In this webinar, panelists examined US policy towards the Caribbean during the first year of the Biden Administration, with a focus on notable issues in need of attention and the opportunity to discuss these issues when the US hosts the Summit of the Americas in June 2022
Presenter
Sir Ronald Sanders
Ambassador of Antigua and Barbuda to the United States and the Organization of American States
Download the Working Paper presented by Sir Ronald Sanders here.
Executive Summary: In 2015, significant oil and gas reserves were discovered in Guyana, transforming the country into a major fossil fuel producer. Before this discovery, Guyana, like other vulnerable developing countries in the Caribbean basin, had been advocating for international attention to their exposure to emerging climate risks and for the adoption of policies and provision of necessary support for climate change mitigation and adaptation.
These efforts led to a global agreement under the Paris Agreement in 2015 to limit the increase in global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the rise to 1.5°C, among other objectives. In keeping with its obligations under the United Nations Framework Convention on Climate Change, Guyana developed a Low Carbon Development Strategy and a Climate Resilient Strategy and Action Plan that aim to achieve zero carbon status and climate resiliency in line with the Paris Agreement. However, the discovery of substantial oil and gas resources in Guyana now places the country in a seemingly contradictive position as both a current victim of climate change and an actor that exacerbates the problem.
To reconcile these roles, two factors need to be considered. Firstly, Guyana lacks the resources to build climate resiliency and transition to an affordable and sustainable energy system. Secondly, as the world transitions to net zero, Guyana has the opportunity to use its newfound wealth to implement both mitigation and adaptation strategies. The region can address regional energy and food security, internalize supply chains, and utilize the resources of Guyana, Suriname, and Trinidad and Tobago to facilitate progress in meeting their obligations under the Paris Agreement. Given the low carbon intensity of Guyana’s oil and gas resources and the feasibility of production compared to global producers, there is an opportunity for Guyana to emerge as a major supplier of fossil fuels during the global transition to net zero. However, Guyana must ensure that its production of oil and gas meets the highest available environmental standards and that the resources accruing are used to facilitate the transition to net zero and to build climate resilience.
Presenter
Ulric Trotz, (fmr) Science Adviser, Caribbean Community Climate Change Centre, Belize
Speakers
Anthony Bryan, Co-Chair and Fellow, CPC & Professor and Senior Fellow, Institute of International Relations, UWI
Thomas Singh, Director of the GREEN Institute, & Senior Lecturer, Dept. of Economics, University of Guyana
Relevant Quotes
Relevant Quotations:
Dr. Ulric Trotz:
“The basic point I wanted to make was that dealing with this issue of being an oil and gas producer, while at the same time being vulnerable to climate change is the fact that we need to look at how the resources derived from oil and gas are utilized for the benefit of Guyanese people.”
“If you look at the implementation of the LCDS, there’s been a lot of activity on the zero-carbon aspirations with the gas-to-shore project, Amaila Falls, the renewable energy systems for the interior, et cetera, we’ve been addressing the mitigation aspect of the LCDS and it’s very interesting, whereas over the years in the international community we have been trumpeting adaptation, adaptation, adaptation.”
“Our position is we are in a world that is committed to climate change and we as small developing countries whose carbon footprint is very minimal, we need to build climate resilience.”
“Climate finance has been a major stumbling block in the global discussions, and very recently that it was more or less estimated that $100 billion is a drop in the ocean on what we really need to significantly address [the problem].”
Dr. Anthony Bryan:
“Environmentalist have also voiced concerns about Guyana joining the oil and gas industry while the world transitions away from fossil fuels. But I think this has been answered by Guyana’s president where he says, ‘it aims to use the oil windfall to diversify the economy, improve access to social services, and promote investment in non-oil sectors including agriculture, tourism, and manufacturing’ and I think that is the position that the oil produces in the region.”
“Guyana is in a splendid position to really dictate a little bit about what the international global climate agenda should be. It has the resources, it has the influence, it has the attention of the world, so this is a historical opportunity to deliver both on climate mitigation and development goals.”
“You make progress at the pace necessary to deliver on global and development goals. It requires investment and I think developing countries such as ours, certainly Guyana, should ask developed countries for measures to rebuild trusts of confidence and international cooperations.”
Dr. Thomas Singh:
“We need in Guyana and probably in the Caribbean to learn to use incentives. We need to learn incentives on the whole, but when it comes to incentives, we sort of don’t understand the power of well-designed incentives. For example, natural gas-associated gas as a transition fuel, what if we decided to shorten the horizon for the extraction of this associated gas and put a limit, so it just doesn’t simply run with the oil.”
Dr. David Lewis:
“With this resource boom that Guyana has because of oil and gas, the question is how can Guyana use these rapidly and exponentially to develop the local, but also the foreign skills capability to handle this at the level of a world-class economy, that the energy sector is “imposing” on Guyana? Because it is a world-class best practice benchmark that’s taking place.”
“There is a pressing need that if we’re going to get this moving, the skills base needs to be advanced and I think the paper does a great contribution in terms of emphasizing the need for that institutional and human capacity, and emphasis is made, and it’s been discussed the role of the EPA and some of the government agencies. I would say that we also need to go beyond that, private sector capabilities and civil society capabilities because where we have seen examples of successfully managing the oil and gas resource growth, we also see the successful development of institutionality at the government, the private sector and at the civil society level.”
Moderators
David Lewis, Vice President, Manchester Trade Ltd. Inc. & Co-Chair, Caribbean Policy Consortium
Transforming Guyana, Episode IX: The Agricultural Sector and the Oil & Gas economy
Production of the Guyana Business Journal & Caribbean Policy Consortium.
SPEAKERS
Terrence Blackman Founder, Guyana Business Journal
David E. Lewis: VP, Manchester Trade Ltd. Inc. & Co-Chair, Caribbean Policy Consortium
Arlington Chesney: Former Regional Director, IICA and Executive Director at Caribbean Agricultural Research and Development Institute
Joel Bhagwandin: Director, SphereX Professional Services | Commissioner, Public Procurement Commission, Guyana
KEY QUOTES
Arlington Chesney:
“With the proposed refinery and gas-to-shore project we have the ability to produce inputs whether it be fertilizers, pesticides, et cetera and better processing capacity because of cheaper electricity that would be provided.”
“There is a skill shortage, not a labor shortage, in addition to organizational shortage. Some of us are working with [universities] to see how they could hone their programs to be better able to meet the demands of the oil and gas sector for the region. You have to start putting in place that training capacity, improving the human capacity of the region to be able to provide the skills that are required.”
“It is to me a little bit unfair to say that Guyana is going to suffer the Dutch disease or the ‘resource curse’ because we have an oil and gas industry that is very organized, very organized in terms of human and financial capital. We have an agriculture sector that at best is disorganized and the traditional senior business people are not directly interested in our agriculture.”
Joel Bhagwandin:
“It is clearly evident of the fact that the government is making a concerted effort to increase food production, tapping into the regional food market, tying into regional food security, and truthfully speaking you can’t look at the agriculture sector in isolation because it’s interlinked to the other sectors. In order to increase food production or increase the true potential of the agriculture sector, you need to make the necessary investments in the infrastructure. The energy projects are important because when talking about the value-add products, we need cheap energy to achieve that investment.”
“The government is making tangible investments in the sector; we’ve seen steady increase in the agriculture budget. In terms of leading the region, […] what happened during those days when we as a country was pushing this regional agenda, the rest of the region didn’t see the importance. Now however, against the backdrop of global external shocks and crises, all of this has amplified the need to revisit and escalate this objective of why regional food security and regional energy security are important—all of this goes hand-in-hand together.”
David E. Lewis:
“Guyana regardless of how big and how dominant the oil and gas sector is going to become, beyond the numbers and statistics, what’s going to happen is the rest of the economy needs to continue to live and we need to find ways to get that to leverage.”
Transforming Guyana Episode VIII: Investment Attraction & Retention and the Importance of Protection, Regulations, and the Business Environment in Guyana
Patricia Francis, Chairperson of Trade Facilitation Task Force & fmr Executive Director ITC, fmr President JAMPRO
KEY QUOTES:
“Certainly with respect to the regional artists, I think this is probably one of the most important of this opportunity of Guyana. I think Guyana’s very small population cannot actually grow in this on a global basis unless they somehow integrate into the region, and by that I don’t only mean CARICOM I also mean South America because as things begin to transform and move there is going to be need for the industry to come out and [speak] about can it live on 800,000 people or does it need to expand into other markets.”
“Any of the industries that you’re talking about […] the infrastructure to support those and the kind of ecosystem on which you build those industries is going to be critical and important, so once you start talking about producing for a global market you’ve got to think about how [you’re] going to move those goods or how you’re going to move those goods by sea or by air.”
“I think also again the local content act recognizes this to a large extent, but I think the government has certainty that this is going to be a moving target as they build capacity, both huge physical and also institutional in order to support industries as they move forward.”
Komal Samaroo, Executive Chairman of Demerara Distillers Limited
KEY QUOTES:
“Because we did not have a competitive environment, local production became a challenge, we could not compete against imports coming in, the cost of power, the shortage of skills, the lack of capital. I believe that with the situation where power cost is going to come down, infrastructure is being put in place and where there is more availability of capital, I think companies are looking to invest in areas that result in products that previously were imported can be available locally.”
Scott MacDonald, Caribbean Policy Consortium, and Chief Economist at Smith’s Research & Gradings
KEY QUOTES:
“Guyana is definitely on the map for foreign investment, it is attracting it within Latin America and we’re talking about a country with less than a million people. Guyana came in seventh in 2021 in terms of foreign investment. For a small country on the shoulder of South America, Guyana in many regards is punching above its weight.”
“It’s key to have awareness of what’s going on in the global economy, where you are, and in other words to put it mildly don’t get cocky Guyana. You’ve had a lot of success, you’ve moved ahead, you’re transforming the economy, you’re getting a socio-economic facelift but don’t get cocky about it because we live in a very competitive world.”
“As we’re doing the great energy shift globally, it’s critical Guyana moves to develop non-fossil fuels sectors, that goes from small medium-sized enterprises, offshore office centers, BPOs, the whole range of industry; but there’s no reason why Guyanese companies can’t issue forth from Guyana.”
“There’s a shopping list that goes with the vision thing for Guyana, that is the policy mix of improving education, development of human capital is critical, diversification from non-oil sectors, promotion of foreign direct invest but also promotion of local investment. We want to see a more competitive private sector in Guyana and I think that’s very critical.”
“Guyana’s transformation is definitely in motion, it has critical momentum, but the trick going forward is how do you keep the momentum, how do you keep those reforms going and how do you main the consensus in Guyanese society that this is the vision of where we want to go. I think the prospects are very good for Guyana, but there’s a lot of challenges that sit here.”
Andrew Schnitzer da Silva, CCO, Ascending Ltd., Workforce, Marine, Technical Training and Procurement
KEY QUOTES
“What I see happening in Guyana is in a way much different from what I saw happening in the beginning of the century in Angola and what I am experiencing right in Mozambique, there is willingness to transform and to create better ways to attract investors, but at the same time I feel that on the ground there is still a lack of understanding of the huge impact that this discovery can entail. There is still not a clear understanding of all the requirements and of all the efforts that need to be made in order to attract foreign investment.”
“There is some sense of fear that maybe the foreign investors are going to keep the whole ‘gold’ in the gold rush, so there is also still some weariness into how to accept and to how to collaborate with foreign investors coming. It is difficult to penetrate and I think that happens naturally.”
“Guyana does have a small population, does have a huge task ahead of itself and it could profit a lot from creating collaborative ways of investing in developing its infrastructure, in developing its resources, and in looking at digging up the ‘gold’ a lot quick than it will be able to do by wanting to do it by itself.”
Moderators
David Lewis, Vice President, Manchester Trade Ltd. Inc. & Co-Chair, Caribbean Policy Consortium
KEY QUOTES:
“So there’s that risk and that danger that all this focus on the oil and gas crowds out the reality of the need to do the basic day-to-day homework of modernizing the economy, streamlining bureaucratic and regulatory procedures, and really get beyond and overcome still what I would call ‘hangover’ of the 60s and 70s and that state-controlled period. The view that there’s nothing good about what has been the experience of Guyana with foreign investors. I think you know that is still a work in progress and to the degree that we can begin to focus more on some of these new success stories beyond oil and gas.”
Terrence Blackman, Founder, Guyana Business Journal
The Guyana Business Journal (GBJ) & Caribbean Policy Consortium (CPC) present Episode Seven of their Webinar Series, Transforming Guyana.
DATE: Wednesday, December 14, 2022
TIME: 10:30 AM EST
In Episode Seven, Dr. Blackman, Dr. Lewis, and their guests explore Guyana’s emergence as a Petrostate and its implications for Guyana’s Indigenous Communities.
Please register and join us for an informative and insightful conversation.
This Wednesday, November 30, the Kimberly Green Latin American and Caribbean Center (LACC), in collaboration with the Caribbean Policy Consortium(CPC), will host the webinar “US-Caribbean Relations: From Trade to Economic Partnership.”
In this webinar, Ambassador Dr. Richard L. Bernal, OJ will present on the current status of US-Caribbean trade and prospects for the future with analysis from experts in the public and private sectors.
Panelists will examine how the existential crisis of CARICOM requires a wholistic approach by the U.S. which integrates economic, security and environmental aspects in a self-reinforcing program.
DATE:Wednesday, November 30, 2022
TIME: 10:00-11:30 am EST
Live webinar via Zoom
Free and open to the public but registration is required.
Professor of Practice, Sir Arthur Lewis Institute of Social and Economic Studies, University of the West Indies, Jamaica and Fellow, Caribbean Policy Consortium (CPC)
Discussants:
Andrea M. Ewart, Esq.
Attorney and Founder, DevelopTradeLaw, LLC and Fellow, CPC
Eric B. Wolff
Regional Senior Commercial Officer, Caribbean Region, U.S. Commercial Service, US Embassy Santo Domingo
Moderator:
Dr. Anthony Pereira
Director, LACC, Florida International University (FIU)
With a special emphasis on the English-speakingCaribbean, the LACC/CPC Caribbean Policy Series includes four webinars for the 2022-2023 academic year with experts from the GreaterCaribbeanregion, moderated by FIU faculty andCPC members, and a series of policy-oriented papers addressing economic, political, and strategic matters in the region that will be published electronically as part of theLACC Caribbean Working Paper Series. The LACC/CPC CaribbeanPolicy Series is part of LACC’s renewed commitment to expand programming related to theEnglish-speaking Caribbean, a sub-region with phenomenal human capacities, strong democratic institutions and incredibly rich socio-cultural and environmental diversity.
Roger Kranenburg, Vice President, Energy Strategy and Policy, Eversource; Anthony Bryan, Senior Fellow , Institute of International Relations UWI, St.; Augustine, Trinidad and Tobago; Dax Driver, CEO & President, Energy Chamber of Trinidad & Tobago; Lorraine Sobers, Lecturer, Department of Chemical Engineering Petroleum Studies Unit, University of the West Indies; and Bobby Gossai, Jr., Senior Petroleum Coordinator, Petroleum Management Programme, Ministry of Natural Resources, Guyana.
Quotes
Anthony Bryan:
“The country has a problem with ethnic rivalry but I think oil and possibly gas may be the glue that brings the ethnic groups together rather than dividing them.”
“Trying to do too much too quickly and promising too much too quickly is probably going to fall short… Everything doesn’t have to be built in a day, it can take time. It should be well-planned and well-structured. Do not focus just on immediate problems, but look at opportunities long-term.”
“CARICOM nations are still very minor contributors to global carbon footprint and climate change, and in 2030 they are continuing fossil fuel production as a funding pathway to renewable energy. So, oil and gas are playing a key role in this economy as they invest incremental portions of their revenue from oil and gas into renewable and sustainable energy in order to meet their renewable goals in 2030.”
Roger Kranenburg:
“Use this benefit you have today, definitely make the best use out of it but work to develop a diversified economy. Economies that are just dependent on resources are tough economies to run effectively even if they are very wealthy. Take this gift and invest it for the future.”
“Fossil energy is here to stay for some time, but the world is very focused on a decarbonized future and getting there as best as we can, and for society I think it’s a good thing.”
“Guyana has a very bright future in leveraging what’s a essentially a waste product or limited valued product, in the associated gas in those fields. My personal view is economically it doesn’t make a lot of sense for Guyana to invest in refining, these are global markets and you pick what you’re playing in that market. Oil goes to the global market and the current volumes of gas and where it’s located, that’s tough to put on the global market, it may change in the future but right now that gas is a low-value commodity so [instead] bring that to shore.”
“I’m a strong supporter of it [gas-to-shore] and would very much like to see Guyana move forward in that project. It may seem expensive but if you play out Guyana’s future, it could be such a prosperous future and the expense will be nominal compared to the benefits that can be derived.”
“In the renewables future, if you’ve got a system that’s run off of gas, it actually makes it very much able to integrate renewables effectively. A renewable I find very exciting for Guyana is solar. I think it’s an extremely bright future for the country.”
Lorraine Sobers:
“Electricity is an important part of energy security and they’re intrinsically linked because the cost of energy effects every facet of our modern society, linked to power generation and also the transportation.”
“The good news is Guyana has begun taking steps to move from that state of energy insecurity by becoming a net exporter of crude and low-carbon development strategy [which includes] the gas-to-power and renewable energy.”
“Guyana really needs reliable power generation and distribution, it’s critical to so many services. In the next decade, we’re looking at increased demand, decarbonizing of the power generation, digitalization, infrastructure and its ability to withstand extreme weather events with climate change.”
“Guyana’s power sector has to be reconfigured to meet demand to facilitate the input of multiple renewable energy producers. Multiple producers and variable renewable energy sources would ensure that there’s resilience built into the system so that we have energy security.”
Dax Driver:
“There is a fight for investment dollars within the major oil and gas producers, there’s a big fight that goes on within those companies about where there capital is going to be allocated, the companies are weary about where’ they’re allocating capital because of climate change and the push for net-zero. They’ve become very disciplined about their capital allocations because of this concern about the long-term demand for oil and gas.”
“Clearly Guyana has been up till now highly attractive, that’s partly because of the structure of the production sharing agreement which is in place.”
“Another thing I would also emphasize is the speed of development, it’s unprecedented how fast Exxon and their partners have gone in working with the government of Guyana from a find to production. This has happened much faster than elsewhere, and that speedy development adds huge value to the resources of a country.”
David Lewis:
“This is all about as Roger mentioned, providing the best available public goods to the population. We all talk about people saying, oh, let’s look at Sweden and Finland and say, Well, you know, that’s what they did. They maximize and monetize these resources, made them available as investments, not expensive investments in public goods, health, water, electricity, education and so on. And that then drove innovation, innovation drives development, development provides stability and stability provides reliability, resilience and sustainability. So at the end of the day, what good is having all these resources if you do not provide more and better public goods?”
This webinar was jointly hosted by Global Americas (GA-www.theglobalamericans.org) and the Caribbean Policy Consortium (CPC-www.cpccaribbean.org) featuring regional experts on the state of energy security, GA and CPC fellow Scott Mac Donald moderates the discussion.
Terrence Blackman, Founder, Guyana Business Journal
David Lewis, Vice President, Manchester Trade Ltd. Inc. & Fellow, Caribbean Policy Consortium
Speakers
Professor Leyland Lucas, Dean, School of Entrepreneurship & Business Innovation, University of Guyana
Andrew Schnitzer da Silva, CCO, Ascending Ltd., Workforce, Marine, Technical Training and Procurement
Richard Ramberran, Executive Director, Georgetown Chamber of Commerce and Industry
Key Quotes
Richard Rambarran:
“There are a number of issues as it relates to the environment for doing business in Guyana and the way that the environment creates the conditions for competitiveness when juxtaposed alongside more mature economies that have had time to correct some of these market inefficiencies that exist. Take for example, most common is the cost, reliability, and quality of electricity we face here in Guyana. Secondly, of course, is access to finance and rate of interest, and the depth and breadth of the financial sector we have and how competitive we can be in that regard as a private sector…”
“How do we then take what we currently have in place and improve, in a variety of ways, the environment for doing business in Guyana and increasing the competitiveness of the Guyanese firms?…What we really ought to be probing on how can we eventually build an internationally competitive private sector…When we begin to move in that direction, we will really see a lot of benefits that accrue to local content…We will never be irresponsible and advocate for the implementation of local content on something which we clearly don’t have the capacity to do.”
“Since the implementation of local content, I’ve actually seen more persons coming and investing…there is a degree of certainty that exists.”
“I don’t think we need a modern immigration policy in place of the local content act. What I think we need is a modern immigration policy alongside the local content act.”
Professor Leyland Lucas:
“There is no perfect piece of legislation…What has been created as our legislation, will go through several iterations over the years; there will be a number of changes, amendments to this legislations simply because we have to deal with the realities of our environment.”
“One of the critical things for the effective local content policy to really take shape is skills development and how quickly we can ramp up those skills in order to take advantage of the advanced components of local content. It is important for us to recognize that that skills vacuum is not going to be fixed overnight.”
“You have Guyanese experts who are in the Diaspora who have ability to help us in our development…If we are going to engage the Diaspora and allow them to take advantage of local content opportunities, then how do we create a structure that allows them to take advantage of those opportunities without necessarily being present in Guyana.”
“In the Caribbean we talk about ‘free movement of human capital’ but yet we do not see free movement of human capital. So as we expand and deal with this local content issue, we also have to ask ourselves how do we embrace our Caribbean brothers and sisters, no matter where they are coming from and at what levels can they contribute to the overall development of this country…We are at a unique stage where the end is certainly not in sight and so as we deal with those economic migrants, we do need to take a look at our migration policy and maybe make some changes.”
Andrew Schnitzer da Silva:
“There is a big eagerness in wanting to implement these policies or laws and there has to be a transition, an understanding from where the country is and where the country wants to be and what that entails. Lots of times, it doesn’t happen overnight…It has to be an evolving law that understands the needs of the country at any given moment in time.”
“If we stop having international companies that are used to international standards through which we can learn and be permeated by them in order to create a different way of going about business, then it will be very difficult to input that type of rigor or that type of excellence in the way we do business…When skills aren’t present or if skills are lacking, it is very difficult for companies to be committed to these [local content] numbers.”
“Going back to the 51% shareholding structure and the 75% managerial presence in these structures…If companies in-country do not have the expertise and companies have to come from abroad, nobody is going to give away 51% of their knowledge and of their gained experience unless they trust a local partner. In order to gain trust, I believe the best way is through time…it needs to be nurtured and needs to have a conduit in order for it to be successful…”
