Dear Editor,
The PetroCaribe deal that facilitated the export of rice to Venezuela as a form of payment for fuel imported from Venezuela is an avenue that should be pursued with the highest priority. The expanding foreign currency crisis in Guyana is in no small way linked to the unilateral cancellation by Venezuela of the PetroCaribe Agreement between Venezuela and Guyana. Currently, Guyana must pay to the Petroleum Company of Trinidad and Tobago Limited (PETROTRIN) the full price of its oil purchase in United States dollars in advance of receiving the shipment.
Guyana has, from the latter part of 2015, been unable to source significant amounts of its fuel imports at discounted prices, and obtain generous credit facilities from Venezuela. This includes an initial moratorium of two years on the financed portion of the fuel purchase, with the financed portion of fuel import ranging from 40% to 60% of the purchase price of fuel, and the financed portion was repayable over approximately twenty-three years. 
Also, the PetroCaribe Rice Offset Arrangement created a boom to our economy by generating increasingly high levels of rice exports at premium prices, where close to 500,000 tonnes of rice were exported by the end of 2014; employment opportunities increased in the rice industry and its many sectors; economic prosperity was created for many of our rice farmers and millers; and the Guyana economy was boosted by this key driver.
The economic downturn we are now experiencing could worsen exponentially.
The sugar, rice and forestry industries are haemorrhaging, and revenue from the huge oil find in offshore Guyana will not be received by Guyana until 2026, based on recent media reports and assuming anticipated oil production is not sold by the Guyana Government at discounted values.
Regarding the revenue-sharing arrangement with ExxonMobil, based on comments in the media attributed to Hon. Minister Raphael Trotman, it was clearly stated that Guyana will not receive any revenue from production until ExxonMobil has recovered its investment cost. The investment cost is presently projected to be US$6,000,000,000 (US$6B) by the time production commences in 2020. Assuming production of 100,000 barrels per day starts in 2020, at current market prices, the US$6 Billion in exploration and production costs will not be repaid until 2026. Thus our Hon. Finance Minister must look to the most likely economic opportunities that would revitalize the economy over the next several years.
Recently, the Democratic Labour Party of Barbados reached out to former Barbados Prime Minister Owen Arthur, who held the post of Prime Minister from September 1994 to January 2008, appointing him on March 1, 2017 as Chief Economic Advisor to the ruling Administration. The Right Honourable Owen Arthur is from the Barbados Labour Party, currently the major opposition party in Barbados.
My recommendation is that the Guyana Government appoint two of our former Presidents – Donald Ramotar and Bharrat Jagdeo, who are both known to have very good relationships with the President of Venezuela, Hon. Nicolás Maduro – to reactivate the Guyana/Venezuela PetroCaribe Agreement with the rice offset component. Sugar might even be added as an offset option to the fuel imported.
The economy of our neighbour Venezuela is not going through the best of times; however, Venezuela has oil in abundance, and their oil reserves are the largest proven oil reserves in the world. The reinstatement of the PetroCaribe and Rice Offset Agreements between Venezuela and Guyana would certainly allow Guyana’s economy to right itself and halt the decline in our foreign exchange rate, among other positive benefits.
Let us unite in our efforts to achieve the greatest benefit for all Guyanese. We are capable enough to diplomatically deal with Venezuela’s claims to western Guyana and large parts of Guyana’s Atlantic waters, while we seek economic trade arrangements with Venezuela that would benefit both countries.
Sincerely,
Nigel Hinds
