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Opinion: Oil Rich Guyana - Contrasts And Opportunities
This article was published on News Americas on Fri. Aug. 26, 2022. It is being republished here with permission, and it is slightly edited. The views expressed are the author’s and not necessarily those of 18º North.
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So, what would you do, if one day to your surprise, you found a buried treasure worth many billions of dollars? What would you do?
Spend it wildly and foolishly? Hide it so no one else could get to it? Or would you use it wisely not only to take care of yourself but also your children and entire family for generations to come.
That is the question facing the CARICOM South American nation of Guyana right now. Or more precisely the government of Guyana as a result of the huge oil fields discovered off its shore.
The answer is no one knows yet, but if Guyana’s history is our guide, the answer may not be promising. So, the question that must be answered now is how to ensure Guyana’s new oil wealth is not squandered or stolen and lost to corruption.
As a Guyanese-born, now American citizen, my recent trip back home was my quest to find the answers to these questions given the many headlines that dominated just weeks before my departure: “Guyana’s annual oil revenue to go from US$1B in 2022 to US$7.5B by 2030 – Rystad Energy”, “Guyana races against the clock to bank its oil bonanza”, “Oil, Natural Gas Booming in Guyana as Offshore Production Ramps Up.”
Those were just three of the headlines regarding Guyana, the country where I was born, grew up and left for the United States in 1996.
On August 1, 2022, after 10-years of not visiting, I decided to return – pushed largely by a business partner – to see how much had really changed in Guyana and what exactly the newfound oil boom – now four years in – means for the country and Guyanese.
Here’s what I experienced and witnessed on the ground that points to the current issues and the opportunities that exist in this new oil-rich nation.
Let me begin with my arrival as a useful lesson.
The country’s immigration clearance leaves much to be desired, leading to an opportunity for possibly a private concession partnership with a major operator to ensure the airport is run to international standards and in a way that improves the quality, service, ease of flow, and security.
I along with dozens of others, including many persons flying there for business, landed on a late-night American Airlines flight from Miami on August 1st after 11 p.m. EST at the Cheddi Jagan International Airport. While the arrival ambience at the airport has been greatly enhanced, the lines stretched out to the exit as five immigration officers behind glass-enclosed booths slowly processed each passenger.
I finally was processed – tired, hungry and beyond angry. I made it out of the airport and through baggage claim and customs at 1:30 a.m. EST, much to the stunned disbelief of my pickup driver.
The message many in the line repeated was clear: a slowly-developing country, not 21st-century nation ready for global investors and investments.
Moving on … There is a desperate lack of hotel rooms in Guyana, but with several hotels planning to come on stream it is hoped this issue can be solved soon. Again, the question is – will it? Where is the master plan with proper zoning?
Much attention desperately needs to be paid to zoning and strategic beautification and maintenance. For a first timer, leaving the airport for instance, one is met with a desolate narrow road that looks sinister in parts with shacks in some places along the roadside in several areas, where some have chosen to eke out a living.
Across the country, construction of giant concrete homes and buildings are sprouting everywhere, replacing the once wooden buildings on stilts that the country was known for. This is what many point to as big “progress.” But with no real zoning, this has led to a chaotic, Wild West appearance as businesses are springing up next to residences, or even abandoned homes in once-residential villages and neighborhoods.
Georgetown, the country’s capital, is urgently and badly in need of a makeover and daily maintenance – even though a lot has changed across the city and the country in terms of options of stores, malls, supermarkets, restaurants and cafes, including US fast food chains, and even a few hotels.
But no newly-wealthy, promising developing nation should stand for a dirty capital like Georgetown. Overall, the city is in desperate need of maintenance and enhancement. The arch that welcomes you to the city needs bulb changes as half of it is lit and half is not. Georgetown needs an impressive new arch to welcome the world.
Garbage, grass-covered walkways, including in front of the Ministry of Public Works, broken or flooded pavements, many overflowing garbage receptacles, and vendors who’ve taken over the pavements, forcing pedestrians onto a dangerous roadway to compete with cars, mini-buses, trucks, bikes and scooters, is most of downtown Georgetown, in a nutshell.
Pedestrians are forced to walk on the congested narrow two-lane roadways, where minibuses, four-runners, cars, taxis, four-wheelers, and trucks compete for space at breakneck speed, dodging in and out of traffic and overtaking within a hair pin’s length of the other vehicle on the narrow two-lane roadways.
Parking options are largely non-existent so the already-narrow road becomes parking garage central with vehicles double parked on the side of the roadway, making the roads even narrower.
Huge concrete structures have popped up in unzoned areas, leading to a maze of discord – brothels with foreign migrants, mainly from other South American nations; clothing hanging out the windows. Schools look shabby, as do national buildings like the world’s tallest wooden building, the St. George’s cathedral, which is currently locked behind an ugly chain-link fence and unavailable to tourists or visitors; and the country’s national museum, which still has zero air conditioning.
Urgent attention is needed to remake the city to match what is seen in a tiny portion of it – the area around the Marriott and Pegasus hotels, and the short seawall nearby along with what passes for a roundabout. This is the first impression of an investor and must tell a different story.
Waste is also a major problem in Guyana. Yes garbage!
That is obvious from the city to the countrysides, where few options to dispose of household and industrial waste exist. Georgetown lacks garbage receptacles, so trash ends up on the street or in drains, where empty plastic bottles, Styrofoam containers, and old-discarded wood now dot the landscape. That clogs drains during rainfall and creates terrible flooding.
In many areas on the East Coast of Demerara, some use the cover of night to transport and dump construction waste like old sinks, carpets and huge concrete blocks along the parapet of residents’ homes. Many wake up early in the morning to this overnight “crime.”
Others burn garbage freely or throw it on open, abandoned land. Still others take carcasses of animals and dump them into the mangrove swamps along the east coasts that are not maintained – so they have become wild and overgrown and now block out the sea in many areas.
The rot and smell of decay in some parts of these mangrove swamps is unbearable. Drivers and people in minibuses, not uncommonly, throw garbage from windows into the street.
Despite its oil wealth, the country still has blackouts, a.k.a., power outages, much as I remember from growing up there. Luckily for some, solar panels give them the option to switch over, so they are not stuck in the darkness and stifling heat.
Focusing on harnessing the obvious natural resources like the sun and waterfalls is a great way to solve this problem as is a waste-to-energy plant that will solve two problems at once for a lot less than the cost of the current fossil fuel energy generated by the government-owned power plant, that costs .32 cents per KWH. Again, a private/ public partnership remains the key to solving this problem going forth fueled by petrodollars.
With more vehicles on the narrow roads, coupled with construction of roadways, congestion is as insane as a Miami-to-Fort Lauderdale drive at rush hour. The longer-term planning has to be focused on overpasses and major highways, as well as an effective train system to connect the Linden to Lethem areas.
This will help to boost eco-tourism as well as make it easier to transport goods and services while maintaining the eco-system and leading to fewer disruptions in animal habitat.
A visionary long-term master plan, through a public/private sector partnership, is key versus a piecemeal approach that involves local contractors building roadways and bridges that quickly fall apart.
Guyana is also badly in need of digitization, as it continues to lag behind the rest of the world, despite a population of less than 1 million. Applying for a simple police clearance is a 7-day process – which could be cut down if applicants can apply online, get an appointment and then complete the process in person.
The application for a CSME (CARICOM Single Market and Economy) certificate from the Ministry of Foreign Affairs, is via a website that is buggy and badly needs updating to accommodate ease of upload of documents. While the staff there is extremely polite and responsive, they cannot control the obvious major technological issues.
Digital payment is few and far between in Guyana, with one company offering it currently, meaning it is still largely a cash-only society. Businesses, even major ones, lag behind on digital marketing. Simple opportunities, like reputation management, accurate online listings, and search engine optimization are missing in action.
The message is that a digitization masterplan can put Guyana’s newfound wealth to very good use.
Who can do business in a country where setting up a bank account feels worse than pulling teeth without Novocain?
A simple transaction, including adding someone to an account, is a three-step process, that includes bank staff prancing around in well-pressed uniforms as they ignore customers for more than 45 minutes at a time. Only to be told you then must make an appointment and return twice.
To compete in the global world, so much must change dramatically. Banks must invest in digital technology and security that allows for a much easier and seamless transaction and one that gives many tech-savvy clients the option to easily set up an account or manage their accounts online themselves without time wasting.
Crime is still also a part of the landscape of Guyana as with many countries globally. So many have taken to living behind bars on windows and doors that are obvious fire hazards.
Crime is not just limited to murder and armed robbery, but pickpockets and crimes of passion – including domestic violence against women, as partners kill in rage.
The other crime that is talked about in hushed tones, including in taxis and barber shops, is narcotrafficking. Locals in east coast villages quietly point out the persons who are suspected of trafficking cocaine in fish, as well as shops where low-grade crack cocaine can be bought by younger villagers experimenting and becoming addicted.
Guyanese in-country feel the local police are ineffective and prone to bribery and general corruption. Many complain that even traffic violations can be avoided by “passing you hand” to a cop.
As such, private security has become big business in the country, with many foreign business owners and wealthy private residents turning to this option to protect property and life.
Bribery is also commonplace, with even taxi drivers capable of making a call to fast-track documents like passports and business registration applications for the right price.
Put those petrol dollars to work building a modern system to do business for the 21st Century.
With the Guyana dollar at about 210 to 1 USD, the disparity in wealth is a maze of contrasts. There are the ginormous homes and buildings that scream wealth, along with G100 million (US$476,225) homes in gated communities and brand name vehicles everywhere. Yet, poverty is still obvious with 43.4 per cent of the population living on less than $5.50 per person a day despite the high cost of living – where even a locally- grown pack of plantain chips is sold to nationals for G$200 (US$0.95); a whole trout caught locally costs G$5,000 (US$24); a local lunch of soup and mauby for two is G$5,000 (US$24); and an appetizer and two drinks at a restaurant will cost about US$40.
Nowhere was the stark disparity in wealth more evidenced than the several beggars at the Port Mourant Market on the Corentyne in the county of Berbice, an area where previously there was hardly such panhandling.
It’s a sad state of disparity for a country where more than ten billion barrels of oil and gas have been discovered since 2015 and it is expected to produce one million barrels per day by the end of the decade. The current government has tried to fill in with cash grants to parents for school age children, but more is needed in terms of a social safety system that can bridge the wealth gap, including for the elderly, the infirmed and pensioners.
ACCESS TO CAPITAL FOR SMEs
Lack of access to capital for small to medium enterprises is stagnating growth in a country, where many are extremely entrepreneurial and producing products that can be marketed internationally, yet lack the access to capital to make it happen.
This is an issue that needs to be addressed urgently, again not just though the central government, but with a public/ private sector partnership in order to remove feelings of racism, nepotism and partisan politics that exists. Through finance and digitization, Guyana’s SME sector can become part of the country’s economic boom, creating a new line of exports as well as growth.
The oil dollars must also be spent on funding SMEs, training and education of the population and workforce and erasing unemployment and university fees.
From all indications, the issue of race, post-elections, seems to have largely returned to a state of calm, despite protests recently over the police-involved shooting of an Afro-Guyanese youth. That led to an ugly attack on Indo-Guyanese at the Mon Repos market with burning, looting and robbing. However, during my visit, all seemed well – from Berbice to Georgetown. In Berbice and on the Corentyne, especially at Rose Hall and Port Mourant, Afro and Indo-Guyanese sell and live side by side.
The same was true at Bourda Market in Georgetown and in many bars and cafes around the city of Georgetown, where younger Indo-Guyanese men openly hang out with younger Afro-Guyanese women. However, on the East Coast, in some cabs driven by some Indo-Guyanese drivers, racial distrust is openly voiced for Afro-Guyanese, but the reverse was never experienced. Perhaps, Guyana can finally move beyond race, with the increase in its foreign population that could easily overtake the local population, given the human capital that is needed to grow the new oil-rich nation.
ACROSS THE COUNTRY
Across the country, there is great improvement in the roads as building-out of those continues; access to mobile telecommunications and WIFI, solar access, increased car ownership, and a thriving cab industry, as well as loans for home ownership. There is also now more access to stores and supermarkets stocking American products, more banks and American fast food in villages, versus the past, when many had to make the trek to the capital.
A MASTER PLAN?
Despite the issues highlighted here, Guyana is undoubtedly on the pathway to transformation. Now, it’s time for a visionary 10-year masterplan, much like with the power plan created by Singapore and China, that pays significant attention to detail and moves more towards a private/public sector partnership model of growth than a government-driven plan.
The question is whose master plan? What are its goals and how to achieve them? So far, all Guyana has is a big oily pot of black gold that has so far not met the real needs of the masses, and has a long way to go towards transforming the country.
But as I left Guyana, I remained hopeful – because hope springs eternal from all that oil gushing up from Guyana’s sea bed.
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