Black Immigrant Daily News

…calls for urgent action to address inefficiencies within transport sector at ACMF Anchor Awards 2022

President Dr Irfaan Ali on Friday zeroed in on the realities of soaring freight costs within the Region and its burden on developing states, and as such, called for urgent action to address the inefficiencies within the transport sector.

He made this call at the American-Caribbean Maritime Foundation (ACMF) Anchor Awards 2022 in Fort Lauderdale, Florida, where he was the guest speaker.

During his address, the Guyanese Head of State acknowledged the ineptitudes in transport and how it is affecting the Region while outlining that expeditious movement cannot be achieved without intervention.

“Unless we can increase the productive capacity and we can improve the system of production, and use our geographic location to ignite a reversal in the chain of goods and supply, we will not be able to have this expeditious movement or changes in terms of efficiency within the Region,” Dr Ali stated.

He related that Guyana has been making strides to re-engineer the supply systems and develop infrastructure, as he lobbied for more investments in shipping logistics.

“Shipping and logistics, the industry itself has a very long life in the Region. This, of course, is critically linked to human resource development. It is not training people to be exported. It is not training people whose skills will not be required in the future. It is training in a developmental context.”

Today, more than 100,000 commercial shipping vessels navigate the oceans, moving more than 80 per cent of internationally-traded goods. This is seven per cent of the value of global trade.

Statistics show that trade in goods has more than quadrupled over the past five years, while it is estimated that the volume of cargo has increased from 2.5 trillion tonnes in 1970 to 11 trillion tonnes in 2019 – two-thirds of this trade occurring in developing countries.

Ali, however, underscored that the pandemic inflicted a range of challenges on the global economy with global output shrinking by 3.1 per cent in 2020. This slowdown in economic activity, lockdowns, and restrictions forced onto countries has led to a decline in maritime trade by 3.8 per cent and 422 million tonnes.

Moreover, shipping costs skyrocketed sevenfold in some instances, leading to a spike in prices and higher inflation.

“The high cost of sea freight stands as an obstruction to economic development. The high cost of sea freight is contributing to rising prices in commodities and inputs from both manufacturing and the agriculture sector. It is increasing import costs and making the Region’s export less competitive. Developed economies can better absorb price increases but not so much, as poor developing states. Our region’s Small Island Developing States, with a high dependence on imports, increased shipping costs add to their burden,” he noted.

He called for action and solutions immediately to turn around the sector, given the long-term consequences attached to current operations. According to Ali, the shipping industry has an important part in the recovery from COVID-19 devastation and the supply chain crisis. He added that better freight rates will support a better recovery.

“This requires us to collectively come to the table and find answers faster. Otherwise, we will be hurting our economies severely in the long-term and the social tensions within our societies is going to escalate,” the Head of State positioned.

Maritime responsibility

On the other end, the upkeep of maritime responsibility and ensuring that the Caribbean waters are kept safe from accidents were also put forward.

“The Caribbean Sea must be kept safe from conflict and environmental damage. The Heads of State in the Caribbean Community, since 1999, express great concern for the movement of nuclear and toxic waste through the Caribbean. This is a good time to reaffirm the position that the Region’s maritime space be protected from the risks of marine accidents,” the Guyanese President told the gathering.

According to the World Bank, the blue economy is the “sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the health of the ocean ecosystem.”

The President said in order to capitalise on the blue economy, modernisation of the economy is necessary.

“The maritime sector in the Caribbean must be modernised in order to help the Region seize the opportunity inherent to global trade and the exploitation of the blue economy. Enhancing the Region’s human resources is an integral element of that modernisation.”

NewsAmericasNow.com

Black Immigrant Daily News

Vice President Bharrat Jagdeo has made it clear that the Government will not be selling crude to any refinery with a capacity above the 30,000 barrels per day (bpd), as the Government is currently seeking proposals from interested companies.

During a press briefing on Thursday, Jagdeo explained that the Government does not want the carbon footprint a large refinery would leave. Earlier this year, there were a number of companies that had expressed an interest in building large refineries in Guyana. Jagdeo noted that this is why the Request for Proposals (RFP) that has been issued by the Government, specifies that the proposals must be for a 30,000-bpd refinery.

“We need for national security, a small refinery in the country. So, we’re not looking to become the refinery capital of the Region. So how do we trigger this? We don’t want to own it in Government, but how do we get all these bidders to work together? We’re only selling 30,000 barrels of crude per day to one, the bidder most serious about building the refinery.”

Jagdeo noted that in the Request for Proposals, the Government put out that they would provide the land, and tax concessions and would sell the oil needed for the refinery to operate. He explained that while the company that eventually wins the bid will not be restricted to selling fuel to the Government, in times of crisis the State can exercise its powers to restrict fuel export and make the company sell to them for domestic consumption.

“So, this is for national security purposes, to have energy security at home so we don’t run out of gas or diesel or anything like that here. We’re pursuing this refinery. But not with Government funds. And through an open process,” Jagdeo explained.

“I saw one person say they want to build four refineries. Who is that? I don’t know who would want to build four refineries… it doesn’t make sense. That’s all we’re supporting, a 30,000-barrel-a-day refinery for Guyana. The others, we’re not selling any crude to them.”

Successive Governments have been cautious on the matter of building a refinery in Guyana that is State-owned, resulting in the only takers for this initiative coming from the private sector. The former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had previously hired a consultant, Pedro Haas, to carry out a feasibility study into constructing an oil refinery.

The results of the study did not favour building a refinery, particularly one with a capacity to produce over 100,000 barrels per day. In his study, Haas looked at the cost of building an oil refinery with a capacity of producing more than 100,000 barrels of oil per day. The study had come up with a US$5 billion price tag in order to construct the refinery in Guyana.

The expert also suggested that as an alternative to the establishment of an oil refinery, the Government could pursue maximising income from commercialising crude oil. Another suggestion was that the Government swap or toll crude oil for products on the global market or create joint ventures with offshore refineries, as well as acquire stock in refining companies.

However, the study was done at a time when oil giant ExxonMobil was the only operator in Guyana’s waters to find oil in commercial quantities. Members of the private sector have previously urged that the construction of a refinery be re-explored when more operators find oil.

Back in August, Jagdeo had hinted that while the Government had received at least eight or nine proposals for big refineries to be set up here, there is a need for at least one small refinery in the country to process the crude for local consumption in order to ensure the country’s energy security in the future.

According to the RFP that was issued, construction on the refinery is expected to begin by the first half of 2023, with the project expected to be completed within two years. The refinery will be located near the Berbice river. The proposals are due next month.

NewsAmericasNow.com

Black Immigrant Daily News

Karim Benzema ne jouera pas lundi en Liga contre le Rayo Vallecano, le Français ressentant encore une gêne après sa blessure à la cuisse gauche, a déclaré dimanche Carlo Ancelotti, son entraîneur au Real Madrid, alors que…

NewsAmericasNow.com

Black Immigrant Daily News

Karim Benzema ne jouera pas lundi en Liga contre le Rayo Vallecano, le Français ressentant encore une gêne après sa blessure à la cuisse gauche, a déclaré dimanche Carlo Ancelotti, son entraîneur au Real Madrid, alors que…

NewsAmericasNow.com