Dear Editor,
It is an exciting moment for Guyana. APNU/AFC has been voted out of Government, and the PPP now occupies office. The excitement that the country is experiencing is not simply because APNU/AFC is no longer in power, good as that development is. As history proves repeatedly, a new party in power does not guarantee the actualization of people’s aspirations. What matters is the trajectory of the party that comes to power.
That new vision and path must include everything one can conceivably imagine: transparency, accountability, equality, reform, inclusion and incentives, to name just a few. Without these, Guyana will never be able to leverage its human and natural resources to make it a prosperous nation.
Nothing is more indicative of the present Government’s pre-eminent focus on these prerequisites for development than the announcement this week that the biggest investment in the history of Guyana is likely to happen soon.
From what has recently transpired, the sum of over US$200 billion will be lent to, or invested in, Guyana for developmental projects. This unprecedented development will play a pivotal role in the transformation of Guyana from what it is today into an economic giant. As at 2019, Guyana’s Gross Domestic Product (GDP) was US$4.28 billion. With this incredible amount of money coming to Guyana, one can only imagine the gargantuan impact it will have on Guyana’s economy.
Many of the goods and services that are today excludable will become nonexcludable. Things that are now inaccessible to most of the citizens of Guyana will be accessible in the not-too-distant future. Poverty, so rampant under the APNU/AFC Government, will be dramatically reduced. Several factors conflate to make this outcome possible.
Investments to the tune of US$200 billion are inherently transformational. We know of many countries that are endowed with enormous natural resources, yet they are poor; some mired in poverty. Partly responsible for this unfortunate situation are the lack of foreign direct investments – purchases of assets in a country by foreign firms, and the nonavailability of foreign loans.
The outcome of this development would be the emergence of a robust economy, as more jobs, with attendant spending power, would become available across all sectors. However, foreign investments, or loans by themselves, cannot trigger drastic economic growth. Seeking investment opportunities cannot be divorced from the political culture of the specific country. It presupposes the existence of a healthy political culture. A healthy political culture is one that pre-eminently values the rule of law, “a system in which all individuals and groups, including those in Government, are subject to the law, irrespective of their power and authority.”
One of the foremost considerations for foreign investors intending to invest in a country is the extent that the rule of law exists. Contracts and other legal arrangements that are integral to any form of business arrangement cannot be honoured except where the rule of law is paramount. The rule of law guards against arbitrary intervention, against the breaching of an arrangement without the culpable party facing legal consequences. In other words, investors’ confidence in the legal system underpins any decision to invest in that country. Investors’ confidence is not, however, tied only to the guarantee that agreements will be honoured. This is important, but it does not constitute the totality of considerations that must be reckoned with. Investors make decisions along a continuum of events, past and present. Internal conflicts and violence, and the nature of them, are decisive factors.
Investors must be satisfied that systems are in place to constrain the tendency toward conflicts and violence.
In Guyana, this is particularly important. Guyana is notoriously known for the eruptions of violence during elections that not only claim lives, but also extensively damage properties and businesses. It is also prominent in another way: the egregious practice of one of its major political parties to peddle lies and spread provocative ideas about the other political parties, especially about the PPP.
This can create serious setbacks for the country.
However, confidence in the PPP Government to create a stable political environment for both local and foreign investors far outweighs any apprehension they may have. This contrasts sharply with the period that APNU/AFC was in office. Their tenure produced intractable problems for the nation. However, despite the seemingly unsurmountable problems that confront the nation, Guyanese in the diaspora and foreigners are coming to the shores of Guyana in a manner that we have not seen before.
When representatives from the US International Development Finance Corporation, the US Treasury and the US State Department, the National Security Council, Homeland Security and the Export and Import Bank visited Guyana earlier this week for talks on investment opportunities, they did so against the backdrop of a new political culture, the underpinning of which is the rule of law.
Because the rule of law is indistinguishable from the concept of fairness, accountability and transparency, these entities have shown a deep keenness on partnering with Guyana to maximise the usage of its resources for the economic prosperity of its people.
The announcement this week represents a turning point in Guyana’s economic history.
Sincerely,
Sheik Ayube
