World Bank surveying investment climate
Stabroek News
May 14, 2004
The World Bank launched an investment climate assessment (ICA) in Guyana last week and its findings should be presented to the government in about nine months.
"Having political and macroeconomic stability is prima facie for investments but that is not to say that the government cannot take actions (independent of these) to improve the investment climate," Charles Feinstein, sector leader: finance, private sector and infrastructure in the World Bank Caribbean Country Management Unit told Stabroek Business on Wednesday.
A Bank team was in Guyana between May 5-8 to launch the ICA and had meetings with both sections of the private sector and the government.
Feinstein says the Bank offered to conduct such an assessment for Guyana, and the government subsequently requested the bank to go ahead and do the ICA. He says the ICA was found to be beneficial in countries where it has been done. Simultaneous ICAs are to be done in Jamaica and Trinidad by the World Bank.
The World Bank official says the study will last a while as it requires extensive survey work. Consulting firms would be hired to do interviews and sampling of both local and foreign investors on their experiences in Guyana.
"A series of interviews will be done to determine how Guyana's climate rate and what are the major pluses and disadvantages of doing business in Guyana," Feinstein says.
Asked whether the ICA is prompted by the low growth rate Guyana has seen in the last few years, Feinstein says that the stagnation has been a reason but was not the motivation.
He notes that Guyana is one of the poorest countries in Latin America and the Caribbean and the ICA will determine what needs to be done to achieve and re-ignite economic growth.
However, in the past few years, the falling growth level has been blamed on political instability, weather conditions or the crime situation. Put to Feinstein that politics has a destabilising effect on economic growth, he says the government can still act to encourage investments.
The growth targets for Guyana over the medium and long term have been revised downwards, even in the face of the economy growing under one per cent on average in the last few years. (See page 8B for other story).
Already, questionnaires have been sent out to businesses to determine how the local investment climate affects productivity.
"The goal is to advise government on ways to change policies that hinder private establishments like yours and to develop new policies and programmes that support productivity growth," respondents were told.
Questions on the investment climate sought to determine what the constraints to growth were, government/business relations, the effect of crime on business and even the level of corruption necessary to execute transactions with the government.