Summary
Guyana is well positioned to lead a regional integration agenda aimed at strengthening South-South cooperation within the continent and regionally within a global context.
Over the years, the Indian Government has supported Guyana on several fronts. One notable contribution from the Indian Government, for example, was financial support to construct the Guyana National Stadium at Providence.
Indeed, there are many other ways in which Guyana received support from the Indian government as well as the many Indian owned enterprises operating in Guyana for decades.
Considering that India is a global leader in agriculture and technology, Guyana can benefit from India’s expertise to bolster its own food security agenda and ICT transformation.
This can be achieved by not only partnering with Government at the bilateral level, but through private sector partnership as well where meaningful synergies can be developed and capacity building for the Guyanese private sector.
1. Background
In a conference paper by this author presented at the “West Institute International Academic Conference on Business, Economics and Social Sciences” in September 2020, Guyana’s economic transformation in becoming a geopolitical importance in the Caribbean and South America was highlighted.
The author sought to present a compelling case of whether Guyana can become transformative within the region, viz-à-viz, an enhanced framework that would foster deeper regional economic integration of South America and the Caribbean with the rest of the world. This notion is premised against the backdrop of its arguably geopolitically potent location, its emerging petroleum industry, coupled with the increasing global interests in Guyana.
The paper analyzed the causation and drivers of these determinants and concludes that with good political leadership and governance, Guyana can move from being an under-developed country to a ‘developed’ economy thus becoming a strategic geopolitically important country because at the margin western hemisphere oil supply is crucial, and because a Brazilian corridor to the sea is important.
In these respects, it is contended that Guyana can play a pivotal role that fosters greater regional and continental integration of the Caribbean and South America, respectively―within the global economy.
With this background in mind, nearly two and half years later, the President Irfaan Ali led Administration is ambitiously, assiduously, and aggressively working to position Guyana within this very context―that is, as a geopolitically and strategically important country in the Caribbean and South America.
To this end, since assuming office, the Government embarked on a mission to rebuild Guyana’s international credibility and image, position the country as an attractive investment destination, and has been tirelessly working to deepen and reinvigorate Guyana’s diplomatic relations with all of its diplomatic allies across the globe and regionally.
This article focuses on the Guyana/India relations, in particular, how the two countries stand to benefit economically.
2. Discussion and Analysis
Paraphrasing India’s External Affairs Minister at the round table discussion forum yesterday, April 23, 2023, while the two countries shared a long-standing bilateral relationship with each other, there has been a rejuvenated effort in deepening ties between the two countries, especially on the economic front.
Over the years, the Indian Government has supported the Guyana on several fronts. One notable contribution from the Indian Government, for example, was financial support to construct the National Stadium at Providence. Indeed, there are many other ways in which historically Guyana received support from the Indian government as well as the many Indian owned enterprises operating in Guyana for decades.
With respect to international trade between the two countries, India enjoys a trade balance surplus with Guyana. In this regard, for the fiscal year (FY) ended December 2022, imports from India amounted to US$62.2m, representing 1.7% of total imports, while exports to India amounted to US$1.6 million, giving rise to a trade balance deficit for Guyana with India.
Moving forward, reference was made to a Memorandum of Understanding (MOU) between the two countries outlining focus areas that the two countries are mutually pursuing.
Chiefly, India is particularly interested to purchase Guyana’s crude oil. According to U.S Energy Information Administration, India was the third-largest energy consumer in the world after China and the United States in 2021, and the second most populous country, with 1.4 billion people.
India’s energy needs continue to grow as a result of population growth and modernization. In fact, India is the fastest growing major economies, recording close to 9% GDP growth in 2021.
Although India has made considerable headway with energy reform and continues to focus on greater energy security, infrastructure development and market liberalization. India’s government continues to face challenges to meet the country’s growing energy demand, including securing affordable energy supplies and attracting investment for upstream projects and transmission infrastructure.
Therein lies the opportunity for Guyana to become a major supplier to meet India’s energy needs in the medium term as production are expected to be ramped up to over 1 million barrels per day by the end of the decade.
Already, Guyana’s Vice President, Dr. Bharrat Jagdeo has signaled that any deal in this regard between the two countries, will be premised on commercial terms.
Considering that India is a global leader in agriculture and technology, Guyana can benefit from India’s expertise to bolster its own food security agenda and ICT transformation.
This can be achieved by not only partnering with Government at the bilateral level, but through private sector partnership as well where meaningful synergies can be developed and capacity building for the Guyanese private sector.
3. Conclusion
Against the foregoing, Guyana is well positioned to lead a regional integration agenda aimed at strengthening South-South cooperation within the continent and regionally within a global context.
About the Author
Joel Bhagwandin is a public policy/financial analyst―and an experienced financial professional with more than 15 years’ experience in the financial sector, corporate finance, financial management, consulting, and academia.
He is actively engaged in providing insights and analyses on a range of public policy, economic and finance issues in Guyana over the last six years.
He has authored more than 300 articles covering a variety of thematic areas.
Joel has also written extensively on the oil and gas sector. Academically, he is the holder of an MSc. in business management with a specialism in banking and finance from Edinburgh Napier University.
He is currently pursuing his second and third masters: 1) MBA (Finance) (Top-up) through Edinburgh Napier University, and 2) MSc. in Finance (Economic Policy) through the University of London.
