A survey by the local private sector has revealed that the Guyana economy is holding its own in the current global economic and financial crisis and that businesses outside the manufacturing sector have been minimally impacted, according to President of the Georgetown Chamber of Commerce and Industry, Chandradat Chintamani.
Speaking with Stabroek Business earlier this week Chintamani said that the survey revealed that the Guyana economy has been faring much better in the current crisis than those of other Caribbean countries. He cited Jamaica as being among various Caricom territories whose economies had been significantly impacted by the decline in the regional tourism industry and who had been compelled to resort to sources of multilateral lending including the International Monetary Fund. (IMF)
The survey which Chintamani said had been undertaken by local consultants with the aim of providing the private sector with a clearer understanding of the global economic and financial crisis and its implications also served to provide the business sector with an assessment of its own performance as well as the performance of the Guyana economy. “Actually, we got much more out of the survey than we actually set out to achieve. We now understand much more clearly that our own members have not been significantly affected by the global financial and economic crisis. The areas that have been significantly affected are parts of the manufacturing sector and the bauxite industry and this has had to do with the linkages of those industries to external markets. The indication from the Central Bank is that at this stage we are more-or-less in line with 2008 as far as remittance flows are concerned,” Chintamani told Stabroek Business.
Part of the recent survey included one-on-one exchanges between the consulting team and members of the private sector and Chintamani said that among the revelations that arose from the survey were that none of the entities in the commercial sector was required to reduce staffing levels as a result of the crisis while there has been no reduction in the level of planned private sector investment or in the level of imports into the country.
However, Chintamani told Stabroek Business that the Guyana economy and specifically the private sector continued to face “internal challenges” that need to be addressed urgently. “We are aware that many of these issues are being addressed through the vehicle of the National Competitiveness Strategy and perhaps at this juncture there is a case to be made for extracting some of the issues from the Competitiveness Strategy document with a view to addressing them urgently.”
The private sector has placed tax reform at the forefront of its list of priorities for engagement with government and Chintamani told Stabroek Business that this was one of the issues that merited priority attention. ‘We know that there is a Green Paper in circulation on taxation and that the
consultants that have been engaged by the government in the process of addressing this issue are due to return to the country. We in the private sector have issues that we want to raise and we are keen to engage the consultants when they return. We feel that that the existing Green Paper is still a working paper and that there are various ways in which we in the private sector can add value to that document,” Chintamani said.
The GCCI President told Stabroek Business that he felt that one possible approach to addressing the issue of tax reform might be to address the various taxation issues separately. “Perhaps we can begin with income tax, for example; then we can move to property taxes, corporate taxes and the various other taxes in turn. “
Meanwhile, according to Chintamani the challenges of the country’s manufacturing sector continue to arise primarily out of its smallness, its limited competitiveness and the difficulties which it faces in securing export markets. “One of the things that we would all wish to see is a set of circumstances in which we have less imports and more exports. The question that arises, however, is how do we arrive at that point? Our production costs are high and that reduces our competitiveness; freight costs out of Guyana are also very high. Those are things that need to be addressed.”
Chintamani disclosed that issues relating to the competitiveness of the manufacturing sector were among the matters that surfaced during a recent meeting between private sector officials and President Bharrat Jagdeo. “At that meeting the President gave a commitment to look at certain areas including electricity costs. We cannot change the electricity rates because of the cost of fuel and other operations but the discussions with the President centred on what was felt to be the need to begin to address the hydropower development issue with an enhanced sense of urgency. If we can have a reliable electricity supply it will not only reduce production costs and make the manufacturing sector more competitive; what it will also do is to place us in a position to more aggressively encourage various forms of private investment in Guyana.”
