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Chapter 6:
Reviving Our Economy:
Competitive Industries
Lil finger point to de big thumb and sey nah guh.
(Those who are in the lead are in a
position to give warning and advice.)
Guyanese proverb
Guyana’s Economy Today
hen
I launched CariAir Incorporated in Guyana in 2004,
my goal was to contribute to two industries that had
been neglected for a variety of reasons: turning raw
products into finished goods and the regional
aviation market. My hope continues to be that as
this initiative provides jobs for our unemployed, it
will expand to become one of the largest companies
in Guyana—in other words, a “win-win” situation in
which everyone profits.
To put this initiative into a broader
framework, I did not wait for government or
financial experts to determine my course of action.
Instead, in my own field of expertise, I acted.
And this is a general principle that
applies to every one of us—businessman,
schoolteacher or manual worker: we cannot leave the
welfare of Guyana up to “experts.”
In a sense, each one of us is an
expert, because each one of us has his or her unique
experience of Guyana. And when Guyana is in a state
of economic decline, as is unfortunately the case
today, each one of us is responsible to get actively
involved.
As inflation rises and robs
individuals of their earnings and savings, Guyana’s
political entities find themselves unable to develop
a new strategic direction. Rather than take
necessary steps, such as diversification, they
continue to engage in rancorous in-fighting. In such
an atmosphere, “experts” are not going to step
forward and solve Guyana’s problems. And so every
one of us, as a private citizen, must actively
participate in creating a national ideology and
direction.
Let us begin by taking a look at
Guyana’s economy today, beginning with an overview
of the chief economic sectors, such as agriculture,
mining, and so forth. Then the problems that each
sector faces will be presented, and finally, many
suggestions will be proffered as to how Guyana’s
ailing economy can be set to rights.
Agriculture
Fully one-third of Guyanese workers
are involved in agriculture. This major activity
accounts for a quarter of Guyana’s gross domestic
product.
It should be noted that there is an
intangible aspect to agriculture as well. Guyanese
farmers are independent, hard-working,
entrepreneurial men with faith in their families and
their land. In such men, the spirit of Guyana
shines brightly. It is this spirit that we must
cherish and nurture, and we do so by not allowing
errant economic practices destroy their life-work.
Guyana’s two most important export
crops are sugar and rice. In addition, coconuts,
coffee, cacao, citrus fruits, corn, manioc and other
tropical fruits and vegetables are grown for
domestic consumption.
Most farms are located on Guyana’s
coast, where the alluvial soil is rich and fertile.
At present, efforts are being made to increase the
amount of land available for cultivation through
reclamation projects, and success in this endeavour
will be warmly welcomed.
Livestock
Large areas of rough pasture exist in
the interior savannas of Guyana. Here, farmers raise
substantial numbers of cattle, hogs, sheep and
chickens, whose products are mainly directed to the
domestic market.
Fishing
Some Guyanese earn their living
through fishing and shrimping on the Atlantic
coastal waters, and there is ample room for
expansion of this activity, without fear of
depleting the local supply.
Forestry
Working in Guyana’s interior, the
forestry industry is chiefly involved in the
harvesting of hardwood, which is used in
construction and furniture-making as well as for
fuel.
Mining
Mining is a major Guyanese industry
in which 10% to 15% of the labour force is
indirectly involved. Guyana’s most important mining
product is bauxite, followed by gold, diamonds (for
industrial use) and manganese.
Manufacturing and Energy
Manufacturing is limited to
processing bauxite and the production of a limited
number of commodities: foodstuffs, beverages,
construction materials, clothing, soap and
cigarettes. There is room for much diversification
and expansion.
Oil
Now that API oil has been discovered
in the Takatu Basin, Guyana may become an
oil-producing state. At present, four companies are
exploring for petroleum in Guyana: Exxon-Mobil,
Repsol, Country Guyana Ltd., and CGX.
Eco-Tourism
Guyana is a nation blessed with a
wealth of natural resources in its vast and pristine
rainforests. In these rainforests live a profusion
of rich and rare flora and fauna, such as the harpy
eagle (the largest in the world) and the toco
toucan. Guyana’s interior encompasses a variety of
eco-systems. And it richly deserves its fame as “a
land of many rivers,” waterways and waterfalls,
including the spectacular Kaieteur Waterfall, five
times deeper than the Niagara Falls.
Until now, this land has been
exploited solely for its physical resources:
bauxite, gold, and so forth. And in the process
damage has been inflicted upon the land and upon its
residents, the Amerindians. But in recent years, an
eco-tourism economy has begun, and revenue is being
earned from foreign tourists eager to explore
Guyana’s great interior. There is still much room
to expand this eco-tourism, both for the
adventure-seeker and for the scientist.
In Sum
This brief list of Guyana’s resources
makes it clear that Guyana possesses a potential
plenitude. We have been given a considerable
challenge: we live in a country that is experiencing
want, yet which is placed in the midst of a wealth
of natural resources. Let us match those resources
with the resources of our spirit, and in so doing
create a true economic miracle.
The
Problems
Agriculture
griculture as a whole suffers
from a number of debilitating weaknesses. Among the
factors inhibiting agricultural growth are:
! Weak support
services.
! Deterioration
of drainage and irrigation facilities.
! High-cost
farm-to-market infrastructure.
! Insecure land
tenure.
Let us now have a look at each of
the major crops that Guyana produces.
Sugar
Sugar constitutes Guyana’s single
largest source of foreign exchange, and employs more
workers than does any other Guyanese industry.
However, the sugar industry faces
major challenges. Among these are:
! Low world
prices for sugar, which are continuing to decline.
! Antiquated
factories, which impede the achievement of lower
cost production.
! The probability
that preferential quotas in the major European
markets will come to an end.
Without continued preferential
quotas, Guyana cannot ensure the sustainability of
its sugar industry in an international, competitive
marketplace. Although the sugar industry has been
bolstered by long-term funds, the last such
significant contribution was made more than a decade
ago, and, unless the government changes its
agricultural policies, the prospect of attracting
more capital is unlikely.
Therefore, Guyana must realize
now that its once profitable sugar industry is
losing its strength, probably irreversibly, and
Guyana must substitute other export activities in
its place. This is just one of the many reasons why
Guyana must diversify its economic production.
Rice
The growing of rice is a central
Guyanese industry. Like the sugar industry, its
well-being is vital to the health of the nation.
Rice provides for:
! The solvency
and well-being of many rural communities.
! Livelihood for
rural families.
! The wherewithal
to give their children an education and a hopeful
future.
! Land value.
Guyana has received preferential
market treatment in the European Union, as part of
the African-Caribbean-Pacific (ACP) group of
countries. However, such treatment cannot be relied
upon to continue. In addition, given the fact that
rice production is labour-intensive and daily wages
in Guyana are two to three times that of the
low-cost Asian rice-producing states, the long-term
competitiveness of Guyanese rice production cannot
be relied upon.
Thus the future of the rice
industry is very uncertain. Despite that, however,
Guyana lacks a planned and coordinated approach to
maintaining and enhancing the rice industry.
In addition, Guyana has neglected
its drainage and irrigation infrastructure, which
has brought the rice sector to a state of crisis and
done irreparable harm to the lives of many Guyanese.
Unless Guyana rectifies these
weaknesses and faces the fact that (like sugar) the
rice industry will probably be weakening, the rice
industry is likely to reach a crisis point from
which it might not be able to recover.
Forestry
More than 75% of Guyana is richly
forested. Most of this land is state-owned, and
nearly half is allocated for commercial forestry
purposes.
However, before forestry
development can become sustainable, a number of
significant impediments must be overcome. These are:
! Problems due to
government regulation:
" Low forest-use
fees.
" Short
concession periods.
" Provision of
one-year cutting permits.
! Problems due to
industry limitations:
" Lack of
industry experience in sustainable management.
" Inadequate land
use planning.
" Most saw mills
are old and outdated.
! Problems due to
lawlessness:
" Roving,
chainsaw millers frequently poach timber from formal
operations and sell it at low prices, undercutting
legitimate businesses and paying little or no forest
fees and taxes.
To date, in response to such
problems, Guyana has implemented a variety of
reforms in order to foster sustainable forestry
development, such as:
! A tree tagging
system.
! Improved
monitoring and surveillance by the Forestry State
Commission.
! The
transformation of the Forestry Commission into a
self-financed, professionally managed and operated
organization.
Mining
Guyana mines principally bauxite,
gold and diamonds. The mining industry faces a
number of impediments, chief among them being:
! Low recovery
rates.
! Paucity of
geological data.
! High costs of
river-based shipping.
Additionally, Guyana’s mining
activities have been environmentally harmful.
Mining effluents frequently are disposed of in local
rivers, resulting in sedimentation and mercury
contamination problems. In 1995, Guyana suffered
one of the world’s worst mining disasters, when
three billion litres of cyanide spilled into
Guyana’s largest river, the Essequibo. Mining sites
also encroach on native Amerindian lands and its
pollution destroys their homes and health.
Therefore, one major challenge that the mining
industry faces is how to continue the industry in a
manner that is both profitable and environmentally
responsible.
Bauxite
Guyana was a major world supplier
of high-quality bauxite, which is used in the
refractory, abrasive and chemical markets. However,
with the entry of new competitors—particularly
Brazil and China, whose product is both of higher
quality and lower-priced—Guyana’s market share has
been slipping. As a result, Guyana’s bauxite
industry has been experiencing financial losses for
the last two decades.
At present, Guyana’s bauxite
mining company, a privatized corporation that is the
result of an operational merger of Aroaima and
Bermine, is experiencing two major challenges:
! It is operating
at less than half of total capacities, and is
dependent for its continued existence upon intensive
government subsidies.
! Its two
principal buyers are reducing their purchases
substantially.
Gold
Gold is Guyana’s second-largest
generator of export earnings, after sugar. Cambior
(which runs Omai, the country’s largest existing
gold mine) is engaged in significant privatization
restructuring, which bodes well for the efficiency
and profitability of this industry.
However, Omai is expected to
close its operations, as reserves are expected to
run out in 2005. Therefore, the future of gold is
uncertain.
Diamonds
Diamond production has increased
dramatically in the last ten years, producing
alluvial, industrial-grade material. However, Guyana
has not been able to produce diamonds of a higher
grade to be used in jewellery, a much more lucrative
field.
Electricity
Guyana Power and Light (GPL),
Guyana’s sole power industry and one of the most
important industries in the country, is in the
process of collapse, for reasons cited in the
chapter on infrastructure (i.e., rising costs and
lack of sufficient revenues).
This collapse will have a
significant negative impact on Guyana’s business
environment. For instance, when GPL institutes a
daily two-hour blackout, which results in two hours’
loss of consumer spending, this can significantly
damage the earning power of small business owners.
Water-Based Industries
Guyana is justly famed as “the
land of many waters,” for its rich network of rivers
and streams. However, with the exception of fishing
and shrimping activities and shipping, Guyana has
made no use of this precious resource.
Guyana can and should use water
for:
! Hydro-energy.
! Aquaculture.
! Drinking water.
In
Sum
Guyana’s natural resources lie before us. Yet we
have not been able to make adequate use of them. We
are still using archaic and rapidly aging
technologies, and our political convolutions have
hamstrung our industries.
Accomplishments begin in dreams. So now let us dare
to dream—and work towards the fulfilment of those
dreams.
Modernising Our Industries: The
Heart of Our Economy
“Guyana Is Open for Business”
y mission is to
turn this slogan into a reality.
But how?
First and
foremost, we must set aside political differences
and join together for the sake of Guyana and the
well-being of our children and our children’s
children.
Then:
We must attract
local and foreign capital investment.
We must broaden
our economy so that it does not depend up a narrow
range of industries such as sugar, rice, and
minerals. We must face the fact that in the
twenty-first century Guyana cannot retain a
nineteenth-century economy, dependent upon the same
crops and materials year after year.
We must expand
existing export markets and break into new ones in
order to fuel the future growth of our economy.
And most of all:
we must be proactive, productive, professional,
progressive. We must dedicate ourselves to making
Guyana work.
Agriculture
During the present
downturn in the farm economy, farmers must be
provided with the means to change and improve their
farming and marketing techniques.
Diversify and
Export
In addition to its
traditional cash crops of sugar and rice, Guyana
produces a wide variety of fruits, vegetables and
other crops, which have been sold almost exclusively
to the domestic market. But as the preferential
marketing that sugar and rice have enjoyed comes to
an end, many of these other crops can take their
place.
Thus, Guyana must
develop a plan to shift rice and sugar farmers to
these alternative crops. In addition, farmers should
be encouraged to diversify into new areas, such as
apiculture.
Two areas must be
stressed: farming techniques, employing new
technologies to generate higher yields and reduce
waste; and selling to external markets.
Prepare the
Necessary Agricultural Infrastructure
Much of the arable
soil that is needed lies below the high-tide mark of
the sea and rivers. Farms situated elsewhere have to
deal with the inundation of water that comes with
the heavy seasonal rainfall.
Therefore, we must
be prepared to invest the necessary heavy
expenditures to make agricultural expansion
possible, by building and improving the
infrastructure so as to:
!
Prevent flooding.
!
Allow for drainage and irrigation.
Food Security
in Guyana
At the same time
that we work to expand and improve Guyana’s
agricultural exports, we must focus our agriculture
policy on food security for Guyana’s population. To
this end, Guyana must develop food-processing plants
and large-scale agriculture.
Guyana’s Cash
Crops
Now let us have a
look at Guyana’s two greatest cash crops: rice and
sugar.
Rice and Sugar
Much must be done
to keep the rice and sugar industries from
collapsing. Modern technology must be introduced,
such as advanced forecasting tools, and the
infrastructure that supports production must be
considerably repaired and expanded. Farmers and
millers must have access to financial assistance,
and the market must be approached by a combination
of long-term planning and aggressive overseas
marketing.
If rice and sugar
are to maintain their importance as cash crops, we
must improve the genetic varieties of rice and sugar
cane and modernise the mills. All aspects of these
industries must be privatized, and at the same time,
investors must be courted and new markets found and
developed.
Livestock
Production
The livestock
industry must be made more efficient and productive,
making use of modern technology. Facilities and
infrastructure, such as veterinary diagnostic
facilities, will have to be improved.
From the marketing
standpoint, we must encourage joint venture
investment with European, American and Caribbean
interests, and begin consideration of exporting
livestock.
Mining
Mining in General
The mining
industry must be expanded, with improved physical
facilities, increased production and diversification
into new areas, such as the glass industry. Miners
must be able to earn a decent salary, and the
industry must develop its overseas and export
connections. And of course mining must be bound by
regulations that protect the environment
Bauxite, Gold
and Diamonds
The failing
bauxite industry must be revived by expanding
operations and diversifying the product’s uses.
As for gold, in
the face of exhausted resources, measures must be
taken to increase output, and private investors must
be found to finance the digging of new mines.
And like bauxite
and gold, the diamond industry must offer incentives
encouraging private investment.
Oil
The presence of
petroleum—meaning that Guyana could provide our own
energy—could be one of the greatest gifts that we
can attain. Thus we must continue to aggressively
drill for oil, negotiating with our neighbours to
ensure that our sovereignty is protected.
Fisheries
Guyana must
attract private investors, export fish in greater
numbers, foster the development of aquaculture, and
improve fishermen’s work conditions.
Forestry
The forestry
industry must have greater access to working
capital. Facilities must be modernized and the
entire industry privatized. The export market must
be strengthened, and joint venture partnerships with
foreign firms must be forged.
Manufacturing
Guyana must
attract foreign interest by improving its
manufacturing in a variety of ways.
Water-Based
Industries
Guyana must make
use of its famous water resources to produce
hydroelectricity and utilize water in other creative
ways as well.
Eco-Tourism
Guyana will be
well-advised to undertake a professional campaign
that will welcome eco-tourists and provide the
proper infrastructure that they require, such as
national parks and tourist resorts.
In Sum
Guyana has grown
weary, almost moribund. But we can build up Guyana
so that it will experience a new prosperity to be
enjoyed by all its citizens.
We can create
miracles in Guyana, miracles that will illuminate
every household—from a Georgetown mansion to a
shelter along the Essequibo River.
Our guiding
principle must be that no one will be left behind.
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