…over?
if we’re to go by statements coming out of this Administration, you wouldn’t be blamed for concluding they’ve given up on the developmental model launched after WWII. Which declared that while poor countries like ours had natural resources, we needed CAPITAL – Foreign Direct Investment (FDI) – to develop them into exportable products. These could then be exported to provide foreign currencies that would enable us to buy all the things from abroad to deliver the good life. Sounds good, nuh?
Trouble was…there were two dozen poor countries to every “developed country” with capital…so the challenge was how to break out of the pack to get their hands on the capital. They came up with inducements like “tax holidays” – where there would be no taxes for a stated number of years; reduction/elimination of duties for importing machinery; land at concessional rates – etc etc…
But with our early leaders Burnham and Jagan vying to prove who was a “better socialist” than the other, they both nixed the idea of “dropping their pants to the capitalists” – as they dubbed it. Burnham preached “self sufficiency” through cooperative socialism which had collapsed and abandoned by the time the PPP slipped into office in 1992. By which time the whole socialism bit was abandoned even by the USSR. The old “development by attracting FDI” became all the rage again.
GTT had already been invited in by the PNC along with Barama and both were given State assets at fire-sale terms just to get them to look at us. The PPP continued the policy since it’d been insisted on by the IMF which has bailed us out of the socialist fiasco. But the PPP was heartily criticised by the Opposition and its allies in the press for some of the “inducements”. It all came to a head with the Chinese company BaiShanLin.
For reasons that still aren’t clear, the Muckraking KN became the Chinese Company’s bete noir over the last two years and made it into GUYANA’s foreign “Public Enemy Number 1”. They even dragged Minister of State Joseph Harmon into their vicious vendetta of vengeance. In that climate, earlier this month, Prezzie announced he’d be “reducing concessions to foreign companies to create a “more level playing field for local investors”.
This Eyewitness believes Prezzie would be throwing out the baby with the bathwater…because foreign companies don’t just bring in “capital” – they also bring in technology, foreign markets and managerial talent. Perhaps because of their weakness in these areas, domestic companies just haven’t been stepping up to the crease to invest.
Specifically in forestry, which of the locals will take up Prezzie’s challenge?
…on counterattack over?
Our Foreign Affairs Minister is taken aback at BaiShanLin taking their case to the UN, claiming Guyana’s breaking an agreement between China and Guyana on conducting business here. BaiSanLin claims it’s been “crippled” by the actions of the Government. And the agreement guarantees an Arbitral panel to handle disputes.
But there’s also another forum that’s been around since the sixties – on the insistence of the IMF – when the first drive to attract FDI became a hot topic. This is the “International Centre for the Settlement of Investment Disputes” (ICSID): the primary institution for handling the cases that companies file against sovereign states.
This investor-state dispute settlement (ISDS) option has been used with increasing frequency in the new millennium and in fact, the US is insisting it be inserted with Free Trade Agreements it’s crafting with both Europe (TTIP) and the Pacific Rim countries (TPP).
It’s a new world, out there. Guyana better get with the programme!
…and a reality check
We Guyanese are fond of boasting about our “resources”, But whatever we have, other countries have that…and then some. And the “then some” are the inducements.
It’s not as if we’re beating away foreign investors with a stick.
