Guyana, the Target of Chinese Companies

A large infrastructure project for land and maritime communication routes in Latin America and the Caribbean might put Guyana in debt.
Julieta Pelcastre/Diálogo | 12 September 2019

Barges with housing for miners float on a gold mine on the Mazaruni River in Bartica, Guyana. Bartica is the launching point for people who extract gold and diamonds in the jungle regions. (Photo: Andrew-Caballero-Reynolds, AFP)

As part of its ambitious geopolitical plan, China intends to build a road in Guyana to connect the city of Lethem, on the Brazilian border, with Linden, located 108 kilometers from Guyana’s capital, Georgetown. The plan also envisions a deep-water port on the north coast to receive large vessels.

Although authorities are waiting for the findings of an Inter-American Development Bank study to start construction on the two projects, “There are plans for China to provide the capital required and to conduct the construction work,” said the digital magazine Diálogo Chino in its article: China Extends its Reach to Guyana.

The road connection will reduce transport times to Brazil, China's largest trading partner in the region, by providing a shorter exit to the sea to the Panama Canal. Chinese companies will benefit by receiving raw materials quickly and cheaply. The plan estimates that the project’s design will be ready in October 2019.

Guyana is one of the poorest countries in South America, but it harbors important reserves of bauxite, gold, the 17 rare-earth elements used to create cutting-edge technology, and “vast oil reserves discovered not long ago, which could make it the richest country in the hemisphere in a few years, and potentially the richest country in the world,” says news agency BBC Mundo.

Belt and Road

Since 2017, Guyana has been working with the Chinese government to gain access to a $50 billion special fund to execute the projects, as well as the new bridge at Demerara port, the modernization of Cheddi Jagan International Airport, and the development of the Amaila Falls hydroelectric plant, the Guyana Chronicle newspaper reported. Cooperation between both countries continues to grow; in June 2018, Guyana and China signed an agreement on the Belt and Road Initiative.

This initiative is China's expansion plan,  officially named the Silk Road Economic Belt and the 21st Century Maritime Silk Road. 

“Western Hemisphere nations that have already signed an agreement on the Chinese project expect to get more infrastructure investment,” said Margaret Myers, Asia and Latin America program director at Inter-America Dialogue, in the organization’s British digital magazine The Dialogue. According to the digital publication, since 2002, Chinese construction companies and banks have been expressing an interest in taking part in about 150 transport infrastructure projects in Latin America and the Caribbean, and almost half of those projects started some phase of construction in 2018.

“China's final goal is to have a relevant weight on an international scale and increase its influence by creating commercial and economic dependency of other countries,” Yadira Gálvez Salvador, a scholar specializing in defense and security at the National Autonomous University of Mexico, told Diálogo. “Beijing doesn't care what kind of government it's dealing with; it’s just maintaining relations for their geopolitical, economic, military, and intelligence interests.”

China is the top source of funding for Guyana and other Latin American countries, but it faces serious questions about the social and environmental consequences, as well as the construction of infrastructure megaprojects with inadequate planning and low-quality materials in the different communities where it operates.

“According to our recent experience with Chinese investment, Guyana always ended up with the short end of the stick. In the works conducted so far, we have seen an invasion of projects and complaints of corruption, little use of local labor, and no skills transfer,” said Abena Rockcliffe, senior journalist at the Guyanese paper Kaieteur News. “The country's authorities don't provide enough information about the terms and conditions of Chinese loans and investment.”

Land and maritime connectivity projects might endanger the Green State Development Strategy: Vision 2040, Guyana's national plan for sustainable development, which seeks to preserve the country's natural resources, their sustainable management, and the transition to renewable energy. According to the United Nations, rainforests cover three quarters of the country. Developing high-impact projects through the Guyanese jungle would leave “the burden of razed rainforests” in its wake, says the World Rainforest Movement on its website. 

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