Cheaper electricity, more commercial banks, less red tape - President promises business community
Written by Gina Webmasters, Published in News, Georgetown, GINA, April 22, 2015, Source
The prospects of doing business in Guyana are likely to get better with the return of the Donald Ramotar led Government after the May 11, 2015 elections, as the incumbent Head of State today told members of the business community of several planned initiatives that will increase the ease with which business is done here.
President Ramotar was at the time addressing members of the Guyana Manufacturing and Services Association (GSMA) at a luncheon hosted for the PPP/C’s Presidential Candidate and incumbent President to interact with GSMA members at the Marriott Hotel, Kingston.
President Donald Ramotar addressing members of the Guyana Manufacturing and Services Association (GSMA) at a luncheon at the Marriott Hotel, Kingston
He said once re-elected his administration will ensure the red tape is cut out and bureaucracy is minimised so that business decisions could be finalised with greater speed.
In this modern environment, Information, Communication and Technology (ICT) has “a tremendous role to play. We will liberalise the ICT sector, he said adding that “Government has no intention of going into competition with companies in the business, but we have to create social bandwidth.”
The President said the enabling legislation was presented to the National Assembly, but it “is lying in parliament. That’s another bill I appealed to the opposition to talk about when I prorogued the parliament.”
More banking licences
President Ramotar signalled his government’s intention to facilitate further competition in the banking sector with the issuance of additional licences for the operation of commercial banks in Guyana.
“Since 1990s we have not given any commercial bank licence because economy was small…But my intention is to issue more commercial banking licences in the future once I’m re-elected. I think that is important because even though the banking sector has done really well, and they work very closely with us on many projects, I still detect some form of conservatism.
We will search for reputable banks, to try to bring them to Guyana and I hope this will help the private sector greatly because by stimulating more competition in this area I expect that the interest rate spread will come down considerably in the interest of the private sector,” he said.
Members of the Guyana Manufacturing and Services Association (GSMA) at a luncheon at the Marriott Hotel, Kingston
The President noted that government has not ruled out the creation of development banks, but at this time in the economy it’s not affordable and hence, government is looking at alternatives to provide greater financing for entrepreneurs, particularly those investing in micro and medium enterprises. He said Government will relook at the experience of micro credit through the Women of Worth (WoW) programme and the mechanism in place to have affordable housing loans, which are partnership initiatives with commercial banks because “we want to extend that experience to other sectors to stimulate small and medium size enterprises to grow… We will be using more fiscal measures that we believe can serve the same purpose until we are able to set up the specialise type institution, such as development bank,” he said.
Cheaper electricity
Critical to this modern business environment and stimulating the economy, the President noted is cheaper electricity. “The need to have cheap energy in our society is extremely important,” he noted, adding that the Amaila Falls Hydroelectric Project was a very well thought out project that would have saved Guyana about $3 billion from the Treasury over 20 years “…so to say that they (opposition) opposed it because of debt is a total misrepresentation… we would have been buying power from them at half of what we are generating power at this point in time and that is why I want to assure you that when elected again on May 11, I will pursue the Amaila Falls hydro project, and hopefully I will work very hard to start building it before the end of this year,” he said.
The President also noted that there is need to modernise the country’s infrastructure to prepare for the future and this is one of the reasons why Government is expanding the airport, supporting first-class facilities like the Marriott hotel, pursuing cheaper freight cost, an impressive road network to enhance transportation access and speed, and hoping to build a deep water harbour in Berbice. This harbour will not be at the expense of the existing harbour in Demerara.
President Donald Ramotar fielding questions from members of the Guyana Manufacturing and Services Association (GSMA) at a luncheon at the Marriott Hotel, Kingston
“(The) Demerara harbour will always be important. Demerara harbour cannot and would not be de-emphasised in any way, but clearly we need a new deep water harbour to deal with the new type of maritime trade taking place,” he said. This is especially pertinent in light of the expansion of Panama Canal and the possibility of a new canal being dug in Nicaragua. He added that the Caribbean is already preparing for these developments with Jamaica now building a new deep water facility and Cuba already owning one.
“We have a distinct advantage in the sense that we are both a Caribbean and South American country,” he said which is ripe for Guyana to become a maritime hub.
“When you think of the spin off benefits that could accrue you would see how…it could be to the private sector, government and country as a whole, we could export and import in larger volumes.”
Skilled workforce
The country’s success, both in the private and public sectors is heavily dependent, the president noted, on the development of a highly skilled workforce and that is the reason behind the “human capital investment we are making.” He noted that over the next five years, his government would review and re-align the education system to better equip people with the skills needed for Guyana’s development.
The President noted that Government will pursue means to ensure that secondary education is the minimum level of education, and those who are so inclined will be continuously trained through the Ministry of Labour’s Board of Industrial Training (BIT), which provides technical training and certification for thousands of youths and single parents annually in various technical skills.
Security
The President acknowledged that security is a burning issue for the private sector and pointed to the 15-point plan he recently outlined to curb crime and boost security. Among the issues is the need to reduce the length of time it takes the police to respond to an emergency call. The President shared the findings of a study from the University of Vanderbilt on security in Latin America and the Caribbean, which found that Guyana has the second lowest experience of crimes in Latin America and the Caribbean. Nevertheless, the President agreed there is need to deal with security fears and his Government is continuously addressing this concern.
Taxes
Speaking about economic challenges the President urged the gathering to be weary of promises from the opposition of “freeness” and cutting taxes because “it will take us back to an experience we already had in this country. It will create a bigger deficit, it will create higher inflation rate and it will create exchange rate instability,” the President said.
The government’s response would have to be to raise the interest rates. He cautioned that this will affect macroeconomic stability and “our worst critics will agree with us that we have been very responsible with the macro stability of our country. We want to maintain our macroeconomic policy to have stability in our country,” he said.
Government has already cut several taxes and will continuously review the tax system to further reduce them in a responsible way.
He noted that should the current oil exploration activities reap positive results, then this will be good news for tax reductions.
Guyana is appreciative of the private sector’s contribution to development inspite of local and international challenges and in turn the government is committed to facilitating maximum returns and ensuring the environment is more conducive to growth and prosperity, he said.
Private sector
“I would like to acknowledge the tremendous role that the private sector has played and is playing in Guyana development and the achievements economically that we have made inspite at times very unfavourable international economic situation and an opposition that seem intent on holding our country back. Thank you for the optimism and confidence that you have shown and the hundreds of entrepreneurs who took risks, raised financing and invested in projects to create jobs and today are earning deserved returns on their investment,” he said.
The President noted that Government and the private sector have worked on several documents that outline a framework for growth and development, including the National Development Strategy (1997), the National Competitiveness Strategy and collaboratively worked on events such as the business summit and the National Economic Forum and these have “helped to craft policies that we have pursued and have helped us to successfully navigate the situation we have faced internationally”.
Members of the GMSA raised several concerns with the President including questions about his government’s plan to address perceived corruption, concessions for the business community, taxation, and plans for tourism and government’s policy on energy.
