24 January 2025

The Government of Guyana has unveiled an ambitious US$6.6bn (GY$1.382tn) National Budget for 2025, marking a historic 21% increase from the previous year.

Tabled by Finance Minister Ashni Singh, the budget aims to propel economic growth, address social needs, and stimulate private sector investment under the theme, “A secure, prosperous and sustainable Guyana.”

Despite a moderated economic growth forecast of 10.6% for 2025, Guyana remains one of the fastest-growing economies globally. Singh emphasised that the non-oil sector is set to grow by an impressive 13.8%, showcasing the success of economic diversification efforts.

“Agriculture is forecast to grow by 11.4%, with sugar production expected to surge by 115.4% and rice by 12.4%. Meanwhile, the mining sector will see a 17.2% increase in gold output and over 70% growth in bauxite production,” Singh announced.

The budget prioritises several key sectors, with record-breaking allocations aimed at improving infrastructure and social services.

A US$686mn (GY$143.2bn) will fund a dramatic expansion of healthcare, including the completion of a Paediatric and Maternity Hospital and six regional facilities, as well as US$14mn (GY$2.9bn) for a neurological rehabilitation centre and a cancer treatment centre of excellence. “This budget places Guyana well on its way to realising a modern, world-class healthcare system,”  said Singh.

Over US$540mn (GY$112.6bn) has been allocated to continue the government’s aggressive housing programme, with the goal of surpassing its manifesto promise of 50,000 house lots by adding an additional 25,000.

Agriculture receives US$500mn (GY$104.6bn) which will support robust growth in sugar, rice, livestock, and fisheries, furthering diversification in the economy. Meanwhile US$34.48mn (GY$7.2bn) will support initiatives to enhance the wellbeing and development of indigenous communities, including infrastructure, education, and healthcare investments.

The 2025 budget also introduces several measures to ease the cost of living and boost disposable incomes. The threshold for income tax has been raised to US$623 (GY$130,000) from US$479 (GY$100,000), with the first US$240 (GY$50,000) from second jobs or overtime now tax-free. “The concept of working longer, and in particular, working longer hours is one that we have to embrace, given the recognition that the size of the supply of labour is not growing in Guyana at the pace at which the demand for labour is growing” said Singh.

Additionally, direct support initiatives include US$240 (GY$50,000) school grants, US$24 (GY$5,000) health vouchers, and US$479 (GY$100,000) for every newborn are aimed at providing direct financial support to families. While Old Age Pensions have been increased to US$197 (GY$41,000), and public assistance has risen to US$105 (GY$22,000).

With continued electricity woes in 2024, the budget allocates US$423mn (GY$88bn) to energy projects, including the Gas to Energy (GtE) Project, which will deliver 300 MW to the national grid and reduce electricity costs by 50%. Investments in roads and bridges also remain central to the government’s strategy to support economic growth.

“This budget isn’t just about growth; it’s about ensuring that growth benefits every Guyanese,” remarked Komal Singh, Chairman of the Private Sector Commission (PSC).

For 2025, oil revenues are expected to fund 37% of the budget, with US$2.5bn withdrawn from the Natural Resources Fund. Production from the Stabroek Block, which will reach 900,000 barrels per day by year-end, is a key contributor to the country’s development plans.

“The size of this budget signals a growing and robust economy, key to attracting both local and international investments,” Komal Singh noted, adding that over US$2.5bn in private sector investment outside the oil sector has been recorded in the past four years.

While the budget has been praised for its transformative potential, opposition leaders have raised concerns. Former Finance Minister Winston Jordan labelled it a “hodgepodge,” arguing it lacks targeted measures to reduce poverty, which is estimated at 48%.

“The child allowance does nothing for those already covered by the income tax threshold,” Jordan remarked, while Opposition Leader Aubrey Norton critiqued the absence of substantial benefits for low-income earners.

Guyana’s 2025 budget represents its boldest step yet as an oil-driven economy, with record allocations for health, housing, agriculture, and indigenous communities. However, balancing growth with social equity remains a pressing challenge.

“This milestone budget empowers citizens with more disposable income and creates an enabling environment for private sector growth,” Komal Singh asserted. Whether it delivers on its promises will be pivotal for Guyana’s economic trajectory in 2025 and beyond.

10 January 2025

The Dominican Republic is poised to embark on an ambitious development agenda in 2025, with the government authorised to secure over US$6.5bn in international financing.

This decision, embedded in Article 71 of the 2025 National Budget, signals a significant commitment to addressing critical needs in transportation, water, sanitation, energy, and education through the implementation of 37 major infrastructure projects.

The budget, approved as law by the Senate, includes a bold financing strategy that paves the way for the executive branch, through the Ministry of Finance, to accelerate the rate of borrowing from international organisations in 2025.

The financing strategy relies on partnerships with international financial institutions, including the Inter-American Development Bank (IDB), the Japan International Cooperation Agency (JICA), the Spanish Agency for International Development Cooperation (AECID), the Andean Development Corporation (CAF), and the Central American Bank for Economic Integration (CABEI).

Among these, a US$500mn loan is earmarked for the construction of a monorail in Santiago de los Caballeros, while US$371.5mn will fund the expansion of Santo Domingo’s Metro Line 2.

Other significant projects requiring financing include the construction of additional sections of the border fence with Haiti which is estimated to cost US$239.9mn, and the country’s nationwide bridge rehabilitation and maintenance programme estimated at US$200mn, to be executed with support from the IDB.

The heavily touted National Plan for Connectivity and Transformation of Road Infrastructure (Planacovial) is also expected to move forward once the government can secure the required  US$600mn investment which is being negotiated with CABEI.

All loans and financing must be negotiated at market-compatible interest rates and fees applicable to the Dominican Republic, with a minimum repayment term of seven years.

This aggressive borrowing strategy comes amid significant growth in the Dominican Republic’s public debt. As of November 2024, the Non-Financial Public Sector (NFPS) debt reached US$57.48bn, up from US$30.7bn in 2020. External debt accounts for 70.4% of this total, equivalent to US$40.43bn.

The rising indebtedness reflects increased reliance on international markets. Private creditors, mainly through bond issuance, have grown their share of external debt from US$22.16bn (72.2%) in 2020 to US$31.04bn (76.8%) in 2024. Meanwhile, multilateral organisations like the IDB and World Bank remain significant players, albeit with a shift in their relative contributions. The IDB’s share declined from 13.4% of total external debt in 2020 to 9.8% in 2024, while the World Bank’s increased from 3.8% to 4.8% during the same period.

Despite the ballooning debt, the debt-to-GDP ratio dropped from 56.6% in 2020 to 46.1% in 2024, driven by robust economic growth. However, experts warn of vulnerabilities associated with the heavy reliance on international private financing.

“The increase in external debt, especially through bond issuance, suggests a greater dependence on international private financing,” observed El Caribe financial writer, Martín Polanco, adding that “although this allows for diversifying the sources of resources, it also increases the country’s exposure to the risks associated with global interest rates and market volatility.”

The 2025 budget reflects President Luis Abinader’s focus on infrastructure, but critics argue it continues a longstanding trend of prioritising current spending. The administration has followed the precedent set by previous governments, dedicating the majority of revenues to current expenditures, including significant increases in public sector employment, employee benefits, and interest payments on existing debt.

This fiscal strategy has sparked debate about the balance between investment and sustainability. While supporters highlight the transformative potential of these projects, detractors raise concerns about the long-term implications of increased debt servicing costs.

The Dominican Republic’s ambitious borrowing and development plans aim to propel the nation’s infrastructure into a new era of modernisation. As the government navigates the complexities of securing and managing these funds, it faces the dual challenge of fostering growth while safeguarding fiscal stability. With US$6.5bn on the line, the year ahead will test the administration’s ability to execute its vision effectively.

13 Decemeber 2024

The Bahamas is grappling with a storm of allegations and political upheaval following a US indictment that accuses high-ranking Bahamian police and government officials of enabling massive cocaine shipments to the US.

The indictment, unsealed by US Attorney Damian Williams and DEA Administrator Anne Milgram, charges 13 individuals, including high-ranking officials of the Royal Bahamas Police Force (RBPF) and the Royal Bahamas Defence Force (RBDF), with cocaine importation and related weapons offenses.

“For years, drug traffickers have smuggled tonnes of cocaine through The Bahamas with the support and protection of corrupt Bahamian government officials who control airports throughout the country and provide sensitive information about US Coast Guard movements to drug traffickers,” said Williams.

The indictment paints a damning picture of systemic corruption, accusing Bahamian officials of accepting bribes of up to US$2mn in exchange for facilitating the safe passage of cocaine shipments.

The fallout in The Bahamas has been swift and dramatic. Commissioner of Police Clayton Fernander resigned, with Prime Minister Philip Davis confirming his departure and recommending ACP Shanta Knowles as his successor. If appointed, Knowles would become the first female Commissioner of Police in Bahamian history.

“We are taking important steps to restore trust and accountability,” said Prime Minister Davis, noting that there would be more changes to the leadership of the country’s security forces.

During a heated parliamentary session, St. Barnabas MP Shanendon Cartwright added to the turmoil by grabbing the ceremonial mace—a symbol of parliamentary authority—and throwing it out of a window in protest. This was followed by the forceful ejection of opposition lawmakers from parliament.

The chaos within Parliament spilled into the streets, where opposition supporters gathered to protest the corruption allegations. Opposition Leader Michael Pintard criticised the government for attempting to “silence the Bahamian people” and called for a broader commission of inquiry to investigate systemic corruption.

“We know that the transshipment of drugs and arms through The Bahamas cannot be facilitated by law enforcement alone,” said Pintard. “It has to be facilitated by a wider group of persons who have authority in different sectors of our society.”

In the first sitting of parliament since the mace incident, House Speaker Patricia Deveaux announced the suspension of the entire official opposition except former Prime Minister Hubert Minnis following a motion moved by the government.

“It is so moved that for the next two sittings, the honourable members mentioned will not be allowed to sit in this honourable assembly,” said Deveaux. Following this, the six members, led by Opposition Leader Pintard left parliament and staged a concurrent press conference.

Adding to the intrigue is the indictment’s reference to an unnamed high-ranking Bahamian politician who allegedly agreed to authorise law enforcement support for drug traffickers in exchange for US$2mn. Prime Minister Davis has expressed frustration with US officials for withholding the identity of this individual.

“I told them to disclose to me the named politician,” Davis said. “They haven’t done it yet… They’re painting The Bahamas as a bunch of corrupt government officials. I asked them to identify who they are. Are they public servants? We do have bad apples amongst ourselves, and we got to root them out where we find them,” he added.

In an interview, Former Prime Minister Hubert Minnis suggested that if Prime Minister Davis was not informed by the US about the indictment, it may be an indication that they do not trust the current government.

He recalled that when he was in office he was informed by the US about investigations involving a high-ranking public figure in The Bahamas and had no objections to the actions of US investigators.

The Davis administration has sent a formal diplomatic note to the US, requesting further details about the allegations. Minister of Foreign Affairs Fred Mitchell has also called for clarity, while the Bahamian public grows increasingly restless.

Meanwhile, the government is pushing forward with an Independent Commission of Investigations Bill to address misconduct by law enforcement and public officials. Minister of National Security Wayne Munroe described the bill as a step toward restoring trust, but Pintard dismissed it as inadequate.

“This is no substitute for a broader commission of inquiry,” Pintard said. “We need to examine the relationships between local and international criminal organisations, security forces, and members of Parliament,” he maintained.

As The Bahamas navigates this crisis, the implications for its international reputation and governance remain uncertain. The scandal has laid bare deep-rooted issues within its institutions, raising urgent questions about accountability and reform. For now, the country’s political and law enforcement leadership faces an uphill battle to restore trust both at home and abroad.

29 November 2024

Barbados has secured a groundbreaking US$300mn debt-for-climate swap to finance critical infrastructure upgrades while reducing the country’s public debt stock.

Prime Minister Mia Mottley hailed the initiative as a global first, describing it as a transformative model for tackling climate resilience while avoiding an increase in national debt.

“This is the first debt-for-climate swap that will get back a capital sum upfront to build a project upfront. What is here is the ability to repurpose debt in a way that not only meets our obligations but provides immediate financing for critical infrastructure,” declared Mottley during a session in the House of Assembly.

The arrangement restructures existing debt at a lower fixed interest rate of 3.25%, compared to previous rates as high as 8%, enabling Barbados to redirect savings into infrastructure projects.

State Minister of Finance Ryan Straughn elaborated on the financial terms, highlighting that the loan was secured from three Canadian-owned banks—CIBC, Royal Bank, and Scotiabank— which will lend US$180mn, US$70mn, and US$50mn, respectively.

The syndicated 20-year loan is the country’s largest local financing effort and includes a five-year grace period and fixed quarterly payments of approximately US$5mn beginning in 2030. The savings from refinancing existing high-interest loans are expected to amount to US$150mn over the loan term by paying off higher-interest loans from the Inter-American Development Bank (IDB) and the Green Climate Fund (GCF).

The  government has defended the move, arguing that it is not increasing debt, but rather restructuring in a way that gives the country financial breathing room while achieving tangible infrastructure upgrades and alllowing them to tackle critical challenges like water leakage and disaster risk mitigation.

Part of the funds from the loan will be used to build a US$60mn sewage treatment plant and a seven-megawatt solar energy system with battery storage, as well as Barbados Water Authority enhancements such as pipeline installations, and water infrastructure upgrades to build resilience.

“Not a dollar, not a cent. It is coming out purely of taking our existing debt and instead of paying eight per cent… we pay only 3.25% and get a treatment plant… a pipeline… [and] a seven-megawatt solar system with battery storage,” stressed Prime Minister Mottley.

However, while the government touted the initiative as a model for innovative climate financing, Opposition Leader Ralph Thorne critiqued the deal, calling it “just another loan”. He questioned its originality and suggested it might increase national indebtedness, contradicting the administration’s stated goals.

“Is the government replacing local debt with foreign debt?” Thorne queried, accusing the government of misleading the public into believing it was unprecedented.

Thorne also raised alarms about unresolved environmental issues, particularly allegations of untreated sewage being pumped into the sea, which the government aims to address through the project. Mottley dismissed the critiques as baseless, arguing the swap provides essential resources for modernising Barbados’ water and waste systems.

“This is a capital project intended to protect the water resources of Barbados, augment the water available to farmers, bring down the cost of food, and allow those ploughing the food to earn a living to support their families,” she said.

Mottley underlined the international recognition the swap has garnered, with praise from institutions like the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB). She positioned Barbados as a trailblazer in climate finance, showcasing the country’s commitment to addressing climate change through innovative solutions.

In the Upper House, Independent Senator Crystal Drakes and Opposition Senator Ryan Walters voiced concerns about transparency and the broader impact of the deal on Barbadians. Drakes stressed the need for clarity on how the upgrades would expand sewage services and improve water supplies.

“This resolution is critical to the survival of Barbadians…but as good as the policy innovation may be, there are more details that need to be shared,” said Drakes.

Walters echoed these concerns, highlighting the financial uncertainties tied to the transaction. “There are great unknowns about what the financial impact of this restructuring will be,” he said, pointing to the long-term implications for pensioners and future generations.

Meanwhile, University of the West Indies Economist, Professor Justin Robinson commended the debt-for-climate swap as a pioneering initiative in regional financing. He noted that the deal’s sustainability-linked terms reflect Barbados’ commitment to environmental goals and global governance standards. However, he warned of potential risks, including additional loan costs if performance targets are unmet.

“Our people deserve infrastructure that works, water that is secure, and an environment that is protected. This swap delivers on all fronts without burdening the taxpayer,” said Prime Minister Mottley as she concluded her contribution in Parliament, urging Barbadians to see the deal as a long-term investment in the country’s future.

15 November 2024

Regional conglomerate ANSA McAL has completed its largest acquisition in its 143-year history, purchasing US-based chlor-alkali producer Bleachtech LLC for US$327mn.

The acquisition, finalised through ANSA’s subsidiary ANSA Chemicals US LLC, marks a significant step in the group’s ambition to expand its market presence and achieve its “2X” growth strategy of doubling profits by 2027.

Bleachtech operates two plants in Seville, Ohio, and Petersburg, Virginia, producing sodium hypochlorite (bleach), sodium hydroxide (caustic soda), and hydrochloric acid. These chemicals are essential in water treatment and sanitation.

“This acquisition is hugely transformational for ANSA McAL,” said Group CEO Anthony N. Sabga III. “We have well publicised our goal to double the size, scale and impact of the group by 2027. This acquisition will add a substantially incremental component to our business. This allows us to now, for all intent and purposes, to be the main supplier of chlor-alkali treatment for two major states in the US,” he added.

The purchase was funded through a mix of debt and equity, with approximately 60% of the cost financed via loans and 40% by cash. The debt, totaling US$200mn, comprised a five-year syndicated term loan of US$190mn arranged by Citibank NA, and a sellers’ promissory note of US$10mn and were completed on 1 November 2024.

The loan carries a floating interest rate based on the three-month Secured Overnight Financing Rate (SOFR), currently at 4.57%, plus a 3.75% margin, for a total initial rate of 8.32%. A T&T Stock Exchange disclosure noted that It is secured by the newly acquired US assets of BleachTech and guranteed by the group and two of its subsidiaries, ANSA McAL Chemicals and ANSA McAL Chemicals Holdings.

The cash portion of the acquisition, amounting to approximately US$127mn, was funded through a mix of ANSA McAL’s treasury reserves and the liquidation of significant US-dollar investments, said Sabga in a Business Guardian interview.

“The acquisition price was based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortisation) that we believe reflected fair value for the business,” said Sabga of Bleachtech, which generated US$85.7mn and US$57.4mn in revenues and EBITDA in 2023, respectively.

The transaction faced delays due to the need for regulatory approvals from the US Federal Trade Commission and the Committee on Foreign Investment in the USA. This heightened scrutiny arose from the classification of chlor-alkali production as critical infrastructure in the US, given its essential role in producing potable water.

The company, which was acquired debt-free with some working capital on its books, has two plants currently operating at 50% capacity, producing between 32mn and 37mn gallons annually. The plants have the potential to double production, creating opportunities for further profitability. “We feel that we can definitely seek to acquire more markets and also additional uses for that volume,”said Sabga.

“My priority over the next few months will be to meet with relevant stakeholders to share our growth plans and commitment to working with Bleachtech’s talented team. The purification and disinfection end use of Bleachtech’s products is very much in line with our group’s environmental commitments,” said the Group CEO, adding that “it is also aligned to Trinidad and Tobago’s national objective to diversify the economy both from an industry and geographic perspective”.

Bleachtech’s former owner, Richard Immerman, expressed optimism about the future under ANSA McAL’s leadership. “We are excited that Bleachtech is joining the ANSA McAL group. I have been impressed with the care, professionalism, and rigour ANSA McAL brought to this process. Their intention to invest and grow this business is good news for all of us who helped build, and work for, Bleachtech, as well as for our suppliers and customers,” Immerman said.

“Our focus now remains the continued safe operations of the plants while we explore ways to build out demand to utilise spare plant capacity,” said Andy Mahadeo, ANSA McAL’s Chemicals Sector Head.

While not explicitly mentioned, there is speculation that safety is a priority for ANSA given that a major chemical leak occurred at BleachTech’s Seville plant in January 2024, injuring two workers. The company was later cited and fined by the Occupational Safety and Health Administration.

Notwithstanding this seemingly isolated incident, the acquisition represents a milestone in ANSA McAL’s history, reinforcing its position as a global player in the chemicals industry. With a strong EBITDA margin of 67% in 2023, Bleachtech is poised to deliver significant returns, even as the group works to expand production and market reach. 

01 November 2024

A recent ruling by Trinidad and Tobago’s Supreme Court has granted US energy giant ConocoPhillips the authority to seize payments directed to Venezuela’s state-owned oil company, PDVSA from the cross-border Dragon Gas project.

The court’s decision to uphold earlier rulings marks a critical milestone in ConocoPhillips’ long-standing dispute with Venezuela over expropriated assets.

The ruling, delivered in late September, allows ConocoPhillips to pursue its US$1.3bn claim against PDVSA by appointing a receiver over funds owed to the Venezuelan company through the Dragon Gas field venture, meaning that PDVSA’s revenue under project could now be redirected to ConocoPhillips in partial settlement of an arbitration award.

“The order gives to the claimant a green light to be able to enforce the judgment in Trinidad if they can establish there are assets held by the defendants or there is money which is owed to the defendant by entities in Trinidad and Tobago,” said Judge Frank Seepersad, noting that PDVSA’s past actions—such as relocating its European headquarters from Lisbon to Moscow—raise concerns about potential asset transfers out of reach of creditors.

Despite the ruling’s implications, the Trinidadian government appears undeterred in its commitment to the Dragon Gas project. Earlier, Energy Minister Stuart Young addressed concerns by affirming that the ruling would not derail Trinidad and Tobago’s gas dealings with Venezuela, emphasising the project’s importance to the energy sector.

“The recognition of the International Chamber of Commerce (ICC) award dated 24 April 2018, does not affect the 30-year Exploration and Production Licence for the Dragon gas field which was granted to Trinidad and Tobago (Shell and NGC) in December 2023,” Young stated, further criticising opposition claims that the project’s viability is in jeopardy.

Francisco Monaldi, Director of the Latin American Energy Programme at Rice University’s Baker Institute for Public Policy, also downplayed the impact of the ruling on the Trinidad-Venezuela energy relationship, characterising it as largely strategic leverage for ConocoPhillips in its negotiations with PDVSA.

“It is mostly about a negotiation between ConocoPhillips and PDVSA. They have done this in the past in Curacao and other Dutch Caribbean islands and basically this allows ConocoPhillips to have leverage in the negotiations of payments with PDVSA that has been ongoing,” Monaldi observed.

According to him, the payments to PDVSA from the Dragon field are minimal at this stage, estimated at around US$1mn monthly for social contributions and taxes. The bulk of the project’s revenue generation is expected further down the line, which means immediate disruptions are unlikely.

On the Venezuelan side, officials have expressed optimism about the ongoing development of the Dragon Gas field despite the ruling. Vice President and Energy Minister, Delcy Rodríguez, hailed the arrival of the survey vessel Doña José II to commence technical assessments at the Dragon field.

However, some energy experts remain sceptical about Venezuela’s willingness to move forward with the Dragon Gas project if payments are jeopardised. Anthony Gonzales, former director of international relations at the University of the West Indies, questioned PDVSA’s motivation to continue if payments are not guaranteed.

“I am not clear on the Court’s decision and whether it will apply in this case where Shell, a foreign company, is to make the final investment decision to invest in developing and exploring Venezuela’s Dragon gas. Shell has to pay either PDVSA or the Venezuelan government for that gas,” argued Gonzales, highlighting that there is still some uncertainty about the ruling.

ConocoPhillips’ remains committed to reclaiming billions in expropriated assets. Since Venezuela nationalised ConocoPhillips’ oil projects in 2007, the company has actively pursued compensation through multiple arbitration awards, totalling over US$10bn in damages. The company’s strategy has included various legal actions across multiple jurisdictions, including moves to seize assets in the Caribbean and a high-profile bid to auction shares in PDVSA’s US-based subsidiary, Citgo, to recoup its losses.

The outcome of this case could have lasting implications on how energy companies approach Venezuela and other countries with complex legal and economic landscapes. For now, the leaders of Trinidad and Tobago and Venezuela remain focused on advancing the Dragon Gas project, recognising its potential to fortify the region’s energy security amidst an ever-evolving geopolitical context.

18 October 2024

President Irfaan Ali has unveiled an ambitious social spending programme fuelled by the country’s rapidly growing oil revenues.

In a special session of Parliament, Ali announced several measures aimed at improving the quality of life for Guyanese citizens, including free university education, a one-time cash grant for every household, and a significant increase in the minimum wage.

As the country gears up for general elections next year, the President’s announcements signal a dramatic shift in Guyana’s economic landscape, leveraging its newfound oil wealth. “We have a US$22bn economy now,” said Vice President Bharrat Jagdeo, justifying the scale of the initiatives.

Among the headline announcements was a one-time cash grant of GY$200,000 (nearly US$1,000) for each of the nation’s approximately 264,000 households. Ali emphasised that the grant is aimed at reducing income disparities and ensuring more disposable income for every family.

Vice President Jagdeo also defended the cash injection, stating that after studying the issue, the conclusion was that Guyana’s economy is strong enough to absorb the GY$60bn (US$287.25mn) payout without risking inflationary pressures.

“We wanted to look at tax measures too to help people. But our experiences with tax breaks for the business community and the hope that they would pass on the benefit has not been a great one…so that is why we opted in this case just to give directly [to households],” Jagdeo added, noting that the country’s wealth from oil revenues allowed for such bold actions.

Guyana, once one of South America’s poorest nations, has transformed since ExxonMobil and partners discovered vast oil reserves off its Atlantic coast in 2015. With oil production soaring since late 2019, the government is now in a position to fund large-scale social programmes that were previously unimaginable. The country’s GDP grew by more than 60% in 2022, the highest growth rate globally, according to the International Monetary Fund.

In addition to the cash grant, Ali announced that university education would be made free starting January 2025, restoring a policy that had been discontinued in the 1990s. “Starting from the January 2025 semester, tuition fees will be completely abolished from the University of Guyana,” Ali said, fulfilling a long-standing campaign promise. This will benefit around 11,000 students and cost around GY$8bn (US$38.31mn).

The government also pledged significant support for the elderly and pensioners. President Ali committed GY$10bn (US$47mn) to the National Insurance Scheme (NIS) to assist retirees who have not met the required contributions to qualify for benefits. Noting that the details of the plan will be revealed in the 2025 National Budget, President Ali touted the cash injection as a means of improving the quality of life for the elderly, who have given their lives to building the country.

Further demonstrating the government’s focus on social welfare, Ali announced that every child in the country will receive a GY$10,000 (just under US$50) universal healthcare voucher starting in 2025. This initiative aims to finance a suite of basic health tests and preventative care, particularly for non-communicable diseases. “This universal health voucher will help us as we work to build a healthy, strong and resilient population,” said the President, estimating that around 500,000 people would benefit from the programme, at a cost of GY$5bn (US$24mn).

President Ali also took aim at high energy cost, announcing a plan to reduce electricity costs by 50% by the end of 2025. With government revenue increasing exponentially in recent years, the country’s civil service has been clamouring for pay increases. The Ali Administration have decided to focus on lower income earners, revealing that the minimum wage for public sector employees would be raised from GY$70,000 to GY$100,000 per month (US$350 to US$500). This increase is expected to pump over GY$1bn (US$4.7mn) into the economy. “This is how we build prosperity,” declared Ali.

Despite the widespread praise for these initiatives, some critics have raised concerns. The Working People’s Alliance (WPA), an opposition party, suggested that the one-off cash grant is an election tactic rather than a long-term solution. “This is election gimmickry,” said WPA co-leader David Hinds, calling for structured cash transfers tied to poverty alleviation rather than ad hoc payments. He also advocated for a feasibility study to explore more sustainable cash transfer systems.

Meanwhile, former Finance Minister Winston Jordan questioned how the government would define household for the purposes of the cash grant. Instead, he argued that the Ali Administration should half the payment and distribute it to each adult Guyanese, using identification data from the Guyana Revenue Authority (GRA), NIS and the Guyana Elections Commission’s (GECOM) register.

Vice President Jagdeo responded to criticism, saying the government had already taken significant steps to stabilise electricity and fuel prices, negotiate lower mortgage rates, and subsidise water costs. “We have tackled almost every single component in the four years we have been in office so far, and now this is the latest robust intervention to tackle cost of living,”said Jagdeo.

As Guyana prepares for its upcoming elections, the Ali administration’s promises of cash grants, free education, and social support will be central to the political debate. However, one thing is clear: Guyana’s oil wealth has opened up possibilities for social spending that were once unimaginable, and the country is eager to see how this newfound prosperity will shape its future.

4 October 2024

TotalEnergies and APA Corporation announced a historic US$10.5bn Final Investment Decision (FID) to develop the “GranMorgu” oil field on Suriname’s Block 58.

This landmark project, which marks the nation’s first offshore oil development, is expected to generate significant economic growth and employment for the country.

“This FID is a historic milestone in Suriname’s oil and gas industry. What seemed like a distant dream is becoming a reality,” said Annand Jagesar, CEO of Staatsolie, Suriname’s national oil company, during a press conference.

The GranMorgu development, which includes the Sapakara and Krabdagu oil discoveries, is located 150 km off Suriname’s coast and holds recoverable reserves of over 750mn barrels of oil.

Patrick Pouyanné, Chairman and CEO of TotalEnergies, expressed optimism about the project, noting that “GranMorgu fits with our strategy to accelerate time-to-market and develop low-cost and low-emission oil projects.”

The development, which is the largest investment ever in Suriname, will include a 220,000 barrels-per-day Floating Production Storage and Offloading (FPSO) unit designed with advanced technologies to minimise greenhouse gas emissions, including zero routine flaring and full reinjection of associated gas.

With TotalEnergies’ commitment to fast-track the project, first oil is expected by 2028, providing a much-needed boost to Suriname’s economy. The development plan includes drilling 32 new wells and leveraging cutting-edge technology to ensure operational efficiency and environmental sustainability.

The consortium is expected to be able to produce oil for under US$20 per barrel, even with enforcement of TotalEnergies’ emissions cap of 18 kg of CO2-equivalent per barrel of oil equivalent on new projects.

Suriname’s President, Chandrikapersad Santokhi, hailed the investment as a major milestone for the nation, stating, “Suriname and its people welcome and appreciate this final investment decision…  We consider this a historic and milestone occasion, creating significant opportunities and revenue prospects for Suriname, as well as attracting investors worldwide.”

The President added that the FID reflects Suriname’s commitment to developing its energy sector while adhering to environmental regulations and standards.

TotalEnergies and APA each hold a 50% stake in the project, with Staatsolie having the right to acquire up to a 20% interest by June 2025. Staatsolie CEO Annand Jagesar revealed that the company has already secured a US$175mn payment and are engaged in negotiations with financial institutions to float a bond to raise funds to make a second payment.

The GranMorgu is expected to create more than 6,000 jobs, including 2,000 direct and 4,000 indirect positions, and contribute over US$1bn in local content. Paramaribo will serve as the primary hub for administrative, support, and logistics activities, with the expectation that significant economic benefits will accrue to local communities.

“Our policy, and that will go for any government, is aiming to raise the standard of living for our population,” declared President Santokhi. He underscored the importance of reinvesting revenues into key sectors such as healthcare and infrastructure, emphasising the government’s strategy to leverage the project’s success to uplift the broader population.

In support of Suriname’s social development, TotalEnergies and APA signed a Memorandum of Understanding (MOU) with Suriname’s Health Ministry to fund the rehabilitation of two mother and child hospitals in Paramaribo.

Staatsolie CEO Annand Jagesar emphasised that the project will transform the nation’s economy and raise the standard of living for its citizens. The company estimated that the country’s oil and gas resources could bring in between US$16bn and US$26bn; a massive value when juxtaposed against Suriname’s US$4.34bn GDP.

The announcement of the FID has also garnered attention for its potential impact on the local economy. Suriname’s Finance Minister, Stanley Raghoebarsing, highlighted that at least US$1.5bn will be invested locally over the next three to four years, which will help stabilise the country’s exchange rates.

However, Raghoebarsing warned of the need to manage cash flows carefully to avoid overheating the economy, as experienced by neighbouring Guyana where there has been upward pressure on wages and some initial appreciation of the Guyanese Dollar.

The GranMorgu project is expected to replicate the success of Guyana’s offshore developments, where a consortium led by ExxonMobil has discovered over 11bn barrels of oil and gas resources.

APA’s CEO, John Christmann, echoed this optimism, highlighting that the immense geologic potential in the Atlantic Margin’s deep waters.  “[This] FID is a point of no return, Suriname will never be the same,” declared Christmann to those gathered at the press conference.  

20 September 2024

Tensions are high between the governments of the Dominican Republic and Venezuela following a series of diplomatic disputes, including the latter’s presidential election and the former’s facilitation of a plane seizure.

Relations notably soured when Venezuela unilaterally revoked Brazil’s recognition as Argentina’s diplomatic representative in Venezuela, which the Dominican Republic condemned as a violation of international diplomatic agreements, specifically the Vienna Conventions.

The Dominican government expressed concern over the impact this decision might have on Venezuelan citizens seeking asylum in the Argentine Embassy in Caracas.

The situation worsened following the disputed Venezuelan elections in July 2024, which saw President Nicolás Maduro declared the winner. Many Latin American countries, including the Dominican Republic, questioned the legitimacy of the election and called for an urgent meeting of the Organization of American States (OAS) to review the results.  

“The Bolivarian Republic of Venezuela expresses its firmest rejection of the interference and declarations of a group of right-wing governments, subordinated to Washington and openly committed to the most deafening ideological postulates of international fascism,” said the Venezuelan government in a statement.

“This is a fluid situation, and we will continue to monitor and determine our course of action,” said Dominican President Luis Abinader, who clarified that the Dominican Republic’s stance aimed to ensure Venezuela complies with calls for a vote recount in the presence of international observers.

“The Dominican Republic will never abandon its principles, particularly its commitment to democracy,” Abinader asserted, underscoring the country’s dedication to democratic values.

The diplomatic strain was exacerbated when Venezuelan President Nicolás Maduro demanded the withdrawal of Dominican diplomatic personnel, citing what it called “interventionist actions” by the Dominican Republic. Consequently, the Venezuelan embassy in Santo Domingo and the Dominican embassy in Caracas are no longer operational.

The disagreement has now grown to involve Russia, after the cessation of the arrangement which saw the Russian Ambassador to Venezuela also cover the Dominican Republic, using the Venezuelan Embassy as a base. The Russian government, through a decree signed by Prime Minister Mikhail Mishustin has since approved the establishment of an embassy in the Dominican capital.

A significant flashpoint in these deteriorating relations occurred with the seizure of a plane linked to President Nicolás Maduro in the Dominican Republic by the US, alleging it was illegally purchased and used by Maduro’s government.

Venezuela has accused the Dominican Republic of working along with the US to seize the plane, viewing this incident as part of the broader diplomatic and economic hostilities directed against the country by the Abinader Administration​.

“The Justice Department seized an aircraft we allege was illegally purchased for US$13mn through a shell company and smuggled out of the US for use by Nicolás Maduro and his cronies,” said US Attorney General Merrick Garland in a statement.

It has since been confirmed that the plane was being used by Maduro and his government including for his transportation for peace talks with Guyana in St Vincent earlier this year, as well as for prisoner exchanges with the US on the Grenadine island of Canouan.

“Once again, the authorities of the USA, in a recurring criminal practice that could not be labelled anything but piracy, have illegally seized an aircraft that has been used by the President of the Republic, justifying its action in coercive measures that, illegally and unilaterally, they impose around the world,” said Venezuela.

In another twist, Venezuelan Minister Diosdado Cabello has accused the Dominican Republic of owing US$350mn for past oil transactions. “Pay the US$350mn you owe, so you have the moral standing to talk about the people of Venezuela,” he asserted, adding that President Abinader had acted naively in the plane seizure, assuming that the US would never take action against the Dominican Republic.

Responding to the accusation about oil debt, President Abinader rejected the claims, stating that no oil imports from Venezuela have occurred since his term began in 2020. “No Venezuelan oil imports have been made during my administration,” Abinader emphasised, pointing out that the last significant transaction occurred in 2015, well before his presidency.

Citing Former Minister of Economy Juan Ariel Jiménez, local media have estimated the oil import debt to Venezuela at US$214.3mn, with US$54.3mn related to the PetroCaribe Programme.

With more than 120,000 Venezuelans living in the Dominican Republic and continued suspension of flights between the countries, there is little optimism about a thawing of relations in the near future.