Guyana lost a space shuttle investment a few years ago, which would have placed it on the international map, but can hosting World Cup Cricket in 2007 revive those fortunes?
The broad-based World Cup Cricket Committee (WCCC) led by Norman McLean -now disbanded- certainly thought so. It viewed the project as one with the potential to give the economy a much needed infusion as not only would it involve the construction of a 20,000-capacity stadium, but would see investments in housing, transportation and the tourism and hospitality sectors.
Guyana has to meet the International Cricket Council (ICC) criteria by May to have its bid approved to host one of the games and having a stadium is key to this. President Bharrat Jagdeo, currently in India, is expected to finalise arrangements for the design, financing and construction of the stadium by the Indian government.
McLean feels it is a "doable" project as the stadium will take 32 months to construct and there is time on Guyana's side. He says there are designs available for the construction of such a stadium and the land has already been identified between Nandy Park and Greenfield Park on the East Bank of Demerara for the project.
"This has to be seen as a once in a lifetime opportunity to showcase Guyana. Our capital Georgetown must again take pride of place in the Caribbean as the Garden City. This will be 'Project Guyana'. Its impact could be tremendous on our economy, environment and people. We hope we can remove the negatives and highlight the positives and create an atmosphere to develop and market Guyana," the WCCC said in its revised concept paper to the government on hosting the 2007 event.
As the WCCC notes, it is not just about a stadium. There will be need to house the thousands fans flocking Guyana for the event as well as to feed and entertain them.
The WCCC recommends that much like the Festival City coming out of Carifesta in the seventies , 400 to 500 houses should be built in a `World Cup Cricket Village' to be sold to Guyanese after the event to reduce the cost of the development. The committee suggests that either the National Insurance Scheme or the commercial banks get involved in this housing project and redeem their investment through mortgages.
There is also the need for an "efficient and viable" network of roads to allow for entry and exit to the stadium to and from the airport. The Committee insisted that the four-lane road to the Harbour Bridge, the new bypass road from the East Coast and a new East Bank road will all be critical to hosting the event.
"Our minibuses, their drivers and conductors have an important part to play in our transport system, requiring a higher level of service and commitment," the WCCC said.
But not only will there be increased demand for Guyanese cuisine and housing, the opportunity is also excellent for the tourist sector to get off the ground.
"The expectation, as has been seen in the World Cup in South Africa, is an enormous influx of thousands of cricket enthusiastics and tourists. We need to capitalise on the presence of these tourists to expose them to the wonders of Guyana, Kaieteur, our rivers, waterfalls, the Amazon rainforest, our flora and fauna and other eco-tourist attractions. We have to work with THAG (the Tourism, Hos-pitality Association of Guyana) and other agencies to establish the amenities and seek to promote Guy-ana, its history, culture and traditions. That old time Guyanese hospitality must be evidenced. In addition, we need to work with them in the strategies to achieve our objectives and market Guyana," the WCCC said.
At the time of the concept paper, India had not been approached to finance the venture and the WCCC had suggested that Lotto funds be used and that the government would need to guarantee loans where necessary.
"This must be seen as the biggest sporting or other spectacle which could grace our shores in a decade or more. This will certainly be the biggest event to be held by Guyana after Independence, Non-Alignment and Carifesta. This must be seen as equal to hosting the Olympics. It is therefore not just a cricket board responsibility but a truly national one requiring vision, detailed planning and national will to execute the programme to satisfy the international standards set by the ICC,' the WCCC said.
The WCCC had set out to form various committees including fund raising among others to get the US$30-35M task underway.
However, when two Indian architects came to Guyana to unveil the plans for the stadium, the co-ordinators of the visit did not facilitate a meeting with the WCCC and a miffed McLean resigned, advising the Sports Minister, Gail Teixeira, that the committee should be disbanded and a board should be instituted to get the project going.
"I do not believe the treatment meted to me was good. I thought I was treated discourteously. The people came in and had a big public showing to which I was invited but I was never introduced to them. I would have thought that the first person to be met in that visit would have been the chairman and the committee but they never met us, not once," McLean said.
McLean has not even received the courtesy of a response from the minister but remains a member of the bid committee for the government. The other members are the minister, and Chetram Singh, head of the cricket board. Neither the committee nor its members ever got a word of thanks for the government for the work it did. Minister Teixeira is on leave and could not be contacted for a comment.
The barrel remains an economic lifeline
Barrels from overseas relatives have been lifelines to countless families over the years and while many goods are available locally, barrels still are common especially at Christmas time.
Even P.J. Patterson, Prime Minister of Jamaica in a speech on October 13 remarked on the "barrel phenomenon" which he said had received very little attention in research and analytical work. "Numerous migrant dependents back home rely as much on the goods sent home regularly to them in these barrel consignments, as they do on actual remittances."
A study on remittances was sponsored by the United States Agency for International Development with the aim to investigate the relationship between migration and remittances(money and goods sent home). Entitled 'Remitting back home and supporting the Homeland: The Guyanese Community in the US' [ please note: link provided by LOSP web site ], the study revealed that US$55 million worth of remittances, sent in 1997, had increased to US$90 million by 2002. This study has not recorded the exact number of barrels brought into Guyana, though transfers that include barrels and boxes are valued at US$37 million for 2002.
On the ground it is clear the barrells remain an important form of remittance. Managing Director of Guyana National Shipping Corporation(GNSC) Harold Bascom noted, "There has been an increase... by some 30 containers(from 2002 to 2003). Quite a sum given there has not been that amount for previous years."
He said since the Guyana Revenue Authority changed its system to allow for the clearing of barrels on the wharf, it is easier for all parties involved to complete transactions. He also noted that the barrel trade operates as a survival kit for Guyanese and was not supposed to be abused by traders. Fewer traders seem to be using the barrel route at this moment.
A representative of Williams Caribbean Shipping said some 300 pieces including barrels, was their average intake for the November-December period.
King Solomon had cleared about 80 or more barrels with personal effects up to December 15. They expected at least one more shipment by Christmas. The charges paid to their overseas office are US$119-$164 for door to door shipping,
Williams Shipping brings in some 10 containers with over 180 barrels every week for the Xmas season. Their representative said normally the traffic was 4 to 5 containers weekly. In her opinion there was a decrease in the number of containers arriving this year compared with the numbers from last year.
Marketing Manager Clarence Perry at Laparkan estimated that the company ships about 30 to 60 containers of barrels with about 160 containers in each, between November and December. He observed a decrease of about 25% this year in barrel shipments.
Cut the red tape, provide clearer policies
-business sector to government
Many business leaders say if there is to be economic growth this year there must be less bureaucracy and clearer policies for business development.
These comments follow the release of the 10th Annual Business Outlook Survey for 2004 by the Ram & McRae Chartered Accountants firm in which 20 out of 45 businesses said they lack confidence in the economy.
The Chairman of the Linden Chamber of Industry and Commerce Develop-ment(LCICD) is more optimistic, but notes several steps must be taken to stimulate economic growth.
"Many people come from overseas to start businesses [but they cannot access incentives]," says Kenneth Wilfred Simmons, chairman of LCICD.
He believes an easier way must be found to allow local and foreign entrepreneurs to benefit from incentives that are available.
Edward Boyer
Simmons decried the fact that persons needing land for agricultural purposes had to go through a drawn-out process and were still not successful.
As an example he said that in Linden a speedy distribution of agricultural land would allow farmers to get access to bank loans after getting the necessary papers. Looking closer to home, he adds that the Linden community can benefit from the Guyana/Brazil road because it will mean easy access to Brazil. Simmons says a number of joint ventures can develop with manufacturing companies in Brazil since Guyana can be used as a port via other countries.
The president of the Berbice Chamber of Commerce and Development Association, Gyandat Marray, notes that reducing the bureaucracy and controlling crime are essential for economic growth.
Decentralizing government services and having local government elections can go a very long way in stimulating economic growth, he says. Marray says a bridge across the Berbice river is crucial if businesses in the area are to explore opportunities outside the region.
"It is going to be a tough year...it is a year of cutting costs and surviving," says Samuel Arjoon, president of the Essequibo Chamber of Commerce. According to Arjoon, this will be a year to consolidate whatever business opportunities there are and for the government to develop a business-friendly environment.
As for the Essequibo region, he says finding cheaper avenues to transport produce from the region is essential. He adds if the ships which buy rice from Essequibo producers can come through the Pomeroon river instead of suppliers having to send smaller boats to meet the ships, this can reduce costs. And he says if manufacturers in the region can gain easy access to the Guyana/Brazil road this will also be beneficial.
"I will like to see the government, the private sector, the unions and the opposition come up with a national policy that would embrace the development of Guyana," says Edward Boyer, president of the Georgetown Chamber of Commerce and Industry.
Boyer says this year's budget will also have to contain policies to stimulate economic growth in the manufacturing sector and the business sector.
Areas such as the tendering process must be constructive and transparent, he suggested, while adding that incentives should be given to businesses which are importing technology or equipment for retooling or upgrading their business.
Boyer also challenges, "the banking sector to accommodate more nationalistic and conscious [approaches] to development."
Regulatory bodies, he says, must do their jobs and a way must be found to decrease the backlog of cases in the judicial system. "Governmental agencies should develop a national interest. We can't sit down and wait for something to happen... we have to have a competitive spirit."
Auto Supplies Co. owner Brian James, whose store was razed by fire in November, says it is premature to talk about what measures businesses will take this year, until the budget is released.
"I think the tone of whether the economy is moving forward is based on the budget," James adds.
But James says the economy can have a better year with the recent debt relief that Guyana has received. Improving roads and other infrastructure work and creating employment, James believes, should be the government's priority after getting hold of the money.
Services such as water, improving river transportation and water and electricity supply must also be the government's top priority.
The issue of electricity is one of great concern because the service is costing in some cases as much as the businesses' payroll or even higher, James say.
Managing Director of John Fernandes Ltd, Chris Fernandes, says the future of Guyana depends on the ability of the politicians to work together.
"People are very cautious towards [making] investments," he says so meaningful political dialogue is key if people are to get confidence in the economy.
Officials from Banks DIH and Demerara Distillers Limited when contacted, did not offer any comments on what could be done to stimulate economic growth.
Some of the concerns of the 45 entities which responded to the Ram & McRae survey said the crime situation, less direct taxation, lower interest and exchange rates and enhanced governance were at the top of their list.
Nevertheless, businesses largely said 2004 should be better than 2003.
And they see the resumption of talks between the PPP/C and PNCR and the tabling of the Investment Bill as very important for economic growth.
Small business support body loans $71M in first year
The Small Business Develop-ment Finance (SBDF) institution has financed some 938 loans to the value of $71.2 million since its inception on November 6, 2002.
SBDF lends for commercial and manufacturing enterprises. Loans are processed in different ways through officers in the field, or at their various office locations on specific days. Managing Director, Manjula Brijmohan, said, "We do not expect a developed proposal. What we ask them is to discuss the needs of their businesses. We then send officers to appraise, analyse and evaluate the applicants' circumstances.
"They [the officers] are in Essequibo on Saturdays, Parika on Sundays and once a week in West Berbice. We carry out network checks before putting it [the loan] together with the applicant and preparing a synopsis. The officers look for a project's capacity for continuous development, whether the project has potential and the client's capacity to manage and operate. They also offer financial management programmes that focus on training persons in management.
"We are supported by the banking system, the private sector and international agencies, while the government also assisted initially."
The institution's interest rate on loans is about 15% on a reducing balance. "Collateral varies according to the size of loans or activities, since we take soft securities, household articles or transports. It depends on the valuation of the client," the managing director told Stabroek Business.
SBDF does not have any co-guarantor schemes, because there are no group loans.
One of the programmes promoted by SBDF is the Rural Agricultural Cash Crop programme, which is funded by the British High Commission and aims at supporting and orienting young farmers.
The mission statement of the SBDF is to strengthen the economic base of micro and small scale sector entrepreneurs in Guyana through increased access to lending, technical support and non-traditional financial facilities. So that small enterprises could position themselves to be most competitive and take advantage of their size to participate in the world markets in an era of intense global competition.
Dairy industry poised to capture local market
Agriculture Ministry affords technical skills, pushes cottage industries
By Nicosia Smith
Liquid yoghurt, yoghurt, soured cream and a dip - some of the products being produced with cow's milk at the Good Morning dairy plant in Sophia.
The Ministry of Agriculture and the National Dairy Development Programme (NDDP) at Mon Repos, are hoping to give the local dairy industry an added boost by encouraging families to develop cottage industries using local milk and they are providing dairy farmers with technical training.
Dairy consultant Dr Appupillai Murugan, who is attached to the NDDP says the climate in Guyana is very conducive to milk production and farmers need to take advantage of this.
"This is the high time for the farmers," Dr Murugan says, "to produce clean and quality milk and milk products to get an assured market."
It is hoped that with the increased emphasis on the dairy industry, families and entrepreneurs will utilize local milk to make products such as ghee, butter and ice-cream from the fat of the cow's milk. And from the milk itself, cheese, yoghurt, panneer and milk sweets. Dr Murugan says with proper packaging and good preparation such production can be a lucrative business for families. Recipes for cottage cheese, yoghurt and panneer are given at the end of this article.
Exhibitions by the NDDP during Guyana Nite 2003 and the Sophia Caribbean Week, organised by the Ministry of Agriculture, were geared to create awareness among consumers and farmers about the milk products and by-products that are or can be made available here.
Dr Appupillai Murugan
Dr Murugan specializes in farmers' organisation, cattle breeding, infertility treatment and control. He is a dairy consultant with the Indian Technical Economic Corporation (ITEC) on a one-year contract with the Guyana government. India produces 83 million metric tonnes of milk per annum, through various dairy cooperatives and is considered a world leader in milk production.
"The agro climatic conditions are very highly suitable for dairying... Guyana is a fertile land with plenty of water and greens which is ideal for cattle rearing," Dr Murugan indicated.
He says: "Though cows' milk contains lot of health values, the consumers avoid this valuable product for the sake of uncleanliness and adulteration of the milk."
In the past, several companies which ventured into the dairy industry on a commercial basis were confronted with a shortage of milk and inconsistent quality. Dr Murugan feels that one of the major causes of their setbacks was that these companies did not fully analyze the state of the dairy industry or the farmers who were involved.
But he adds that the NDDP is currently ensuring that the farmers, who are the foundation of the dairy industry, are producing clean milk and that they receive advice from trained technicians. For example, farmers who do not have milking machines can continue to milk with their hands as long as they take certain steps. These include placing the cow under a shed, cleaning the cow's breast as well as the immediate surroundings; the farmer's hands must also be cleaned.
At present, the NDDP is working in Regions Two, Three, Four, Five and Six, since these areas have very large cattle populations and already plants in Regions Four, Five and Six are producing pasteurized milk.
Dr Murugan also adds that for the moment, he would like to see cottage industries develop to supply the family base before expanding the marketing of milk and milk products commercially. It is estimated that 55 percent of the milk on the local market is pasteurized and local milk producers can take advantage of this.
Milk production in Guyana is currently seven million gallons per annum, compared with the 12 million gallons produced in 1993. Stabroek Business was told that one reason for this decline is recent World Trade Organisation policies which facilitate the easy importation of the powdered milk. This is widely being used here instead of local milk.
Dr Murugan says his plan is to teach everyone about the need to consume milk, especially local milk.
Currently demonstrations are being done in Regions Two, Three, Four, Five and Six, with lectures are being given to school children in each region about the benefits of drinking milk. If the importance of fresh milk and milk products is imparted to school children, Dr Murugan feels, they in turn, can help to change the attitude of their parents. "Cow milk can never be substituted by powder milk or any other source," he adds.
Facts about Milk
Milk is said to be a gift of nature and it is the only food which can be consumed continuously from birth to death. It is also the most nutritionally complete and perfect food - with protein, energy fat, vitamin and minerals.
Cow's milk, according to some researchers, produces immunoglobins which are responsible for the development of immunities in the body against diseases. It is also said to contain anti-carcinogenic factors which prevent cancer.
Besides this, cow's milk is the cheapest and richest source of calcium, contains quality amino acids and is easily absorbable compared to other drinks and food.
Developments in the
local dairy industry
Recently three dairy processing plants were established locally to produce value-added dairy products. The plants are Good Morning, in Sophia, Moogoodies, in New Amsterdam and White Gate Dairy, in Mahaicony. The White Gate dairy plant, which was built through funding from the Food and Agricultural Organization (FAO), produces chocolate, vanilla and strawberry flavoured milk.
It also plans to produce panneer (an Indian milk product), milk sweets, yoghurt, ghee, cheese, whey wit (a milk drink) and pasteurized low fat milk.
Moogoodies produces low fat pasteurized milk, yoghurt and cream cheese.
Good Morning produces liquid and solid yoghurt, pasteurized whole milk, soured cream and a dip.
Large manufacturers
Michael Pereira, operations manager at Banks DIH says Banks does not use local milk in any of its milk products.
For example, the milk mixture for the Banks' crème liqueur is imported because the milk used is a special mixture and the liquor content is added. For Demico Ice-Cream, powdered milk is used.
Pereira says at the moment it is very profitable to import the powdered milk for the ice-cream and to import other packaged milk products from Trinidad such as the peanut and chocolate punch as well as the low fat and full cream packaged milk.
Because of the added hygienic measures that must be taken to produce milk products at Banks, as well as the small quantity being sold, Pereira says the investment may not be warranted. "The quantities that we sell are so small it does not call for an investment," he says.
One thousand cases of milk products with 12 in each case take approximately three months to be sold, he says. And competing with other foreign milk products on the market also affects the rate of sales.
An official at Sterling Products Ltd which makes Creamo and Igloo Ice-Cream says it is very convenient for the company to use imported powdered milk. Sterling imports milk from Canada and America.
Officials there say, "for us to [use local milk] we have to have the facility for storage," which they do not have at the moment.
They also add that even if the local milk is to be used it must be readily available and the quality must be reliable. Sterling produces 500 to 700 gallons of ice-cream per day.
Home-made yoghurt
Nutrient value
-Using Whole Milk
4-5% fat
3-4% protein
4-5% lactose (sugar)
-Using Skim Milk
Less than 0.5% fat
4-5% protein
5-6% lactose
Ingredients:
2 cups (500 ml/16 full ounces) milk
2 1/2 tbls milk power
2 tbls yoghurt
Method
1. Combine two tablespoons of the milk with the milk powder to form a smooth paste. Add the remaining milk, whisking to ensure the mixture is free of lumps. Transfer to a medium pan and heat almost to a boiling point.
2. Pour the mixture into a large casserole dish and cool until it is lukewarm. Blend three tablespoons of the lukewarm milk with the plain yoghurt, and then gently stir it back into the remaining lukewarm milk. Cover with the lid of the casserole dish or foil.
3. Wrap the dish in thick towels or a blanket. Leave undisturbed in a warm place for six to eight hours, or until thickened. Chill for at least four hours before using. Do not keep the yoghurt for more than one week - it becomes very acidic if it is stored for too long. Makes about 600 ml (12 full ounces)
Cottage cheese
Cheese is one of the most important products of the dairy world. It is considered nature's versatile food and has long been recognized as the best method of conserving and preserving the nutritional wealth of milk. It is highly digestible.
Cottage cheese is a soft unripened variety made from skim milk (fat removed milk). It is a good source of quality protein and low in calories.
1 gallon of skimmed milk will produce about 160 grammes of cheese (depends on the quality of milk).
Materials required:
-1 gallon skimmed milk
-Muslin cloth to strain
-Citric acid one ounce in half pint of
water or seven lime fruits
-Salt to taste
-Colour if needed
-Pepper or garlic or onion on choice
Method
-Strain the milk to recover any dust particles in it.
-Heat the milk to 84 degrees celsius
-Add citric acid or lemon
-Stir to avoid boiling
-Look for curd formation and when curding is complete, stop adding acid.
-Strain with a muslin to separate the whey.
-Add salt to taste. Other ingredients like pepper, onion or garlic for flavour can be added if needed and colouring can be added on choice.
-Press the content in the muslin with a weight (about 20-30 kgs) for two to three hours.
The shelf life of this soft cheese if stored in a refrigerator is less than a week.
Panneer
Panneer is a milk product obtained by acidic coagulation of milk at about 80 degrees celsius followed by removal of whey and pressing. Panneer is used for preparing vegetable dishes or eaten raw, and with sugar, or to prepare sweets. If panneer is prepared from high fat milk it results in a smooth product. Panneer contains high nutrients; one gallon of milk will produce about 300 grammes of panneer.
Nutrient value:
-24 to 26 % fat
- 17% protein
- 45% total solids
Ingredients:
-1 gallon of milk
-1 cup of curd
-10 drops of lemon juice
Procedure: (1 stirrer to stir, utensil and some weight to press the panneer)
-Boil the milk in a clean utensil
-Add the curd or lemon juice in water to the milk, when it is in the boiling stage
-Keep on boiling until the milk curdles
-Pour the entire product into the muslin cloth and squeeze 80% of the whey out
-Keep a weight on the panneer collected in the cloth for 15 minutes to drain the last of the whey
-Then cut the panneer into pieces as per desired shape
(Recipes courtesy of Dr Appupillai Murugan)
Long-term purchasing: pro or anti consumer?
As yet unregulated in Guyana, hire purchase is perhaps the most widely used purchasing option in the retail industry, especially with regard to household appliances.
Similar to leasing, hire purchase allows people to make use of equipment while still paying for it. The difference is that in a hire-purchase agreement persons take ownership of the item with the last payment of the agreement. The item purchased is the security, therefore only when all the repayments have been made does the purchaser fully own the item.
Among the advantages of hire purchase is that it offers an excellent way to spread the cost of acquiring equipment. It is particularly effective with long-life equipment; allows ownership of the item from day one and its fixed repayments could help enable accurate budgetary and financial controls. However, hire purchase also has disadvantages as in some instances items purchased require costly maintenance, can become out of date or depreciate in value. Usually, a substantial deposit is required and there is the likelihood of a penalty, if the agreement is terminated. More importantly, the hire purchase price is way above the cash price, sometimes more than doubled.
Stabroek Business spoke with a few of the major players in the hire-purchase arena to have a feel of their default rates given the high interest rates attached to the service.
"All 65,000 of our customers are very happy with the service we provide and we are giving them the opportunity to have the things they would like to have," said David Burgess, managing director of Courts Guyana Inc. "If you talk to [Minister of Industry and Commerce] Mr [Manzoor] Nadir or the Prime Minister they will tell you that they like what we are doing."
Though reluctant to quote figures, he revealed that the default rate at Courts was about 15%, which translates to about 9,750 customers.
"At Singers, hire-purchase customers choose their own period of repayment, which can be anywhere between 12 and 36 months. If payment is completed within six months, they pay no interest. If payment is made with in a year the interest rate is reduced," Singers' Marketing Manager, Eric Whaul, said.
With regard to defaulting, he said that when customers go over the credit period they are sent a notice. And if they continue to default then a second or even third notice is sent, after which a customer must go into the store and pay a substantial amount. Whaul insisted that after the third notice most customers usually paid a substantial amount of their outstanding debt. He said that the default rate was not high, since Singers' staff took pains to advise people, based on their salary and ability to pay. Although some people were deliberately delinquent, he said, it was just a small number.
Additionally, interest rates at Singers are lower than that of its competitors and as a result, Whaul claimed, over the past ten to 11 months consumers have been switching to Singers. He also said that "the Singer's warranty tends to be longer."
"Defaulting applies to anybody since people run into difficulties. For instance someone may fall ill and have to go overseas," Whaul said. "This is only one of several different circumstances that may affect a customer's ability to repay on a purchase."
Kissoon's Company Secretary, Harry Basdeo, said that their hire-purchase rate was calculated at 32-33% on the cash price. While the default rate on such purchases is calculated at some 10-15%. "All types of people default. It varies to all areas and different types of items", he said and defaulting occurs because of both lifestyles and the present economic situation.
He said that Kissoon's expended millions of dollars to finance their hire-purchase scheme. The returns vary, according to the level of sales existing at the time.
Persons looking at long-term purchasing can also borrow money from banks, where almost the same form of security is required as in stores which offer hire purchase terms. A customer applying for such a loan at the Guyana Bank for Trade and Industry, the National Bank for Industry and Commerce (NBIC) or the bank of Nova Scotia, would be required to have a deposit of up to 25% of the cost of the item.
At Scotiabank loans below $100,000 are not offered and borrowers are required to assign their salaries to the bank.
However, as stated by Mahendra Hardial, a loans officer at NBIC, "it is way easier to take a loan from the bank and repay the bank at a 7%-15% rate of interest. This may work out to a customer paying $7000-$15000 in interest." This means that if a customer wants to purchase an item worth $80,000 he/she would have to have a deposit of $16,000. For such loans, banks require customers to repay within 18 months.
EDITORIAL
A new challenge
This is the first attempt by the Stabroek News to publish a weekly business section, which it is hoped will grow and become a part of business life.
Information is crucial for the effective functioning of markets and while Guyana is emerging from a culture where all information is regarded as state/business secrets, this it is hoped, will change.
Stabroek Business hopes to engage the interest and opinions of businessmen and policy makers in discussing the development of a viable capital market and a business culture.
It hopes the government will rethink its policy of having the agreements it enters into, on behalf of Guyana, with the international financial agencies withheld from public scrutiny. There is no such thing as policy information getting into the wrong hands. The government is not in competition with anyone who can steal its trade secrets in these agreements. Agreements with the IMF or World Bank concern every Guyanese and it is their right to know what they entail.
For the last few years, the government backtracked on having its Article IV consultations and its IMF-monitored programmes published on the IMF website. None of these agreements have been laid in parliament and Stabroek Business restates that government business is no secret. These documents should be publicised as soon as they are available to allow for a timely flow of information, which is crucial for markets to effectively function.
On the part of private businesses, we hope that those large public companies which are reluctant to speak to the media on any issue, however controversial, will cultivate a new attitude of openness and transparency. After all, public companies have a duty both to shareholders and to potential investors. They do not belong to the directors or managers and with the fledgling stock exchange, there is all the more reason to be open and transparent.
Stabroek Business cannot do it alone and needs the support of both policy makers and businessmen to help cultivate the culture of business information flow. This publication recognizes that it will be an uphill struggle at the start and wishes to encourage everyone to see Stabroek Business in the light it is intended - to facilitate a market economy driven by timely information.
We aim to offer quality, in-depth reports but while in the start up period this may be difficult because of human resource/skill constraints, we welcome any views and letters on business issues as well as comments on how to improve this publication.
We are on the start of a journey which we hope will become a Guyanese name brand -Stabroek Business - and look forward to your comments, criticisms and support.
Business Letter...Business Letter...Business Letter...Business Letter...Business Letter...
Guyana should consider export-led growth policies
Dear Editor,
The recent reduction in mortgage rates would definitely boost the government's land distribution and homeownership programme.
However, the circumstances surrounding this decrease have macroeconomic implications. This decrease is a result of the increased savings recorded by the New Building Society and is accompanied by a decrease in the interest rate on savings.
The director of this institution holds that the institution could have very well lowered savings rates and kept the lending rate constant. This option was overlooked in order to make borrowing more affordable.
While reading the November 2003 edition of the Stabroek Business I made an observation. A recent Bank of Guyana Report showed that the total deposits in the economy stood at $105 billion in 2002. This amount was $11 billion in 1990 thus representing an 854% increase. This is interesting. We have seen that in the commercial banks there has been a decrease in the interest rate on savings from about 7% to an average of about 3.54% in the last three years, but in contrast there has not been any noticeable decrease in lending rates over the period. Shouldn't there be a decrease in the average interest rate with increased savings? Is this implying that the banks in Guyana are raking in monopoly profits as a result of some price fixing arrangement? I hope not.
Increased savings are also an important economic achievement in that, supply-side economic theory teaches that savings equals investment. With high savings there is a lowering of the pressure on lending rates because of the availability of credit in the system. This theory is accurate when we consider that lending rates have decreased from 36% in 1990 to 18% in 2002 in Guyana.
Supply-side policies were used extensively in the Japanese economy during its magical years of 1950 to 1990 that saw economic growth reaching a high of 16 per cent. Because of this the Japanese are called a 'nation of savers.'
Guyana being a country with a small population should definitely consider export-led growth policies and as such these developments are most refreshing.
Yours faithfully,
Rovin Stanley
More traffic but few benefits for Rupununi
Businesses and communities in the Rupununi say they are still to see substantial economic progress despite the area becoming more accessible to people from other regions, with the recent improvements to the Lethem/ Georgetown trail.
One businessman in the Aranaputa Valley or the Annai Basin, which is a three-hour drive from Lethem, says business is good but most of his customers are locals living in his area and not the users of the road.
"The people who pass through contribute very little," says Sucil Kissoon who owns a grocery/general store.
Among his customers are teachers, health care workers as well as private farmers. In fact, he says the migration of youths to Brazil and Georgetown is also affecting business by decreasing the spending power in the area. Statistics from 2002 show the population in Region Nine at 22,000.
Nevertheless, Kissoon says he is able to cut his transportation costs by going to Boa Vista, Brazil to purchase certain canned food, clothing and appliances, instead of going to Georgetown.
Items such as rice, sugar and flour are still bought in the city.
Meanwhile, Terrence Boston, a rancher located a few miles from Lethem, says the road is contributing to an increase in cattle rustling.
Boston said from August to December 2003 he had lost 60 head of cattle to rustlers who he believes sell to truckers using the road. Norma Rodrigues, a rancher in the North Rupununi, also says she has lost cows and horses in the same way.
For the Helping Hands Women Group of St. Ignatius, the road means better access to markets in Georgetown for their cashew nuts. The 13-member group supplies 17 supermarkets in the city.
The women had received assistance from the Rotary Club of Canada, the United Nations Children.s Fund and from other groups, to invest over $388,000 to buy 3,430 pounds of raw cashew nuts. As of December they had made over $1.6M from their investment.
Sixteen women who make cassava products at the Bina Hill Institute in the North Rupununi will also be hoping that the road will also mean more markets for their products.
Some of these are farine, casreep, tapioca and cassava bread.
The women started the Surama Cassava Project to generate their own incomes when their husbands were away and to improve their standard of living, but say they need technical support in marketing and packaging.
"The road will have an impact whether negative or positive," says Rodney Davis, chairman of the North Rupununi District Board.
Davis says the North Rupununi will need leaders with the initiative to create business opportunities since the area is suffering socially and financially.
Because even with all the grandiose projects the road promises to bring, right now many homes still have troolie roofs and mud walls and the children still go to school barefeet.