The notion of a deep-water port and a road linking Brazil and Guyana is nothing new. The conceptualisation of this initiative was developed and publicly discussed a long time ago. Hypothetically, these are indeed good developmental initiatives to transform the economic development of any small developing nation like Guyana.
With approximately 80 per cent of the world’s merchandise trade carried by ships, maritime transport remains by far the most common mode of international freight and transport. It is the backbone of facilitating international trade, offering the most economical and reliable method to move goods over long distances. Ships can carry long volumes of merchandise and use free highways in the seas, requiring only infrastructure developments at the seaports.
In Guyana’s case, we may have to build new seaports in addition to effecting infrastructure developments at existing seaports. The performance of ports is an essential element of overall trade costs for all countries (AfricanBank Development Report, 2010).
Against this background, it is widely recognised that an efficient transport system that facilitates the economical movement of goods, resources and people is vital for economic growth, and by extension globalisation. In a historical context, during the 19th century, improvements in transport and communications were major contributors in the expansion of world trade and globalisation. Communications continued to be revolutionised in the 20th century with innovations such as cars, aero planes, large bulk carriers, container ships and pipelines for oil and gas. The introduction of railways and improvements in roads caused land transport costs to fall by 90 per cent from 1800 to 1910; while the real cost of ocean shipping fell by 80 percent between 1750 and 1990. By 1980, the real cost of air freight had fallen by approximately 75 per cent from its level in the 1930s. The increased participation of developing countries in world trade “would not be possible without global shipping networks, port reforms, and investments in transport infrastructure as well as trade and transport facilitation”, according to UNCTAD.
Moreover, there exists “a virtuous cycle wherein better transport services lead to more trade, and more trade helps to encourage improved transport services”. By the beginning of the 21st century, the ‘tyranny of distance’, while perhaps not completely tamed, was greatly diminished (Tull, 2006).
A brief overview of the economic impacts of deep-water ports in U.S (Georgia)
The statewide economic impact of Georgia’s deep-water ports in fiscal year 2011 includes (figures are in US$):
• $66.9 billion in sales (9.5 per cent of Georgia’s total sales);
• $32.4 billion in state GDP (7.8 per cent of Georgia’s total GDP);
• $18.5 billion in income (5.2 per cent of Georgia’s total personal income);
• 352,146 full and part time jobs (8.3 per cent of Georgia’s total employment);
• $4.5 billion in federal taxes;
• $1.4 billion in state taxes;
• $1.1 billion in local taxes
Each year, ports and waterways carry more than 2 billion tons of cargo. Not only are ports crucial for the exportation and importation of goods for international trade, but also for transporting of goods domestically. Another major economic benefit that ports provide to countries is the creation and maintenance of jobs.
Though space precludes a more comprehensive review of empirical studies of how seaports — or deep-water ports in particular – contribute to the economic development of countries around the world, much evidence nonetheless exists to corroborate and/or validate such notion that deep-water ports do aid in massive positive economic spinoffs to countries.
Against this backdrop, the road linking Guyana and Brazil together with the deep-water port project could significantly transform Guyana’s economy in terms of job creation, reduction of poverty for its citizens, more revenue in the form of taxes for the Government, better quality of life and standard of living for its people, the creation of new industries and new business and economic opportunities, and the list goes on.
Hypothetically, depending on the location where the port might be developed, when one looks at the geographic position of Guyana on the South American map, literally kissing the Atlantic Ocean, could Guyana become the gateway to facilitate the transport of goods from other South American countries through Brazil and a deep-water port? If such an idea is proved to be possible and economical, then one can only imagine the sea of economic prosperity which these developments could potentially bring to Guyana.