What happened to the proposal from a South African group to build a road to Brazil?

Stabroek News
August 10, 2001

Dear Editor,

If it is to release the shackles of under-development, Guyana needs to adopt a bold, imaginative plan to develop its vast land space and abundant natural resources. Its strategic geographic position, nestled as it is between South America's economic power-house Brazil to its south, the mineral-rich Venezuela to its west, Suriname to its east and the Caribbean archipelago to its north makes Guyana the natural fulcrum of the Caribbean - South America economic axis. This potential position is strengthened by the fact that neighbouring countries such as Venezuela and Suriname have active trading borders with proximate countries such as Colombia and French Guiana respectively and because of plans to construct a paved road linking Georgetown with the border township of Lethem and from thence to the Brazilian township of Bom Fin, and the cities of Boa Vista and Manaus.

Guyana is envisioned as the lynch-pin between the Caribbean islands and South America with the dawning of the Free Trade Area of the Americas in the next four years. This is a highly significant objective, because if the Caribbean is to become a real beneficiary of the FTAA, it needs to establish two centers. Firstly, there needs to be a gateway to the South American continent and secondly there needs to be a financial center within the Caribbean where trade transactions can be carried out. Guyana is the natural candidate for the role of "gateway", while Barbados with its sophisticated banking and international trading network is the obvious candidate for the role of financial center.

Readers should note that Miami is currently the center of choice for trade between the Caribbean region and Latin America. In existing circumstances, economies of scale benefits, which trade via Miami offers, outweigh the inefficiencies of longer trade routes and the involvement of US middle-men in commercial transactions. If the Caribbean is really to benefit from the FTAA, then trade volumes must grow exponentially and this will not be possible if Miami remains the "economic center of the Caribbean" as intrinsic inefficiencies will stymie growth.

The Caricom family needs to take a comprehensive view of its position vis a vis the Free Trade Area of the Americas and for example it should invite Brazil to become a non-borrowing member of the Caribbean Development Bank, where it would join Venezuela and Colombia who already enjoy non-borrowing member status in that institution. This move would breathe new life into efforts to widen regional development.

Additionally, the ongoing territorial dispute between Guyana and Venezuela must not be overlooked. Guyana's former President Desmond Hoyte had put forward a very reasonable formula for discussion with the Venezuelans, but the impetus to find a lasting solution seemed to have been lost when he demitted office and there is need to seek renewed national consensus on the issue, which can then be transformed into a coherent national initiative to be pursued with the backing of Guyana's sister states in Caricom.

I should also like to make reference to an article by Andrew Richards, which appeared in the Stabroek News edition of 25 June 2001, under the caption "South African group eyes Lethem Road in regional development plan". In that article, Richards pointed out that a group of potential investors had made a presentation to the Guyana government on constructing the road from Linden to the Brazilian border at Lethem at a cost of four hundred and fifty million United States dollars through private investment using a mechanism which they termed a "spatial development initiative".

Under this plan, a paved road would be constructed, including a multi?span bridge over the Essequibo River at Kurupukari and a spur road from Annai to Lethem. It would be financed by a combination of equity from the developers and commercial loans which would be repaid from revenue from "ribbon" development projects such as a 250 megawatt hydro-electric plant; an eco-tourism industry which the group feels can generate up to 300,000 visitors; rehabilitation of the alumina plant at Linden and the expansion of bauxite mining at Ituni.

This proposal should be viewed alongside an expression of interest from Brazilian President Fernando Enrique Cardoso to construct the Linden - Lethem highway to link with the road system on the Brazilian side of the border, so that Northern Brazil, particularly the states of Roraima and Amazonas can have direct road access to a port on the Atlantic coast.

This proposed link could also be of immense benefit to the Caricom states, for Manaus the capital of Amazonas is an important cultural center, which for example boasts an ornate opera-house of long standing, where famous European performers have been featured; a manufacturing center and free trade zone. Perhaps, with the blessing of the Federal Brazilian government, Caricom can forge a special trading relationship with Amazonas and Roraima. This could facilitate the widening and deepening of trade with South America's most populous and economically powerful nation.

Non regional interests are pointing us in a direction that it may be well worth our while to pursue. Perhaps Guyana should take the lead in doing this on behalf of the Caricom Region. Guyana certainly has the incentive, since its economy now shows disturbing signs of paralysis. Heavy capital investment and transformation from commodity production to a service based economy, which the road would mandate, could be the answer.

In the final analysis, developments in strategically placed and potentially rich Guyana will have great bearing on the future of the region.

Yours faithfully,
W.A. Angoy