N Touch
Wednesday 26 June 2019
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Guyana, still the place to be?

Business Day Editorial

Last Friday a no-confidence motion in the Guyana government was debated in that country’s Parliament. Charrandass Persaud, a member of the ruling coalition, voted with the opposition in favour of the motion, bringing down the administration of President David Granger and forcing a general election to be held by March.

This will have far-reaching effects on Guyana. Indeed, it is already doing so.

TT has close ties to the Granger administration, to the extent that a memorandum of understanding affecting both the private and state sectors was developed and signed recently.

The passage of the motion of no-confidence immediately puts Guyana back into the divisive and debilitating politics of election, where racial and political divisions can be expected to surface. Almost immediately capital expenditure and economic projects, in which TT no doubt would have had a stake, will be put on hold until after the election.

Unless carefully handled, this could lead to decisions which could destabilise Guyana. A budget has been passed with salary increases and initiatives approved. If, after the election, a new government comes in, it could throw out the budget, and recent decisions could be discarded. After all, a new government could claim that the no-confidence vote and the election result demanded that it discard the policies of the previous administration and detail a new budget.

This is a moment of weakness in the country’s history which is being seized upon. At present the leader of the ruling coalition, the president, is ill, and the coalition has recently lost key areas in local elections, which emboldened the main opposition People's Progressive Party (PPP). It is an opportunity for the opposition to do all it can to wrest control from the coalition.

In addition, on Saturday Venezuela’s military intercepted a ship contracted by US oil company ExxonMobil to do a seismic survey in disputed Guyanese waters. Venezuela and Guyana share major border claims that include areas where hydrocarbon is beginning to look like king. Guyana can expect a boom in 2020, when oil production is expected to start. Venezuela’s act may be a signal of its intention to capitalise on Friday's political development.

Domestically, the concept of coalition government and its application in Guyana is at best under review. It is going to be difficult to trust such coalition initiatives going forward. The damage that has been done to people’s trust of coalitions may be quite grave indeed.

There will also be a period of unease as foreign investors wait to see the outcome of the election. They will monitor policy pronouncements emanating from the opposition camp. Are there going to be statements which suggest that agreements will be rescinded, renegotiated or abandoned altogether? Foreign investors who have seen the actions of neighbouring Venezuela will look to determine whether Guyana is supportive of foreign investors and willing to provide security.

The way both government and opposition treat with the fears of foreign investors will either dispel such fears or make them a reality – with damaging consequences for the acquisition of capital for the hydrocarbon sector.

Equally important is whether the country can put up a unified front against the threat posed to Guyana.

If the consequences of the no-confidence motion are to be mitigated, a mature and unified position must be adopted by Guyanese politicians – even though they may wish to get their hands on the significant revenue which will make this Caricom member state the place to be for business in the very near future.

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