I recently saw from one of my Trinidadian friends, that a minority leader of a political party posted on his Facebook page, stating that Guyana’s Vice President, Dr. Bharrat Jagdeo called a press conference to respond to some distasteful remarks made about Guyana by T&T’s Prime Minister, Dr. Keith Rowley’s. This 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, a journalist posed the question about a possible foreign exchange shortage, where he said what he said as a “by the way” 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 it is not the first time 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 is 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 AnsaMcal 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 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’s economy (from trade and profits from TT companies in Guyana) is sufficient to cover more than 90% of TT’s debt service payments.
Interestingly to note, 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 reserve 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 into 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 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 forecast to more than quadruple from pre-oil levels, to US$17 billion.
While the Guyanese dollar is weaker to the US dollar relative to the TT currency to the US dollar, the Guyanese exchange rate has been stable over the last fifteen 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 was equivalent to more than one year’s worth of import cover, which has weakened consistently to 8.6 months 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 a 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 of them, if not all of them, are in violation of the revised Treaty of Chagauramas.
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 benefited 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 in Guyana, our Guyanese counterparts have many fruitful and gainful partnerships with our 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, drop the arrogance, it won’t get us anywhere.