Latest update June 1st, 2026 12:37 AM
DEALING WITH THE GLOBAL FINANCIAL CRISIS
With a financial crisis now hitting the West, it is instructive that the President of Guyana should be in the East, in China to be precise.
If there is a problem in the West, the best place is to be in the East.
And the West does have a problem, a financial problem.
There is no doubt that the global financial crisis will have some trickle-down effects on Guyana. It may not have the same contagion effects as the global food crisis and the high cost of fuel, but there is no question that Guyana will be adversely affected, most probably by a decline in remittances.
These remittances, on which a great many of our families subsist, are likely to see a reduction. There are large Guyanese communities in North America and in parts of Europe, and most of the families over there support relatives back home in various ways.
The financial crisis now affecting America and Europe will ultimately mean that not all of these families will have the usual amount of money to send back home, even though aggregate remittance levels are expected to remain high.
Developmental aid is not expected, also, to be severely affected. Even though the US Senate has approved a $700-billion bailout plan which, however way it is looked at helps corporate America more than the average citizen; even though the cost of this bailout package will have to come from somewhere, the US Aid Budget is not likely to be affected, and neither are it contributions to international banks, from which Guyana secures most of its loans and grants.
The economy of Guyana, long nurtured on a diet of foreign credit and borrowing, must feel some amount of constipation at the developments in Wall Street.
There should, however, be no panic or fear, because ultimately Guyana is not likely to face any serious crunch as a result of this crisis.
It is, however, important that Guyana does not put its eggs in one basket. And this is why the visit by our President and Minister of Finance to China is so important.
China is offering to inject significant funds into the Caribbean, and Guyana is well poised, because of its long historic ties with that country, to take advantage of the opportunities that can be forthcoming through these Chinese investments.
Already, it is reported that China will be assisting Guyana with some US$40M to refurbish our electricity distribution system. This should help improve the efficiencies and reduce technical losses as the power sector moves towards cheaper fuel for the generation of electricity.
China is already involved in a major way in our economy. The Chinese have built the new sugar factory at Skeldon, and having already built a state-of-the-art convention centre, are likely to increase their involvement in projects in Guyana.
Given the uncertainties in financial markets in the West, the growing ties with China can only be helpful in allowing Guyana to cushion any fallout.
China is, of course, not the only Asian country with whom we are witnessing increased ties. Guyana has benefited considerably over the past years in relations with India, which is also providing significant investments in Guyana.
The Japanese, too, have made a strong stake by assisting us in the construction of a new hospital at New Amsterdam, and in the building of the CARICOM Secretariat.
The more Guyana deepens her ties with other parts of the world, the more increased bilateral assistance is forthcoming, and the less vulnerable Guyana will become in moderating any fallouts from the problems of the economy of the West.
India is also helping Guyana with her economic development. India has been offering scholarships, medical assistance and financial aid.
Like China and Japan, India is in the East, and, from the look of things, is well protected from the financial fallout affecting the United States and, consequently, Guyana.
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