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Natural resources plays a vital part in Guyana's rapid development

Interview - November 26, 2014

Guyana’s Minister of Natural Resources and the Environment, H.E. Robert Persaud, gave the United World team insight as to the role the sector plays in Guyana’s impressive growth.


Guyana is going through exciting times at the moment. In a period of global economic recession, it’s been one of the top five fastest growing economies in Latin America and the Caribbean, and is even projected to have an impressive growth in GDP of over 5% for 2014. But what impact does your sector, the natural resources and environment sector, have on this economic prosperity?

83% of Guyana is covered in tropical rainforests and within those rainforests, as well as outside of those rainforests, we have an abundance of minerals and precious stones. As a result of related or unrelated factors of the global economic slowdown, prices for minerals, particularly gold, presented many opportunities that utilized our natural assets. We’ve been able to position ourselves as a destination where both local and foreign investors can come to Guyana, examine possibilities, and determine the best way to develop these resources in the most sustainable manner. We have been successful in terms of delivering this natural green capital within which we have minerals and other resources which contributes to economic growth and prosperity. The upward movement in global gold prices in recent years has done well for us. We’ve used this as an opportunity to propel our developmental agenda as a mining country, so that other minerals can be developed in a similar capacity.  In so doing, we’ve been able to manage some stability at a macroeconomic level, as well as at the sub secular level. We strive to generate more employment, more opportunities, and put the country in a position where we can withstand some of these external shocks. We have been successful in deploying our natural resources wealth as a cushion for those global effects.

Guyana has always been a pioneer in climate change and indeed with your country’s Low Carbon Development Strategy (LCDS), you’re once again leading the world in sustainable and green economy practices. What are your expectations for the LCDS program for the future, and do you see other countries emulating what you’ve pioneered?

You know there’s a famous saying that conservation without money is not conversation.  We have been able to have a healthy convergence of economics in the environment. Whereby unlike others, we have said that we would sustainably manage our natural resources, but also take care of people’s social and economic needs. You cannot tell a hungry man not to mine.  The LCDS allows us to be able to have a healthy convergence of our environment and natural resources with the economic and social realities of our country.  We have developed a strategy, whereby, the resources can be developed in a sustainable and healthy way, but at the same time do economic justice for the country. It is not only about economic justice and providing social justice to the population, but also ensuring and maintaining environmental justice.  It must be emphasized that the LCDS allows for this convergence to an extent where we see expanded growth of the natural resources sector, but not at the expense of the environment.  Once we had the growth in the natural resources sector have also allowed for some level of in deforestation. We still have problems in terms of environmental issues, seen in a general sense and based on international monitoring.  We are one of the few countries around the world where its forest is independently monitored by international forces. We have independently, and are the first country in the world to develop a National Monitoring Reporting and Verification System for forests at a national scheme.  We are the first to implement this in a voluntary way because we’re proud of our country.  

How have your previous experiences, you were the Minister of Agriculture before this, which is the backbone of the economy, allowed you to implement pragmatic practices in the Ministry of Natural Resources and the Environment that would then allow for a symbiotic relationship? Environment and agriculture are linked. How have your insights allowed you to catapult your Ministry?

At the end of the day, it’s about people. We discuss satisfying people’s basic need; hunger. And if people are out there hungry for food or for any basic need, as a government you are enabled to fulfill this need. If you are inefficient and ineffective at deploying the resources you have to satisfy this, you, at the end of the day, will be entering in what we call a self-defeating process.  Therefore, understanding that basic concept that the water and soil is about satisfying basic peoples’ need allows one to have that better perspective. How can you then satisfy these needs and then transfer other resources to meet these needs, at the same time recognizing that if you utilize these resources in a manner that is not sustainable, you will also be defeating the purpose of which you’ve started from? Hence, that simple exercise of understanding the basic concept of hunger; that hunger extends not only to the stomach, but generally to what people desire, enables us to understand peoples’ expectations. We are able to apply that same principle to the natural resources of our country. We are committed to the development of our human resources and marrying human needs with the needs of the environment. The only way you can do that is through an approach of sustainability and ecological development. To do so requires an element of innovation, bold political leadership, as well as lasting political rule. In Guyana, in order to examine the LCDS and other approaches; those three elements are very much present.

I read an issue where you quote, “Our activities are normally not only about production and producing, but it’s about strong societal environmental responsibility.” It sounds like this is the ethos of your ministry. What is the impetus to drive many of your policies?

Every Guyanese, everyone who utilizes or develops natural resources must also be an environmentalist. We have succeeded in making this responsibility mainstream, so that it is no longer a requirement, but rather a normal way to conduct business.  We expect stakeholders to move from feeling obligated to environmental regulations to self-enforcement. If I am going to be a good miner, a good forester, a good agriculturalist, I’m also expected to be an equally good environmentalist.  At the end of the day, it’s about patrimony. What we’re managing is the patrimony of this nation. There’s nothing else we honor in Guyana, and if you’re not able to dispense and fulfill these obligations properly, we will be doing harm to the patrimony. It is about instilling that value.

So how hard is that as a Guyanese trader? What are your top priorities for these challenges you’re facing due to trying to implement these types of policies and practices?

Let me give you one example. When I became Minister in late 2011, early 2012, I said to the mining community, “You will have to stop the use of mercury. You will have to ban them.” Four days later, I was confronted with a no confidence motion from the mining community who had asked for my removal. And that was a good thing; in the sense that they challenged me and challenged policy makers in the way we were viewing the situation.  Although we meant good, and had altruistic intentions, there was a gap in what was desired.  We had to bring everyone on board to subscribe to the desired agenda. We began the process immediately to bring the miners on board. We showed them the economics of doing things in an environmentally friendly way. In their continued use of mercury, the gold recovery will remain at 30%. We showed them non-mercury recovery techniques where it moved from 30% to 80%. They started to listen to the conversation. Thus, this is where it comes back to the corporate world with healthy convergence of economics and environment. We are trying to implement a change of attitude, from moving from a mindset of adhering to strict enforcement and compliance, to seeking and exploring ways in which we can converge economics with the environment. That is the only way to be sustainable. You can do it with a heavy-handed approach,  which will last for a while, but if you do not attend to people’s needs, especially in a developing country such as ours,  you will run the risk of this whole arrangement collapsing.

Speaking of the mining sector, I know you’ve called for the Guyanization of the mining sector where you want to have more domestic operations involved. Do you think that Troy Resources’s recent purchase of 1.1 million dollars of equipment from Farm Supplies, which is a Guyanese company, is a good example of your policies to implement Guyanization of the mining sector?

Guyanization is a broader concept. It’s not only about ownership and control. Guyanization is about respect and utilizing what’s available. The utilization of any potential and capabilities of the country by both foreign and local companies is what we mean by Guyanization. It is about giving the people of Guyana the full and maximum opportunities. We recognize an investor has his/her obligations to share, and we want them to be economically viable, and we would not compromise that. At the end of the day it is about respect and ensuring the maximum benefits to the people of Guyana. Once we talk about developing a natural resource, we are talking about the patrimony of the people of Guyana, as it is theirs. It is the only thing that Guyanese collectively own. We don’t own anything else collectively. Anything else that we own collectively is irrefutable. This is the most tangible thing we own as a collective. How we handle, manage and give the opportunities is something we cannot give light currency to.

So you’ve called the unavailability of cheap reliable energy as one of the biggest hurdles to the development in the economy, especially the value-added sector, where there is enormous potential in Guyana. What is being done to achieve this? What do you think the government should do in order to circumvent this hurdle?

The government has a road map. The government has a clear vision to look at the development of hydropower and move steadfast in this direction. We’ve been inhibited by the political situation and are exploring ways we can get around those. We’re also talking to other partners where Guyana can become a net exporter of energy given the resources we have. However, we recognize that if we talk about Guyanization and of Guyanese having maximum benefits of the natural patrimony, it is also about ensuring that much more value added of processing is in the country. We must see alumina or aluminum production, manganese or manganese byproducts, gold as a refined product, agriculture produce into cans and process, forestry into furniture or housing units, etc. The day of this country being a primary commodity exporter should be something all of us collectively work towards. There are investment possibilities, and that’s why we thought to create linkages laterally as well as multi-laterally with the US, Canada, Asia, and South America. We are also looking at the collaboration of linkages where a country we can develop viable local industries, based on resources and services.

Considering the expertise of the US in natural resource extraction, recent reports show that America will be the number one net exporter in energy by 2015, do you think there are possibilities between Guyanese and American companies to partner to form joint ventures, to extract this for knowledge exchange for capital exchange? Do you think there’s a lot of potential with this?

Guyana has always viewed the US as a strategic partner, not only in political, hemispheric and global terms, but as a strategic partner in terms of economic growth and development. Our common language presents an opportunity.  Geography and our proximity also present an endearing opportunity in this regard. We have encouraged and seen the fruits of that encouragement particularly in the oil and gas sectors. It’s not about hegemony. It is about what makes economic sense. Hence, it makes economic sense to involve the US and their levels of investments in Guyana.

Do you think the average American businessmen know of all the competitive advantages here? Or do you think more needs to be done to educate, market, and brand Guyana in America?

You know at the end of the day we are a small place in the global atmospheric scheme of things. At times, business decisions are made after examining economies of scale, and we believe that Guyana has enormous opportunities that investors have not seen.

We’re a part of CARICOM, MERCOSUR; the linkage within South America, and whilst we’re small and limited in scale, Guyana must not be seen in isolation, but rather as a catalyst and gateway into South America. Perhaps, what we may see is a seismic shift in thinking by US investors about the opportunities and the potentialities that exist in Guyana, not only today, but the potentialities of what exist beyond today.

In the oil and gas sector President Ramotar said that Guyana is within reach of becoming an elite oil and gas country. What do you think is missing in terms of technology, human capital, and capital itself? What are your priorities to ensure that Guyana reaches becoming an elite oil and gas country?

We are working aggressively with companies to complete their exploration programs. The first stage is exploration, then development and production. We have reached out and engaged a number of US companies in this regard and that program is progressing very diligently.

Considering the unique responsibilities of your Ministry, as normally in most countries, a ministry of natural resources is just mining, oil, and gas.  You also have the environment in your mandate. Whenever there is development within an environmentally sensitive place such as Guyana, you always have to strike a balance between conservation and development. How are you ensuring that during this rapid period of development, the unique identity in the culture and the environment is conserved as you develop?

If we miss the important principle that development isn’t integrated, we disservice development itself. Environment is one side of the coin, natural resources is the other side. Once you start separating the two, once bureaucracy takes over, you don’t have synergies, you a lack of coordination and it makes it difficult for investors to do business. Harmonization has allowed us to be much more effective in achieving that balance between environmental management of stability with the issue of economic and social development of those resources. Once separated, we are harming development. Everything is integrated, and we’ve taken an integrated approach.

We have a model we’re willing to share.  We’re not saying it’s the only model, we’re not saying it’s the best model, but we can say that with these sets of challenges, we have proven over time that this is a model that can stand up, and a model that can be presented to the global community.  It has worked for us so far, and in the long-term we believe it will continue to do so.

You’re bringing a pragmatic, feasible, tested, proven economic model that brings together all the world’s biggest concerns, and solves the problems, and moves forward. Do you see yourself as an ambassador?

Put it this way, we’ve been told that we’ve been punching above our weight.  We cannot sit by and wait at a multi-lateral level for things to happen, and hope that it will eventually get to us. We believe that with the resources that we have, there is need for us to continue development. We recognize that we can play around, and we have offered our experiences voluntarily.  We’ve positioned ourselves as a laboratory for this kind of experimentation of development in economics. We have made that sacrifice, and many countries have not. We’ve made that sacrifice, and we’ve made it quite clear that we need to be taken quite seriously. We’re not asking for or demanding anything, but we’re saying that if you have an obligation, you have a responsibility. You’ve made commitments, it’s time you’ve stepped up and deliver. We’ve owned up and taken the steps others are still contemplating. We’ve moved from theory to implementation, practice, and results. It’s also about what makes ecological sense, and that is what we’ve done, and it is there for all to see, we have not kept a secret.

At the end of the day, it’s about how to strategically position oneself. For Guyana, this is how we have positioned ourselves. You talk about competitive advantage, why invest in Guyana, why should I go there? Is it more of the same? The answer is very simple: it is not more of the same, it is less of better. Thus, that is how we’ve been able to position ourselves.

Mahatma Gandhi once famously said that a nation’s culture resides in the hearts and the souls of its people. So taken the opportunity to reach out to America’s number one newspaper, how would you describe Guyana’s culture to Americans who have never been here before?

It is one of caring. It is one of open-mindedness. It is one of affection, and I think there are few safer places Americans can be than in Guyana. People look up to Americans. They love Americans. Sometimes they love Americans more than they love themselves. It is defined by that.

I don’t think there’s a single American who has come to this land and has received an Anti-American sentiment, or felt it. I mean, a person might be a victim of a robbery, but that could happen in any part of the world. But, the feeling of inhospitality, of “I don’t want you here” does not exist. I would be devastated if I heard of that happening in Guyana. It’s not part of our character, it’s not part of our embodiment of Guyana, it’s not who we are. We can be many things, but certainly, we’re not that.