Under pressure: Govt releases belt and road MoU inked with China

After mounting pressure, the Government of Guyana through the Foreign Affairs Ministry has finally released the Memorandum of Understanding (MoU) with the People’s Republic of China to execute loan-financed projects under the Belt and Road Initiative (BRI).
The particulars of the MoU state Guyana is expected to engage in bilateral cooperation with the People’s Republic of China. This means the two countries will be carrying out joint plans and pilot programmes in several key areas.
According to the MoU, these areas include economic and technological exchange and joint research programmes. In addition, there is expected to be information sharing between the two countries, as well as capacity building, exchange of personnel and training opportunities.
Part five, section two of the agreement also speaks to cooperation on areas of education, culture, health, tourism and other relevant fields.
The MoU also details that public/private partnerships and free market principles will apply between Guyana and China. In a publication earlier this year, the World

Bank had noted the benefits to countries that open up their trade.
According to the World Bank, this often leads to economic growth, improved productivity and brings down the price for goods and service through increased competition. Of course, there are some drawbacks to a free trade economy.
One of the most obvious ones is that it may crowd out domestic business. Besides the economic threat to local competitors, there is also a need to replace revenue that may be lost from waiving of import tariffs.
Besides the areas of cooperation, the MoU stipulates that it will have a lifespan of three years. The agreement, according to the document, automatically renews for another three years when it ends, indefinitely, unless terminated.
The MoU also details that termination can only occur with a written notice of at least three months through diplomatic channels.

MoU
The MoU was first signed on July 27, 2018, between Foreign Affairs Minister Carl Greenidge and Chinese Ambassador to Guyana, Cui Jainchun. It falls within the framework of China’s Silk Road Economic Belt and the 21st century Maritime Silk Road, more commonly referred to as the Belt and Road Initiative.
The signing was done at the Chinese embassy in the presence of President David Granger, Prime Minister Moses Nagamootoo and Ministers of Government. The signing was also done in commemoration of the 47 years since the establishment of diplomatic ties between the two countries.
The accord is expected to enhance cooperation in five main areas, namely: policy coordination, facilities connectivity, trade and investment, financial integration, and people-to-people interaction. Public infrastructure is also expected to be a major focus under this agreement.
In July last year, members of a ministerial team from Guyana visited their counterparts in neighbouring Brazil, during which it was agreed that both countries would provide financial resources for the engineering and design of the Linden-Lethem road.
It was reported that the two countries would be working closely with the People’s Republic of China to access billions from the China Select Fund to complete this critical piece of infrastructure that holds great potential in terms of integrating the two countries and improving trade between the neighbours and the Caribbean.
Minister Greenidge also noted that another major project that can benefit from this MoU with China is the new Demerara River Bridge, which Government is working on constructing to replace the Demerara Harbour Bridge, which has outlived its 10-year lifespan.
The Belt and Road Initiative refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road, a significant development strategy launched by the Chinese Government with the intention of promoting economic co-operation among countries along the proposed Belt and Road routes.
The initiative has been designed to enhance the orderly, free flow of economic factors, and the efficient allocation of resources. It is also intended to further market integration and create a regional economic co-operation framework of benefit to all.
The initial focus has been infrastructure investment, education, construction materials, railway and highway, automobile, real estate, power grid, and iron and steel.
Already, the Belt and Road Initiative has been listed as one of the largest infrastructure and investment projects in history, covering 73 countries, now a total of 74 with the addition of Guyana, as well as 28 international organisations.