Guyana will not see any meaningful progress or attract any sustainable investment until there is a democratic transition of government and political stability in returned to the country.
This is according to experts; Dr Remi Piet, Senior Director at Americas Market Intelligence (AMI) and Arthur Deakin, an Analyst at AMI who conducts political, economic and other risk analysis activities for the mining, energy and infrastructure sectors.
Piet and Deakin, via an opinion piece published by Caribbean News Global, noted that the electoral situation in Guyana is “beyond scandalous”. They reminded that over 100 countries across the globe have demanded that the recount figures be used as a basis for final declaration of the results of the March 2 General and Regional Elections.
The national recount has confirmed that the PPP/C has won the March 2, polls with in excess of 15,000 votes, but President David Granger and his APNU/AFC have largely remained unmoved to the mounting calls to step aside and allow for a smooth transition of government.
In fact leading Coalition members have adopted a very confrontational approach with the international Community and local stakeholders, which have been calling for credible elections results to be declared in Guyana.
For months now, the country is largely at a standstill with several oil and gas related projects not being able to move forward due to the absence of a functioning democratic government.
Several other international investors have also taken a position to wait until the political impasse is resolved before they move ahead with their projects.
Piet and Deakin expressed that before investments start flowing to Guyana, some issues would need to be addressed, this include concerns over a greater application of US sanctions due to the inconclusive nature of the elections.
“Our view is that the recently imposed sanctions are unlikely to be more than a temporary punishment. Rather, they are simply a measure to pressure the current administration to give way to the next administration. In the long-term, these sanctions will be irrelevant,” the experts posited.
They asserted that Guyana needs to have a minimum level of “institutional stability and certainty” to attract foreign investment. “Transparency, through adherence to the rule of law and open communication with the private and public sectors, is of paramount importance”.
According to the experts, the approval of the Payara oil field is another important development that the upcoming administration needs to address headfirst.
“The delay in this project’s approval will subsequently postpone the receipt of oil revenues, affecting investments in other areas of society, such as the sugar industry. The timeline for the construction of schools, hospitals, roads and electricity, is long overdue. Delays will also have a direct effect on Guyana’s job creation and GDP growth”.
The Payara project was initially projected to be approved in 2019 with first oil by 2023. But due to delays in governmental authorisations and the present political crisis, new projections expect Payara to be approved in the first half of 2021 and achieve first oil by 2024.
The authors noted that if the Payara project is approved within this new time frame, it can still produce about half its oil reserves by 2030, delivering U$7 billion in income to the government. “That is much greater than Guyana’s GDP from 2019”.
According to the experts, despite the economic and oftentimes political uncertainty caused by COVID-19, many large firms in North America and Europe are flush with cash. These firms are eager to invest in emerging markets, seeking to find greater returns.
They added that for many, “Guyana could be a juicy fish in a massively competitive ocean. But first, it needs to implement a sustainable regulatory framework after it ensures a democratic transition to the next administration”.