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The importance of trade and maritime ports to Guyana

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by Correspondent

 

Though known by the sobriquet, “Land of many waters”, signifying the many waterways that are distributed naturally and abundantly throughout the length and breadth of our vast and beautiful country, Guyana remains remiss for its lack of greater use of maritime transportation.

This absence is brought into sharp focus when one considers a country like Japan, for example, which can hardly claim to boast the water resources of our country. Yet, in that country, seaports function as a lifeline.

There, the volume of international trade has grown steadily in recent years and the competition among seaports of neighboring Asian countries has become severe in the international transportation market – driving down costs and increasing competitiveness, all to the benefit of the business community and consumers.

 

 

There is no doubt about the relevance of ports in the context of our national development. Indeed, it is taken as a given, that the importance of these infrastructural facilities lies in their ability to provide a fast, safe and relatively cheap conduit for goods and people.

Some of the larger ports also serve as hubs for connection and transshipment, allowing cargoes on different long-haul routes to be served more efficiently by several ships. Ports usually have deep-water channels or berths, as well as storage facilities, which determine how much cargo the port can handle and the type and capacity of vessels it can receive.

Therein lies their connection to trade and increased trade flows. The evidence is there that since the mid 1980s, the growth in world trade in goods and services has outstripped that of world output.

 

 

With approximately 90 percent of this global trade being conducted by maritime transportation, ports are now playing a more pivotal role than they did in the past. And this trend is expected to be sustained because as countries develop, trade becomes germane to their economic activities because of the principle of comparative advantage.

This brings us to the discussion on the importance of trade to Guyana in the context of maritime transportation.

As was noted by Finance Minister, Winston Jordan, since the beginning of the 1990s, inter- regional and intra- regional trade has gained extraordinary strength and importance in Guyana and it is no doubt underpinned by a conscious development strategy.

 

 

Jordan is of the view that imports and exports have significantly influenced the level of economic growth, employment, the balance of payments and the country’s international reserves. He recalled that in 2014, for example, exports of goods and services accounted for 43 percent of Gross Domestic Product (GDP) while imports as a percent of GDP was 66 percent, both ratios attesting to the highly open nature of the economy and its dependence on trade for growth and development.

He said that these ratios are projected to remain high in the medium to longer term, as investments in areas such as petroleum, bauxite, timber and gold begin to materialize.

Jordan said that a key area of economic policy discussion outlined in Guyana’s National Competitiveness Strategy Document is trade policy and export promotion with specific reference to the adequacy of ports to facilitate buoyant trade volumes.

 

 

He said that the government has a vision of comprehensive infrastructural connectivity and reform that would include aligning the maritime sector with international standards and best practices.

The Parliamentarian noted that dredging to create deep water channels will be undertaken in addition to the maintenance of Guyana’s ports, harbors and rivers in an effort to make maritime transportation safe, less costly and more reliable.

He noted that the question is: “how do we realize what essentially has been a burning issue for a long time?”

To this he said, “I don’t presume that there is any easy answer, but our Government is prepared to explore all the options available to realize this objective, in the shortest possible time.”

 

 

As it relates to financing for the Maritime Transportation Sector, the Finance Minister said that in the National Development Strategy, it is understood that historically, European markets organized Guyana’s ports to facilitate the accessibility to primary markets.

He said that these ports are at Georgetown at the estuary of the Demerara River; and Linden, 65 miles up the same river.

He said that this historical condition has remained virtually unchanged in contemporary Guyana, even though lately, there has been talk of a Deepwater Harbor and Container Terminal in the Berbice River. Jordan said that this limitation has become even more pronounced, as the need to expand the ports is driven by the increasing demands of the shipping industry.

 

 

The Finance Minister said that calls have been loud, prolonged and clamorous for the Georgetown Harbor to be fixed. He said that members of the Shipping Association have been vociferous in pointing to the constant threat posed to the channel from the heavy silting during outflows from the Amazon River.

Jordan said that members of the Shipping Association have also highlighted the shallow draught of the Demerara River channel on the size and weight of vessels and cargo traversing the port and the impact it was having on the free flow and expansion of commercial shipping.

He said that members  spoke too, about the negative impact this was having on shippers, the commercial sector, the public sector (including GuySuco), and the private productive sector. Jordan said that the members pointed out that business across the spectrum had slowed down as a consequence.

 

 

While he is inclined to believe that the slower growth of business would require a deeper, more rigorous analysis to ascertain the underlying factors, Jordan said that there is no denying that the issue of the inadequacy of the Demerara River draught would feature prominently.

The Finance Minister said that the shallow draught is responsible for rising freight costs as well as reduced market access, both on the export and import sides.

He said that other problems which have been identified in the past as having a direct or indirect negative impact on port development include piracy, theft and loss from international and local vessels, the lack of fire fighting vessels, poor pilotage services – because of equipment and human resources constraints – and a lack of adequate navigational aids.

 

 

In spite of these, Jordan stressed that trade is taking on heightened importance in the drive to grow the economy and in the development of the country. The Finance Minister said therefore, that adequate infrastructure must be put in place to handle the higher volume of activities at Guyana’s ports. He cautioned that the failure to do so will continue to have a severe impact on the competitiveness of, and by extension, the economic performance of the country.

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