Confronting realities

Stabroek News
August 13, 1999

During her visit to Brazil at the end of June former President Janet Jagan signed a Memorandum of Understanding (MOU) with the Mercosur economic bloc comprising Brazil, Uruguay, Paraguay and Argentina. The signing was explained in a press statement as a move which would pave the way for Guyana's membership of Mercosur.

So what does the MOU say? Its first article states that the signatories have agreed to strengthen reciprocal relations in order to encourage economic relations, to identify possible action leading to the intensification of trade relations, to maintain free market economies and emphasize the importance of private sector initiatives as a source of prosperity, to develop and diversify co-operation between the parties, to promote investment between the parties and to endeavour to install mechanisms for the promotion and protection of investments between the parties.

The second article ambles on in much the same vein as the first. It signifies that the parties have agreed to support those activities which would expand trade relations between them, to promote fairs, symposia, industrial exhibitions and the like, and exchange information on trade policy, marketing systems, the regional and world demand for export commodities and any other subject necessary for the implementation of the MOU. It also approves the establishment of proficiency training in trade-related areas, and the identification of potential sectors for investments "which create the possibility of reciprocal trade flows... with third countries."

One does not have to be an experienced trade negotiator or senior diplomat to divine that this particular document is little better than a swirl of candyfloss. What it contains are vague statements of intent for better trade relations, but no mechanisms for implementation, and no binding commitments to steps which would be necessary to qualify us for accession to Mercosur. There is no suggestion either that the parties have any intention that Guyana should seek associate status with that body in the same way as Chile and Bolivia have done.

The reality is that we cannot expect to have a meaningful reciprocal economic relationship with the southern trading bloc any time in the foreseeable future. Our tiny, fragile, unsophisticated economy with its very limited productive capacity has not yet evolved to a point where it could survive in an environment tailored for the needs of large, diversified, economies like those of Argentina and Brazil. Mercosur is the world's fourth largest trade bloc with a combined economy of US$1 trillion, and we cannot even meet the preconditions for entry.

If the MOU does not really deal with substantive issues in relation to acceding to the bloc, then what is it all about? It would seem, according to a joint communique issued after former President Jagan's visit to Brazil in May, that Guyana is interested in greater integration with South America. The Brazilian Government, which has a special interest in drawing closer to Guyana for reasons which need no elaboration here, undertook to play good officer by submitting the MOU to the Mercosur countries in June. It was signed by everyone on the Latin side without fuss, presumably because it committed no one to anything in particular. It is, if you like, a kind of palliative for this country in circumstances where we cannot qualify to secure an agreement of economic substance.

Mrs Jagan's dream, as contained in a press release of June 29, was that Guyana would become a bridgehead to the Caribbean's access to South America. We cannot be a bridgehead unless our economy is sound, and unless we have strong links - economic and otherwise - with the Caribbean. The irony is, that despite the Govenment's statements to the contrary, the MOU will undermine our links with CARICOM, since it provides incontrovertible evidence that we are acting unilaterally.

Trinidad, which has also publicly declared its interest in joining Mercosur, is the CARICOM nation which stands the best chance of becoming a bridgehead. Sometimes referred to in Western circles as the 'Caribbean Tiger', its economy is strong, it has good trading links with Jamaica and Barbados, and has also extended itself further afield. Strong nations in good standing in CARICOM will get away with acting unilaterally; weak ones won't.

There is nothing wrong with dreams, but they will remain just that if the realities are not confronted.

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Guyana: Land of Six Peoples