US foreign investment given the boot

http://www.stabroeknews.com/index.pl/article?id=56525517

US foreign investment given the boot
Stabroek News. Business Supplement.
Friday, July 27th 2007

This column explores initiatives to improve the business climate of our
nation and make Guyana Open for Business a reality. Peter R Ramsaroop,
MBA Chairman, RoopGroup

Stabroek News editorial on July 24 made a profound statement in
reference to whether Guyana is open for business or not, "one thing
most businessmen will not tolerate is being pushed from pillar to post,
being given cryptic answers which leave them in doubt" This last week,
another major foreign US investor was given the boot by the Minister of
Agriculture who he said did not even understand the concept of
opportunity cost. This investment firm wanted to build the first modern
milling plant for finished wood. They were approved initially for a
forest concession and now after years of waiting, were told that it had
been referred to a subcommittee. They got their Brazilian Visas while
in Guyana and left for Brazil to discuss moving their investment there.
They are hoping that the government will return their concession fee.

The mill investor told me as he left for Brazil that the Minister of
Agriculture clearly did not understand the long term impact of their
investment and turning raw materials such as lumber into finished
products. The need for finished wood is in demand globally, yet we do
not have such a plant in our nation. The US Ambassador needs to re-look
at his policies for Guyana and must advise future US investors of our
climate so as not to have them waste resources.

Previously in this space, we've examined many ideas around the concept
of building Guyana into the next "Tiger Economy" patterned after fast
growing and modernizing economies in Ireland and East Asia. One of the
leading indicators for building such an economy is the trend in foreign
direct investment (FDI). Where then does Guyana place in the hunt for
global capital and the jobs that may follow and how can we become
competitive in an increasingly fierce battle for foreign investment?
Sadly, instead of building a "tiger" economy it seems that all too
often we are trying to keep an economy more akin to a mouse on IMF
life-support. We are addicted to aid and debt relief. We are proud to
be a poor country and our President emphasises that in every speech he
makes externally as he begs for more favours from developed nations, as
if it is our right to get help. With all of our resources how can this
be? How is it possible to sustain poverty in the face of so much
"potential"? I try to give voice in this column to some of the key
points both public and private that can help arrest our economic decay
and put us on the road to prosperity.

Economists and policymakers around the world generally agree that an
overall policy framework built on economic and political stability,
with clear rules regarding the entry and operations of international
businesses and a clear privatization policy are the main components of
the public sector's responsibility for creating a positive climate for
FDI. Other concrete steps that have proven to attract investors are
simplified administrative features, investment facilitation services
such as those that are supposed to be supplied by Go-Invest, and
incentives such as tax reduction/abatement or subsidies. This recent
investor did not receive any of these services. I can attest to the
same treatment by Go-Invest. Foreign direct investors, typically, have
a longer-term perspective when engaging in a host country.

Until next week, "Roop".