Remarks as prepared
Deputy Chief of Mission Mark Cullinane
Caribbean Trade in Americas Networking Event (Virtual)
December 9, 2020
Minister of Natural Resources for the Cooperative Republic of Guyana, the Honorable Vickram Bharrat, Minister within the Ministry of Public Works Deodat Indar, President of the American Chamber of Commerce in Guyana, Mr. Zulfikar Alli, colleagues from the Department of Treasury, distinguished members of the private sector from the United States, ladies and gentlemen, good morning. It’s an honor to speak with you today, and I thank the organizers for putting this event together, despite the challenges we’ve all had with this pandemic. Business and trade are about people who want to connect and make things happen, so it’s really not a surprise that this event is happening.
Judging from the invitation and RSVPs for this event, there is a lot of interest in Guyana from the United States business sector. It’s obvious that Guyana has been getting more and more attention after oil was first discovered in 2015. In 2019 the drilling started with the help of Exxon Mobil, and to date Exxon’s discoveries in 18 of its 21 exploratory wells are incredible. The sheer number of oil barrel equivalents offshore – now 9 billion and still rising – is staggering. Guyana is on track to become the second or third largest oil producer in the western hemisphere over the next 20-40 years. The IMF projects Guyana’s economy will grow by 26.2 percent in 2020. In 2019, the country’s GDP was $4.2 billion and by the end of this year it is projected to grow to $5.3 billion, making it the fastest growing economy in the world.
While oil and gas are strong reasons enough to be interested in Guyana, I am sure you will hear today that they are not the only game in town. In addition to the spin off industries that oil and gas provide, Guyana’s leadership understands the importance of balanced growth and the country has much to offer investors across an array of sectors, including renewable energy, financial, construction, and agriculture. As with other Caribbean countries, it’s close proximity to the U.S. and regional integration through CARICOM make it an attractive partner. In addition, Guyana is the only English-speaking country in South America, making communication that much simpler for the American investor.
And the United States government is here to help. As part of Secretary of State Mike Pompeo’s historic September 17 visit to Guyana, Guyana signed onto the Growth in the Americas initiative, the second Caribbean country to do so. This agreement provides a framework to promote private sector investment in finance and procurement, infrastructure, and energy security. It will also lay the groundwork to implement global best practices in policy, legal, regulatory and investment frameworks. As part of this bilateral collaboration, we have established a Working Group with the Government of Guyana to develop the foundation for partnership in these key areas. The first meeting is later this week. Less than one month after the Secretary’s visit, a six-agency delegation led by the International Development Finance Corporation, or DFC, came to Guyana, further highlighting the U.S. Government’s support of economic growth and security cooperation in the region. U.S. government officials met with Guyanese government and private sector leasers, and outlined opportunities for U.S. government project financing through public private partnerships.
So what’s in it for you, you may be asking yourself as an American company. And how can the Embassy help? Well the deals and networks you make in Guyana will be led by the Guyanese, but the Embassy side is something I can answer.
In 2019, the Embassy became a U.S. Commercial Service partner post with the U.S. Department of Commerce, which means we can connect investors with Guyanese businesses. We also help facilitate requests for Guyanese businesses seeking to invest in the United States. Interested in opening a U.S. franchise here? We are your first stop. Need assistance exporting importing U.S. products and materials to Guyana? We are here for you. If you’re seriously considering business in Guyana, here are some steps we recommend:
- Do your research. Export.gov, the U.S. Commercial Service Market Research Library, and the Embassy website all have economic reports that will help guide your planning process. I would especially highlight the Investment Climate Statement and Commercial Country Guide.
- Connect with business support organizations, such as the American Chamber of Commerce in Georgetown, and finally
- Register with the Embassy, especially if you’re planning a trip to Guyana. Setup a meeting with our commercial team to discuss any issues that arise. Our team can advise you on local business and regulatory considerations and also offer other services like introductions to relevant GoG departments and local business connections.
- Come to us early so that we can help you navigate your quest for investment and distribution partners. As you know from your previous business experience, if you are looking for quick solutions after problems arise with a procurement or a contract, it is a lot harder to get back on track.
Your market research will inform you that there are challenges to working in Guyana. One of the biggest obstacles is the cost of energy. Guyana’s energy generation is largely fossil fuel-based, with power plants utilizing heavy fuel oil. The cost of electricity is 32 cents per Kilowatt hour which is significantly higher than Guyana’s South American neighbors but about average for the Caribbean. Guyana also knows it will have to improve its power grid, which suffers from systemic losses. However, Guyana expects to take advantage of the natural gas that emits from the oil wells, which is projected to lower the cost of energy two-fold.
Guyana is also working on reforming its financial sector to attract investment. The Minister of Legal Affairs committed to amend existing legislation to allow for the development and diversification of the existing financial sector. Guyana’s currency is stable and local banks are highly profitable and continue to grow. International companies will look for this stability and reform as they evaluate Guyana as a place to set up operations.
In addition to regulatory reform and improving the energy grid, diversification in the energy sector will help Guyana fulfill its dream of a green economy. The Ali administration committed to create an additional 400 MW of power generation within the next 5 years. The Minister of Public Works highlighted solar energy parks and micro-grids as a part of the Government’s plan for hinterland community development. The Guyana Energy Agency signed a deal last month for two solar farms in Lethem and Bartica which will provide much needed energy for those areas.
Finally, there are numerous infrastructure projects the Government of Guyana has put out for tender or intends to do so in the coming weeks and months. The Ministry of Public Works has announced two large RFPs: a $150 million high rise, four lane, Demerara Harbour Bridge, and the construction of four international hotels. The Government is expected to announce tenders for new highway construction and road expansion projects, a gas to shore power generation plant in or near Georgetown, and a deep-water port.
These are all sweeping changes and it will be crucial for the government, in concert with international partners, the private sector, and civil society to get it right. The U.S. is committed to Guyana’s prosperity for all Guyanese, and our stance with regard to Guyana’s political stability over this past year should not leave any doubt that we take our values – fairness, transparency, accountability, and the rule of law – seriously. Our priorities here are governance, prosperity, and security, or GPS. We always tell our Guyanese partners that when you attract investment from U.S. partners, you get quality, you get sector specific experience, and you get a transparent deal. That’s why we advocate on your behalf. Your business relationships will help define the next stage in our bilateral relationship. Your success will lead to more efforts to build Guyana as a safe, democratic, and prosperous nation for all its citizens. And that is good for the United States.
Thank you for your time today.