Brazil woes stall multi-billion-dollar projects

Jun 24, 2016 News

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As Guyana and its South American counterpart, Brazil, seek to widen their Trade Agreement and simultaneously, strengthen their relations, the initiatives that were seen as the instruments to enhance these processes, have been

affected by the existing political and economical issues being faced by neighbouring Brazil.

The Guyana/Brazil Land Transport Link, Deep Water Port and the Hydro Project are on the slow burner however, with Guyana raking in $1.8 Billion last year from rice exports alone. The state seems adamant in seeking to extend their trade agreement with Brazil by way adjusting tariff lines.
However, the main challenge is transport infrastructure.
Minister of Foreign Affairs, Carl Greenidge, during his appearance before the Foreign Affairs Committee at Parliament yesterday, was responding to queries made by Committee Members when he stated that with the challenges being faced by Brazil,
“We are not likely to see much progress,” with these projects not until Brazil settles some of its existing political and economical issues.
The country is scheduled to host the Summer Olympics in Rio de Janeiro this year; President Dilma Rousseff was removed from office after a period of 180 days while an impeachment process proceeds on charges that she had violated the country’s law on fiscal reasonability among other allegations.
Also, more than half of the members of congress are reportedly under investigation following a corruption scandal linked to the state oil and gas firm. The country also witnessed the rise of a new government. On the other hand, the country’s economic growth has reportedly slowed rapidly due to a ballooning effect; falling oil prices and structural inefficiencies.

LAND TRANSPORT LINK
Minister Greenidge stated that the Government had engaged the Brazilian Government by way of a “follow up” with respect to discussions that were held by the previous administration – the People’s Progressive Party/Civic (PPP/C).
He continued that in a meeting last June with the Brazilian Head of State, a Brazilian team had agreed that both countries will collaborate in an effort to get financing to conclude the feasibility study for the road.
Also, both states would collaborate to find funding for the road.
“That was to have been followed up by the Minister of Foreign Affairs of Brazil when he visited here. We’ve met since, but as you’re aware, Brazil itself has been going through difficulties and therefore, it (has) really not gone beyond the level of exchanges – there were specific things to have been done,” the Minister stated.
The Minister also spoke about the tapping in to the Latin-American fund which he said was “anticipated and agreed” that Brazil would be the initiator of that exercise.
“Truth is, I think that for most Latin America, that fund has not yet been tapped so the working mechanisms to access the fund seems not to be clean to everyone. But it is a substantial fund and we are looking forward to pursuing the offer so that the road can be built.

DEEP WATER PORT AND THE HYDRO PROJECT
As it relates to the Deep Water Port, the same issues apply, the Minister stated. He continued that there were several discussions on this matter and also on the Hydro Project, and stated: “In those cases, the Government of the State of Roraima also approached us when we went for a meeting with the President. The Head of the Finance Committee of the Senate, who happens to be a senior official of the Roraima Region, also came and we discussed these matters at some length.”
Greenidge stated that as such time as Brazil “settles down at the political level, we are not likely to see much progress in that regard, but most certainly at the level of the Central Government and definitely at the level of Roraima; it is something that they have a strong interest in”
It is intended that the proposed land link will join the northern states of Brazil through the Guianas and facilitate shipping access from port(s) in Guyana for imports and exports to and from Roraima, and the Amazonas, with the northern Atlantic, the Caribbean, and North and Central America region. The development of this land transport link between the two countries and the development of a deep water port are also seen as critical in the fostering of the integration process for the Caribbean region as a whole.
It is envisaged that Guyana’s integration with Brazil will open up foreign markets to Guyana’s exports, improve transportation costs, while at the same time, increasing competitiveness through increased economies of scale, and also, increasing the flexibility of labour supply which will result in less unemployment.

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