A look at those investments

Jan 24, 2012 Editorial

Guyana has been looking at foreign investors for a very long time. This stemmed from the fact that people in foreign countries were always seeking investment in other countries either because there is a lot of money to be had or because there are tax concessions to be had when an individual invests in another country.
The United States, perhaps because it had grown uncomfortable with distributing money to the poorer countries of the world even though it has its own poor people, made a pitch to those of its foreign nationals who had money to invest. The United States Government offered a tax relief to United States-based Guyanese who wished to invest in Guyana.
Indeed. Had they invested the same sum in the United States the returns would have been less because the tax structure would have been greater and the subsequent wages bill would have been higher since the minimum wage is so much higher than what operates in Guyana.
Over time many investors have come to Guyana. In fact, most of the big businesses a few years back were owned by expatriates. Things reached the stage where the locals began to take over. They had amassed their money and it was time for them to re-invest.
There were investments in the mining sector and the Brazilians led the way. Guyana benefitted and its gold production soared. The Brazilian investment is keeping the industry alive and Guyana can boast of record alluvial gold production.
There has been significant investment in the communication sector. The first of these was the investment by Atlantic Tele-network. This investment saw the drastic improvement in the local telephone service. Today there is scarcely any section of the country that is not accessible by phone. ATN is an American company and it is enjoying the promised tax relief given to companies that invest outside the United States.
The situation gets even better. The United States also guarantees protection to those companies. It orders small countries like Guyana to refrain from imposing legislation that would affect the companies. Nationalisation is out of the question. Venezuela may be the exception to the rule but it is a power that has dared to confront the United States.
Now Guyana is seeing massive financial inflows from China, the growing world power. With a population larger that more than half the global population China has grown by leaps and bounds. It has reached the stage where it must seek opportunities outside its borders. For years it has been investing in its own development. Such has been the case that it was on record as recording a level of growth that was unheard of even in the other world powers.
Now Guyana has been singled out as one of the countries into which China is prepared to pour its money. It knows the returns are great. The investors see Guyana as a gold mine. However, nothing comes without a string attached.
Guyana, desperately for money to promote its development has seen the interest by the Chinese as a blessing. With its mass of money the Chinese can afford to grant soft loans and Guyana is a willing partner in accepting the loans.
What we must be prepared to accept is the quality of goods that we get. The Chinese themselves say that they are good imitators. They can make two articles that look the same but very close inspection would reveal the difference in quality. The prices are also different.
Fortunately, the Chinese are so far only involved in the construction sector. But even here they will be supplying the material for the construction. Are our engineers good enough to detect the difference in the quality of the goods?
Indeed, we may find that at the outset the finished product may look as good as anything under the sun. The proof of the pudding will be in the lifespan of the product or the project. We have the Skeldon Modernisation Plant as an example. We have spent untold millions on this plant but we are still to get the best for the investment.
We are not looking at the hydro project, the Marriott project and even the airport expansion project. Will we get value for money?

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