Improving the Investment Climate …Tax holidays, remissions management were narrow-minded –Finance Minister

Mar 10, 2016 News

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…assures that efforts now geared to making process more transparent across all sectors
According to Finance Minister, Winston Jordan, Guyana has historically followed the traditional path of the provision of tax holidays and tax remissions in an attempt to make the investment climate investor-friendly.

He said that there has been focus on the provision of fiscal incentives while paying insufficient attention to all of the other factors and institutional support systems that are required to make “doing business” less of a burden. He noted however that in hindsight this system of operation was narrow-minded.
With the lessons learned, he said that Government is geared towards ensuring that the tax effort is administered fairly and transparently across all sectors, while balancing fiscal incentives with strengthened institutional arrangements.
The Parliamentarian delivered these remarks recently at launch of the Phase II – The Caribbean Growth Forum which was held in Belize. There, the Finance Minister said that all of this is in an effort to make doing business easier for micro to mega investments.
The politician said, “We are expanding our capacity to facilitate public private partnerships, which we view as a vital strategy for overcoming problems of financing and narrowing the infrastructure deficit.”
The economist expressed that the Granger administration is also in constant dialogue with the private sector to ensure that policies and programmes remain relevant and attendant to the needs of both public and private sectors.
Though international prices have declined sharply, Jordan noted that the domestic cost of electricity remains an issue. He said that this acts as a drag on the investment climate generally, and attracting certain types of large scale investments, specifically.
To this end, he said that Guyana with its many rivers and waterfalls, has opted for clean energy solutions. It is concluding a project to define the best energy mix, among hydro, solar, wind and bagasse, among others.
The Finance Minister also told the gathering that addressing the incidence of violence and crime with an expanded citizen security programme is yet another instance where the Government has instituted proactive measures to improve the overall business and investment climate.
Jordan said that although Guyana has been highlighted as having one of the most advanced procurement legislation in the Region, he acknowledged that the application of its procedures and enforcement of its regulations leave much to be desired.
In recognition of this, he said that Government has commenced the process of strengthening procurement planning, systems and procedures in the public sector. He stated that priority actions have included reforming the National Procurement and Tender Administration to make it more transparent, accountable and efficient.
Jordan asserted that among the other measures taken are decentralizing higher procurement thresholds within the ten administrative regions, creating certified procurement specialists and doubling the pool of evaluators, with greater private sector involvement, to more effectively administer the hundreds of billions of taxpayer dollars being expended to procure works, goods and services.
The Finance Minister noted however that it is important for all nations to seek the reform of their education systems across all levels of delivery to ensure that they are teaching people to think and to innovate and not simply to remember the content of the pages of the given text.
He emphasized that growth that is job-led must recognize both existing and emerging sectors. To this end, he said that policy leaders must seek to provide support in a suite of areas including access to credit and legislative support to persons across the spectrum – whether it is the mega farmer or the novel writer, the manufacturer or the scientist.
The Finance Minister said that the development of “regional innovation hubs” that support the young and the not so young jumpstarts new ideas that may often times fall outside of the traditional education systems, but are certainly worth considering.
He noted that this area of logistics and connectivity presents unique challenges for Guyana.
The Parliamentarian asserted, “Our topography varies from a coastline below sea level, subjected to the vagaries of climate change, to mountainous impassable terrain, open savannah and rainforest.  The wealth of diversity in our topography presents both challenges and opportunities.”
“The current strategic thrust is to provide for greater connectivity between our coastal strip and the hinterland regions, thus providing cheaper and more reliable access to the major portion of our land.
“Government stands ready to work with the private sector and development partners to support the construction of railways, bridges and major roadways and ports, air and inland waterway transport that would result in the proverbial quantum leap that is needed in infrastructure development.”
Jordan stated that leveraging Guyana’s comparative advantage in terms of geographic location, given its “gateway” to and from South America is one that Guyana’s policy leaders are on record as wishing to share with the region.
He said that the opening up of the telecommunications sector and the push for a knowledge driven government and industries is a key priority for Guyana. Jordan noted that it is through the effective application of this approach that he expects to be able to significantly improve connectivity, competitiveness and, ultimately, growth.
The Finance Minister said, “I and many others have recognized that growth is by no means the elixir of sustainable development; it is, however, undoubtedly the means to get there.”
He noted that perhaps, the elixir to sustainable growth can be the pursuit of quality strategic growth that is job-led, people-centered , environmentally-responsible and supported by fiscally-prudent policies and stable macroeconomic fundamentals.

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