Guyana – an investment hotspot with bright prospects
FORMER Prime Minister of Spain, Jose´ Maria Aznar once said that, “without economic development, any potential for political openness and freedom will be questionable.” This ideology has been put to the ultimate test over the past years, as the world witnessed a global economic and financial crisis that will be talked about for years to come.
In fact, parts of the world are still reeling from aftershocks of this crisis, while others are slowly rebuilding their economies. It is no secret that the Caribbean Region was not spared, particularly those countries that depend heavily on tourism.
Many investors have described Guyana as the most un-spoilt place on earth and were most astonished that the economy maintained a stable course despite a volatile global environment.
Known as the ‘Land of Many Waters’, our very own 83,000 sq miles Guyana was not completed unaffected, but thankfully as a result of visionary economic planning, the country was spared the worst, so much so, that even with a prolonged economic crisis, real growth in Gross Domestic Product (GDP) was experienced for over eight consecutive years.
But what exactly has driven the Guyanese economy? Why did it not crumble like some in sister CARICOM countries? Why did it manage to avoid laying off workers by the thousands as is being done all over the world?
Charity Mall in Essequibo, Region Two
Guyana’s Minister of Finance, Dr. Ashni Singh rightfully said that this growth of about five percent per annum, seen across the length and breadth of the country, could not have been and indeed is not in any way accidental.
The Government of Guyana has long recognised fully, how inextricably linked economic growth is to the well-being of people. Continuous growth in the Guyanese economy has seen the creation of more jobs, and the generation of more income which are ultimately resulting in improved living conditions for citizens.
Economic performance has not only seen GDP growth, but all of the correlators are evident as well. These include: strong inward foreign direct investment, continued growth in credit to the private sector, stable prices, low inflation rates which continue to trend downwards, and other key macroeconomic fundamentals remaining on a favourable trajectory.
City Mall in the heart of Georgetown
It is this conducive economic environment that has led to a boom in investments in almost all of the 10 administrative regions. According to ECLAC’s annual report, Guyana earned US$294M through foreign direct investments in 2012 representing a 19 per cent increase from the previous year’s US$247M.
Guyana has met most of the requirements to encourage investors with a stable macro-economic environment that has over the last few years seen a stable currency and low inflation, positive relations with neighbouring countries like Venezuela, a major trading partner, and Brazil, a rapidly emerging economy.
With major infrastructure projects in the making like the Amaila Falls Hydropower Project, the Cheddi Jagan International Airport (CJIA) expansion project, and the Marriott Hotel, Guyana is on track in transforming towards the new growth poles for development.
The tourism sector for example has seen an influx of visitors, and with the CJIA expansion and Specialty Hospital construction plans; Guyana is bracing itself for an unprecedented development in the sector. Unfortunately those investments have been frustrated in the Parliament, with the political Opposition cutting the budgetary allocations for these key projects.
Last year, contributions to GDP from the tourism sector were estimated at $22.2B by the World Travel and Tourism Council which has also projected a 1.9 percent increase this year.
Containers being shipped to and from Guyana through the John Fernandes Wharf
There has been continued investor confidence in the Guyanese economy, higher than it has ever been, despite the prevailing political circumstances. Many internationally renowned companies such as Qualfon, a major international corporation in the ICT sector, has placed on record the view that Guyana is a good place to do business.
In fact, Qualfon’s operations in Guyana are the most competitive in its overall global operations. The company has invested millions of US dollars and is in the process of constructing another facility which will create over 6000 jobs.
Guyana Bank for Trade and Industry (GBTI) in Lethem, Region Nine
On the local side, a recent survey of commercial businesses show more than 91 percent enjoyed profits last year, proving once again, the dynamism of the Guyanese economy, and the rewards entrepreneurs have been enjoying.
The Guyana Office for Investment (Go-Invest) reported that total FDI increased by 17.2%, from US$164.4M in 2009 to US$198M in 2010. The agriculture, forestry and fishing sectors benefited from a 12.8% increase in FDI in 2010; the energy sector grew by 36.9%; mining and quarrying by 34.2%; manufacturing by 49.7%, and tourism and hospitality by 21.9%.
In the housing sector alone, ordinary Guyanese men and women have expressed their confidence in the local economy by investing in building their own homes after the PPP/C Administration distributed over 100,000 houselots.
Guyanese are very smart and are extremely cautious where their money is concerned, as such, had it not been for their confidence in the country’s stable economic climate then it is highly unlikely that they would’ve taken such risks.
With the constant changing aesthetics, the City of Georgetown can no longer be aptly described as the ‘Garden City’. In a few years’ time, it would be completely transformed into a concrete jungle that could be compared to some of the most popular of cities. Already, the City is home to a series of international fast food chains, shopping malls, night clubs, movie theatres, and other recreational facilities.
Skybar in Charity, Region Two
The Canadian Government is one of several diplomatic partners that have maximised on the opportunities to invest billions of dollars in job creation ventures such as in natural resources exploration.
Four years ago, Minister Ashni Singh had said that, grouped together, international investor confidence in Guyana, from the exploration sector amounted to CDN $2B.
The search for oil in a basin that was once vastly underexplored has seen reputable petroleum exploration companies CGX, of Canada, Repsol of Spain, and Exxon Mobil of the United Kingdom investing millions. As recent as May 14, Repsol signed another agreement with the Guyana Government to explore for oil in the Takutu block in the Berbice River.
Within the last three years, historic large scale investments by First Bauxite Corporation in bauxite mining at the Bonasika mine along the Essequibo River, Canada’s Guyana Goldfields Inc., at the Aurora Cuyuni River Mines, Sandspring Resources Inc., at Toroparu mines and Reunion Manganese Incorporated in the Matthews Ridge area have been witnessed.
Most recently Troy Resources, an Australian firm announced it had secured financing for its Karouni mine in Guyana and has already brought in a US$5M ball mill.
The Princess Ramada International Hotel Poolside
Many investors have described the country as the most un-spoilt place on earth and were most astonished that the economy maintained a stable course despite a volatile global environment.
A survey conducted by the Georgetown Chamber of Commerce and Industry (GCCI) revealed that over 95 percent of companies performed extremely well, recording a profit. Some companies, especially the financial ones and investment ones have enormous capital.
It must be noted that local and foreign investors are not confined to the City; in fact, Regions Two, Three, Five, Six and Ten have seen a tremendous influx of new businesses; while existing ones continue to thrive and expand.
And sure enough, with the growth in the business sector came growth in the banking sector. Commercial banks have all expanded their reaches throughout the country, even in Lethem, Region Nine, which has emerged as a hub for investment activities, particularly given its close proximity to Brazil.
As Guyana celebrates its 48th anniversary as an independent, sovereign nation, the words of Jose´ Maria Aznar that economic development goes hand-in-hand with political openness and freedom, should be reflected on.
As far as economic development goes, Guyana has achieved such in no insignificant terms. The PPP/C Administration has and continues to commit to the tenets of transparency, accountability and good governance; had this not been the case the country would not have been deemed at a prime investment location.
And lastly, freedom, today in a world where it is unsafe for school-aged girls to have access to education and where thousands of lives are lost in unnecessary warfare, Guyanese citizens from the deep south of the Rupununi to the end of Moleson Creek are guaranteed rights and freedoms by the highest law of the land, the Constitution.
For these and countless other reasons, Guyanese, wherever they may be, have every reason to be proud and to celebrate. The country is far from a bed of roses, but the achievements are monumental and the prospects are brighter than ever before.
(GINA Feature)
