A Memorandum of Understanding (MoU) will tomorrow morning be signed between the United States and Guyana that positions this country, with US help, to bolster private sector investment in infrastructure, Washington yesterday announced.
Signing for the US will be its Secretary of State Michael Pompeo, who will from this evening, begin a two-day visit here where discussions will be held on a number of matters of mutual concern, and for Guyana it will be President Irfaan Ali, who has trumpeted foreign investment opportunities during the campaign for his presidency this year.
“The Secretary will also sign a Growth in the Americas memorandum of understanding. This will permit Guyana to improve its investment-enabling environment so that the country can benefit from transparent infrastructure investment that respects Guyana’s sovereignty,” a senior US official yesterday told reporters in Washington.
The MoU, referred to as América Crece is a US government initiative that seeks to catalyze private sector investment in infrastructure in Latin America and the Caribbean. “This whole-of-government approach channels the resources and expertise of many U.S. government agencies in a coordinated effort to help countries attract private sector investment. For example, under América Crece, the United States assists countries to improve their regulatory frameworks and procurement structures to meet the requirements of limited-recourse project financing,” the US government explains.
Stated in 2018 as an energy infrastructure-focused initiative, the America Crece has now expanded to encompass broader infrastructure needs, including, but not limited to, telecommunications, energy, ports, roads, and airports. Facilitating energy infrastructure investments remains a core focus of the initiative.
Tomorrow, Pompeo’s team will meet with officials from ExxonMobil and other oil companies working here separate from its engagements with government. “We’re going to meet with the oil companies, see how they’re doing, and see what their plans are. We’re meeting with the government separately,” the official said.
The US says that Pompeo’s visit here should not be seen as putting pressure on government for any permits and approvals either.
“First on Exxon, no. I mean, this is certainly not an effort to put any pressure on Guyana. I think it’s more a celebration of their great success in this. Obviously we think American companies are really competitive – as I mentioned, the way our companies behave and they’re subject to Foreign Corrupt Practices Act and so on. You look at that and then look at what China does. So those kinds of comparisons are made, but they don’t – it’s not so much that we have to make them. It’s they’re demonstrated out there in behaviour,” the US official said when asked about the optics of Pompeo’s visit in relation to pressure on this country for the permits’ approval.
International risk specialist Raul Gallegos, consultancy expert and director of the firm, Control Risks, which looks at risk analysis in the Andean region, had told this newspaper on Tuesday that he believed private sector development would be an area that would be discussed, given Guyana’s newfound oil fortunes.
As he zoomed in on three possible areas for discussions, he had also pointed out that Pompeo will underscore government addressing the ethnic polarization here.
“In the eyes of the US and foreign companies, Guyana’s deep ethnic division is the largest risk for their operations, especially in a country with weak institutions unprepared for the oil windfall to come,” he said.
Further, he added, “Money makes people do unwise things, and this becomes even more salient when two communities deeply distrust one another.”
The US State Department yesterday also underscored that environments have to be created to attract honest foreign investments and said it will do its part to assist Guyana and its Dutch neighbour Suriname create those, as Suriname has similar oil reserves. “What we are trying to do is help Guyana and Suriname develop the kinds of welcoming environments for honest foreign investment that both want and need to further their prosperity and development. And so I think this is a case where everybody is in agreement as to what they want and it’s a question of what do we do to get us from here to there. The Exxon evaluation will be done on its own merits by the Guyanese experts,” the official said.
Pompeo is expected to meet today with representatives of US mining and oil companies that are part of this sector’s critical investment in Suriname’s prosperity and future growth.
He will, the US official said, highlight through the meetings how US companies throughout the hemisphere invest responsibly and transparently.
Similarities
With similarities not only with oil economies but also new governments in Guyana and Suriname, Washington sees new opportunities.
“These countries, Guyana in particular, have the opportunity to go from one of the poorest countries in the region to having the greatest increase in income in the region in a very, very short period of time. And I think leaders in both countries are aware of the pitfalls of what they call the ‘natural resources curse’. We have, through time, developed lots of programmes and good advice and best practice models and so on that will be shared with these countries under various programmes that different US departments will be running. So that’s clearly a shared interest in being sure that the oil development pans out to fortify the democratic, open, transparent nature of these countries and not to exacerbate problems of corruption and so on,” the officials said.
“Yes, I think the fact of new leadership in both countries makes this more doable, not necessarily because of the personalities but because of a process here that we had before – in Guyana, a government that was – had overstayed its constitutional term and was – its status was sort of up in the air. Now you have a government that clearly is the choice of the Guyanese people. Also in Suriname you’ve had a government that – there, it was perhaps more associated with personality, but where the leadership had some serious defects that limited the ability to maintain good relations with a lot of the other countries in the region. That’s now been changed out and we’re very hopeful that we’ll see regular, peaceful rotations of power in both countries without the kind of problems we’ve had in the past.”
For Pompeo, who is credited for his active role in ensuring that Guyana’s electoral process was not derailed by the APNU+AFC government which had endorsed false elections results of the March 2nd elections, he will also underscore his country’s continued support for democracy here.
The US believes that this country’s newly elected leaders can “build an all-inclusive – can build an inclusive democracy that consolidates rule of law, attracts transparent private-sector investment, and exploits [its] natural resources for the benefit of all of its citizens.”
