Corruption issue takes centre stage at investment seminar

Jun 30, 2013 News

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-govt. insists Guyana remains attractive

“If perception is reality, then change is mandatory.”- Francis Forbes

It was supposed to be a straightforward two-day forum geared to improve Guyana’s investment profile.
But the Guyana Investment Conference, organized mainly by the diplomatic community and a number of prominent sectors, was anything but that.

On Friday at the Guyana International Conference Centre, Liliendaal, Government went on the defensive, maintaining that the local investment climate remains healthy but that a few things need fixing.
This was minutes after a regional expert hired to implement a crime and security strategy for CARICOM said that there is a perception that corruption is prevalent or endemic in Guyana.
Finance Minister, Dr. Ashni Singh, made it clear that his government is unhappy over the agenda for the seminar which while it dwelled in no small way with crime and security of Guyana, failed to address burning issues of cost of power and bandwidth.
The Minister, clearly at odds with the tone of the seminar, also echoed President Donald Ramotar, who on Thursday blamed international perception reports for negatively affecting investments to Guyana.
The government was one of the organizers with the High Commission of Canada as the lead organiser. Also collaborating for the forum were the European Union, the United States Embassy, the British High Commission, the United Nations Development Programme, the Inter-American Development Bank, REPSOL, Pacific Rubiales, the Private Sector Commission, the Beharry Group of Companies (specifically, GBTI and NAFICO) and the Georgetown Chamber of Commerce and Industry.
A press conference on Friday following the seminar no government official was present. Only US Ambassador D. Brent Hardt and Canadian High Commissioner, David Devine were there to host it.
The day before, President Ramotar accused diplomats of overstepping their boundaries and taking positions without prior consultation. On this front, he blasted the United States government for downgrading Guyana in its annual Trafficking in Persons report.
“Here again we see how subjective and unfair positions can harm the reputation of our country. Reputation is important in attracting investment.”
President Ramotar also used his speech to take a swipe at the U.S government on revelations by former spy agency contractor Edward Snowden of its secret surveillance operations.
Free society
“We have a free and open society. We do not interfere in people’s privacy. We do not read their mail or anything like that. That is an era I hope that is past forever in our country,” Ramotar stated.
In responding to President Ramotar’s statements which accused the US and other diplomatic missions of taking positions, the US Ambassador believed that President Ramotar was unfair as his country too has come under criticisms on issues. It is what is being done to address the issues that matters, he said.

On Friday also, Francis Forbes, a former Top Cop of Jamaica, now the Executive Director of CARICOM Implementation Agency For Crime and Security (IMPACS),  said that Guyana, the region’s financial success story of the millennium, is threatened by the scourge of corruption. He made reference to Singapore, a first world country with a solid economy and a “strong, ethical government with an efficient police force.
There is a wide belief that development and security are closely linked. With an emerging trend of trans-national crimes, the situation is a worrying one.
According to the officials, significant proceeds of the drug trade have in recent times placed a whole new dimension on the extent of the problem. It will affect the future of effective law enforcement and public sector administration if the current trend continues, Forbes said.
“The integrity of the judiciary will be affected. There is evidence that these have been undermined.”
There is also evidence that Government and politicians are even involved in trafficking and there are security officials who intentionally compromise law enforcement efforts.
According to the CARICOM official, “Bribery leads to uncertainty in an economy. (It) impedes long term foreign and local investments and pushed firms underground, outside the sector.”
It also leads to higher tax rates, ability to raise revenues and fewer and fewer tax payers.
“A vicious cycle of corruption and underground activity can result.”
In his recommendations, Forbes said that for Guyana to improve on its crime and security it will need new legislations to support anti-money laundering efforts and to ensure forfeiture of assets suspected to be acquired by illegal means.
There is also need for an ombudsman, an adoption of zero tolerance policy and closer scrutiny of workers who issue permits and licences. The professionalizing of the police force, whistleblower legislation and witness protection legislations are necessary, he said.
“If perception is reality, then change is mandatory.”
Guyana healthy
However, Finance Minister Dr Ashni Singh, said that the local situation is different from what is being portrayed.
“The ultimate test of the investor environment is the investor. While crime and security are important aspects, they are no means the only aspects.”
He urged the organizers to speak to investors who may have a different view as what the challenges are in Guyana. These include cost of energy and bandwidth. These were not included in the agenda of the seminar.
Regarding investors, it is clear that Guyana remains an attractive prospect.
Qualfon, a Mexican Call Centre on the East Coast of Demerara, is the largest private employer with over 2,000 persons. US-based Blackstone Group is about to invest millions of dollars in the Amaila Falls project.
According to the Finance Minister, Canadian investors like CGX, Guyana Goldfield and Sandspring have invested over CAD$2B in Guyana.
There are many large businesses in Guyana which do tremendous trade overseas. These include Banks DIH, DDL and the Beharry Group of Companies.
Commenting on the country’s track record for investments, Dr Singh said that small business loans have increased dramatically in recent years.
Of course, he admitted, there are still many things to fix, including crime and security, the cost of bandwidth and energy, regulatory framework and the reduction of red tape.
Using the US as an example, he said a Dick Morris book had slammed President Barack Obama over his track record, for no investments in that country.
Guyana, according to Singh, would be wary of doing that.
Corruption is a perception, he argued, promoted by politicians.
“We have an obligation as the government to put strong legislations in place to eliminate opportunities for mismanagement and corruption. We will not shirk that responsibility. Do not say because it is happening there that it is acceptable here. It is not acceptable anywhere.”
Also discussed at the two-day conference were challenges and opportunities in Guyana; investment promotion and protection; capital markets decision processes and corporate governance.

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