Using oil to diversify Guyanese foreign policy, starting with India

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Wazim Mowla is a Guyanese American program assistant for the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center in Washington DC, and a master’s student at American University’s School of International Service.

By Wazim Mowla

Amid increasing US rhetoric about competing with China in Latin America and the Caribbean, Guyana should use its newfound oil reserves to diversify its foreign relations. This process should start with India, who over the past few months, has indicated its interest in strengthening ties with Guyana in all sectors, starting with oil. It will be important that Guyana capitalizes on this opportunity as it navigates its new place on the world stage, particularly as it relates to US-Chinese dynamics.

Since president Mohamed Ali took office in August 2020, Guyana has found itself in the middle of US-Chinese competition. First, when former US Secretary of State Mike Pompeo visited Guyana in December 2020, he issued a warning about engagement with China. And second, the opening and sudden closing of the Taiwan investment office in February 2021 elicited strong statements from both US and Chinese officials with each accusing the other of influencing Guyana’s decision. In both cases, US and Chinese officials were less focused on Guyanese interests and more about asserting geopolitical influence.

Therefore, as an emerging power in the western hemisphere, it is important that Guyana drafts a foreign policy plan that is not dependent on the notion that the US and China are the premier global powers. Although the two dominate headlines, causing many analysts and leaders to presume the world is entering another Cold War-like atmosphere, the international community is instead moving toward a greater emphasis on regional powers and by extension, regionalism. This means that in its own hemisphere, Guyana should look to Mexico and Brazil, and across the Atlantic, to the African Union, Germany, the United Kingdom, Russia, and India, among others.

Fortunately for Guyana, it possesses the natural resource (oil) that will draw new regional actors to Guyanese shores and cause old ones, like India, to pay more attention to the country than in recent times.

For instance, with oil as the primary interest, India has recently increased its engagement with Guyana since president Ali took office. Shortly after his inauguration, the Indian government committed US $1 million to Guyana to support COVID-19 efforts and earlier this year donated much-needed vaccines to the country. In addition to pandemic assistance, India offered to support Guyana on its gas-to-shore project, is helping with the re-opening of sugar estates, providing scholarships to Guyanese students, and has noted its plans to invest in infrastructure projects.

India’s interests and recent activity in Guyana is due to the latter’s oil and gas wealth. An example is India’s indication that it wants to secure a long-term deal for crude supply from Guyana, which has, thus far, culminated in the state-owned Indian Oil Corporation Limited’s lift of one million barrels of Guyanese oil. It is unlikely that this is the last time the state-owned Indian company will seek oil from Guyana, as the country is the world’s third-largest crude consumer and its demand for oil has risen over the past seven years. With a likely long-term partner in India, what Guyana does with these strengthened ties is vital for the future of its foreign policy and its citizenry.

As already noted, attention from India has positive effects for other sectors of the Guyanese economy and its people, which can translate to future foreign policy and economic wins. Indian interest and the implications are likely to continue, putting Guyana in a position to promote additional Guyanese goods in the Indian market, increase educational exchanges, and create greater autonomy for itself amid US-Chinese competition. For example, access to Indian markets can help with Guyanese sugar and rice exports. At the same time, Guyana can increase educational ties with India, especially as the former seeks to fill much-needed skills gaps, of which India’s world-ranked technical schools can be of use.

Finally, stronger ties with India can provide Guyana an additional regional power it can lean on if US-Chinese tensions worsen. India has its own rivalry with China, although it is mostly contained to the Asian continent. But as India’s economy grows, competition with China might outgrow its current geographic area and migrate across the Atlantic.

Further, India provides Guyana a socioeconomic model, in terms of ethnic relations, more like its own than that of the US. While India’s treatment of certain religions and ethnicities have been criticized recently, Guyana can look to the country to find small successes that have historically existed.

These ties, and broadly, engaging with different regional powers put Guyana in a better position to withstand the consequences that usually affect small states when two economic powerhouses compete. In the same way that the Guyanese government needs to diversify its economy to lessen its reliance on natural resources, the same applies to foreign policy – it should not be tied to the US or China and the dynamics between the two. This does not mean that Guyana should disengage with the US and China, as both are influential in international relations and are important economic partners, but these countries are unlikely to put Guyanese interests above their own.

This means that Guyana must be innovative and forward-thinking in its foreign policy. The first step is cementing lasting ties with India. As they continue to materialize for Guyanese gain, president Ali should look to other regional powers to replicate this model. The more regional actors Guyana engages, the better for the country in the short and long term, putting it in a better position to be in control of its destiny.

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