Latest update November 27th, 2024 1:00 AM
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Guyanese must benefit from their own natural resources and national patrimony
DEAR EDITOR,
The Georgetown Chamber of Commerce and Industry (GCCI) has noted, with concern, comments recently made by members of the government regarding local content legislation and foreign direct investment (FDI).
Finance Minister, Winston Jordan, recently made comments regarding the long-awaited local content legislation, noting that while it is important, the Guyanese private sector, “should not make it the be-all and end-all.” Minister Jordan went on to say that companies that are coming to Guyana to invest and conduct business in the oil and gas sector are not waiting for local content and other legislation.
Contrary to the Minister’s statements, the GCCI remains adamant in its belief that local content legislation is important and necessary as it gives local companies a footing from which to engage with regional and international companies coming to Guyana to operate in the oil and gas sector.
While competition is encouraged, the importance of having the right framework in place to leverage and encourage local initiative must remain at the forefront. Local content legislation functions primarily to protect and promote the development of indigenous companies by facilitating a level playing field. Delays in the process of legislative enactment do not bode well for local firms and their ability to participate in the supply chain of the oil and gas sector.
Guyanese businesses are being told to ‘fight’ and be competitive while still waiting on legislation that, by design, should function to enable competitiveness in a disadvantaged environment. It is the role of government to strategically address obstacles that hinder private sector development including, but not limited to, access to financial capital and attaining technical expertise.
Local content policies are not only limited to regulating the number of locals employed by foreign companies, but more importantly, they provide a pathway to ensuring capacity development through the transfer of technology, skills transfer and training.
During a recent Guyana investment outreach to Trinidad, Prime Minister Moses Nagamootoo made reference to Guyana’s need for technical expertise in the oil and gas industry, noting that Trinidad is well positioned to lend assistance due to its history as an oil-producing nation.
While it is true that Trinidad has the capacity to assist Guyana, it is unreasonable to expect a skills and knowledge transfer to occur out of charitable means or through an organic process. The only way to create a system for continuous knowledge transfers and improvements on both sides is to ensure that the appropriate legislative and policy framework is in place.
In keeping with the Prime Minister’s sentiments, investors and international companies should be able to operate in an efficient and cost-effective manner through investment incentives. However, local content legislation is also necessary to guard against shell companies that are registered in Guyana. These are locally registered companies which barely own assets, perform services, and export profits.
Ultimately, the call for local content legislation is tantamount to a request to share the benefits of the oil and gas industry with the local population – Guyanese must benefit from their own natural resources and national patrimony.
Government must be mindful of its rhetoric regarding local content legislation and note that while indigenous Guyanese businesses are being forced to navigate an entirely new industry without policies and legislation in place to guide and protect them, foreigners are readily receiving benefits such as US Dollar accounts, tax holidays and tariff holidays.
The Chamber is calling on the government to provide incentives for local businesses to reinvest their funds, starting with a local content legislation. The Chamber supports the promotion of foreign direct investment, and also, local reinvestment. To this end, we look forward to working with the various government agencies and ministries to recommend policy and legislation that will help to achieve growth in both areas and earnestly anticipate the finalisation of the local content policy as a first step on the road to local content legislation.
Yours Sincerely,
Nicholas Deygoo-Boyer
President
Georgetown Chamber of Commerce & Industry
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