Sat | Apr 1, 2023

Letter of the Day | Investing in Guyana could be the answer

Published:Thursday | January 26, 2023 | 12:59 AM


Eight years ago in May 2015, the shape of the Caribbean changed. The first substantial deposits of oil were discovered off the shores of Guyana, a country that until then had struggled despite its richness in natural resources such as bauxite and gold. But blessed with a new type of gold, the modest South American country has since managed to grow leaps and bounds. Now, as Minister Aubyn Hill leads his second mission to Guyana, a new idea has formed.

The staggering pace of Guyana’s recent growth cannot be overstated. Until the emergence of oil and gas, Guyana was the second poorest economy by GDP in the Western Hemisphere, trailing only Haiti. However, by the end of 2021, the country had a GDP per capita that was twice Jamaica’s and almost on par with that of Mexico. Foreign investors understandably came flocking from far and wide, and what they discovered when they arrived was GASCI.

The Guyana Association of Securities Companies and Intermediaries (GASCI) stock exchange was formed in 2003 and only has 19 listings and four licensed brokers. However, it has still seen unprecedented growth similar to that of Guyana’s GDP, with its total market cap increasing by 425 per cent in the past five years and by 58 per cent during 2022 alone.

According to the Guyana Americas Merchant Bank, Jamaican investors are both welcomed and accommodated, with the steps necessary to open an investment account from Jamaica being nearly identical to the experience locally despite the distance. This now presents Jamaican investors with an obvious opportunity – get in early and ride the wave, invest in an economy with almost guaranteed growth.

As the proceeds of Guyana’s oil and gas industry create a newly enriched population with suddenly significant amounts of disposable income, it can be expected that retail investment in GASCI will spring to life, and Jamaican investors who were already in the market will benefit the most. But there will also be the possibility for Guyana to invest in Jamaica. By helping to develop GASCI, cross-listing Jamaican companies, and even establishing a branch of the JSE in Guyana, there is the opportunity for a strategic partnership that transcends commercial exchange and creates not just wealth, but inter-ownership between the countries.

But what does this have to do with CARICOM?

To many Jamaicans, CARICOM still represents unity in name alone. We have made progress in trade and right of movement through the CSME, but true integration has always required something further – it requires ownership. Ownership gives us a tangible interest in the success of a company and by extension a country’s wider economy. Jamaica and Trinidad have come far, and the Eastern Caribbean has done well, but Guyana presents a unique mixture of opportunities that can kick-start this process while benefiting everyone involved.

The synergy of exchanging funding across our borders will supercharge our economies, providing Guyanese companies with the capital they will need to scale and Jamaican investors with lucrative investments, and vice versa. But its true power may actually lie in strengthening the CARICOM community.

In an industry that is so driven by self-interest, we suddenly have the opportunity to serve both ourselves and each other. Investing in Guyana, individually and as a country, could be the answer.