Letter: Prime Minister Rowley should be thankful for Guyana

The content originally appeared on: INews Guyana
President Dr Irfaan Ali and Trinidad and Tobago’s Prime Minister Dr Keith Rowley at State House in Guyana (DPI Photo)

Dear Editor,

Trinidad and Tobago’s (TT) Prime Minister, Keith Rowley, has a lot he should be thankful to Guyana for, rather than making disdainful remarks about Guyana.

I also saw, from one of my Trinidadian friends, that a minority leader of a political party posted on his Facebook page that Guyana’s Vice President, Dr. Bharrat Jagdeo, called a press conference to respond to Prime Minister Rowley’s inappropriate remarks. That is not true. The Vice President did not address Prime Minister Rowley in his press conference. It was after his press conference, and during the question-and-answer segment, when a journalist posed the question about foreign exchange shortage, that he said what he said as an en passant comment.

But let me take this opportunity to highlight a few things in regard to why Prime Minister Rowley should be thankful to Guyana, because this is not the first occasion in which he has made remarks about Guyana in a mocking way.

Trinidad & Tobago is Guyana’s largest trading partner for imports, whereby Trinidad enjoys a handsome trade surplus with Guyana. In 2022, Guyana’s import bill with Trinidad amounted to over US$1 billion, accounting for 25% of Guyana’s total imports. On the other Guyana, Guyana’s exports to Trinidad are virtually negligible, less than 5% of total non-oil exports, giving rise to a trade surplus with Guyana in the region of US$900 million.

Additionally, there are two large Trinidadian conglomerates operating in Guyana, namely: Massy, and Ansa McAL Group of Companies; and one financial institution, Republic Bank Ltd. In 2022, these three companies racked up an estimated after-tax profit in the region of US$185 million from their operations in Guyana. There are many other Trinidadian companies operating in Guyana’s oil and gas sector as well, and some are in partnerships with Guyanese firms. So, looking at our balance of payment accounts, reasonable estimates can be derived in terms of the repatriation of profit to Trinidad.

Considering all of the above, altogether, the Trinidad economy earns anything over US$1.3 billion attributed to Guyana’s economy. This amount represents nearly 6% of TT’s 2022 GDP, 17% of TT’s current revenue, and 91% of TT’s total debt service figure for 2022. In other words, Guyana’s contribution to the TT economy (from trade and profits from TT companies in Guyana) is sufficient to cover more than 90% of TT’s debt service payments.

It is interesting to note that in just seven years, US$4.6 billion of TT’s economy was wiped out under Prime Minister Rowley: from US$27 billion in 2015 down to US$22 billion in 2022. Another US$3.1 billion in TT’s foreign reserves disappeared: from US$9.9 billion in 2015, the equivalent of 12.2 months’ import cover, down to US$6.8 billion, the equivalent of 8.6 months’ import cover in 2022. As for the total debt stock: 90% of GDP and climbing, up from 68% in 2015.

To put this in perspective, Guyana’s pre-oil GDP was US$4 billion. Effectively, the TT economy shrank by an amount that is larger than the size of Guyana’s pre-oil GDP. That’s like killing all of the productive sectors in the Guyanese economy, taking it from a state of prosperity and growth to bankruptcy and widespread poverty in just seven years — all under the stewardship of Prime Minister Rowley.

Meanwhile, the Guyanese economy is projected to surpass TT’s economy by 2025. For instance, based on projected growth for 2023, real GDP is forecasted to more than quadruple from pre-oil levels to US$17 billion.

While the Guyanese dollar is weaker to the US dollar than the TT currency to the US dollar, the Guyanese exchange rate has been stable over the last 15 years within the framework of a floating exchange rate system. In the case of Guyana, exchange rate stability is important at this time versus a revaluation of the exchange rate for a stronger currency.

Conversely, Trinidad & Tobago has a fixed exchange rate regime, which means that to maintain a certain exchange rate, the Central Bank has to maintain an established minimum level of foreign exchange reserves. As mentioned above, the foreign exchange reserves were equivalent to more than one year’s worth of import cover, which has weakened consistently to 8.6 months of import cover in 2022. This means that if the TT economy continues to dwindle at the current rate, by 2025, the TT economy will be in trouble; that is, a brewing debt and foreign exchange crisis.

In addition, to date, Guyana has a long list of unresolved trade barriers with Trinidad & Tobago, to the extent that Guyanese firms are prevented from exporting their commodities into TT; even approved items are denied entry. And TT seems to have no interest in resolving these issues, though some, if not all, are in violation of the revised Treaty of Chaguaramas.

Be that as it may, I wish to acknowledge that, over three decades ago, Trinidad & Tobago under former Prime Minister Basdeo Panday was very generous to Guyana when Guyana had its own debt crisis. To this end, Guyana benefitted from debt forgiveness from TT, which in part helped Guyana to recover during that period.

Finally, Guyana has always been generous to Trinidad & Tobago, and there was a time when Trinidad was more generous to Guyana. Guyana welcomes the many Trinidadian firms operating locally, and our Guyanese businesses have many fruitful and gainful partnerships with their Trinidadian counterparts. Going forward, I would like to see more mutual respect for each other, especially from the level of the current TT Government. And to the rest of our TT counterparts, some of them need to drop the arrogance; it won’t get anybody anywhere.

Yours respectfully,Joel Bhagwandin