Guyana’s assets parceled out to foreigners at “give-away prices” – AFC

Jun 29, 2014 News

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…. “GO-INVEST is an instrument of Cabinet…. will not be able to develop this country or stop the giving away of the country’s resources because it is not given its independence,” Ramjattan

While Guyana may have the ideal environment for foreign investment, many financial analysts have opined that before

granting applications, proper screening on the type of companies investing in Guyana should be done.
It is believed that this “screening process” hardly takes place. Meanwhile, Guyana’s resources and assets are given to foreign investors at “give-away prices” and in some cases state assets are given as gifts. This they assert, will certainly have dangerous implications for Guyana’s economy.
They believe that it is important to conduct proper screening of all investment proposals to determine if companies are “high risk” or corrupt.
The results of this screening should be one of the requirements before handing out “like candy” tax holidays, they said.
According to a 2013 report by the United States Bureau on Economics and Business Affairs, (http://www.state.gov/e/eb/rls/othr/ics/2013/204653.htm), the Government of Guyana actively encourages foreign direct investment (FDI), but needs to do more to facilitate investment and implement more transparent and accountable procedures.
It said too that Guyanese law permits foreign ownership of companies, and there is no mandatory screening of foreign investment. However, the Government conducts de facto screenings of most investments to determine which businesses are eligible for special tax treatment, access to licenses, land, and approval for investment incentives. It said too that in spite of recent efforts to remove discretionary power from various ministries, these agencies still retain significant authority in determining how relevant laws, such as the Investment Act, Small Business Act, and Procurement Act, are applied.
It also highlighted that the country’s main investment agency, the Guyana Office for Investment (GO-INVEST), is the starting point for those seeking necessary permits and tax concessions. GO-INVEST assesses whether a prospective investor’s proposals have sufficient capital backing, and if not, inquiries generally do not progress further.
The report also said that though not required, the Government expects investors to submit business proposals to GO-INVEST that outline the proposed project, the value of the investment, and employment to be generated from the investment. GO-INVEST reviews the proposals and makes recommendations to the Guyana Revenue Authority (GRA).
With this in mind, our financial analysts have called into question the nature of the due diligence reports conducted by the Guyana Office for Investment and whether a report is conducted on all companies it reviews and assesses before providing a recommendation for tax holidays.
CEO of Go-Invest, Keith Burrowes said that it currently lacks the capacity to conduct a due diligence report on all the investors it sees or companies rather , thereby making it unable to identify high risk or corrupt companies. He said that GO-Invest lacks the necessary resources to even monitor in many cases how the concessions granted to some of the companies will benefit the country.

Former Auditor General, Anand Goolsarran, in sharing his views said, “If one were to look into what areas foreign investments take place, you will find that they are mainly in the areas of natural resources – gold, forestry, agriculture. Some would argue that Guyana “patrimony” is being parceled out to foreigners at give-away prices. If you reflect on the level of corruption that is perceived to have existed in Guyana, it is easy to see why.”
“It is true that GO-INVEST does not have the capacity to do a proper evaluation of potential foreign investors. They need to do something about it. The question is, how independent is Go-INVEST of Government influence? One gets the impression that potential investors approach the higher authorities first and decisions are made accordingly. GO-INVEST comes into the picture after the decision is made and acts as “post office”. That must change.”
In supporting the former Auditor General’s points, Leader of the Alliance For Change, Khemraj Ramjattan said that it does seem that Guyana’s assets are being given to foreign investors at give away prices and in some instances, it is gifted to them.
“It does appear that especially natural resources which are exhaustible such as forestry and gold have been given away especially to the Chinese who are well known for their enormous appetite for these resources… The characteristics of countries which only seek to extract are corruption and an unsophisticated kind of entrepreneurship. They don’t want to get into production of other items and adjoining industries and value added industries which will sustain our economy.”
As it relates to GO-INVEST, Ramjattan said, “This is but an instrument of Cabinet and would hardly do anything without instruction. It is not going to be able to develop this country or stop the giving away of the country’s resources because it is not given its independence.”

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