Is Guyana Prepared to Join the Digital Economy?
By Omari Joseph
At the turn of each Industrial Revolution, the societies at the forefront of innovation benefitted the most. These societies boasted significantly higher productivity than less-advanced ones. Protectionism and mercantilism were widespread in the mid-18th through early 20th centuries, particularly in the economies of the colonial powers. These practices allowed these empires to insulate their economies from external competition. Colonisers forced colonies to supply raw materials, then serve as export markets for the finished products. This created a monopoly on the technologies that were central to industrial development. Hence, colonies saw little of the development of their colonial masters. This trend was established during the colonial era, and has continued into the present day.
At the cusp of the 4th Industrial Revolution, Latin America and the Caribbean continue to lag behind their old colonial masters. The same applies to most former colonies worldwide. Technological advancement has come at an unwelcome time for many developing countries. Presently, many of them have hardly advanced their economies and industries beyond what they were in the mercantilist and protectionist era. They continue to be exporters of raw materials, while remaining reliant on imports of finished products from developed nations. Whether by coincidence, design, or a combination of the two, many developing countries are anachronisms, operating according to a colonial business model in a globalised economy.
To secure a place in the current world economy, developing nations in Latin America and the Caribbean (LAC) have to undergo some rapid changes. Business operations are increasingly data-driven and internet-reliant. Modern economies require advanced information and communications technology (ICT) infrastructure to remain productive and globally competitive. The Inter-American Development Bank (IADB) has expressed that ICT adoption has been slow and not widespread in the LAC region. Although firms of all sizes throughout this region generally have internet connectivity, the adoption of advanced ICTs is low for most firms, with small and micro enterprises lagging way behind. The same observation has been made by the Caribbean Community (CARICOM). This led CARICOM heads of government to meet and draft a “Roadmap for a CARICOM Single ICT Space.” This Roadmap was approved at the 28th Inter-Sessional Meeting of the Conference of Heads of Government of CARICOM on 16 February 2017 in Georgetown, Guyana.
This is where the spotlight shifts to Guyana. Later that year, the Guyanese government proposed initiatives to improve the country’s ICT sector. The proposal was aimed at improving economic resilience in the face of the rapidly-changing national and international environment. The plan acknowledged that, without ICT penetration throughout the economy, development would continue to progress slowly, or stagnate.
Three years on, former Foreign Secretary Carl Greenidge expressed that “[developing countries, including Guyana] have therefore struggled to develop the necessary logistical, legal, and technological capability to facilitate e-commerce, and have obviously missed out on many opportunities for trade, employment, and economic growth.” Even from a layman’s perspective, it seems that Guyana continues to miss out on these growth opportunities. Understanding what informs these perspectives will help to paint a clearer picture of where Guyana stands. Therefore, let’s take a brief look at the Guyanese context, and attempt to make a reasonable assessment of Guyana’s preparedness for a more digital economy.
Digital economies allow for transactions, billing, and order tracking to occur at the click of a button. You place the order in an instant, receive a generated invoice, and you can track the location of your order until it arrives at your doorstep. While the transactions occur electronically, many physical and logistical processes are happening in the background.
The World Bank (as of 2018) ranks Guyana 132nd of 160 countries on the Logistics Performance Index (LPI). This LPI ranking suggests that Guyana is among the worst performers globally. Guyana is also below the regional average for Latin America and the Caribbean, which is one of the worse performing regions on the LPI.
Unsurprisingly, infrastructure (i.e. ports, railroads, roads, ICT) was Guyana’s worst-performing area. The country lacks a national rail network, which was a common feature of top LPI performers, like Japan and Germany. Robust road networks connecting various regions of the country are also absent. The Western Essequibo coast is not connected to the east and the rest of Guyana by road. It should be noted that connecting the Essequibo coasts by road would be a difficult and expensive undertaking. Regardless, given that most of Guyana’s agriculture and commercial activity is concentrated on the coast, this significantly limits the movement of goods and people.
Both of the major river bridges in Guyana, the Berbice River Bridge and Demerara Harbour Bridge, are considered to be temporary. The Demerara Harbour Bridge was commissioned in 1978, and was only designed to last 10 years. Over 40 years later, the bridge is still in use, and has had multiple issues, leading to temporary closure over the past decade. As a pontoon bridge, the bridge also has a strict weight limit, which affects the transportation of freight across the river by road. Also absent are paved highways linking the coast and the hinterland regions of Guyana. The building of these would be significant in improving trade with Guyana’s southern neighbour, Brazil.
Seaports are another underdeveloped area of infrastructure in Guyana. Last year, the United States Ambassador to Guyana, Sarah-Ann Lynch, highlighted the need for a deep-water harbour in Guyana to help fill what she described as an “infrastructural gap.” A deep-water harbour would provide a significant boost for Guyana’s economy by reducing the cost and time taken to transport goods in and out of the country. Later that year, CGX Energy requested proposals to construct a deep-water port facility in Berbice. This year, following his inauguration, President Irfaan Ali announced that his government plans to invest in a deep-water harbour.
As previously mentioned, ICT is another area of infrastructural weakness for Guyana. Outside of large private-sector enterprises, like commercial banks and international companies, the adoption of ICT in business operations is either low-level or limited. This is made evident by the lack of proliferation of e-commerce in local business and dearth of jobs in the sector. Inefficiencies in public and private institutions are also indicative of the low level of ICT adoption. The Guyanese government has taken steps to improve the ICT sector, including collaborating with the government of India on the construction of the Centre for Excellence in IT in late 2017. Also, in 2017, the government launched the Smart Programme, which was a national broadband initiative to upgrade national ICT infrastructure and expand the e-Government network.
In 2018, the Electronic Communications and Transactions Bill was drafted to “promote the development of the legal and business infrastructure necessary to implement secure electronic commerce and to enhance efficient delivery of governance by public authorities by means of reliable electronic records and electronic filing of documents and for related matters.” Despite these measures, in 2020, many public institutions still rely on paper filing, and lack robust electronic databases. The Electronic Communications and Transactions Bill has been presented, debated, and critiqued. However, it has not been passed, to date. The political action and associated rhetoric are encouraging, but, the lack of tangible results indicate that development within the sector is either slow or stagnant.
This slow-to-stagnant development of ICT in Guyana has been exacerbated by the current monopoly conditions in the telecommunications sector. The Georgetown Chamber of Commerce and Industry (GCCI) has long lobbied for the liberalisation of the telecommunications sector to help improve service within the country, and ultimately facilitate a better business environment. Better ICT infrastructure would encourage the creation of new enterprises and jobs within the sector, as well as improve the efficiency of existing enterprises. Unfortunately, the liberalisation of the sector is not enough to see holistic development. Former Minister of Public Telecommunications, Catherine Hughes, noted that, “Guyana would be unable to position itself as a credible offshore provider of ICT and other knowledge-based services unless our [Guyana’s] investors and potential clients are certain that their intellectual assets would be protected.” This highlights another hindrance to Guyana’s transition to a more digital economy.
Perhaps the most significant area of weakness is found in the legislation that governs ICT and related sectors. As expressed by former Minister Hughes, the lack of legal protection acts as a deterrent to potential investors. Online payment platforms and other digital services that rely on data protection and copyright laws are also deterred. Were these laws in place, there could be better relationships with companies like PayPal or Stripe. Even if local alternatives were created, the lack of legal protection puts users and service providers at risk.
A general analysis of Guyana reveals that it is unprepared for a transition to a more digital economy. Like many developing countries, Guyana continues to crawl forward, while the rest of the world boldly steps into the 4th Industrial revolution. The existing issues and deficiencies require urgent attention. If Guyana’s current development trends persist, it may become an anachronism in the future global economy.
Omari Joseph is an intern at M74 from Georgetown, Guyana. He is an undergraduate student of International Tourism Management at the University of the West Indies in Trinidad. Omari has written for the CAF Development Bank of Latin America, the Eric Williams Memorial Collection, and the Explore Guyana Magazine.
The views expressed above are those of the author and do not reflect the official position of the M74 Group, which remains neutral on all matters. Publishers assume no liability for content.