March 6, 2019 issue | |
Guyana Focus |
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Net Foreign Direct Investments trend lower |
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In spite of all the hype surrounding Guyana’s oil prospects, net foreign direct investments (FDI) as a percentage of the country’s GDP, has fallen substantially in recent years – and accelerated under the current administration. |
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Incidentally, according to the country’s Constitution, the ruling APNU-AFC coalition should have resigned and called new general and regional elections within 90 days after the no-confidence vote. However, the government has held on to power and the Guyana Elections Commission (GECOM) contends that it is not in a position to hold new elections within the stipulated period. |
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As opposed to periodic investments by foreigners in a variety of mostly small scale initiatives, FDI has a more permanent effect on the economy. According to the World Bank, FDIs are the net inflows of funds to acquire a lasting management interest, typically 10 percent or more of the voting stock in an enterprise operating in the country. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as indicated in the country’s balance of payments. As the Chart, FDI Net Inflows Trend Lower shows, net FDI averaged 3.7% of GDP during the 2015-2017 period under the current administration, reaching 0.9% in 2016, that is, the lowest level in the past 25 years during the first full year of the APNU+AFC coalition in power. Comparatively, during the 2000-2014 period, net FDI averaged 7.7% of GDP. In the 1992-1999 period, net FDI averaged 13.5% of GDP, peaking at a record high of 39.2% in 1992 when the former PPP/C administration assumed power. Evidently, net FDI inflows have been lower under non-PPP administrations and this fact holds true for years prior to 1992. It would therefore be prudent to examine why foreign investors have abandoned Guyana under the former PNC and current APNU+AFC governments. While there is optimism that oil will attract higher levels of net FDI, it must be recognized that foreigners, like any business, tend to invest in the least risky jurisdictions given alternative choices of jurisdictions. While investors might take a certain degree of risk in countries like Guyana or strive to benefit from a first movers advantage, they carefully weigh the risk of each opportunity and end up choosing those opportunities with the greatest payback and least risk. Incidentally, the advent of greater openness in the global economy – barring protectionist measures by the Donald Trump administration in the US – has also made attracting foreign investments increasingly competitive. Therefore, the benefits of investing in Guyana must be more attractive than any other competing destination. Foreign investors also consider several other factors prior to making their investment decision. Among these factors are the ease of doing business, the stability of the government, the state of the regulatory and judicial processes, the level of taxation, the state of crime and corruption, and the quality of the local workforce. While Guyana is not at the bottom of the list of investment destinations in many of these categories, it certainly falls short in many areas, with an unstable government, and high levels of crime and corruption topping the list of its weaknesses. Although political instability is a relatively new phenomenon, corruption and crime have been historically pervasive. In fact, contrary to the illusion of a decline in both social ills, anecdotal evidence indicates a significant increase in recent years. Incidentally, while the government has been making strenuous efforts to attract foreign investments, it has not enjoyed the desired level of success. Several overseas trips by government officials have attracted varying degrees of interest but such interest has not materialized in actual inflows of funds. The imaginative pitch of “restored democracy” by government officials is not a sufficient reason to invest in a foreign country, even though that might be attractive to foreign-based Guyanese. But, then again, even overseas Guyanese will first determine whether it is worthwhile investing in the country where they are currently residing versus packing up shop and heading into an uncertain environment in Guyana. Even though, the government might not support the reality that the current constitutional stalemate is a deterrent to investments as a whole, there is apparently evidence at the local level which indicates that there has been a decline in business activity in the country. According to the results of a survey by the Georgetown Chamber of Commerce and Industry (GCCI) published in the local press, there has been a significant decline in commercial activity as a result of the present political uncertainty. The survey showed that 64 percent of respondents experienced some form of decline due to uncertainty over the state of political affairs in Guyana. For those businesses which registered a decline in activity, approximately 85 percent experienced a 25 percent to 50 percent drop in the level of commercial activity. The remaining 15 percent of businesses experienced a 75 percent to 100 percent decline in business. The GCCI observed that the significant decline in commercial activity is worrying and with the continued state of political uncertainty can result in further decline in economic activity. It further noted that from a national development perspective, the climate of uncertainty does not bode well for investors’ confidence, both local and foreign, as well as business planning, budgeting and other key features of business management and administration. This decline can be directly correlated to the decline in FDI inflows. The loss of confidence at the domestic level would have a direct impact on how foreign investors view the country. There is no doubt that Guyana possesses tremendous opportunities for foreign investors. Last month, Minister of Public Infrastructure, David Patterson, referred to the country as “almost a blank canvas to paint a masterpiece” when speaking at an oil and gas forum in Houston, Texas. Perhaps, he is right. But you cannot paint on a tainted canvas. |
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Jagdeo agrees to have talks with President Granger despite reservations | |
Cites appeals from citizens, civil society, diplomatic corps | |
Opposition Leader Bharrat Jagdeo | |
Opposition Leader Bharrat Jagdeo last evening said he will attend today’s meeting with President David Granger as a last effort to “offer the government a way out of the constitutional crisis and to keep Guyana in the democratic fold of nations”. A statement from his office follows: Statement by the Office of the Leader of the Opposition Having received a letter on February 25th 2019 from the Ministry of the Presidency inviting the Leader of the Opposition to a meeting with the President on March 6th, 2019 to discuss the following matters: i) “The National Assembly’s constitutional role in the present situation; and ii) The Guyana Elections Commission’s readiness and requirement for funding to enable it to conduct General and Regional elections”. The Opposition rejected these grounds for the meeting in light of the apparent reluctance of the President to name a date for elections in accordance with article 106 (6) and 106 (7). Recognizing that the date of March 21, 2019 was fast approaching without any indication by the President nor GECOM to meet the three months deadline, the Leader of the Opposition offered a reasonable and feasible proposal to the President in the national interest and to prevent the country slipping into a constitutional crisis. The letter dispatched on March 4, 2019 stated: “I am proposing to the President for his consideration, the following:- i) The date of the general and regional elections to be held before the expiration of the present voters’ list on April 30, 2019; ii) No new contracts to be awarded by the State, including Regional Democratic Councils, and, State-owned corporations after March 21, 2019; iii) No new agreements, loans, grants, land leases, or any other such agreements or contracts after March 21, 2019, that bind Government; iv) No abuse of State resources for partisan activities/purposes; v) Access to the State-owned media by all the contesting political parties. On the agreement of your Government to these proposals, the Parliamentary Opposition will be prepared to lend its support for the two-thirds majority required to comply with Article 106 (7) for an extension beyond March 21, 2019. I, therefore, am proposing that the meeting focus exclusively on the date for these elections. Further, l believe that my proposal to hold general and regional elections before April 30, 2019 is reasonable and feasible with a claims and objections period, provided that GECOM acts in good-faith and in conformity with its mandate and the Constitution. This proposal will ensure that the Constitution remains intact and prevents our nation slipping into a constitutional crisis. If my proposal finds favour with the President, l shall be prepared to meet him on March 6, 2019 at 11:00 a.m. or at any other time.” This afternoon, the Leader of the Opposition received a reply from Minister of State, Joseph Harmon, stating that “the content of these letters has been conveyed to the President who advises that he is prepared to meet with you on Wednesday March 6th at 11:00 hours at the Ministry of the Presidency and to discuss the issues raised in your aforementioned letters.” Many people believe that nothing positive will come out of the meeting tomorrow given the track-record of duplicity of the Granger administration thus far. The Opposition Leader shares some of these misgivings. Nevertheless, having been approached by many Guyanese, civil society bodies and members of the diplomatic corps to make one last attempt to avert the constitutional crisis that the President, with a complicit GECOM, is leading our nation into, the Leader of the Opposition is prepared to make one more good-faith attempt in the interest of the nation, and, will attend the meeting. This is the last attempt by the Parliamentary Opposition to offer the government a way out of the constitutional crisis and to keep Guyana in the democratic fold of nations. If the meeting fails, the true nature of the government will be seen by all those who urged the Opposition Leader to meet. Tomorrow will be a test of the integrity, credibility and sincerity of the President; he will be tested as to whether he can be trusted “as a man of his word” to put our nation, its future and its people first on a foundation of constitutional and parliamentary democracy. This will be a test as to whether the constitution or ‘power lust’ wins out. Tuesday, March 5, 2019 Office of the Leader of the Opposition Co-operative Republic of Guyana 304 Church Street, Queenstown Georgetown |
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March 12 set for Court of Appeal to hear oral arguments on confidence motion appeals | |
Georgetown – After setting timelines for the laying over of “skeletal arguments” by the attorneys on the substantive appeals filed by the Attorney General (AG) to challenge two of the High Court judgements on the validity of the no-confidence motion against government, acting Chancellor Yonette Cummings-Edwards last Friday fixed March 12th as the date for oral submissions to be made. Joined on the Full Bench of the Court of Appeal by Justices Dawn Gregory and Rishi Persaud, Justice Cummings-Edwards announced that the court would proceed to hear two of the five appeals filed as those records have been settled. Last month, Williams appealed the decision in the action on the motion that he brought against Speaker Dr. Barton Scotland and Opposition Leader Bharrat Jagdeo and the decision in the action initiated by chartered accountant Christopher Ram. He subsequently asked the Court of Appeal for orders to stay the effects of two judgments and to keep the President, the Cabinet and government in place until his appeals are heard and determined. Earlier this week, Justice Persaud fixed March 15th as the date for oral arguments in those applications. The AG in the case he filed in the High Court had contended that the support of an “absolute majority” of 34 of the 65 elected Members of Parliament was needed for the confidence motion to pass. However Chief Justice (ag) Roxane George-Wilshire on January 31st held that 33 elected members constitute a majority. The motion was passed by a vote of 33 to 32 members. “So, therefore, the ruling of the Speaker that the no-confidence motion… was carried by a vote of majority of all elected members of the National Assembly is thus lawful and valid and made in accordance with the requirements of Article 106 (6),” the judge said. In the action filed by Ram, Justice George-Wiltshire found that while there is nothing in the constitution that speaks to formal resignation of the Cabinet, she believed that it was automatically triggered by the passage of the motion. She went on to say that even though Cabinet has resigned, the President remains the President and the ministers remain ministers to perform their duties and functions of office. Williams later filed appeals challenging those decisions. His contention is that the judge “erred and misdirected herself in law” when she ruled that the motion was validly passed and that the Cabinet should have resigned and preparation for elections within the constitutional timeframe should have commenced. This timeframe, according to the constitution, is three months. During Friday’s session, Roysdale Forde, the attorney for APNU General Secretary Joseph Harmon repeated an oral application he had made a day earlier, asking that his client be added as a party to the appeal filed by the AG in the Ram case. He told the court that given the fact that he is an added party in the initial matters filed by the AG and the one filed on behalf of private citizen Compton Reid, and given the fact that all the matters are connected, any decisions made in either one will affect his client. “Yes… there are things in the Ram matter that would affect Mr. Harmon,” he said in response to objections from both attorney Anil Nandlall, who is representing the Leader of the Opposition, and attorney Kamal Ramkarran, who is representing Ram. After listening to all the parties, Justice Cummings-Edwards informed them that Forde will be allowed for the time being to file submissions in the Ram case as an intervening party. On Harmon’s behalf, two appeals in the cases brought by Reid against Scotland, former Member of Parliament Charrandass Persaud and the AG, as well as the case brought by the AG were filed. Forde and attorney Olayne Joseph, in the Notices of Appeal, contend that there is dissatisfaction with both decisions in their entirety, including that the vote of Persaud on the motion was deemed valid even though he was disqualified from being an elected member of the National Assembly given his Canadian citizenship. Meanwhile, one of Reid’s attorneys, Robert Corbin, informed the court that he was concerned with the time schedule being fixed, given the fact that the matters are being heard together. He said the decisions that were being made will have an “impact” on the Reid matter before reminding the court of the March 15th hearing before Justice Persaud. “I was wondering whether or not it will be overcrowding the court with seeking to have both matters being addressed at the same time,” he said before inquiring what is likely to happen on March 12th. In response, the Chancellor said that that is a hearing date. Reid, through his legal team, said that he was dissatisfied with the entire decision in the case that he filed and therefore asked the Appellate Court to set it aside. Corbin pointed out that he doesn’t want his appeal to be “restricted by decisions” that were being made. “There ought to be adequate time for the appellants and respondents to properly address this court on what I consider to be a matter of very significant… public importance,” he said. He added that the court is being asked to address a fundamental issue for the “future of the Republic.” He said that these are important issues of interpretation of the Constitution “for the future and not necessarily to deal only with what people perceive to be a crisis at this moment and to be moving with undue haste just because of political imperatives… will not be in keeping with the expectations of this society.” Earlier, Justice Cummings-Edwards informed that the records in Reid’s appeal are not yet finalised and, therefore, the matter is not yet before the court. Williams, in a brief comment to the media, reiterated that timelines have been given for the hearing of the substantive appeals. He said that skeletal arguments will be submitted and all parties will return to court on March 12th. Nandlall expressed hope that the matters will be heard swiftly. “I don’t need any time. The submissions which were made in the court below are the submissions which I will lay over. I only need to change the names of the parties and to put in the appellate court. I think all the parties should be in a position to do the same and the court should hear and determine the matter as quickly as is reasonably possible so that we can move to the next stage,” he told reporters outside the court. |
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Region Seven communities reeling from ‘complicated’ Venezuelan influx: Toshaos | |
Devroy Thomas, Toshao for Arau | |
By Kemol King (Kaieteur News) Venezuela is experiencing an unprecedented humanitarian crisis, which has caused a massive exodus of millions of refugees to neighbouring countries, including Guyana. Four years later, the influx of persons affected by the political and socio-economic unrest is still affecting Guyana. Devroy Thomas is the Toshao for Arau, a border community in Cuyuni-Mazaruni, Region Seven. He expressed discontentment for the growing migrant situation in the region, which he describes as complicated. In an interview with Kaieteur News, Thomas explained that Venezuelans coming into the region enter through the Wenamu River. The river is narrow, he explains; it is about 90 feet wide. He said that Venezuelans have been trying to cross all year. However, at this time of the year, the water is very low, so it is safer to cross. According to Thomas, most of the incomers reside in communities in and around Arau. He said that though many are unemployed, they stay in the “business area” of the mines, hoping to get jobs in the mining sector. In his estimation, over 100 people have crossed the river in the past year and the community does not have the resources or the capacity to cater to their needs. The Toshao noted that a significant number of migrant children are in need of schooling. He explained that the leaders in Arau have been trying to get the children involved in school, but the authorities maintain that the children shall not be enrolled unless the arrangement is legal. Since most of the children are illegal immigrants, few are actually given a chance to pursue an education. |
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Claude Anselmo, Toshao for Kaikan | |
A lot of free time and lack of access to comprehensive healthcare has resulted in an outbreak of sexually transmitted diseases (STD). According to Thomas, the Community Health Worker for the area told the village leaders that some young people have been referred to the Georgetown Public Hospital Corporation because there isn’t medication available to treat those illnesses. There is one drugstore run by a Colombian, but because of the demand for medication, it has quickly run out, and the individual has not been able to stock the store as much as the community needs. To add to that, crime has taken a turn for the worse. Thomas recalled two murder cases, one quite recent. He said that no one knows who the victim is, but they are certain he is Venezuelan. Two skeletons were found by the village leaders, while they were conducting research with the Amerindian Peoples’ Association, (APA) but no one has accounted for missing persons. Although he maintains that the influx leaves the community in a worse state than it was before, Thomas refuses to turn refugees away. “When one of them comes around, we don’t refuse them. We have to offer them something,” he said. Thomas is calling for the government to assist the refugees because they are suffering, “and they need help very much.” However, the Toshao in a nearby village feels differently about the crisis. Claude Anselmo is the leader of Kaikan. He is also the regional representative for Cuyuni-Mazaruni to the APA, with responsibility for Kaikan as well as Arau. “These are not refugees,” he contends, “These are businessmen”. He said that many Venezuelans come in with things to sell “drugs, ammunition, whatever they can sell.” He said that they would come in with things to sell, then cross the river again. At one instance, the influx had started to slow. However, when word reached that the Government of Guyana had sent two sets of food and supplies for the refugees currently in the area, more started to swarm. But the government has not maintained a steady supply. Since they come and meet a shortage of resources, Anselmo said that they break and enter business places, and steal clothes from villagers’ yards. There have been multiple arrests for trafficking of marijuana and cocaine, as well as for breaking and entering. And for both issues, Venezuelans are currently facing prosecution. On top of that, he says, migrant women have decided to perform sex work as a way to earn. Like Arau, Kaikan is affected by a surge in STDs. The Guyana Police Force and the Guyana Defence Force have presence in the area, but the Toshaos are not confident that this has proven effective against crime and insecurity. And though there is at least one community policing group in the area, they are afraid, because they are not armed as the police and soldiers are. Both Toshaos still try to help, but they say that people are afraid for the wellbeing of their communities. Thomas said that they will continue to provide assistance for those in need, but they are small in number and there is not much they can do. |
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