General Secretary to the People’s Progressive Party Civic, Donald Ramotar, has described the Alliance For Change’s (AFC) negative position on investors coming into Guyana as “absolute nonsense.” KN Nov 23th 2009. Ramotar is of the opinion that even though there should be more investors entering Guyana, the absence of large scale investors “has to do with infrastructure”. This was a response to Chief Executive Officer of the AFC Peter Ramsaroop who had said that the current crime and general absence of rule of law are warding off any massive investments in agro proceedings. The PPP General Secretary should be embarrassed to utter such a statement after 18 years in power.
Permit us to respond to Mr. Donald Ramotar’s comment that the main constraint facing investments in Guyana is lack of infrastructure and not crime. We will address Mr. Ramotar’s comments directly and we shall outline some of the key impediments to investments in Guyana.
Mr. Ramotar noted that Congo receives investments in spite of severe political instability. However, the General Secretary needs to understand that Congo receives mainly investments in extractive industries that take away Congo’s resources with minimum value added at home. That is not the vision of the AFC, however. Our natural resources must be processed at home. Therefore, we seek long-term commitments from foreign investors that will have a social purpose for Guyana. We seek agro-industrial processing, ICT, eco-tourism, creative and cultural industries in the arts, etc.
The AFC sees the Diaspora as a key resource for skills, ideas and investments for the development of Guyana. The Diaspora is most influenced by crimes. Importantly also the Diaspora is influenced by the fact that too many crimes/murders are never solved and too few criminals are convicted. These important and valuable Guyanese will never return home as long as there is no credibility in the police. Remember, Mr. Ramotar, that it is your government – famous for accepting foreign aid – which turned down the most important piece of aid to reform the police force. What message is the PPP sending to the Diaspora, Mr. Ramotar? Why did the PPP turn down this most critical piece of help to reform the police force?
Crimes also retard business formation. For example, drug dealers can launder funds while legitimate businesses must borrow from the commercial banks at 15% interest rate. Legitimate business folks have also been threatened and killed by the drug pushers. How can the legitimate businesses compete Mr. Ramotar? Also, there is a large smuggling economy that makes it difficult for legitimate businesses to compete. Crimes do retard investments, Mr. Ramotar.
Crime also destroys and corrupts key institutions that are needed for development; such as the legal institutions. Mr. Ramotar claimed to be an economist but he failed to realize that the evidence is clear. Investments are retarded because of the lack of strong laws and the enforcement of these laws. Take for instance the infringement of copyright in Guyana. It has killed the creative and cultural industries. Why write a poem, a song or story when others will abuse them? Why should our people be creative when they cannot enjoy the fruits of creativity? It has totally destroyed the cinemas in Guyana (yes investments!). The AFC understands the importance of the rule of law in economic development, and would implement specific policies to improve the administration of justice and deepen a rules based environment, so as to facilitate investments in the creative talents of Guyanese and therefore promote development.
Serious crimes also force our people to migrate. Many of these Guyanese are educated, technically skilled, investors and entrepreneurs. Therefore, crimes lead to shortage of investors/risk takers and depletes our human capital. Thus, we have yet another channel through which crimes (and the failure to solve crimes) have led to low and unproductive investments in Guyana.
The AFC is of the view that the following are the key binding constraints that impede investments in Guyana. (i) Lack of infrastructure (energy and other infrastructure like farm to market roads). (ii) Lack of reasonable financing. (iii) Crime and the lack of credibility within the police force. (iv) A severe shortage of human capital. (v) Lack of suitable institutions/laws (and the enforcement of these laws) that can stimulate the creative and cultural industries. (vi) A limited role and focus on research and development. The AFC blueprint shall outline these in more detail
An unpatriotic act by the PPP administration was not implementing the National Development Strategy (NDS ). Had we implemented the NDS since 2001 and started the smaller energy projects recommended, Guyana would have been in a position today to attract large investment. The PPP is waiting for the “silver bullet hydro project”, as economist Dr. Tarron Khemraj recently noted, to solve our energy needs. But one silver bullet energy project is not likely to solve the energy needs of Guyanese as Ramotar indicated. The AFC proposes the portfolio approach to energy – we prefer geographically focused small/medium scale hydro projects, ethanol, bio-diesel, wind and solar energy. These are not only realistic, but also more likely to create jobs for our people.
The AFC also intends to tie in with the energy projects agro-industrial processing (of non-traditional crops) in regions 2, 3, 4, 10 and Lethem. The PPP has never thought about addressing the bottlenecks that limit these industries. That’s as unpatriotic as it gets. It was made known recently that not even Dr. Cheddi Jagan had any idea what to do with the economy in 1992. Not having a vision of their own, the PPP opportunistically held on to the IMF/World Bank backed Economic Recovery Programme (ERP). Not that the ERP did not include some positive measures. But the PPP should have had something to add to the ERP. They never did and up to recently they have pursued a beg/borrow and spend strategy. That is also unpatriotic. The AFC believes that Leaders must have a vision and idea of what they intend to do for Guyana before they enter power. Today several PPP and PNC leaders are vying for the Presidential prize in 2011. But we are yet to have an idea of what they intend to do to transform the Guyana economy. What are Mr. Ramotar’s and Mr. Ramkarran’s view of the LCDS? Will they seek to reformulate the LCDS? We need some patriotic punch, please. No more stringing along on the coat tail of Dr. Jagan’s legacy or Jadgeo’s failed policies.
The PPP has also not even worked out their foreign policy. They do not yet understand how foreign policy is part of economic policy. We have the Caribbean Basin Initiative (CBI) through which we could sell products like ethanol to the United States. We can also sell agro-processed goods to the US. Yet they are busy building a cozy relationship with Venezuela, which claims 5/8 of Guyana’s territory. We are now dependent on that country for oil through Petrocaribe, we need to sell our low yielding rice to that country. Now we are about to join with the Chavez government to fight the drugs underworld. At the same time we have snubbed the United States request for a known Guyanese drugs dealer to be investigated and charged. Now, it is reckless and unpatriotic to have such close economic relations with an aggressive neighbour that claims 5/8 of our land. If we continue on this path Venezuela will have a lot of leverage against Guyana.
The AFC will pursue a much closer relation with Brazil? We need ethanol technology and investments to save our sugar estates.
Recently the PPP, famous for its strategy of accepting foreign aid, turned down the most important piece of aid help Guyana could ever need – the proposed security deal with Great Britain. Imagine this government which is busy surrendering Guyana’s leverage over Essequibo now is invoking nationalistic sentiments to turn down the British help. Guyana is a country of unsolved crimes and murders, yet this government turned down the security pact with the UK. Remember this is a government legendary for begging and accepting aid. But it now sees it fit to turn down an essential piece of help. What is the government afraid of? Does it have things to hide from independent help like the British? This is another incidence where the patriotism of the government was found lacking.
The AFC Blueprint notes that security is a key binding constraint preventing the economic development of Guyana. Lack of security, unsolved murders/brutal crimes and an unbelievably incompetent police force conspire to prevent Guyanese from relocating to Guyana. Foreign investors are also wary about the lack of security, the lack of closure for brutal crimes and the absence of the rule of law in our society. We need our Diaspora to invest here and share their skills and expertise. Yet, the government has taken no fundamental step to reform the security forces. That’s as unpatriotic as it gets.
Point of contact: Peter R. Ramsaroop
C.E.O – Alliance For Change
Tel: 226-0181
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