Lack of preparation for globalisation can cost Guyana billions -GCCI warns
March 4, 2004
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The warning was contained in a presentation the GCCI made during consultations with Finance Minister Sasenarine Kowlessar on the 2004 National Budget. The GCCI met with the Minister on February 26 in the Ministry's boardroom.
According to the GCCI, a World Bank report has warned that the Caribbean stood to lose one third of its US$12.5B in annual exports due to the effects of globalisation.
"If Guyana is to survive and compete in a globalised system, fiscal policies must be planned to boost investment, communication and transportation networks must be strengthened and social policies must be the focus as a vital strategy for national development. The impact of future trade policy decisions will be vital for Guyana as for other developing countries," the GCCI said.
Pointing out that Guyana is heavily dependent on European markets for its export income from traditional agro-based industries, particularly sugar, rice and rum, which had long benefited from preferential trading arrangements with the European Union (EU), the GCCI noted that these arrangements are now due for renegotiation.
"There lies a great potential for Guyana in Europe's organic market. The tourism industry is another sector, which will have positive spin-off in the entire economy. The business community must be given all the support necessary to expand and create wealth," the private sector body urged.
The GCCI felt that a National Export Strategy could be helpful, acknowledged that the private sector must challenge itself to create exports and not depend on local and domestic market. "Additionally, there is need for a change of attitudes in the business community and not be too dependent on government."
Addressing the issue of wealth creation, the organisation noted that Guyana can become a major trans-shipment point between Latin America and Europe and the potential is also ripe for the government to create export bonds which will facilitate the service and commercial entrepreneurs re-exporting foreign goods at a profit.
Raising concerns about the "adverse impact on certain macro economic factors" on the business community, the GCCI referred to the political disturbances, which had plagued the country and the "uncontrollable crime situation". These negative events, the organisation said, have resulted in billions of dollars in losses and possible endangerment to local and Foreign Direct Investment, which plays a major role in economic development of a nation.
The GCCI also told Minister Kowlessar that Guyana must fine-tune macro-economic policies, restore discipline in the finances of public enterprise and have institutional and legislative changes to help create an enabling environment.
"There must be a momentum ... to enable businesses to grow and create a maximum number of productive jobs. Faster and efficient delivery of government services is critical to improving business climate. Certain services need to be available online. The delivery of the whole range of services electronically has to be accelerated to cut down on waiting time and reduce costs to businesses," GCCI said.
Among the other concerns of the organisation are the introduction of value-added tax to jumpstart the economy; the raising of the income tax threshold to ensure the average consumer has increased spending power; the reduction of the PAYE rate and the expediting of regional linkages which would allow trade flows with Guyana's neighbours to increase; improving the efficiency of the legal system and a reduction of some banking rates.
The organisation also said it would welcome any relief from Customs problems.