Greater and Easier Access
About six months ago, the first bridge linking Brazil and Guyana was officially opened across the Takutu River. This simple but important event brought a change to the centuries old practice of migratory travel by boat or foot to reach the other bank of the river. Air travel, a comparatively expensive activity, offered Brazilians and Guyanese the only other, but limited, alternative for a time. With the bridge paid for by Brazil, access becomes greater and easier for residents of both countries. This also means that the flow of traffic, people and goods between Guyana and Brazil can follow a safe and legitimate land path to their respective destinations. Despite the difference in language, and with globalization already upon us, this is an investment that is worthy of commendation and support.
Size and Sign
The current volume of traffic using the bridge is small relative to its potential and is likely to remain that way until a more dependable all-weather road that serves the bridge from the Guyana side is built. The road is expected to stretch from Takutu to an area close to the mouth of the Demerara River, unless a more viable alternative exists.
With Georgetown being targeted for a deep-water harbour, the route of the road seems fairly well settled. The administration reported in the 2010 budget that a multi-purpose complex has been set up at the border point in Lethem to record arrivals and departures and the flow of goods, and to regulate health and agricultural interests. This development also makes it easier to record the bridge traffic in the mainstream of the national accounts. The size and sign of the entries in the national accounts will indicate how prepared Guyanese are to make good use of this historic land link.
Financial Stake
Despite the simplicity of the logistics, making good use of the new land link might not be easy. It is not impossible either and should begin with Guyanese individuals and businesses making strategic assessments of the utility of the bridge, road and anticipated deep-water harbour. This attitude is required if the private sector wants to improve its competitive position and hold its own against competitors from Brazil and around the world. Apart from the financial stake in the architecture across the river, Brazil has a vested interest in this bridge and the upgraded road that would inevitably follow.
Two to Tango
Brazil is a huge country with thousands of miles separating its less developed northern region from its major seaports in the southeast. The argument has been made that a land link to Guyana’s seaport would make it easier for Brazil to better serve the northern part of that country. That understanding leads to the conclusion that Brazil needs the bridge and road desperately.
As the saying goes, it takes two to tango and that bridge would not have been there if Guyana did not realize that it could benefit from its existence as well. However, the benefits will not come from speculative behaviour and wishful thinking.
Staggering Statistics
Once the novelty is overcome, Guyanese would have to determine how to convert this new interchange into economic value. This is a very important issue since Brazil with its advanced technology and vast economic strength is currently in a better position to make use of this link than Guyana. When completed, the road will allow Guyanese to have easier access to more parts of their country and to the relatively vast Brazilian market.
However, Brazil is in a better position to make greater use of the infrastructure and to dictate the relationship between the two countries. The IMF lists Brazil as the tenth largest economy in the world while the World Bank lists it as the eighth largest in the world. Either way, the Brazilian economy is over 1,500 times larger than that of Guyana. The population is 180 times that of Guyana.
These staggering statistics mean that when Brazil is ready to play ball the bridge and the road will most likely affect every business sector in Guyana, some favourably, some unfavourably. Up against a competitor of this size and calibre, it will require strategic assessments and bold action by Guyanese businesses to achieve more favourable than unfavourable results.
Hospitality and Automotive
There is room for the relationship between the two countries to grow. Guyanese might be surprised to know that, despite its proximity, Guyana does very little official trade with Brazil. Two-thirds of Guyana’s trade is with seven countries and Brazil is not one of them. Now that could change and bring benefits to a range of industries in Guyana. The hospitality industry was likely to receive an early and favourable boost from the bridge link, even though that industry is still in a fledgling state. Greater impetus will come from the deep-water harbour when it is built. Unlike with Suriname where visitors crossing the border into Guyana are not compelled to come to the capital, Brazilian travellers will need to do so.
An important reason for the bridge is to move goods between Brazil and Guyana from the planned deep-water harbour. Truck drivers servicing the port will need to eat and rest before and after long journeys. These workers will require accommodation and will most likely depend on the hospitality industry for that service. The automotive industry is also likely to see a boost in business when the purpose of the bridge is being fully met. No estimates are available on the quantity of vehicles that were likely to use the road but it is hard to imagine that vehicles will be coming in one or two at a time if the deep-water harbour is to be viable and efficient.
Stiff Competition
At the same time, the availability of a deep-water port serving both Guyana and Brazil will bring many more vessels, and of larger size, to Guyana. Guyana could become an important sea route and a competitive exporter through lower transportation costs. Companies like John Fernandes and Muneshwar, for example, that service these vessels could benefit or face stiffer competition from Brazilian or even North American agents that see the opportunity for big profits from direct participation in the brokerage or freight forwarding market. Banks DIH would have to worry about more than illegal substitute beverages coming across the border. At the same time, the increase in vessels calling at Guyana’s port could revitalize Georgetown and bring a new and different life into neighbouring areas like Vreed-en-Hoop, Versailles and Agricola to mention a few potential beneficiary spots.
Shift in Market Focus
The bridge and the road also make it easier for products from Guyana to enter the Brazilian market. The volume of trucking capacity is likely to increase substantially. This could lead to a shift in market focus by Guyana from North America and Europe to Brazil and Latin America. Some of those goods being trucked across Guyana could be dropped off in Guyana and add to the competition that local businesses face.
Further, the bridge and road will make it easier for Guyanese to travel to Brazil, shop and stock up their homes, instead of relying on goods produced domestically.
Relocation
A likely spin off of Guyanese consumer demand is the location of production facilities by Brazilians in selected parts of Guyana. Such an initiative need not stop with Brazilians. Companies from other foreign countries could begin to see competitive advantage in the Guyana and Brazil markets and decide to set up shop in Guyana. Asian, European and North American companies, that already operate in Brazil, could take advantage of the road to expand markets in Brazil, Guyana and the Caribbean because of the access guaranteed by the road, the planned deep-water harbor and CARICOM relations. Guyanese companies could also shift their operations to the border region of Brazil to strengthen their competitive position.
Small Business
While new entrants into the production sphere of Guyana have the benefit of improving quality and lowering prices, it could also displace Guyanese producers. Small business operators could face real threat of elimination or acquire new opportunities as a result of the bridge and the road. Like every big business in the private sector, they need also to begin determining how to adjust to the new and emerging realities. The preceding examples indicate that the scope for development in Guyana is huge and could attract migrants from the Caribbean and the rest of the world. It will soon be Guyana’s turn to deal with the issue of illegal immigration.
Added Significance
In addition to its size, Brazil is one of the fastest growing economies in the world. It has become a formal part of the G-20, the group of most influential economies in the world. Moreover, Brazil will be hosting the Olympic Games in 2016. As it prepares for this event, the already busy ports of Rio de Janeiro and Sao Paulo are likely to become busier. With such prospects, the land link with Guyana takes on added significance for Brazil. Therefore, Guyanese should not expect Brazil to sit back and wait for them to approve of its economic behaviour. Now that it has the opening provided by the bridge link, Brazil is unlikely to allow Guyana or anyone for that matter to thwart its economic ambitions and dictate the speed of its economic progress.
Proverbial Ostrich
Guyanese should expect the dynamics of the relationship with Brazil to become livelier and the energy generated by this new kinetic affiliation to alter the association between Guyana, the Caribbean and the rest of the world. Brazil has the economic and political clout to do so. To think otherwise, is to assume the posture of the proverbial ostrich with its head in the sand. Yet, the rejection, embarrassment and frustration that Guyanese experience in seeking to visit North American and European cities could lead them to embrace this still unknown, but equally attractive and now more accessible, neighbour with great ease.
