Guyana will lose many opportunities unless mindset evolves – Jagdeo tells Private Sector
…says much interest seen in commercial banking
Vice President Dr Bharrat Jagdeo has outlined a series of undertakings that are in the pipeline for the future – all geared at enabling a better environment for Private Sector expansion and investments.
Speaking during his feature address at A corporate dinner organised by the Private Sector Commission on Wednesday evening, the Vice President pointed towards a series of factors which influence investment and increase economic drive.
He highlighted that avenues must be cultivated for the local Private Sector to have their projects financed at a competitive rate, to grow the financial sector in a particular direction.
“We know that our Private Sector, even when they have good projects that are bankable, are having a hard time accessing financing, and the cost of that finance, even when they access it, is often prohibitive because they’re competing with investors from abroad who have a lower cost finance.
“Unless we find a way to address this issue permanently, our local investors would be at a disadvantage,” he told the gathering.
It was pointed out that part of the local content policy would deal with more payment flowing through the banking system, attracting larger institutions around the world and having a greater presence locally.
Jagdeo noted, “We have to roll out a strategy along that line, and that’s what we’re working on at this point in time. We’ve already been very cautious, conservative in our financial sector liberalisation, to restrict the number of commercial banks and other financial institutions in Guyana. We did so in the early period because we had eight state-owned institutions that were all bankrupted and the entire financial system was very shallow.”
Presently, he said, the market has somewhat stabilized, and Government is re-exploring the granting of new licences to a number of commercial banks – an area of significant interest.
“We’ve had a large interest in this sector, and a fairly high number of banks that have applied, so we’re thinking about expanding that a little more aggressively. We are going to be licensing institutions that are non-deposit-taking institutions, so that they can bring in additional capital without putting the local savings at a risk.”
Additionally, while addressing the issue of lower energy costs, the Vice President said the combination of gas-to-power, hydropower and solar power in the main network should alleviate this current challenge. At present, the aim is to have stable power until these plans are realised.
Jagdeo underscored, “We’ve already started moving this forward. We have $85 million sitting in the IDB. That is going to be deployed shortly into solar systems for Essequibo and Linden and some areas that are not connected with the grid. We have about 15 projects that can serve the communities that are not connected with the grid. We have to build a smart grid that, hopefully, will be financed there. The gas-to-shore, work has started on that.”
With some sections questioning the feasibility of the project, the Vice President clarified, “We have done the feasibility. It’s technically feasible and financially feasible…It’s a no-brainer for any sensible person, given the cost of generating power. Another set said it’s a disaster that we’re moving ahead with this pipeline without an environmental study. The pipeline will not be built tomorrow. The study is being done now.”
There is also the issue of changing the pace of doing business locally, in keeping with international practices and breakthroughs to execute initiatives at a faster rate.
“We have an international presence here that operates at different levels of competency and different pace of getting things done. Unless we evolve in mindset, both from the Private Sector and the Government, to adjust to that pace of moving the economy forward, we would be left behind or we would lose many of the opportunities that could come to our people, the Guyanese Private Sector and our country,” the former Head of State identified.
Last week, Natural Resources Minister Vickram Bharrat asserted that the country has always suffered from the cost of power-generation – a great hindrance to development. He said Budget 2021 lays the foundation to alleviate such matters.
The Minister further added that the PPP/C administration has no apologies for incentivising the Private Sector, because it is a partner that will allow for expansion of the traditional sectors.
“The Government cannot develop the country alone; the Government cannot employ every single Guyanese. We need the Private Sector, we need the foreign investors to come to our shores, and we will continue to partner with the foreign investors and local Private Sector to ensure that we move all of our sectors forward…We are not only focusing on our new and dynamic sector, which is oil and gas; we’re also focusing a lot on our traditional productive sectors,” he was quoted as saying. (G12)