The World Bank has developed a tool called the Logistics Performance Index (LPI) to partially measure the competitiveness of a nation. The LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their trade logistics systems and what they can do to improve their performance. The LPI 2018 allows for comparisons across 160 countries.
Guyana’s rank was 132 with an LPI score of 2.36 in 2018 compared to an LPI score of 2.67 in 2016. This basically means that Guyana has regressed with regards to the efficiency of its supply chain systems. Can we understand why an oil investor ignores Guyana and buys basics, as simple as drinking water, from non-Guyanese sources? In simple language, our systems make it a major challenge for Guyana to do business with the rest of the world.
This is how Guyana fared between 2016 and 2018 and it gives you a fair assessment of the wider economic and systemic decay happening.
Let us reflect on the successes first. The quality of the Customs Services improved between 2016 and 2018 and that is an indictment to the leadership in that team. There were too many instances of human interference in the customs system before 2016 and credit must be given to the new leadership appointed by Team Granger who made massive changes to the system that resulted in greater efficiencies with a resultant improvement in customs revenue for the nation.
But the failures in other areas are overwhelming, so much so that Guyana lost 47 places in the ranking and is now considered less competitive in the conduct of international trade. The nation lost competitiveness in transportation infrastructure, quality of the port facilities, logistics competence, tacking and accounting for products shipped and timeliness of deliveries.
Logistics are the backbone of international trade and clearly, Guyana is on another planet when it comes to doing business internationally. What have GO-Invest, the Foreign Affairs and the Business Ministries done for the good of Guyana because the evidence is clearly not there to support a progressive action? Unless we take drastic measures to connect Guyana to the global value chains, we will continue to be an outsider globally. Talk to any logistics professional on the ground and they shall confirm this.
To give you an idea of how bad Guyana is rated internationally, a score of five translates to a perfect system of logistics while one is the worst possible rating you can get. In 2016 Guyana was rated at 2.67. By 2018 Guyana was rated at 2.36, illustrating a decline in the nation’s logistical competitiveness over two years.
What can be done?
1. Better integration between production and trade facilitation – To back this up, the respective departments in the Government need to focus on production and productivity in the right packages to penetrate targeted overseas markets with the right launch at the right moment. One question to ask is why more of Guyana’s poultry products are not being sold in the Caribbean Community (Caricom) market and it will expose how badly integrated the whole trade facilitation system is in Guyana.
2. More efficient transportation system – Port Georgetown must be dredge come what may. Too small ships are coming to Guyana costing the nation too much per unit. We are engaged in a process of building a new bridge across the Demerara River when there is already a bridge across the river but there is no initiative to more vitally needed projects such as to deepen the channel in the Demerara River or build a floating deep-water harbour to accommodate larger ships to reduce our unit shipping cost.
With oil coming to Guyana, it is clear that we are not ready to service the industry as yet and this is why Trinidad is taking the cream of the oil services jobs today. The fact remains the oil investment was made in Guyana and Trinidad is reaping the benefit due to the home country. Of course, Trinidad had a great advantage and a more mature oil services industry but even the water on the rig cannot be Guyanese? I am told bread is coming from Miami for the rig workers.
But let us face the facts – who has the better supply chain – Guyana or Trinidad and this is one of the reasons that will continue to drive Trinidad’s advantages. Well, I cannot expect much from the Government at this point in time since they are busy with Local Government Elections but I am hoping someone in the Foreign Affairs and Business Ministries is asking the question – why Guyanese water is not available on the rig and take some firm action on this matter of delinquency on our part in compliance with the principle of local content support services.
