UNCTAD’s review of maritime transport 2022

– United Nations Conference on Trade and Development (UNCTAD)

By Bishop Juan Anthony Edghill

I turn your attention to Chapter 3 of the Review of Maritime Transport 2022, which discusses Freight Rates, and Transport Costs. This section is of paramount importance to developing economies like Guyana because currently, our imports outweigh our exports, and our consumers rely on goods from far-flung corners of the world.

Globalization has created a complex web, within which we are woven.

Both the countries on the selling and receiving end of the goods spectrum are affected, of course, however, small developing economies with little to no influence within the global shipping arena face the brunt of the challenges, as we are price takers rather than price setters.

The Report indicated a sharp rise in TEU cost over a three-year period for China to South America (Santos) route: It noted that, in December 2019, the average rate per TEU was less than $2,000, but by December 2020 it had tripled to $6,543 and at December 2021 it was $10,196. This represents a staggering price increase of 409.8 percent in a short space of time. While the figure as at December 2022 is not available as yet, and a decline, rather than another increase, has been recorded thus far following March 2022, an alarm is necessary because the cost will remain above pre-pandemic levels, and it is consumers, ordinary women, and men, who will continue to feel the brunt of prolonged high prices, through cost transference.

These massive increases in price have been largely linked to the COVID-19 pandemic, and are currently being impacted by the war in Ukraine; unfortunately, least-developed countries and emerging economies have traditionally, and disproportionately, borne the negative effects of challenges that have historically originated outside of our region. I note the individual actions taken by the United States, Korea, and the European Union, to safeguard themselves against market abuse, yet, towards a more equitable world, collective global efforts are necessary to safeguard vulnerable countries as well, within the global shipping economy. There must be checks and balances put in place to ensure that the pricing mechanism adheres to specific standards, with strict regulatory oversight to guard against market inequality.

Moreover, UNCTAD has accurately indicated that developing countries will need support to invest in more robust, resilient, and sustainable supply chains.

The government of Guyana has been working assiduously to ensure that we not only critique maritime transport, but we become more active players in the industry. Thus, we are leading the movement for more cooperation in the area of regional trade.

Regional trade helps to promote food security, which, as we have seen, is severely affected by disruptions in shipping routes and price increases. Goods both originating from and being delivered within the same region, stand a better chance of being delivered within a timely manner, at a lower cost, and shorter travel routes including a reduction in the number of cargo vessel trips, will reduce the production of greenhouse gases, should the right technology, trade facilitation, and port management practices be put in place.

Land is one of Guyana’s most valuable and abundant assets, and Agriculture is one of our most productive industries. Thus, these are assets we are willing to both share and leverage. During this year, in the area of agriculture, Guyana has signed the St Barnabas Accord with Barbados to agree to the following food security measures:

• The creation of a Joint Working Group on Food and Nutritional Security comprising Ministries responsible for agriculture and health, state-owned agricultural and marketing corporations, and private sector representatives;
• Exports from Guyana to Barbados of beef; corn and soya; coconut and coconut products; fruits and vegetables; poultry and poultry products;
• Export from Guyana to Barbados of shade houses;
• Export from Barbados to Guyana of one thousand (1,000) artificially inseminated black belly sheep in tranches;
• Establishment of a company to manage the black belly sheep production and the creation of a youth programme that includes differently-abled persons to work on a rotational basis on a 50 acre farm in Guyana;
• Lease by Guyana to Barbados of land at a concessional rate for the purpose of joint partnership in animal husbandry and poultry rearing (including poultry feed production) and for the production of flowers, food crops inclusive of breadfruit, cassava, plantains, pineapple, bananas, passion fruit, oranges, and coconuts;
• Promote adherence to CARICOM’s 25×2025 initiative to increase food security and reduce extra-regional agri-food imports, among other measures.

It is our aim to extend this to other counterparts as far as possible. This is a monumental task and we cannot accomplish it alone, we require technology transfers as well as technical assistance in the areas of transport and trade facilitation solutions to make the suggested and necessary transition to smart and green trade logistics, and to enhance our transport infrastructure, particularly our ports.

I must highlight the increase in Green House Gas Emissions from 2020 to 2021. Climate Change is, of course, an issue that is of great importance to SIDS, low-lying coastal territories, and developing countries, since the negative consequences of shifts in climatic conditions manifest almost immediately in our territories.

The very sea upon which we rely to support trade, provide our food, and to support our tourism industries, has become one of our greatest threats as a result of sea level rise and the proliferation of natural disasters. Guyana’s capital, Georgetown, being itself, below sea level is particularly at risk. I take note of and commend UNCTAD’s policy recommendations designed to arrest this situation, and will be championing them within our region. As it relates to digitalization and decarbonization in particular Guyana looks forward to both contributing to and accessing capacity building to make these changes a reality within our domain.

Permit me to close by highlighting a small but meaningful change that Guyana has made to its customs management system to improve the efficiency therein.

At the level of the Guyana Revenue Authority, we have implemented the ASYCUDA World programme, which is an integrated customs management system developed by UNCTAD. With the implementation of the ASYCUDA World, the Guyana Revenue Authority has strengthened the efficiency of Customs operations for improved transparency through full audit trails and is working towards reform of the customs clearing procedures, among other mechanisms. Additionally, the government of Guyana is now being provided with more accurate and timely statistics on foreign trade and revenue.

ASYCUDA World is promoting faster clearance time as well as lower transaction costs. One of the features that are particularly beneficial to Guyanese society is the electronic payment option for customs declarations. The Guyana Revenue Authority has partnered with the Guyana Bank for Trade & Industry Limited and Demerara Bank Limited to have this facility available, which allows Importers desirous of utilizing the electronic payment functionality to use these E-Banking Services. This process captures the details of their declarations along with the duties and taxes to be paid and generates a reference number. This reference number is then used when making the electronic payment.

As a developing country, we believe that we can contribute meaningfully to improvements being made in the global maritime industry- we believe that small steps taken at home, will lead to a big impact collectively and so we commend other developing countries who have adopted a similar posture, we champion the cause of UNCTAD providing more assistance towards helping countries who fall into this category to achieve these goals and we encourage those developing countries who have not yet considered their role in strengthening the efficiency of the maritime industry to do so forthwith.

We are in this together and together we can see positive change.