As we await the Court rulings on the consequential orders on July 12, 2019, a clearer picture in terms of the future trajectory of the Guyanese economy will then be derived; that is, its political and investment landscape. Following the Caribbean Court of Justice (CCJ) ruling on June 18, 2019, a number of associations— private sector bodies and the diplomatic community, including the US Ambassador in Guyana, have come out and issued statements for all parties to respect the Court’s ruling and to arrive at consensus in respect to the consequential orders.
Notwithstanding, the President and the Opposition Leader’s positions on the matter are in stark contrast, which hints that it is unlikely that the two major political parties will come to any form of consensual agreement on the way forward. In this regard, the President is demanding for there to be House-to-House registration to manufacture a new voters list which will be ready only until November 2019, while the Opposition Leader is demanding that this is not necessary and that there are other methods of sanitizing the voters list. The Opposition Leader is pushing for elections to be held within three months. As such, it would appear that the CCJ may have to deliver its own orders, which it is slightly adamant to so do as it has pleaded for the political leaders to make this thing work on the basis of a marriage between principle and practicality.
Meanwhile, the private sector and investors are cautiously optimistic that the political directorate will come to some compromise. It is a given that everyone agrees that there needs to be fresh elections, in which case the people of Guyana and investors alike are therefore hopeful that political stability will be restored. However, until such time, the business climate, with the exception of oil and gas related activities—which remain unaffected by the political circumstance— other businesses are closely monitoring the situation as business activities are dwindling.
The Government, against the backdrop of the No-Confidence Motion, is argued by the political Opposition as they are holding on to power illegally and thus cannot expend public monies for any major projects or contracts during this period. The political Opposition has already signalled that it is not extending the life of the Government, which can be done by way of a two-thirds majority vote in the National Assembly.
The consequences of a growing political uncertainty and a weakened state
It can be argued without much doubt that given the current political climate with a collapsed Government in place, Guyana can be characterised as a weak state and growing political uncertainty. This is especially the case since in order to extend the life of the Government until elections can be facilitated, it requires a two-thirds majority vote in the National Assembly. The Opposition, on the other hand, has already indicated that it is not inclined to so do. Moreover, it was noted in the press that the Government is pushing ahead with Budget 2020 preparation, despite the current political and constitutional circumstance—a development that is perhaps unfortunate for a democratic regime. These events can fundamentally undermine the principles of a democratic system.
Studies in other countries have shown that for there to be increases in private investment, it is necessary that a favourable economic climate be provided in such a way that the investor becomes optimistic towards the expected growth of the economy. Secondly, it is emphasized that democracy is very important for a nation to sustain investment. Third, instability in politics deters investment plans. Scholars have argued that there should be a fair play in politics and everyone should have fair opportunity. Moreover, long term policies with certainty in their implications should be preferred over short term policies to achieve stable and sustained investment and as a result— stable economic growth, which is the ultimate goal of economic policies pursued by Governments.
Finally, this author wishes to take the opportunity to urge our politicians on both sides to demonstrate some level of political maturity and that this is the time to compromise in order to pull Guyana out from being viewed as a weak state and growing degree of political uncertainty. These are not good signs for Guyana at this point, especially against the backdrop of the emerging oil and gas industry as the country prepares for commercial oil production in less than a year’s time.