We need to back off and let investors feel more confident

Dear Editor,

As much as I am inclined to let this pass, my conviction is spurring me to comment on your recent article, ‘Lewis calls for body to monitor foreign investment (SN, July 24). In that article it was reported that, “In the wake of bauxite companies Bosai and Rusal failing to deliver on several promises made to the Guyanese people, veteran trade unionist Lincoln Lewis is calling for the establishment of a Foreign Investment Commission that will monitor all investors in the country and determine whether the investment is needed or not, and could serve as a long-term solution to companies not fulfilling their promises.”

My mental exclamation was, “Said what?” and as I was getting over the shock and delved deeper, I was further astonished. The article continued, “When contacted, Lance Carberry said that as part of the agreements with these foreign investors, the government has to ensure that they have penalties for non-performance.  The penalties should be such that the investor would not want to incur them. My response was, how is it possible for two persons, who I hold in such high esteem, can get it so wrong?

One of the careers I pursued since coming to the US was that of insurance agent. I gave up on it, but learned that one of the requirements for maintaining the licence was the need to submit to refresher courses every two years. Why do I get the feeling that our leaders are still living in the sixties and seventies and refresher courses are in dire need? Why do I get the feeling that some did not get the memo that the USSR had collapsed, and a lot has happened and changed since Ronald Reagan uttered those famous words, “Tear down those walls”?

What is wrong with a Foreign Investment Commission? It is the unnecessary establishment of another bureaucracy at taxpayers’ expense that will create more opportunities for corruption and will in no way solve the problem. Research on the background of a company can be done at the Foreign Affairs Ministry or by an independent contractor tasked with the job whenever the need arises. What good is background anyway, if there are laws in your country to prosecute wrongdoing?  Also, depending on parliamentary oversight is a defeat of the purpose since government holds the majority.

Mr Lewis’s concerns are legitimate and indeed are a cause for concern. What I see here is that Guyana has not established itself as a very favourable place to do business. We have not taken advantage of the financial crisis to jockey ourselves into a position where companies looking for competitive labour may be attracted. Let’s at least establish that companies do not invest for the same reason as a government. GuySuCo in the hands of an investor would be revamped or sold.

As a government entity the masses can be further taxed and funds sourced from other parts of the economy to keep a block of voters happy. Not so a business investment. Here is where the confusion lies.

These calls for a commission are made from principles that are stuck in the past and the naïve contention that businesses are established to create jobs regardless of the consequence. This call is made at a time when the bauxite industry is in limbo and uncertainty with workers and unions.   It is hard for me to believe that a company would see a certainty in profits by sticking to promises made and not go full speed ahead. Also we must understand where investment dollars come from.

I find that unions can be both productive and counter-productive and must say that this is a bad time for this kind of union militancy. I may be wrong but I am convinced that this already has a casualty in the name of our own Precision Woodworking.  Industrial action caused the closure of Tumatumari. No business would feel safe in this environment of constant industrial action. These factors need to be in the equation.

My view is that we need to back off and let investors feel more confident. Allow more investments to get a footing. In a small population like ours, soon we will find that competition and upward mobility in a company would dictate workers’ wages. We are all anxious for development and seeing more work opportunities for the unemployed, but if we are not extremely careful we can end up shooting ourselves in the foot.

What I would support is government calling these companies in and re-adjusting their contracts if the previous arrangements cannot be fulfilled, and not have the bauxite companies lock out the possibilities of others building the refineries. Opportunities can be made available to others who can use this same environment and make a profit.  Maybe we can find angle investors and I would think Guyanese investors, who would not be looking for major profit margins. I think Guyanese investors would be more inclined to be thinking about Guyana’s development, but still we cannot allow the unions to crush them before they even get out of the blocks.

Yours faithfully,
F Skinner   

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