ATTRACTING FOREIGN INVESTMENT

Feb 01, 2019 Editorial

There are significant opportunities for foreign and local companies to invest in the country, especially with its huge oil deposits and impending production in 2020. It is rather unfortunate that for a country with so much potential there is not greater interest by foreign investors.
Since taking office in 2015, the government has been doing everything it can to woo foreign investors to help grow the economy. Many high ranking officials in government have made numerous overseas trips to encourage investors, but they were only partially successful.
When in opposition, the current government had blamed its predecessor for its failure to attract foreign investment, and during the election campaign, it had promised to reduce crime and attract such investors. It did reduce crime and since taking office, the government has reiterated its commitment. From their many overseas trips, the President and several Ministers have touted the current mood of restored democracy in the country and their overwhelmingly successful engagements with investors. They claimed that there is a surge in Guyanese entrepreneurs who wanted to return home with their capital and technical skills and expertise to invest and help develop the economy and improve the lives of the masses.
However, despite the optimism shown by the President and some members of the cabinet and with the discovery of huge oil deposits in the country, only a handful of foreign investors have shown any renewed interest and confidence to invest here. But many Guyanese nationals have returned home and have made substantial invests in the country and most are doing well. A couple of banks (Baroda and Nova Scotia) seem to be no longer interested in doing business in Guyana because of their low profit margins. Both have announced plans of leaving.
Several reasons have accounted for the small flow of foreign investors into the country. One, in addition to the high crime rate, which may or may not be a main deterrent, the accelerated pace of globalization has changed the world economy and has left many developing countries, including Guyana behind. Two, the world economy is undergoing rapid and comprehensive changes and both the developed and the developing countries are competing for foreign direct investment at a pace never seen before. And three, Brexit and President Trump’s unconventional foreign policy strategies have and continue to unnerve the global economy.
The passage of legislation to end or reduce corruption, money laundering, and to re-establish the Procurement Commission and other constitutional bodies did not attract many foreign investors. Not to mention the steps taken by the government to improve tourism, to ensure that Guyana becomes a peaceful and lawful state, coupled with the abundance of natural resources as well as the progress made in transforming and diversifying the economy, which has been dependent on agriculture and a few limited products such as sugar, bauxite, and more recently gold.
But even with these changes, it seems that foreign companies are not convinced that the current state of the economy is ripe for investment.
What Guyana needs urgently is a massive influx of foreign investment in every sector of the economy. The government, through the Ministries of Foreign Affairs, Business and Tourism, obviously have to do more to convince foreign investors that Guyana is the place for them to do business. The country is in need of foreign capital to help boost the economy, create jobs for our youths, spur development and reduce poverty. Attracting foreign investment will definitely help to fulfill these goals.

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