Guyana harnessing foreign policy to market investment opportunities – academic
— urges Guyana to continue expanding foreign presence
While many other nations use their foreign policy to compete with their neighbours, Guyana has been using its foreign policy, backed by the clout of its oil and gas sector, to promote economic opportunities in Guyana.
This is the view of Wazim Mowla, a Guyanese American academic and programme assistant for the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center in Washington, DC.
In a column on an online entity, he spoke of Guyana’s drive to market its investment opportunities and the embassies the country plans to open in oil-producing nations. It is an approach that Mowla lauded and urged Guyana to make more use of.
“Guyana, whose oil resources has brought it new political and economic capital, is using its Ministry of Foreign Affairs to strengthen existing relations with old allies and build new partnerships with other oil-producing nations as a way to draw foreign direct investment to both its oil and non-oil sectors.”
“The latest example was Guyana’s announcement that it will open embassies in Qatar and the United Arab Emirates (UAE), joining the extant mission in Kuwait,” Mowla added while noting that the announcement came after high-level discussions with middle eastern officials about Guyana’s oil sector.
Mowla pointed out that not long after President Dr Irfaan Ali was inaugurated, a team from the UAE visited Guyana. He also noted that there were discussions with Qatar about investment opportunities. Qatar also sent a field hospital to Guyana, to aid in the battle against the COVID-19 pandemic.
The academic also noted in his opinion piece that with Guyana also strengthening relationships with old allies, the time is also opportune for establishing relationships with new ones. And Guyana opening new embassies can be seen as a way of making way for new markets for its non-oil sectors like agriculture and mining, while also diversifying the economy.
“To do this, Guyana will need to continue expanding its diplomatic relations with other countries. If Guyana relies on state-to-state discussions as a way to draw interest to the country, little investment is likely to materialize, and if substantial investments occur, it might be an ad-hoc event. If an embassy is opened, it would move beyond one-off discussions between Government officials and instead establish a direct, open line between each country’s representatives.”
“Guyana should continue to open embassies in the Middle East, such as with Saudi Arabia, but at the same time look toward European countries, as it looks to increase markets for rice and sugar, as well as Africa and East Asia. If Guyana manages to do this during the next few years, while the world watches its unprecedented economic growth, the country will quickly amplify its development,” Mowla wrote.
Guyana, with its oil and gas industry, has been spared the economic pain suffered by many of its regional counterparts. For instance, the Caribbean Development Bank (CDB) had recently noted that Guyana, unlike 19 other countries, did not record any increase in its debt to Gross Domestic Product (GDP) ratio.
This was revealed in the CDB’s 2020 Review and 2021 Outlook Regional Report. In the report, the bank notes that on average, the regional debt to GDP ratio increased from 66.5 per cent to 79.5 per cent among 19 Borrowing Member Countries (BMCs).
Guyana, which is also a BMC, was able to avoid this altogether and was, in fact, the only BMC surveyed by the CDB to record economic growth for 2020, with 26 per cent. The economies of the other BMCs contracted by 12.8 per cent on average due to the COVID-19 pandemic.
According to the CDB, Guyana’s economic growth was driven solely by the start-up in first oil, though this growth was still lower than expected due to the declining oil prices that were brought on by the COVID-19 pandemic last year. It means, however, that Guyana is uniquely positioned as an investment destination.