutes from the Secretariat of the Caribbean Community and Common Market (CARICOM). 
President Jagdeo is also working feverishly to put together the means to build a hydro-electric power station in Guyana. With its many rivers and waterfalls, Guyana lends itself to hydro-power. Once hydro-power is established, energy costs – now one of the big expenses of doing business and accounting for as much as 20% of GDP – would drop significantly opening the distinct possibility for less expensive production of sugar and bauxite and reduced costs in the mining and timber sectors. 
Then, there is oil exploration off shore in an area where the maritime boundary with Suriname is now legally settled. The Canadian company, CGX, which has been exploring the area, made some hopeful statements in August. Amongst them was that “the cost estimate to drill the Eagle Deep Well has been reduced significantly to below $70 million from US$90 million” and they were encouraged by the seismic data processed during the first half of 2009. If this leads to the renewal of drilling next year, it would be a further boost to the Guyana economy.
CGX Oil Rig offshore Guyana before the maritime boundary with Suriname was settled by arbitration
However, the prospects for economic improvement are dimmed by political uncertainties. President Jagdeo’s term of office ends in 2011, and his Peoples Progressive Party (PPP) will have to choose a Presidential candidate next year. That candidate will have to be someone in whom the electorate, beyond the traditional PPP support, has confidence both to manage the economy and lead a multi-racial nation. 
A recent convention of the main opposition, Peoples National Congress (PNC), to elect its leader and other officers turned out to be a fractious affair. While Robert Corbin was re-elected leader, the PNC is now split into many parts with its middle class support severely disenchanted. The main beneficiary of the PNC’s internal confusion appears to be a third party, the Alliance for Change, which promotes itself vigorously as a non-racial grouping dedicated to a one-nation Guyana.
But, the telling political battles will be fought next year – first within the two main parties and then at the national level. 
Within sight of all the parties is the prospect of real economic opportunities for Guyana if the politics can be managed with maturity.

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