The same support given to western and other countries investing in Guyana will be afforded to Caribbean nations and nationals coming here, President Irfaan Ali yesterday stated.
“As we have indicated before, the assets of our financial sector are insufficient to develop our petroleum industry, much less to also drive economic and social transformation on the scale which we are pursuing. Therefore, Guyana has set out on a deliberate path to forge enhanced partnerships with major economies such as Brazil, Canada, China, India, the United Arab Emirates, Qatar and the United States of America,” Ali said.
“An open invitation is extended to Caribbean financial institutions to come to Guyana and to explore the opportunities available. We are just as keen to partner with regional institutions as we are in forging international partnerships,” he emphasized.
Addressing the Jamaica Stock Exchange (JSE) Regional Capital Market Conference 2023, virtually, as part of the discussion on “Guyana: The New Frontier – Building Relationships for Development”, the President noted that while Guyana will see significant financial growth from its burgeoning oil and gas sector, it does not have all the resources to do it alone and needs help from sister countries in the region.
Ali laid out his vision for an overarching development strategy that would “bring prosperity not only to Guyana, but for all of the region.”
He warned that countries that are complacent and do not equip themselves for future crises, such as food insecurity, are putting their populace at risk for abject hunger.
“We have the other major crisis that faces the world; that is the food crisis … when you think about hunger and poverty… we’ll say Africa is the region. But Latin America and the Caribbean are the fastest growing regions in terms of food insecurity. We are swiftly becoming the most food insecure region in the world and we have to address this. This is a crisis that is coming before us, but in this crisis lies opportunities,” he said.
“How do we develop a regional food hub, a regional food ecosystem, a regional agriculture technology zone that will support the production of foods, support agriculture, support the ecosystem and infrastructure that would ensure that we are food secure, ensure that we reduce our food import bill, and ensure that we can create a viable future for our farmers utilizing technology? And that is another plank on which Guyana’s development would take place, positioning ourselves to becoming a food capital in the world,” he added.
Guyana, he said, is doing its part and already has begun working with Brazil, India and Caribbean nations to create bilateral relationships. “Creating dynamism within the whole architecture.”
With transport and logistics challenges, he said that it is an opportunity that presents itself for regional investors to tap into.
Win-win
Giving data on Guyana’s economy, the President pointed out that this country is now the fastest-growing economy in the world, as in 2021, Gross Domestic Product growth was almost 20%. Last year, that figure was estimated at more than 60%.
He said that this growth was not confined to the oil sector since the non-oil sector also registered a growth rate of 11.5% and it was why investors should look at this area for long-term financial sustainability.
“The growth of the non-oil sector is important to us because as I have said, transformation is not only due to the discovery of oil alone, but also the use to which the oil revenues will be put and the trigger which the industry is already playing in boosting the economy,” Ali posited.
Under his government, he said that he will ensure that Guyana sets the tone to become an economic powerhouse so as to fulfill the grand, but realizable ambitions which for a “long time have eluded the country.”
However, Ali stressed that this country sees itself as being beholden to regional development. “We have envisioned our future development by taking into account our place and role in the Caribbean. We are firmly committed to the goal of regional integration. Thus, while we are pursuing win-win partnerships with other countries and regions of the world, we remain firmly anchored within the Caribbean family. As Guyanese would say, ‘our navel string is buried here.’”
Reasoning that policymakers in small states can improve long-term growth by bolstering resilience to climate change, fostering effective economic diversification, and improving government efficiency, he said that key questions need to be asked and subsequently planned and mapped out from analyses derived. “How do we bolster our ability to be resilient to climate change in adaptation and mitigation expenditures, how do we increase economic diversification, and how do we improve government sufficiency to support private sector development, expansion and growth?”
The partnerships sought by this country, according to the President, are not only to develop the oil and gas sector, but also to modernise traditional sectors such as agriculture, gold, diamond, bauxite, manganese mining, and forestry.
“Guyana is also set to become the energy and industrial capital of the region, a regional food engine, an eco-tourism destination, a major aquaculture producer and the mecca of regional cricket. These are our ambitions from which we are not shirking,” he posited.
“The new frontier that Guyana represents is therefore not confined to oil and gas but to all the aforementioned areas. We have not yet set our sights on becoming the financial centre of the Caribbean, but this is an opportunity that exists. Given our own development and given the projections of own development, our financial sector will continue to expand. Our financing needs are great and we are looking for win-win partnerships,” he added.
Silo mentality
Zooming in on the importance of financial markets to Guyana, and the region’s development, he urged the Caribbean financial sector to play a more instrumental role in mobilising capital to fill the Region’s financial gaps.
“Just over a week ago, the President of the Caribbean Development Bank observed that Gross Financial Needs of the Caribbean in 2020 was in excess of US$10 billion. The challenges facing our financial system in the Caribbean is whether it can rise to the occasion of mobilising the capital requirements for financing regional development. We know that this cannot be done from the savings within the Region and therefore the challenge will have to involve partnership with others,” he said.
To play the role as a catalyst for development, the financial architecture of the Region must be modernised and become integrated, Ali reasoned. He cautioned that in doing so, its people “cannot develop a ‘silo mentality’, in which the region’s financial sector becomes insular and segregated.”
“Our financial sector also must have a regional focus. We do have a few banks which are regional players but more such banks, as well as indigenous banks are needed to take up greater space,” he stressed.
And with a note of caution, he reasoned that financial markets are not without risks, and as such, the deeper the region becomes integrated into the global financial markets, the higher the risk of exposure to global problems.
“Securities and capital markets need strong regulation and oversight in order to protect investors. Experiences around the world forewarn us that the need for strong regulation, due diligence, and oversight of financial institutions is critical. In our quest to deepen our financial sector, the region has to be prudent and avoid exposing our investors and depositors to extreme risk of implosion by financial institutions,” he underscored.
