Private sector gets new incentives
By Michelle Elphage
PRESIDENT Bharrat Jagdeo yesterday declared open the historic summit with the private sector urging businessmen to develop new ways of thinking, so that the country's resources can be best used to the benefit of its people. Addressing a packed Savannah Suite of Le Meridien Pegasus Hotel in Georgetown, the President announced new incentives the Government intended to bring on stream immediately to further aid private sector development. These include reducing royalties on gold to four per cent if prices fall below US$280, and to three per cent below US$265; and tax holidays on the importation of information technology items for the next five years. He reminded the gathering that the "costs are real" for Guyana, in the face of globalisation and liberalisation breaking trade barriers, unravelling preferential markets and flooding countries with cheaper products. "It is necessary that we take steps to reduce our exposure to international shocks and thereby cushion our real sector from any adverse international climate," Mr. Jagdeo forewarned. "This requires a vision of development; a new way of thinking; and a change in attitudes. We need to ask ourselves where we want our country to be in the next ten years. What would be the role of Government in development? What kind of economy are we planning for? "I would urge you to think through these questions as we attempt to define a framework to accelerate our country's development." Declaring that there was need to remove the current bureaucratic inertia in the public sector, the President said in today's competitive world there is no place for red tape. "These are major hindrances to the business community and which result in added costs. I challenge the private sector to work with us in not only documenting a compendium of red tape but also to eliminate them," he stressed. "We would also work to demystify the bureaucracy. Once we demystify the business of Government, then the public and business community would be better aware of what the procedures and requirements are for a particular service." The President said the administration believed that a sustainable macro-economic framework was essential to attract and sustain investment in the country. "Low inflation maintains the real value of assets; lower interest rates makes the cost of capital affordable, and competitive exchange rates and unrestricted repatriation of capital provide confidence to local and foreign investment," the Head-of-State explained. "My administration will continue to pursue inflation reducing policies, the safeguarding of our external reserve position and the generation of public sector savings." He said issues that need vigorous address include the elimination of tax and non-tax dis-incentives such as lack of appropriate infrastructure, weak legal systems and a non-responsive public sector. Mr. Jagdeo said the Government will give impetus to strategic investment projects like the construction of the Guyana/Brazil road, a deep water port and container harbour, a bridge across the Berbice River, the development of the Intermediate Savannahs and the Canje Reservoir Scheme. "These projects are very vital for the further transformation of our economy because they open new markets to South America, they would make our exports cheaper by reducing freight rates out of the country (and) they can create territorial linkages," the President explained. "But the Government does not have the resources and the access to financing now at a concessional level is very limited." He suggested that there is need to pursue new ways of funding for the projects, recommending public/private or fully private financing. The Canje Reservoir Scheme consists of damming the Canje River to provide gravitational irrigation for about 350,000 acres and improved flood control for another 150,000 acres of land. The President acknowledged that the issue of a land policy is equally important, noting that it was one of the major problems affecting investment coming into the country. "We recognise that a sloth in the issuance of titles and in identifying land for new investment has been one of the problems associated with investment flow into the country," the Guyanese leader said. But he explained that the major impediment has been bad record keeping over the years. "Three to four years now we're working on just inventorising the land across the country. What is available, what has already been given out. We're trying to computerise the system," the President added. "But we found that the institutional arrangements were also preventing us from moving in a rapid way and with this in mind we changed the structure of the Lands and Surveys Department. We created a semi-autonomous agency which is going to be implemented shortly." The President said he also found that enough publicity was not given to significant moves by the Government pertaining to its land policy, where for example last year a decision was taken to extend leases beyond 25 years. "This would allow many of the long-term holders of leases to go to the bank and use the lease as collateral for raising financing," he advised. According to Mr. Jagdeo, another decision taken which could positively influence about 90 per cent of the current lease holders in the country, is that with holdings for less than 15 acres with some period of beneficial occupation, the holding can be converted into a free hold title. "Our success in attracting investment would also depend on the speed with which we reform the institutions that support the private sector. Clearly, we have not achieved the objectives for which GO-INVEST (Guyana Office for Investment) and the (Guyana) Export Promotion Council (GEPC) were set up. "Additionally, the Private Sector Commission also performs functions, through the centre, some of which duplicate the role of these two agencies," the President said. "We'd like to see the streamlining of these two agencies to better serve the needs of investors." While urging that the summit should not degenerate into an incentive meeting, Mr. Jagdeo assured that he intends to look at the various sectors to see how they can be assisted. About 12 working groups of three persons each were to submit recommendations to the plenary session yesterday afternoon. The retreat included workshops, a working lunch and a separate meeting between the President and the Private Sector Commission (PSC). The opening ceremony was chaired by Mr. David Yankana, Head of the Consultative Association of Guyanese Industries (CAGI). The President added that while some specifics could come out of the one-day caucus, there will have to be follow-up meetings for other decisions that will have to take considered talks.
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