Editorial | Go for opportunities in Guyana
Three years ago, this newspaper urged Jamaican firms and policymakers to begin seriously prospecting for opportunities in Guyana, one of our partners in the Caribbean Community (CARICOM). The evidence, though anecdotal, suggests that few took our advice. They should.
For the better part of two decades, Guyana has been among the region’s best-performing economies. It has grown consistently for the past dozen years, averaging nearly four and half per cent a year, which is in the ballpark of what it will achieve in 2019. Though building on a low base, that level and consistency of growth is nothing to sniff at. It indicates an increasing consumption of goods and services, which somebody has to supply.
Guyana, however, is on the cusp of a major take-off. The International Monetary Fund (IMF) projects that its economy will balloon by approximately 86 per cent in 2020 to just under five per cent the following year, then jump by 20.6 per cent and 26.3 per cent, respectively, in 2022 and 2023.
The country’s gross domestic product (GDP), currently at around US$4 billion, will be nearly four times as large, at US$15 billion, by 2024. The Guyanese economy then will be slightly smaller, a bit over five per cent, than what Jamaica’s is today. But, with a population less than 30 per cent of Jamaica’s 2.7 million, they, on a per capita basis, will be substantially richer than us.
What will make the difference is the discovery of oil in Guyana’s offshore seas. When in 2016 we suggested that Guyana would be the region’s burgeoning economy, ExxonMobil had just doubled the expected output from Liza-2 oilfield, which its partner with Hess Oil and China National Offshore Oil Corporation will have to exploit, to a projected 1.4 billion barrels. Since then, there have been other major oil finds, and prospecting continues to look promising. Indeed, oil production is expected to reach 750,000 barrels a day within five years, with the industry accounting, the IMF estimates, for around 40 per cent of the economy.
Guyana won’t, by itself, be able to provide all the expertise and skills required for its emerging petroleum sector, especially during its rapid growth phase in the next decade or so, or to meet the other demands of a rapidly growing economy. Much of these will have to be imported, with a far bit, we expect, coming from developed countries.
Opportunities for CARICOM partners
But there are also opportunities for the country’s CARICOM partners, particularly those with something to offer, if they position themselves to use the facilities contemplated by the community’s single-market regime. In this regard, Guyana’s relatively close neighbour, Trinidad and Tobago, with its expertise in oil and gas, would appear to have an early call on the Guyanese opportunities.
However, as we noted in 2016, there are prospects for Jamaican institutions, such as the Caribbean Maritime University and the University of Technology offering training to Guyanese, or providing Jamaican graduates, to work in areas where specialist skills will be in demand, including engineers of all types, surveyors and welders, and other areas of construction.
Further, Jamaica had developed a relatively sophisticated sector in financial advisory and intermediation services, which are likely to be in demand as the Guyanese government goes about its plan, if it maintains its undertaking, of creating a sovereign wealth fund, which it hopes will manage some of the US$300 million a year it expects to earn in profit-sharing and royalties from the oil industry.
Indeed, even as they invest in infrastructure and social service, creating such a fund, and ensuring it is properly managed, is one promise the Guyanese government should keep, and on which they should take our advice on what not to do. We can tell them about our experience with the US$4 billion earned from the bauxite production levy over four decades, and of the little we have to show for it.