Receiver/managers had been appointed for both of these companies among
others, which in the last few years went bankrupt, and NBIC, under the
direction of its new managing director, has begun taking a second and a very
pro-business look at its bad-debt portfolio. This stood at $3.7B last year
or 29% of its loan portfolio.
“We are prepared to sit with any of our customers who have had difficulties
and talk about ways and means of restructuring and reorganizing their loan
portfolios,” Michael Archibald, NBIC’s new managing director, told Stabroek
Business. But he said people should not confront the bank with a request for
more time, but rather with a tangible proposal on how they intend to
restructure their operations.
While Archibald would not discuss the specifics of any of the cases of
restructuring before the bank, including the two mentioned above, he says
NBIC is working with more than half of its clients in receivership to
restructure their debts but seems to be enjoying more successes now.
Reports reaching this newspaper indicated that since Archibald took over the
helm, owner of the Guyana Furniture Manufacturing Company, Mohabir Singh,
was able to retake control of his firm and is running it, as opposed to the
arrangement under receivership where Barama Company Limited was put in
charge. In the arrangement arrived at with the bank, Stabroek Business was
told that a hefty portion of the interest accruing on Singh’s portfolio was
written off and the principal was restructured to allow him to service his
debt. A similar arrangement is being worked out with Sankar in conjunction
with his other creditors, the Commonwealth Development Corporation (CDC) and
the Guyana Bank for Trade and Industry Limited (GBTI).
The new approach by NBIC comes after a number of its clients went bankrupt
over the years and the bank had been accused of being hostile to businesses
in the stringent measures it had adopted. Addition-ally, the depressed
nature of the economy as well as the property market did not allow the bank
to recover its outstanding debt in the receiver/manager arrangements it
undertook.
But Archibald defends the route NBIC took in the past, saying that calling
in the debentures had to be done to drive home to clients the gravity of the
situation they faced if they did not make crucial changes to restructure
their operations. He explained that while some companies were willing to
change the way they did business and even undergo lifestyle changes, some
had difficulty going this route.
“Many people had to see action being taken before they became willing to
make the necessary changes. After it registered that someone else is in the
chair, then these companies came around to the position that it will be
better to sit and talk....of course after they called us all sorts of
names,” Archibald says, a position endorsed by head of credit, John Alves.
Archibald insists that it is not a shift in policy for NBIC to take another
look at the none-performing loans after it moved in on clients. He says the
bank has always been flexible in its approach to dealing with clients,
especially in light of a legal system fraught with delays. But he notes that
the Financial Institutions Act of 1995 has very specific requirements as it
relates to loan classifications and this forced the bank’s hands in the last
few years. And being the biggest bank, it meant that more customers were
affected. He says NBIC has tried to work with most of its clients to
restructure their debts and while some have worked along with the bank “very
willingly, others have not”. He said even in cases where persons were taken
to court, the bank is still willing to sit with these customers and find
ways to restructure their portfolio as it is not in the bank’s interest to
have these issues dragged out in the judicial system. For NBIC, he says,
appointing a receiver/manager is a measure of last resort.
“People have to be prepared to make changes in the way they do business, to
make lifestyle changes and some individual changes,” says Archibald.
He recognizes, however, that much animosity has built up in the relationship
between top management and clients in the last few years and having someone
new in place (himself) to talk to will help to lessen this animosity.
Alves echoed the view that it had to sink in to businessmen that their
businesses were going down and they were losing all that they had worked for
before they took stock and took the hard decisions necessary to keep their
businesses afloat.
Interest rates is an excuse
Archibald believes the interest rates on loans were used as an excuse by
businesses for their failures and sees poor management as the main reason
for these failures in the face of depressed market conditions.
“People did not make the management changes which were required. In my view,
businesses just continued as normal and did not respond to the changes
around them; to the need to tighten their belt; to the need to adjust, and
went along their merry way as they did in the past,” Archibald asserts.
A lot of the management, production and technological practices of the
businesses dated back as old as 20 years and Archibald underscores the need
for firms to keep abreast at all times with what is taking place in the
market place.
Both Archibald and Alves noted that the inability to recover monies lent out
and the abuse of the judicial system in the recovery process had increased
the risk of intermediation and the cost of funds by virtue of the
provisioning process where the bank has to forego income and then this
appeared as a charge on its accounts. This did not help the process of
lowering the lending rates and credit to the private sector has also fallen,
shrinking by $10 billion or 18.2% in the first half of this year. The prime
lending rate at NBIC is currently 17% and can go up to 21.5% depending on
the risks. But the Bank does engage in negotiations for clients that it has
to compete for. NBIC claims that its spread is in mid-single digits, but can
come further down once these problems are eradicated.
Both of the NBIC top men welcomed the establishment of a commercial court
and hope that the judges selected to preside will have commercial law
experience and would not be the very judges who have been granting stays of
execution and exparte injunctions blocking the enforcement of contract
processes. Alves notes that sometimes it took as much as three years to get
to trial and then after a trial, another judge would grant an 18-month stay
of execution against the judgment.
As a result of these realities, NBIC has been taking a more cautious
approach to lending and is focusing more now on one’s ability to repay and
one’s management practices to determine whether a loan should be granted, as
opposed to the heavy emphasis in the past on one’s assets. As a result,
Alves says fewer persons are qualifying for loans and fewer loans are being
advanced.
In 2002, loans to the agriculture sector by NBIC fell by 30%, while loans to
the manufacturing sector fell by 31% and this situation continued for the
2003 fiscal year. The bank’s financial performance this year, however, is
said to be much better than the $128M after-tax profit in 2002.
The sectors in which the bank has noted notable increases in lending in the
2003 fiscal year were the personal sector and the residential mortgages
sector.
The bank sees the mortgage sector as the one holding the most potential for
growth once the government can find a way to expedite the processing of
transport deeds.
New schemes are being created under the title system but a number of old
schemes, still under construction, were done under the old transport system.
Alves also underscores the need for basic infrastructure to be put in place
in these schemes to encourage construction.
“Banks do have money to lend out and we want to lend, but persons need title
before we can lend.” Alves said. Pushing housing development faster will not
only redound to NBIC’s benefit, but to the entire economy’s because of the
ripple effect of the construction sector.
NBIC is the single largest bank, locally, with assets of $52 billion, up
from $34B in 2002. Its deposits have increased to $45B and it now has some
150 000 depositors. (Back to top)
Dollar hits
$200/US$1
The G$/US$ exchange rate has hit the G$200/US$1 at most street and
cambio dealers. Swiss House Cambio yesterday confirmed it has been selling
the US$ at $200 for almost two weeks now but indicated that most of the
banks were quoting $204 to customers. The lead cambio expects, that with the
onset of Christmas, rates will fall back to the $196/$1 level. For months,
persons have been forecasting that the Guyana dollar will cross the
psychological barrier to reach G$200/US$1.
(Back to top)
Political
stability key for private sector growth
- deGroot
Dr Peter deGroot was returned as Chairman of the Private Sector
Commission (PSC) last week and sees the main goal of the PSC in this term as
the lobby for a stable political environment, which will include work to
ensure that the electoral machinery for the 2006 General Elections is
well-oiled and there is no potential for political turmoil.
“The most important issue and challenge facing the private sector is the
maintenance of a stable political environment. The lack of this enabling
environment has led to and will continue to lead to increased levels of
crime; reduced levels of private sector activity; reduced investments and
increased loss of human resources through migration,” Dr deGroot says.
He notes that a stable political environment has eluded the country in
recent times and though the situation had improved recently, “it is now far
from ideal”. He adds that the private sector is in a ‘wait and see’ mode
regarding their investments, but notes that time is not on Guyana’s side and
there is urgent need for an enabling environment for businesses to make
money, to create jobs and as a result, realise lower poverty rates.
“We need to keep moving all the time and to develop from an organisation
which operates as one fighting fires to one that prevents fires,” says
deGroot, adding that this is what the PSC is aiming to achieve.
As to the crime situation, deGroot says he gets a sense that businessmen are
not convinced that the problem is over, but at the same time are not unduly
alarmed by the sporadic incidence of killings or kidnappings.
But of concern, deGroot notes, is the alarming rate of the loss of scarce
skilled human capital through emigration, which seriously affects the
business community.
This emigration, he feels, is a result of the unstable environment, the
perception of the grass being greener on the outside, and developed
countries’ programmes actively soliciting such skills. For him, the major
hurdle to be crossed in pursuing a stable political environment, is keeping
alive the embryonic stakeholders briefing group, whose major objective is to
objectively assess progress in the implementation of the Joint Communiqué
between the government and the opposition.
As he sees it, there are no clearly established deadlines in the communiqué
and the lack of trust between the parties does not help the process. Hence,
he sees a crucial role to be played by this independent monitoring group to
push the process along.
“What I am hoping now is that we can move out of the mode of helping to
solve problems after they have occurred and to use our collective experience
and try to be more proactive - try to prevent the problems before they
occur,” says deGroot.
One such area of focus will be the general elections scheduled in two years.
“Although this is not an immediate issue, it is nevertheless a significant
challenge that we will have to face fairly soon. The history of political
unrest and social upheaval in the aftermath of general elections has a
significant negative impact on the business community,” says deGroot. He
notes the experiences of little or no investments in the year prior to
general elections and the problems of the post-election periods.
DeGroot says of concern is whether the Elections Commission will be ready
for General Elections in 2006 and why it is they are still unable to hold
regional elections after over two years.
He says no one in the PSC is aware of what the constraints are on the ground
as it relates to the electoral machinery process.
What the PSC intends to do is to work with the Elections Commission through
its governance and security sub-committee headed by retired major general,
Norman McLean, to determine the issues on the ground that needs ironing out
for a smooth running off of the local and general elections. This PSC
sub-committee was recently merged with the Guyana Manufacturers’ Association
sub-committee.
DeGroot notes that as of now, it is not clear under what system the next
elections will be held because the system of regional representatives plus
national representatives on an eligible list contesting the general
elections was only valid for the 2001 elections. He also notes the problem
of the list system where politicians are not accountable to the people but
rather to the head of the list.
The PSC’s governance sub-committee has begun looking at the issue of the
system under which the national elections are to be held with a view to
arriving at a PSC position. This position will then be used to help
influence the national position on what would be the best system for Guyana.
DeGroot stresses that the PSC will be a neutral member in the process to
ensure a timely, smooth and an efficient general election.
Among the other challenges facing the private sector and highlighted by
deGroot were the unstable and high cost of electricity, which cuts into the
ability of firms to be internationally competitive, as well as the high cost
of credit.
One of the successes, which the PSC has enjoyed, was the opportunity to
revisit the investment code/bill, which is now with a parliamentary select
committee. DeGroot says that through the process of constructive engagement
with the Government and consultation with the Opposition a mutually
acceptable document was arrived at and this process of reworking the bill
represents a perfect example of how the collective minds of the private
sector, the government and the opposition can work together for the benefit
of the country. (Back to top)
Badal
negotiating US$10M rice investment move to Trinidad
Guyana Stockfeeds Inc. (GSI) has received an offer to move its
proposed US$10 million parboiled rice mill to Trinidad and Chief Executive
Officer, Robert Badal, says he will insist that the board look at the offer
seriously.
Badal did not want to disclose the name of the company making the offer, but
says GSI will seek majority control (51%) in the joint-venture arrangement
on the cards.
“I am fed up with the unwarranted frustration (locally) and shall insist at
the next meeting of the board that it seriously considers this option to
take the investment to Trinidad, which enjoys a large local market and
excellent access to those in the Eastern Caribbean, as well as very cheap
electricity. I have definite assurances that all necessary permits, fiscal
concessions, shall be secured by the prospective Trinidadian joint- venture
partners. The company is now at a Rubicon between what may well prove
misplaced patriotism, and the best interests of its shareholders,” Badal
told Stabroek Business.
The Environmental Protection Agency (EPA) had evaluated the rice mill
project and had ruled that the proposed mill will have no adverse
environmental impact, but that decision was overturned by the Environmental
Assessment Board (EAB) after a public hearing and it ordered that an
Environmental Impact Assessment (EIA) be done. Badal feels that this
decision was ultra vires and void in law and did not take account of the
factors required under the law, but extraneous issues. The last recourse
available to the company now would be an appeal to a tribunal if it does not
wish to wait for the EIA.
Badal noted the inconsistency of the situation where an environmental permit
was granted for a cement-bagging plant in the heart of the city at the
Guyana National Industrial Company (GNIC) complex, but a permit for a
state-of-the art parboiled rice mill at Farm, East Bank Demerara, was
overturned.
He said Guyana Stockfeeds made representation to a number of senior
officials in the government to have the issue resolved and even wrote the
President without any success.
Badal also noted the case of a stop order, which was flouted by a large
poultry dealer and says it was drawn to his attention that the government
brokered a settlement between that establishment and the EPA.
However, Stabroek Business was informed that the EPA had referred that
matter to Dr Roger Luncheon after it could not get the poultry company to
comply with its orders and had suggested that an environmental management
plan be prepared to correct the deficiencies as a second measure, but
nothing came out of this either. That project has gone ahead.
Badal says the EAB’s failure to take account of relevant considerations in
reversing the EPA’s decision and the government’s lack of interest to have
the issue resolved requires a full explanation.
“Several persons have mentioned to me that there is a deliberate attempt
underfoot at the highest political level to frustrate the company’s
investment through what is thinly disguised as an environmental issue. I was
even told by one source that carrying out an EIA is a waste of time and
money because “the party boys will frustrate it” through the EAB,” Badal
said.
If the board concurs with the move to Trinidad, Guyana will stand to lose
the sale of one million bags of paddy per annum, which GSI had intended to
purchase from local farmers with a value of $1.5 billion. This is because
the investors in Trinidad will seek cheaper sources of paddy. Guyana would
also lose the Trinidad parboiled rice market of 30,000 tons of rice per
annum and an estimated US$12 million in foreign exchange per annum.
GSI views its US$10M as the best private sector investment ever conceived
for the rice industry, given that it focuses on value added and will enhance
the competitiveness of Guyana’s rice production.
(Back to top)
Crucial loan needed to improve financial management, implement
constitutional reforms
The government is seeking a crucial US$32.5 million loan from the
Inter-American Development Bank (IDB), likely to be approved next month, to
pursue reforms in fiscal and financial management, a component of which will
cover support for parliament in economic policy oversight.
The policy-based loan will support the adoption and implementation of a
series of reforms to the tax, financial management, audit and fiduciary
oversight systems to allow for more efficient and transparent fiscal
management in Guyana.
According to a brief profile posted on the IDB website, the project will aim
to raise revenue levels by increasing the efficiency of the tax
administration and by reducing the tax systems’ distortions, while promoting
horizontal equity. It will also allow for improved management practices to
reduce discretion and increase transparency in the management of public
funds. The project will strengthen the role of the National Assembly in
economic policy, in consensus building and in overseeing policy
implementation. Support will also be provided to operationalise the
constitutional reforms in the areas of public audit and financial and
fiduciary oversight.
The loan carries an investment and technical support component to allow the
government to achieve and sustain the reform benchmarks identified in the
sector reform programme. This will finance the required investment and
operational improvements at institutions to lead the implementation of the
reform agenda. The government’s counterpart contribution required for the
project is US$2.8 million.
The IDB is considering the loan as part of its country strategy for Guyana,
which seeks to maintain a sound macro economic framework for sustained
growth and private sector development, as well as improving governance and
public sector modernization.
“In supporting the strengthening of the revenue base and providing a
framework for the efficient rationalization of public spending, it will help
to underpin the fiscal basis for sustained economic growth. The essential
nature of the activities it aims to support is reflected in the fact that
benchmarks from the programme constitute the majority of the performance
indicators listed in the country strategy paper as triggers for the
maintenance of the baseline lending scenario in the 2002-2003 period,” the
project outline said.
The objectives of the project are to implement a reform agenda to improve
the management of public finances and provide a strong fiscal basis for
sustained growth.
“The proposed operation will assist the government in the implementation of
reform measures that should result in a substantial strengthening of the
operations of the central Government. This will facilitate the efforts to
meet the fiscal policy objectives and targets of the Poverty Reduction
Strategy,” the project outline said. (Back to top)
Commercial Court will
sit in the High Court
- Expected to reduce backlog by 20% in three years
The Commercial Court will operate as a division of the High Court
and Chief Justice Carl Singh says it may sit daily, initially, before its
sessions peter out to once per week as the current Bail Court functions.
Contrary to the perception of many, the court is not going to be independent
of the existing court system as it can function with one or more judges
presiding on a part-time basis over a specified list of commercial cases.
“It is not going to be a separate court,” Justice Singh notes, but will
operate within the existing courtrooms of the High Court. It will rely on
the Supreme Court’s Registry for administrative support for the filing,
servicing and tracking of claims falling under its jurisdiction.
The court and an alternative dispute resolution (ADR) mechanism, being
supported with technical assistance from the Inter-American Development Bank
(IDB), are expected to realize a 20% reduction in the backlog of commercial
cases before the High Court within three years. The current backlog is
11,000 cases, a third of which are commercial cases. The court and the ADR
mechanism are also expected to see a 40% reduction in the time taken to
resolve commercial cases.
Ii is further anticipated that over 200 disputes will be resolved per year
by the second year of the ADR mechanism’s life.
The Office of the Chief Justice is the implementing agency for the project
and a project manager is to be hired. Two judges are to be identified for
training in commercial law to preside over the Court and an evaluation is to
be done to determine how many sittings of the court would be required per
week.
“We have not yet evaluated whether there will be enough work to sustain the
court on a daily basis. The court will perhaps sit everyday. And there may
come a time when the court will sit once per week,” Justice Singh says.
Justice Singh is of the view that the quickest way to start up the court
would be for the Chancellor of the Judiciary, Justice Desiree Bernard, to
issue a practice direction.
As it is, the Commercial Court could be established on the authority of the
Chancellor or by revising the rules of civil procedures in the High Court, a
process currently underway. However, having the revised procedures in place
will take some time, which could delay the operationalising of the court. To
get around this revision process, which also provides an opportunity for a
permanent establishment of the court, the Chancellor can issue a practice
direction detailing the list of matters to fall within the jurisdiction of
the court, as well as the rules of procedure for the management and
administration of such commercial matters. Justice Singh is of the view that
the revision process will not be completed in time to allow for timely
establishment of the court.
Resident Representative of the Inter-American Development Bank (IDB), Sergio
Olea-Varas, has indicated to Stabroek Business that the method of start up
is an issue for the implementing agency.
Because timing is crucial, the IDB has also suggested that the practice-
direction route be taken as an interim measure to allow the Commercial Court
to operate immediately after the judges and the registry staff have been
sufficiently trained. Simultaneously, it says, the Rules Committee could
continue work to include appropriate provisions for the establishment of the
Commercial Court to give it greater legal and institutional stability.
Justice Singh expects that it will take some two to three months to put most
of the arrangements in place, but he feels the training schedule for the
judges would prove to be a ticklish issue and could see some delays in the
process. The judges selected for training (likely to take place abroad as
well), may have different schedules and this could delay the process. As
such, Justice Singh could not specify a time-frame for the start-up of the
court. However, he recognizes the urgency with which it has to be activated
so as to provide a bolster for the investment climate.
“I am very enthused about the Commercial Court because I think we need to
attract investors to our country. Given the state of our economy, everyone
recognizes that if investors do not see and believe in an efficient, strong
and functioning legal system, they will stay away,” Justice Singh says.
He adds that a Commercial Court, which sets itself targets for the
expeditious hearing of matters and the timely delivery of judgment will
certainly “impress potential investors”.
“The Commercial Court also will mark the beginning of special courts and the
accompanying tool of the alternative dispute resolution mechanism will be a
significant contributory factor to the reduction of our case load. The
benefits are many... things can only improve with the establishment of this
court. I see it as a stepping stone for the eventual establishment of a
family court and a constitutional court,” Justice Singh says.
The Commercial Court is expected to deal with banking issues principally and
contracts within the commercial community, as well as trade issues among
other matters of commercial interest.
The judges to preside over the court will be backed by an efficient case
management system. Such a system will be based on strict procedural rules
for the filing of claims, will require conferences with judges prior to
trial, and will have enforced targets.
The Commercial Court is expected to encourage the use of ADR mechanisms,
especially mediation, at the case management conference stage. The IDB notes
in the technical cooperation project document that Uganda’s and Canada’s
experiences have shown that over 50% of the commercial disputes taken to
court can be settled without a trial either in conference or through ADR
mechanisms.
The IDB technical cooperation will fund a case management master from the
Caribbean to lead a comprehensive workshop on effective case management
techniques as well as a case management master from one other common-law
jurisdiction. These practitioners are also to advise the Chief Justice and
other stakeholders in drafting Commercial Court case management rules based
on international best practices. The project will support a visit abroad by
the Chief Justice and the Supreme Court Registrar to consult with case
management masters and to observe effective case management techniques in
another common-law jurisdiction.
Support Services
The Registrar is expected to designate specific staff with
responsibility for the administration of commercial court claims.
A special counter is to be created at the registry to allow for the filing
of commercial claims. Streamlined procedures, guided by commercial court
case management rules, are to be implemented. These include the service of
papers, scheduling of conferences, timely notices to counsel and judges and
record-keeping.
Technical assistance from the IDB will allow for advisory services to be
provided to the Registrar for the planning and implementation of efficient
administrative procedures. Software will be provided for a revised
management information system, including the automation of cause/case book
via the funding of the purchase and installation of case management
software. This software will be used to automate all of the registry cases.
The support will allow for the training of staff including judges, registry
staff, the Registrar, Deputy Registrar and Court Manager on the purpose,
structure and procedures of the Commercial Court including case management
rules and procedures, roles and responsibilities. After every six months,
the project caters for staff to be coached on how to improve their use of
the MIS system and the implementation of procedures.
A week’s study tour will also be financed for the Registrar in another
common-law jurisdiction to observe and develop knowledge of best-practices
in the administration of commercial court cases and case management
procedures.
The project will also provide about five networked desktop PCs, two
printers, miscellaneous accessories and related basic desktop PC training
for the court.
The Judges
Two judges, with some commercial law experience, would be designated by
Justice Singh to preside over the court on a rotational basis.
“While judges in Guyana will indeed benefit from technical training on
commercial law matters [including continuing education on Guyana’s own
commercial legislation], many commercial cases in Guyana are not
particularly complex and the Commercial Court judges’ effectiveness will
depend more on their court management skills, decision-making capacity,
decision-writing skills as well as sensitization to the importance of
enforcement and the economic impact of commercial court decisions,” the IDB
profile of the project says.
Training initiatives will include familiarization sessions abroad on case
management for at least one commercial court judge designate and the Chief
Justice. This will take the form of one-on-one training and observer
sessions with case management masters in foreign jurisdictions.
The judge(s) will also participate in conferences/workshops on court
management. On a regular six-month basis after the court is established, the
judges and their staff would be observed and coached on how to improve their
performance under the project.
The project will also support the purchase of a baseline inventory of
commercial court sections for the Supreme Court Library and will sensitize
lawyers with respect to the procedures and ongoing legal education on
matters of commercial law.
The IDB is budgeting resources to fund at least one workshop to bring
together senior members of the judiciary, the bar, the Rules Committee and
the private sector to review and discuss the Commercial Court provisions and
related case management rules. A workshop may also be required to achieve
consensus on the scope of the Commercial Court’s subject matter jurisdiction
and the finalization of the list of commercial matters to be under the
court’s jurisdiction. The bank recommends that the UN Commission on
International Trade Law base be used as well as other Commercial court lists
such as in the UK, Toronto, Uganda and Jamaica as a reference point. An
international expert is to be funded to advise and assist in such drafting.
Alternative Dispute Resolution (ADR) Mechanism.......
This mechanism will also be located at the High Court building to lend
credibility and legitimacy to its acceptance.
Mediation and arbitration services are to be provided by a roster of
independent mediators and arbitrators. The ADR Committee chaired by the
Chief Justice or the Chancellor and comprising the bar and the private
sector will oversee its administration.
Once it is established and proven, the ADR mechanism is expected to evolve
to be a fully independent non-profit centre with a Board of Directors, an
executive director and a roster of independent mediators and arbitrators.
The ADR committee will prepare a plan for such a centre for review within 18
months of the project being initiated.
The ADR committee is also responsible for the development of standard rules
and procedures, codes of conduct for mediators and arbitrators, as well as
the basic forms.
The project provides start-up capital for the ADR including office
equipment, a basic library of information resources and the funds for one
study tour for the coordinator to observe a successful foreign
court-connected ADR facility.
The service will be user-pay, with fees tiered on the basis of the dollar
size of disputes or be time-based. A fee scheme is to be developed.
The IDB project will finance consulting services to design and deliver
in-country training for six to eight mediators and four to six arbitrators.
Twenty-four lawyers have already received training in mediation techniques.
The IDB’s assistance will provide for the coaching of arbitrators and
mediators at ongoing six-month intervals to allow them to improve their
effectiveness.
There is not expected to be mandatory referral to ADR until the mechanism
has proven itself, but the Commercial Court’s judges are expected to
encourage ADR at the conference management level of cases.
The draft proposed revised High Court rule (33) provides for the court to
“encourage the parties to explore forms of alternative dispute resolution
including mediation and conciliation”. Should this revision be delayed, the
practice direction establishing the Commercial Court is also expected to
include a provision for referral to ADR under its case-management
provisions.
Other sources of case referral to ADR include voluntary decision by parties,
advice of counsel, as well as binding arbitration clauses in commercial
contracts. (Back to top)
Anti-money laundering
laws to bite next year
Full implementation of an amended anti-money laundering law is not
expected to take place until the start of next year, when the new Financial
Intelligence Unit (FIU) is up and running.
The unit was to have been operational by the end of September, but
accommodation for it within the Ministry of Finance is not yet ready.
Additionally, the government has to readvertise for a director for the FIU,
as it cannot afford the services of any of the three persons short-listed
for that position.
Rajendra Rampersaud, head of the policy unit in the Office of the President,
indicates there is a need to identify a sustainable source of financing for
the unit to ensure continuity in its leadership.
The FIU, a semiautonomous agency to trail suspected money-laundering
transactions, will carry out the functions of the Supervisory Authority and
was to have been established since 2000 following the passage of the Money
Laundering Prevention Act (MLPA) in February of that year. However, nothing
was achieved over the last three years.
Earlier this year, the government tasked Rampersaud with the responsibility
to have the unit fully operationalised and he had expected this to be done
by the end of September. His plans were hit by setbacks.
“I now expect that the unit will get going next year in full swing,”
Rampersaud says. He also expects that before the year is out, two identified
support staff for the unit (a police officer and a central bank official)
will be in place at the Ministry of Finance to start laying the groundwork
while the search is on for a director.
As it is, the United States government is providing the physical support
services for the FIU and technical assistance in the form of training will
come from the Caribbean Anti-Money Laundering Programme (CALP). But the
Ministry of Finance first has to complete the refurbishing of the office
space to house the FIU.
And in the current session of the National Assembly, the anti-money
laundering law will be amended to allow for regulations to be gazetted.
Section 12 of the current act is to be amended to make it obligatory for
financial institutions to keep records for all business transactions.
Section 13 will also be amended to require the FIU to investigate and record
all transactions, including the complex, unusual and large ones. The
amendment also prescribes penalties ($25,000) for any breach of the
provisions of the regulations by financial institutions.
The regulations to accompany the amended act have already been crafted and
the government is working to fine- tune the guidelines to be issued to the
commercial banks once the regulations are in effect. All of this is to take
place before the end of this year.
Finalization of the guidelines means that financial institutions will be
able to put systems in place to determine the true identity of their
customers; to recognize and report suspicious transactions to the FIU; to
keep records for six years, to train relevant staff; to liaise closely with
the FIU on matters concerning vigilance, policy and systems and to ensure
internal auditing. Compliance officers are to regularly monitor the
implementation and operations of financial institutions anti-money
laundering systems.
Financial institutions are asked not to enter into any business relationship
with a person unless it has such systems in place. The financial
institutions covered under the regulations include those covered in the
Financial Institutions Act as well as credit unions, trusts, safe custody
services, building societies, immovable property businesses, money
exchanges, money-lending and pawning, money-broking, money-transmission
services, venture-risk capital and firms issuing and administering means of
payments such as credit cards, travellers’ cheques and bankers’ drafts among
others.
Failure to adhere to the requirements of the guidelines could lead to the
revocation or suspension of financial institutions’ licences or carry other
legal repercussions.
The guidelines define suspicious transactions as those inconsistent with a
customer’s known legitimate business or activities for the type of account
he seeks to establish. The guidelines cover new businesses as well as
existing businesses and financial institutions are expected to be on alert
when conducting transactions with existing clients.
Section 3 of the Money Laundering Prevention Act carries a sentence of seven
years and a maximum fine of $1 million or both for money laundering. Aiding,
abetting, counselling, procuring or conspiring to commit the offence carries
the same punishment. Tipping off someone about an investigation or pending
investigation would draw a jail term of three years or $100,000 in fines.
Falsifying, concealing, destroying or otherwise disposing of, or causing or
permitting such actions on any material likely to be relevant to an
investigation or the execution of a freezing order, carries five years in
jail or $100,000 in fines.
Money-laundering is defined as any procedure to conceal the true origins and
ownership of the proceeds of criminal activities and is not only related to
drug-trafficking as is widely believed.
The FIU will be the central national agency responsible for receiving,
requesting, analyzing and disseminating to the competent authorities
information concerning the suspected proceeds of crime. Where the unit
believes it is dealing with money laundering, its reports will have to be
turned over to the police force which is to also benefit from training to
allow for prosecution of suspects. (Back to top)
Domestic debt could
be source of vulnerability
- World Bank
The World Bank has expressed concern over Guyana’s domestic debt
(treasury bills, debentures and bonds), saying it could become an “important
source of vulnerability” if not addressed.
Local analysts, including Professor Clive Thomas and Ramon Gaskin, have
criticized the sustained mopping-up feature of the government’s monetary
policy, contending it is not scientifically validated.
The World Bank’s comments were made in its draft report reviewing Guyana’s
development policy. It notes the surge in Guyana’s domestic public debt,
standing at 71% of Gross Domestic Product (GDP) at the end of last year. The
Bank points out that the interest paid on domestic debt had reached 3.1% of
GDP at the end of last year, compared with an interest on external debt of
4.6% of GDP.
Defenders of the government’s monetary policy have argued that the exercise
is crucial to ensure that inflation levels are kept low and to allow for
stability in the exchange rate by preventing capital flight. But critics
point out that Guyana’s economy is not characterized by too much money
chasing too few goods (the source of inflation) but rather inadequate
purchasing power in the hands of a majority of its citizens. The critics
also note the effect fuel-related products have had on inflation.
Additionally, they say that capital flight is fuelled by the instability of
the currency itself and not the other way around. This instability is as a
result of demand and supply for the currency with supply constrained by a
trade deficit. The currency has moved from $111.8=US$1 in 1991 to $200=US$1
today - a 78% decline.
“I am not saying that the government should not intervene as the situation
warrants and defend the currency or fight inflation with sterilization as a
tool in monetary management. What I am saying is that this sustained mopping
up is not scientifically validated and has lost its effect as a tool of
monetary policy in Guyana,” Gaskin says, a position which has also been
expressed by Dr Thomas previously.
At the end of June of this year, deposits in the banking system had hit $104
billion (residents only), a growth of 3.2%, while inflation over the same
period was 3.7%. However, the stock of treasury bills, debentures and
government bonds reached $54.7 billion at the end of June, 1.8% more than
the end of December level.
Gaskin argues that his experience in the banking sector taught him that
persons rarely touch their savings for consumption and if they do, they
would replace them as soon as possible. This, for him, is because of the
stable culture of savings in Guyanese.
As it stands, the interest rate paid by commercial banks on deposits, when
inflation and taxes are deducted, do not yield a positive return and this in
itself should have been a factor to influence capital flight, according to
Gaskin. However, he points out that deposits are at its all-time highest in
the financial system. He argues that those persons who seek to preserve the
value of their savings against depreciation and inflation will take their
money outside of Guyana and the mopping up exercise will not stop this.
The stock of debentures at the end of June stood at $3.8 billion, while
91-day treasury bills were $3.2 billion (an increase of 9.6%), 182-day
treasury bills were $7.5 billion (an increase of 50.1%) and 364-day bills
were $37.6 billion (a decline of 4.3%). Defence bonds stock was $4 million
(a reduction of 8.3%).
“The increase[s] resulted primarily from the issuance of treasury bills to
sterilize excess liquidity in the financial system as the stock of defence
bonds declined by 8.3 percent or $0.3 million to $3.5 million, while
debentures remained unchanged,” the Bank of Guyana says in its just released
half-year report.
Domestic debt servicing totalled $1.424 billion at half year, 36.9% less
than the same period last year and resulted from lower interest charges on
the stock of treasury bills and debentures redeemed. Interests on 91-day and
182-day treasury bills fell by 51.4% and 29.3% or by $57 million and $84
million respectively. Interest on the 364-day bills and debentures also fell
by 36.6% and 47.3% to $1 billion and $61 million respectively.
However, the total stock of outstanding treasury bills increased by five
percent from its end June 2002 level but rose by only 2% during the first
half of the year. The report says that the maturity structure of the
outstanding stock of treasury bills changed from one year earlier, shifting
towards the shorter term.
The commercial banks continue to hold the largest share of the outstanding
stock of treasury bills at 50.9%, 5.3% more than the year before. The public
sector’s share, of which the National Insurance Scheme is the only
stakeholder, contracted to 23.9% from 29.1% while the share of the other
financial intermediaries decreased by 0.4% to 21.9%. The share of the
private sector contracted to 0.2% from 0.6%.
Treasury bills issued during the first half of 2003 amounted to $34.6
billion, 9.2% higher than the comparable period last year. There was no
issue of debentures. Redemption of treasury bills totaled $33.7 billion with
redemptions for the 182-day issue moving up by 34.1% and the 364-day issue
by 5% or to $10.1 billion and $17.4 billion respectively. The 91-day
treasury bill maturity decreased by 15.9% to $6 billion. There was no
redemption of debentures.
On the other hand, the stock of outstanding external debt amounted to US$1.2
billion or $238 billion, 1.3% higher than the end of June 2002 balance but
0.02% or $0.2 million lower than the end of December 2002 level. The
increase, the bank says, reflects the impact of an appreciation of the Euro
on the Euro-denominated portion of the stock of debt and disbursements
received under existing loans.
External debt service payment increased by 21.9% to reach US$25.2 million,
contributing to a higher debt service ratio of 10.5% compared with 8.6% in
the previous period.
Total debt relief under the HIPC initiatives during the first half of the
year was US$19.8 million, a 1.8% increase. Relief under original HIPC was
US$12.2 million or 13% less than the previous year. Interim HIPC assistance
amounted to US$7.6 million, 39.6% higher than that received in the first
half of 2002.
A preliminary analysis of Guyana’s external debt sustainability has
indicated a drop in the external debt to GDP ratio to 75% after the EHIPC
completion point. At the end of 2002, debt to GDP stood at 71.5% and NPV of
debt to revenue stands at over 400% compared with the EHIPC benchmark of
250% and NPV of debt to export at just under 150% (as in benchmark).
“The continuation of this trend would make it difficult to reach the fiscal
target and completion point (for EHIPC) could be delayed further,” the World
Bank says in its draft report. Guyana is expecting to reach floating
completion point next month to achieve a further US$25 million in annual
debt-service relief.
The bank concludes that debt management in Guyana remains a concern with
domestic and foreign debt managed independently, the national debt committee
inactive and each ministry being able to negotiate and borrow without an
assessment made of the efforts of new borrowing on debt sustainability.
Source: Bank of Guyana Annual Report
From the table, there seems to be a direct relationship between the
depreciation of the currency and inflation. That is, while the Guyana dollar
lost 54% of its value between 1992-2003 using the average exchange rates for
the period, the level of prices (inflation) went up by 86%. The relationship
becomes clearer when it is noted that prices for imported goods move up in
line with the depreciation of the Guyana dollar.
The balance of trade deficit dates back for many years and has a direct
bearing on the value of the currency, as it reflects itself as a supply
constraint.
There seems to be no direct relationship between the stock of treasury bills
and the rate of inflation. As can be noted, when the excess liquidity was
$3B in 1990, the government stock of treasury bills was $7.6B, more than
doubled the level of the liquidity. However, inflation was 63.6%. When
liquidity was $5.5B in 1994 and treasury bills amounted to $23.5B, more than
4 times the liquidity, the inflation rate was 16.8%. In the three years when
the liquidity was determined to be in the region of $4 billion, t-bill stock
was $22B, $27B and $35 billion. However, the corresponding inflation rates
were 8.1%, 4.5% and 8.6%.
The high levels of inflation in the late 80’s had been attributed to the
printing of the Guyana dollar to close budgetary deficits.
(Back to top)
More Essequibo fuel
businesses deny smuggling
By Yohann Earle
Essequibo River fuel retailers have all denied allegations of smuggling
and some have even produced bills to show that their products are legally
obtained.
But residents in the area insist that some of these retailers sell illegally
obtained fuel. The residents say they can detect the smuggled fuel, since it
burns faster than the gasoline purchased at the legal pumps and is different
in colour and odour.
The Guyana Energy Agency (GEA) recently told Stabroek Business that some of
these businesses buy fuel from Venezuela for “next to nothing” prices, which
are usually only available to Venezuelan nationals. However, Guyanese
living in Venezuela and who are eligible to source the cheaper fuel
facilitate these purchases.
One boat owner told Stabroek Business that a drum of gasoline from Venezuela
costs $14,000 but fuel through any legitimate dealer can cost over $20,000
per barrel.
From the start of next year, the GEA will introduce a system of fuel marking
in an attempt to discourage smuggling. An additive will be put into the fuel
on importation and this will allow for its identification by investigators
scouting out illegal sources of fuel. The GEA has assured that even if the
marked fuel is mixed with other products, tests to be carried out will
detect this and persons to whom the fuel belongs will be liable for
prosecution.
Essequibo and the Corentyne are seen as the two points of entry for illegal
fuel into Guyana and areas such as Morasi, Lanaballi and Fort Island on the
Essequibo have been targeted for anti-smuggling operations by the Customs
and Trade Administration (CTA).
Stabroek Business visited Morasi, Lanaballi and Fort Island recently to
assess the state of the fuel market in these areas.
At Lanaballi on the right bank of the Essequibo River, Looknarine Persaud,
also known as ‘Scott’, is one of the persons in the fuel trade. Farmers,
boat owners and miners purchase fuel from him but he denies any association
with illegal fuel from Venezuela. Persaud has been in the business for the
last 18 years.
He produced bills from the Guyana Oil Company (Guy-oil) to prove his claim
that he buys some 3,000 gallons of gasoline and about 4,000 gallons of
diesel per month. He contracts vessels to transport the fuel to his location
at a price of $9 per gallon. Guyoil has confirmed to Stabroek Business that
it sells the quantum of fuel cited to Persaud.
Persaud confirmed that officers from the Customs and Trade Administration (CTA)
make periodic checks for illegal fuel at his establishment.
“They check the bills and they also check to see when was the last time you
bought fuel,” he explained. He also said that personnel from the Guyana Fire
Service would check the tanks to ensure the proper storage of fuel.
Persaud sells mixed gasoline for $580 per gallon and plain gasoline for $480
per gallon. He also sells diesel, kerosene and various grades of lube oil.
Persaud’s operation is isolated, located immediately at the waterfront in
the Essequibo River. There were no other signs of habitation. He also
operates a general store to supply miners, farmers and others frequenting
the interior. His operation is only accessible by boat.
Stabroek Business also checked out the mini-gas station at Morasi, nine
miles from Parika and some 40 minutes before Lanaballi. The owner of that
operation was not in but a heavy odour hung over the air to which residents
had their own tales to tell. The scent was not similar to what prevails at
gas stations.
And one man on Fort Island confessed to Stabroek Business that he and many
others on the island sell small quantities of gasoline although none of them
had licences to do so. The majority of the fuel is sold to the four or five
persons on the island who own small power generating sets, he said, and the
rest is sold to farmers and boat owners.
The man said that he and the other dealers on the island buy fuel from
Shairaz Ali of Vergenoegen, East Bank Essequibo, owner of the Two Brothers
Gas Stations. The man said he sells about four or five gallons of fuel per
week. Asked whether anyone from customs has been checking on the sale of
fuel on that island, he said not in recent months.
Stabroek Business visited a yard on the island, which was full of oil drums
and was informed that this was one of the places dealing in smuggled fuel.
But no one was at home to answer the charges.
Another man on the island said that some months ago the authorities
conducted a raid on the island checking for smuggled fuel but he could not
say what was the outcome.
At Aliki, also located on the right bank of the Essequibo River, Stabroek
Business saw a sign which read: ‘Gas and Kero for sale’. An investigation
revealed that Vibert English had erected this sign in order to advertise his
small venture. He told Stabroek Business that his operation is “a small
thing,” which he runs on an ad hoc basis.
When he was operating, he says, he would sell five, ten or 15 gallons per
week. Asked who supplies his fuel, English replied, “I does buy from Scott
(at Lanaballi)”. He said he had been licensed by the Fire Service to ply his
trade.
The other islands in Essequibo are also suspected to deal in smuggled fuel
but Stabroek Business was unable to make a trip to them.
Ahmad Amin, owner of a gas station at Sans Souci, Wakenaam, had denied
recently any involvement in smuggled fuel. An official of Two Brothers owned
by Shairaz Ali had also denied similar allegations.
H.N. Sugrim of the Corentyne has also been under customs surveillance for
smuggled fuel but he has denied any association with smuggled fuel.
(Back to top)
Trade fairs
prove good showcases for smaller companies
Trade fairs and exhibitions come and go and are generally seen as a
form of entertainment for most patrons, especially as the sessions wind
down, as opposed to an avenue offering serious business propositions to
those exhibiting their products.
The usual faces at these fairs include Demerara Distillers Limited, Laparkan,
Fibre-Tech Industries, Banks DIH, the phone company and others who continue
to see benefits from advertising their products.
This is not to say that new products from smaller companies do not receive
good promotion at these fairs. For example, Suprya’s Delight, a little
confectionary outfit which sells packaged peanuts, cashew nuts, almond nuts,
mixed nuts and even chopped nuts, was able to catch the public’s attention
as did the Nieuw Image clothing line by Jocelyn.
Perhaps one feature that goes unmentioned by many from these fairs is the
number of small businesses which surface with the potential to carve niches
in the non-traditional sectors, create jobs, generate income and garner
foreign exchange. It is also noteworthy that many of them source a higher
percentage of their raw materials locally than the larger companies.
Stabroek Business spoke with the owner of a few businesses at the most
recent fair held at the Sophia Exhibition Centre. Others chose not to be
quoted while some did not want to disclose the financial aspect of their
business because of security and tax concerns.
From two tarpaulins, Samuel Wicker rises
Samuel’s Wicker, Rattan and Upholstery Works had one of the more
eye-catching displays. The boat-designed and egg-nest looking chairs were
the favoured pieces for many, including security guards who could not resist
taking a break in them.
Their sunny colours make them ideal for patios and sunrooms. But it will be
later this year that Guyanese would be able to purchase the wicker and
rattan products as all of the products are exported. However, owner
Praimroop Prasad says he intends to start supplying the domestic market
sometime later this year.
Prasad, whose business is located at the Eccles Industrial Estate, recalls
his very humble beginnings from contraband trader dodging customs officials
to exporter and earner of foreign exchange.
It was “with Jesus wallaba posts and two tarpaulin, a very small capital of
$60,000, and loans from IPED” that he established Samuel’s Wicker, Rattan
and Upholstery Works in 1997 to export all of its produce to a niche market
in Barbados. Prasad is a former employee of a furniture upholstery store and
switched to trading in contraband in the 1980s. He brought in flour and
other banned food items from Suriname for sale in Guyana, until he could no
longer deal with the difficulties posed by evading Customs.
When he saw the market opportunity in Barbados, he seized it, and began
sourcing wicker products for exports out of the Pomeroon river where a large
community of families work on wicker furniture. But because of the demand
for high quality products in the regional market, Prasad decided to
manufacture the furniture himself. He recalls that when he approached his
suppliers, he was flatly informed that they could not produce a higher
quality product than they were producing.
Prasad sources 90% of his materials from within Guyana. The foam for the
cushions he buys from AH&L Kissoon Ltd while Amerindians supply the raw
material for his wicker and rattan produce.
Business, Prasad says, has been slow for the year so far but is picking up.
Craft industry needs duty-free concessions too!
Eighteen years ago, Trevor Alfred graduated from the Burrowes School of
Art and began literally using his hands to earn a living.
He spends his time making pottery and sculptures and painting to produce
ceramic pottery for sale. Using earthen clay and a small amount of kaolin,
he makes moulds which he then burns in a kiln before applying a glaze to
give it a finish.
Alfred makes decorative plates in various sizes and with terra-cotta
designs. He also produces mugs (including beer mugs), miniature vases, wine
sets and even orange juice squeezers as well as bowls. Additionally, he
makes little trinkets such as soapstone necklaces and clay pendants with
various zodiac designs.
His products are known locally, having been supplied to Guyana Stores until
its privatisation. He also supplies the Hibiscus Plaza in front of the
Guyana Post Office and the Craft Shop at the Amerindian Hostel. Alfred also
has a small gallery at his residence at Supply, East Bank Demerara.
Alfred is keen to get into export markets in a big way, having showcased his
products in Barbados, Martinique and Antigua through the Guyana Office for
Investment.
“It is a profitable business and it would be good if the government can look
into assistance for us as these little produce can bring in foreign
currency,” Alfred says. He adds that the craft industry could be bolstered
if the government provided duty-free concessions for the importation of the
tools of trade on a large scale, including ovens and machinery. As it is,
local sales are not sufficient to allow Alfred to remain a self-employed
person.
Linden supporting tourism
Coretta Braithwaite focuses her energies on creating leather and craft
as well as hand-painted cushions and jerseys to target the tourism sector.
From Half-Mile Wismar, Coretta has been doing this for ten years but
business is currently slow with her returns much less than $5000 per month.
However, she explains this is very much a seasonal trade as her returns
during Mashramani, Easter, and in the July, August and December periods make
up for the slow sales the rest of the year. Her monthly returns in these
periods average $40,000.
The Linden Economic Advancement Programme (LEAP) sponsored her participation
in the fair and also facilitated her participation in subsidised courses to
improve her management skills. She said her presence at the exhibition was
to actively seek unexplored export markets, in territories such as Antigua,
St. Maarten, St Croix, and Tortilla. Additionally, she would like to secure
contracts to supply the police force or the power company with safety boots
and utility belts.
Braithwaite uses all natural material to make her products. The leather in
her craft is sourced from local cows and the straw, bamboo and lucky seeds
are from her yard. The string, which she uses to make curtains, comes from a
hinterland vine. She makes car seats, hats, bags, fans and other items from
tibisiri, which comes from the Ite palm. Braithwaite strips the leaves of
the palm and dries them in the sun to make the straw.
Transforming waste into art
Iris Calistro, 58 years old of Kabacaburi with nine children, began
experimenting with coconut fibre and balata latex as a means of producing a
value-added product four years ago.
With encouragement from Beacon Foundation and Dr Leslie Chin of the
Institution of Private Enterprise Development (IPED), Calistro and a group
of 12 persons began applying their hands to converting balls of coconut
fibre into filling for mattresses.
But after 14 mattresses were produced, all of which were purchased by Dr
Chin, the project died a natural death because of a lack of commitment and
inadequate responses from businesses to keep it going.
But Calistro decided to try her hand at a new product - broad brimmed hats.
“I looked at the coconut fibre and said you know what, I could make a hat
from this....and it came out good. I used a bowl as the mould. I showed it
to the rest of the people in my area and they were impressed and I began
making more hats,” said Calistro. She sold the first few for $600 a piece
but her price has since increased to $1000 per hat. And she has been taking
every opportunity to showcase her new creation including at the recent
Amerindian Heritage Month celebrations at Umana Yana.
She not only makes hats from the fibre but also does plant-baskets and
shoulder-bags. She uses tibisiri to make placemats, shoulder-bags and
jewel-boxes, which fetch better prices.
Calistro said that she would very much like to get into the export-market
and expects assistance from the Guyana Office for Investment to further the
process.
“We need help to export our products, we would like to export...” says
Calistro.
Designer seeks markets
Derrick Alphonso, owner of Alphonso’s Modern Tailoring Establishment, is
from Linden and is a tailor and designer by profession, a passion he
discovered after he left school.
His clothes are quite popular in Linden as well as in the city and LEAP
invited him to share a spot in the booth it sponsored at the recent trade
fair.
He jumped at the opportunity to promote his business further and would
welcome if it materialises into export markets. His designs are quite
attractive with their own distinctive appeal. His finished products,
however, he feels, can be improved if he can source modern machines and
improved technology. This will allow him to finish his orders much faster.
His business currently employs two persons.
Alfonso is also into HIV counselling in Linden at the Linden Care Foundation
and he is also vice-chairman of the Regional Rights-of-the-Child Committee,
Region Ten. He is currently pursuing a degree in Social Work at the
University of Guyana.
Juggling to make ends meet
Using local material such as leather, wood and semi-precious stones,
Anthony Hopkinson specialises in hand-made jewellery such as earrings,
bands, chains and necklaces.
A resident of East Ruimveldt, Georgetown, his interest in craft was ignited
one day when he noticed someone putting together such jewellery during a
basketball game and five years later, he is still in the trade.
Hopkinson attended East La Penitence Primary School and Lodge Community High
School, but says he was never the school type so he dropped out.
Life before craft involved work as a carpenter and mason and he is currently
doing electronics at Abdul’s Electronics. Electronics offers him an
insurance policy if his present occupation falls apart.
His initial investment five years ago was about $10,000 and Hopkinson says
he has recovered this sum. But these days returns are not steady. He says
this is his fifth exhibition and the returns are not as good as they should
be. (Back to top)
Restructured PSC
is stronger, more representative
- says deGroot
The Private Sector Commission is today viewed as a much stronger
organisation and should be seen as being politically neutral, says its
chairman, Dr Peter deGroot.
The PSC played a leading role in the Social Partners’ Initiative last year
and this helped to put the organisation into a politically neutral
limelight.
Since last year, the PSC has had to undergo its own restructuring, followed
the loss of its Honorary Secretary/Executive Director, Mr David Yankana as
well as the head of its Economic Policy Unit and associated staff. deGroot
said these losses provided the PSC with an opportunity to find fresh blood
and invigorate itself.
As a result of this restructuring, the PSC is now run by an executive
committee. This comprises the chairman, his deputy Ramesh Dookhoo, Paul
Cheong as treasurer and Claude Merriman, secretary along with Michael
Correia as a committee member. The PSC’s new Executive Director, Bal Persaud,
also sits on the executive committee. The Council remains the final decision
making forum of the organisation.
The PSC now has four functioning subcommittees with Rodney Gun-Munro heading
the trade and investments arm, Merriman the public relations arm, Cheong the
finance arm and Norman McLean, the governance and security sub-committee.
The PSC, the umbrella private sector organization, has been accused in the
past of being an elitist club with individuals using the body to pursue
their vested interests rather than the collective interest of the membership
and the PSC as a whole.
But deGroot makes the point that to get proper representation at the PSC
level, businessmen have to ensure that they promote their concerns at their
umbrella association level for it to be taken to the PSC Council for action.
Corporate members of the PSC also need to ensure that they attend meetings
and have their voices heard.
As it is, the PSC is now looking at what role it can play to assist those
businesses not represented by any formal organization.
deGroot holds the view that there are too many private sector organisations
around today and many of these lack the wherewithal to represent their
constituent members.
He says the PSC is looking at how it can provide help and bring these
organisations within its fold as achieved by the Private Sector Organisation
of Jamaica (PSOJ).
For example, the Guyana Rice Millers and Rice Development Association is
almost defunct and a number of other organisations are losing members. But
not every business house can afford to be corporate members to be able to
have direct access to the PSC. As such, the PSC hopes to come up with some
measures to allow for effective representation of a wider section of the
business community. (Back to top)
CGX
seeks US$750,000 locally
- prospectus filed with the Securities Council
Onshore (ON) Energy Inc, a wholly- owned subsidiary of CGX, has
filed a prospectus with the Guyana Securities Council for clearance to raise
US$750,000 to fund preliminary exploration for oil and gas on the Berbice
block of its prospecting licence.
This map exhibits the CGX onshore block, the oil and gas show while
drilling, the Staatsolie geochemical anomalies and the surface oil show. |
CGX on September 18 announced it had begun exploration on the 377,500-acre
onshore portion of its Corentyne Prospecting Licences through ON Energy and
intended to do so in three phases, each subject to modification and
contingent on the positive results of the prior phase.
Two days earlier, the company had filed with the Guyana Securities Council a
prospectus to raise US$750,000 by issuing 15 million shares valued US five
cents each and equivalent to 20% of the equity of ON Energy Inc.
Additionally, on October 6th, the firm announced that it has retained CMMB
Securities Limited of Trinidad as agents to raise new equity capital through
private placements for CGX’s exploration and corporate activities.
“It is the intent of ON Energy to externally finance preliminary exploration
with the money to be raised in Guyana or other Caricom member countries,” a
recent statement from CGX said. Negotiations have started with investors in
Trinidad for an equity stake in CGX, but this is separate from the
prospectus filed locally.
The company filed its prospectus with the Guyana Securities Council on
September 16th and the Council issued a receipt on September 29th. However,
clearing the prospectus for its public issue is expected anytime soon.
In June of 2000, the United States Geological survey of undiscovered
conventional oil and gas resources in 23 basins in South America, Central
America and the Caribbean ranked the South and Central America regions as
third in the world for undiscovered oil and gas resources behind the Middle
East and the former Soviet Union.
The potential for undiscovered giant oil and gas fields is expected to be
greatest in offshore basins along the Atlantic margin of eastern South
America, from the Santos Basin in the south to the Guyana-Suriname Basin in
the north. The potential for additional giant oil fields in the Maracaibo
and East Venezuela basins is considered to be much less, but these basins
(and offshore Trinidad) were estimated to contain significant undiscovered
oil and gas resources, that assessment found.
Warren Workman, Vice-President of Exploration with CGX, says the presence of
an active petroleum system and the hydrocarbon potential of the offshore
Guyana-Suriname basin is supported by the 900 million barrels of oil in the
onshore Tambarjedo field (Suriname), some 200 kilometres east of CGX’s
Berbice block as well as the oil and gas shows in most of the offshore
wells.
The company in Suriname, Staatsolie, has done extensive aero-magnetic and
geochemical sampling and has identified several anomalous leads along a
fairway inclining toward the Berbice block.
Workman in a recent interview with Stabroek News said CGX’s decision to
return to exploration was informed by the current production situation in
Suriname, the seeps in a number of older wells and the anomalous leads.
“I am optimistic (about a possible oil find) with the precaution that it is
a new base for production. It is high risk to expect that the first well(s)
will be successful.
However, the presence of oil in the Tambarjedo field near Paramaribo,
Suriname, is encouraging and indicates that there is a reasonable chance for
gas and oil currents, “ Workman said.
ON Energy on October 1st began a geochemical survey, which requires the
acquisition of soil samples and this survey will run for six weeks. The
company has eight sampling teams following roadways, trails, rivers and
creeks and assessing plantations and farmlands to carefully extract soil
samples of about 1 kilogramme each, using a shovel. The company plans to
extract a minimum of 5000 samples.
Following assessment of the findings of this survey, ON Energy will have to
determine whether it will need to do additional geophysical work or proceed
to seismic or drilling operations.
CGX has transferred its onshore block to ON Energy. Its offshore block
comprises the Eagle and Wishbone properties. Suriname gunboats had chased
CGX out of the Corentyne River in 2000, as it was about to commence drilling
for oil. CGX shares closed trade last week at CDN 45 cents per share on the
TSX Venture Exchange, Canada public venture capital marketplace.
(Back to top)
Plummer seeks US$3M plug
for Globe Trust
Administrator of Globe Trust and Investment Company Ltd (GTICL),
Conrad Plummer, is seeking to raise US$3 million to re-capitalize that
financial organisation.
In an offer open to individual investors, Plummer is offering controlling
interest in Globe Trust of at least 51% of the stock.
According to Plummer, Globe Trust shares as they stand carry no value and
their future value is debatable. In advertisements placed locally,
regionally and internationally, he has invited potential investors to
express their interest in the reorganization of the firm, which could take
the form of various financial instruments, including equity.
According to the advertisement, 57 individuals collectively represent 24.6%
of the current shareholding and all of these shareholders except three
individuals hold less than five percent of the shares.
Investors desiring to control the institution will have to meet the Bank of
Guyana’s fit-and-proper test requirements and would also be required to
submit a three-to- five-year business plan.
Asked what timeframe is needed to turn the institution around, Plummer said
a lot will depend on this current phase and the direction in which the
investor may want to take the company.
“If after the investment the company remains cash-strapped, then it will
face a protracted period of rebuilding, but if it acquires the necessary
resources — financial and human — at the time of the investment, then the
period (to recovery) will be shorter,” Plummer, a seasoned banker, says.
He feels that though GTICL will lose some business, it can recapture the
trust of most of its depositors “over time”.
“This will not be easy and it cannot be assumed that it will happen
automatically, but I am convinced that it can be regained with a lot of hard
work from the new owners,” Plummer asserts.
GTICL, he says, will inform current depositors as to when they can access
their funds, since the company will not be able to put a date on this until
after the details of the investment are confirmed and approved.
Since the Bank of Guyana seized the institution two years ago, depositors
have been unable to access their monies and stand to lose a portion of it in
the reorganization.
GTICL went into decline over poor management of its debt portfolio, and the
Bank of Guyana had originally sought to have it liquidated. But Chief
Justice Carl Singh refused the request and ordered Globe Trust’s
reorganization in a historic move in Guyana’s financial system.
(Back to top)
An environmentally-friendly Vendor yearns for independent wealth
Frank ‘Skip’ Eversley wants to be “independently wealthy” and his
chosen path is street vending, selling the odd bits and pieces at the corner
of North Road and Camp Street, a junction usually clear of vendors.
He built an eye-catching, simple stall, which houses a cooler below and the
odd condiments above and displays prominently the three daily newspapers. He
ensures that his surroundings are always clean and Stabroek Business has
caught him on more than one occasion sweeping clean the gravel immediately
before his stall.
A woman had earlier occupied a less conspicuous spot nearby, on the pavement
in Camp Street, selling the odd chewing gum and sweets before she cleared
out. Eversley confesses he has been eying the spot he has chosen for quite a
while.
But Eversley is not your run-of-the-mill vendor. He is a remigrant who
claims to have heeded the cry of the late President Cheddi Jagan to return
and give of his service. He chose to do so in the form of a vulcanizing
business, which failed.
Eversley, who worked as an unskilled worker in different fields in the US,
said he acquired the capital to invest in Guyana and the clothes to last him
a lifetime before he returned in 1992 to set up a vulcanizing business at 68
Craig Street, Campbellville. He subsequently moved to 27J Duncan Street,
Campbellville, before anchoring at 254 David Street, Kitty. But he was
forced to sell his equipment, as the business was not making money.
He then turned to farming and livestock- rearing at Riverview on the right
bank of the Essequibo, and made plantain chips and bread when the going got
tough. He also tried his hands at seine-fishing but he recalls that one
night the crew fell asleep in their boat and drifted to a village several
miles from Riverview. They had to paddle from around 6 am to about 4 pm
before they got home.
Eversley spent six years in Riverview before he rejoined his reputed wife in
the city. She was working at Vernon’s Grocery in Bourda Market earning $3000
a week.
To supplement his income, Eversley decided to go into business and needed
$16000 to get started. His old friend, Chief Marshal Walter Dainty lent him
$10,000, another friend Magnel Parks, the Manager of the Flying Stars Domino
Club lent him $4000 while another friend lent him the $2000.
Applying the skills he learnt over his life and using palettes sourced from
S&L Electronics, Eversley put together his stand using among other things
his grandmother’s old cobweb broomstick, which is older than him.
“I need to be independently wealthy, I don’t need to beg,” is Eversley’s
motto. He says he intends to pay back his creditors or the trust would be
destroyed from their relationship.
Eversley in his younger days attended the Campbellville Government School
before he went to the Festival City Government School. His parents had
migrated to England and left him in the care of his grandparents.
However, after his grandfather died and his grandmother migrated to be able
to maintain the family, he began to experience difficulties and decided to
start working to support himself.
Weiting and Richter was his first employer at a wage of $15 per week. He
gave that up and went to work for the Bookers Company, for $25 per week,
during which time the company was nationalized. He then decided to follow
his brother and joined the Guyana Defence Force in August 1976.
Like so many others, he got married and left Guyana in 1984 for the United
States of America, but now feels if he had stayed, he would have done better
in Guyana.
Eversley worked with Jazzy Jack at 69th and Railroad Streets, Chicago,
Illinois as a road vendor where at the State Transit Authority’s (STA)
underground facility, he marketed earmuffs, scarves, gloves, sock, peanuts
and candy around the clock.
After a year there, Eversley moved on to the Chicago O’Hare Mariott where he
did dishwashing for another year and then went on to work with Metals
Masters Incorporated in die-casting, making hand brakes for Harley Davidson
motorcycles, and Honda engines. Eversley said he moved from a sweeper to
metal-recycle personnel, which involved refilling furnaces with molten
metal.
He found this job to be too dangerous and suffered personally as well as he
was hardly able to see his wife.
He left that job after another year and went to work for a contractor in
Southern Chicago working on hotels, and houses. He began as a labourer
earning US$10 an hour and left at a rate of US$22.50 an hour. But he still
cannot get a job with a contractor in Guyana, he confesses.
At various stages of his life in Chicago, Eversley said he collected junk
and sold it to recycling companies. He also functioned at one time as a
building- supervisor for a 24-unit apartment building.
Eversley expects to eke out a living from his spot at the corner of Camp and
North Road. He only distributes local products including the plantain chips
he produces, and cheese-straws and mittai made for him by a friend who wants
to share in the profits, and coolers such as lemonade, water, fruit-juice
and icicles.
The only signs of imported items on his stall are chewing gums, mints and
cigarettes but these were also from a friend who wants a share of the pie.
Eversley wants to promote local products but is skeptical about the products
of local manufacturers who do not recycle their soft drink bottles.
(Back to top)
Stock
Exchange round-up
INTRODUCTION
To support the creation of a strong capital market, GASCI provides below
detailed information on trading activities and the market to start the
public awareness process in the equity market
Modest stock activity in October
October has seen modest activity on the floor of GASCI with 181,524 shares
changing hands for a total consideration of G$1,494,198 in 32 transactions.
There has been lower volatility in price movements with all but two shares
trading in a 3-point (G$0.1) range. Two shares made a debut with their first
trades on the exchange – GSI and PHI.
Leading the activity in terms of transactions, volume and consideration was
DDL with 13 trades for 90,294 shares and a total value of G$584,361 at a
weighted average price of $6.5. DDL tested new lows during session 15 with a
price of $6.2 (though there was only one transaction at that price) and
since then the price has recovered to $6.5.
DIH was the next most active with 56,705 shares traded in 6 transactions
totalling G$359,412 and a weighted average price of $6.3. The price of DIH
shares fell during October to $6.3 but traded steady during the last two
sessions at that price.
The biggest movement in price came from BTI which jumped from $25 to $30
during session 15 and has traded at $30 since. Over 6 trades 6,900 shares
have changed hands for a total consideration of G$202,000.
NBIC saw the biggest fall in price of $2.1 from the previous trade in
session 10 of $14 to $11.9 during session 15. Some 21,625 shares were traded
during October with a total value of G$258,425. During session 17, NBIC
closed up a point – the only share to close higher that session.
Trading in both GSI and PHI was light with 6,000 and 3,500 shares being
traded at $15 and $6 respectively.
Where the market is heading?
Tracking the movements in share prices of all shares traded on the GASCI
stock exchange, the vBI (pronounced vee-Bee) shows at a glance where the
stock market in Guyana is heading and by how much.
Constructed by the Caribbean Actuarial & Financial Services (CAFS), the vBI
shows the capital return that a portfolio of shares would have returned if
invested in the same proportions as the weighting, given each of the
constituents that makes up the index.
The weighting used is the market capitalisation – that is, the market value
times the number of shares in issue. CAFS has used the market weighted
average price (MWAP) published by GASCI as the measure of market value when
determining the capitalisation – in this way the index is less sensitive to
fluctuations in price due to small trades. This is suited to small markets
such as Guyana, where there are relatively small volumes traded frequently,
along with the occasional large trade.
The construction of the index is such that once a share is first traded it
is added without changing the level of the index so that from that point on,
the movements in the index reflect the total market capitalisation including
the new addition. Patrick van Beek, the creator of the index, explains the
analogy between the index and a portfolio of shares saying that “when a
share is first included on the index, the holdings in a portfolio tracking
the index would be reduced by selling them in order to invest in the new
addition”.
The vBI will continue to be updated with the long-term aim to include all
securities 9eligible for trading on the GASCI exchange.
Changes to the weight in the index as new constitients have been added
The vBIs construction follows that of the FTSE Actuaries Share Indices
published by FTSE International in conjunction with the Faculty and
Institute of Actuaries.
The construction differs from the older indices still in use today – eg the
Dow Jones Industrial Average and Nikkei 225 index which are unweighted
indices thus making them unsuitable for calculating returns. However the
newer Standard & Poors 500 and Topix indices are constructed along similar
lines.
Notes
EPS: earnings per share for 12 months period to the date the latest
financials have been prepared (2002 year end for CBI and JPS and the 2003
interim results for the remainder). As such the majority of these EPS
calculations are based on un-audited figures.
P/E Ratio: Price Earnings Ratio = Last trade price / EPS
Dividend yield = dividend / last trade. The dividend proposed or declared in
respect of the 12 months to the 2003 interim can be distorted eg if an
interim dividend was declared or proposed in respect of the first half of
the 2002 financial year, but not in the first half of the 2003 financial
year. Hence, the dividend yield has been calculated with both the 2002
dividend and the dividends declared or proposed in the 12 months to the 2003
Interim.
The market information provided here is provided for informational and
educational purposes only and is provided on a time delayed basis. GASCI
does not guarantee the accuracy or completeness of any information contained
on this page. Although the information has been obtained by GASCI from
sources believed to be reliable, it is provided on an “as is” basis without
warranties of any kind. GASCI assumes no responsibility for the consequences
of any errors or omissions. GASCI does not make or has not made any
recommendation regarding any of the securities issued by any of the
companies identified here nor the advisability of investing in securities
generally for any particular individual. (Back
to top)
EDITORIAL
A stable political environment
The economy continues to languish, growing by a mere 0.9% for the
first half of this year. The International Monetary Fund forecasts a
negative 0.2% growth for Guyana this year.
This low level of economic activity follows a five-year pattern of minuscule
growth of –1.3% in 1998, 3% in 1999, -1.4% in 2000, 2.3% in 2001 and 1.1% in
2002.
This growth pattern of 0.6% per annum for a country with a per capita GDP of
US$797 per annum does not augur well for economic resurgence, job creation,
or poverty reduction.
While external factors including weather patterns and commodities prices
have played a critical role in the economic downturn, political instability
on the domestic front and the explosion of crime have whittled away what
little confidence had been left in the private sector. A number of
businessmen have since emigrated, writing off their investments to the
occasional visit to collect whatever returns are available, if any.
In the last few years, dozens of businesses have gone under as a result of
mismanagement coupled with the unfavourable economic conditions. And private
family businesses continue to play new investments by ear. According to
chairman of the Private Sector Commission, Dr Peter DeGroot, there is still
a wait-and-see attitude by businesses as they consider possible new
investments in the economy.
DeGroot is concerned, and rightfully so, that if the politicians do not get
it right this time in creating a stable political environment for the
private sector to operate within, the poverty-reduction and job-creation
objectives would not be met and Guyana would continue to lose whatever
little skills and businesses it has left.
While some investors may still be willing to come into Guyana to invest in
the least risky areas, which are outside of the capital, they would require
skilled staff to keep their operations going. However, at the current rate
of emigration, Guyana will continue to find itself in difficulties in
sourcing skills for simple tasks.
It is a known fact that exports and investments are necessary for Guyana’s
economic revival and to allow businesses to start preparing themselves to
compete with the outside world which is moving ahead at a rapid pace with
advances in technology.
The single most important issue for businesses is a stable political
environment to allow the private sector to take the role as the so-called
`engine of growth’.
The recent joint communiqué though welcome, has been slow in delivering
tangible results. General Elections loom in 2006 and with such elections,
the years before and after are usually lost to economic activities because
of political uncertainty in the run up to elections and in the post-election
period, the acrimony.
There is a small window of opportunity available for the government and the
opposition to show true leadership and to act decisively to build confidence
in the investment climate. To stop the rhetoric and follow through with the
swift implementation of the agreed agenda; to forget the power-play and the
need to criticize for the sake of criticizing; and to put into action the
much-touted slogan of `putting Guyana first’!
We need a stable enabling environment now. If not, we will continue along
with an average 0.5% growth per annum, hit elections, continue with acrimony
and then one morning wake up and realize - there is no private sector
around, worse yet, there are no skills available to allow for a rebuilding
process. Who will be the victor of the spoils?
(Back to top)
BUSINESS LETTERS
SNDP’s proposal is for the interim
management of the .gy domain
Dear Editor,
Thank you for highlighting the issue of the .gy domain name in the
September edition of the Business Supplement. There are many key
stakeholders who should have an input into how the .gy domain is managed and
the media is a key ally in keeping the public informed.
I would however like to change the impression that the Sustainable
Development Network Programme (SDNP) is fighting with UG for control of the
domain. The University as a public institution should be one of the fittest
institutions to manage a public trust as the .gy domain in the best
interests of all Guyanese and not for profit. However, the .gy domain is
still outside of Guyana because the University has not developed the
technical infrastructure to manage the domain and SDNP’s proposal is to use
its infrastructure to manage the domain as an interim arrangement while the
management policies are discussed nationally.
The Government for example could decide to subsidise the running costs to
encourage local use of the domain and perhaps have small fees charged in the
beginning. There are other decisions we need to make about domain
name-squatting, whether the top level domains would be used, etc. It is
believed that the University would have benefitted from the IDB-funded
national information and communication technology ICT project and would
therefore have been able to acquire the technical infrastructure to
implement full management in Guyana of the .gy domain as a public trust in
the interests of all Guyanese.
I regret if the reporter was not informed that at all times and in all
discussions, the Government, the University and any interested persons are
kept aware of all the possibilities for the management of the .gy domain,
and interested readers could contact us for details of these proposals. SDNP
has no intention of managing the .gy domain in its own interests nor does it
see any benefit to the Guyanese public in controlling the .gy domain to the
exclusion of the University or any other stakeholder.
SDNP sincerely hopes that Guyana could continue to have the political will,
the infrastructure and the human resources to make the .gy domain readily
available to Guyanese.
Yours faithfully,
Vidyaratha Kissoon (Back to top)
The Booker plan for the sugar industry made
sense
Dear Editor,
I refer to the article titled ‘Sugar will survive’ (Stabroek Business
Supplement Vol. 3 #9 1 October 2003)
The areas for major cost-reduction in the sugar industry lies in the
field-cost and administration-cost areas and not the factory-cost area.
Sugar is made in the field, the factory only extracts it.
The sugar industry at the time of nationalisation employed 25,000 persons
with an employment cost of about 60% of its operating cost and was
profitable.
Both Mr. Boast and Mr Gaskin should examine the historical performance of
the estates in Demerara and Berbice and note the rationale behind why the
industry was always treated as one unit with one overall operating cost and
with one Head Office.
This was because of advantages and disadvantages in both Demerara and
Berbice caused by our weather conditions, soil type, and variety of canes.
All top specialist staff were well trained experts equal to their
international colleagues in professional competence, and attended sugar
technology conferences to ensure they kept abreast with the latest methods,
systems and technology.
Guyanese skills were used to build and run factories in Zambia, St Kitts,
Nigeria, Jamaica and Kenya. Are these skills not available to the existing
industry?
Two good examples, which we can use to understand the sugar experience in
Guyana are Blairmont and Versailles. Blairmont was a lost cause up to the
latter part of the seventies and a high performer in the eighties and
nineties with minimum factory inputs. Versailles had recorded returns of
nearly four tonnes of sugar per acre extracted by the worst factory in the
Booker area. Superior factories will not guarantee profitability as they can
be problematic, incur greater loss and be costly to operate. For example:
Concord vs British Airways and Sprinter vs Prado.
The Booker plan to develop the sugar industry up to 500,000 tonnes of sugar
per year, included developing in phases, all of the existing factories
including the Demerara factories. Enmore was being developed to process 150
tonnes of cane per hour to cater for farmers as far as Mahaica.
Skeldon and Blairmont were next in line.
The Booker Group of Companies’ overall profitability was tied around the
sugar industry i.e. cattle, ship-ping, distilleries, engineering ser-vices,
Insurance, agricultural machinery, Guyana Stores (including fertilizers and
Chemicals) lithographic, officer supplies, Demerara Foundry and others
mainly located in Georgetown. The group provided work for those who are now
unable to find employment in George-town.
One of Dr Clive Thomas’s presentations in the Sunday Stabroek highlights the
beneficiaries of a company based on the management structure and strategy
employed. The sugar industry is a good case to examine.
The cropping cycle in Guyana is one year while in the African countries for
example, it is two years.
The existing factories can process in excess of 400,000 tonnes of sugar per
year with good quality canes. A significant amount of capital input was made
in the industry and as a result it should be producing above the old record
of 368,000 tonnes per year.
The Skeldon Factory Modernisation Plan has all the makings of exploitation
and failure especially since we have to rely on a foreign management team
and consultants for its construction.
Green Construction in the Bauxite Industry and CDC/ESBI in the electricity
corporation are two good examples in the past to learn from before
attempting a project such as Skeldon.
A cost benefit analysis should have been carried out. When I worked in the
Booker years this is how decisions were made by the experts. Major benefits
can be made from the sugar industry’s engineering services, office supplies,
chemicals and fertilizer supplies, agriculture machinery supplies, medical
supplies and contract services if these were controlled by the experts and
auditors.
The questions below need answers:
i. Why was the existing Skeldon Factory not extended in phases to minimise
the risk of plant failure, commissioning problems and loss of money in an
unnecessary capital expenditure?
ii. Why was a cost benefit analysis to determine the return on investment
not carried out?
iii. What is Guysuco’s return on investments over the past 10 years and how
does this compare with the proposed capital expansion for Skeldon?
iv. The Guyana sugar industry’s cost per tonne of sugar is about 40 per cent
less than our Caribbean neighbours. Why can’t we have dialogue on the future
of our industries?
v. When sugar was nationalised the Guyanese people were told that they were
the new owners. The people of Georgetown no longer benefit from the sugar
industry nor do the people of Guyana, except the employees.
vi. What is the position with sugar workers’ pension for the years 2000,
2001 and 2002? And why do the unions, the political parties and government
continue to allow workers’ money to be misused and abused?
Yours faithfully,
O. Gilgileous (Back to top)
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