I refer to the article titled, ‘Investment must be geared to local employment -President tells Chinese investors’ (SN, April 3). It has to be; and every vision and effort devoted to assuring the prioritization and realization of this from all investors. Repeat: all investors.
Having said this, it is recognized that there are two conflicting sides to the investment coin. Investors seek profit maximization and are always probing for ways to minimize costs. Labour costs can be a huge recurring drain on the bottom line of any company; it is usually the biggest one when aggregated. Savvy investors know of depressed labour markets and quite cleverly hold the honeyed carrot of jobs in their presentations and courtships. Like marriage, many times there is failure to deliver on roseate promises. The Guyana experience with jobs and promises of jobs has to be an enduring disappointment.
On the other hand, local decision-makers, clawing and competing for foreign direct investment, are compelled to make concession after concession to generate first strong interest, and then entice a foot beyond the threshold into the parlour of dialogue. What follows is a financial mating dance. Sometimes, one party to the ritual is serial two-timer; perhaps the counter-party across the table is a seller and looking to redirect some of the money terms being negotiated. This could take the form of off-the-record scholarships for relations, or under-the-table cash flows. Put differently, it is where the country is cheated from the inception by those representing it. And it is where those wishing to be domestic fixtures cooperate through bringing handsome gifts. This is investing on the cheap. There is no intention of delivering other than the barest contractual minimum, and this has special relevance to that costly item called labour, which somehow always loses out.
Nevertheless, I believe that an honest government representing the best interests of the country has to incorporate a multi-featured, multi-step approach in all the buying, selling, presenting, negotiating, executing, and implementing. Remember: one of the local priorities is employment, while the foreigners identify returns, relief (tax), and profit repatriation facilities as key determinants of their presence.
Some taxes can be given up after hard, honest bargaining, but for every percentage point conceded, there has to be-must be-a job number specified and delivered. Next there is the issue of repatriation of profits. This, too, must be tied to the number of actual jobs created. The higher the number of long-term jobs created after a named baseline, the higher the percentage of repatriation agreed upon by the negotiating parties. This can get as granular as basis points as opposed to percentage points.
There has to be a fine level of specificity associated with such deliberations. First and foremost, it has to be principled and for the benefit of the country. Whenever, personal considerations enter the discussion, the seepage starts.
Further, in the case of Guyana there are coveted jewels, many jewels that promise high returns. This has to be part of the carrot dangled from this side. Fulfil the terms and conditions hammered out before, particularly with regard to jobs, and there can be priority considerations on other opportunities waiting for the taking in mineral rich, resource rich Guyana.
Let there be no mistake: the foreign investors are very shrewd and sophisticated investors; they are as tough as nails, too. But with an exchange rate of approximately $200: US$1 (some approximation that is!) there are lots of profits and yields to be earned here. They want to be around here. Thus the local position has to be: more jobs, more jabber; more work (for us) means more investments (for you). Do come again.