Deliver concept paper on development bank -Jagdeo urges private sector By Gitanjali Singh Stabroek News October 12, 1999 The government has been prepared for two years to grant tax free status to a private sector development bank and to waive the Bank of Guyana's reserve requirement, but the private sector has failed to deliver the concept paper. "Two years ago the private sector promised to work on a proposal to establish a development bank which will not have to pay taxes and which would be excluded from the reserve requirement that commercial banks have to put up. But that concept paper has not gone any further and I hope today we can get some firm commitments too," President Bharrat Jagdeo demanded of key players of the local private sector as the business summit with him got off the ground yesterday at Le Meridien Pegasus Hotel. Private Sector Commission (PSC) Chairman, George Jardim, addressing the summit's plenary session on burning issues facing the economy and needing the government's intervention, cited legislative reforms to facilitate lower cost financing for businesses. But Mr Jagdeo, who gave the feature address, said the government could not provide long-term financing as it still had a budget deficit. He said over 15 meetings were had with the private sector on the issue. "We are willing to provide incentives for the private sector to do this [low-cost, long-term financing venture]," Mr Jagdeo said, noting that he made mention of this in his budget speech as finance minister two years ago. The concept paper for the private sector development bank lies with the Guyana Manufacturers' Association and repeated efforts on the part of this newspaper in the past to obtain an update on the issue met with promises of a later response which was never forthcoming. Jardim also spoke of the need for further reforms in the financial sector to permit the transformation of privately-held companies into public companies and to mobilise pension funds into productive instruments for business. He said that reforms were needed for commercial banks to be made to operate more efficiently. The President in response, said his administration was open to further financial reforms, but noted that there had been substantial reform in this area in the past few years. He cited the enactment of the Financial Institutions Act, the new insurance act and securities legislation as well as the repealing of the capital issues control act. He also noted that the government's holdings in financial institutions had been reduced from seven to two and this would be further reduced to one by year end. He also pointed out that interest rates have moved down significantly from the range of 30% to around 18% and tariff barriers have also been coming down. The summit, which got underway yesterday, was a promise made by President Jagdeo in August. A © page from: Guyana: Land of Six Peoples