Thursday 21st April 2005

 
Guyana ripe for investment
 
 
 
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President Bharat Jagdeo meets supporters in Georgetown, Guyana. Guardian file photo.

Some weeks ago, Geoffrey Da Silva, the CEO of the Guyana Office for Investment (Go-Invest) addressed the 17th Annual Investment Conference of Development Finance Ltd and we now reprint relevant parts of his address as it is the Chamber’s view that businesses looking to invest regionally should consider Guyana as a possible option.

The Government of Guyana is implementing new policies to transform Guyana from a low income country to a middle income, semi-industrial one by creating a business-friendly environment that is promoting the growth of a dynamic private sector and improving the quality and skill level of its labour force.

The two major constraints in Guyana are a lack of significant economic diversification and significant foreign direct investment.

During the last five years, more than 150 foreign investors from 14 countries, (mainly from the United States, Canada, Malaysia, T&T and Brazil) have established businesses, especially in the mining, forestry, information and communications technology, tourism and food processing sectors.

More than 130 domestic investors also invested in the Guyanese economy, especially in the sectors mentioned above.

The export of value-added products to higher-earning specialty markets is essential for Guyana to continue to create jobs, generate more foreign exchange and raise the standard of living for its people.

Therefore, the strategy of the Government of Guyana is to attract and support existing and potential Guyanese and foreign investors to invest in the manufacture and provision of value-added products and services for export.

This strategy has six components:

1.Improve the competitiveness of Guyanese businesses through a new business culture that is collaborative and innovative.

2. The diversification of economic activities away from primary production to value-added branded products and services in “traditional” and “non-traditional” industries.

3. The simultaneous and balanced encouragement of both domestic and foreign investment including joint ventures

4. Consistent and expanded support for the growth of micro, small, medium and large companies

5. The equitable distribution of economic activities across the country

6. The diversification of markets, including the maintenance and expansion of share in current markets, and the development of new markets

Investment procedures have been simplified for the obtaining of licences to perform various business activities, and for transferring property.

A new Investment Bill was passed by Parliament in 2004 where the government guarantees the rights of investors to import and export any product not prohibited by law, free from restriction or limitation.

It provides legal protection for investments and the property of investors. Investors can freely determine the distribution of their profits, providing they satisfy their tax obligations.

Foreign investors and their foreign personnel can obtain work permits. Investors are free to open bank accounts in Guyanese currency or foreign currency.

Discretion in the granting of concessions has been eliminated through the passage of the Fiscal Enactments Act of 2004. A Procurement Bill has been passed by Parliament. Other legislation includes a Competition and Fair Trading Act and an Anti-Money Laundering Act.

The exchange rate has been stable for the past four years. Inflation is relatively low and interest rates have been lowered by 50 per cent since 1992.

The government has continued to limit the fiscal deficit to a range that has enabled it to become a net depositor with the banking system.

A stock exchange and a securities commission are operating.

There is non-discriminatory treatment of local and foreign investment with respect to investment incentives and access to the abundant land, minerals, water and other natural resources.

A non-resident of Guyana can acquire and dispose of assets, moveable and immovable, in the same manner as a citizen of Guyana.

Go-Invest is the primary contact for local and foreign investors. The agency liaises, on their behalf, with government ministries and other agencies in an efficient and effective manner.

Whether a company is a new business or an existing one planning to expand, foreign or locally owned, there are considerable incentive packages for a number of specific sectors—processed foods (fisheries, poultry, beef and fruit juices); fresh and organic foods; minerals, wood products, information and communications technology, eco-tourism and handicraft, manufacturing, infrastructure and energy.

To get a list of incentives approved, a project simply has to provide a brief proposal listing the owners, shareholders, partners, products, markets, number of employees, the level of investment and the sources of financing as set out in the Go-Invest Investor Roadmap.

All the sectors are export-driven and have been identified by the National Development Strategy as being areas where Guyana has a comparative advantage that could be developed into competitive advantages.

In addition, Guyana has special access to the Canadian, American and European markets through the Caribcan, the Caribbean Basin Initiative and the Cotonou Trade Agreements.

On taxation, investors and exporters can access export allowances for non-traditional exports to markets outside of Caricom.

The government is taking to Parliament this year legislation to implement a Value Added Tax System (Vat). There is unlimited carryover of losses from previous years and an accelerated depreciation on plant and equipment.

Guyana will become one of the major gateways for products and services to move between northern Brazil and the rest of the world.

In the short term there are investment opportunities in electricity generation, the Berbice River Bridge, a new highway from Georgetown to the Cheddi Jagan International Airport, construction of roads, bridges and culverts, sea defences, the privatised Ogle Municipal Airport near to the new Caricom Headquarters, construction and engineering services for major projects in the health, education, water and housing sectors that total over US$400 million.

In the medium to long term, the most important investment opportunities will be activities associated with the Guyana-Roraima Integration Project that consists of the physical integration of northern Brazil and the hinterland of Guyana into the regional and global economies.

The industrial corridor that will be developed in an ecologically and socially responsibly manner, will include the construction and installation of the following: a heavy-duty cargo highway linking Boa Vista and Manaus in northern Brazil to Georgetown, a deep-water port on Guyana’s Atlantic Coast, a hydroelectric power plant in Guyana, electric power transmission lines to Boa Vista and Georgetown, fibre optic cables and repeating stations linking northern Brazil to the “Americas II” submarine cable network.

Parallel to the development of the basic infrastructure, there will be opportunities to create a number of productive facilities in Guyana and northern Brazil.

Private investors from Asia, Europe, the Middle East, North America, the Caribbean, Brazil and Guyana have shown keen interest in investing in the industrial corridor to develop soybean farms, meat and dairy centres, fish farms, alumina plants, oil and gas facilities, ICT parks, gold and diamond mines, organic farms and pharmaceutical plants based on Guyana’s rich bio-diversity.

Reasons to invest

The labour force is young, enthusiastic and easily trainable

The wage rates are the most affordable in Caricom

Guyana has state-of-the-art telecommunications with a direct fibre-optic link to North America and Justice, democracy and inclusive governance are being promoted by the governing and opposition parties.

 

 

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