Sun | May 22, 2022

Editorial | Persaud, Guyana and inattention

Published:Tuesday | January 25, 2022 | 12:05 AM

GUYANESE Dr Yesu Persaud’s death last week, at the age of 93, did not command too much attention in Jamaica. Not even the island’s private-sector institutions seemed to notice much. There was no significant statement of his seminal contribution to industry and commerce in the Caribbean.

Which is sad. For Dr Persaud did much – for Guyana and the Caribbean. The inattention, however, is hardly surprising. Jamaica does not look much to Guyana. This is a mistake. We may be passing up economic opportunities. But first about Dr Persaud and why he is significant to this region.

Dr Persaud was a founder of Guyana’s Institute for Private Enterprise Development, a not-for-profit organisation that provides training and loans to small and micro businesses. He was the conceptualiser and a founder of the Demerara Bank, Guyana’s first indigenous commercial bank.

For several years, Dr Persaud was a fellow at University of Warwick’s Centre for Caribbean Studies, which, in 2010, was renamed in his honour. He also had a long stint as chairman of the Caribbean Council for Europe (the successor to the old West India Committee) that promotes the region’s business and trade agenda with the European Union (EU). He was a trustee of Caribbean Latin American Action, the group that used to hold its annual conferences in Miami, promoting economic and other relations between the United States and Latin America and the Caribbean.

But Dr Persaud’s most seminal contribution to the English-speaking Caribbean was through the region’s rum industry. He was a key architect in its transition from exporting rum in bulk, primarily to Europe, for, as he put it in an interview in the early 1990s, “building equity in our brands”. But before that, he conquered Guyana’s rum sector and led its consolidation into a modern manufacturing enterprise.

In the mid-1970s, Dr Persaud became the head of Diamond Liquors Ltd, one of the firms that emerged from the old British sugar/rum companies that operated in pre-independent Guyana but left in the face of Forbes Burnham’s socialist policies, including the nationalisation of large swathes of industry. Although he never shared Mr Burnham’s ideology, Dr Persaud, in 1983, engineered and oversaw the merger between Diamond and another state-owned company, Guyana Distillers Ltd, both of which bottled branded products for the Guyanese market. The new entity became Demerara Distillers Limited (DDL).

The DDL was privatised in the 1980s, which coincided with Dr Persaud’s push to take the company’s brands to the global market. Those efforts accelerated in the early 1990s, at a time when he was also chairman of the West Indies Rum and Spirits Producers’ Association (WIRSPA) and advocating the philosophy of ‘equity in brands’ for regional rums. At that time, only Puerto Rico’s Bacardi (a brand whose ownership was contested by Cuba) was recognisable outside the Caribbean as a global rum brand.

“Together with Jamaica’s Evon Brown (National Rums) and Patrick Mayers of Barbados, Dr Persaud played a pivotal role in obtaining funding for the Caribbean Rum Sector Programme,” WIRSPA recalled in a tribute. “This programme allowed many CARIFORUM rum producers to substantially benefit from upgrades to their facilities, training and marketing, to transition from low-margin bulk rum to high-value branded products.”

The association, significantly, also made this point: “The 1992 launch of El Dorado 15 (by Demerara Distillers) is widely seen as a pivotal moment in rum’s transition to a premium spirit.” The rest, the saying goes, is history. Except that is not all, with respect to Dr Persaud’s relation with, and influence on, Jamaica’s rum industry.

In 2010, three years before his retirement as executive chairman of DDL, that company took a one-third stake in Jamaica’s National Rums that manufactures under the Monymusk brand, which brings us back to the matter of paying attention to Guyana.

Most projections are for Guyana’s economy to grow by 25 per cent this year , multiples of what is expected of its Caribbean peers. Growth was around 21 per cent last year. In 2020, it was over 43 per cent, or half of what was projected before the onset of the COVID-19 pandemic. At this rate of expansion, Guyana’s GDP will double in another three to four years, bringing it on par with Jamaica’s but with a quarter of this country’s population.

Indeed, in 2020, Guyana’s per capita GDP was around US$9,250. Ours, according to the World Bank, was a bit over US$4,500, having slipped from US$5,308 in 2007, just before the Great Recession. A little over two decades ago, in 2000, GDP per head in Jamaica was US$4,481. Guyana’s was US$3,851.

OIL A BIG BOOST

What has made this dramatic difference in Guyana recently is the discovery of oil offshore. In the Stabroek Block alone, some estimates place the reserve in the region at 13.6 billion barrels of oil equivalent. Oil production is already up to 120,000 barrels per day (bpd) and is expected to reach 400,000 bpd by 2025. But even before its exponential expansion because of oil, the Guyanese economy was moving along at a fair clip - 4.4 per cent in 2018 and 4.5 per cent in 2019.

Since 2016, not long after the announcement of the first big oil find, this newspaper has been urging Jamaica’s businesses, training institutions and professional service providers to pay attention to Guyana. An economy with that pace of growth, and given the peculiar circumstances of Guyana, is likely to be in demand of goods, skills and services that cannot be supplied domestically. Jamaica may have some of them. But we have to know what Guyana’s supply deficits are, which will not happen with inattention, or the assumption that the Guyanese market will be coming in search of us.

Next door to Guyana is Suriname, which, like Guyana, is a fellow member of the Caribbean Community. They, too, have made significant discoveries of oil. That economy, too, will grow. Is Jamaica paying attention?