Ever since three very famous Harvard economists – D. Rodrik, R. Hausmann and A. Velasco – came up with a tool for diagnosing key binding constraints restricting growth and development, there has been no shortage of “growth diagnostic” studies on Guyana. From my point of view, I always thought that these studies are illustrating prima facie constraints instead of the fundamental binding ones.
I have concluded from my reading of history that the geographical and ecological features of Guyana’s coastal plain – on which about 90% of the population lives – present the major constraint on economic development. The coastal plain in its natural state would be a swamp. It is now well known that the once swampy region was drained by the Dutch from around the middle of the 1700s for taking advantage of its relatively fertile soil.
The Booker sugar estates and subsequently GuySuCo played a central role in maintaining drainage through desilting, digging and clearing perennial vegetation from canals. Kokers were also maintained and not permanently closed. GuySuCo provides the nation – as did Bookers in a previous era – with a public good, drainage. Usually, the entity producing the public good never directly gets paid. For instance, when GuySuCo continually cleans the surrounding canals, the poultry and vegetable farmer – as well as the village barber or shop owner – never pays a cent directly to GuySuCo. Life goes on without much regard for drainage system until a major flood.
Some have argued for privatization of GuySuCo that will allow for other crops. But there was a time in the late 1700s and most of the 1800s when the estates were private and each had to solve the drainage problem on its own. Drainage in those days was treated just as any private good such as a bunch of mangoes or a bag of rice. As a result, many small to medium-scale plantations growing coffee and cotton, and subsequently sugarcane, failed because of the high cost of operations.
The cost also involved heavy up-front physical investments in building back dams, sea dams and side line dams, as well as digging and maintaining canals – activities that added significantly to labour and non-labour cost of production. Just a few plantations could afford mechanical pumps for periods when high tide and heavy rainfall coincided. Therefore, I would be interested in knowing which foreign private investor would come to grow avocadoes or vegetables and also take on the cost of maintaining drainage. As researchers have noted over 70 years ago, Guyana’s amalgamated and large-scale sugar plantations survived so long because of political connections in London.
After independence, many canals were allowed to be overgrown with thick vegetation. Many of these were deliberately covered over to make roads and housing schemes. I personally can identify several kokers that once existed and canals that were filled in. Squatting areas – at least the few I know – naturally tend to spring up in areas that are poorly drained. These are policy choices that will impact negatively on many citizens – often struggling folks – causing them to face recurring floods and asset destruction. Some people can build their home on stilts, but that always adds another layer of cost which will strain already short budgets. A manufacturing plant on a second floor will be costlier, too. If flood insurance is included, then that’s a major added cost of doing business, not to mention an added cost of living expense for regular folks.
Another argument holds that some canals can be filled in because they are not for primary drainage since they are not linked to an outlet or koker. Yet, others have noted that man-made lakes should form a key feature of housing developments as in places like Florida. However, these secondary canals that remain are already functioning like the artificial lakes of Florida. They are important for preventing flash floods and storing water until they can be released.
Furthermore, the geographical constraint imposes the existing production structure of mainly primary products. An important school of thought in economics holds that not only does the production structure matter for development, but also the complexity of that structure. By structure, we mean the interrelatedness of various industries. The deeper the interrelatedness, the more complex the structure and the types of employment required to keep it going. Of course, higher complexity generates higher sustained incomes.
In addition, the settlement patterns that essentially evolved out of the dispersal of plantations and village movements across the coastal plain add to the complication. In addition, small communities in the hinterland add more to the average cost of delivering basic services, let alone more expensive ones like an electrical grid system and power plants.
We also cannot discount the political implications of how settlements and occupations evolved over the past 200 years – all determined by our geography. The financial requirements to maintain the system of drainage will ultimately mean that not everyone will get what he/she wants, which is clearly a recipe for accusations of political favouritism in the context of Guyana’s politics.
Therefore, the geography, settlement patterns, structure of production and political rivalry are all deeply connected and tend to reinforce each other over the decades. These also give rise to the quality of institutions (laws, regulations, constitution, public service independence, etc.) that exist. The degree of trust also evolved in an environment that requires outwitting the other side to maintain power or win political power. It will require fundamental rethinking to break out of this bad equilibrium.
It is often suggested that the best Dutch engineers must be consulted. While I agree with this, Guyana will also need to have its own domestic capacity in this technology. Let us consider a few similarities and differences between the geography of The Netherlands and Guyana. The first main consideration is that George-town and Amsterdam are below the sea level, as are other very highly populated regions in both countries.
However, there are two crucial differences between The Netherlands and Guyana. First, the average annual rainfall from 1991 to 2000 in The Netherlands is 791 millimetres. For the same period of 1991 to 2000, Guyana witnessed an average annual rainfall of 2, 394 millimetres. This is not a trivial difference and it will significantly complicate water management and infrastructure planning in Guyana.
Moreover, the demand on the oil revenues will be very high. New-found oil monies will certainly help, but capricious policy choice like taking gas pipelines to Wales will have to be avoided. It is not just what one builds, but the sequencing and interconnectedness will be even more crucial.
Second, The Netherlands does not face continuous growth of vegetation all year. In the winter months, the cold regions of the world do not experience plant and weed growth. Mosquitos are also subdued in the cold periods. Weeds can grow all year in Guyana. As anyone who grew up on a sugar estate knows, this is a recurring problem. A tremendous amount of labour and machine costs go into keeping the canals clear. The intake of saltwater can help, but this cannot work for all canals, especially those that service agricultural lands.
The PPP/C, PNCR, AFC and other parties, as well as civil society, have to sit down and agree on a medium-term and long-term plan for keeping waters of the Atlantic and hinterland from overcoming the farms and living areas on the coastal plain. Whichever party gets into government will need to stick to the national plan. The hinterland is also not spared from heavy rainfall and floods. It is not going to be easy, but it can be done. Finally, I also personally believe that maintaining an elaborate system of canals in the tropics will add a unique tourism experience.
Comments can be sent to: tkhemraj@ncf.edu
