Dear Editor
I WRITE with reference to Dr Gary Girdhari’s Letter to the Editor published in Stabroek News (October 30, 2022). I hold Dr Girdhari in high regard and welcome his critical engagement. I will highlight each point made by the writer and offer my response.

Girdhari begins by saying that all contracts are contracts regardless of geographical location. He is correct, but only in a nominal sense, in the same way one can say water is the same everywhere. More injurious than the circularity just noted, is the fact that my point concerned cultural attitudes towards contracts, not the form or contents of existing contracts. The error is obvious and warrants no further comment.

Dr Girdhari makes two related points about foreign investments. The first is that “thus far, Guyana has not been better because of foreign investments,” and secondly, that “there is no evidence that big oil would favour Guyanese.” With respect to the former, we are told that “Alcan, Bookers, Barama, Omai come to mind readily,” as ‘evidence’ of the failure of foreign investments.

You will note that not a shred of evidence is offered by the writer for this sweeping claim. Surely, as Guyanese we all know that Alcan and Bookers brought in significant foreign exchange to Guyana and employed thousands of our citizens. Omai is a more complicated case, and I will have to deal with that in a follow-up article. For now, what I can say from direct contact with senior people in the gold industry (November 1, 2022) is that there is an aggressive exploration programme currently under way with more than two million ounces of proven reserves confirmed. The mining construction phase will see US$ 1B and will employ 1,200 Guyanese. The operating phase will employ 1,000 of our people.

Girdhari’s point that oil will not favour Guyanese is shocking for the simple reason that the 2022 projected growth rate for Guyana by the IMF and other independent sources is between 57 per cent-60 per cent. By contrast, the global growth rate for 2022 according to the IMF is 3.2 per cent and will drop to 2.7 per cent in 2023 (IMF, October 2022). Projected earnings over the next few decades for Guyana top US$157B (Oil Now, July 27, 2022). The oil sector will contribute US$ 1.1B in foreign exchange to Guyana by the end of this year.

While I understand the general concerns expressed by Dr Girdhari, I must also surmise that his fears are more a matter of 1970s ideology, locked as it were in economic nationalism vis a viz foreign capital, and economic populism on the domestic (fiscal) side of things. The only reasonable inference to be drawn from his arguments is that we should shut out capital inflows and return to some version of import substitution ‘industrialisation.’ Numerous countries tried that and failed.

In closing, please allow me to share some relevant data on FDI. “According to the UNCTAD annual report in 2018, the ratio of global FDI stock to GDP increased from 9.58 per cent to 39.24 per cent during 1990–2017. This ratio increased from 9.32 per cent to 43.79 per cent in developed countries and from 12.86 per cent to 32.58 per cent in developing ones.” Finally, the World Investment Report found record levels of FDI in Asia, Africa, and Latin America in 2021, totalling US$619B, US$83B, and US$134B respectively (UNCTAD, 2022).

With this kind of FDI dynamic on a global scale, why should Guyana, a country historically starved for sizeable capital inflows, take a back seat? Please explain the rationale, without resort to ideology or ‘taste.’

Yours sincerely,
Dr Randolph Persaud