President of the Georgetown Chamber of Commerce and Industry (GCCI), Deodat Indar, is calling on stakeholders to increase their exportation of locally produced and manufactured goods, as he highlights the continuous increasing of the country’s trade deficit.
During a presentation at the Annual General Meeting (AGM) of the Private Sector Commission (PSC) last Thursday, Indar drew attention to the figures from the Bureau of Statistics regarding Guyana’s exports in the first quarter of 2018.
He noted that from a total export of US$325 million between January and March, 59 per cent is raw gold; bauxite represents 9.6 per cent; and shrimp and prawns 8.8 per cent. However, what was more startling, the GCCI head pointed out, are figures like 2.5 per cent for timber export, one per cent for sugar, and fruits and vegetables one per cent as well.
“[Those are] very strong figures for such very large industries…that is something that needs to be looked at seriously, because those are main foreign currency earners… and this is just the first quarter information… So that is telling a story that we need to export more in the different sectors, not just the primary commodities. Our finished product, manufactured goods and so, needs to be exported, and in that way we can build our export capacity,” he posited.
Indar, recently elected PSC Vice Chairman, went on to highlight some of the bottlenecks in Guyana’s exportation capability. He explained that while Guyana
GCCI President, Deodat Indar
has a liberalised trade policy with many agreements with different countries, the country does not always reap the benefits.
“We have bilateral agreements with Colombia, with Costa Rica, DR (Dominican Republic), in Argentina and in China; as well as partial scope agreement with Brazil. So we have all of these agreements, but the question is: Is it to the benefit of the Guyanese businesses?” he asked.
The GCCI President turned his attention to the ‘CARICOM Bloc’, saying that although the region remains accessible, the single economy aspect is something that continuously needs to be worked on. He outlined that the local private sector finds that while there is some level of integration between Caribbean partners, there are some things that still need to be ironed out; such as certain clauses in the Treaty of Chaguaramas.
He mentioned as an example that if Guyana wants to export honey, it cannot go to Trinidad, or even via Trinidad, and this stifles honey exportation here.
He outlined that despite the Bureau of Statistics’ figures showing trade deficits for 2014, 2015, 2016 and 2017, there seems to be a closing of the gap; which says that more locally-produced goods are being used, and local consumption of manufactured goods is being promoted. This, he said, is a good trend, and would lessen the effects of Guyana suffering from export shocks and commodity prices.
According to Indar, Guyana has recorded continuous trade deficits in recent years, and there are different reasons behind this.
“But the thing is: if we go into agreements initially, we find ourselves importing more than we export. How do we deal with that? That’s a conversation that the private sector has to work with the Government on, to try to set up all of the institutions, all of the competitive structures that are needed to take different sectors and make them export-ready. We do have some, and I think we need to broaden those,” the GCCI Head asserted.
Moreover, he further outlined that foreign direct investments have also been on the decrease from 2014 to 2017, and when that happens, it affects aspect of the influx of foreign currency that Guyana badly needs.
He noted that most of the imports are being bought and the invoices are in US currency; so, to balance out the trade and ensure there is a stable foreign currency market, foreign direct investments are always a good thing, not only for the country, but (for) the private sector as well. Against this background, he noted that there needs to be more encouragement of non-oil investments.
“So although Guyana might be 127 on the World Bank’s [Ease of Doing Business] Index, that does not stop an investor from coming to Guyana and invest in oil projects, because that’s happening now right before our eyes.
But what we need to do is look at the non-oil projects, those are the ones that are on the periphery support system – in infrastructure, medicine, education, security, and all of those other things – we need to look at investments in those areas that are non-oil,” he opined.
