With an influx of foreign investors expected as the oil and gas sector expands, Minister with responsibility for Finance Dr. Ashni Singh has called on the private sector to prepare for the changes required to seize local content opportunities and not solely depend on government.
“We speak of local content to secure interest …it is incumbent on the domestic private sector to ensure that you are producing at the level and at the quality; and with the reliability and standards expected of those who will be purchasing from you, and that is not something the government can do for you,” Singh told the Georgetown Chamber of Commerce and Industry (GCCI) 131st Annual Awards Ceremony and Gala, held last Thursday at Park Rayne, Houston.
“This is the moment in Guyana… for boldness. Not throwing caution to the wind, but this is the moment for you to actively examine the new and emerging opportunities. This is the moment for you to sit down and actively seek out the opportunities, some not so obvious, and to consider what you need to do to reinvent where the invention is necessary, to position yourselves to realize the opportunities and advantages that tomorrow has in store for us. This I urge you to consider,” he charged.
Guyana’s partner in the Stabroek Block, ExxonMobil, has said that since 2015, the year it discovered oil in commercial quantities here, it has spent nearly $20B in local content. That sum is expected to significantly increase this year given heightened operations offshore and as preparation comes on stream for production at another well sometime next year.
Singh said that local businessmen must understand that gone are the days when visitors were largely from the diaspora. Tourists from overseas and business travelers “expect a particular level of service….expect a particular level of efficiency and whose loyalty both to the country and your enterprises will depend on the quality of service they enjoy”.
Singh gave the PPP/C’s commitment to a business friendly environment void of bureaucracy.
Truly committed
And as Guyana prepares for the rapid transformation promised, government, he posited, will ensure said that the infrastructural development needed to make this possible will also be delivered.
“I would venture to say that at no other time in Guyana’s history that we would experience a more rapid transformation, as we see. As we navigate this transformation…I want to say you have, in us, a partner that is truly committed to ensuring the restoration and preservation of an environment that will be genuinely conducive to rapid transformational growth going forward,” he said.
Singh believes that the preservation of a macro-economic environment that is friendly to doing business is key to realizing developmental goals set. “The macroeconomic environment matters to all of you. You do business so know how much … exchange rate instability will impact you. You know how much the exchange rate matters to you. You know how much inflation matters, you know how much real GDP (Gross Domestic Product) growth…in the economy that surrounds you, matter to you. You know that a stable, safe, secure, dynamic sector matters. You deal with these issues every day,” he reasoned.
“We as a government have always …placed the highest levels of importance, on getting the macroeconomic fundamentals right. And we assure you that we will continue to secure it, as it relates to the environment so that you don’t have to worry about the stability and predictability of your future investments. But instead, you can be assured, that the (fundamentals) will continue to be conducive to your investments,” he added.
Pointing to the Public Loans (Increasing of Limit) Order 2021 and the External Loans (Increasing of Limit) Order 2021, laid in the National Assembly earlier on Thursday, Singh said that it was also done with the private sector in mind. The government is seeking through the first order to increase the amount that Guyana can borrow from domestic lending agencies to $500 billion dollars from the current figure of no more than $150B.
Similarly the external debt threshold will increase from $400 billion to $650 billion once the proposed measure is debated and passed by the legislature.
“You might ask why I mention this – the increase in the ceiling – but I took the opportunity of speaking this evening because it is of relevance to you,” he said.
He repeated the justification for the increases saying that among them are to make sure that the private sector has enough access to financing needed for their own expansion projects.
“When we borrow …we want to make sure we do so in a manner that does not crowd out credit to the private sector. That it does not create a situation where the financial sector is not able to lend to the private sector. That it does not create a situation where interest rates do not become competitive, that it does not occur in an environment where borrowing is inflationary and therefore you have price instability but instead you continue to have an environment that is characterized by stable prices and by strong and continued growth,” he said.
“And we adjusted the debt ceiling, it is to ensure that our debt is sustainable,” he added, while again comparing debt inherited in 1991 when the PPP/C took office from the PNC’s 28 years rule.
“I want to say to you that your government will continue to manage the fiscal operations of the country to ensure that we never return to a time when we are unable service our debt”, he added.
The Irfaan Ali administration, Singh said, recognizes the importance of investing in facilitative infrastructure as it believes that it is essential to unlocking the economic potential of this country and critical to private sector expansion plans.
It is to this end he reasoned that with the single biggest impediment to the private sector being cost of energy, government swiftly aims to address it with the gas-to-shore project, in the short term and with renewable energy projects.
According to Singh, his government’s first choice for power generation has always been renewables and had its planned Amaila Falls Hydropower project gotten the support from the opposition and was seen through to completion, today this country would have already reached its energy supply targets.
However, renewable forms of energy are still being actively analyzed, even as government forges ahead with the gas-to-shore project.
“We have put on the fast track, delivering…. mobilizing the gas resource that we have available to land on the coast, and to harness that resource for purposes of electricity generation. That, we anticipate, is to be realised within the next three years or so. When that happens, you can be assured that there will be a dramatic reduction in the cost of energy, which will immediately create opportunities as it relates to value-added processing and production. We have a number of other initiatives we are also working on,” he said.
Transport infrastructure is another area that will see investments from the government, according to Singh, who said that he looks forward to the day that projects such as the road to Brazil and the bridge to Suriname are completed for locals to benefit.
“Contemplate for a moment the day you can load your lorry with the products you manufacture and drive it eastward on the bridge to Paramaribo or drive it south to Lethem. Taking advantage of the industrial estate. Conveying your goods to northern Brazil and vice- versa. You know better than we do the advantages of scale. You know better than we do if you were manufacturing for a market or if you were harvesting for a market that is two, four, five, or ten times the market you are operating. I look forward to the day when I see your company establishing its presence in all of our neighbouring countries and beyond,” he stated.
Crying shame
Reflecting on when he was a child and his grandfather worked at Demerara Mutual Life, Singh said that his grandpa would bring calendars home at the beginning of every New Year. On those calendars, he said he would look with “wonderment” to see that the local company had offices across the Caribbean with agents.
“I look forward to the day when I can pick up the calendars some of you would have published or visit the websites or I see your electronic publications and I see you having a presence across the region …if Demerara Mutual Life could have done it hundreds of years ago, it would be a crying shame if we couldn’t go it today, particularly so with the opportunies before us.
Given that this country’s human resources are of the utmost importance, Singh said that government will be investing heavily in education and skill sets development. “We how we will do our part. We will continue to invest heavily …but I urge you too to do your part,” he said.
