The investment generated from 1985 to 1992 has not continued

http://www.stabroeknews.com/index.pl/article?id=56525422

The investment generated from 1985 to 1992 has not continued
Stabroek News
Thursday, July 26th 2007

Dear Editor,

It is interesting to note your recent editorial highlighting the
bureaucratic nightmares that now characterise the investment climate or
lack thereof prevailing in Guyana at present. In fact, when the late
President Hugh Desmond Hoyte inherited the Guyanese presidency in
August, 1985 following the death of the dictator Forbes Burnham, we all
know only too well that he had to perform a tightrope act. This act of
stealth, statesmanship and above all a clear and most committed
willingness to embrace both democratic and economic reforms were
executed within the confines of a highly hostile party setting. There
were many and probably are still many that rejected his reforms and
meaningful changes that in essence were Guyana's own 'glasnost,
perestroika and demokratzatsiya'.

Those reforms resulted in the lifting of restrictions on the press and
thereof the birth of the illustrious Stabroek News. Sadly and
ironically the very party that benefitted from so great a platform
afforded it by the very Stabroek News has today gone sour on Messrs. De
Caires and team by choosing to withhold advertising revenue under the
guise of so called market realities. The Treaty of Chapultepec to which
Guyana is signatory has been ignored and despite global public
condemnation for such vicious action against SN by the state - the
Jagdeo regime continues to run amok like the proverbial 'bull in a
china shop'.

Let's not forget the removal of restrictions on basic food imports
such as wheaten flour coupled with embarking on an open, free-market
system which also resulted in the complete abolition of foreign
currency controls and the once cumbersome import licensing regime, all
compliments of the Hoyte era. All of the above, plus the granting of
generous tax concessions and other fiscal incentives designed to spur
both overseas and domestic private investments led to the 'period of
economic renaissance', where one and all, irrespective of race, colour,
creed or class benefitted immensely from Hoyte's far reaching economic
reforms. In fact, the period 1985-1992, can be duly characterized as
the only period in living memory that the long suffering people of
Guyana saw a chance for a bright and stable future. The period
1990-1992, alone witnessed the inflow of more than US$ 500 million. We
all know about the once active Omai, Barama and the now extinct Aroaima
investments and despite that only one of these entities is still around
- their prior existence in the now barren legitimate Guyanese economic
landscape were owed in great measure to the sterling vision,
dedication, deep rooted commitment and unparalleled leadership provided
by the late President Hoyte.

The privatisation of the former state owned telecoms utility GTC, now
GT&T could have been surely accomplished in a better and much more
structured manner as opposed to the current situation prevailing
therein. Nevertheless, the complete privatisation of the once decrepit
telecoms utility has certainly aided in the immense improvement of
basic telephony across the entire country compared to the period of
state ownership.

I grew up in a home without a phone so I was part and parcel of the
'analog divide'. Many people across Guyana are today victims of the
'digital divide' but this can be fixed in short measure because the
fundamental network infrastructure developed by GT&T and compliments of
the Hoyte reforms are there in place.

The country has failed to garner any significant major foreign
investment beyond that of the recent Digicel/U-Mobile presence therein.
It is interesting to note that Shock International wants to invest in a
US$ 26 million sawmilling venture and have been in discussions with the
powers that be since 2004 and now almost 3 years on, investor
confidence and patience from their financial backers are starting to
wear thin.

The economy of Guyana has been purposely managed on the premise of
'debt reduction' and time and again it has been proven that this is not
the way forward in terms of jobs creation and wealth creation for this
is and will prove to be only a 'band aid solution'.

There are a few important points that must be considered as to the
current state and the future of the country's economy:

(a) Guyana's economy is not multi-tiered or diversified for it is still
primarily a resource based one with little or no value added products
being generated. Its continued successful exploitation and production
of gold, bauxite etc., are all still subjected to global commodity
supply and demand cycles. Given the ongoing rise in demand and hence
favourable prices for same as a result of demands from China and India
then the country should be cashing in. However, there do not exist
either infrastructural or production capabilities to take advantage of
same so instead neighbouring Suriname stands to gain massively from
both Indian and Chinese investments in its oil, gas, bauxite and iron
ore sectors as do the rest of Latin America. Besides, there is no
demonstrable political will to make the country investor friendly
despite casual rhetoric from Messrs Jagdeo and cohorts.

(b) Guyana continues to produce both rice and sugar way above the
average costs of production elsewhere. On account of this, it is unable
to effectively compete for global markets against the likes of
Thailand, Vietnam, Indonesia and the Philippines. In addition, the
European Union is already producing adequate amounts of beet sugar to
meet domestic demand with the pressure growing under the WTO demanding
the ending of preferential treatment for Guyana's exports currently
enjoyed under the Lome and Cotonou Agreements. This is no longer an
afterthought. There is no real future in the sugar cane sector unless
of course Guyana moves aggressively and rapidly towards the production
of organic sugar, high end spirits and liquors and that of ethanol
manufacturing, none of which seem to be the case.

(c) Guyana's underdeveloped social infrastructure and the lack of
adequate domestic investment capital to fuel the local business sector
has led to the absence of a viable value added manufacturing sector
that could improve foreign exchange earnings through viable exports and
outsourcing arrangements in the garment manufacturing or ICT driven
sector.

(d) Given the global trend towards information technology, knowledge
transfer and the era of the intellect worker , all of which seem to be
alien concepts locally, Guyana's chances for greater capital inflows
and technology transfer are severely restricted. Besides we are
experiencing a brain drain versus a brain gain as in the case of India.

The recent World Bank report highlighted the threats posed by
transnational criminal operators and drug lords to the Caribbean's
future. The region and moreso Guyana continue to lose its brightest and
best minds as brain drain becomes the order of the day and without the
remittances from abroad this country like most of the Caribbean will
become very depressed if not the perfect incubators for failed states.

However, instead of doing the proper thing by admitting to failures
and acknowledging the gaping shortcomings - the President of Guyana,
Bharat Jagdeo, chooses to lash out at Transparency International and
other perceived critics. When asked or quizzed about the various loans
to certain hotel operators - all that one gets is a huge load of
malarkey.

Yours faithfully,

Mike Singh