Guyana Focus
Guyana’s coalition government is waking up to the realization that the private sector is critical to the country’s development.
The government knows very well that small businesses have the greatest potential for job creation, especially in rural communities – a recognition of the current as well as past governments. The much ballyhooed oil sector will create relatively few direct jobs.
Incidentally, the government’s renewed commitment to the sector comes on the back of a rather antagonistic relationship with the country’s Private Sector Commission (PSC), which continues to question its policies and plans for economic development, in spite an apparent warmer relationship.
The PSC claims to represent some five thousand micro, small, medium and large businesses through their membership of the 24 sectoral member organisations each of which has a seat on the governing Council of the Commission
In its efforts to support small businesses, Minister of Finance, Winston Jordan indicated this month that there will be no new taxes in the 2018 budget, which will seek to generate economic activity for small business owners.
“We want to create conditions particularly for small businesses to grow,” he said during consultations for the budget.
Earlier in May, Jordan said government would be prepared to offer concessions and tax holidays to private sector investors in value-added agricultural production.
“(The) government doesn’t want to get into economic activity, but we would support any private sector individual or individuals who would like to get involved in this particular aspect with concessions and tax holidays,” he said.
In another move in March, the government promised to make it easier for small businesses, including farmers, to obtain funds, up to GYD$5 million, from the government-run Small Business Bureau which will be restructured to eliminate barriers created by the Norway funded project.
Incidentally, the government has allocated GYD$50 million in the 2017 National Budget for small business development.
The new focus on small businesses and the private sector comes on the back of hard hitting criticisms of the PSC earlier in the year.
Last February, the government labelled the PSC a “political stool pigeon” and accused the organization of yielding “to its political handlers”– referring to its allegiance to the opposition PPP.
In a missive attacking the PSC, the government deemed it rather shameful that the business organization has allowed itself to repeat the propagandistic chatter of the opposition and to seek to undermine confidence in the economy and its good governance.
The administration also charged that a number of PSC leaders are aligned to the PPP and that consequently it has been far less than vocal on corruption and drug trafficking. It stated that: “The PSC has further eroded its credibility as an independent private sector umbrella body for having remained silent during protracted periods of violent crime sprees, the descent of Guyana into a narco-economy and obscene levels of corruption under the former discredited and corrupt government with which several of its leaders were and continue to be associated.”
The supposedly highly politically motivated comments by the government stemmed from PSC’s declaration that it lacked confidence in the way the APNU+AFC administration was managing the economy and expression of concerns about the constitutionality of the then proposed law to recover stolen state assets, as well as alleged political interference in the judiciary.
But in a 180-degree turnaround, the government has commenced wooing the business community, claiming that it is committed to creating an enabling environment for the private sector by ensuring there is no executive interference, backed by efficient law enforcement and regulatory agencies, and the infrastructure to facilitate access and use of Guyana’s abundant resources.
When addressing the PSC’s Annual General Meeting last June, Minister of State, Joseph Harmon brazenly denied that there was a feud with the private sector. In defending the government’s earlier stance, Harmon told PSC members that when the coalition took office it was busy dismantling a fake economy that hindered the development of the country’s productive sector, sidelined legitimate businesses and did not sufficiently focus on value-added production.
Minister of Finance, Winston Jordan also held out the olive branch to the private sector at the meeting after criticizing it for contributing a mere one percent to economic growth and for requesting concessions without mathematical justification.
In the same breath, he softened the government’s earlier position, stating: “I have already alluded to the strategic position of the Private Sector Commission to the nation’s development and I wish to debunk, here, the perception or suggestion that the government views the Private Sector Commission with hostility and that it is a feud between the government and the private sector.”
Although relations between the government and the PSC appear to be healing, the two parties are definitely not singing from the same song book.
When delivering the keynote address at the opening of a two-day Guyana Business Summit last week, President David Granger was caught off guard by a series of questions by the PSC.
The umbrella business organization wanted greater clarity on a number of issues, including the government’s approach to economic development, taxation policy, incentives for business, plans to strengthen democracy and to ensure the rule of law is maintained, and direction on where anticipated revenues from the oil and gas sector will be spent.
From a broader perspective, the PSC wanted to know what plans the government has to develop the quality of life for all citizens and also how it intends to work with the private sector to create jobs.
Granger did not provide any specific answers to the PSC’s questions, leaving room for uncertainty.
Therein lies the real problem. The government, like previous governments, has no real definitive plans for private sector development. It has been touting the decades old story of diversification, especially in agriculture, and greater use of domestic resources to develop small businesses – all the while, shooting from the hip.
It’s a story that has periodically changed places between the front and back burners for more than four decades under different government administrations. Yet, success has been fleeting.
It just so happens that various governments have been reminded of its importance whenever domestic economic conditions are less than favourable.
Arguably, a few small businesses have succeeded but history shows that outside of a few large companies, the private sector has not been big on diversification and has instead been very averse to taking risks.
The underlying truth is: Guyana has substantial scope for diversification in a number of industries, especially agriculture. Other broad sectors with potential include timber, fisheries, gold, bauxite, sugar, rice, and tourism.
In each of these areas, the inputs for diversification are locally produced but require capital to establish manufacturing plants to take advantage of the backward and forward linkages to each sector. With the use of appropriate technology, the related industries can be globally competitive, if managed and marketed appropriately.
But to do so requires an in-depth look at the potential for diversification which has never been seriously researched or articulated. Sugar is a classic example of the failure of the government to look at diversification potential prior to abandoning the industry.
Rather, lip service policies have emerged, which do not take into consideration the country’s capabilities and comparative advantage in specific areas; nor have they been supported by diligent strategic imperatives with appropriate tactical support.
And the advice of clueless foreign consultants has made matters even worse, especially if it is linked to “tied aid.” Just imagine a country with a solid history in agricultural crops experimenting with so called “Irish” potatoes.
As well, in many instances, inexperienced political associates are given a first crack at available diversification opportunities, leaving more qualified participants in the cold – resulting largely from entrenched cronyism under successive governments.
More important, the absence of the legislative framework and inadequate incentives leave participants willing to engage in diversification initiatives pretty much on their own, resulting in more failures than successes, and in some situations, with inefficient and uncompetitive operations.
These weaknesses are exacerbated by restricted access to capital, low levels of research and development and weak marketing and distribution.
To attract investments in specific areas, it is necessary to secure and incentivize private investors and minimize the role of the state. There is no doubt that the private sector has a profit motive because it expects a return on its investment. The government must therefore focus on facilitating private investors if it is to succeed in diversifying the economy.
In as much as Guyana presents attractive opportunities, the government must recognize that private money seeks out the most favorable terms for their investment. Therefore the role of the state is to take a hard look at where the potential for diversification exists and prepare comprehensive packages of opportunities for investors who will determine whether the conditions are favourable.
It is instructive to note that real private sector investors are more likely to succeed in leveraging true potential than those who simply jump on a political bandwagon to exploit opportunities without doing the relevant due diligence.
In its efforts to support small businesses, Minister of Finance, Winston Jordan indicated this month that there will be no new taxes in the 2018 budget, which will seek to generate economic activity for small business owners.
“We want to create conditions particularly for small businesses to grow,” he said during consultations for the budget.
Earlier in May, Jordan said government would be prepared to offer concessions and tax holidays to private sector investors in value-added agricultural production.
“(The) government doesn’t want to get into economic activity, but we would support any private sector individual or individuals who would like to get involved in this particular aspect with concessions and tax holidays,” he said.
In another move in March, the government promised to make it easier for small businesses, including farmers, to obtain funds, up to GYD$5 million, from the government-run Small Business Bureau which will be restructured to eliminate barriers created by the Norway funded project.
Incidentally, the government has allocated GYD$50 million in the 2017 National Budget for small business development.
The new focus on small businesses and the private sector comes on the back of hard hitting criticisms of the PSC earlier in the year.
Last February, the government labelled the PSC a “political stool pigeon” and accused the organization of yielding “to its political handlers”– referring to its allegiance to the opposition PPP.
In a missive attacking the PSC, the government deemed it rather shameful that the business organization has allowed itself to repeat the propagandistic chatter of the opposition and to seek to undermine confidence in the economy and its good governance.
The administration also charged that a number of PSC leaders are aligned to the PPP and that consequently it has been far less than vocal on corruption and drug trafficking. It stated that: “The PSC has further eroded its credibility as an independent private sector umbrella body for having remained silent during protracted periods of violent crime sprees, the descent of Guyana into a narco-economy and obscene levels of corruption under the former discredited and corrupt government with which several of its leaders were and continue to be associated.”
The supposedly highly politically motivated comments by the government stemmed from PSC’s declaration that it lacked confidence in the way the APNU+AFC administration was managing the economy and expression of concerns about the constitutionality of the then proposed law to recover stolen state assets, as well as alleged political interference in the judiciary.
But in a 180-degree turnaround, the government has commenced wooing the business community, claiming that it is committed to creating an enabling environment for the private sector by ensuring there is no executive interference, backed by efficient law enforcement and regulatory agencies, and the infrastructure to facilitate access and use of Guyana’s abundant resources.
When addressing the PSC’s Annual General Meeting last June, Minister of State, Joseph Harmon brazenly denied that there was a feud with the private sector. In defending the government’s earlier stance, Harmon told PSC members that when the coalition took office it was busy dismantling a fake economy that hindered the development of the country’s productive sector, sidelined legitimate businesses and did not sufficiently focus on value-added production.
Minister of Finance, Winston Jordan also held out the olive branch to the private sector at the meeting after criticizing it for contributing a mere one percent to economic growth and for requesting concessions without mathematical justification.
In the same breath, he softened the government’s earlier position, stating: “I have already alluded to the strategic position of the Private Sector Commission to the nation’s development and I wish to debunk, here, the perception or suggestion that the government views the Private Sector Commission with hostility and that it is a feud between the government and the private sector.”
Although relations between the government and the PSC appear to be healing, the two parties are definitely not singing from the same song book.
When delivering the keynote address at the opening of a two-day Guyana Business Summit last week, President David Granger was caught off guard by a series of questions by the PSC.
The umbrella business organization wanted greater clarity on a number of issues, including the government’s approach to economic development, taxation policy, incentives for business, plans to strengthen democracy and to ensure the rule of law is maintained, and direction on where anticipated revenues from the oil and gas sector will be spent.
From a broader perspective, the PSC wanted to know what plans the government has to develop the quality of life for all citizens and also how it intends to work with the private sector to create jobs.
Granger did not provide any specific answers to the PSC’s questions, leaving room for uncertainty.
Therein lies the real problem. The government, like previous governments, has no real definitive plans for private sector development. It has been touting the decades old story of diversification, especially in agriculture, and greater use of domestic resources to develop small businesses – all the while, shooting from the hip.
It’s a story that has periodically changed places between the front and back burners for more than four decades under different government administrations. Yet, success has been fleeting.
It just so happens that various governments have been reminded of its importance whenever domestic economic conditions are less than favourable.
Arguably, a few small businesses have succeeded but history shows that outside of a few large companies, the private sector has not been big on diversification and has instead been very averse to taking risks.
The underlying truth is: Guyana has substantial scope for diversification in a number of industries, especially agriculture. Other broad sectors with potential include timber, fisheries, gold, bauxite, sugar, rice, and tourism.
In each of these areas, the inputs for diversification are locally produced but require capital to establish manufacturing plants to take advantage of the backward and forward linkages to each sector. With the use of appropriate technology, the related industries can be globally competitive, if managed and marketed appropriately.
But to do so requires an in-depth look at the potential for diversification which has never been seriously researched or articulated. Sugar is a classic example of the failure of the government to look at diversification potential prior to abandoning the industry.
Rather, lip service policies have emerged, which do not take into consideration the country’s capabilities and comparative advantage in specific areas; nor have they been supported by diligent strategic imperatives with appropriate tactical support.
And the advice of clueless foreign consultants has made matters even worse, especially if it is linked to “tied aid.” Just imagine a country with a solid history in agricultural crops experimenting with so called “Irish” potatoes.
As well, in many instances, inexperienced political associates are given a first crack at available diversification opportunities, leaving more qualified participants in the cold – resulting largely from entrenched cronyism under successive governments.
More important, the absence of the legislative framework and inadequate incentives leave participants willing to engage in diversification initiatives pretty much on their own, resulting in more failures than successes, and in some situations, with inefficient and uncompetitive operations.
These weaknesses are exacerbated by restricted access to capital, low levels of research and development and weak marketing and distribution.
To attract investments in specific areas, it is necessary to secure and incentivize private investors and minimize the role of the state. There is no doubt that the private sector has a profit motive because it expects a return on its investment. The government must therefore focus on facilitating private investors if it is to succeed in diversifying the economy.
In as much as Guyana presents attractive opportunities, the government must recognize that private money seeks out the most favorable terms for their investment. Therefore the role of the state is to take a hard look at where the potential for diversification exists and prepare comprehensive packages of opportunities for investors who will determine whether the conditions are favourable.
It is instructive to note that real private sector investors are more likely to succeed in leveraging true potential than those who simply jump on a political bandwagon to exploit opportunities without doing the relevant due diligence.
Georgetown – Longstanding Guyanese businessman and entrepreneur, Dr. Yesu Persaud, was honoured by the University of Warwick of the United Kingdom Monday night, after it renamed one of their research centres after him.
The Demerara Bank Head Office on Camp Street was filled with dignitaries including United Kingdom High Commissioner to Guyana, Gregg Quinn, United States Ambassador to Guyana, Perry Holloway, Minister of Public Infrastructure David Patterson, former Prime Minister Sam Hinds and other special guests to honour the commitment and work of Dr Persaud.
Giving the feature address at the event, Minister of Public Security Khemraj Ramjattan said that the event for Dr Persaud, a humble icon of the country, is not only for him personally, but for the entire Guyana, because of the prestige of the award.
Referencing the Indian indentured servants, Ramjattan said that they played a major role in the building of Guyana while bringing their contributions to the table.
“Dr. Yesu Persaud quite frankly is one exceptionally glowing example of a jewel,” Ramjattan said, while referencing Persaud’s humble upbringing and eventual rise to become one of Guyana’s icons.
Remarks were also made by Professor David Dabydeen, Associate Director, Development Office of the University of Warwick, Luke Taylor, Head of Humanities, University of Guyana, Al Creighton and Director of Demerara Bank Limited, Sheila George.
Persaud was hailed for his contributions to the country via the business sector, especially his contributions to Demerara Distillers Limited (DDL), Demerara Bank Limited, the Institute of Private Enterprise Development (IPED) and to the University itself.
Persaud was also recognized for his commitment towards the development of the country and his affinity for helping people.
In his speech, Dr Persaud referenced hard work and persistence as the keys to his success and recalled his humble beginnings as the assistant to a rat catcher on the sugar estates. He told how he left the shores of Guyana with the intent of not only becoming qualified as an accountant, but as a manufacturer and every other thing imaginable.
The Centre for Caribbean Studies at the University will be renamed the Yesu Persaud Centre for Caribbean Studies and will feature snippets of his biography on its walls.
The Demerara Bank Head Office on Camp Street was filled with dignitaries including United Kingdom High Commissioner to Guyana, Gregg Quinn, United States Ambassador to Guyana, Perry Holloway, Minister of Public Infrastructure David Patterson, former Prime Minister Sam Hinds and other special guests to honour the commitment and work of Dr Persaud.
Giving the feature address at the event, Minister of Public Security Khemraj Ramjattan said that the event for Dr Persaud, a humble icon of the country, is not only for him personally, but for the entire Guyana, because of the prestige of the award.
Referencing the Indian indentured servants, Ramjattan said that they played a major role in the building of Guyana while bringing their contributions to the table.
“Dr. Yesu Persaud quite frankly is one exceptionally glowing example of a jewel,” Ramjattan said, while referencing Persaud’s humble upbringing and eventual rise to become one of Guyana’s icons.
Remarks were also made by Professor David Dabydeen, Associate Director, Development Office of the University of Warwick, Luke Taylor, Head of Humanities, University of Guyana, Al Creighton and Director of Demerara Bank Limited, Sheila George.
Persaud was hailed for his contributions to the country via the business sector, especially his contributions to Demerara Distillers Limited (DDL), Demerara Bank Limited, the Institute of Private Enterprise Development (IPED) and to the University itself.
Persaud was also recognized for his commitment towards the development of the country and his affinity for helping people.
In his speech, Dr Persaud referenced hard work and persistence as the keys to his success and recalled his humble beginnings as the assistant to a rat catcher on the sugar estates. He told how he left the shores of Guyana with the intent of not only becoming qualified as an accountant, but as a manufacturer and every other thing imaginable.
The Centre for Caribbean Studies at the University will be renamed the Yesu Persaud Centre for Caribbean Studies and will feature snippets of his biography on its walls.
Georgetown – A police rank was Monday granted self-bail after he denied allowing the escape of Melvor Jeffrey, the Agricola teenager who reportedly had been shot by police in Agricola during an operation.
It is alleged that Jermaine Joseph, 20, of West Coast Berbice, on July 19, at the Georgetown Public Hospital Corporation (GHPC), being employed with the Guyana Police Force which had lawful custody of Jeffrey, through negligence or carelessness, allowed Jeffrey to escape from lawful custody.
Joseph, who is assigned to the Tactical Services Unit pleaded not guilty to the charge read to him by Magistrate Leron Daly.
According to the attorney of the accused, his client is not a flight risk.
The attorney then requested that his client be released on his own recognisance.
This request was granted by the Magistrate after Police Prosecutor Sanj Singh made no objection to bail being granted.
Joseph is expected to make his next court appearance before Magistrate Judy Latchman on October 30.
Jeffrey, a mason, was in custody following a police operation in Agricola, on July 11.
He was shot several times, allegedly by the police, during the operation and was taken to the GPHC where he remained a patient until his escape around 2:00 am on July 19.
It was previously reported that the youth had escaped from the hospital after noticing that the policeman assigned to guard him was not at his post.
Jeffry was recaptured on July 23, after he was found hiding in a barrel at Agricola, East Bank Demerara.
He was later read five robbery charges by a city magistrate.
It is alleged that Jermaine Joseph, 20, of West Coast Berbice, on July 19, at the Georgetown Public Hospital Corporation (GHPC), being employed with the Guyana Police Force which had lawful custody of Jeffrey, through negligence or carelessness, allowed Jeffrey to escape from lawful custody.
Joseph, who is assigned to the Tactical Services Unit pleaded not guilty to the charge read to him by Magistrate Leron Daly.
According to the attorney of the accused, his client is not a flight risk.
The attorney then requested that his client be released on his own recognisance.
This request was granted by the Magistrate after Police Prosecutor Sanj Singh made no objection to bail being granted.
Joseph is expected to make his next court appearance before Magistrate Judy Latchman on October 30.
Jeffrey, a mason, was in custody following a police operation in Agricola, on July 11.
He was shot several times, allegedly by the police, during the operation and was taken to the GPHC where he remained a patient until his escape around 2:00 am on July 19.
It was previously reported that the youth had escaped from the hospital after noticing that the policeman assigned to guard him was not at his post.
Jeffry was recaptured on July 23, after he was found hiding in a barrel at Agricola, East Bank Demerara.
He was later read five robbery charges by a city magistrate.
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