Caribbean & Central America - April 2022

*** GUYANA EMPHASISES DIVERSIFICATION. The good news on oil continues to flow. On 4 April, US oil giant ExxonMobil announced that it had made a final investment decision for the Yellowtail development, its fourth and largest in the prolific Stabroek Block. It is expected to deliver 250,000 barrels of oil per day from 2025. ExxonMobil has now discovered over 10bn oil-equivalent barrels in its offshore Guyana operations.

The previous week, at the Annual General Meeting of the Guyana Manufacturing and Services Association (GMSA), there was great emphasis on the need for Guyana to diversify its economy in order to maximise the benefit of these oil discoveries, with a particular emphasis on agriculture. On 29 March, Vickram Bharrat, the minister of natural resources, told the conference: “As a government, we are committed to ensuring that we develop our non-oil sectors like forestry, mining, and agriculture which will play a major role as we move forward as a country, and as we finally realise our potential as the breadbasket of the Caribbean.” He acknowledged that it would be a mistake to focus only on oil and gas, and he emphasised that the government “is seeking to address the biggest issue of power generation”. He said the gas-to-energy project “will address that issue”.

Much the same message was given by US ambassador to Guyana, Sarah-Ann Lynch, with some added advice on how Guyana could best achieve this. She said: “Economic diversification is absolutely critical to achieving prosperity for all. Just as Guyana’s high tide enables bigger ships to come to port, economic diversification can be a high tide that lifts all sectors and all people of Guyana.” She, too, emphasised that lower-cost and more reliable electricity “must be available to manufacturers”. And she added that “land leases or permits must be available to agricultural investors, and reliable and high-quality infrastructure must be built including roads, bridges, and ports”. Tender processes needed to be modernised, she said.

*** DEBT STILL INCREASING IN SURINAME. On 28 March, the International Monetary Fund (IMF) reported on its first review of the extended arrangement under Suriname’s Extended Fund Facility (EFF). It expects growth of 1.8% in 2022, with inflation at 25.8%, still high but down from 60.6% in 2021. On the fiscal side, the primary balance is expected to be 1.7% of GDP by the end of the year, but central government debt is still rising, from 125.3% of GDP in 2021 to an expected 132.2% of GDP in 2022.

*** JAMAICA’S DEBT ON DOWNWARD PATH. According to Finance Minister Nigel Clarke, speaking in the budget debate in early March, Jamaica’s debt-to-GDP ratio is now down to 96%, from 110% in March 2021. This is nearly back to the 94% level recorded in March 2020 at the beginning of the coronavirus (Covid-19) crisis.