Last Thursday, the South American trade bloc MERCOSUR was told by His Excellency Dr. Mohammed Irfaan Ali, President of the Cooperative Republic of Guyana, that it should strive to establish regional economic integration.
Guyana is the only English-speaking country in South America, with a small population of less than one million people, per capita income of US$5,000 (2019), and GDP in nominal terms of US$4 billion. By virtue of Guyana being on the cusp of an economic transformation wherein it just became a petroleum producing state, Guyana has an opportunity to become the driver of a transformative agenda within the region, viz-à-viz an enhanced framework that would foster deeper regional economic integration of South America and the Caribbean with the rest of the world. This notion is premised against the backdrop of its arguably geopolitically potent location, its emerging petroleum industry, coupled with the increasing global interests in Guyana.
Guyana can play a pivotal role that fosters greater regional and continental integration of the Caribbean and South America respectively within the global economy.
Towards that end, Guyana can lead a regional integration agenda aimed at strengthening South-South cooperation in South America, Latin America and the Caribbean through the auspices of Caricom and the other regional trading bloc as mentioned herein, within the framework of leveraging the country’s development needs. Within these respects, for example, Guyana’s geographic location in South America, which places it at an advantage in terms of access routes to the rest of the world, is an important factor that has to be considered in the deep-water harbour project and the Brazil-Guyana road link project. These two projects alone can integrate more South-South cooperation, where opportunities would open up for not only Brazil’s goods to pass through Guyana, thereby creating new industries and commerce, but for other countries’ goods in South America to pass through Guyana to the rest of the world’s markets.
As a region and a sub-continent together, the political leaders of South American countries need to start examining the need for a South American Development Bank to focus on large scale development projects in the member states. In the long term as well, the need to connect the continent through the construction of railways would be necessary if the leaders of South America are serious about deepening integration of the continent and to cement its role in regional integration in order to conduct business with the rest of the world. To this end, Guyana can become a regional hub for shipping and commerce.
Importantly, Guyana needs to address its human capital deficit, infrastructure deficit, and high energy cost. By addressing these issues, where the paper discussed to some extent ways in which the country can reduce the cost of energy, the types of projects thereto, and the infrastructure deficit presenting opportunities for large scale investments, these of themselves can be pioneer developmental strategies wherein Guyana leads the regional integration agenda. Guyana does not only have oil as its attractiveness to foreign investors and underpinning its geopolitical importance, but it is also endowed with an abundance of natural resources, including arable agricultural land and potable water. The Caribbean Community alone imports US$ 10 billion in food annually, a significantly important market where Guyana can tap into the opportunity to supply these markets.
Guyana is well positioned to become the food basket of the region. As a strategy to bridge the human capital deficit gap, a structured immigration policy can be put in place to attract the skills and expertise needed to advance the country’s development agenda through these regional associations as well. And lastly, there is a need for regional capital market development. The need for creative tools and innovative financial products that would align with these development goals for the region needs to be examined as well from a regional and global perspective, and Guyana could be the leader to position itself in the region to drive these regional integration goals.
About the Author:
JC. Bhagwandin is a financial and economic analyst; and an Adjunct Professor at Texila American University, Business College. The views expressed are exclusively his own and do not necessarily represent those of this newspaper and the institutions he represents. For comments, send to [email protected]