Our indigenous private sector currently lacks the financial capacity to invest in large projects like Amaila

Dear Editor,

I, respectfully, would like to respond in detail to Mr. Carl Greenidge’s letter titled `In most economies private businesses seek out opportunities to invest’ (SN 08.09.13).

In relation to the Amaila Falls Hydro project, the Georgetown Chamber of Commerce & Industry (GCCI) has maintained a singular position in this regard which calls for both government and opposition leaders to agree on the protocol for procuring the services of an independent, reputable regional or international investment firm to review the economic feasibility of the project and propose recommendations that all parties and stakeholders and, in particular, the Guyanese citizenry can accept.  Our position was predicated on a fundamental belief to achieve a political convergence of positions between the government and the opposition against the backdrop of an active stream of public commentary. We believe that a credible third party’s assessment would ease fears and doubts while ensuring that the people of Guyana receive the best arrangement in going forward with the project.

Mr. Greenidge’s tone in his letter was quite surprising because the GCCI always strives to maintain good relations with all important policy stakeholders in Guyana, and the APNU is no different in this regard. In fact, on September 4, I led a Chamber delegation for a cordial and substantive meeting with APNU leaders Mr. David Granger and Mr. Lance Carberry. For two hours, we discussed the many challenges impeding Guyana’s national competitiveness as referenced in the Chamber’s recently published “Competitiveness Manifesto.” The meeting ended with both sides agreeing to continue discussions in an atmosphere of good-faith relations and productive dialogue for the benefit of all stakeholders.

I also take this opportunity to address erroneous assertions made by Mr. Greenidge in his prolix letter.  He accused me of being offended, outraged and even insulted by his call for our domestic – or rather, indigenous – private sector to invest in the Amaila Falls Hydro project.  This could not be further from the reality. The fact is when the Kaieteur News reporter approached me about Mr. Greenidge’s view, I merely offered an opinion suggesting our local private sector might not be in the most ideal position to invest at this time and hence the reason why no party has come forward to do so.

When viewed with breadth and depth within a globalised context, our private sector is still relatively small and it would constitute a stretch to label even our largest indigenous firms as medium sized within a suitably comparable international context. Our indigenous private sector, still in a critical formative stage but nevertheless maturing gradually, lacks currently the financial capacity to invest in large infrastructure projects. And, in the case of Amaila where the proposed project has yet to be undertaken successfully in Guyana, it is reasonable to assume that members of the local private sector would be justifiably apprehensive about undertaking a potentially significant financial investment for such a project.

Additionally, many indigenous firms lack the experience, capacity, expertise or capabilities to execute such a large and innovative project (as considered within Guyana’s context).  Our country’s economic history is riddled with comparable examples. In the early 1990s, the Government of Guyana finalized an agreement with the Atlantic Tele Network (ATN), the parent company of GT&T, to operate a 20-year monopoly licence to provide telecommunications services to the nation. Why didn’t Mr. Hugh Desmond Hoyte and Mr. Carl Greenidge, then president and finance minister, respectively, go with an indigenous firm and preferably ink a non-monopoly agreement for telecommunications services.

I would suspect the same issues that preclude our companies now from investing in Amaila were precisely the concerns affecting them in the early 1990s. That is, the lack of sufficient financial and expert capabilities.

I’ll illustrate further by using a more current example. Everyone knows that oil and gas represent enormously lucrative and profitable economic ventures and Guyana’s geography provides solid investment opportunities for our indigenous companies.

It then begs the question about why no domestic investing in offshore exploration activities is occurring currently. Why are only international firms leading the charge in that regard? Again, financial and capacity constraints restrict our indigenous private sector from undertaking such investments to the extent that they can withstand any potential serious risk-induced impacts.

I hope that Mr. Greenidge, upon reflection, will rethink his position stating “the claim that private businesses in Guyana cannot afford to invest in Amaila is silly.” It really isn’t a silly proposition but one instead that is grounded in economic and empirical realities. To wit: no single entity or group of “domestic” companies has come forward to proceed accordingly when the international investor Sithe Global withdrew from the project.

As it relates to the private sector’s contribution to the national treasury – or, what we commonly call the “taxpayers’ money” – I maintain the private sector pays a proportionally larger share of such contributions and is concurrently responsible indirectly for the personal income taxes paid by private sector employees.  I concur with Mr. Greenidge that it is not a form of benevolence but rather a “civic duty” to pay taxes. That assertion applies to both the private sector and to individual contributions; hence, it’s not blasphemous, but rather in order, to say that whenever government spends, it is in fact spending “our” (that is, the people of Guyana) money, whether our motivation was a result of an imposition or civic responsibility.  In this context of “our” we, therefore, logically cannot exclude the significance of the private sector’s contributions.

In closing, I will refrain from speaking further on Mr. Greenidge’s attempts to link and align me to the government. That is okay, because in my tenure as president of the GCCI in the last one and a half years, I have seen attempts from both sides of the political divide tying me to the opposite side. I accept the realities of this dynamic because I will continue to articulate the Chamber’s positions reflecting objectivity and impartiality on matters of national policy and strategic economic importance. Furthermore, I will continue to work with all major policy stakeholders in and out of Guyana to help secure, for the benefit of all Guyanese citizens and residents, a nation growing wisely, steadily and prosperously.

 

Yours faithfully,
Clinton Urling

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