By Tiffanne Ramphal
From decades of economic decline and stagnation, with peaking poverty levels and a decline in the real Gross Domestic Product, Guyana has emerged even to the point of outperforming several of its Caribbean counterparts.
This is the view of Director of the Caribbean Development Bank (CDB)’s Economics Department, Dr. Justin Ram, featured speaker at the Georgetown Chamber of Commerce and Industry (GCCI)’s 124th Gala Dinner and Awards Ceremony on Thursday evening at the Pegasus Hotel.
According to the Specialist, it is as a result of implementing a robust and sustained reform agenda that Guyana was able to reverse its economic stagnation thereby enhancing its development indicators, including per capita incomes and poverty levels.
He said that implementation of reforms such as the Investment Act and Small Business Act both implemented in 2004 and the National Competitiveness Strategy drafted in 2006 had been rewarded substantial debt relief and in turn a reduction in debt ratios.
By extension, economic performance and debt relief have freed up resources for increased social spending. This, Ram said, paid off when poverty levels went down from 65% in 1988 to 38% in 1999; and extreme poverty down to 18.6% in 2006 from 29% in 1992.
However, he said that the country still faces critical development challenges. Of these, there was mention of inadequate infrastructure, high vulnerability to natural disasters and climate change, high poverty levels and economic concentration and constraints to private sector development.
Therefore, a new wave of reforms is needed to consolidate and augment past progress.
According to Ram, closing the infrastructure gap, building capacity and strengthening institutions has been seen as a way forward in this regard and has received a lot of attention from the Government as well as the Caribbean Development Bank.
Towards addressing these impediments, he first noted a number of specific constraints which private sector stakeholders have identified as needing immediate attention in order to facilitate development. The high cost and unreliable power supply which has led most large enterprises to invest in their own electricity generating facilities; scarcity of managerial capacity and skilled labour due to migration and high taxes on production were among those mentioned.
Resulting from these restraints in the World Bank’s “Doing Business” Report for 2013, Guyana was ranked 115th of 189 countries overall for ease of doing business. Moreover, the 2013-14 Global Competitiveness Report ranked Guyana 102nd out of 148 countries in respect of international competitiveness.
According to Ram, improving Guyana’s competitive position will require continued efforts at improving basic factors for such competitiveness, including continued improvements in infrastructure, institutions and basic education and health. At the same time, he said that it will be important to address areas that are necessary to help Guyana to transition from an economy that is driven by the basic factors of production to one that is efficiency-driven. He said that the transition will require a greater focus on education, improving technological readiness of the economy and developing its financial markets, among other things.
“Such investments and reforms would facilitate the continued development of Guyana’s private sector and foster the economic diversification that is necessary to build more resilience and generate prosperity,” he expressed.
Further, he drew attention to reducing Guyana’s concentration in the extractive industries of agriculture, forestry and fishing, mining and quarrying; nothing that these activities leave the economy vulnerable to “Dutch Disease”, the result of an exploitation of natural resources leading to a decline in the agriculture sector.
It is upon consideration of this outcome that Ram noted that it would be ideal to establish a sovereign wealth fund to manage the windfall from their extraction. He said that such resources could then be used to underwrite the type of investments and reforms that are necessary to facilitate economic diversification away from natural resource-based products and into higher value added goods and services.
In order for this to be accomplished, however, a strong partnership between the private sector and Government is needed, to build consensus on the priority agenda going forward.
“The private sector should also take the lead in ensuring that Guyana’s vulnerability to natural events is reduced and that economic policies being pursued bring lasting and sustainable benefits… As assets are extracted, the private sector must ensure that sufficient investment is made in other types of assets such as human capital, plant and machinery, telecommunications and infrastructure since these will be the assets that will help support growth in the future,” he urged.
Meanwhile, apart from the motivational speech given by the Economic Specialist, awards were handed out to the best performing businesses in Commerce and Industry for 2013.
Queens Atlantic Investment Incorporated (QAII) copped the most coveted Business of the Year Award for large businesses; followed by Princess Hotel and Casino, Fun City Entertainment Centre who landed the Business of the Year Award for small to medium sized businesses.
Also awarded was Neal Sukhlal, Chief Executive Officer of Impressions, for being the first to introduce digital fabric printing in Guyana and in the Caribbean. Impressions received the Award for Innovation.
Matriarch of the Farfan and Mendes Group of Companies, June Mendes, received the Lifetime Achievement Award for her contributions to business growth in Guyana and the Public Services Award of Excellence was given to the Home Affairs Ministry.
Homage was also paid to past Presidents of the Chamber for the past four decades for their contributions to the sector.
According to the current President, Clinton Urling, it is those men that paved the way for the current level of success and prominence that the Chamber currently enjoys.
“I have the distinct honour to say that we stand on the shoulders of giants and we drink from wells of opportunity that we ourselves did not dig,” he said. Among the awardees were Komal Ramnauth (2010-2012); Manniram Prashad (1995-2001) and Sheik Nasseer (1967-1969).
While congratulating the awardees from the podium in the packed Savannah Suite, Urling urged that in boosting the business sector and the country’s economy as a whole, “one must not lose sight of the national motto, ‘One People, One Nation, One Destiny’.”
Among those in attendance at the Gala were President Donald Ramotar, Prime Minister Samuel Hinds, Members of Parliament and Members of the Diplomatic Corps, among others.
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