IN his contribution to the recently held National Economic Forum former President of Guyana, and Champion of the Earth awardee, Bharrat Jagdeo said economic development and future industrial growth depend on cheap energy.

The support which such energy renders to the private sector’s competitiveness was also highlighted during Jagdeo’s remarks at the second and final day of the Forum.

“How does any private sector entity invest and compete when they have to compete with people who are paying ten cents per kilowatt-hour in another country?  It is the biggest loss of competitiveness,” Jagdeo said.

He blamed ‘charlatan economics’ advanced by some of the country’s well known economists for the defeat of the Amaila Falls Hydro Power project and which resulted in Guyana losing a “major chance to advance its economic development.”

Sithe Global recently announced its decision to pull out of the project, citing lack of political consensus after A Partnership for National Unity (APNU) voted against the Hydro Electric Power (Amendment) bill and the debt ceiling motion. While the Alliance For Change (AFC) supported the bill, it reduced the debt ceiling from $130B to $50B.

Jagdeo’s analysis of the current global environment paints a very gloomy picture about the future of the hydropower investment.

“Newly emerging economies now are facing pressures on their balance of payment on their currencies etc… because of one primary decision that’s made by the United States of America… that is, the federal reserve will stop buying or intervening in the market in the near future… a single decision can cause ripple in countries like Brazil and India and Russia… and so money (for investment) is not going to be always available and we recognise that we need foreign capital to drive the growth that we are talking about,” Jagdeo said.

The hydro project promises cheap and reliable energy to all consumers (domestic and commercial), a reduction in the reliance on fossil fuel by approximately 90%, and the creation of an environment favourable to foreign investment.

The agriculture sector, a significant contributor to the country’s Gross Domestic Product (GDP) could advance from a stage where minimally processed commodity will become value added production with cheap energy.

The peculiarities of the global export market were highlighted on day one of the National Economic Forum during a presentation on energy made by scientist, Professor and Chairman of the Canadian oil exploration company CGX, Dr Suresh Narine.

“The commodities’ game is a race to the bottom… producing the cheapest commodities means that your profit margins shrink… and you has very little trickle down ability for the country. So in order for us to truly realise the potential for our agriculture sector, we simply need to value add however, if we don’t have cheap energy we can’t value add.”

With reliable energy, subsidies totalling in excess of $100M that the government has been channelling to the Guyana Power and Light (GPL) on an annual basis, could be directed elsewhere.

On this premise, and the fact that a finite resource- fossil fuel will peak, Dr. Narine supported the hydro project as the most sensible investment.

Officials of the Blackstone Group, the parent company for Sithe Global endorsed the project as the least cost alternatives in the countries and one that three different studies have all pointed to.(GINA)