My Notes on Nation Budget 2014

§  -Budgets should not be reviewed in isolation, but rather as a continuation of government’s economic and development programme during its current period of office. With that being said, this budget can be summed up as a continuance and extension of the previous two budgets under the Donald Ramotar administration.

§  -With the above context under consideration, this budget can be described as steady, attractive and people friendly building on the achievements of its predecessors.

§  -We in the private sector would have wanted to see more initiatives that increased consumer spending and provided savings for the private sector to reinvest into the economy through expansion and new activities. We would have wanted to see a drop in corporate taxes to around 5%, which was done two years ago and even though some had feared a drop in revenues as result, we saw that last year, corporate tax collection increased by 16%. Also, the PAYE income tax rate should have been reduced further. Last year, as a result of the 3 1/3 percent reductions in this rate, the economy lost around $1 Billion in revenues. The government could have further reduced that rate another 3 1/3 percent and look at other ways of offsetting the revenues lost. Another initiative the government could have considered is reducing the high tariffs on imported meats (Chicken, Beef, Pork) so that prices for those commodities on the domestic market could reduce and save consumers billions in disposable income annually.

§  -Reassuring to see that current government revenues went up by 4.8% and specifically, tax revenues increased by 7% to $126 Billion.

§  -While tax changes have to be implemented gradually, it is important that the government is guided by a comprehensive tax reform proposal. This proposal should be shared with the entire population so that everyone knows what to anticipate over a number of years as it relates to tax reform.

§  -FDI receipts reduced by US$79 Million in 2013. Measures should be put in place to spur this and can include tax relief to large international/multinational companies based on size of investment and number of actual employment created as reflected on payroll. Other favorable measure to attract FDI should also be considered.

§  -Proportions for sector allocations are trending in the right direction with education, health, security and infrastructural upgrades topping the list.  These address critical social and infrastructural upgrades that are necessary for a stable and prosperous society.

§  -We are particularly pleased with the social programmes contained to help struggling families get their kids to school. However, government will have to find appropriate mechanisms to ensure that the funds allocated reach its intended targets and that the monies once received by the family, is spent for the purpose intended. This could cause logistical and resource problems during implementation and monitoring. To ensure efficacy, government would have to spend and utilize additional resources, both financial and human. Additional funds might have to be allocated for this.

§  -This measure also raises the question as to whether the monies allocated could not have been allocated to increase teachers’ salaries or increase the salaries of the Guyana Police Force. It would be much easier to do so in terms of implementation and the cost of doing so would have been cheaper.

§  -The subsidies to GPL is welcomed since the high cost of fuel and electricity generation would be too burdensome on consumers were it not for the subsidy.  In terms of the Linden electricity subsidy, government should have taken the opportunity to tie that subsidy and declare Linden as an Electricity Free Manufacturing Zone to encourage manufacturers to set up operations and pursue the industrial diversification of the economy. These electricity zones could offer free electricity for a number of years and gradually include charges as companies’ financial and operational performances improve.

§  -The Linden-Lethem road upgrade and the CJIA expansion programme are also welcomed as they provide critical logistical and transportation efficiencies for our private sector and in particular the mining and tourism industry.  It is also hoped too that the road upgrade would lead to increased cross border trade with Brazil.

§  -Need to keep a watch on decrease in remittances that was US$141.1 million less last year than in 2012. That means a significant sum of money not circulating in our economy and this is money that is usually used as disposal income.

-GUYSUCO subsidy is necessary considering the state of the agency and the consequential social and economic consequences were it to stumble further. Annual Government subsidies to GUYSCO are an un-sustainable strategy and measures would have to be put in place to diversify the products manufactured by the entity. For instance, energy, confectionaries, molasses, animal feed, etc. Additionally, underperforming estates can be sold or offered at concessionary rental to multinational firms looking to invest and set-up their manufacturing and industrial operations. This would absorb any employment that is lost as a result of the estates’ closure

Reflection on Tenure with the GCCI

It is hard to believe that two years have passed since I became President of the Georgetown Chamber. In the interview below to Stabroek News, I recount my experiences as leader of the country's premier private sector organization.

1.      Your two most significant accomplishments as Chamber President:

During my tenure, I have seen the Chamber’s national profile rise prominently as one of Guyana’s most visible, active and efficacious civil society organisations. Much of this effective exposure has been achieved through the many advocacy positions taken by the Chamber over the past two years. Many of these positions were chronicled in the Chamber’s publication, “The Top 20 Barriers to Competitiveness” and advanced through media briefings, press releases, luncheons and dinners, television interviews, face-to-face discussions with policy makers, the Chamber’s new website, social media platforms such as YouTube and Facebook, and our own television programme.

This exposure has opened doors to numerous opportunities for the Chamber. Many members, stakeholders, investors, policy makers, civil society members are reaching out to the Chamber to share or receive information or to act as partners for hosting activities and events. Moreover, the steady streams of publicity and attention have reinforced the perception for members that the Chamber will always work on their behalf. This has made it easier for the Chamber to obtain member-based support and funding for many new events.

The second major accomplishment is that I have been able to increase significantly the Chamber’s programme of activities while also expanding the Chamber’s revenue base. This ensures that we are able to achieve our current goals while accumulating the requisite financial surplus to provide for the organisation’s long-term sustainability.

2.      Two things which you wish you had accomplished:

First, I had set sights on building a stronger, expanded Chamber secretariat with the requisite staffing to become more effective in realising our goals. This was curtailed amid the competition for resources between current expenditures and the impending reconstruction of the Chamber’s secretariat building. The Chamber allocated a large percentage of our surplus revenue to savings for the reconstruction project, which restricted our capabilities to hire staff including a legal advisor to draft policy positions, a researcher to gather and analyse data important to the private sector, and a support officer dedicated to help small- and medium-sized enterprises. In the end, it was a small sacrifice to pay because we were still able to achieve much. Going forward we will have a modern world-class facility with a stronger secretariat staffed with the capabilities just mentioned.

Secondly, I wished the Chamber would have received donor financing to set up trade facilitation and capacity building grants for export oriented companies and micro and small businesses. We applied to the agency for Caribbean exports during my first term for a facility to help small businesses but while the application was successful, we were informed the agency did not have sufficient funds to move the grant forward. I’ve spent most of the past year trying to persuade every donor and the international representatives in Guyana about the utility of allocating loans, grants or matching funds to the Chamber to help build our local private sector’s capacities.

3.      Two things you would most like to see the Chamber accomplish during the tenure of the next executive:

First would be for the Chamber to access donor funding for the purpose I mentioned in the previous question.  I hope the Chamber adopts a multipronged approach to determine if private sector companies are willing to provide the necessary funding through sponsorship agreements.

Second, I would hope to see the construction of the long awaited new Chamber Secretariat building completed. The current facility is inadequate to keep pace with the organisation’s increased, more extensive, and complex work demands and provision of enhanced services to our members. This will be critical in continuing the efforts to build confidence with all of our stakeholders.

4.      Your views on the way in which the political culture impacts on the country’s social/economic development:

In the time since independence was achieved, our political culture has come to be  dominated by ethnic insecurities at the electoral level and distrust at the political leadership level. Over the course of our history, this combination of distrust and insecurities has led to politically motivated disturbances and, in some cases, violence. The occurrence of Guyana’s politically unstable environment also has coincided with periods of negative economic growth. The times where Guyana has recorded its highest growth rates occurred when the political environment was stable.

The current political environment where the combined opposition parties control the legislature and the government controls the executive requires enormous negotiations and compromises for moving the country’s economic and development agenda forward. Unfortunately, after two and a half years, compromise in critical instances has proven to be elusive, resulting in an unstable political environment that has negatively affected the country’s economic prospects.  If the situation persists, we will eventually have to face costly early general elections along with the concomitant fears and economic slowdown that accompany it. 

5.      The major impediments to private sector development in Guyana:

My position on these issues have been repeated elsewhere and reaffirmed in the Chamber’s many surveys over the years. The most pervasive concern will be the human resource challenge of finding and retaining good employees, especially highly skilled individuals. The reliability of utilities such as electricity and high costs, crime and security issues, political discord, and the country’s excessive dependence on primary producing commodities that are vulnerable to external price shocks round out the most harmful challenges facing our economy.

6.      Anything you would do differently:

The only thing I would do differently is focus a bit more on motivating and getting my private sector colleagues involved in formulating and executing the Chamber’s activities and events.

7.      Critical lessons learnt during your tenure:  

There are quite a number of lessons learned over the past two years:

1.)   Objectivity and impartiality are important prerequisites when articulating advocacy positions and dealing with stakeholders. This may not win you popularity all the time and occasionally will offend and criticise a stakeholder at one point while praising it at another. However, this approach ensures in the end that the same stakeholder respects you for your objectivity and is more likely to trust and work with you during your tenure.

2.)   Political issues take up a tremendous amount of a private sector leader’s time and energies because of the fragile and instable nature of our politics as previously described.

3.)   The combined private sector covered under associations and the Private Sector Commission plays an important role in advancing Guyana’s development and is the most vocal of all the civil society organisations. Much of the work is done behind the public’s view and organizational interventions over the years have resulted in net positives for Guyana’s social and economy stability.

4.)   Political issues are more “sexy” for media operatives who give a disproportionate amount of coverage towards politicians and political commentary as compared to business, social, cultural, and human interests represented in the most pertinent issues. This leads to a situation where private sector advocacy positions do not get the level of front page publicity they rightly deserve.

5.)   The interests of the whole – or, more specifically, the country – should always take eminence over individual or partisan interests. This mantra has served me well when contemplating the advocacy positions for the Chamber to consider.

8.      How would you rate your performance as Chamber President:

While I would remit obvious bias and rate my performance as exemplary, I believe the undisputable record of activities and achievements, history and time will be the most formidable judges regarding my contributions and legacy during the time that I served as Chamber President.

9.      Immediate and medium-term plans:

I hope to return to my academic studies so as to further empower myself to make a meaningful contribution to Guyana’s development either through civil society or direct political participation. However, I’m not fixed on that position and I have a few months to make the best decision depending on the circumstances as they unfold.

Is All Lost With the Non Passage of AML/CFT Bill?

I had written this a few months ago and it was published in Stabroek News

No, is the definitive answer to the question posed in the above title of this essay. However, it will require adaptive leadership on the part of government and opposition political policy makers to avoid drastic economic consequences for our country.

By adaptive leadership, I am suggesting that it would require a change and shift from the current rigid positions from both government and opposition.  This would involve engaging in discourse that leads to concessions and compromises on both sides.  Anything short of this and our country will experience material economic damage that would take a long time to recover from.

Are the consequences grave?

Since before the Bill got defeated last week Thursday, there were many who were cynical and not so convinced of the consequences of not passing the Bill. Many felt it was gross exaggeration and fear mongering by the government and the private sector to get the political opposition to sign on to the bill.  Those who hold this view are very erroneous in their contention.

One only has to take a comparative examination of the experiences of other territories that have faced such a situation.  Lets take the examples of St. Kitts and Nevis and the Cook Islands.  In 2000, both these territories were not convinced of the severity of being grey or blacklisted by the Financial Action Task Force (FATF). For them, the cost of implementing pre-emptive regulatory reforms was much greater than the not clearly defined consequences of a stated Blacklist by FATF. These countries made the assumption that a blacklisting advisory was more “bark” than “bite.” This was premise on the fact that FATF’s blacklisting creates no obligations under international law and the multilateral grouping had no authority to impose direct sanctions or legal actions. However, while that is true, they underestimated the actions that would have been taken by member and non-member states of FATF, particularly, the US, Canada and other OECD countries. For instance, the United States Financial Crimes Enforcement Network (FinCEN), which is an arm of the Treasury Department, issued advisory to its accounting, insurance, banking, and legal firms flagging both countries within one month of the blacklisting and this resulted in large financial services firms in the US withdrawing their services from these jurisdictions for fear of being tainted by association and suffer losses to their reputations and share prices. Other firms just weren’t willing to spend additional resources when it came to the extra scrutiny required to effect wire transfers through correspondent banking relationships, so they terminated those relationships. Also, the reputational damage as a result of the blacklist caused foreign investors to rethink their investment plans to both destinations as a result of the high hurdles to conduct international financial transactions, which are critical to their operations. As such new incorporations fell off significantly.

Within a few short months both countries were reeling from the economic damage caused by the blacklisting and they both recanted and came to the realization that the necessary legislative and regulatory reforms were the far more cheaper option, and thus by 2002 and 2004 respectively St Kitts and Nevis and the Cook Islands had already implemented the necessary reforms and were de-listed by FATF. The Prime Minister at the time of St. Kitts lamented the “massive threat to our economic survival” posed by blacklisting and noted that: “The impact of blacklisting goes well beyond the offshore financial sector... No foreign investor would want to invest in a hotel, manufacturing or other real sector project in a country that does not have the capacity to facilitate the payment of dividends or repatriation of capital through normal banking processes.”

Way Forward

Whether or not FATF agrees to grey-list or blacklist Guyana for not meeting the recommendation of legislating the AML/CFT, the above two examples show that the consequences while being severe, can be reversed if the affected country take the necessary steps to implement the FATF recommendations (which can be done even after a blacklist advisory is in effect). With Guyana’s example, adopting the AML/CT legislation is a critical recommendation that must be fulfilled and can be done if our political parties engage with an intention of achieving that.

In the Wednesday edition of Stabroek News (November 13), Speaker of the National                                                                     Assembly Mr. Raphael Trotman reaffirmed this when he noted that the Bill could be reintroduced if there is a pact between government and opposition parliamentarians.

The Government representatives meet at a plenary session with the Caribbean FATF authorities in the Bahamas during November 18-21 to report on progress made since the last review was done. It is expected that the government will make the case to the Caribbean FATF to put off and delay issuing an advisory that Guyana is a non-compliant country.  Similarly and commendably, our private sector is expected to aid with a petition to the CFATF authorities in the same vein.

 This is a laudable move that is worthy of a try, however, the fact will still remain that our political policy makers would have to meet and put the country’s interests first and offer concessions to arrive at a collective position.

Budget 2014 Simplified

For ease, I've compiled the 2014 Budget. All the essentials you need to know on the 2014 Budget:

My analysis will follow in the press.

2013 Facts

Real GDP Growth 5.2%

Balance of Payments Deficit US $119.5M

Inflation Rate 0.9%

Commercial banks average lending rate 11.16%

Small savings rate 1.33%

Treasury Bills rate 1.45%

Foreign exchange transactions US$6.4B

Export earnings US$1.4B

Import earnings US$1.8 B

Balance of Trade deficit US$0.4 B

Net current transfers US$353.2 M

Remittances US$328.2 M

Capital Account US$314.8 M

Foreign Direct Investments US$214M

International Reserves US$776.9

Net domestic credit $129 B

Expansion of credit to private sector 14.5%

Non-financial public sector deficit $28.7 B

Total current revenues $135.7 B

Non-interest current expenditure $115.9 B

Tax revenues $126.5 B

Internal revenues $51.7 B

Corporation tax $21.6 B

Personal income tax  $955.8 M

Customs & trade tax $13.2 B

Value Added Tax $34.4 B

Exercise tax $27.3 B

Capital expenditure $50.1 B

Public enterprises deficit $1.6 B

External debt US$1.2 B

Total debt service US$45.9 M

Total domestic debt $98.8 B

2014 Targets

Budget Size G$220B

Real GDP Growth 5.6%

Inflation Rate 5%

Balance of Payments Deficit US$21.9M

Total Current Revenue $149.6 B

Total Expenditure $215.9 B

Fiscal Deficit $32.4B

Internal Revenues $55.8B

Value Added Tax & Excise US $65.8B

Non-Tax Revenues G $14.4B

Growth in private sector credit (Chart):

Manufacturing 22%

Construction 18.8%

Engineering 17.4%

Personal and Real Estate 16.9%

Mining & Quarry 13.9%

Agriculture 13.7%

Rice Milling 9.9%

Budgetary Measures

Subsidy to Guyana Sugar Corporation-- $6B

Subsidy to Rice Industry $500M

Other Agriculture Subsidies $200 M

Guyana Power & Light subsidy $6.9B

Rural Enterprise Development $1B

Establishment of Hospitality Institute US$4M

Preparatory work to dredge Port Georgetown $100M

Linden to Lethem Roads upgrade $1B

“Clean Up My Country” initiative $1B

Education grants for families $2B

Thoughts on Topical Issues

Here are my thoughts on some current issues:

Money Laundering Legislation

Parliamentarians should ensure this legislation is adopted and passed not only to avoid international sanctions but also to curb domestic corruption and ensure stronger financial accountability and transparency in both the public and private sphere.

APNU argument that they have not had sufficient time to review the legislation and offer their own input is disingenuous. They had at least 4 months since the first deadline was missed to articulate and draft their own positions for inclusion into the government’s draft. I think it is a missed opportunity from the APNU to really ensure that their input went into the legislation and thereby ensuring that a stronger and more robust bill was sent to the parliament for deliberations.  Moreover, it would have tested the government’s commitment to stronger rules, oversight and penalties.

In the current design of the parliament, it is absolutely essential that compromise and concessions be the order of the day. Therefore, I view the AFC’s position that if the Public Procurement Commission (PPC) is established it would support the money laundering legislation as reasonable.

Here I saw the government passed up on a great opportunity to avoid all the drastic consequences for not adopting the legislation.  If the consequences are as dire and pernicious as we in the private sector and government are making it out, then it would have been a small concession to move forward with the constitutionally mandated establishment of the PPC.

Having missed the opportunity to collaborate with the AFC, the government now faces a combined AFC and APNU alliance when it comes to the AML/CFT bill. That alliance is calling for three things: The establishment of the PPC, Local Government Elections, and Presidential assent to previous bills passed in the House. Here again, none of the demands seem unreasonable to me and a smart government would move forward with negotiations on them. The one item  that I disagree with that the opposition is making is the bill to be amended to include a clause that empowers a police or GRA officer to seize cash from any citizen  on mere suspicion of money laundering if that cash exceeds $10million. 

At this stage, I rather suspect that the opposition parties will vote on an amended bill and bring to out of Select Committee and pass it on the open floor of the House. Stay tuned.

On a final note, even if the bill is passed in the upcoming weeks, there is still no guarantee that the FATF authorities would approve the amendments and whether it would not still apply sanctions due to our inability to pass the legislation before the Feb 28 "deadline."

National Budget

Today is Budget day. Some people get excited, anxious or scared, or a combination of all three when budget day approaches. Budgets are sometimes godsend and included initiatives and changes that bring about prosperity for many and disappointment for others. Expect no excitement or optimism from me this year, in particular when the budgetary debates begin. In what is already being described as a "car crash" scenario by senior parliamentarians, expect many "reductions" from the estimates provided by the Finance Minister. By reductions, I mean zero allocations to certain parts of the budget or we might see the outright rejection of the Budget by the combined opposition. If the latter scenario materializes, then expect national and general elections within three month of the conclusion of the debates. 

Public Procurement Commission

This body should be established immediately. 

I cannot agree with the government’s demand for a final “no objection” clause. Not only does it violate the spirit of the constitution, which is explicit in the fact that government’s role in awarding contracts should be minimized, it is also unnecessary.  There are many mechanisms in the current legislation to ensure that the government interest is served on the PPC.  The government appoints representatives to sit on the PPC and also has a say on who the Chairman of the PPC is. With all this oversight over the functioning of the PPC, it is needless for a government’s “no objection.” The government can have its appointed representatives on the PPC query any discrepancy and ensure the full integrity of the procurement process.

National Competitiveness Council

We need a long-term mechanism that is immune to electoral cycles or political bickering to ensure that national infrastructure and economic development projects are prioritized, adopted and implemented.  Therefore, the NCC structure and functions should be reviewed and overhauled. Opposition parliamentarians or economic experts and members of the academic community should be added to serve on the NCC, which is heading by the president.

The NCC should be staffed with the best and brightest economists, researchers and financial analysts to provide input to the NCC members.

Once decisions are made, they should become legally bound so as to ensure they are implemented and funds provided for.  This would eliminate the uncertainty that currently prevails over large projects and whether or not funding would be provided for their implementation.

Once we have a reformed NCC, the projects undertaken by NICIL should be transferred to the NCC and that entity made redundant. This would eliminate many of the political suspicions that exist over NICIL and its functioning.

Local Government Bills

There should be no excuse or rationale for these bills not being assented to by the president considering the fact that all sides of the parliament adopted it unanimously over two months ago, including the president’s parliamentary representatives. I cannot expound enough how urgent the citizens of Guyana need these bills and for local government elections to commence forthwith. Our democracy is at risk, our communities are at risk and the voice of our people are at risk the longer we take to ensure local government elections. Just look at what is going on at the Georgetown Municipality and the eyesore and health risk it poses to visitors and the citizens of the city.

The minister of local government and the minister of the environment should be pressing the president to assent to these bills especially since the current system does not favor them and defeats all the good work they are putting into their respective portfolios.

Who are "Tax Payers"?

A common rhetoric that policy makers, politicians and critics like to peddle is that tax payers monies should not be used to subsidize private sector development. But who exactly makes up the "Tax Payers" being referred to? In Guyana the answer is simple, the majority of payments come from the private sector, both directly and indirectly. 

Last year, corporations that pay Corporate Taxes contributed $20 Billion to the treasury. Directly and apart from corporate taxes, business owners pay income taxes, pay VAT when they make purchases for their businesses, pay duties on imports for their businesses, pay NIS and other statutory taxes, pay property taxes, pay environmental taxes, pay capital gains taxes, mining taxes among others.

Indirectly, no Vat taxes would even be collected if private sector activities ceases and private sector employment produces Income taxes collected from employees, which would not be at current levels if businesses fails to start up and no employment is available or created.

The other sources of taxes not involving the private sector would be public service income taxes, citizens property taxes, vehicle taxes and registration, among a few others. If you add up all the non private sector taxes, its total contribution to overall taxes would be negligible when compared to private sector related taxes.  

I would conservatively estimate a minimum ratio of 80:20 percentage in favor of private sector related taxes. 

So, why not allocate subsidies and other allocations to help business succeed so that overall tax payers dollars would increase? Get the point!

Subsidise Manufacturers

The biggest impediment for our private sector manufacturing firms to compete in a global market place is the high cost of electricity. In my previous post, I outlined the need for Guyana to look at structural changes to the economy and diversify into high productivity industrial or manufacturing activities.

With the high charge on electricity, our companies just can’t afford to compete. At a news conference, I announced that the government should charge a lower rate or subsidise electricity to Manufacturers. I also suggested that they consider establishing electricity free manufacturing zones across the countries (places like Linden and Lethem would be primary targets). This is necessary as a short-term measure to assist manufacturers.

Currently, these manufacturers are paying a higher rate than residential customers to the power company. This should be reversed if we are serious about diversification of our economic profile and if we want to ensure the creation and sustenance of jobs and economic growth.

Government seems to be putting all its eggs in one basket when it comes to the manufacturing industry and waiting until we realize hydro-power generation for the costs and reliability of electricity to improve. Well, while we wait, the country continues to be exposed to external price forces for our commodities and our manufacturing industry continues to hobble along to the edge of a deep cliff.

Dani Rodrik on Economic Growth Paths

Dani Rodrik is one of my favourite academic and political economists. His sharp and insightful views have won him many accolades and respect from both his academic colleagues and political policy makers the world over.  Dani is not afraid to veer away from traditional economic theory and inject heterodox ideals into his analysis. He is not a big fan of unfettered free markets fundamentalism of most of his classical and neoclassical colleagues but rather argues that governments have a significant role to play in helping to develop industrial capabilities and capacities.

For this post I will examine Rodrik’s views as it relates to sustainable economic growth paths and what lessons Guyana can learn from.

Countries develop on two principal paths according to Rodrik, namely, through 1.) Fundamentals and 2.) Structural Transformation.

For Rodrik, by fundamentals he is referring “to the development of fundamental capabilities in the form of human capital and institutions. Long-term growth ultimately depends on the accumulation of these capabilities—everything from education and health to improved regulatory frameworks and better governance.”

And by structural transformation he means “the birth and expansion of new (higher-productivity) industries and the transfer of labor from traditional or lower-productivity activities to modern ones.

Rodrik goes on to argue: “with the exception of natural-resource bonanzas, extraordinarily high growth rates are almost always the result of rapid structural transformation, industrialization in particular.”

I deliberately underlined that important point because it is worth emphasizing. While Guyana has enjoyed a 4% percent annual growth rate over the past 8 years, such success can almost entirely be attributed to the gold prices bonanzas.

High Prices = Economic Growth;   Low Prices= Economic Death

It is time our policy makers start to move away from mere rhetoric and talk of diversification and get on with the process of making it happen.

In future post I will examine some diversification initiatives used by various countries to shift away from commodities only development.

Current Leadership of Go-Invest Crippling its Growth

Published in Kaieteur News on January 12, 2014

President of the Guyana Chamber of Commerce and Industry (GCCI), Mr. Clinton Urling has disclosed that the body will be paying more attention to proposals geared towards attracting foreign investment. More importantly, Urling stressed that the government owned agency, Go-Invest needs strengthening immediately.
GO-Invest is an organization which provides advice and concessions when necessary, to investors who are looking for the best way to start a business in Guyana.
It also enables entrepreneurs from around the globe to tap into the wealth of trade and investment opportunities available in the country.
Keith Burrowes is the current Chairman of this key investment agency.
However, Urling explained that this call comes in light of the fact that the company has been staggering in its ability to perform effectively and efficiently. While Burrowes is the current Chairman, Urling stressed that the investment company needs an immediate change in leadership. He also piloted the call for an immediate review of the company’s objectives and method of approach to its projects.
He added, “Even certain mega projects should be removed from the company and placed under one body, preferably the National Competitiveness Council. I would also suggest the setting up of an Implementation Unit to further assist the body in fulfilling its mandate.”
Due to the amount of political rivalry that has been so evident last year, Urling said that a lot of projects fell on the sideline and as such, they were not given the attention and priority status that they required.
He added, “We also need a consultation body to deal with these projects so that more input can be had.”
In addition, the National Competitiveness Strategy report even recommended that the mandate of Go-Invest be revised in order to maximize the efficiency of the company’s role in incentive administration, among other key functions.
The report explained that the agency has an important role to play since it is serves as a bridge between government and businesses on the interest of investment and export related issues.
It said as well that, “As the international economic environment evolves, and Guyana increasingly needs to compete globally instead of regionally, GO-Invest will have to change further.”
However, in an interview with this publication last year, Mr. Burrowes had explained that the agency was unable to carry out its current mandate due to a lack of resources.
He had also mentioned that the company has the ability of accomplishing more than it had since its establishment. But this he said can only be changed if it were furnished with the necessary assets.
Also supporting the call for the strengthening of the company and the change of its leadership was financial analyst, Mr. Ramon Gaskin.
Gaskin posits that the company is failing due to its lack of human resources and that it’s Chairman, in particular, is in charge of too many companies. “Mr. Burrowes cannot handle the load and the pressure that comes with reforming such a company. He has too many jobs to deal with. This in itself prevents him from having the time to adequately deal with Go-Invest. He holds over four major positions in major companies across Guyana and that is apart from his position at Go-Invest. The company has been stunted for some time.”
Moreover, “There needs to be the implementation of an Investment Review Agency that is set up by Parliament. This Agency would be able to manage investment proposals both local and foreign. Guyana needs such an agency with clear roles on how investment proposals are to be approved. Such a change is necessary for Guyana and for the government owned agency or else the organization will just continue to slide down the slope of failure until it turns into a derelict that serves no purpose at all.”