In an interview with the Diplomatist, Guyanese High Commissioner to India, H.E. David Pollard, highlighted the recent developments in the resurgent Indo-Guyanese bilateral relationship.
Q. Could you give us an overview of the history of diplomatic relations between India and Guyana?
Diplomatic relations were established from the very beginning, when Guyana gained independence in 1966. The two most significant leaders in Guyana’s early political history were Cheddi Jagan, who was of Indian origin, and Forbes Burnham, who was the Prime Minister who led us to independence and was of African origin. Both these leaders were driven by socialist thinking at the time, as did many other developing countries. This provided a political bond in addition to the cultural bonds between Guyana and India, born out of the Indentureship programme. The country was, at that time, embarking on a process of cooperative socialism which was adopted as our ideology in 1970, when Guyana became a republic within the Commonwealth. Our leaders wanted to have Cooperatives as the main organisational unit of production. However, Cooperative Socialism got caught up in many of the problems that beset other forms of socialism over the years. Therefore, in the late eighties and early nineties, we had to undertake a massive economic reform program in Guyana.
Q. When the economic reforms in Guyana started, what was the role of the cooperatives thereon?
I think there was actually a time when Guyana had the most cooperatives of any country in the world, even though it is a “small” country. Almost every economic organisation became a cooperative. One major problem with all early socialist economic systems, however, was that they attempted to comprehend and, in that sense, impose prices and market information rather than letting price discovery occur through a bottom-up process. The fatal problem with this approach is that if the imposed prices and market signals are incorrect, it causes a massive misdirection of resources and mispricing of workers’ efforts. In Guyana, one of the most significant economic indicators that symbolised the distortions in the economy in the late 1980s was the currency exchange rate with the US dollar. Like many developing countries at the time, we had pegged the Guyana dollar to the US dollar at a fixed exchange rate, which we defended with foreign currency controls. In the early 1990s, the peg was G$4.80 to US$1. In 1992, under the then Minister of Finance Mr. Carl Greenidge, we floated our currency to let it find a market determined level. After 10 years, from its start at G$4.80, the Guyana dollar ended up around G$200 to US$1! So, we had been living in a world where we thought that a Guyana dollars worth of effort was valued at 20 American cents. In reality, it was only worth half a cent! Moving to a market driven foreign exchange rate, thus, required Guyana to completely rework its economy, paving the way for private companies and undertaking a lot of adjustments, much of it under supervision of the IMF. As part of all these adjustments, we had to close the mission here in India in 1994 for a few years.
Q. Why did Guyana close the mission in India for a while?
We were economising; we had been living beyond our means at the time. If you think that everything you are selling is worth 50 times what it really is and you then realise what your exports are really worth and how much you can actually afford, you have to readjust your economy and government spending in particular. So, Guyana witnessed a period of hardship; massive reduction in all parts of government spending as part of which the mission in India was closed. It re-opened in 2005, and there was a new High Commissioner – Mr. Gajraj – who came there a year or two later and served here until 2015. At this point, there was a change of administration in Guyana following which I became the High Commissioner in September 2016. Thus, the history of our representative relations in India were those of a bright start, followed by an unfortunate period of stepping back in terms of representation when Guyana had to withdraw from India (only from our part; India was always in Guyana) because of the economics of our transition, followed by a restoration of full diplomatic representation in 2005.
Q. Were India-Guyana ties affected by the closure?
No. India-Guyana ties remain strong; these are deep and cultural. The ties were also political; Guyana was a very early and committed member of the Non-Aligned Movement which India, together with other like-minded countries, including the former Yugoslavia, were working on as a “third way” to counteract the effects of the bipolar world that then held sway. Going back to the previous question, I would like to hope that, given developments in the last 2-3 years, we are now looking to re-understand, re-calibrate and redirect the main elements of the bilateral relationship and build our diplomacy on that.
Q. Coming to the present, three MoUs were signed earlier this year with regard to Renewable Energy, Cultural Exchange and the Framework Agreement for the International Solar Alliance. Have things moved forward in any of these areas since the signing of the agreements?
Things have been moving forward in all of these areas. Guyana and India have enjoyed many years of long and friendly bilateral relations which slipped into a comfortable familiarity that, over time, was not particularly well-directed. Recently, however, there have been changes of administration in both countries. There was a change of government in Guyana in May 2015 and a change of government in India as well with PM Modi’s government coming to power a year earlier in 2014. So the time was ripe to have senior officials in both governments meet properly and discuss how they wanted the long-standing relationship to go forward. I’m very pleased that, earlier this year, a lot of those meetings have occurred. The Minister of Foreign Affairs and second Vice President of Guyana led a delegation here at the end of January and then our President, His Excellence David Granger, was here for the launch of the International Solar Alliance on the 12th of March 2018. Sustainable development is one of the primary areas for the renewed bilateral cooperation, and this is part of all the agreements recently signed. There is existing trade between Guyana and India but it’s relatively small. Conventional trade, therefore, needs to grow, but there is much asymmetry between the number of products that India manufactures and has available compared to the Guyanese economy which is still, largely, mineral, extractive and agriculture-based. As the range and quantities of production are so different, bilateral trade will have to find its niches and grow around that, powered, in large part, by the private sector. Making big trade agreements may not be immediately feasible, but what we can certainly do is work on commonly agreed goals which many countries have agreed on – issues of sustainable development and, within that, climate change and renewable energy. The MoU on renewable energy encompasses that and includes solar energy, biomass, and other things.
Q. Would you be looking at an exchange of scientific information and expertise?
Most certainly, because within renewable energy, there are many technical aspects where knowledge sharing is essential. For example, there are some pilot projects in rice husk gasification and similar complementary technologies that can help our farms become more efficient as they are enabled to generate energy themselves. Our sugar industry already uses bagasse as a biofuel to generate electricity. But the main area we are looking at now is solar energy because of India’s very strong capabilities in that area. Already, since the MoU was signed in early February, the national focal point personnel from Guyana (ISA works through national focal points in countries that are members) have been back in India and working on creating a solar road-map for Guyana. We are also looking to benefit from some of the training opportunities here and, perhaps, to use the Lines of Credit programme that we have with India to get solar energy going quickly on a significant scale in Guyana. Guyana has very low utilisation of renewable energy at the moment. We have some rooftop solar infrastructure; I, myself, have an office in Guyana which has been running on solar energy for 4-5 years already. But what we need now is to use renewables to supply most of the energy for some towns – there are many in Guyana that are off the grid. The Guyanese government, as part of its renewable energy strategy, has designated certain towns and areas in Guyana as ‘green towns’, and we are looking at solar energy to power some of these.
Q. There has been a recent discovery of significant oil deposits in Guyana. What kind of collaborations – government-to-government, private sector, etc. – are you inviting from India in this regard?
A consortium of companies led by Exxon Mobil had, around the time of elections in 2015, started to make very significant discoveries of oil reserves in Guyana. They have, so far, drilled at least 7 wells and six of those have struck oil. The reserves that they have already identified can produce in excess of 3 billion barrels, together with quite a lot of natural gas. So, from being a country with zero fossil fuel resources, Guyana will be going into the production of oil in 2020. That will be only five years after the first discovery was made and evident of the rapid development that has taken place in the oil sector. In terms of the current size of the Guyanese economy and its GDP, the revenues from oil production will be transformational. What is interesting about this in relation to India is that India’s trading relations with Latin America and the Caribbean, of which we are a part, are still largely dominated by extractive industries – in particular, energy and oil. For example, India is the biggest importer of oil from Venezuela. India is also a country that, despite all its efforts in renewable energy generation, still imports 80 percent of its oil with a significant amount of that coming from Latin America – Venezuela, Mexico, Ecuador, Colombia. So, there’s considerable interest from India in the oil story of Guyana. We will probably be one of the few oil-producing countries from where a lot of oil is exported, because our oil requirements are a small fraction of the anticipated level of production. In 2020, we expect to go from producing zero to 120,000 barrels of oil per day and current development plans see that increasing to around half a million barrels per day within a few years.
Q. Do you, thus, see India becoming a sort of purchasing customer for this oil because Guyana will be looking for a market?
There’s a production sharing agreement, so some of the oil will be sold by the ExxonMobil-led consortium but Guyana has a 50 percent share in the oil produced which we can sell or use. The Indian High Commission in Guyana has already communicated India’s interest in our oil, and our senior officials and the President met with the Ministry of Oil officials here in India. At the moment, Guyana is going full speed ahead with preparations for ‘first oil’ because of the impact it will have on the economy. There are many issues to deal with in ensuring adequate governance and transparency of the oil industry in Guyana so that it is developed for the benefit of the people of Guyana and not for the benefit of smaller interest groups. All of this requires a fair bit of governmental re-organisation. We are currently in the midst of establishing a new Department of Energy which will not be part of the traditional Ministry of Natural Resources. This new structure will have to settle down before appropriate, follow-up high-level talks with India can occur. India’s already expressed an interest in also being involved in exploration of the offshore oil blocks. A number of other private companies are looking to do that as well. India has a fairly developed oil industry of its own as well as efficient production and down-stream capabilities, and we would certainly like to strategise with them about beneficial arrangements that can be made. It will take shape over time, but I think Guyana is very open to responding positively to Indian inquiries about the oil industry. As our governance structure takes on a more substantial form, I believe those discussions will progress and, hopefully, lead to something that will be to our mutual benefit.
Q. Coming back to the sugar industry, what exactly do you mean by reforms within the industry?
We’ve had sugar in Guyana for 300 years and, up until 10-15 years ago, it was still a significant contributor to our economy in terms of earnings, foreign exchange and employment. For a few years now, however, the sugar industry in Guyana has failed to achieve profitability. The industry is still government-controlled and the process of privatisation is only happening now. The fact is that, around the world, other countries are producing sugar at world prices efficiently and profitably and Guyana, which had the benefit of protected prices for a long time, is finding its industry to be loss-making at world prices. Reform with an injection of private enterprise is required. That restructuring is what is happening at the moment. The hope is that these structural reforms will open the door to the technical and management improvements that are needed. The implicit guarantee of state ownership was, perhaps, also a hindrance to some of the modernisation. Of the 11 extant sugar estates, the government intends to retain only 3. The rest are being privatised. There has been a call for Expression Of Interests in the privatisation of the estates. More than 70 proposals have been made and those are now being worked through.
Q. Are you willing to accept private sector interventions from abroad as well?
Absolutely. In fact, a number of foreign companies have already submitted proposals. There are talks on with some other industrial groupings including regional ones. The sugar industry will be transformed for the better. But there are implications in terms of redundancies, redeployments and retraining in Guyana that will have political and social ramifications, and those will all present challenges that we will need to negotiate.
Q. On the tourism front, do you think India and Guyana could do more – would you like to see more air connectivity?
The whole of Latin America wants better air connectivity with India. It is still not possible to get on a plane in India and fly to the GRULACS region. If you go to Madrid or Dubai, you can fly to Brazil and a number of other places. However, air connectivity is still poor. In terms of Guyanese tourism, Guyana is not an island. It is on the main land. It does not have white sand beaches or blue water. The water there is like the water from the Amazon; its brown or red in the creeks in the interior. The tourism product in Guyana is, thus, more eco-tourism related which is part of why we’re so keen on sustainable development. We do not want to destroy the beauty of the Guyanese interiors. The interiors are calming and restorative.
Q. In realistic terms, do we have numbers on both sides to increase flights between the two countries?
I think that awareness is the first thing. I don’t think many Indians think of Guyana as a tourist destination. Guyana itself, throughout the whole socialist period, was never really keen on promoting tourism. It’s taken a while for us to see the value of tourism – how it makes people more aware about what your country has to offer and how good it is at providing employment.
Q. Is Guyana looking at doing some promotional campaigns?
The tourism authority in Guyana is developing itself and we have been noticing a lot more interest here. Our mission in New Delhi has become more visible, and awareness about Guyana has grown. We are looking to work with companies interested in promoting tourism and the travel agency industry here to build on this. So yes, [tourism] is something the value of which is much better understood now and we really have seen a growth in tourism and expect that to continue as we look for the most effective ways to facilitate that.
One of the last things that I’d like to know about is healthcare and interactions between the two countries in that field, like the super-specialty hospital being set-up in Georgetown.
Well, one of the biggest elements of the relationship between India and Guyana is probably the Lines of Credit (LOC) that India is extending to Guyana. Our new cricket stadium, the Providence Stadium, was built in 2007, in time for the World Cup, by an Indian company under the LOC program. One of the other projects under this LOC was to build a super-specialty hospital but that project suffered a bad start. The process of tendering did not yield effective Indian companies with the required competencies and, therefore, the project faced a number of hurdles. In the end, the project was looked at again and the feeling was that instead of spending the money on a super specialty hospital – much as Guyana needs that, it would be more effective to spend the money on primary healthcare. So that project was replaced by a multi-part project to upgrade or develop regional hospitals that are not near Georgetown. There is a government hospital in Georgetown which is the main hospital, but there are many private hospitals in Guyana. Many of these are run by Indo-Guyanese, with many of them having been started by Indian doctors. Guyana’s interior is very big and sparsely populated. Thus, the regional primary contact points that patients would be assessed at need work and efforts need to be directed towards improving healthcare at the primary level.
Q. Are you looking at government or private interventions?
There are a lot of private doctors in Guyana but in terms of regional hospitals and the sort, those are still government entities. In Guyana, the model for industrial or economic development is still largely government led. However, the private sector is making strides in the services it can provide.