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GUYANA Invest With Confidence We are pleased to present this second edition of INVEST GUYANA as we encourage you to consider Guyana as a new frontier for investment opportunities in its push for sustainable development and a green economy using its vast resources of mineral deposits and large land mass with virgin tropical rainforest. Guyana’s historic annual economic performance continues apace based on significant foreign direct investment and is driven by the Guyana Government led national infrastructure investment and development programme as detailed in the 2014 National Budget. The Government’s investment programme includes the construction of four lane highways, resurfacing of major roads, the new Marriott Hotel, the new Specialty Hospital, an expanded Cheddi Jagan International Airport and a new Demerara Harbour Bridge among the many other projects. This investment programme by the Government has been well supported by the Guyana private sector which has followed the lead by the Government and shown confidence in the national economy. Across the country the construction boom is evident with the many new hotels and commercial buildings and a range of housing developments catering for all sectors of society and several new airlines servicing the country with direct links to North and South America. Outstanding performance in the mining and agricultural sectors continue to generate significant export earnings for the country and new and emerging industries led by Tourism and the ICT sector are allowing Guyana to evolve into a diversified economy.
Contents Guyana the Place to Invest Guyana’s Economic Review Go-Invest Supporting Growth & Diversification IMF Welcoms Guyana’s Strong Economic Performance Guyana’s Business Climate Encouraging Investing in Guyana’s Agricultural Sector ICT As a Productive Sector Bridging the Digital Divide Caribbean Export Supporting Entrepreneurs in Driving the Economy US$10M Micro and Small Enterprise Fund Launched Turning Dreams Into Reality... The Resurgence of Limacol New and Renewable Sources of Energy Guyana’s Extractive Industries Investment Opportunities Tourism – Soaring To New Heights Doing Business in Guyana
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Advertising & Marketing Services (AMS): P.O.Box 101582, 213B Camp Street, Georgetown, Guyana, Tel: (011592) 225-5384 Fax: (011592) 225-5383 E-mail: info@amsstlucia.com
Our thanks go to Julianna Hutson, Our Editor, Khalil Alli for his 2014 National Budget Review and the many other contributors and support teams for their efforts. Special thanks also to the Government of Guyana and in particular the Ministry of Tourism, Industry and Commerce, GO-INVEST, The Private Sector Commission, our valued Advertisers and the many others who assisted in making this publication a reality.
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INVEST GUYANA is published annually by:
It is our hope that through the pages of this publication we will stimulate your interest to make that next bold step to explore and “Invest with Confidence” in the many investment opportunities in Guyana.
Lokesh Singh Publisher / Managing Editor
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Publisher / Managing Editor: Lokesh Singh lokesh@amsstlucia.com
Invest with Confidence
Project Co-ordinator: Deomattie Seeram Editor: Julianna Hutson
10 20 43 57 40 Editorial Contributors: Lokesh Singh, Julianna Hutson, Vanessa Narine Nizam Hassan, Chevon Singh, Lance Hinds Jack A.Alli & Sons, Ministry of Public Works, Ministry of Natural Resources and the Environment, Ministry of Housing and Water, Ministry of Public Works, NICIL, Wesley Kirton, Prof Suresh Narine, Michael Younge, Rabindra Chandarpal, Dr Mahender Sharma, Private Sector Commission, GO-INVEST, IMF, Carib-Export, Troy Resources Ltd
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Lokesh Singh Anupa Outar
Graphic Design & Layout:
Advertising & Marketing Services Heimant Ram & Deomattie Seeram
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For Further Information on Investing in Guyana Contact:
Cecil Sylvester
Contributing Photography:
Cecil Sylvester, NICIL, GO-INVEST, Office of the President, Guyana Tourism Authority, DDL, Carib-Export, Buddy’s Housing, Espn-Cricnfo, Min of Public Works, Min of Natural Resources, King’s Jewellery World, Troy Resources Ltd, Air Services Ltd, Adrian Narine, Guyana Marketing Corporation, Central Housing and Planning Authority, Ministry of Public Works, Ministry of Health, Guyana Geology & Mines Commission © Copyright 2014. Reproduction of any material without the permission of AMS is strictly prohibited. AMS wishes to express sincere thanks and appreciation to all parties who have assisted in making this publication a reality.
The Guyana Office for Investment (GO-INVEST) 190 Church & Camp Streets, Georgetown, Guyana. Tel: 592 - 225 0658 / 227 0653 Fax: 592 225 0655 Email: goinvest@goinvest.gov.gy Website: www.goinvest.gov.gy
Ministry of Tourism, Industry & Commerce: 229 South Road, Lacytown, Georgetown, Guyana Tel: 592 226 2505 Fax: 592 225 4310 Email: wmilton_ps@yahoo.com Web: www.mintic.gov.gy
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Guyana
South America Charity
ANNA REGINA
Barima - Waini
Pomeroon - Supenaam Essequibo Islands - West Demerara
Fort Island Demerara Harbour Bridge
Demerara - Mahaica
Fort Zeelandia
Jubilee
Cuyuni - Mazaruni
Umbrella Splash
Mahaica - Berbice
Bartica Hurakabra Berbice River Bridge
Rockstone
ssau Dubulay
Orealla Upper Demerara - Berbice CorTours
Governor Falls
Potaro - Siparuni
735,554 (July 2014 est.)
Governor Light Falls CorTours ATTA Rainforest Lodge
THE WORLD’S TALLEST SINGLE DROP (741 ft) WATERFALL
V
(GYD) Pirara East Berbice - Corentyne
Manari Town/Community
Takatu Bridge
Shea Rock
Administrative Regions Major Bridge
Upper Takutu - Upper Essequibo
Konashen u Sip
r
Rive
14 T: (592) 225.5383 - 4 F: (592) 225.5383
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T: (592) 219.0096 - 6 • F: (592) 219.0093 Email: info@guyana-tourism.com Website: www.guyana.tourism.com www.guyanabirding.com
Message from the President of The Republic of Guyana The response from current investors has been overwhelming and encouraging. It also reflects the buoyancy of Guyana’s resources and capability, progressive policies and commitment to its investors.
As the post global economy begins to show signs of rebound from the 2008/2009 global economic crisis, Guyana has proven to be an economic trail blazer in Latin America, the Caribbean and South America. Guyana remains one of a few countries that has achieved and continue to experience positive and robust economic growth. We should be proud that we have been at the forefront in pushing the Caribbean economies. For eight consecutive years our economy has grown by an average of 5% per annum. Such positive growth was largely driven by several sectors including mining, forestry, agriculture and agro-processing, manufacturing, information communications technology and tourism. These sectors continue to experience an upward trend. Such robust, continued growth is not accidentally achieved, but is strategically mapped by a committed, competent and visionary Government which I am proud to lead. It is a demonstration of my Government’s commitment to improving the investment climate in Guyana for persons and companies looking to expand or create new symbiotic opportunities. The response from current investors has been overwhelming and encouraging. It also reflects the buoyancy of Guyana’s resources and capability, progressive policies and commitment to its investors. Given the investor interest and economic growth of Guyana, we have launched a number of initiatives to facilitate and promote both local and international investment opportunities. These initiatives include infrastructural programs and policy positions to promote Guyana as an attractive investment destination.
H.E. Donald Ramotar President of the Republic of Guyana
While Guyana is ripe for investment opportunities, this Administration remains keen on responsible investors who demonstrate a commitment to sustainable development, the protection of the environment and respect for the Guyanese people. Our rich natural resources, advantageous geographic location and industrious human resource positions Guyana as an ideal investment destination. As part of this Government’s effort to inform and support investors I invite you to peruse the following pages and visit our office on investment and promotion, GO-Invest, more of which is located within these pages, for a taste of what Guyana has to offer.
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Welcome to Guyana A Compelling Economic Success Story Guyana’s significant and rapidly growing popularity as an investment destination is attributable to a multitude of factors, including a demonstrated track record of strong economic performance and other unique advantages that combine to make our country a favorable environment for doing business. Economic Growth and stability: Guyana’s track record of economic growth and stability lends to an ideal environment for investors to pursue profitable enterprises and expand production of goods and services. In 2013, Guyana’s economy recorded its eighth consecutive year of growth, with real GDP expanding by 5.2 %. In contrast, the economies of the Latin America and the Caribbean grew by 2.6% in 2013 and are projected to grow by 3.2% in 2014. Significantly, the growth achieved by Guyana over the years is broad-based with both traditional and emerging sectors contributing to a diverse and therefore more resilient productive base. Government will continue to adopt an economic policy stance that is conducive to stability and growth, promote diversification of the productive sector, and otherwise enable growth in domestic and inward foreign investment in support of our continued economic resilience.
Hon. Dr. Ashni Singh Minister of Finance
Strategic Location: Guyana’s geographical location in South America and socio-political connection with the Caribbean region position us to access two unique regional markets. In addition, our trade relations with Latin America have been expanding. This is also now facilitated with significant improvements in airlift into Latin American destinations with the addition of two hemispheric airlines providing direct flights into Guyana. Our status as a CARICOM and UNASUR member along with the extant trade agreements we have both bilaterally and through our regional membership provide significant opportunities and tariff advantages for export of production from our country. Natural Resources: Guyana’s vast endowment of natural resources is another advantage to doing business in our country. Our rich deposits of bauxite, gold and diamonds, virgin forests, sweeping savannahs and abundant water resources makes us a natural choice for investors in mining, forestry, agriculture and numerous related value-added products. Guyana’s natural beauty also presents multiple opportunities for eco-tourism. Attractive waterfalls, pristine forests, extravagant flora and fauna, and endless savannahs position us as an ideal destination for the modern adventure tourist. Language: Guyana is unique within the region as it is the only English-speaking nation in South America. Investors in industries such as telecommunications and business outsourcing have been particularly interested in Guyana for our language proficiency. Guyana’s ability to communicate in fluent English has led to investment deals in telemarketing and as a hub for contact centers, back-office, and business process outsourcing (BPO). Competitive Labor: In addition to being able to communicate in English, Guyana is noted for its competitive, highly trainable, and relatively affordable work force. Guyana tops the region as a leader in maintaining high literacy rates. The combination of educational quality and language skills has often been cited as an advantage of doing business in Guyana. The evident advantages of doing business in Guyana have resulted in a steady and sustained flow of foreign direct investment and strong domestic private investment, a trend we trust will continue as we welcome all potential investors to join and be part of the compelling economic success story that is unfolding today in Guyana. Sincerely, Hon. Dr. Ashni Singh Minister of Finance Republic of Guyana GUYANA’S PREMIER INVESTMENT MAGAZINE | 7
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Message from Minister of Tourism, Industry & Commerce (Ag) Guyana is one of the few countries in the Caribbean to record robust economic growth for the last eight years, despite the sluggish recovery of the world economy; the medium-term outlook remains favourable according to most independent regional and international organizations. Guyana’s modernization program continues to gain momentum and it is evident that our country is seeking ways to motivate those who possess the confidence in the economy and the acumen to invest in the overall development of Guyana. I would like to take this opportunity to commend businesses and individuals who have embarked on initiatives and to encourage potential investors to take advantage of Guyana’s Stable macroeconomic environment, while recognising ongoing efforts aimed at improving the business environment.
Hon. Mohamed Irfaan Ali Minister of Tourism, Industry and Commerce (Ag)
Guyana is one of the few countries in the Caribbean to record robust economic growth for the last eight years, despite the sluggish recovery of the world economy; the medium-term outlook remains favourable according to most independent regional and international organizations. Notwithstanding the rapid acceleration of the economy Government has managed to control the level of inflation at single digit and maintain stable exchange rates since 2006. Inflation was 0.9% in 2013 - the lowest in decades. The country is also well positioned to benefit from many unexplored market opportunities it is estimated that some US$2.5 billion in unexplored export potential exists for CARICOM’s private sector in Cuba; over US$7.2 billion of untapped trade still exists for CARICOM exporters in the Dominican Republic and this potential exists in areas such as gold, iron/steel, plastics, salt, and perfumes; almost US$8 billion in untapped export business exists in Costa Rica for CARICOM exporters; that over US$13 billion in untapped export business exists in Canada in areas such as ships/boats, beverages, sugar, fertilizers and rice and that untapped export potential in the US market was some US$ 5.6 billion. Given the importance of the adequate infrastructure the government has made significant investment in upgrading the transport system over the past two decades. There are also plans to upgrade, expand and modernize same in order to allow all businesses access to markets in South America and North America. The first of these is the paving of the Linden-Lethem road, the second involves the improvement of the existing port facilities in Georgetown and the development of a Deep Water Port that would cater for future international shipping requirements and to provide connections between the Brazilian state of Roraima and international markets. The third involves the expansion of the Cheddi Jagan International Airport that would make air transport more affordable for exporter with market in Latin America the Caribbean and North America. The Government of Guyana has also developed an extensive menu of fiscal measures to encourage the establishment of new businesses and welcome partnerships which we view as indispensable to spurring Guyana to its fullest economic heights.
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GUYANA THE PLACE TO INVEST A Private Sector Perspective
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n 2014 Guyana is predicted once again to experience some of the fastest economic growth in the western hemisphere. To understand the sources of this growth means to see the growing range of opportunities for profitable investment. Guyana is endowed with outstanding natural resources and a strategic geographical location. This is combined with preferential access to some of the world’s key markets, over 20 years of macroeconomic stability, an Englishspeaking and internationally-minded population, and a government commitment across all parties to developing the private sector. Guyana’s 5.2% GDP growth in 2013 was fueled both by the traditional sectors of mining and agricultural produce, and also by an expansion of 5.5% in the services industry including 5.9% in ICT. Foreign Direct Investment was US$217M, especially concentrated in extraction, forestry and telecommunications. Major companies from across North America, Europe and China are represented. Indeed foreign investment will be crucial to the further development and diversification of the economy, especially in emerging sectors such as transportation, energy and manufacturing.
duty. In targeted sectors such as the tourism industry, additional incentives are available such as tax holidays. To help guide foreign investors through regulations, the semi-autonomous agency ‘Go-Invest’ has been set up directly under the Office of the President. EXPORT MARKETS Guyana is one of the most open economies in the region, and Georgetown serves as the headquarters for CARICOM. This also provides preferential access to European markets through the European Partnership Agreement, while the other major export destinations are the US and Canada. In the future a key opportunity will be closer economic integration with neighbours especially Brazil. There is already a partial scope agreement in place, and in 2014 an industrial zone will be set up in Lethem near the Brazilian border. Strengthened physical infrastructure, and reductions in the cost of electricity, would allow Guyana to take further advantage of these trade opportunities. This is being addressed by the 2014 budget allocation to the Amaila Falls Hydropower project, which is estimated to reduce the cost of electricity by 20-40% as well as improving reliability. KEY SECTORS for INVESTMENT
INVESTMENT FRAMEWORK In the last 10 years Guyana radically overhauled the legislative environment for investment and simplified the tax structure. Under the 2004 investment act and related amendments, foreign companies and owners are guaranteed equal rights for acquisition of land, repatriation of profits and establishment of companies. This contributed to Guyana ranking 80th worldwide (alongside France and Brazil) for ‘Protecting Investors’ – according to the 2014 World Bank Doing Business Index. A range of fiscal incentives are available to promote exports, which include reductions or waivers on VAT, excise tax and import
Areas of investment opportunity in Guyana range from the ‘classic sectors’ such as bauxite, gold and timber, to new possibilities in oil and gas exploration and infrastructure, as well as complementing the country’s diversification agenda in manufacturing and services. As part of the National Competitiveness Strategy (NCS), the private and public sectors together identified target sectors for carving out sustainable, value-added comparative advantage. A sample sector for strategic investment is tourism – in 2014 Guyana was chosen as one of the top 21 ‘must see destinations’ by
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Ramesh Dookhoo Ramesh Dookhoo is a former Chairman of the Private Sector Commission and former President on the Guyana Manufacturers & Services Association. He is currently Chairman, Trade and Investment Sub-Committee of the Private Sector Commission and a Senior Executive of the Banks DIH Group.
National Geographic. In 2014, the inaugural ‘Guyana Festival’ will be held, as part of growing government efforts to support the marketing of the tourism industry. The 2014 budget also account for the establishment of a US$4M Tourism Hospitality Institute, and expansion of the Cheddi Jagan International Airport. New Air routes operational in 2014 include direct flights to Panama, Jamaica and Aruba.
The New Cheddi Jagan International Airport
GOVERNMENT ROLE in PRIVATE SECTOR DEVELOPMENT The strategic framework for investment is underpinned by the Low Carbon Development Strategy (LCDS) and the National Competitiveness Strategy (NCS). As part of the landmark LCDS, Norway has made US$250M available to Guyana to support development in lowcarbon industries. Projects already underway include Amerindian land titling – which will stimulate access to finance by allowing land to be used as collateral, and most recently the US$5M Micro and Small Enterprise Project designed to address binding constraints in the small business sector. Funds from this project are also being put towards major infrastructural upgrades including the Amaila Falls Hydro Project. The institutional structures to support improvements to the investment climate include the National Competitiveness Council – chaired by the President and including key private sector stakeholders. The Ministry of Tourism, Industry and Commerce (MINTIC) has responsibility for private sector development and a number of projects and reform programmes which would be of benefit to investors. In 2013 a National Economic Forum was held including stakeholders from all major sectors in the country, with a chance to represent views directly to government. Major programmes to improve the investment environment include the US$$27M Support for Competitiveness Program, the Doing Business Action Plan to improve the business environment, and the Single Window Automated Processing System (SWAPS) which would drastically reduce the time taken to import and export. Progress in the last year includes the 2013 launch of Guyana’s first credit bureau which is anticipated to significantly improve access to finance, and the launch of a US$$5M micro and small enterprise project to address binding constraints in the small business sector.
The New Marriott Hotel Under Construction
Manufacturing Investment
GOING FORWARD 2014 looks to be another very promising year for investment. The reader is encouraged to learn as much as they can about Guyana’s unique location, industries and opportunities, to read about the experiences of the many foreign and domestic companies which have made highly profitable investments here, and to get more involved themselves.
Mining Operations
Despite its political challenges Guyana remains open to do business with responsible stakeholders in a sustainable, environmentally friendly way that is mutually beneficial to all stakeholders. ¤ GUYANA’S PREMIER INVESTMENT MAGAZINE | 11
2014
National Budget
“A Better Guyana for All Guyanese” By: Khalil Alli, FCA MSc., Partner, Jack A. Alli, Sons & Co. Chartered Accountants OVERVIEW “A Better Guyana for All Guyanese” was the theme under which Budget 2014 was presented to the National Assembly on 24 March 2014 by the Minister of Finance, Honourable Dr. Ashni Singh. This year’s Budget estimated total expenditure of G$220 billion (US$1.063 billion) while total revenue was estimated at G$207 billion (US$1.001 billion), giving an estimated deficit of G$13 million (US$62 million). The total budgeted expenditure is 5.4 percent higher than the previous year’s estimate and represents the highest presented to the House for approval. Budget 2014 was presented against a backdrop of growth in real gross domestic product during 2013 of 5.2 percent. Growth over the three previous years has ranged between 4.8 to 5.4 percent while per capita GDP has ranged between US$3,017 to US$3,496. This budget was the third presented by the current administration, the previous two years resulting in unprecedented constitutional tests as the Opposition-controlled Assembly sought to amend proposed estimates. Budget 2014 is set to follow this trend as approximately 17 percent of the budgeted expenditure was not approved by the House. NATIONAL ECONOMY The GDP for 2013 measured at current basic prices amounted to G$537 billion (US$2.6 billion) with the contribution by industry grouping as summarized in the table below.
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Major contributors to growth in GDP during 2013 were the rice and gold sectors registering production increases of 26.9 percent and 9.7 percent respectively, and consequently setting new records for both industries. Favourable world prices were enjoyed by both industries. The construction sector also recorded an impressive 22.6 percent growth attributed to the national housing initiative, commercial construction and public sector construction projects. The sugar industry however did not have a good year as production contracted by 14.4 percent in 2013. Labour and weather influences continue to negatively impact the industry. BALANCE of PAYMENTS
A significant current revenue source in 2014 is G$18.6 billion (US$90 million) from the Government of Norway under the Reducing Emissions from Deforestation and Forest Degradation (REDD+) framework and for Guyana’s Low Carbon Development Strategy. Capital revenue is projected to be received principally through external loans of G$24.8 billion (US$120 million) and external project grants of G$11.9 billion (US$58 million). Significant funds are expected from external loan arrangements with the Government of the People’s Republic of China of G$8.7 billion (US$42 million) and the Inter-American Development Bank of G$9.5 billion (US$46 million). Guyana also continues to receive grant funding from the European Union as part of the removal of the Sugar Protocol and towards the structuring of the sugar industry. An amount of G$8 billion (US$39 million) is expected to be received in 2014. EXPENDITURE PROJECTIONS for 2014 Budget 2014 projects total expenditure of G$220 billion (US$1.063 billion) of which G$139 billion (US$671 million) will be for current purposes while G$81 billion (US$392 million) will be for capital purposes. CURRENT EXPENDITURE The balance of payments ended in a deficit of US$119.5 million for 2013, as summarised in the table. Despite a fall in world prices for gold, the industry continued to be a leading contributor to the country’s foreign exchange earnings. Rice enjoyed higher export volumes as well as better prices. The lower earnings from sugar and bauxite were both attributed to lower volume exports. Fuel imports continue to represent a significant merchandise import despite a decline from 2012.
The table below analyses the allocation of current expenditure of G$139 billion (US$671 million) across responsible agencies, with comparative allocations from Budget 2013.
Net current outflows from services increased by US$107 million due to higher royalties and license fees while private transfers into Guyana declined by US$66 million to US$353 million reflective of lower worker remittances from overseas. OTHER KEY INDICATORS The exchange rate at the end of 2013 depreciated from the previous year end. The Bank of Guyana weighted average US Dollar exchange rate was G$206.25 at the year end compared to G$204.5 at the previous year end. Inflation was contained at 0.9 percent while the weighted average lending rate at commercial banks increased to 11.16 percent from 11.08 percent for the previous year. REVENUE PROJECTIONS for 2014 Of the total projected revenue for 2014 of G$207 billion (US$1.001 billion), G$168 billion (US$812 million) is from current sources while G$39 billion (US$189 million) is from capital sources. Key current revenue sources are value-added tax of G$37.1 billion (US$179 million), corporation tax of G$29.9 billion (US$144 million), excise tax of G$28.6 billion (US$138 million), income taxes of G$20.1 billion (US$97 million) and import duties of G$12.4 billion (US$60 million). No changes to taxes were proposed in Budget 2014.
Estimates for current expenditure are inclusive of the following significant developments for 2014. Introduction of an education grant of G$10,000 per child to be paid to parents with school age children. The initiative is expected to benefit 188,406 students of nursery, primary and secondary schools, with an overall cost of G$2 billion (US$10 million). Support of G$6 billion (US$29 million) for the Guyana Sugar Corporation to assist with efforts to improve performance. Increase of old age pensions paid to persons over 65 years by 5 percent to G$13,125 monthly. Additionally, the Government proposed to increase the annual electricity contribution for old age pensioners from G$20,000 to G$30,000. These measures together are expected to cost G$512.5 million (US$2.5 million). GUYANA’S PREMIER INVESTMENT MAGAZINE | 13
During the previous year 278 Guyanese doctors returned from medical training in Cuba and have now been integrated into the national health care system. CAPITAL EXPENDITURE With respect to the G$81 billion (US$392 million) budgeted for capital expenditure, the following major projects are included. An amount of G$18.6 billion (US$90 million) has been budgeted for Low Carbon Development programmes including US$80 million as an equity contribution to the Amaila Falls Hydropower Project. Also included are projects towards Amerindian Land Titling, Amerindian Development Fund and Small and Micro Enterprise Development Projects. An amount of G$12.9 billion (US$62 million) was identified for improvement of the road network. Of this amount, significant roadways that have been allocated funds for 2014 include: • • • • • •
East Coast Demerara Highway G$1.6 billion (US$8 million) East Bank Demerara Highway G$1.1 billion (US$5 million) West Demerara Highway G$810 million (US$4 million) Amaila Falls Access Road G$1.3 billion (US$6 million) Hinterland Roads G$1.0 billion (US$5 million) Various roads in Regions 1 through 6 G$2.4 billion (US$12 million)
In addition to the above projects, the Government is negotiating for the construction of the Linden to Lethem road with the Brazilian Government while also pursuing the construction of a fixed bridge over the Corentyne River with the Surinamese Government. Budget 2014 provides G$295 million (US$1.4 million) towards various preparatory aspects of these projects. An amount of G$6.6 billion (US$32 million) has been budgeted for the continuing modernisation and expansion works on the Cheddi Jagan International Airport. It is expected that two new Latin American airlines – CONVIASA and COPA – will commence regular flights to Guyana during 2014. The Government intends to continue its housing drive through the development of residential schemes across the country. Budget 2014 includes G$4.4 billion (US$21 million) for infrastructural development, including roads improvement, in various communities. It is intended that 5,900 house lots will be allocated in this year. 14 | GUYANA’S PREMIER INVESTMENT MAGAZINE
The Government’s Electrification Programme has been allocated G$3.9 billion (US$19 million) towards the construction of five new sub-stations, upgrading of two existing sub-stations, rehabilitation of the distribution networks, and replacement of meters. In addition to the Electrification Programme, the Government is also continuing to pursue the development of the Amaila Falls Hydropower Project and is also in discussions with the Brazilian Government for the construction of a hydropower plant in the Mazaruni area. In the field of Information and Communication Technology, the Government has allocated G$2 billion (US$10 million) for the acquisition of additional laptops under the Government’s One Laptop per Family initiative.
A total of 35,884 laptops have been distributed so far under the programme and a further 17,948 are expected to be distributed in this year. The Government has also budgeted G$1.1 billion (US$5 million) to complete works under its e-Government Project that will facilitate the delivery of e-government services. To protect against the increasing threat of flooding along the coast, the Government announced an allocation of G$6.9 billion (US$33 million) towards drainage and irrigation projects including completion of the Hope Channel Project, acquisition of additional drainage pumps, and construction or rehabilitation of pump stations, drainage structures and intake structures. Additionally, G$1.9 billion (US$9 million) has been allocated to sea and river defence works in 2014. An amount of G$1.1 billion (US$5 million) was budgeted for the Amerindian Development Fund in support of various projects for the indigenous communities.
The water supply sector benefited from a G$2.5 billion (US$12 million) allocation towards improvement of supply networks in various communities across the country. In terms of sanitation, the Government also announced the provision of G$1.1 billion (US$5 million) for the completion and operation of the Haags Bosch Sanitary Landfill. This year’s budget also introduced a National Clean-up Programme, for which G$1 billion (US$5 million) has been budgeted. The Government announced G$2.4 billion (US$12 million) and G$2.9 billion (US$14 million) for construction or rehabilitation of health and education facilities, respectively, during 2014. A significant health project for the Government is the construction a specialty hospital to provide tertiary health care. This project has been allocated G$910 million (US$4 million) in the Budget. In the area of security, among other allocations, G$380 million (US$1.8 million) has been budgeted for the completion of a new forensic laboratory and building while a further G$413 million (US$2 million) has been allocated for the development of community policing groups. An amount of G$725 million (US$3.5 million) has been allocated towards construction or rehabilitation of sports facilities, including the athletic track at Leonora, the warm-up pool at the National Aquatic Centre and various grounds around the country. PROJECTED PERFORMANCE of GUYANA ECONOMY in 2014 It is projected that the Guyana economy will grow at 5.6 percent during 2014 driven by growth in the following key sectors: sugar – 15.6 percent, bauxite – 11.5 percent, construction – 7.5 percent, transportation and storage – 8.4 percent and financial services – 11.8 percent. Rice and gold are expected to grow moderately at 1.1 percent and 2.8 percent respectively, reflective of market uncertainties in both sectors. The balance of payments deficit is expected to fall to US$21.9 million in 2014 due to an anticipated increase in foreign direct investment. Inflation is expected to rise to 5 percent. PARLIAMENTARY APPROVAL Following the debates on Budget 2014, the House did not approve programmes constituting G$37 billion (US$179 million) in expenditure. Among the items not approved are the capital expenditures relating to the Low Carbon Development Programme, the Cheddi Jagan International Airport, the One Laptop per Family Programme, the e-Government Project, the Amerindian Development Fund and the Specialty Hospital. ¤
AUTHOR’s NOTE Budget 2014 was prepared in Guyana Dollars. For purposes of this article, United States Dollars equivalent amounts have been given by applying an exchange rate of G$207 to US$1, and have been rounded to the nearest million in most cases. Figures in tables may not sum to the total due to rounding.
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2013
Guyana’s Economic Review
G
uyana’s economy has experienced moderate growth over recent years which are largely due to sound financial systems, public and private investments and external trade. In 2013 Guyana’s economy grew by 4.6 percent. The economy relies heavily on exports of primarily six commodities namely: gold, sugar, rice, bauxite, timber and shrimp, which represents nearly 60 percent of GDP and are susceptible to weather conditions and fluctuations in commodity prices. More so, it is highly dependent on the importation of fuel, lubricants, manufactured products and machinery. Given this substantial tradeoff, Guyana’s Balance of Payment was in a deficit of US$119.5 million and a net export of US$ 471.4 million in 2013. GROSS DOMESTIC PRODUCT GDP Annual Growth Rate in Guyana averaged 2.12 Percent from 1961 until 2013, reaching an all-time high of 11.36 Percent in 1964 and a record low of -13.19 Percent in 1982. Guyana’s GDP in 2013 has experienced consistent growth by 5.2% - being the eight consecutive year of growth. More so, to highlight the strength of other sectors of the economy, “non-sugar GDP” grew by 6.3%. Figure 1 below shows the percentage contributions for the various sectors. It can be seen that while sugar and fisheries declined by
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14.4% and 6.5% respectively, all other sectors showed significant increases especially the rice industry which contributed a 26.9% increase from its previous year’s output which came as a result
Forestry and Fishing with the major decline coming from Transport and Telecoms. That year saw the largest investment in Agriculture, Forestry & Fishing which accounts for approximately 50% of the overall FDI contributions for 2013.
in increased investments in drainage and irrigation, increased acreage and improved yields. The second largest contribution to GDP in 2013 was the construction sector which recorded a 22.6% growth which was realized as a result of vibrant expansion in private and commercial sector coupled with the housing drive. FOREIGN DIRECT INVESTMENT Foreign Direct Investment remains a vital component in Guyana’s Development. Between the periods 2009 to 2012 as depicted by Figure 3 below, overall FDI showed consecutive increases with a somewhat average input in all components with in Transport and Telecoms and Mining and Quarrying being the largest of the seven components. From a pivot of almost US$300M in 2012, FDI declined dramatically to just over US$200M in the following year. All components shrunk significantly except for Agriculture,
EXPORTS Overall export earnings in 2013 contracted marginally by 2.8% or US$1.376 billion mainly due to a sharp decline in gold prices along with lower export volumes of sugar, bauxite and timber. Despite declining prices (i.e. from US$1,575 in 2012 to US$1,344 in 2013), gold still accounts for the largest portion of export having a share of 47.1% and a total value of US$648,538 in 2013.
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how Guyana’s Balance of Payments can be thrown at the mercy of price fluctuations on imported fuel. Rice exports fell second in total exports - sharing a 17.4% and a value of US$239,826. Despite local price fluctuations and adverse weather conditions experienced by farmers especially in the latter part of 2013, rice exports expanded by 22.2% mainly due to the fact that there was an 18.2% increase in export volume combined with a 3.4% increase in average international export prices (i.e. US$607 per tonne).
Other import commodities such as Fertilizers, iron, steel, motor vehicles and accessories, plastic, medicines, etc. each averages on a 2.5% contribution on imports. ¤ With a value of US$134,646 and a 10% contribution to total exports, bauxite is still ranked third in its contribution to Guyana’s exports even though there was a 24.7% decline export volume which intern outweighs the 18.6 % increase in export prices. Despite a 6.3% increase in sugar prices (i.e. US$ 713 per tonne) export earnings on sugar contracted by some 13.6% from the previous year given a steep decline of 18.7% in export volume . Other export commodities with the exception for timber, fish, shrimp and prawns accounts mainly for Guyana’s secondary industries which aggregates to 8.1% of total export contributions. IMPORTS Imports declined by a 7.5% to US$1.838 billion in 2013 of which the United States, Trinidad & Tobago, Venezuela and China form some of the largest trading partners for Guyana in that year. With the exception for Other Imports which aggregates to US$852,141 in total value and the largest percentage contribution of 46.4% – Fuel and Lubricant is perhaps the most significant given Guyana’s dependency on this primary commodity; It shares a 31.3% and a value of US$574,691 of total imports. This alone highlights a high dependency on imported energy and it speaks volumes on 18 | GUYANA’S PREMIER INVESTMENT MAGAZINE
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GO-INVEST
Supporting Growth & Diversification
I
n 1994, GO-Invest was established to stimulate, facilitate, and promote the development of trade and industry, especially the diversification of investment activities in all sectors of the Guyanese economy.
GO-Invest work to enable entrepreneurs from around the globe to tap into the wealth of trade and investment opportunities available in the country. It is the Government Agency for any investor looking for the best and most accurate counsel to start a business venture, grow an existing one or explore overseas markets in Guyana. DEVELOPING ECONOMIC SECTORS in GUYANA According to United Nations’ Annual World Economic Situation and Prospects (WESP) report 2014 Guyana’s economy is projected to grow by a conservative 4.5% in 2014 while the Government has projected this growth to be 5.6%, the highest growth projection for the Region.
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Guyana’s vast tracts of productive land present enormous opportunities for growth. Indeed, agriculture already represents a significant proportion of Guyana’s domestic production and agriculture exports amounted to over a third of Guyana’s total exports. While the majority of agriculture exports consist of rice or sugar products, the value and share of processed goods and fresh fruit and vegetable exports have experienced a positive growth trend in recent years. Sugar account for 8.3 percent of total export earnings in 2013. While changes in the E.U’s sugar sector relations with the region will have an impact on the industry, planned diversification of target markets by GUYSUCO together with improved production efficiency will ensure sustainability. In 2013 rice production saw an overall production increase of 26.9 percent from the previous year, moreover, Guyana can now boast of having its first line of aromatic local rice variety with over 500 acres grown in 2013 and placed in the domestic market with additional varieties slated to be tested in yield trials in 2014. The Mining Sector, another traditional sector in Guyana, remains resilient to price shocks with growth only minimally affected.
internet service providers and cellular phones); Light manufacturing: (pharmaceuticals, garment, packaging and building materials); Energy: (hydro power, wind, co-generation, bio-fuels, solar, oil and gas exploration); Mining: (bauxite, gold, diamonds, manganese and uranium); and Wood Products: (value added products-flooring, decking, mouldings, furniture etc). In enhancing and supporting diversification of the non-traditional sectors, GO-Invest promote Investments in all regions across Guyana. In recent years, GO-Invest has placed extra focus on local direct investments to encourage Guyanese nationals to invest in Guyana and has also committed to improving the business climate and the investment attractiveness of the country, in partnership with other government agencies.
Despite cautious response by the global markets to the price shocks, the prospects are encouraging and exploration results suggest that significant gold deposits are still there to be mined. Government’s support for the sector is evident with improved hinterland infrastructure and a favourable fiscal regime. Guyana is traditionally known for its export of timber or semiprocessed forms, the Government and segments of the forest product industry have placed an emphasis on promoting valueadded forest product production for export to the Caribbean, U.S. and Europe. ENHANCING & SUPPORTING DIVERSIFICATION There is increasing diversification across and within the eight economic sectors: Agriculture: (aquaculture, ornamental fish culture, non-traditional products, agro-processing, livestock rearing and the modernization of the sugar and rice sectors); Tourism: (hotels, eco-lodges, tour operators, bird-watching and
Although the largest number of Foreign Direct Investment (FDI) projects continues to be from the USA and Canada, we have seen more FDI projects from Brazil, China, India and Trinidad and Tobago, as well as some projects from Russia, Ireland, Mexico, St. Kitts, St. Lucia and the United Kingdom. Significantly, more Overseas Guyanese (OG) in the Diaspora, especially from the United States and Canada, are investing in Guyana. Additionally, GO-Invest’s Export Promotion Division works closely with investors and lays the groundwork for businesses seeking to develop export opportunities in overseas markets. The division helps current and potential exporters promote their products in national and international exhibitions, trade fairs, and regionspecific and country-specific trade missions. For instance, in 2013 GO-Invest facilitated Guyanese delegations to trade shows in Canada, St Croix, Martinique and Barbados, Atlanta, New York. In identifying issues related to barriers or concerns that might hinder export business development, the division stays in frequent contact with export business groups and trade associations. Guyana offers investors a range of General, Specific & Sector-Specific Incentives for agriculture and agri-business, manufacturing, forestry, mining (services within this sector), tourism, fisheries, ICT. The majority of investment incentives are in the form of tax incentives. Firms interested in finding out which incentives they are entitled to should contact GO-Invest. ¤ CONCLUSION This strategic approach to develop an open, competitive, diversified and sustainable economy has enabled our country to continuously survive and overcome the challenges facing the global economy.
river yachting); Services: (construction, housing, transportation, financial, medical, machining, retail/wholesale); Information and Communications Technology: (call centers, medical transcription,
For Further Information Contact: GO-Invest Lot 190, Camp & Church Sts, Georgetown, Guyana, Tel:+592 225 0655; 227 0653/4 or by Fax +592 225 0655. Email: goinvest@goinvest.gov.gy Website: http//: www.goinvest.gov.gy GUYANA’S PREMIER INVESTMENT MAGAZINE | 21
IMF
Welcomes Guyana’s
Strong
Economic Performance Projects Positive Future Outlook
T
he Executive Board of the International Monetary Fund (IMF) released its report on the review of the Guyana economy at the end of 2013. It noted Guyana’s “strong macroeconomic performance” and called for the current Administration to build on existing efforts to ensure a more even distribution of the benefits from economic growth. The report stated that the economy has experienced seven years of uninterrupted growth averaging about four per cent annually. It said: “The key pillars of the macroeconomic resurgence have been sustained reforms, in particular the implementation of VAT, favorable commodity prices, significant inflows of Foreign Direct Investment (FDI) and debt relief under the Heavily Indebted Poor Countries Initiative (HIPC) and Multilateral Debt Relief Initiative (MDRI) initiatives.” Real economic activity expanded by 4.8 percent in 2012 on the back of broad-based growth in agriculture, manufacturing, mining, construction and other services. Twelve-month inflation remained low at 3.4 percent, notwithstanding higher energy and food prices. In financial year 2012 (FY2012), the overall fiscal deficit was 4.5 percent of Gross Domestic Product (GDP), virtually unchanged from the 2011 outturn.
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Central government revenues net of grants declined by 0.8 percent of GDP, reflecting lower income and consumption tax receipts, and non-interest current expenditures rose by one percent of GDP mainly on account of higher transfer payments to the electricity and sugar companies. The deterioration in the central government balance was offset by improved performance of state-owned enterprises whose financial position shifted from deficit to surplus. The external current account balance was broadly unchanged from 2011 and gross international reserves stood at 4.2 months of imports at end-2012. Meanwhile, the banking soundness indicators have remained strong, with capital adequacy ratios well above the regulatory minimum requirement, non performing loans (NPLs) between five and six per cent over the last three years, and provisioning for bad loans at comfortable levels. According to the report, the successes were “underpinned by favorable commodity prices and robust foreign direct” investment. “While the medium-term economic outlook remains positive, IMF Directors encouraged the Guyana authorities to persevere in their commitment to sound policies and reforms to strengthen policy buffers, promote more inclusive growth, and further reduce poverty,” it said.
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“The Directors commended the authorities for the progress so far in poverty reduction. In this regard, efforts to lower the cost of energy, address skill mismatches, and improve the business environment represent important policy initiatives,” the report said. The IMF also underscored the need for steps to increase productivity in traditional sectors, such as agriculture and mining, should also be part of a strategy to foster more inclusive growth. The report also underscored the importance of prudent fiscal consolidation anchored in a medium-term policy framework that safeguards debt sustainability, bolsters fiscal and external buffers, and addresses unmet development needs. It also indicated that priority should continue to be given to implementing reforms to boost the efficiency of public enterprises and replacing universal subsidies with better-targeted social assistance. POSITIVE OUTLOOK According to the report, the macroeconomic outlook is generally positive for 2013 and the medium term. Growth is projected at 4.8 per cent in 2013, continuing the broadbased robust expansion in economic activity. Twelve-month inflation is expected to remain low at around 3.5 per cent by yearend. The revised 2013 budget envisages an overall fiscal deficit of 5.2 percent of GDP, largely related to the worsening performance of public enterprises, which are projected to return a deficit of 0.4 percent of GDP compared to a surplus of 1.3 percent in 2012. Higher VAT receipts are projected to raise central government non-grant revenue by 0.9 percent of GDP. Meanwhile, central government capital expenditure is projected to rise by 0.4 percent of GDP, while the public wage bill as a percent of GDP will remain broadly stable and transfers will decline by 0.7 percent of GDP. The current account deficit is expected to widen to 16.8 percent of GDP in 2013, driven by higher fuel imports, lower commodity prices, and lower remittances, which are projected to fall with slowing activity in major host countries. At the same time, with larger disbursements related to an ambitious public investment program and resilient FDI, gross international reserves are projected to remain adequate at 3.6 months of imports. The Board welcomed Guyana’s strong growth over the past several years. Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. ¤
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Guyana’s Business Climate Encouraging Former US Ambassador Brendt Hardt
T
HE United States continued to be one of Guyana’s most significant trading partners to date and the former Ambassador to the country, Brent Hardt, who ended his tenure in Guyana on July 3, 2014, contends that there is much potential for continued and expansion of trade between the two countries. “Trade is a big part of our relationship…we are each other’s closest trade partners in the sense that I think the trade relations between us is the biggest of any countries,” he said, in an interview. The former Ambassador noted too that Guyana’s business climate is encouraging, as evidenced by the interest expressed in the country by American companies. “Guyana is a place we can do business,” he said. EMERGING TRADE AREAS Hardt noted that the investment prospects in Guyana are bolstered by the emerging areas for trade, including oil and Information Communication and Technology (ICT). Initial geological survey work strongly suggests the possibility of commercially viable off-shore oil and gas deposits. The U.S. Geological Survey estimates that the Guyanese coastal area holds recoverable oil reserves of roughly 15 billion barrels and gas reserves of 42 trillion cubic feet. Hardt said, “We’ve worked to encourage US in-
vestors to come here, and I know as the oil and gas field becomes increasingly of interest here in Guyana, we’ll hopefully see more US companies engaging in that area. There is already interest, and we look forward to seeing more and more companies here.” Up to December 2013, principals from petroleum companies operating in Guyana had a meeting with Minister of Natural Resources and the Environment, Robert Persaud, and Deputy Commissioner of the Guyana Geology and Mines Commission, Newell Dennison, in the United States. The meeting was held against the backdrop that Guyana has petroleum prospecting licenses issued for exploration activities by petroleum companies in the offshore, coastal, near shore, deep water and ultra-deep waters of Guyana, and within Guyana maritime areas. At the December meeting, a major investor, CGX, indicated that significant funding was being arranged for its own exploration programme over its prospecting areas, and that it should, in the near term, be advising on its plans. As recent as June 20 this year, Chief Executive Officer (CEO) of the company, Dewi Jones, said, “We are very pleased with the progress of all our activities thus far in 2014. We continue to work towards drilling our next offshore exploration well in Guyana, and are still optimistic that a joint venture partner will be secured prior to drilling.”
Hon Carolyn Rodrigues - Birkett, Guyana’s Minister of Foreign Affairs and US Ambassador Brent Hardt sign the third amendment to the Letter of Agreement on Narcotics Control and Law Enforcement 30 May 2012
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Additionally, Esso, Repsol and Anadarko were companies operating offshore, which concluded geophysical in their respective prospecting areas. Nabi Oil and Gas Inc. concluded a small geochemistry survey over their coastal onshore block in the last quarter of 2013; and together, such investments in exploration have been in the vicinity of US$50M. All the companies present committed to keep their timelines, and especially with regard to processing and interpreting their new data, which has to inform on an anticipated next campaign of drilling speculated for as early as 2015. TRADING FRAMEWORK Over the last few years, both countries have recorded much success in its trade engagements, which is supported by a number of agreements that constitute the trading framework between the countries. In May 2013, the Caribbean Community (CARICOM) and the United States signed a Trade and Investment Framework Agreement (TIFA) today in Port-of-Spain, Trinidad and Tobago. CARICOM Chairman, His Excellency Michel Martelly, the President of Haiti and Mr Joseph Biden the Vice President of the United States signed on behalf of the two sides. The signing ceremony took place following a meeting between CARICOM Heads of Government and the US Vice President at the Diplomatic Centre in Port of Spain. The Agreement is expected to drive strengthened trade and investment ties between CARICOM and the United States as it would serve as a mechanism for the two sides to develop practical strategies on a wide range of trade, investment and economic cooperation issues. This is seen as essential to spurring economic development and diversification of the Region, and to contributing to improvement in the well-being of our citizens. The implementation of the Agreement will be executed under the mechanism of the CARICOM-US Trade and Investment Council which will be led by a nominee of the
United States Ambassador to Guyana D Brent Hardt handed over a cheque of $8,967,387 to Finance Minister Dr Ashni Singh for emergency services in Region 10 - 30 May 2013
CARICOM Chair and the Office of the United States Trade Representative (USTR). The TIFA, which is the result of a revision of an Agreement signed in 1991, takes account of the multilateral trading environment created by the WTO, as well as changes in the regional environment brought on by the implementation of the CARICOM Single Market and Economy (CSME). An Initial Action Agenda, which is annexed to the Agreement, sets out areas for attention which include matters relating to the WTO; bilateral trade and investment arrangements; cooperation in regional and multilateral areas; support for regional integration; cooperation to promote and respect fundamental labor rights, social protection, and workforce development; and the facilitation of trade and investment opportunities. In addition, the Agreement establishes the framework for the discussion of issues to address the digital divide through the promotion of innovation and the dissemination of technology for increasing competitiveness, job creation, economic development and trade, as well as for discussing US trade and investment-related legislation which have extra-territorial impact. Specific examples of legislation in this regard are the Foreign Account Tax Compliance Act (FATCA), and the New US Food Safety Modernization Act (FSMA). Signing of the revised TIFA also signalled the formal launch of the revitalized Trade and Investment Council (TIC) which would be essential for CARICOM and the US to engage in the areas mentioned. A first meeting of the United States-CARICOM Trade and Investment Council under the revised TIFA is envisioned before the end of 2013. Additionally, the CSME removed restrictions on the movement of goods and services, skilled labor, and capital within the region and harmonized regional trade laws. There are opportunities for companies interested in using Guyana as a base for the duty-free export of agricultural products, manufactured goods, and consultancy services to other members of the CSME. Guyana became one of the original members of the CSME on January 1, 2006. Also, as a member of the Caribbean Basin Trade Partnership Act (CBTPA), a number of Guyanese products enjoy duty-free access to the U.S. market,
United States Ambassador to Guyana D Brent Hardt greets Hon. Dr Frank Anthony Minister of Culture Youth and Sports
including apparel knit with American-made material, agricultural products (sugar, seafood, fresh fruits) and certain non-agricultural products, such as wood. CBTPA benefits remain in effect during a “transition period” that continues through either September 30, 2020, or, if it falls sooner, the date on which the Free Trade Area of the Americas or another free trade agreement as described in legislation enters into force between the United States and a CBTPA beneficiary country. Relative to trade incentives, import duties are exempted on all agricultural equipment, including machinery. With the approval of the Commissioner General of the Guyana Revenue Authority, Guyana also exempts factory machinery and equipment imports from customs duties. Guyana also offers tax exemptions to firms that produce non-traditional exports or invest in certain regions of the country. Importantly, the overarching laws governing trade agreements are the Investment Act of 2004, whose objectives are to stimulate socioeconomic development by attracting and facilitating foreign investment. Other relevant laws include the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. SUCCESSFUL TRADING Many US consumer goods enjoy widespread recognition in Guyana. U.S. exporters tend to work through local distributors, who are generally found through personal contacts or by identifying potential industry partners. Investors seeking to establish business in Guyana should be patient, persistent, and not expect an immediate return on their investment. Visiting the country in advance of any investment decision can be critical to a project’s success. In addition, a large Guyanese diaspora community exists in the United States and potential contacts and partners may be identified there, as direct diaspora investment and remittances remain a key feature of Guyana’s success and future development.
The United States exported US$359.8 million worth of products to Guyana in 2012, representing 21.3 percent of Guyana’s total imports. In 2012, the United States was estimated as the second largest exporter to Guyana after Trinidad and Tobago. Demand for agricultural and capital machinery, telecommunications equipment, computers and computer components, agricultural chemicals (pesticides and fertilizers), lubricating oils, animal feed, and consumer food products remain strong. Guyana recorded a US$163.1 million merchandise trade surplus with the United States in 2012. This represents a significant increase from 2011 in which Guyana recorded a trade surplus of $60.9 million. The U.S. market remained significant for Guyana with export earnings of US$424.5 million at the end of 2012, an 18 percent decrease from export earnings of US$522.9 million at the end of 2011. Guyana’s imports amounted to US$359.8 million from the U.S. at the end of 2012, a 1 percent decrease from the imports value of US$363.6 million in 2011. Guyana’s major exports to the United States in 2012 continued to be non-monetary gold, fish and shellfish, aluminum and bauxite, lumber and wood, and apparel and household goods. The major imports from the United States in 2012 were machinery, foodstuffs, animal feeds, petroleum products, chemicals, computers and computer accessories, passenger vehicles, telecommunication equipment, and pharmaceuticals. Also, according to the Bank of Guyana Annual Report 2012, Guyana’s merchandise exports for 2012 amounted to US $1,395.8 million, an increase of 23.6 percent when compared to US$1,129.1 million at the end of 2011. The United States, Canada, the United Kingdom, Trinidad and Tobago, and Jamaica served as the primary markets for Guyanese exports. Guyana’s merchandise imports amounted to US$1,977.7 million in 2012, an increase of 11.7 percent when compared to US$1,770.5 million at the end of 2011. US’ policy toward Guyana seeks to develop robust, sustainable democratic institutions, laws, and political practices; support economic growth and development; promote an active, organized, and empowered civil society. ¤
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GUYANA / USA TRADE GROWING
A Strategic Relationship with Major Opportunities By Wesley Kirton
S
ince the early 19th century the United States has been a major trading partner with Guyana based largely on the exports of American manufactured products coupled with the strategic location of Port Miami as a hub for shipping both by ocean and air. Two-way or combined trade between the USA and Guyana has expanded significantly in recent years with Guyana enjoying a healthy trade surplus since becoming a beneficiary of the Caribbean Basin Initiative (CBI) which provides for duty free entry into the United States of a range of products from Caribbean Community (CARICOM) member states. Since the turn of the century US/Guyana official combined trade has totaled US $6.46 billion with Guyana exporting US$ 4.09 billion, thereby enjoying a trade surplus of about $1.7 billion. A review of Guyana’s economy confirms that today the United States remains a leading trading partner with combined trade reaching $322.3 million for the first five months of 2014. Between January and May 2014 Guyana exported goods to the value of $183 million (US) while America’s exports to Guyana reached $139.3 million (US).
US TRADE WITH GUYANA 2008 - 2013 (in millions of US dollars) YEAR EXPORTS IMPORTS BALANCE 2013 318.4 466.4 -147.9 2012 359.6 523.0 -163.4 2011 363.4 424.5 -61.1 2010 290.7 298.6 -7.9 2009 260.4 173.2 -87.2 2008 288.5 145.8 -142.7 The rapid growth of the Guyana economy and demand for Guyanese products by the significant Guyanese Diaspora market in the United States has occasioned significant growth in trade since the turn of the century. Combined trade in 2000 totaled $299 million reaching its peak to date of $882 million in 2012. Among Guyana’s major exports are non-monetary gold which reached $341,433 in 2013 followed by fish and shell fish, bauxite and aluminum, alcohol and lumber. The top US exports to Guyana are pharmaceutical preparations, foodstuff, vehicle spares, industrial machines, excavating machinery, animal feeds and unmanufactured agricultural produce.
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US EXPORTS TO GUYANA 2008 - 2013 (in thousands of US dollars) Products Wheat Corn Animal Feeds Other Foods Agri - Farming Domestic Products Pharmaceuticals Preparation Excavation Machinery Telecommunications Equipment Industrial Machines
2008
2009
2010
2011
2012
2013
2765 7077 9160 5949 4347 81040 14900 13493 4193
23 4413 9717 7334 4482 31371 43567 8688 8754
41 6631 9278 8724 6315 33855 14868 18239 6686
118 11887 11309 9735 6329 26525 32593 31225 6072
86 9251 10946 11952 7033 31383 20055 17618 8163
4937 6013 9864 13825 7884 20377 21897 10070 8732
2744
2722
5192
6037
7347
10231
2012
2013
50063 39526 395302 7725 4051
55576 44172 341433 6020 4708
Source - Compiled from US Department of Commerce Statistics
US IMPORTS FROM GUYANA 2008 - 2013 (in thousands of US dollars) 2008 2009 2010 2011
Products Fish & Shellfish Bauxite & Aluminum Nonmonetary Gold Lumber Alcoholic Beverages Excluding Wine
38631 55452 30648 3750 779
38880 21653 88042 2370 1087
37071 25153 199307 3426 4148
31925 27678 328854 6935 5607
A recent study done by Guyana-born economist Professor Claremont Kirton of the University of the West Indies, Mona Campus in Jamaica shows that remittances account for over 200 per cent of Foreign Direct Investment (FDI) and almost 25 per cent of Gross Domestic Product (GDP). Remittances to Guyana totaled almost $470 million (US) in 2012 with the US accounting for about 68 per cent of these remittances. According to Professor Kirton “migrant remittances to the Caribbean including Guyana are typically used for consumption, savings, and investment or some combination of these purposes; the limited published evidence however suggests that consumption usage is the most significant.” Trade, remittances, personal effects shipments (barrels and boxes) and migration combine to make Guyana’s relations with the United States of America a key element of its national life. ¤
In addition to the export in goods the USA has been a major source for Foreign Direct Investment into Guyana with marked increases in remittances and investment from the Guyanese Diaspora. 30 | GUYANA’S PREMIER INVESTMENT MAGAZINE
Wesley Kirton is a business executive, journalist and former diplomat. He currently serves as Corporate Manager, Marketing and External Relations at Laparkan Trading Ltd. based in Miami, Florida. He previously served as Director of Public Information in Guyana’s Ministry of Foreign Affairs and in the Guyana Permanent Mission to the United Nations. He also served as the Organization of American States (OAS) Director in the Commonwealth of the Bahamas. He is actively involved in Caribbean Diaspora activities in the US where he serves in the leadership of various organizations.
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Investing in Guyana’s Agricultural Sector
G
uyana is believed to have produced more than $75B worth of vegetables and related food, apart from locally consumed meat and dairy products in 2013.
Despite this number, Guyana’s food import bill is a staggering $30B annually-- a reflection of the vast opportunities for investment in the production of substitutes for the imported food commodities. Guyana’s Minister of Agriculture, Dr. Leslie Ramsammy, has been leading the charge for more local and international investors to become involved in the agriculture sector and has developed Guyana’s Vision for Agriculture 2020, a long term strategy to propel the sector. The strategy seeks to change the view that agriculture is for subsistence livelihood and promote agriculture as a wealth generator and entrepreneurial enterprise, producing food and non-food commodities to meet local and export demands. A major objective of the new strategy is to reduce food import and substitute with locally produced food. AGRICULTURE STRATEGY The Agriculture Strategy 2013-2020 is based on an F-5 strategic approach: • • •
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Food Security – Consolidate the gains in the Hungry-Free Initiative in Guyana, ensure everyone has enough food in every community, every day Fiber and Nutritious Food Accessible by citizens – Nutrition Security for All Fuel Production - help to develop alternative fuel sources, reduce dependency on fossil fuel and create a Bio-Energy Industry in Guyana
• •
Fashion and Health Products – An Agro- Processed Industry which creates a new industry in Guyana for health and fashion products Furniture and Crafts – An industry which can further grow in importance in Guyana
The Strategy aims to further expand the crop diversification of the country to promote items such as coconuts, cassava, pineapples, pepper, spices, culinary herbs, carrots, garlic, corn and soybean. The expansion of production of soursop, saigan and rambutan are also being given priority as health foods. Corn and Soya While corn is not a new crop cultivated in Guyana, soya is a now being introduced. Efforts are underway to acquire and test high yielding varieties of corn and soybean that are adaptable to local conditions for commercial cultivation given their importance as ingredients in animal feed production. Significant quantities of corn (40,000 tons) and a similar amount of soybean are imported on an annual basis at an overall cost of over $US20M. The Guyana Government is aiming to reduce imports of these crops by half, by 2020.
As part of government’s investment in the livestock industry, the Ministry of Agriculture is aiming to promote more interest in dairy production. Milk production in 2013 was 46M Liters while milk imports for the same year was G$7.1B. This is with the backdrop that CARICOM countries imported more than $US200M worth of milk last year. To promote milk production and to reduce Guyana’s milk import bill, government has initiated several initiatives to boost bovine production that include embryo transfer, artificial insemination and health care management. In addition, Government is working to establish a dairy herd farm at Mon Repos, on the East Coast of Demerara, to be fully operational by the end of 2014. The farm will produce imported nucleus milk breed cows which, in addition to meeting local consumption needs, can also be used to produce proceeded dairy byproducts such as yogurt and cheese. Talks have begun with a Canadian firm to establish a public-private partnership for a milk processing plant in Guyana. The potential for additional investors in the dairy industry is clearly drawing attention.
“The results so far indicate that at least two of the imported varieties (open pollinated) of corn could be produced economically,” Minister Ramsammy says “Initial cost of production is 20-25 dollars per pound. We currently import corn at 50 dollars per pound.”
SPECIFIC OPPORTUNITIES for DAIRY INVESTORS
The Minister notes that the yield for soybean is currently 2.5 tons per acre, which is similar to Brazil. Of interest to investors is the Guyana Government’s initiative to provide commercial size plots of land for purposes such as corn and soybean production. Minister Ramsammy says Government will be partnering with at least one investor in 2014 to develop semi-commercial enterprises in these areas.
•
LIVESTOCK INDUSTRY Meat The high cost of meat production in Guyana is partly pinned to the country’ dependence on imported inputs like corn and soya. Therefore it is anticipated that a major thrust for corn and soybean production will be towards the livestock industry. While Guyana generally satisfies the demand for fresh meat products, Guyana imports significant amounts of processed and canned meat products. The greatest opportunity for investors, however, lies in the export of fresh and processed meat products to CARICOM and other countries. CARCIOM’s poultry meat imports amount to almost $US300 per year. Trinidad imports about $US10M of goat meat annually. Mutton (lamb) is growing in popularity and demand in CARICOM countries. There is a serious inability of Caribbean countries to meet its demand for pork. Dairy The dairy sector in Guyana is largely underdeveloped with sporadic cattle raring and production of dairy products. The number of high producing cows capable of producing commercial quantities of milk is minimal.
•
The development of modular milk processing facilities for pasteurized milk, yogurts, paneer, cheese, ice cream, flavored milk. Establishment of dairy farms to support such plants.
In addition to direct dairy investment and development, opportunities in the servicing elements of dairy production also have huge potential. These would include the provision of: • • • • • • • • • • • • • • • •
Transport Animal Feed Storage Veterinary Pharmaceuticals Quality Control Silage Dairy Equipment and Supplies Production and Supply of Hay Services to Operate and Maintain Dairy Engineering Animal Breeding Nutritional Supplements Such as Minerals, Vitamins Farm Structures Wholesale and Retail Farm Machinery Agricultural Loans Animal Imports
AGRO PROCESSING The potential for agriculture production also creates the opportunity for non-traditional agro-processing. This industry currently has a few large, medium and small scale companies, but a large number of micro enterprises. Large companies like DDL primarily process fruits into juices whilst Sterling Products uses local fruits to make fruit flavoured yogurt. Many of the medium sized companies process local fruits and vegetables to make pepper sauce, green seasonings, casareep and other sauces that are widely sold locally and internationally to the GUYANA’S PREMIER INVESTMENT MAGAZINE | 33
Guyanese Diaspora. It is estimated that locally agro-processed commodities command around 60% of the local market for such products. Processed condiments have a CARICOM market worth more than $US250M. Apart from the individual enterprises, there is also the existence of Agro-processing Groups in Guyana. These groups include; the Mangrove Women’s group, the Young Women Christian Association (YWCA) and the Pomeroon Women’s Agro Processors Association. The Mangrove Women’s group for instance benefits from technical support from the Ministry of Agriculture in the form of training, assistance in creation of packaging materials, markets for their products among others. In return for the provision of these services, the individual groups which comprise the Mangrove Women’s group work in sync with the Ministry of Agriculture in creating an awareness of the importance of preserving the mangrove in their respective communities. On a larger scale, there is the Women Agro- Processors Development Network (WADN) which consists of an association of six Agro- processing groups. These Agro-processors are located in rural communities around the country. This network of Agroprocessors serves to empower its member groups specifically through improving their entrepreneurial skills. The small and micro- enterprises’ production generally satisfy the local market. The primary agro-processed commodities being produced for local consumption and export are: • • • • • • • •
Sauces (Pepper [Many Varieties], Casareep, Greens Seasonings), Powdered Condiments (Various Types of Meat Seasonings), Snacks (Various Types of Chips Made from Plantain, Eddo, Sweet Potato and Cassava), Juices (Various Types of Fruit Juices), Wines (Various Types of Wines Produced from Local Fruits and Barks) Coconut Water, Coconut Oil Including Virgin Coconut Oil, Coconut Milk, Coconut Cream Fruit Flavoured Yogurt Cassava Bread
Government Projects that the following items are commodities that have huge potential in agro-processing in coming years: • • •
Bottled Coconut Water-Marketed as Functional Foods Virgin Coconut Oil-Can also be Marketed as Functional Foods A Diversified Range of Sauces such as Pepper Sauce in Various Forms ¤
For further information on investing in Guyana’s Agriculture and Agro- Processing sector Contact: Ministry of Agriculture Regent St & Vlissengen Road, Georgetown Tel: 223 7844 Fax: 227 2978 Email: ps.moagy@gmail.com Website: www.agriculture.gov.gy
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A Major Contributor to the National Economy for 45 Years
NAMILCO Advances, Taking Changes in Stride
M
anaging Director of the National Milling Company of Guyana (NAMILCO), Bert Sukhai, contends that the company has come a long way in 45 years of changing operations. “In 45 years we have set trends in the manufacturing sector,” he said. One of these trends, was the fact that NAMILCO, was the first to introduce small packaging (1/2-, 1-, 2-, 10, 11.25-kg) into the local market. The company had traditionally supplied flour in only 100-pound (45-kg) bags, which lasted one month for most families, however changing demands created the opportunity for smaller packaging, as well as, in recent years, easy and quick-to-cook flour pre-mixes. These initiatives were quickly accepted by consumers. According to Sukhai, when the company had a monopoly in Guyana it operated as monopolies do, but market changes have seen the company moving toward expanding its market shares, addressing the issue of internal operating efficiency and meeting the changing demands of its customers. Looking to the future, the Managing Director was confident that NAMILCO will be in operation for another 45 years, at the least.“We have made progress in the
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last four decades and there is much scope for our continued operation, success and ability to contribute to the local economy for another 45 years,” he said. Sukhai added that in the company’s advance, change will be taken in stride and the company continues to improve. Among the changes on the horizon that he referenced were NAMILCO’s moves towards modernisation, the launch of new products, the upgrading of standard certification, the role of the ongoing agricultural diversification drive in Guyana and access to new markets. When the mill reopened in 1985 after the death of former President, Forbes Burnham, NAMILCO took major steps by then purchasing new roller mills and new electrical panels, increasing milling capacity by 20 per cent and storage capacity by 27 per cent. Recently the company spent some US$2M in its modernisation drive and is slated to spend another US$1.5M to improve both its infrastructure and capacity. This modernisation drive is expected to better equip the company’s ability to deliver on customers’ demands. Sukhai disclosed that the next new product is expected to be released by NAMILCO in 2015 and will cater to the demand of the customers, as NAMILCO has done over the past years. Among its “Maid Marian Range” of products are: Self-Rising Flour, Roti Mix, Wheat-Up Breakfast Cereal, Creamed Wheat-Up, Toasted Wheatgerm, Pholourie Quick-Mix, Parsad and Halwa (Sirnee) Flour Mix, Harvest High Fibre Whole Wheat Flour, Real Whole Wheat Flour, Multigrain Flour, Thunderbolt All-Purpose Flour and High Gluten Flour. The company’s Quality Assurance Manager, Taijwattie William, stated that the feedback of customers on NAMILCO’s products are quintessential, particularly as it relates to the its upgrading of standards certification. NAMILCO was certified to the ISO 9001:2008, Quality Management Standard in 2009 and to comply with this standard the company has to ensure that certain production procedures are established, implemented and maintained by each department involved in the manufacturing process. Over the years, the system has streamlined the manufacturing process by frequently monitoring for improvements which is conducted by a team of trained auditors.
According to William, the next move will be towards the attainment of the ISO 22000, which specifies the requirements for a food safety management system that involves: interactive communication with customers, system management, prerequisite programmes and Hazard Analysis and Critical Control Point (HACCP) principles. The Quality Assurance Manager explained that the achievement of the ISO 22000 will be based on ensuring the right infrastructure and capacity, as well as customer feedback is in place – all of which NAMILCO is currently working on. NAMILCO presently has its products in the Unites States of America, Canada, Turks and Caicos, Barbados, Suriname, Antigua and Brazil markets. Maintaining these markets and more importantly, expanding the company’s share in these markets, are not undertaking without challenges. NAMILCO’s Operations Manager, Ralf Hemsing, stated that among these are the issues of energy inputs. He pointed out that the energy costs are high and the production of power by NAMILCO is an expensive undertaking, hence the hope that Guyana’s hydropower programme will come on stream soon. “We know what the deficiencies are,” Hemsing said, adding that the construction of a new mill is also on the cards for the NAMILCO. The company’s Finance Controller, Fitzroy McLeod highlighted other challenges affecting the entity’s operations. He noted the challenge of handling price sensitive products in a competitive environment. According to him, ensuring that pricing is both attractive and competitive is not always an easy undertaking, given the fluctuations in world wheat prices, freight costs and the costs of other inputs. “We are working within these constraints,” McLeod said, adding that the company’s expansion drive will hopefully assist in addressing the challenges – all in the interest of protecting consumers and ensuring the company’s viability. On the issue of exports, he added that there is potential for growth, especially in exports of NAMILCO’s value added products, but this was often constrained by challenges with infrastructure and logistics resulting in limited access to some markets.
The official added that Information Communication and Technology (ICT) advances are also supporting the company’s endeavours. While the company continues to advance and, by extension, contribute to the Gross Domestic Product (GDP) of Guyana, it also places attention on support at the grassroots level. NAMILCO makes contributions to the sports sector, though a number of tournaments, donations to the Health Ministry, charitable groups and orphanages, as well as its peer educations programme on HIV/AIDS. “We provide service behind our product,” the Managing Director opined. He reiterated NAMILCO’s commitment to quality products and support to the Guyanese people and Guyana, as the company advances. The company, in its manufacturing process, according to Sukhai, ensures it replaces the essential vitamins and minerals taken out in the milling process and also adds iron in line with the Guyana and Caribbean Community (CARICOM) standards plus folic acid essential for pregnant and lactating mothers.
NAMILCO undoubtedly continues to play a vital role in the local economy, particularly considering its role in ensuring its products, a staple in Guyana, is on the table daily, providing the essential vitamins and minerals necessary for good health and catering for the health conscious consumers. ¤
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Second Generation Leader Looking at Next-Level Operations
P
RITIPAUL Singh Investment Inc. is the largest harvester, processor and exporter of chilled quality seafood, including shrimp and fish. And with second generation leadership, in the form of Pritipaul Singh Jr., at the massive operations’ helm, the company is being taken to the next level through modernisation, the employment of new technology, and is benefiting from the fresh ideas of a revamped management team. The younger Singh, the Assistant Managing Director of the company, at 20-years-old, is among the youngest to hold such a post and he told Invest Guyana that his management team consists of persons who are all younger than 45-years-old. Although, he does not discount the contributions of persons with many more years of experience, Singh Jr. contends that there are benefits to be had
from combining this with the engagement of ‘young blood’ to take the company forward. “My dad built an empire from the ground up and my role here is to make sure we move to realise our potential. My father, as Managing Director, agrees that a revamped team will be able to do more and make the company even better,” Singh said. According to him, there are many plans in the pipelines to improve the company’s operations and broaden the range of products being offered “We are currently looking at installing an automated packaging system, which will replace manual packaging, hopefully around September this year,” he said. The Assistant Managing Director added that the expansion of the company’s product line is likely to look at value added products, including filets, portioned packaging and flavoured seafood, such as jerk prawns or fish.
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The younger Singh, however, noted too that the seafood industry is a tough business and the move forward is not without its challenges. He explained that the fact that the company places emphasis of being self-sufficient, in terms of utilities and other factors, allows it to address the daily challenges; in addition to consistent upgrades in the company’s operations assist in ensuring customer satisfaction and maintain the company’s profit margin. “We produce our own energy and we have two wells that are able to produce large volumes in a small time. We feel that being self-sufficient, not having to depend on other sources, is important,” Singh Jr. said, “We are also looking at putting in new equipment on our shipping vessels to be able to monitor our operations to make it more efficient.” The Assistant Managing Director expressed his optimism over access to markets once the company’s modernisation plans come on fully on stream.
“Right now we may have some challenges in penetrating the US (United States of America) market, because there are several other companies in that market. What we are confident on is the Caribbean and the EU (European Union) markets where we are sure that, for example, our new products will be accepted,” Singh Jr. said. Currently the seafood industry contributes 1.75 per cent to Guyana’s Gross Domestic Product (GPD), of which Pritipaul Singh Investments Inc. accounts for one per cent. “Between 70 and 80 per cent of all seafood exports from Guyana is done by our company,” the Assistant Managing Director said. He made it clear that there is a conscious effort to make the company the best, as it reflected in its certifications, as well as its focus on giving back to the communities. Singh pointed out that there are several ongoing projects that address infrastructural development support for the religious community. “My vision is that in time we will be able to place more focus on children, who are the most vulnerable, and look at the establishment of a home that will address their educational needs and such,” he said. The Assistant Managing Director underscored the scope of work being done by the company, the realism and potential for success in the vision for the future and the emphasis being placed on giving back to society – all a continuation of humble beginnings of an altruistic and visionary entrepreneur. “We will get there,” Singh Jr. said, “Like my dad said, with no risks there are no gains.” Today Pritipaul Singh Investments Inc. is a vast, hustling, complex employing around 1,500 people and producing large volumes of processed seafood for export under the Mid-Atlantic Seafoods label – with much more changes to come. ¤ GUYANA’S PREMIER INVESTMENT MAGAZINE | 39
ICT
AS A PRODUCTIVE SECTOR
Lance Hinds
T
he development of the Information and Communications Technology (ICT) sector can transform life in Guyana in so many ways. Despite all the sentiment about our tradition productive sectors, it is the technology driven, knowledge management industries and economies that will have to be the cornerstone of this country’s future. It is therefore this sector that will play the leading role in transforming our country’s economy and putting our nation on the path to developed country status. The appropriate utilisation of ICTs can improve the lives of all Guyanese, but it is critical the industry is developed and nurtured. This involves the application of ICT in all sectors and at all levels of our economy and society. Information and Communications Technologies have become engines for social and economic growth globally. In other countries in the Caribbean, the past two decades has been a period which has seen the introduction and spread in use of mobile phones, personal computers and the Internet, dramatic expansion in the number
and range of telecommunications and broadcast media providers, and growth of applications of ICTs in businesses, schools and households. The promulgation the ICT in Guyana has been a very mixed bag. It has meandered, it has had its fits and starts, it has had some individual achievements but by and large 2014 we are still way behind our Caribbean colleagues in the use of ICT to contribute to national development and increased wealth. The development of ICT as a productive sector has been slow. The high cost of supporting infrastructure, absence of enabling legislation, limited skill sets has been a significant contributor to this state of affairs. It is not to say that there has not been any progress. The call center industry has now created close to 3,000 jobs although it should be noted that it was projected that 6,000 jobs would be generated in this market. It is believed that contributing factors to the inability to meet this market include the contraction of the world economy in 2008-2009 and also the high cost of connectivity as a result of a
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The opportunities are available now. Recent advances in technology have “levelled the playing field”, It is therefore now possible for small developing countries like Guyana to play a successful part in the emerging knowledge-based global society. It is critical now that Guyana begin to take advantage of the current and emerging opportunities. Lance Hinds is President of the Georgetown Chamber Commerce and Industry and the Chief Executive of the BrainStreet Group, an Information Technology and Content Development Company. He is also a member of the Caricom Regional ICT Steering Committee and the Regional Innovation and Private Sector Advisory Groups for the Caribbean Export Development Agency (CEDA)
lack of a liberalized telecommunication environment. The University of Guyana’s department of Computer Science has been upgrading their computer science curriculum is now producing better prepared graduates than in previous years. Local ICT Companies are now working in closer partnership with the department of Computer Science with internships and scholarships as a contribution to the enabling environment that is required. The Georgetown Chamber of Commerce and Industry (GCCI) believes conceptually that the private sector must expand significantly in order for the local economy to deliver the revenue, wealth and job creation critical to socioeconomic improvement of its citizens. It is vein it recognizes that ICT must be the fundamental cross cutting component in the overall national vision to attain developed country status in the coming years. The Chamber believes that this will involve the growth of the ICT as in independent, dynamic business sector and also the application of ICT as a cross cutting component in all other productive sectors to achieve rapid and sustained development. In order to achieve this there must be an action-oriented portfolio
of initiatives, formulated over distinct time frames for our long-term objectives, medium-term objectives and short-term priorities. It is with the understanding of these priorities that the GCCI is developing a raft of initiatives that will be based on the following pillars: • • • •
Entrepreneurship Innovation Investment Growth and wealth creation
The overall strategic objective will be the development of an environment that will consistently enable the creation and sustainability of ICT related businesses and the development of a competitive knowledge economy. The initiatives will support the possibilities and processes involved in building capacity for the sector: creating policies and programmes that will stimulate new business opportunities, innovation and entrepreneurship in the local ICT sector. It is critical that the culture of innovation is developed and nurtured: getting high school and university graduates to tap into their creativity and to channel that into creating businesses. There are lots young people with great ideas who are unable to convert those into sustainable
income-generating operations. The GCCI has committed to finding a way to harness these ideas and put the impetus for moving those ideas from thought to finish. The Chamber looks forward for telecommunications liberalization later on this year. Connectivity rates for enterprise level/high end connectivity are still among the highest in the Caribbean. It is only competition that will address that state of affairs. Comprehensive intellectual property is fundamental, critical for the development of a successful knowledge economy. It is difficult to provide the higher level of ICT services otherwise. Guyana can only position itself as a credible offshore provider of ICT related services if prospective clients are comfortable that their intellectual assets are protected. The opportunities are available now. Recent advances in technology have “levelled the playing field”, It is therefore now possible for small developing countries like Guyana to play a successful part in the emerging knowledge-based global society. It is critical now that Guyana begin to take advantage of the current and emerging opportunities. Now is waiting for this country to realize its ‘potential’. The time for talking is now over. A call to action is now required. It is long overdue. ¤
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President Ramotar Interacts with Students in Computer Lab
Bridging the Digital Divide
OLPF Project Creating an ICT Skilled Next Generation and Workforce
I
nformation and Communication Technology (ICT) has emerged as one of the most effective global developmental drivers that can foster greater prosperity and social transformation among nations. The Government of Guyana, through the One Laptop Per Family Project (OLPF), is at the forefront among regional counterparts, changing the lives of its citizens by providing them with the tool and training that will harness this potential. The OLPF Project is a national initiative aimed at Bridging the Digital Divide, by providing access to information technology, the internet, training and skills development to families across Guyana that will enable citizens to become part of the global information and knowledge highway in addition to developing an ever increasing technologically skilled workforce and nation. The OLPF programme was pioneered by former President Bharrat Jagdeo and launched in 2011. The original aim of this programme is to equip 90,000 families with laptops and to expand the use of ICT across the country. For the first three years of the project, the OLPF scheme will deliver 90,000 laptops to targeted groups and families in urban, coastal and hinterland communities, who will reflect a diverse background. The primary focus is on youth, single parents and disadvantaged groups ensuring that today’s teenagers and youths get the resources (laptops, internet connection, maintenance and support) and skills training that will enable them to graduate into
the modern economy as prepared knowledge-based workers, who are capable of enhancing their own growth. Haier Electrical Appliances Limited, a Chinese company won the bid to supply the Laptops for the One Laptop Per Family (OLPF) programme through the award of a contract for US$7.5 Million for the initial supply of 27,000 netbooks. The project was initially launched in January 2011, when 142 computers were ceremonially handed over to a group of students. Since its launch, many successes have been recorded. One of the most outstanding of those has been the opportunities provided to visually impaired Guyanese. Some 34 persons were supplied with user friendly laptops appropriate to their disability when the OLPF Secretariat continued its Region Four (Demerara/ Mahaica) distribution drive at the Guyana Society for the Blind (GSB) at St Phillip’s Green. The laptops possess the computer software; Job Access with Speech (JAWS) that allows for the visually impaired user to read the screen of the laptop using either a text-to-speech output or a refreshable Braille display. A keyboard and a headphone each were also given to the beneficiaries In 2012, during the first phase of the OLPF countrywide distribution, the GSB was supplied with just over 20 laptops. As a spin-off from the laptops supplied and the training provided, the GSB began offering Caribbean Secondary Education Certificate (CSEC) classes in various subject areas for visually impaired students. This relationship also supports their literacy GUYANA’S PREMIER INVESTMENT MAGAZINE | 43
inherent flexibility through mobility allows them to outreach to groups and individuals alike to maximize potential. Laptops also complement the approach to information technology in schools around the “computer lab” which focuses on students only, lifting limitations reflecting better outreach and access. Consistently, evaluation studies report substantial impact of the introduction of technology in several important dimensions across different segments of society, such as motivation to learn, autonomy and diversification of sources in which to seek information, engagement with school and community initiatives, and parental support – engagement as part of the learning framework. Finance Minister Dr. Ashni Singh and Chinese Ambassador Zhang Limin with some of the laptops donated to the Government of Guyana by China
programme. These recipients will be provided with 30 hours of training (two hours per day) instead of the normal 10-hours mandatory training. Additionally, in May, a total of 3,000 laptops were distributed to to beneficiaries in Region Four. A total of 1391 laptops were distributed to families in various communities including Chapman to Grove, East Coast Demerara, and Diamond to Craig, Good Success to Coverden, and Samatha Point to Caneville, all on the East Bank and several city areas such as Campbellville, Lodge, Kingston, Cummingsburg, Tucville, Guyhoc, Subryanville, Meadow Brook Gardens and Alberttown. Recipients from Chapman to Grove received 276 laptops, while at the Woolford Avenue distribution centre, 136 benefited. A total of 204 were distributed in Lodge, 121 in Section K Campbellville and the largest number of 654 to recipients spanning from Diamond to Craig. Prior to this current distribution phase, 28,000 laptops were already given out to numerous families in various communities countrywide. This current phases target a further 6000 recipients of the East Coast, East Bank and Georgetown areas. WHY LAPTOPS? The advantages of laptops are varied, particularly as it relates to their mobility. Other advantages include: •
• •
• •
The equity rationale: given that high-income families are very likely to own a computer at home in the region, low income children are placed at a considerable disadvantage, relative to their better-off peers. The competitiveness rationale: other reasons are closely related to the larger motivations that have turned education and learning reform into a sustained top level priority, in a world economy characterized by technology, the knowledge capital of nations has become a major source of competitive advantage. In this context, information technology has been seen as the influencer and enabler Reach: The laptop is mobile and hence can be accessed by a far wider audience.Laptops will be used at family and community level groups to support knowledge sharing, access to Government and other information resources. Laptops
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Laptops will be internet enabled, where Internet access at dedicated ICT Hubs is allowed and where end users do not have Internet access at home. This method allows end users and groups, families, and communities to share and engage in information and knowledge dissemination on a much far wider basis than static computer labs. New generations of school children and teenagers are becoming known as “digital natives” in contrast with “digital immigrants” (teachers and all adults). That said, there is no doubt about the opportunities ICT hold relative to bolstering the development of Guyana, and in this regard the OLPF drive continues. ¤
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An Interview with Komal R Samaroo Chairman of the Demerara Distillers Ltd Group
D
emerara Distillers Ltd. has consolidated under its control the business of rum production which started in Guyana over 300 years ago. Today the DDL Group of companies is one of the leading alcohol and beverage manufacturing companies in Guyana and the Caribbean producing a full line of fine Rums, Liquors, Liqueurs, Carbonated Beverages including Pepsi, Seven UP, Slice and Soca, Mineral Water, Fruit Juices Jams and Jellies. With the increasing demand for its Rums and growth of market share DDL officially launched on the international market the “Eldorado” range of rum in 1992. Over the years this range has evolved to become one of the world’s leading brands of Rum and the flagship Rum of Guyana. The Group also has expanded locally and overseas and diversified its portfolio venturing into distribution of agency products, shipping, warehousing and insurance. The DDL group as it is known today is one of the major Trading Groups operating in Guyana which is primarily locally owned and operated.
FACING the CHALLENGES and FOCUSED on the
OPPORTUNITIES
Q. Guyana’s economy has grown significantly over the past decade. What are your thoughts on the Investment Opportunities in Guyana? KS.
A growing economy presents opportunities for growth and expansion of existing activities as well as attraction of investments in new areas. As you know Guyana is richly endowed with mineral resources. If you were to analyse the country’s export earnings in recent years, you will observe the significant increase in the earnings from the mining sector. The astronomical increase in the international gold price has been a catalyst for significant investment in the sector in Guyana. In addition, the rice sector has experienced strong growth in face of new attractively priced markets. But the fact of the matter is that buoyancy in the economy, triggered by any sector(s), helps to attract investments in all sectors as spending power is on the rise.
Q. As the new Chairman of the DDL Group, What are some of the strategic initiatives you intend to execute in the short term to benefit from this growing investment / economic environment?
In late 2013, the long standing DDL Chairman Dr Yesu Persaud retired after many decades. Mr. Komal Samaroo a former DDL Group Managing Director and International Marketing Vice President has become the new Chairman.
KS. DDL’s strategy is two fold - firstly, to move its traditional distilling business higher up the value chain through development of its Brands internationally, and secondly, to expand its revenue through diversification into related areas using the core competencies in the organisation.
Mr Samaroo – a Chartered Accountant by profession, has been integrally involved in the development and diversification thrust of DDL and in recent times has been personally piloting the export thrust of the El Dorado brand which has grown significantly under his leadership. He shares his thoughts on Investment and Development Opportunities in Guyana.
Historically, the company’s main business was the exporting of bulk rum to Europe under preferential access provided by the Lome Convention which was a trade agreement designed to protect the traditional trade flows to Europe from ACP countries. But as the decade of the 1980’s was coming to an end we realised that the trade preferences we enjoyed at that time was not sustainable as the world was engaged in global trade negotiations leading to the establishment of the WTO. This was the background to the strategic decision in the late 1980’s to pursue a strategy of brand development internationally.
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We recognised that brand development was a long term strategy. At this point in time we are still at an early stage in developing the Eldorado Rum brand, so there is a lot more to come as we build a most comprehensive portfolio of premium and deluxe rum. Other liquor brands are also targeted for development in the future. In relation to diversification, carbon dioxide recovered from the rum fermentation process is used in the production of carbonated beverages, which together with our Topco juice range give our distribution sector a wider product portfolio to offer to our customers. Our non-alcoholic portfolio continues to be expanded as we recently added juice based drinks to meet demand from consumers who are becoming more health conscious. We will continue to invest in upgrading our Demerara Shipping operations which meets the need of our growing international business while provide a service to importers and exporters generally.
Q. Based on your DDL experience and the Group’s growth, what would be your advice to potential investors looking at investment opportunities in Guyana? KS. Any investor who is entering a new market must do their
feasibility studies, identify their competitive advantage, and invest in human resource development. It is no different for an investor looking for opportunities in Guyana.
Q. DDL in the last year has made some significant investments in
upgrading its manufacturing plant and production capacity. What are the projected benefits of this decision?
KS. We invested significantly in our distillation and bottling facilities to expand our capacity to meet growing international demand, while at the same time automate some of the processes to meet the exacting quality specifications of the international market place. In addition, we needed to reduce production costs so as to release resources for investment in market development. These investments were critical to the success of our strategy of developing our international markets. Q. DDL has built a world famous brand with its “El Dorado Rum“
which has also given Guyana added brand recognition. How can we as a country capitalize on linkages with your brand?
KS. A major part of our brand message is based on the history and heritage of rum production in Guyana as well as the unique processes we use. As you know, Demerara rum was a major component of the ‘rum tot’ served on the British navy for several centuries until it was abolished in July 1970. The manufacturing process as well as the use of our Demerara Rum is inextricably linked to our country’s history. Many of our customers learn about Guyana for the first time from the numerous educational marketing activities we undertake in many countries around the world. So we do market the country as well, as we talk about the historical development of the sugar and rum industries. The prize for the cocktail competitions we organise is a visit to Guyana visiting the distillery and experiencing the country and some of its tourism products. Each year we have several dozens of our customers and partners visiting our distillery to see our production process and we expose them to the life, culture and tourist sites in the country.
El Dorado Rums and CPL Sign Three Year Sponsorship Agreement
In today’s world, consumers of luxury products want to know more about the products they consume. Eldorado Rum is positioned at the top end of the spirits market. We target affluent consumers who want to travel, visit exotic places and experience different life styles.
Q. How important has marketing been in the building of the “El Dorado“ brand and what advice you have in guiding other manufacturers to position their products to generate similar success? KS.
Huge. First and foremost the positioning of Brand Eldorado must be understood. The first product we created for the international market was the 15 year old Eldorado Rum. At the time it was the most expensive rum on the market. We created a product for a completely new segment of the rum market premium sipping rum - capitalising on the trend towards the premiumisation of alcohol consumption. As such we invested significantly in getting our positioning and the style of our rums communicated to targeted consumers. We employed brand ambassadors and advocates to carry our message to influencers in key markets. Our experience is that innovation and differentiation create strong competitive advantage if the message is carefully crafted and communicated to attract and excite new consumers to the category rather than try being another “me too” brand. But for the investment in market to yield any result we needed to get distribution, so that consumers who know about the product can find it when they go to a liquor store. This has been a huge challenge as retailers have thousands of products to choose from and retail shelf space is very limited relative to demand. In addition we come up against brands which benefit from huge subsidy and marketing support.
Q. What are some of the challenges you face today in managing such a diverse group of businesses and your suggestions for addressing same? KS. Although our group is diverse there is a lot of commonalities. In addition, for each of these businesses we have international partners and benefit from their knowledge of best practices in the industry. Actually, our diversity makes us stronger as a group, as each company is interdependent with other companies in the group. GUYANA’S PREMIER INVESTMENT MAGAZINE | 47
Our focus has always been on the development of youth in the areas of Sports and Education. DDL has a proven track record as one of the major sponsors of sports, especially sports that aid the development of youth. Presently, we are involved in cycling, cricket, amateur boxing, football, rugby, hockey and chess amongst others. However, I must admit that the one I am most passionate about is the DDL Foundation. The Foundation which was launched in December 2010 focuses on the advancement of education for high performing secondary students by assisting with the main costs associated with attending school. This includes uniforms, transportation and meals. All students who have excelled in the National Grade Six Examination and who have demonstrated their need for assistance as a result of their financial or social constraints can apply to the Foundation. The Foundation is being managed by volunteers from the DDL staff body and also includes a Mentorship Program where each child is linked to a Mentor who monitors the performance of the child and provided the necessary moral and other support during the period of their relationship with the Foundation. At this time we have 22 young people who are benefitting and we are currently interviewing to add another 5 for the new academic year which starts in September 2014.
Q. Training and Human Resource Development is a critical component. What are some of the successful approaches and programs implemented at the DDL Group to attract and maintain quality personnel? KS. Our most valuable resource is our people. That is why we
invest so much in their development. We have several schemes to attract and constantly upgrade the skills of the human capacity of the company. We employ high school graduates and offer them a career through on the job training and, in some cases, sponsorship at the University of Guyana or through after hours study schemes in areas such as accounting through which they are refunded their cost once successful at the examinations. Each year we also employ university graduates as Management Trainees and expose them to practical training and mentorship within the company that equip them for management positions later on. Several of our senior executives and management staff in the company today came through this program. We also have an in-house training institute that provides on-going training to help all levels of staff in the organisation to keep their knowledge and skills level in line with the changing demands of their jobs.
Q. Corporate Social Responsibility has now become a subject of major focus for companies. What are your thoughts on this subject and some of the initiatives being executed by your DDL Group? KS. As a Guyanese company we strongly believe that it is our responsibility to help develop the next generation of consumers and employees who will be the future of our company as well as the country. 48 | GUYANA’S PREMIER INVESTMENT MAGAZINE
Q. The manufacturing sector has not seen the growth and expansion with the potential of the sector in recent years. What are some of the factors affecting the manufacturing sector and how best we can address these to encourage further investments in manufacturing? KS. In order to attract further investment to the manufacturing sector, there’s need to strategically and comprehensively address the issues of high cost of energy, shortage of technical and others skilled personnel, the small size of the domestic market, the increasing illegal and parallel traded products in the domestic market; the substantial investment and resources required to penetrate international market where ,very often, unfair competition is dominant. These are some of the numerous challenges to be overcome if one is to build a sustainable manufacturing business. Q. What would be your advice to our next generation of entrepreneurs in their quest to invest in Guyana by establishing a manufacturing enterprise and be successful? KS.
I believe that investment decisions in the manufacturing sector should be led by market considerations. Investors should research and study their target markets, determine their positioning and differentiation from existing products and do their feasibility studies, including sensitivity analysis, before investing. Where there is a large domestic market it is easier to start manufacturing businesses, but where a significant portion of the production has to be exported the potential risks are quite high. Manufacturing of products that are commodities in nature are easier to research, but where the product targets consumers around the world, as we do with Eldorado Rum, the marketing plans and selling and distribution strategies have to be very carefully and thoroughly researched. ¤
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Supporting Entrepreneurs in Driving the Economy Training and Development Critical to Their Success
S
mall and medium sized enterprises (SMEs) are central players in the dynamics of international economies. These bodies are increasingly gaining prominence as significant engines of innovation and employment generation, typically contributing to about 90% of the Gross Domestic Product (GDP), outside of government, and, according to the Caribbean Community (CARICOM), over 70% of employment in the Caribbean. As such, SME development has emerged as a key instrument in regional poverty reduction efforts. According to recent statistics published by the Index Mundi, Guyana has been experiencing a marked upward trajectory of economic development and commercial activity over the past two years. This growth indicates a continuation of the trend of steady improvement in the country’s economic profile over the past decade. This change can be largely attributed to the diversification of the economy from a primarily agriculturally-based monoculture to a competitive, multi-dimensional marketplace. This evolution speaks to the renewed vitality of Guyana’s private sector activity: there is a generation of entrepreneurs that is changing how the country does business. The private sector of a nation’s economy is vital to the growth and strength of that economy. This point has been undeniably demonstrated in Guyana. The owners and managers of small and medium sized enterprises (SMEs) are central players in the fiscal dynamics of the Caribbean Forum (CARIFORUM) country. These tenacious ground breakers are fuelling innovation and
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employment generation. Globalisation and trade liberalisation have ushered in new opportunities, as well as challenges, which the entrepreneurs are both taking advantage of and overcoming. Enhancing the environment within which these SMEs interact with the economy is crucial to its continuous growth and development. The Caribbean Export Development Agency (Caribbean Export) offers support to the private sectors of CARIFORUM States like Guyana through a variety of programme-based interventions that include benchmarking and assessment, brand development and packaging, branding and marketing for investment promotion, copyright, economic partnership agreement (EPA) awareness, export marketing, grant proposal writing, intellectual property and management consulting. The Agency recognises the challenges that SMEs in the Caribbean face in achieving optimal operational standards and thus the Agency aims to provide ameliorative measures through these initiatives. Guyana has risen to form, demonstrating a significant uptake in participation. “The Agency is very impressed with the noticeable increase in participation from Guyanese firms. We look forward to an even greater number of small and medium-sized enterprises and business support organizations taking part in Caribbean Export activities in 2014 and beyond” commented Caribbean Export’s Executive Director, Pamela Coke-Hamilton. It is widely agreed that the primary assets of any firm, especially SMEs, is their human capital. These assets are even more valuable
in the knowledge-based economy, where intangible services and variables are of growing importance. As such, augmenting the capacity of SMEs, through a focus on human capital, will not only improve the skills of the overall population but also stimulate continuous innovation within firms and, ultimately, drive economic growth. In 2013, seventy-nine (79) small and medium-sizes enterprises (SMEs) and five (5) business support organisations (BSOs), namely the Guyana Chamber of Commerce and Industry, Guyana Coalition of Service Providers, Guyana Manufacturing and Services Association and Guyana Office of Investment and the Guyana Small Business Association, participated in Caribbean Export programme-based activities. In total, one hundred and thirteen (113) individuals from these firms and BSOs participated in activities. These figures represent a 105% increase in participation since 2012, which saw fifty-five (55) individuals involved in Agency initiatives. The greatest level of involvement however, has been in the grant proposal writing workshop, which was hosted in collaboration with the Georgetown Chamber of Commerce and Industry. The workshop covered a range of areas including technical writing styles, understanding the concepts of objectives, results, approach and methodology, activities, and budgets, thus determining the appropriate content for each category of information. Caribbean Export’s underlying approach to this training is ensuring that all participants ultimately have the ability to access grant funding from any donor programme using the provided guidelines. A total of ninety-five (95) persons attended this event in 2013, compared to eighty- four (84) in 2012.
As a well-constructed proposal is essential for consideration for any grant, the training which Guyanese firms have undergone is a very worthwhile investment. As a result of this workshop, Guyanese firms were able to respond to the Agency’s Call for Proposals under the Direct Assistance Grant Scheme (DAGS) in 2011. Five firms and one BSO were successful in their bids for the Regular Procedures Grant from Caribbean Export to execute projects. These beneficiaries were: Brass Aluminum and Cast Iron Foundry, Citrus Company of Guyana Inc., Forest Products Development & Marketing Council of Guyana Inc., Guyana Apicultural Society, Guyana Manufacturing & Services Association, and TCL Guyana Incorporated. Caribbean Export is committed to assisting SMEs in becoming well-versed in export procedures and requirements and in developing the skills to become a viable competitor on the global market in addition to attaining the necessary resources to make export visions a reality. We seek to achieve this through strategies that require and encourage enterprise participation. To date, under the 10th European Development Fund (EDF) Regional Private Sector Development Programme (RPSDP), in Guyana a total of one hundred and sixty-eight (168) individuals from one hundred and forty (140) SMEs and BSOs have contributed to the success of seventeen (17) Caribbean Export initiatives regionally and internationally. ¤ More information about Caribbean Export can be found at http://www.carib-export.com.
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IAST Creating Opportunities for Commercial Investment
A
Converting Waste to Industrial Raw Material
FTER a period of significant decline and lack of funding, the Government of Guyana, over the past eight years, has been focused on the resuscitation of the Institute of Applied Science and Technology
(IAST). Professor Suresh Narine, named one of Canada’s Top 40-under-40 in 2011 and a Senior Professor at Trent University, was recruited in 2006 to re-focus and rebuild the institute. Under his direction, the facility, located on its own grounds within the University of Guyana Campus, now boasts a modern state of the art laboratory focused on organic and analytical chemistry and materials physics. There has been a renewal of the staff base, and an active program to train highly qualified personnel put in place, aided in part through new memorandums of understanding with the University of Guyana and Trent University in Canada. Since 2006, a number of pilot-scale demonstration projects have been developed by the IAST that are now at the commercialization stage: biogas technology utilizing hemicellulosic feedstock; biodiesel technology utilizing both waste and virgin vegetable oils and animal fats; renewable energy briquetting technology utilizing forestProfessor Suresh Narine ry and agricultural waste; extrusion technology focused on the production of cereals, pasta, risotto and other food products from local agricultural commodities; rubberized asphalt cement production utilizing used tyres; chemical conversion of coconut oil into value-added chemicals, soaps and detergents; a variety of clay-based technologies, including compressed clay building blocks and extraction technologies targeting a range of bioactive and flavor compounds such as lemon grass, sage, jasmine, etc. One such process that the institute has Research in Progress at IAST Laboratory
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developed recently is the manufacture of roofing shingles and other structural construction materials from wood and agricultural waste, combined with certain types of recycled or virgin plastics. The institute is now focused on partnering with investors to commercialize these technologies in the country. Presently, the Institute is offering training to any potential investor in this proIAST Complex
cess, not only in the various unit operations, but also in the quality control testing required. Roofing using this material is very simple – the material can be both nailed or screwed, and provide a highly aesthetic, leak-proof, maintenance-free, lifetime roof. The shingles are installed on plyboard by either nailing or screwing the shingles into the plyboard. In this edition of Invest Guyana, we focus on presenting the processes developed for the manufacture of roofing shingles or roofing tiles. MANUFACTURING ADVANCE Guyana’s forestry, sugar and rice industries produces wood waste, bagasse and rice hulls which is equivalent to approximately 370 per cent of the entire country’s diesel utilization, according to a 2007 report from the Economic Commission for Latin America and the Caribean (ECLAC). This waste biomass is not only abundant, it is entirely unutilized, and is either left to rot in the environment or is burned, especially by rice milling operations, leading to environmental and air quality issues. Some of the bagasse produced is indeed utilized by the national sugar company, GUYSUCO, in their co-generation efforts at the Skeldon Factory and the Enmore Factory, but this amount
Rice Hulls Being Burnt
is not factored into the amount of waste biomass estimated above. This amount of unutilized waste presents untapped and lucrative opportunities in both energy and materials applications. The institute has also developed a robust technology to produce energy briquettes from the waste biomass, which is currently going through the commercialization process with a private investor. There are four main processes which are used to produce the roof shingles: milling, drying, extrusion, and injection molding.
With the Fibre Milling and Drying process, waste from sugar mills; bagasse, waste from rice mills; rice hulls, and waste from saw mills; shavings and wood powder are collected from the many milling operations on the coast of Guyana. These materials are then milled using a hammer mill and sieving operation into very fine powder with carefully controlled particle size and distribution. The milling process is robust and simple, not requiring skilled labor, and access to all spare parts is facile. The process can be easily run from a generator and indeed the entire process at the Institute is run from power generated using biodiesel produced at the institute. The powder so created must be dried to almost zero percent moisture, and this can either be done in an electric oven, or in a specially
Plastic Waste Being Processed
designed solar drier designed by the institute – both the solar drier and an oven are part of the pilot scale operation at the institute, with the solar drier providing a significantly lower cost solution to drying. The Plastic Selection and Drying process utilizes three types of plastic – polypropylene, and high and low density polyethylene. These can either be from recycled materials or virgin plastic pellets. The recycled material is first washed and all foreign materials such as labels and dirt removed, and then chipped into smaller sized particles using a standard plastic chipper. Both the recycled plastic and virgin plastic must be dried to zero percent moisture before it can be used in the process, also. As with the agricultural and forestry fibres, the plastics are also dried using either the solar drier or the electric oven. It should be noted that the process utilizes one of the three plastic types in each batch – different types of plastic cannot be mixed together in the other processes. The Extrusion process Finished Pellets Produce After Extrusion Process involved mixing the dried fibres and plastic together in a high speed mixer in weight percentages ranging from as low as 20 per cent up to 50 per cent fibre. Ultra violet blocking agents, anti-fungal agents, anti-inflammatory agents, color and other proprietary chemicals are added in various percentages dictated by formulae developed at the institute. This homogenous mixture is then fed into a twin-screw extruder, which simultaneously applies high torque mixing whilst heating the mixture to temperatures above the melting point of whichever type of plastic is being used. The result is that the individual fibre particles are coated with molten plastic and the other ingredients, so that when the material exits the extruder through a series of orifices, the semi-molten material that is ejected is completely homogenous. This material is cooled along a conveyor belt, allowing the molten material to crystallize into a solid, which is then chipped into pellets. These pellets by themGUYANA’S PREMIER INVESTMENT MAGAZINE | 53
Production of Roofing Shingles
selves are highly marketable, with large volume demands in the United States and Europe for the manufacture of a wide range of injection moulded, extruded or pressed consumer products, ranging from deck planking, moldings, automotive parts, to medical devices and other high tech uses. The included fibres impart tensile and compressive strengths to the plastics. Different types of plastics and different percentages of fibres and other chemicals result in different levels of strength, melting points and other types of thermo-mechanical behavior demanded by the end applications. The advantage for producing these materials in Guyana relate to the high abundance of cheap available fibres and the fact that the technology has now been made accessible through the work of the institute.
CONSTRUCTION BOOM Due to the current construction boom that is being experienced in Guyana, scientists at the institute chose to focus the injection molding process on the production of roofing shingles. However, the process can be used to create practically any shape of material, providing that the required thermal and mechanical properties of the application can be matched by the injection molded
Roofing Shingles Made by IAST
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material. This ranges from a wide variety of consumer goods to automotive parts, food service containers, architectural moldings and fascia, etc. Indeed, a single injection molder can be used to produce a range of products, simply by the installation of different molds into the machine. The pellets produced in the extrusion process are heated up in the process and a carefully controlled aliquot of the composite material injected into the mold at high pressures. In this case, a single roofing shingle is produced in a matter of seconds. The finished shingles are all identical, weighing 300g each. These shingles should have a lifetime of between 70 to 80 years, and should not fade in the sun or grow mold. They can be priced between the cost of galvanized roofing and asphalt shingles, and still deliver an ROI of between 22 to 30 percent. The colour can be selected by the customer. Additionally, in terms of Quality Control and Roofing Requirements, the IAST boasts a state of the art materials testing laboratory. They have the capability to test all the mechanical, thermal, and degradation properties of the shingles, and staff has been trained to conduct all of the required American Standard Technical Measurements (ASTM) required for roofing materials. The Institute engages in research and development activities that are applied in nature, appropriate to the technology demands and capacity in Guyana, targets the natural resource base of the country and is commercially relevant. IAST also provides quality control and environmental testing services to a wide range of clients from the mining, food and beverages, heavy industrial and petrochemical sectors; the revenue generated from this service is utilized to maintain its impressive equipment base in calibration and good repair. IAST was established in March 1980 as an implementation arm of the Guyana National Science and Research Council. IAST is governed by the National Science Research Council Act No. 26 of 1974 (dated 19th August, 1974) and its mandate is the development and/or adaption of appropriate technology for the utilization of Guyana’s natural resources, so that these resources can be gainfully developed and exploited, for the benefit of the people of Guyana. ¤ The institute is highly motivated to work with potential investors on commercializing this process, and will also be developing other high-demand items from the fibre-plastic composites through the acquisition of other molds. Interested individuals or companies are encouraged to contact: Ms. Shalini Nauth, Confidential Secretary, at 592 222 4214 Email: csec_iast@yahoo.com or Professor Suresh Narine, Director, Email: sureshnarine@trentu.ca
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US$10M Micro
and Small Enterprise Fund Launched GRIF and LCDS Funds for Training and
Development
M
icro and Small Enterprises have proven to be catalytic in creating employment. Small and Medium Enterprises (SME) contribution to Guyana’s GDP in 1998 was estimated to be around 28%, with approximately 22,000 micro and small firms in operation and contributing 40% to the overall employment. Micro and Small Enterprises (MSEs) has been identified as the vehicle to target the creation of employment in Low Carbon Sectors in Guyana, since it is considered the first step in business formalization. The Low Carbon Development Strategy (LCDS) sets out the Government of Guyana’s (GoG) commitment to address two of the major constraints to the establishment and sustainability of micro and small enterprises (MSEs) and to the ability of vulnerable groups to build alternative livelihoods in Guyana being : • •
Limited access to finance Limited technical and business skills.
By facilitating the expansion of the business development support sector along a low carbon path, the GoG aims to provide economic opportunities to some of the most marginalized groups in Guyana, while promoting self-sufficiency, sustainable business initiatives and working closely with the private sector in a sustainable manner. 56 | GUYANA’S PREMIER INVESTMENT MAGAZINE
In this context, the Guyana Government in partnership with the Guyana REDD+ Investment Fund (GRIF) has launched the Medium and Small Enterprise Development (MSED) Project to facilitate the further growth and development of the Medium and Small Business sector in Guyana. The MSED Project is being implemented by the Small Business Bureau of the Ministry of Tourism, Industry and Commerce. The Inter-American Development Bank (IDB) is also involved to obtain social, fiduciary and environmental safeguards. The project is being funded under the Guyana-Norway partnership, through the Guyana REDD+ Investment Fund (GRIF) which will see US$10M going towards the project which is expected to create and sustain 2,200 jobs. The first two (2) year phase of the project will be funded by US$ 5 million from the GRIF. The second phase of the project can be funded with an additional US$ 5 million for another two years. Minister of Tourism, Industry and Commerce, Hon Irfaan Ali, advised that the Small Business Bureau has been tasked with proactively developing business plans and concepts, in keeping with the direction of the economy, so that it can assist small businesses in meeting the sometimes very stringent requirements of the financial institutions, while enabling them to understand more importantly how the small businesses and investments are linked into the overall national economic environment.
Access to finance will be addressed through the following mechanisms: •
•
•
A Credit Guarantee Fund (CGF) : The CGF is a pool of money that is used to guarantee enough of the collateral requirements of the lending institutions to allow a good MSE and vulnerable group business development loan proposal to be accepted by both parties. By assuming part, but not all of the risk, this fund seeks to entice the lending institutions into lending to the MSE at attractive commercial rates. The CGF will guarantee a certain percentage of the debt for loans across all sectors of the economy, as long as they are in the low carbon sectors. An Interest Payment Support Facility will help the MSE pay off a percentage of its interest obligationson the loan, and will target key low carbon sectors that have been identified in the LCDS as being the basis for new economy: aquaculture, fruits and vegetable farming and agro-processing, sustainable forestry, eco-tourism and business process outsourcing. The capital allocated to this facility will be smaller than the allocation for the Credit Guarantee Facility. A Grant Scheme: The Low Carbon Grant Scheme is a pool of money that will be set aside to assist vulnerable persons to access financing for their existing or potential business venture. Access to business and technical training, including financial literacy, will be addressed through A Skills Voucher Scheme. This is a scheme whereby MSEs and vulnerable groups are provided with training vouchers (grants) which can only be exchanged for the training enrollment they need at registered training institutions. Training will be targeted towards strategic skills such as business management, marketing, accounting, financial management, and technical training.
Financing under the MSED project can be accessed through the Guyana Bank for Trade and Industry (GBTI), which was the first financial institution to sign on with the project. Since then, Republic Bank (Guyana) Limited and the Institute of Private Enterprise Development (IPED) are also associated with the project.
The MSED Project was launched on October 14th, 2013 at the Guyana International Conference Centre with Project Implementation currently ongoing. Persons wishing to find out more about this project and related opportunities are advised to contact the Manager,Small Business Bureau at the Ministry of Tourism Industry and Commerce. What is the GRIF? The GRIF is a fund for the financing of activities identified under the Government of Guyana’s Low Carbon Development Strategy (LCDS). The fund will receive up to US$250 million from Norway in performance-based payments for the period up until 2015, based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities. Background on Low Carbon Development Strategy. The LCDS sets out Guyana’s approach to transition to a green economy. Its stated aim is to combat climate change while simultaneously promoting economic growth and development. It sets out how Guyana’s economy can be realigned along a low carbon development path, by investing payments received for avoided deforestation into strategic low carbon sectors. These payments will catalyse Guyana’s efforts to diversify its economy and provide new economic opportunities, employment and more efficient use of resources, while maintaining a valuable forest ecosystem. ¤
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The major problem for most new and young entrepreneurs has been raising capital to make the requisite investment to get their businesses started and additional funding to progress their further development. The Small Business Development Finance Trust Incorporated (SBDF) was established some 11 years ago through the vision and pioneering efforts of one of Guyana’s most successful and legendary entrepreneurs Mr Sattaur Gafoor to assist and support the development of medium and small scale businesses. The mission of the SBDF is “to strengthen the economic base of the micro and small business sector in Guyana through increased access to lending, technical support and nontraditional financial facilities.” The trust aims to achieve this so that “small enterprises could position themselves to be competitive and take advantage of their size to participate in world markets in an era of intense global competition.” Investment opportunities in Guyana today are supported by a growing number of medium and small businesses that are being supported by the Small Business Development Finance Trust Incorporated (SBDF). While the Trust offers financial and technical support to local businesses, there are spin off opportunities that exists to provide raw materials and/or expand existing small and medium sized businesses which generate jobs, foster economic activity and contribute to the development of communities. The following report was presented to the public on June 23, 2014 at the SBDF 2013 Annual General Meeting by the Trust’s Chairman, Sattaur Gafoor. The report provides an overview of the purpose, benefits and vision of the Trust through which investors can capitalize.
Small Business Development Finance Trust Inc.
G
Supporting MSEs and Entrepreneurship
uyana’s positive economic growth over the past eight years has been driven in large measure by overseas and local companies making mega investments in the major economic sectors and the Government of Guyana in national infrastructure in consort with international donor agencies. These investments created the environment for a number of small and medium size entrepreneurs to evolve and flourish through the need to provide products and services to support these mega investments and the general community.
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“In Guyana, most of the coastal population is engaged in rural economic activities with poor infrastructure, using old technologies and is subject to market conditions where hard work alone cannot improve productivity. The experience of SBDF is that along with credit, other services are important such as training in areas of good record keeping, packaging, storage to avoid spoilage etc. Partnership demands transparency and cooperation among providers, receivers and institutions that are involved. The Small Business Development Fund maintains its commitment to work feverishly to provide financial and technical assistance to the most vulnerable and high risk sectors, among them are women-who dominate the micro business, crop and rice cultivation in general. During 2013 the budget of SBDF has assisted many new entrepreneurs to start and / or expand their businesses with better technology. During 2013 the SBDF provided substantial financial support to the SME sector which in the process, created jobs and improved the quality of life and economic wellbeing of many. However, the climate change that the world is experiencing and the unpredictable weather patterns continue to affect the coastal population. These generally devastate small farmers to the extent that many are unable to return to cultivation. Under this situation, we would welcome Government’s support in our work on a regular basis so we could better assist those who are adversely affected. In 2013, almost 600 loans were dispensed to the value of G$440, 204, 000.
The size of micro and small loans offered by SBDF has been increased due to the high cost of inputs. •
The micro loans ranges between G$50, 000 to G$1, 000, 000.
•
Small and medium loans ranges between G$500,000 to G$5,000,000.
•
Over the 11 years since the SBDF has been incorporated it has given loans to over 7,000 families to a total value of some G$2.5B, which in a large way has helped to raise the standard of living for a number of people some of whom have been able to own properties and other assets which has improved their quality of life.
In spite of the challenges SBDF has been able to generate G$30,395,985 during the same year. In addition, debt payments are up to date. There is no doubt therefore that SBDF has grown into a strong institution with the capacity of honoring its financial and developmental responsibilities. SBDF however acknowledges that much more could have been done had additional funding been available. Vision for the future: SBDF promise for the future is to become a leading institution in the arena of micro financing. With the poverty band still quite significant, we are committed to support micro and small entrepreneurs by providing access to finance and training. For 2014, SBDF is expected to help at least another 700 families to the tune of G$550,000,000. This would empower small men and women to gain confidence, think ahead and live with dignity and economic security. We have developed a strategic plan for the next five years during which we hope: • • • •
To help another 4, 000 families To develop our capital resources To train our human resources with suitable technologies To deal with the realities that projects today are more capital intensive which requires more than micro loans.
In addition to the efforts of the SBDF there are a number of other private organizations which have been established offering billions of dollars in loans and grants with the mandate to create and support opportunities for entrepreneurial development in Guyana. The efforts of SBDF and similar organizations have in itself created additional opportunities for Training and Mentorship and a range of support services as Guyana’s economy continues to expand. ¤ For further information contact: Small Business Development Finance 46C Hadfield Street Georgetown Tel: 223 6165/66 Fax: 223 6167
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Eureka Labs…
Pushing boundaries on technology frontier “ We have come
D
IRECTOR of Eureka Medical Laboratories (EML), Andrew Boyle, contends that the 19-year-old company is pushing boundaries on the technology frontier and making positive advances – all in the interest of improving the quality of services offered to its clients. “We are the pioneers in this area,” he said, acknowledging the challenges that are inherent to medical enterprise and the need to continuously push the boundaries. Founded on March 5, 1995, the laboratory initially had a staff of two persons and offered a modest range of tests, many of which were
an extremely far way from when we started in 1995…our staff complement is now over 35 qualified technologists, technicians, resident and visiting doctors
”
performed manually. However, EML has grown exponentially, offering its outstanding brand of services at eight branches in Guyana: Parika, Charity, Anna Regina, New Amsterdam, Rose Hall, Linden, Bartica and Georgetown. The company has also expanded its reach to St. Vincent. “We have come a far way from when we started…our staff complement is now over 35 qualified technologists, technicians, resident and visiting doctors,” he said. Boyle said, “Eureka offers a complete package of medical services and facilitates all tests and laboratory examinations.”
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With five departments, Clinical Chemistry, Endocrinology, Haematology, Serology and Microbiology, EML offers a wide range of services. According to Boyle, the range of tests offered are being expanded continuously and the methodologies used, completely modernized. Additionally, collaborative partnerships ensure clients have unlimited access to state of the science technology. He said, “Eureka, having been established for more almost two decades, has very strong affiliations and connections with laboratory service providers in the UK (United Kingdom) and the USA (United States of America).” Among the services offered are testing for chronic diseases such as diabetes, infectious diseases testing, ultra sounds, digital x-rays, medical clinics, exotic testing, insurance medicals, allergy screenings, cholesterol levels, CD4 and CD8 counts, and, as well as cancer screenings. “You name it we do it,” he said. Notable is that Eureka was first to offer newer technology in cancer screening and allergy testing in Guyana with. The Director added that one aspect of the company’s pioneering technologies is its engagement of clients online. “Our doctors can access their patients test results online now,” Boyle said. EML employs the use of Lab Information System (LIS), developed by Schuyler House, which allows treating-physicians the
convenience of accessing their patients’ results on-line and in real-time. Similarly, EML notably has a stake in the agricultural sector. In early May 2014, the company was brought onboard to conduct viable food and water analyses. These are a necessary component for local growers and food manufacturers to qualify for international quality standards certification, which will further enable them to access regional and international markets. This undertaking was part of the thrust to raise the bar in the quality and standard of local agro-processed foods. Boyle said, “This is just the tip of the iceberg. We have many more initiatives coming on stream to ensure that we take full advantage of the technology available.” He stated that EML’s advances represent a significant investment, which includes focus on developing the local human resource capacity in Guyana. “We do in house and external training, based on the needs that arise,” Boyle said. Additionally, the Director observed that the company’s focus is not only on expanding the provision of quality services to clients and human resources development, but also pays special interest on the environment and safety standards. In January, EML was named as another company that joined the list of medical
institutions that utilise the service of the Georgetown Public Hospital Corporation (GPHC)’s Hydroclave system. The hydroclave is a sterilization system that ensures that all medical waste, primarily from public and private medical institutions in Region Four, is treated before disposal, so as to reduce risks of contamination. “Standards are an important area of attention for us,” Boyle said.
The company’s Corporate Social Responsibility (CSR) is no less important and the Director highlighted the fact that EML undertakes several projects in this regard. “I see a great future ahead for EML,” the Director posited. Eureka is certified by the Guyana Bureau of Standards to provide laboratory services that meet national standards. ¤
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Turning
Dreams Into
Reality...
Housing Sector Pioneering Change Through Transformation By Michael Younge
O
ver the last five years, there has been massive transformation in the Housing and Construction sectors in Guyana with hundreds of thousands of Guyanese benefiting directly from approximately 30, 538 houselots distributed. The transformation of these sectors have also seen more than six thousand, nine hundred and ninety-one squatter settlements being regularized under the stewardship of the ruling People’s Progressive Party Civic Administration. There were more than 59 one-stop shops hosted which gave Guyanese access to several distinct and core services at one venue. Countless new Housing Schemes have been developed and existing schemes further rehabilitated and enhanced. The PRESIDENT’S PROMISE and VISION Additionally, thousands of Guyanese have been relieved of the burden of paying exorbitant and sometimes uneconomical amounts as rent for housing in Guyana as the government continues to invest billions of dollars in providing easier access to low and middle income homes yearly. President Donald Ramotar has said that he will continue to place emphasis on the creation of various housing policies and initiatives that are aimed at tackling the poorest of Guyana’s poor as he understands fully the burden that paying rent and taking up dwelling with others can have on the normal man. Ramotar expressed satisfaction that the ruling People’s Progress Party Civic has managed successfully over the past two decades to significantly reduce the number of persons who have to shoulder making ends meet and other expenses while paying a rent. President Ramotar also explained that the PPP had promised in its most recent manifesto the creation of some 30, 000 new houselots by 2016.
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“We will not wavier on this promise”, he declared while expressing satisfaction that the Housing Ministry will meet the challenges which lie ahead in the sector. Ramotar said too that the administration has delivered on its promise to make access to finance affordable, citing government’s support of low income housing programmes under which tax incentives are given to the banking sector to promote lending for home owners. In the same breath, he added that the government will continue to work with stakeholders to further improve access to financing specifically for the construction sector. In 2009, 4,377 were distributed while in 2010 6,382 were allocated. 2011 saw 8,895 being given out while 2012 5,869 Guyanese benefiting. In 2013, 5,015 were distributed despite a total of 6, 000 being available that year. Figures for Squatter Settlement Regularisation show that in 2009, 906 settlements were regularized while in 2010 1,675 received the Ministry’s attention. 2011 2,073 were regularized while in 2012, 1,737 were made legal. In 2013, some 600 settlements received the Ministries attention. Last year, the construction sector accounted for 9.87% of Guyana’s Gross Domestic Product. The country’s overall growth of 5.5% was led by the construction and housing sector which record 22.6% growth between 2012 and 2013 as a result of the vibrant expansion in the private sector construction buoyed by the national housing drive and by commercial construction as well as implementation of public sector construction projects. POLICY OUTLOOK “These figures and statistics will only tell part of the story. Every day, lives are transformed when Guyanese from all walks of life express joy upon becoming land and home owners. They derive a sense of accomplishment and satisfaction from homeownership that cannot be compared to other achievements in their lives”, Housing and Water Minister Irfaan said during an interview. Ali said that all of the gains and progress made in the Housing Sector
came as a result of deliberate policies and strategies agreed upon by the Bharrat Jagdeo and Donald Ramotar administration. He said that successive PPP/C administrations have always focused on improving the socio-economic state of all Guyanese through the injection of the necessary financial resources which in turn would drive various initiatives aimed at empowering the people. “Sustainable Development is linked to a country’s ability to forge successful public and private sector partnerships that are rooted in futuristic thinking and policies which must in turn aim to improve the livelihoods of citizens and their standard of living”, Ali remarked.
“We have taken deliberate policy position… introduce a special low-income housing window with the commercial banking sector which will see corporate taxes removed for the income generated by commercial banks on loans that are lent for low income housing development,” he said. Singh explained that banks are now able to offer lower interest rates to borrowers and potential borrowers for low income housing developments, as a result of which millions of dollars are lent to thousands of Guyanese at subsidised rate, which they then in turn use to build their homes. He stated that the lowincome window alone has seen billions of dollars injected into the Guyanese economy.
He said that it is easy to become complacent but there is need to focus on improving the fortunes of the sector while mitigating the impact on the concomitant challenges ahead.
In the first quarter of 2013 year alone, 366 persons accessed this facility and a total of $690 million was disbursed under this facility alone. Accumulatively at the end of March, there were 3408 borrowers from the financial system and the total amount disbursed by the banking system was $9.3 billion.
“For us to have a sustainable future in Guyana, we must have a futuristic outlook that understands the environmental consequences and the technological changes. This outlook must be able to bring the environmental challenges and technological advances together to give us what we term a “sustainable and viable solution” not only for the housing needs but also for the future needs of our country”, he plugged.
Dr Singh lauded the private sector for its willingness to lend credit which has grown over the years, adding that for the first quarter of this year, private sector credit has grown. In total credit from the commercial bank to the private sector has increase $161.6 billion at the end of December to $163.5 billion at the end of March growth of 1.2 per cent in first quarter of this year, building on sustain growth year after year for the last several years.
Minister Ali maintained that the Private Sector has shown dynamic leadership and futuristic thinking in this regard as it continued to partner with his Ministry to drive the overall success of the building and construction sector. He used the hallmark International Building Expo as an example of how much the sector has transformed to the point where investors confidence in high.
BUILDING PARTNERSHIPS
“The private sector spends more than $250 million for Building Expo – the private sector invests more than US $1 million for those the nights of Building Expo. These are things we should appreciate and celebrate. Building Expo brings together investors, entrepreneurs, buyers and sellers together so they could interact and work toward building a strong Guyana”, he noted. He said that his Ministry continues to provide the opportunities through Guyanese can benefit as he made references to the East Bank Development Project, the success of the CHPA’s One Stop Shops, Silica City, the new project which was unveiled to link the east Coast and east Bank Highways, the development of massive infrastructure at Diamond and Grove, Parfait Harmonie and at various parts of the country. ECONOMIC OUTLOOK Meanwhile, Finance Minister Dr Ashni Singh has also underscored the fact that the Housing Ministry continues to make sterling contributions towards the overall development of Guyana’s economy. He said the national housing programme is an outstanding example of public policy, private sector response and household effort being brought together to develop and transform the country. He also echoed similar sentiments as the president, stating that the government is on a vertical move to ensure that the financial sector is prepared and enthusiastic about lending for homeownership as it is important.
Despite these gains, the Central Housing and Planning Authority (CHPA) plans to continue to pursue a massive work programme in 2014 that would see more Guyanese benefiting from an improved land divestment policy while at the same time being able to access affordable housing through strengthened partnerships. The Authority’s Chief Executive Officer Myrna Pitt explained that already the CHPA had secured laudable business partnerships with several private sector entities, corporate businesses, professional workers’ Associations, the government of Guyana, civil society, grass root communities, the banking community and several other players. She explained that these kinds of partnerships are very important when the CHPA roll out initiatives aimed at benefiting Guyanese from all walks of life who in turn expect a higher level of public service and more expediency as far processing applications for land is concerned. Pitt who has been at the helm of the CHPA for a number of years also disclosed that while the entity is cognizant of some of the criticisms from the public about the time it takes to process applications for housing and land, it really cannot be avoided. She reminded that the process of preparing government’s housing schemes takes time as a lot of infrastructural work beginning at the designing stage usually has to be done to ensure that the schemes in which land is allotted is suitable for occupancy. ¤ For further Information Contact: Central Housing & Planning Authority Brickdam & United Nations Place Georgetown Tel: 226 2265 Fax: 225 4991
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H
Ryan Shivraj Finance Manager
UNDREDS of Guyanese have been able to take advantage of home owner’s programme of Buddy’s Housing Development, a massive private investment which got underway almost a decade ago. And the company’s Finance Manager, Ryan Shivraj, told Invest Guyana that the market demands, which informed the idea for such an undertaking, continues to be what guides its ongoing operations. He said, “We were the first private developers to begin investing in housing development. In a large way we were the market leaders at the time and today we have four housing developments, which reflect the changes our customers want.” The four gated-communities style developments include Somerset Court, Greenfield Park, Granville Park and the most recent, Green Acres. Somerset Court is Buddy’s Housing Development’s first ever large-scale housing project. This elegant but comfortable housing scheme is situated in Herstelling on the East Bank Demerara. The project was officially completed in 2007 with the total of 92 homes. It featured both two-storied and bungalow homes priced at such an irresistibly low rate that the housing project was sold out within a year. Somerset court was completed with paved concrete roads, street lamps, and a playground. The Finance Manager said, “We strive hard to alleviate the stress of building for customers that are first time home owners; so we provide these turnkey homes with all the amenities, including: kitchen cupboards with granite counter tops, modern lighting fixtures, pressure pump, water heater and much more.” Greenfield Park, in Providence, East Bank Demerara, is the company’s second housing project, which consisted of executive-styled homes with breath taking view of the Guyana National Stadium. The project was completed in July 2009 and consisted of both three- and four -bedroom homes, with features similar to those of executive-styled houses. The third project, Granville Park, within close proximity of the Beterverwagting market, East Coast Demerara, consists of 36 luxurious homes with picturesque view of the Atlantic Ocean. The project
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was completed on November 2011 and consisted of both three and four bedroom homes. The last project, to date, Green Acres, also in Providence, is the largest undertaking that consists of 257 three and four bedroom homes, one and two-storey homes. The project is ongoing and is expected to be completed by the end of the year. “We have been responding to the market changes,” Shivraj stressed. The Finance Manager explained that there are many opportunities to be taken advantage of, when one considers the market feedback received since the company launched its first project.
He said, “With the support of a relatively friendly business environment, we are moving in on these opportunities, as indicated by what our customers are saying. “Many customers often tell us about their appreciation for the construction of their homes, often citing the bad experiences they have had when they attempted construction themselves. I think the construction industry is gaining new respect, since it’s not as easy as some like to think.” Shivraj stated that currently some of the upcoming undertakings of the company include expansion from development of gated-communities to commercial real estate.
The Finance Manager said, “Buddy’s Housing Development is also involved in Land Development. We had sold many lots across the East Coast of Demerara for the construction if luxury homes in areas such as Turkeyen and Le Resouvenir just to name a few. “Right now we are looking at construction of buildings to offer office space and we are currently completing one on Croal Street, Georgetown, which is in addition to one we have on Brickdam “Buddy’s Housing Development is available for all real estate needs, both commercial and residential. We also deal in prime real estate located in Georgetown; so inventors looking for land to construct a building or trying to source office space or business retail space can contact us.” According to him, the other future projects include the construction of apartment buildings that will cater for student and middle income customers, as well as cater to the evolving luxury apartment market. “We are also looking at a hotel on Sheriff Street,” he said. Shivraj expressed confidence in going forward and referenced the growth the company has seen in the last decade, as well as positive indicators for future success. “I think the new drive into the housing market by many middle income earners is the fact that the financial institutions in Guyana are more willing to provide financial support for the purchasing of new homes.
We currently work along with every single financial institution in Guyana and I think that certainly contributed to the boom in the industry,” he said. The Finance Manager noted that, to date, Buddy’s Housing Development has diversified into all aspects of the real estate market. “We have actively showcased our housing projects as corporate sponsors of the International Buildings expos in Guyana. We provide the actual sized home for customers to explore so customers can experience what their dream home could feel like,” he said. Shivraj added that although many persons have moved into the housing market, many persons recognize Buddy’s Housing Development as a trusted name you can trust. He said, “We stand by our quality and promises and provide a level of service that is incomparable. “We have grown and as we continue our operations we are consistently making changes; for example modifying the design and introducing better materials into the construction process, like where we once used zinc roofing we are now using shingle roofing….there is room to do more and we are moving ahead to take advantages of the opportunities that exist.” The Finance Manager contends that change is an integral part of advancement and rather than focus on the risks of change, the company looks at the opportunities within reach to not only improve company’s operations, but also provide a service to customers. ¤
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The Resurgence of A Refreshing Rebirth for Guyana’s Manufacturing Sector Breeze in a Bottle” was created. It is known throughout Guyana, the Caribbean, and the Caribbean diaspora in North America and Europe as a household staple around the world. When the British owned Bookers Group of companies was nationalized by the Guyana Government in the 1970s, the Limacol manufacturing company was renamed the Guyana Pharmaceutical Corporation (GPC), and by 1999 the company was divested by the Guyana Government to private investors and it was renamed, yet again, to the New GPC Inc. The company is now the Caribbean region’s oldest and largest pharmaceutical company and brands itself as the “House of Limacol”.
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imacol has been a tradition in Guyana and around the world since its Guyanese developer , J. A. Adamson accidentally created the product while he was employed as chief pharmacist and chemist at the then, Bookers Drug Store, in British Guiana in the early 1920s. Adamson’s Limacol formula was originally a ‘lime rum’ lotion, but evolved into a complex, liquid blend of aromatic compounds, which, when applied to the skin instantly exuberates a refreshing and reinvigorating feeling. It is because of its unique ability to revive the user that its notorious slogan “The Freshness of a
The resurgence of Limacol’s popularity received a significant boost when the New GPC Inc. announced in 2013 that the brand was going to be the title sponsor of the Caribbean Premier League (CPL) T20 Cricket Tournament. This Tournament was extremely well received across Guyana and the Caribbean islands where the games were played with sold out matches at every stadium. With Limacol sponsoring the Tournament , New GPC’s flagship product reached a whole new market as the brand was plastered across television screens and the worldwide web to close to a billion cricket fans across the globe. This promotion strengthened the connection between Limacol and its traditional users and created global demand for the product.
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Interestingly, the traditional user of Limacol has been a mature audience, but today Limacol is making its way into the hands of young male and female adults. Its unique blend of ingredients allows Limacol to be versatile enough to be used as an after shave, astringent and facial cleanser, in addition to its most traditional use as an invigorative splash for the hot Caribbean sun. So encouraged by public support for the product New GPC has embarked on a new line of Limacol based products. The company aims to launch their new line shortly. The success of the 2013 Limacol CPL tournament has convinced its manufacturer that its sponsorship will remain for the 2014 and 2015 tournaments. Three of the 2014 Limacol CPL matches are scheduled to be played in Guyana undoubtedly to a sold out stadium on all three days, as was the case in the 2013 Guyana matches. The promotion of Limacol to the Caribbean region and the wider world through the CPL sponsorship has generated greater awareness of the product “Limacol” resulting in global interest and increased sales. It is therefore “refreshing” that this brand through strategic marketing with the CPL is now positioned to expand its product range and increase global presence and market share. This will surely serve as a catalyst and a much needed boost to the manufacturing sector in Guyana of the potential opportunities for growth with other products through strategic marketing.
The House of Limacol has evolved since 1999 to reposition itself into one of Guyana’s leading manufacturing enterprises. It currently manufactures approximately two hundred generic and over-the-counter products. The Company’s product line also extends to cosmetics, household cleaning agents and an array of essences. These products are all sold on local and international markets. The
company’s manufacturing plant is built on 5 acres of land located at Farm on the East Bank of Demerara, on the outskirts of the capital, Georgetown. History of New GPC The New GPC’s roots date back to the 1920s when Bookers Drug Store was formed to manufacture the principal proprietary
medicines which, up to that time, had all been imported into then British Guiana. Despite these changes one characteristic which defined the Company’s reputation was its consistency in its manufacture of the highest quality pharmaceuticals at competitive prices. ¤
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Demerara Harbour Bridge
National Infrastructure Leads Development Thrust New Demerara Harbour Bridge Among Major Projects
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uyana’s infrastructural development is continuing to see new, improved roads and bridges, the expansion of the Cheddi Jagan International Airport, new housing schemes and the creation of new communities. With the creation of new developmental and infrastructural initiatives come new opportunities for businesses and communities. The 2014 national Budget caters for $12.9 billion to be spent on roads and $844.2 million on bridges. Some of the more widely anticipated projects being undertaken are the expansion of the East Bank and East Coast road ways that will facilitate four lane traffic, a new roadway to link the East coast to the East Bank of Demerara without having to drive through Georgetown, the construction of the Linden to Lethem Roadway, a deep water harbor and port in Georgetown and the construction of a new and improved Demerara Harbour Bridge. The Demerara Harbour Bridge currently provides direct access between Georgetown and region three, the Essequibo Islands. It also provides indirect access from Georgetown to Regions one, two and seven – areas where activities such as minerals exploration, logging, eco-tourism and rice cultivation accounts for a major portion of Guyana’s GDP. The Government of Guyana’s Housing Sector Development Plan for Regions 3 and 4 led to the distribution of approximately 50,000 new house lots to middle and low income earners within those two regions which has led to increased traffic across the bridge. To prepare for the growing vehicular traffic and increased productivity within major GPD contributing sectors, as outlined above, the Government of Guyana has already undertaken the initial step of conducting a pre-feasibility study. The
study which was conducted in 2013 determined that a new bridge would not only relieve road and marine traffic congestion, but would also facilitate and catalyze improved mobility, sector growth, and planned development at the Georgetown Harbour. The initiative is being pursued as the current floating bridge has passed its useful life and presents not only challenging operations and maintenance demand for the Demerara Harbour Bridge Corporation, but also impedes the progression of improved mobility between the east and west banks of Demerara. The average daily vehicular traffic of the bridge is about 14, 000 vehicles per day with an expected annual increase of 8%. This heavy flow of traffic coupled with the daily retraction of the bridge to allow for the passage of vessels causes severe road traffic congestion at both ends of the bridge, as well as delays and inconvenience to ocean going vessels. The study looked at alternatives to facilitate the growing needs of Guyana’s development and determined that a new high level four lane fixed bridge structure at Houston on the East Bank to Versailles on the West Bank of the Demerara River is the only economically feasibility alternative, providing benefits to society that can amount to a minimum of some US$222M over a 70-year life cycle at a capital cost of around US$264.5M. The new bridge will be made of reinforced concrete, have four lanes (some 20 metres wide) for vehicular traffic; a walkway for pedestrians; a cycle lane; navigational clearance (100 meters wide); navigational aids; and an estimated length of 2250 meters. Base on the pre-feasibility study the Government of Guyana advertised internationally for expressions of Interest
for a public-private partnership for the design and construction of the new bridge. Twenty two applications were received and are in the process of being evaluated. Consultations with various private sector agencies and NGOs that represent a wide cross section of production and manufacturing sectors in Guyana have indicated a strong desire for a new fixed bridge structure across the Demerara River. According to the authors of the report, a detailed feasibility study will be needed to incorporate exogenous costs and benefits not considered in this study, as well as a financial analysis that addresses the concerns of project financing and environmental impacts. History Opened on July 2, 1978, the bridge is a 1.15 miles floating toll bridge that consists of a pedestrian foot walk, with 61 spans; a raised section that provides a horizontal clearance of 32.0 metres and a vertical clearance of 7.9 metres to allow small vessels to pass at all times. It also has two retractor spans that retract fully to leave a horizontal clearance of 77.4 metres to allow large vessels to pass. The floating bridge was designed by TSEL, while the abutments, toll plaza and western approach road were designed by the Structures Section, Roads Division, Ministry of Works & Transport. Fabrication of components started in England immediately after the signing of the contract. The retractor spans were assembled at a dock in London and tested before transportation to Guyana. Construction of the bridge at Peter’s Hall started on May 29, 1976. *Material sourced from the Ministry of Public Works and Communications ¤
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Artist Impression of Proposed New Sheriff Street - Mandela Avenue
Sheriff Street–Mandela Avenue
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Rabindra Chandarpal
n the 1970’s, the seven kilometre bypass between Sheriff Street and Mandela Avenue, flowed seamlessly into each other. It served to connect Central Georgetown to the up-and- coming neighbourhoods south and east of the city. Over the years the large residential communities that once engulfed both sides of Sheriff Street evolved into considerable commercial and industrial hubs. The street now serves simultaneously as a busy urban road, a critical connector within the national road network and a destination centre for goods and services. Given the evolution of the road corridor, the Government of Guyana has set out to transform the Sheriff Street – Mandela Avenue Roadway into a modern, functional passageway through a US$24M project funded by the Inter-American Development Bank. The project aims to improve road safety, organize traffic flows and movements, extend the design life of the roadway, and improve drainage along the road corridor to better facilitate the commercial and industrial make-up that now dominates the area. The enhancements to the road corridor will boast sidewalks and systematised parking
Set for US$ 24 Million Redevelopment and street lighting which are expected to profoundly impact the aesthetics of the area, and increase its attractiveness as a commercial and entertainment hub. The design for the project was executed by a consultancy firm hired through public international procurement. The highlights of the design include: • • • • • • • •
Rehabilitation of the Existing Road Corridor and all Bridges and Culverts Four Way Lanes as Opposed to the Existing Two Way Lanes Inclusion of Sidewalks and Bicycle Paths Throughout the Roadway Guyana’s First Overhead Pedestrian Crossing Bus Stops with Sheltered Seating Construction of a Central Median Along the Roadway with Street Lighting Parking Meters for On-Street Parking Installation of Concrete Drains to Improve Drainage of the Roadway and Interdependent Communities.
Construction works for the Sheriff Street – Mandela Avenue Roadway Project is scheduled to commence in the last quarter of 2014 with a duration of two years. The contractor will be hired by means of public international procurement procedure.
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As part of Government’s policy to promote stakeholder participation, the Ministry of Public Works, the executing agency for the project, sought consensus for the project given its complex nature through extensive public consultations with stakeholders. The consultations aimed to: • • • •
Include a Wide Representation of Stakeholders Demonstrate Government’s Commitment to Dialogue Between Government and Stakeholders Receive Feedback from a Cross Section of Stakeholders Inform Stakeholders of the Project, its Implications and Benefits
Twenty-two separate stakeholder engagements were held over a seven month time frame, which included face to face meetings, open forum sessions, focus groups and site visits. The highlight of the process was four open- house sessions where invitees and the general public were allowed to view preliminary designs and seek clarifications directly from the design team. ¤ Rabindranauth Chandarpal is The Project Manager - Technical Services, Work Services Group, Ministry of Public Works.
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New and Renewable Sources of Energy By Dr. Mahender Sharma
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he Government of Guyana through the Guyana Energy Agency (GEA) has been working on several initiatives to provide the country with a sustainable source of electricity generation from renewable resources. The GEA has the explicit mandate to develop national energy policies and secure its implementation.
Renewable energy is revered for its ability to deliver the convenience of a modern lifestyle without polluting the environment. Climate and environmental services provided by our standing forests are adequately remunerated by the global consuming community, thereby generating revenue for our country while preserving our endowment of nature. They include attracting the inflows of private capital to make Guyana self-sufficient in clean energy and an exporter of renewable energy to our neighbors, thereby reducing the cost and improving the reliability of power domestically while earning inflows from energy exports. The primary categories of generating electricity from renewable resources currently being explored are hydro, solar, wind and bio energy. The objective of pursuing these renewable sources of energy is to generate sufficient reliable energy from the above sources to either connect to the national grid, become a self-sustaining power supply option, or eventually export power.
Hydro
Hydropower is a renewable energy source that is reliable, cost-effective and produces around 16% of the world’s electricity. To promote hydropower development in Guyana, the GEA has commenced a number of activities such as assessing the list of hydropower sites which has formed part of a geographic information system (QGIS) for viewing, editing and analysis capabilities of the different sites. In 2013, an amount of $10.6 billion was invested in the electricity sector and in 2014, Government allocated $7.7 billion to the sector. Among the larger initiatives undertaken so far by GoG is the Amaila Falls Hydro Power Project. Amaila Falls, located on the confluence of the Kuribrong and Amaila Rivers, are the most advanced hydropower development sites. The project, once realized, is expected to have an installed capacity of 165MW. Construction of the hydropower facility and electrical interconnection will take approximately four years to complete and once operational will meet Guyana’s electricity needs from a renewable energy source. Another major hydro project being pursued by GoG involves the signing of an Memorandum of Understanding (MOU) with Brazil, which, in the first stage, provides a two-year period for Brazil to study the adjacent basins of the Mazaruni and Potaro Rivers and diversions within and between them so as
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Dr. Mahender Sharma
to determine the most favourable arrangements and sequence for the development of hydropower sites. Presumably, power developed would be sold to Brazil along a transmission line which would be part of any such development. Guyana is also a party to an MOU on the Northern Arc Interconnection Project which seeks to evaluate the feasibility of a possible collaboration on the energy transmission system for the electric interconnection of Guyana, Suriname, French Guiana and the northern cities of Boa Vista (State of Roraima) and Macapá (State of Amapa) (the Northern Arc Countries) with support from the Inter-American Development Bank (IDB).
Feasibility studies of hydro-power potential have also been conducted on the Chiung River, at Kato and the Eclipse Falls on the Barima River. Approval was received from the European Union for funding the construction of a hydro power station on the bank of the Chiung River. The run-ofthe-river hydropower station will have a 330 kW capacity with a distribution network to supply electricity to an educational complex existing government institutions and a pump station for irrigation. A private mining company is currently studying and reviewing the potential of developing a hydroelectric project on the Kurupung River in Region 7. The 60MW project is being contemplated to provide power mainly for mining activities. Additional hydro projects are being researched and proposed as the benefits of renewable energy generation is being realized. To this end the GEA will continue working with the Hydro-meteorological Department of the Ministry of Agriculture to measure and record hydrometric information for the purpose of assisting hydropower developers with necessary , reliable data. Likewise, in consideration of the capital intensive nature of hydropower projects, GEA will assist in the preparation of an investment portfolio for hydropower development, identify suitable load centres to ensure sound planning and development, review hydro-electric power projects to determine the suitability of design and conduct inspections during construction to ensure compliance with its mandate under the Hydroelectric Power Act. Solar
Guyana has been actively installing solar photovoltaic systems in remote hinterland communities and schools that do not have access to grid power. Under the Unserved Areas Electrification Programme (UAEP) four solar energy demonstration
projects were originally planned to be implemented in Kurukubaru, Yarakita, Capoey, and Muritaro; but due to the positive responses, the project was extended to other remote hinterland communities. A total of 1,750 solar systems were installed in homes (65,125 watts), schools and other community buildings across 21 hinterland villages. GEA documented about 1MW of solar photovoltaic systems installed across Guyana with an estimated 1.81 GWh energy generation per year. The installed capacity of solar power was boosted in 2012 with a massive programme under the Low Carbon Development Strategy to provide solar photovoltaic systems to those communities without grid access. The GEA is also seeking to promote the use of solar technologies by using the current pilot installation as a working example of the benefits of grid-tied technology. With the price for solar equipment decreasing, it is expected that there will be an increase in the number of solar installations throughout the country. There is also great interest within the private sector for large solar systems tied into the national grid under a power purchase agreement (PPA) and for offsetting energy costs at places of business. GEA will continue to develop and encourage the development and utilisation of sources of energy other than those sources presently in use. Research into all sources of energy including those sources presently used will be conducted with the objective of generating energy GEA will continue to encourage the use of renewable energy where suitable and will be exploring financing options for a 10kW Grid Feed-in system and a 20kW biomass-based power generator at suitable locations. GEA will review the net-metering and grid feed-in mechanisms to determine applicability to Guyana. Wind
Wind energy is also advancing in Guyana. Talks are underway with GoG to sign a Power Purchase Agreement with a private investor for the supply of 25MW of power to the national grid. The wind farm is located at Hope Beach on the East Coast of Demerara and is expected to cost approximately US$40M. To this end GEA will support the implementation of wind farms to supply energy to the national grid, provided that pricing mechanisms are competitive and sustainable. Wind energy at the residential and commercial levels for off-grid applications are also being encouraged. GEA is actively conducting wind measurements at suitable sites with the objective of determining wind energy potential and
continue to monitor installed wind generators across the country. Bio-Energy
Other sources of energy are being explored for small scale power generation expected to benefit specifically outlying areas and small communities which does not need to be connected to the national grid. Some of these options include bagasse, rice husk, woodwaste. Bagasse
Bagasse manufacturing involves the use of high pressure boilers used in sugar production for the co-generation of electricity and may provide an opportunity for improving the electricity output of existing sugar factories. It is also possible for such power generation to provide an additional source of income from this renewable energy source. The GEA is continuing its work with GuySuCo to explore the feasibility of generating additional energy from bagasse at the various sugar estates for sale to the national grid. Since rice production is a staple of Guyana’s economy, the GEA is assessing the potential of using rice husk biomass to generate electricity. A list of locations, potential biomass quantities from rice mills and a map with the listing of all potential sources of rice husk energy sources have been completed. This will help in guiding the installation of a rice husk-to-energy plant by 2017. Rice millers will be encouraged to investigate the opportunities for generating energy from rice husk. Woodwaste
The GEA will be collaborating with the Guyana Environmental Protection Agency to create specific central areas for utilizing biomass for the purpose of producing energy. Areas to store/dump wood-waste can be designated with the objective of sustainable waste-management practices thereby creating centralized areas from which biomass-based electricity generation can be realized. GEA seeks to establish a small wood-waste-toenergy demonstration facility for the generation of electricity and is exploring the feasibility for land-fillwaste-to-energy facilities in Guyana Energy Conservation and Efficiency
Over the past year, focus areas have included public education through information dissemination, conducting energy audits and promotion of efficient street lighting. In 2014 work in these areas will continue and a policy will be drafted on including the use the seasonal energy efficient ratio (SEER) as part of the evaluation criteria for electrical appliances in the procurement process. ¤ Dr. Mahender Sharma is the Chief Executive Officer of the Guyana Energy Agency (GEA)
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Guyana’s Extractive Industries Investment Opportunities
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uyana is renowned for its lush and bountiful natural resources which engage the mining and forestry sectors. The development of these sector are being done to secure the greatest social and economic benefits for the country and its people.
The Guyana Geology and Mines Commission (GGMC) has responsibility to regulate all activities in the mineral sector on behalf of the Government of Guyana (GoG). The macroeconomic pillars of Guyana have included the contribution of the mining sector which is arguably the largest foreign exchange earner for the country. The trends in the mining sector show the various scales of economies for good business and commercial ventures. The majority of mining involves the extraction of gold which accounts for close to 15,000 persons in the industry. Gold declarations for 2013 at 481,103 ounces again exceeded the previous 438,645 ounces in year 2012 despite a year of volatile prices. Diamonds declared were at 55,928 carats in 2013 and in excess of 2012 declarations which were 40,764 carats. Bauxite mining is another industry favorite. Bauxite production measured 1,694,308 tonnes in 2013 and was short of 2012 production which was 2,210,182 tonnes. The sub-sector’s shortfall indicated that there were still operational and market challenges to be settled for the industry’s development and growth to be assured. Quarry products, sand and loam production responded indifferently to a demanding construction and infrastructure development growth area with production determined at 654,995 tonnes, approximately 2,334,000 tones and 94, 559 tonnes respectively for stone, sand and loam in 2013 versus 483,858 tonnes, 1,478,184 tones and 92,064 tones respectively for the same products in 2012. Recently the GoG has seen an increase in interest in the mining of petroleum resources. Similarly interest has shown in the mining of platinum group metals and rare earth elements. In general, the tenure status for mining did not vary much from 2012 within the category of Claims which numbered 19,471 issued for 2013 compare with 18,610 issued for 2012. Mining Licenses and Mining Permits in total numbered 1,995 issued in 2013 compare with 1,555 issued in 2012. Prospecting Permits issued in 2013 numbered 7,624 and 7,691 in 2012. The sector appeared to be tentative
as gold prices fluctuated and capital sources became more selective. Having acknowledged the increasing interest in these areas of mining, the GGMC has responded by providing technical assistance to miners. This includes the fundamental aids for sound and proper mining practices, which are reinforced to foster a mindset towards conservation of resources, envi-
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ronmental awareness and personal welfare through occupational health and safety. In these areas, the GGMC has partnered with key institutions and stakeholders such as the Environmental Protection Agency, Guyana Forestry Commission, Guyana Gold and Diamond Miners Association, Guyana Women Miners Organization, the Ministry of Health and Ministry of Labor. Such partnerships have been
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opportunities. For example, engineering and construction for infrastructure development to service the many operations in the hinterland, commercial opportunities for transport and communication, air transport services, water and road transport, satellite and tele-linkages are just a few such opportunities. Other examples are in fabrication and equipment repairs which are essential to the sector and as the assets on the ground become more expensive, surveillance and security services can emerge with much business potential.
Forestry
created to address issues as reduced deforestation and land degradation, the protection of biodiversity, reduction of mining accidents and the containment of the proliferation of malaria. Since Guyana signed the Minimatta Convention which adheres to the ban of the trade in mercury, the GGMC now has the challenge of finding providing alternatives to mercury use in the recovery of gold
while at the same time improving the efficiency of recovery of gold. This challenge has led to the establishment of a G$1 billion fund by the Ministry of Natural Resources and the Environment to promote research, testing and development of a mercury free/abatement technology and/or methods for mining. The major works associated with the mining sector offer numerous investment and business
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Guyana’s forest sector continues to be a lucrative area for investment and offers tremendous potential for further growth and expansion. The GoG supports this sector through the creation and implementation of strong public policies and effective legislation. Over the past decade the forest sector has seen development of new guidelines in key areas of forest management including the Code of Practice for Harvesting Operations, Guidelines for Forest Management and Annual Operational Planning, and Forest Inventory. Additionally, over the past five years, the sector has seen modernization of forest legislation that emphasizes the principles of sustainable forest management. This framework of sustainable forest management provides assurance to buyers that wood products from Guyana are derived from responsible forest practices that emphasize strong forest legality. In fact, Guyana is one of few countries in the world that has on a national scale, a log tracking systems that has been in effect for close to a decade. With increasing production noted in 2013, Guyana’s forest investment climate is well positioned for enhanced investor interest. In 2013, production volumes far surpass the preceding year of 2012. Production increased by approximately 10% in 2013 over 2012 (473,041 m3 in 2013 as compared to 428,934m3 in 2012). In the category of Logs, production increased by close to 10% over 2012. In the Roundwood category, production increased by 24% in 2013 compared to 2012. Production of Plywood and Veneer also showed marked improvement when compared with 2012. This product category recorded an increase of 57% in 2013 compared to 2012 production. The forest sector is projected to remain stable in 2014, with export value increasing over the 2013 level. With a strong policy framework and stable investment climate Guyana’s forest sector has much to offer to both existing and new investors both home and abroad. Therefore, the resource revenues garnered by Guyana are used primarily to promote sustained, inclusive economic development through enabling and maintaining high levels of investment in the country. Effective utilization of resource revenues requires that domestic expenditure and investment
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be built up gradually and be smoothed to take account of revenue volatility. Hence, the Government of Guyana facilitates private sector investments at the national and local level for the purposes of diversification, as well as for exploiting the opportunities for domestic value added. The GoG has made every effort to ensure the sustainable utilization and development of forest resources. Guyana is recognized as a leader in having a green economy at the global level through initiatives such as its pioneering of the Low Carbon Development Strategy (LCDS). Through the LCD initiative, Guyana has recorded a very low rate of deforestation of 0.02 to 0.07% over the past 23 years. With its low rates of forest loss, continued implementation of measures to achieve the sustainable management of the country’s forests should ensure ongoing supplies of raw materials for the industry. Additionally, Guyana has continuously strived to embrace new and emerging programs of work that seek to further enhance Guyana’s efforts on forest governance, legality and payment for forest services, and to anchor local efforts within global priorities. Among the programs are the work on Reducing Emissions from Deforestation and Forest Degradation (REDD+) and Monitoring Reporting & Verification System (MRVS) and their links to Guyana’s LCDS, the initiative on EU Forest Law Enforcement Governance and Trade (EU FLEGT) and forest legality, and other similar areas. Guyana is currently engaged with the EU on negotiation a Voluntary Partnership Agreement on EU FLEGT. This will see Guyana and the EU finalizing a Voluntary Partnership Agreement (VPA), possiblely by the end of 2015 with licensing soon to follow. This will offer the added opportunity to investors to secure international accreditation for timber sources from Guyana. With increasing emphasis on the international stage regarding green practices, and the implementation of strong environmental standards, Guyana is well positioned as an attractive market for tropical forest niche products. 78 | GUYANA’S PREMIER INVESTMENT MAGAZINE
Two of the industry’s main strengths are the availability of raw materials and proximity to the major markets of North America and the Caribbean. As one of the few countries in the Caribbean region with large tracts of relatively intact forests, the country’s proximity to the major wood consuming markets of North America and the Caribbean are also strength for the industry. This natural advantage means that investors will have relatively lower shipping cost. Guyana’s most up to date market report indicates that the main wood products the country exports are logs, sawn wood, plywood, piles, shingles (split wood), doors and window frames. The main markets for these products are the EU, Asia, Caribbean, the Middle East and South and North Americas. Traditionally, the Caribbean region and the Asia/ Pacific markets have been the main export destinations for Guyana’s wood products. However, in recent years, the EU market is becoming an importantly steady and stable destination for Guyana’s forest products, albeit a niche market for some of Guyana’s forest products’ exports. Guyana’s domestic construction boom has also increased the local consumption of wood products. According to the latest International Tropical Timber Organization (ITTO) market report, Guyana’s timber species (Greenheart, Purpleheart, Washiba and Mora) not only were accepted in these markets, but also attracted good prices due to their desirability as durable timbers for structural applications. With the Guyana Forestry Commission (GFC), the Forest Products Development and Marketing Council and the Forest Products Association working collaboratively to develop and promote Guyana’s lesser used species, by using the domestic market as a starting point, there is opportunity for the country to build on the success it has achieved so far in the Caribbean, Asia, the Middle East, EU and North America, to further increase market access for its wood products. However, given the ongoing developments in the global timber trade, the greatest opportunity for Guyana’s wood products industry lies in increasing the production of value added products, particularly secondary processed wood products. In 2012, the ITTO estimated the value of the global trade in Secondary Processed Wood Products at between US $61 and US$80 B. In this regard, Guyana has been consistently working with partnering agencies such as the Guyana Revenue Authority to create an investor friendly licensing system for both renewal and new entrants. It is intended that with an investor friendly climate both at the concession issuance stage as well as other licenses stage; that entering the forest sector and remaining an active stakeholder is efficient and that added value production is supported and boosted. ¤
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MANUFACTURERS OF GUYANA’S GOLD
Generations of Golden Success
Harrinand “Ralph” Persaud, CEO and Marketing Director of King’s Jewellery World in Georgetown, holds a 17-ounce nugget of gold worth $86,000 at current retail prices.
T World.
(PHOTO BY LARRY LUXNER)
he dazzling array of styles, including custom made selections, does not fail to impress when one pays a visit to King’s Jewellery
Their most popular piece, the World famous Cricket band is worn by cricketers such as Clive Lloyd, Chris Gayle, Roger Harper, Kevin Peterson, Sanath Jayasuriya, Lasith Malinga, Rohan Kanhai, Courtney Ambrose, Courtley Walsh, Keiran Pollard, Dwayne Bravo and fans all over the globe. New cricket band designs are added every month through the consistent creativity of the skilled jewellers at King’s in Quamina Street, Georgetown. This year the company plans to launch a stainless steel version with the aim of making it available online and in stores all over the world. The company’s Chief Financial and Marketing Officer, Harrinand Persaud, confesses to Invest Guyana that the key to the company’s success has been the ability to focus on creating new designs and upgrading their previous collections. The company is able to move forward because customers can always come back to find something new. However, the classical handmade filigree is still popular and King’s adds twists by making them in rose gold and accenting pieces with diamonds. Diamond engagement rings and wedding bands are big sellers at King’s as couples ensure they have the best start by investing in quality pieces.
Founders of the business - Looknauth & Ena Persaud (far left) Sons - Harrinand Ralph Persaud and wife Renata Persaud, Daughter in law Amanda Persaud and son Gowkaran Ravi Persaud, Daughter in law Anya Persaud and son Rohandev Ryan Persaud. Founded in 1970, in Alexander Village, Georgetown, by Looknauth Persaud, King’s started with one goldsmith and two apprentices. Today, the company has grown into an internationally recognized shopping hub – an advance that has been credited to Mr. Persaud’s entire family: Ena, Harrinand, Rohandev, Gowkaran, Renata, Anya and Amanda Persaud. New technology is definitely making it easier to increase King’s capacity and efficiency. Today they can deliver intricate designs that are made anywhere else in the world using CAD / CAM computer aided molds. Presently there are four graduate gemologists, accredited Jewellery professional and graduate Jewellery designer on site at Kings amongst the 100 plus other employees. Everyone working at King’s form a close family unit and most employees continue to work for years. The Manager of the workshop, Niranjan Sukhram, has been with the company for over 35 years.
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Persaud pointed out that King’s has not only met the requirements of the Guyana National Bureau of Standards for international quality, but was a trend-setter in the standardization process. The company now carries the Bureau’s mark of excellence since the introduction of the gold standard. The worldwide access to “imitation” pieces do present something of a challenge, but pointed out that local prices, for quality products, are competitive and in some cases even below international competitors. “If you look at some of our gold pieces and compare with let’s say Tiffany’s in New York, you would see that our gold pieces are priced according to their silver pieces, so we do make a good offer to our customers,” he said. Persaud highlighted that he would be delighted to one day see Guyana become more of the “Duty free Shopping” concept as that used in other Caribbean Countries. He said, “It would be a dream come true to become the dealer for Rolex and Omega as these are very respectable sought after
Alana Seebarran, former Miss India Worldwide promoting King’s Jewellery products international brands. Visitors and tourists often end up in King’s and if we can offer competitive prices on these products, they would buy in Guyana.” However, Persaud expressed confidence about moving forward considering the growth the company has seen, despite its challenges. We pride ourselves by being able to build excellent relationships with our customers and this makes them keep coming back for more. The Chief Financial and Marketing Officer said value added products will continue to be introduced as the company expands, adding that the past year’s successes have not only benefited the company, but communities as well. King’s is very generous to all local charities, religious and sports organizations. Persaud contends that the company has come a long way from since the 1970’s and the operations at its eight branches reflect the collective expertise o f the Persaud siblings’ travels and experience operating in North America and around the Caribbean. “We spent time travelling and working abroad so I think what we have seen, in terms of customer demands and competitive product lines, we have been able to contribute to the growth of the company and hopefully we will be able to take this success much further. Jewellery from King’s is cherished and passed on from Generation to Generation.” he said. King’s is a Guyanese family owned jewellery manufacturing company and continues to be a leading luxury retailer offering the finest jewellery, diamonds, gemstones, watches, sunglasses, handbags, clothing, shoes, crystals, pens and accessories. ¤
Harrinand Persaud, Chief Financial and Marketing Officer of King’s with the world’s fastest man Usain Bolt wearing a King’s Cricket Band. GUYANA’S PREMIER INVESTMENT MAGAZINE | 81
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Tourism – Soaring To New Heights With New Airlines and Expansion to Hotel Plant Sun and Sand Resorts Director Bushan Chandra Presenting the Hotel’s Blue-Prints to President Ramotar and Tourism Minister Irfaan Ali
Copa Airlines Inaugural Flight Arrives in Guyana
Princess Hotel to be Rebranded Ramada
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UYANA has been growing in stature as an in demand eco tourism destination. In recent years this has seen additional growth with new hotels in the capital Georgetown and other regions of the country.
Recently, Guyana was featured in National Geographic Traveler Magazine on its Best of the World list, which features 20 destinations to visit in 2014. “The list reflects what’s authentic, culturally rich, sustainable, and superlative in the world of travel today,” National Geographic said. The destinations are featured in the December 2013/January 2014 issue of Traveler magazine.
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“Our annual Best of the World list doesn’t reflect hot spots drawn from celebrity sightings or travel statistics,” said Keith Bellows, editor in chief of National Geographic Traveler magazine. “It reflects the expertise and experience of National Geographic Travel’s huge network of global travel experts. If you want to explore places worth visiting now, this is a great place to start.” It was also noted by National Geographic that Guyana may be the best kept secret in South America, with most of the country still covered in wild forests. Stunning natural wonders, stretching
Newly Trained TravelSpan Flight Attendants
The Guyana Government has since welcomed several new international airline companies which have commenced regular scheduled services to Guyana within the last year. Travel Span – offering direct services between New York and Guyana, with connections to Trinidad. Fly Jamaica – offering services to New York, Toronto and Jamaica. Conviasa – offering services between Venezuela and Guyana. Copa Airlines – offering direct services between Guyana and Panama with connections to all of South and Central America and other international destinations. Suriname Airways – offering direct services between Guyana and Miami, Florida.
from newly restored mangroves near Georgetown to the mighty Kaieteur Falls, to the pristine Iwokrama rain forest — Guyana offers curious travellers an opportunity to experience one of the only four remaining intact rain forest eco systems on the planet. According to Tourism, Industry and Commerce Minister, Irfaan Ali, the fact that Guyana was listed in the top 20 list is a great breakthrough for the local tourism industry. It will indeed solidify Guyana on the eco-travel map, and will lure even more visitors to these shores in search of adventure, relaxation, and that unique Guyanese experience. Minister Ali also reminded that, just two years ago, the destination was also featured in National Geographic’s Traveler Magazine’s “50 tours of a lifetime”. He also said that Guyana was featured among the best tours in Central and South America and that this magnitude of exposure will help raise the destination profile and create more awareness for Guyana. Ali said that while there is much to celebrate this year, industry leaders and sector players must not lose sight of the need to continuously develop the industry, and to raise the bar in every aspect of service delivery; particularly as Guyana continues to gain regional and international recognition. With the sterling economic performance of the country over the past decade and its recent label as a hotspot for investment, Guyana has not only seen an increase in tourist arrivals but a significant increase in demand for travel to the country by potential investors, the diaspora and specific groups attending an ever increasing number of conferences, trade shows and mega sporting and entertainment events hosted by the Guyana government, the private sector and regional and international organizations. This has created a demand for increased international airline travel to Guyana and other support hospitality services. The Guyana Government has since led the investment thrust with a range of major investments such as the expansion of the Cheddi Jagan International Airport, a new Marriott Hotel with Conference and Banquet Facilities, new four lane highways and a proposed new bridge over the Demerara River.
The development and expansion of the Ogle Airport to international standards has created an added boost for regional and domestic airline travel. The regional airline LIAT operates all services to and from Guyana out of Ogle Airport. In addition Trans Guyana Airways offers direct services between Georgetown to Paramaribo, Suriname and a number of other local airlines have expanded their fleet and services to target the demand for travel to the interior regions and tourist locations. Recently we have seen the entry of two new airline companies in the domestic market and the launching of private helicopter services by Air Services Ltd offering private charter and aerial tours. This boost in visitor arrivals has also had a positive impact on the hospitality sector and has resulted in a number of investments in new hotel construction, expansion to current hotels and new service providers in the restaurant, tours and transportation sector. In 2015 Guyana will welcome the arrival of the international hotel brands Marriott and Ramada. In addition the New Thriving Group are soon to open their new Hotel and Banquet Hall at Camp and Lamaha Sts, Georgetown. A new hotel will soon open in Lethem, Rupununi. The new Park Vue hotel was recently opened at Farm on the East Bank of Demerara. The Pegasus is undergoing renovations, Herdmanston Lodge has expanded with a new wing of suites, the new Buddy’s Hotel is under construction, the new multi million Sun and Sand Resort and Casino at Liliendaal has broken ground. Investments in support services is also moving apace and we have seen the opening of Silhouette – a fine dining restaurant and 704 – an international style Sports Bar. A new revolving restaurant is nearing completion on Sheriff Street in Georgetown. New fast food franchises Dixie Lee and Papa Pete’s have opened and Royal Castle, Church’s Chicken and Popeye’s are expanding with new branches. ¤ To get on board and invest in this rapidly expanding sector with so much opportunity contact: The Ministry of Tourism, Industry and Commerce 225 South Road, Georgetown, Guyana Tel: 226 2505 Fax: 225 4310 Email: wmilton_ps@yahoo.com Web: www.mintic.gov.gy
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he research tells us that while the idea of the helicopter originated in the 1500s with drawings by the Italian inventor Leonardo Da Vinci, the first piloted versions of the machine were created by two Frenchmen, Paul Cornu in 1907, and Etienne Oehmichen in 1924. Historically, however, a Russian, Igor Sikorsky, is considered to be the “father” of the genre because he invented the first successful helicopter, upon which further designs were based. Little did the Italian, the Frenchmen and the Russian foresee that the machine they pioneered would be creating a transformation in Guyana’s transportation sector with the recent development by Air Services Limited of our helicopter service in the country. Guyana is a vast country with limited infrastructure of roadways south of our Atlantic Coast. Movement of goods and people into our vast forested panorama is largely by river and by light aircraft using approximately 100 hinterland airstrips (half of them government-owned). Because of the spread of the terrain, and the considerable distance between airstrips for light aircraft, the helicopter seems to be a machine designed with Guyana in mind. The obvious application is the one of emergencies, where life and limb are in jeopardy, or where vital medicines or supplies and spares for the extractive industries are critically low, and there is no adjacent area airstrip. The helicopter can operate safely reaching a clearing in our dense jungle, bringing the relief and the saving of life that would not otherwise be possible. But that is only a small part of its reach.
Inaugural flight from Ogle
Air Services Limited (ASL) has serviced Guyana’s hinterland communities for over half a century and has played a major role in the development of our interior to the benefit of both residents and visitors, and the acquisition of our three helicopters is now adding another level to this service with its diverse applications. ASL’s helicopter service which comprises of two Bell 206 Long Rangers and one Robinson 44 has already been readily utilised to enhance the searchand-rescue capacity of both the Guyana Defence Force, the Guyana Civil Aviation Authority and other aircraft operators. We are also now providing med-
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ical evacuation support directly from the remote interior locations to Ogle Airport where the nearest city hospital is minutes away thus saving numerous lives. The exciting development of oil exploration here over the past years has also opened avenues for helicopter use offshore, and in the hinterland Guyana is clearly on the brink of a market for helicopter service meeting the needs of the gold-mining and forestry sectors. As the development wheel turns, and these new vistas arise, we laud the support of the Government of Guyana to permit Guyanese
aviation operators such as Air Services Limited to offer commercial helicopter services. ASL is proud to be the only locally owned commercial helicopter operator in Guyana. ASL operates with the Civil Aviation Authority-approved maintenance staff, and we also have fully qualified helicopter pilots and an approved helicopter flight instructor to train local helicopter pilots. Service by our fleet of 22 fixed-wing aircraft to locations where airstrips exist are now being complemented by our helicopter servicing operations which are days away from the nearest airstrip; this service eliminates the arduous logistics of having to drug supplies for days on end. Mining operations are now saving precious downtime by having essential spares delivered to site, and by production brought directly to Ogle. This widening of the country’s air services has undoubtedly accelerated the pace of our country’s development. With the arrival of this service, other vistas have opened for the “choppers”, one of them being to take tourists quickly and safely to remote locations, in virtual wilderness, for a unique day-time visit to a spot that would ordinarily require several days of difficult overland travel. In addition, for the professional photographer or travel show videographer, the helicopter, with its ability to hover, and to land virtually within yards of a hard-to-reach scenic wonder, is a godsend. New applications are arriving all the time. Recently, for example, ASL collaborated with Bushmasters and the GDF on an
exciting skydiving event which was filmed in 3D, a first for ASL and Guyana for that matter. Next was a group of adventure tourists who rappelled into virgin rainforest to undergo survival training after which they were extracted from a location near one of the most beautiful but relatively unknown waterfall. Landscape Tourism which consists of visitors being flown between our remarkable tabletop mountains are becoming a norm as this gives an unparalled birds eye view of the exotic tepuis and their impressive waterfalls. Teams of scientists have been dropped off to remote areas to undertake much needed research on our flora and fauna adding to the exciting list of endemic species not known of before. In mid-year, for example, we were able to see the dramatic video and pictures, taken on top of Mount Roraima, Guyana’s highest mountain, showing the ASL helicopter that had taken the photographers there. The photograph of the machine, parked on the virtually flat terrain of the 9,219 ft high mountain captures a memorable moment. Mister Sikorsky would have been proud. Closer to our coastline and capital we offer daily aerial tours to our residents and visitors. ASL’s tradition of naming each new aircraft after some outstanding employee in the organization continues. In the case of the first helicopter, and with permission from the GCAA it was named 8R GTR which are the initials of Tularam Ramsukh our maintenance manager who has contributed significantly to this company. ¤
Chinapau community kids gets first glance and feel of helicopter
Discovery Crew preparing for skydiving event
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Doing Business in Guyana By: Jack A. Alli, Sons & Co., Chartered Accountants
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eneral information is provided on areas of interest to investors including methods of establishing a business in Guyana, taxation issues, employment issues, investment protection and environmental considerations, among others. I: Forms of Business There are several options for establishing a business in Guyana including registering a new company, registering an established foreign company in Guyana, establishing a partnership or operating as a sole proprietorship. Registering a New Company Under the Companies Act, a company can be registered with submission of an application to the Registrar containing the following: •
Articles of incorporation giving details such the name proposed for the company; the registered office in Guyana; the share capital – rights, privileges, restrictions, conditions, payment terms; and the size of the board of directors.
•
Statutory declaration by two directors of the company attesting to the information submitted to the Registrar, along with a copy of the corporate instruments of the company.
•
A registration fee G$60,000 is required. There is an obligation to file an annual return with the Registrar, along with the audited financial statements.
Statutory declaration by an attorneyat-law that the Companies Act has been complied with.
•
Registering a Foreign Company A foreign company established under the laws of a country other than Guyana can register to carry on business in Guyana as an external company under the Companies Act. To register the following documents should be submitted to the Registrar.
A fully executed power of attorney that shall empower some person named in the power and resident in Guyana to act as attorney of the company.
A registration fee of between G$80,000 to G$300,000 is payable depending on the share capital of the company.
•
Statutory declaration by an attorneyat-law on the suitability of signatories to the articles of incorporation.
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Details of the persons who are to be first director(s) and secretary, and their consent to serve.
•
Statement containing details such as the company name; the jurisdiction incorporated in; the date and manner of incorporation; the company’s share capital; the extent of limited liability; the undertaking in Guyana and date of commencement; the full address outside Guyana and in Guyana; and the names, addresses and occupations of the directors of the company.
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A registered external company is required to lodge audited accounts with the Registrar on an annual basis. A registered company is entitled to own land in Guyana as may be authorized by licence of the President. Registering Sole Proprietorship or a Partnership Under the Business Names (Registration) Act, a sole proprietorship or a partnership carrying on business under a business
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name other the true surname(s) of the sole proprietor or all partners, is required to be registered. The Partnership Act governs the workings of partnerships in Guyana.
against the corporation tax liability for the succeeding year or years to the extent this liability is in excess of the minimum tax for the relevant year.
Registration of a business name requires submission of an application to the Registrar containing the following details:
Tax returns must be filed by April 30 of the year following the accounting year-end. Accounting year-ends that do not coincide with the calendar year-end must be approved by the tax authority. Tax returns are required to be submitted with audited financial statements.
•
The business name, general nature of the business and the principal place of business.
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The name, nationality, usual place of residence and other business occupation of the sole proprietor or every individual who is a partner.
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A nominal registration fee is payable.
Corporate bodies are required to pay corporation tax in quarterly installments on March 15, June 15, September 15, and December 15 of the year of income. Any shortfall of taxes after accounting for quarterly installments should be met by April 30 following the year of income.
II: Tax Regime Corporation Tax Corporation tax is charged at a rate of 40% for commercial companies (except telephone companies) and at a rate of 30% in the case of any other company. Telephone companies pay corporation tax at a rate of 45%. A commercial company is a company for which at least 75% of the gross income is derived from trading in goods not manufactured by it, and includes commission agencies, telecommunications companies, banks and insurance companies, other than long-term insurance companies. Where the actual corporation tax liability of a commercial company as computed at 40% or 45% is less than 2% of the turnover of the company, the Corporation Tax Act provides for the payment of corporation tax at the rate of 2% of turnover - referred to as minimum tax. Minimum tax paid in excess of the actual corporation tax liability is to be carried forward for setoff
Branch Profit The corporation tax rates on branch profit are the same as for companies. Branch profit net of corporation tax is subject to withholding tax at 20%. Tax Losses Losses may be carried forward indefinitely to be set off against future profits. Brought forward tax losses cannot be used to reduce the tax payable of any year by more than 50%. Loss carrybacks are not permitted. Payments to Foreign Affiliates A company may claim a deduction for charges paid to foreign affiliates, provided such amounts are reasonable and necessary, having regard to the requirements of the trade. Deduction for management charges is restricted to the lesser of the charge and 1% of gross income of the company. Group Taxation There are no group taxation provisions.
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Income Tax Income is taxable when it accrues in or is derived from Guyana, whether or not the individual is resident in Guyana, and whether or not the income is received in Guyana. Employment compensation includes all benefits and allowances derived from employment, except allowances for medical or dental expenses or for any passage to or from Guyana and allowances for subsistence, travel, company car, entertainment, security, or expenses if explained to the satisfaction of the tax authority. Income tax is charged at a rate of 30% after deduction of a personal allowance of G$600,000 per annum. Self employed persons make income tax payments in quarterly installments with any shortfall of taxes being made by 30 April following the year of income. Other employed persons have income taxes withheld under the pay-as-you-earn (PAYE) system. Tax returns must be filed by April 30 of the year following the year of income. National Insurance Scheme National insurance contributions are required at a rate 14% of earnings, with 5.6% being deducted from employees’ salaries and 8.4% being contributed by employers. Self-employed persons contribute 12.5% of earnings. There is a maximum monthly earnings ceiling of G$158,159. Withholding Tax Withholding tax is deducted at source on gross distributions, bank interest and other specified payments (e.g. royalties,
Stamp Duty Stamp duties are charged on various types of instruments. The rate applicable varies by type of instrument. Custom Duties Customs duty is charged on the importation of goods into Guyana. The rate applicable varies by type of good. Excise Tax Excise tax is charged on the importation or domestic manufacture of motor vehicles, petroleum products, tobacco products and alcoholic beverages. The rate of excise tax varies across and within these product groups. Value-added Tax Value-added Tax Act at a rate of 16% is charged on taxable supplies of goods and services. There are certain categories of supplies which are zerorated or exempt.
management fees, rent) made to nonresidents. The rate of withholding tax is 20%. Property Tax Property tax is payable on net property of companies and individuals at the end of year of income. For a company, the first G$10 million of net property is exempt, the next G$15 million is taxed at 0.5% and thereafter a rate of 0.75% applies. For an individual, the first G$40 million is exempt and a rate of 0.75% is applied on net property in excess of G$40 million. Capital Gains Tax Gains arising from disposal of capital assets held for between 1 and 25 years are subject to capital gains tax at a rate of 20%. Gains arising upon the disposal of capital assets within 12 months of acquisition are subject to corporation or income tax as appropriate. Capital assets held for more than 25 years are not subject to capital gains tax upon subsequent disposal. Capital losses are allowed as an offset to capital gains and may be carried forward for a period of 24 years.
Corporation Tax Holiday Under the Income Tax (In Aid of Industry) Act, the Minister of Finance may grant an exemption from corporation tax with respect to new economic activity of a developmental and risk-bearing nature in one of the following fields: • • • • • • • • •
•
Non-Traditional Agriculture Development and Agro-Processing Information and Communications Technology Petroleum Exploration, Extraction, or Refining Mineral Exploration, Extraction or Refining Tourist Facilities Value-Added Wood Processing Textile Production Biotechnology Development and Manufacturing of New Pharmaceutical Products, Chemical Compounds and the Processing of Raw Materials to Produce Injectables Infrastructural Development, Including the Production of Electricity Using Renewable Sources of Energy
New economic activity is one of the following administrative regions of Guyana may also qualify for exemption from corporation tax: • • • • •
Region 1: Barima / Waini Region 7: Cuyuni / Mazaruni Region 8: Potaro / Siparuni Region 9: Upper Takatu / Upper Essequibo Region 10: Upper Demerara / Upper Berbice
Exemption is granted for a period of up to 5 years but may be extended up to 10 years if the activity is in one of the specified economic fields. In the case of infrastructural development the exemption may extend beyond 10 years. Export Allowances Companies that export sales of manufactured, processed or agricultural products are entitled to export allowances as a deduction from chargeable profits. The quantum of the allowance is dependent on the percentage of export sales to total sales. Products that do not qualify for this allowance are bauxite, gold, diamonds, petroleum, sugar, rum, molasses, rice, timber, lumber, and shrimp. Also, export sales to certain CARICOM countries do not qualify for the allowance. Double Tax Treaties Guyana has effective double taxation treaties with Canada, the United Kingdom and CARICOM Member States that have ratified the CARICOM Double Tax Treaty. III: Labour Laws in Guyana Labour Regime Guyana has several laws which govern the employment of labour. Some of the significant laws in this regard are: • • • • • • • • • • • •
Labour Act Termination of Employment and Severance Pay Act Wages Council Act Leave with Pay Act Shops (Consolidation) Act Prevention of Discrimination Act Occupational Safety and Health Act Labour (Conditions of Employment of Certain Workers) Act Trade Unions Recognition Act Employment of Young Persons and Children Act Licensed Premises Act Factories (Hours and Holidays) Act
These laws address matters such as the treatment of wages and salaries, normal
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hours of work and overtime, leave with pay, safety, health and welfare, accidents and occupational diseases, termination of employment and severance pay, registration and regulation of industrial establishments, collective agreements, employment of young persons and duty of employers to keep records. The normal work week is legislated as 40 hours over not more than 5 days. Any hours of work beyond normal hours are remunerated as overtime in accordance with applicable law. The minimum wage in Guyana is G$35,000 per month.
Transfers of Funds Abroad The Investment Act also allows investors to transfer funds, subject to payment of applicable taxes, for the following purposes:
•
•
•
• • • • • •
Employment of Foreigners Foreigners require a work permit issued by the Ministry of Home Affairs to be employed in Guyana. Applications for work permit require information on both the employer and the intended nonnational employee.
Repatriation of dividends, earnings and capital Remittance of proceeds of sale or liquidation of an investment Payment of interest on international loans Payment for imports Payment of fees for trademarks, royalties and management services Payment of licensing fees for franchising agreements Transfers of funds may be prevented however in circumstances of bankruptcy, insolvency, criminal proceedings, court orders or judgements or when necessary for the protection of stockholders or creditors.
A CARICOM national holding a CSME Skilled National Certificate and his/her spouse are not required to obtain work permits to be employed in Guyana.
Dispute Resolution The Investment Act provides that in cases where disputes arise among investors or with the Government of Guyana, the following avenues are available if the
IV: Investment Protection
matter is not amicably settled through consultation or mediation.
Rights and Guarantees Under the Investment Act, the Government of Guyana provides various assurances to investors with respect to any investment made in Guyana, including the following: Not to compulsorily acquire or take possession of the investment unless for a purpose in law, on a non-discriminatory basis, with prompt payment of adequate compensation and with a right of access to the court system. To allow investors to purchase or lease land in Guyana subject to existing laws. Not to intervene in the management of investor’s activities, nor impose conditions on the sale, pricing or distribution of associated products, except in the pricing of utilities. Guarantee the right of investors to determine the distribution of all profits and dividends, and to receive their share of such profits or dividends subject to settlement of corresponding tax obligations. To allow the employment of skilled and expert foreign personnel when necessary with the approval of the relevant authority and in accordance with applicable laws.
• • •
Submit the dispute to arbitration under the Arbitration Act Refer to matter to the competent courts in Guyana Submit the matter to the International Centre for the Settlement of Investment Disputes (ICSID) of which Guyana is a member.
• •
Importing of any waste matter whether hazardous or not Release, use or keeping of any genetically modified organisms Harvesting and utilization of forest resources Extraction and conversion of mineral resources
Currency Matters The unit of currency in Guyana is the Guyana Dollar which is freely convertible into other currencies based on prevailing market conditions. All monetary obligations or transactions in Guyana are required to be expressed, recorded and settled in Guyana Dollars unless permission is obtained from the Bank of Guyana which is responsible for the regulation of the financial sector in Guyana. Under the Investment Act investors may open accounts in Guyana Dollars and in foreign convertible currencies with licensed banks in Guyana. Anti-money Laundering The Anti-money Laundering and Countering the Financing of Terrorism Act was passed in 2009 replacing previous legislation on the subject. The Financial Intelligence Unit, provided for under the Act, is responsible for the handling of suspicious transaction reports and other information relating to money laundering, terrorist financing or the proceeds of crime. Stock Exchange The Guyana Association of Securities Companies and Intermediaries Inc. operates the Guyana Stock Exchange. There are presently seventeen companies on the Exchange.
V: Other Matters of Interest Environmental Protection Under the Environmental Protection Act, administered by the Environmental Protection Agency, a developer of any of the following types of project, or any other project that is likely to impact the environment is required to obtain an environmental permit. • • • • •
Construction of any hotel, guest house or inn above ten rooms Installation for hydro-electric energy production Construction of roads, harbours and airfields Dams and other installations designed to hold liquid or to store it on a longterm basis Installation for the treatment of waste water, industrial or domestic waste
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Accounting Standards The accountancy profession in Guyana is regulated by the Institute of Chartered Accountants of Guyana. Accounting standards adopted for application in Guyana are the International Financial Reporting Standards. ¤ Author’s note: The information contained in this article is for general guidance on matters of interest only and is not meant to be comprehensive. It is recommended that you obtain advice specific to your circumstances from professional advisers before proceeding.
Government Offices & Agencies Office of the President Shiv Chanderpaul Drive Georgetown Tel: (592) 225 7051 Fax: (592) 226 3395 Email: hpssec@gmail.com Website: www.op.gov.gy
Ministry of Home Affairs Brickdam Stabroek Georgetown Tel: (592) 225 7270 Fax: (592) 227 4806 Email: homemin@guyana.net.gy Website: www.moha.gov.gy
Office of the Prime Minister Wight’s Lane Kingston Georgetown Tel: (592) 226 6955 Fax: (592) 226 7573 Email: opm@networksgy.com
Ministry of Housing and Water 41 Brickdam Stabroek Georgetown Tel: (592) 225 7192 Fax: (592) 227 3455 Email: minister_housing@yahoo.com Website: www.chpa.gov.gy
Ministry of Agriculture Regent & Vlissengen Roads Bourda Georgetown Tel: (592) 223 7844 Fax: (592) 227 2978 Email: minister@agriculture.gov.gy Website: www.agriculture.gov.gy.com Ministry of Amerindian Affairs 251-252 Thomas & Quamina Streets South Cummingsburg Georgetown Tel: (592) 227 5067 Fax: (592) 225 7072 Email: paulinesukhai@yahoo.com Website: www.amerindian.gov.gy
Ministry of Human Services and Social Security 1 Water Street Stabroek Georgetown Tel: (592) 225 7112 Fax: (592) 227 6990 Email: humanservicesministry@yahoo.com Website: www.mlhsss.gov.gy Ministry of Labour 1 Water Street Stabroek Georgetown Tel: (592) 226 6115 Fax: (592) 227 1308 Email: ministeroflabour@yahoo.com Website: www.mlhsss.gov.gy
Ministry of Culture, Youth and Sports 71-72 Main Street South Cummingsburg Georgetown Tel: (592) 226 7568 Fax: (592) 225 5067 Email: drfrankcsanthony@gmail.com Website: www.mcys.gov.gy
Ministry of Legal Affairs 95 Carmichael Street North Cummingsburg Georgetown Tel: (592) 225 3607 Fax: (592) 227 5419 Email: attorneygeneral@legalaffairs.gov.gy Website: www.legalaffairs.gov.gy/
Ministry of Education 26 Brickdam Stabroek Georgetown Tel: (592) 226 3094 Fax: (592) 225 5570 Email: moe.manickchand@gmail.com Website: www.education.gov.gy
Ministry of Local Government & Regional Development Fort Street Kingston Georgetown Tel: (592) 225 8621 Fax: (592) 226 5070 Email: mlgrdmin@gmail.com
Ministry of Finance Main & Urquhart Streets Georgetown Tel: (592) 227 1114 Fax: (592) 226 1284 Email: asingh@finance.gov.gy Website: www.finance.gov.gy Ministry of Foreign Affairs 254 South Road Bourda Georgetown Tel: (592) 226 9080 Fax: (592) 223 5241 Email: minister@minfor.gov.gy Website: www.minfor.gov.gy Ministry of Health Brickdam Stabroek Georgetown Tel: (592) 226 1560 Fax: (592) 225 4505 Email: ministerofhealth@gmail.com Website: www.health.gov.gy
Minister of Natural Resources and the Environment Upper Brickdam Georgetown Tel: (592) 231 2506 Fax: (592) 231 2503 Email: minister@nre.gov.gy Website: www.nre.gov.gy Ministry of Public Service 164 Waterloo Street North Cummingsburg Georgetown Tel: (592) 227 1193 Fax: (592) 227 2700 Email: psmgy@yahoo.com Ministry of Public Works Wight’s Lane Kingston Georgetown Tel: (592) 226 1875 Fax: (592) 225 6954 Email: minister@publicworks.gov.gy Website: www.publicworks.gov.gy
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Ministry of Tourism, Industry & Commerce 229 South Road Lacytown Georgetown Tel: (592) 226 8965 Fax: (592) 225 9898 Email: minister_housing@yahoo.com Website: www.mintic.gov.gy
Guyana Rice Development Board 117 Cowan Street Kingston Georgetown Tel: (592) 225 8717 Fax: (592) 225 6846 Email: grdb@gol.net.gy Website: www.grdb.gy
GO-INVEST (Guyana Office for Investment) 190 Camp & Church Streets, Georgetown. Tel: (592) 0658/227 0653 Fax: (592) 225 0655 Email: goinvest@goinvest.gov.gy Website: www.goinvest.gov.gy
Guyana Tourism Authority National Exhibition Centre, Sophia, Georgetown. Tel: (592) 219 0094-6 Fax: (592) 219 0093 Email: info@guyana-tourism.com Website: www.guyana-tourism.com
Private Sector Agencies Private Sector Commission Umbrella organization for most private sector business and employer organisations. Most major companies are also members. 157 Waterloo Street, North Cummingsburg, Georgetown. Tel: (592) 225 0977 Fax: (592) 225 0978 Email: office@psc.org.gy Website: www.psc.org.gy Guyana Manufacturing & Services Association 157 Waterloo Street, North Cummingsburg, Georgetown Tel: (592) 223 7405-06 Fax: (592) 225 5615 Email: gma_guyana@yahoo.com Website: www.gma.org.gy Forest Products Association of Guyana 157 Waterloo Street, North Cummingsburg, Georgetown Tel: (592) 226 9848 Fax: (592) 226 2832 Email: fpasect@guyana.net.gy Guyana Gold & Diamonds Miners Association (GGDMA) East Half 29 North Road, Bourda, Georgetown Tel: (592) 225 2217 Fax: (592) 225 1828 Email: info@guyanaminers.com Website: www.guyanaminers.com Institute of Private Enterprise Development 253-254 South Road, Bourda, Georgetown Tel: (592) 225 8949 / 226 4675 Fax: (592) 226 4675 Email: iped@ipedgy.com Website: www.ipedgy.com Tourism and Hospitality Association of Guyana (THAG) 157 Waterloo Street, North Cummingsburg, Georgetown. Tel: (592) 225 0807 Fax: (592) 225 0817 Email: thag.secretariat@gmail.com Website: www.exploreguyana.org
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Georgetown Chamber of Commerce & Industry 156 Waterloo Street, North Cummingsburg, Georgetown. Tel: (592) 227 6441 or 225 5846 Tel/Fax: (592) 226 3519 Email: gtchambe@networksgy.com Website: www.gccigy.org Berbice Chamber of Commerce and Development 12 Chapel Street, New Amsterdam, Berbice Tel: (592) 333 3324 Email: bccda@guyana.net.gy Linden Chamber of Commerce and Industry 97 Republic Avenue, McKenzie, Linden Tel: (592) 444 2901 Fax: (592) 444 4057 Email: infodesk@lindenchamber.org.gy Website: www.lindenchamber.org.gy Rupununi Chambers of Commerce and Industry Block ‘A’ Takatu Drive, Lethem, Rupununi, Region 9 Tel: (592) 772 2213 Email: rupununircci@yahoo.com Upper Corentyne Chamber of Commerce & Industry Lot 52 East Public Road, No. 78 Corriverton, Berbice. Tel: (592) 335 3199 / 335 3738 Fax: (592) 335 3738 Email: ucci_9@yahoo.com/ hemchand@yahoo.com Central Corentyne Chamber of Commerce 65 A Public Road, Rosehall, Corentyne, Berbice. Tel: (592) 337 4778 Email: central_chamber@yahoo.com West Demerara / East bank Essequibo & Islands Chamber of Commerce and Industry. Ocean View Dr. Ruimzeight, West Coast Demerara. Tel: (592) 269 0020 / 269 0030 Fax: (592) 269 0022 Email: westdemerara_chamber@yahoo.com
Embassies and Overseas Missions in Guyana Embassy of the Federative Republic of Brazil 308 Church Street, Georgetown Tel:(592) 225 7970 / 226 9693 / 227 5789 Fax: (592) 226 9063 Email: brasemb.georgetown@itamaraty.gov.br, brasemb@networksgy.com
Embassy of the Argentine Republic 66 Brummel Place, Stabroek, Georgetown Tel: (592) 231 9521-22 Fax: (592) 231 9505 Email: eguya@mrecic.gov.ar
Embassy of the Russian Federation Public Road Kitty, Georgetown Tel: (592) 225 2179 / 226 9773 Fax: (592) 227 2975 Email: embrus.guyana@mail.ru
Canadian High Commission 66 Brummel Place, Stabroek, Georgetown Tel: (592) 227 2081-2 Fax: (592) 225 8380 Email: grgtn@international.gc.ca Website: http://www.canadainternational.gc.ca/guyana/index.aspx
Embassy of the United States Young & Duke Streets Kingston, Georgetown Tel: (592) 226 3938 / 225 7960 / 225 4900 Fax: (592) 227 0240 / 225 8497 Email: GeorgetownExecOffice@state.gov Website: georgetown.usembassy.gov
Embassy of the Republic of Cuba 40 High Street, Kingston, Georgetown Tel: (592) 225 1883 / 226 8842 Fax: (592) 226 1824 Email: emguyana@networksgy.com Website: http://www.cubadiplomatica.cu/guyana/EN/Home.aspx
British High Commission 44 Main Street, Georgetown Tel: (592) 226 5881-4 Fax: (592) 225 3555 Email: bhcgeo@networksgy.com Website: www.gov.uk/government/world/organisations/british-highcommission-georgetown
Indian High Commission 307 Church Street, Georgetown Tel: (592) 226 3996 / 226 8965 / 226 3240 Fax: (592) 225 7012 Email: hoc.georgetown@mea.gov.in Website: http://www.hcigeorgetown.org/
Embassy of the United Mexican States 44 Brickdam South Cummingsburg, Georgetown Tel: (592) 226 3987 / 226 3988 / 226 3989 / 226 3990 Fax: (592) 226 3722 Email: mexicoembassygy@gmail.com Website: http://embamex.sre.gob.mx/guyana/ Embassy of the Bolivarian Republic of Venezuela 296 Thomas Street, Georgetown Tel: (592) 226 1543 / 226 6749 / 226 9041 Fax: (592) 225 3241 Email: lilianamanoo@yahoo.com Website: http://guyana.embajada.gob.ve/ Embassy of the People’s Republic of China Track ‘B’, Mandela Avenue Tel: (592) 227 1651 / 227 1652 Fax: (592) 225 9228 / 226 4308 Email: prcemb@networksgy.com, chinaguyana@yahoo.com Website: http://gy.china-embassy.org/eng/ Embassy of the Republic of Suriname 171 Peter Rose & Crown Streets, Queenstown, Georgetown Tel: (592) 226 7844 / 225 2631 / 225 2846 Fax: (592) 225 0759 Email: surnmemb@gol.net.gy
Caribbean Community Secretariat Railway Embankment, Turkeyen Greater Georgetown Tel: (592) 222 0117 / 222 0274 Fax: (592) 222 0173 Email: carisec1@caricome.org, carisec2@caricom.org, carisec3@caricom.org, osg1@caricom.org Website: http://www.caricom.org/ Delegation of the European Union 11 Sendall Place, Stabroek, Georgetown Tel: (592) 226 4004; 226 5424 Fax: (592) 226 2615 Email: delegation-guyana@cec.eu.int Website: http://eeas.europa.eu/delegations/guyana/index_en.htm United Nations Development Programme 42 Brickdam, Georgetown Tel: (592) 226 4040 / 226 4048-9 / 227 1659 Fax: (592) 226 2942 Email: registry.gy@undp.org Website: http://www.gy.undp.org/content/guyana/en/home.html
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Pan American Health Organisation / World Health Organisation 8 Brickdam, Georgetown Tel: (592) 227 5150 / 227 5158 / 226 9165 Fax: (592) 226 6654 Email: email@guy.paho.org Website: http://www.paho.org/guy/
UNESCO National Commission 90 Robb Street, Georgetown Tel: (592) 225 4306 Fax: (592) 226 0645 Email: unesco@gol.net.gy Website: en.unesco.org
Commonwealth Youth Programme Homestretch Avenue, Georgetown Tel: (592) 226 8565 / 226 3105 / 226 3064 Fax: (592) 226 8371 Email: e.percival@commonwealth.int Website: http://thecommonwealth.org/
UNAIDS Secretariat Main & New Market Streets, Georgetown Tel: (592) 225 1580 Fax: (592) 223 3177 Email: halls@unaids.org Website: www.unaids.org/en/regionscountries/countries/guyana/
United Nations Chrildren’s Fund (UNICEF) 72 Brickdam, Georgetown Tel: (592) 226 7083 / 227 3662 / 225 9993 Fax: (592) 226 5894 Email: sdharte@unicef.org Website: http://www.unicef.org/infobycountry/guyana.html
Canadian International Development Agency c/o Canadian High Commission High & Young Street. Georgetown Tel: (592) 227 2081-2 Fax: (592) 225 8380 Email: daniel.joly@international.gc.ca Website: http://www.international.gc.ca/international/index. aspx?lang=eng
International Centre for Rain Forest Conservation & Development (IWOKRAMA) 77 High Street, Kingston, Georgetown Tel: (592) 225 1504 Fax: (592) 225 9199 Email: dgobin@iwokrama.org Website: http://www.iwokrama.org/ Office of the Organisation of American States 18 Brickdam, Stabroek, Georgetown Tel: (592) 227 6229 / 227 6257 Fax: (592) 227 6219 Email: oasgy@gol.net.gy Website: https://www.oas.org/en/about/offices_detail.asp?sCode=GUY Inter-American Development Bank (IADB) 47 High Street, Kingston, Georgetown Tel: (592) 225 7889 / 225 7950-3 / 225 6130 Fax: (592) 225 7138 Email: idbguyana@IADB.org Website: http://www.iadb.org/en/mapamericas/guyana/idb-in-guyana,5913.html
United Nations Population Fund 44 Brickdam, Stabroek Georgetown Tel: (592) 223 6571 / 225 4334 Fax: (592) 231 5423 Email: duncan@unfpa.org Website: http://www.unfpa.org/ Vice Consulate of Brazil in Lethem 209 Kanuku Drive, Lethem, Rupununi Tel: (592) 772 2091 Mobile: (592) 677 8737 Fax: (592) 772 2091 Email: theotonio.oliveira@itamaraty.gov.br Fooad and Agriculture Organisation (FAO) 18 Brickdam, Georgetown Tel: (592) 227 3149 / 225 1362 Fax: (592) 227 6099 Email: pearl.tucker@fao.org Website: http://www.fao.org/countryprofiles/index/en/?iso3=GUY
Inter-American Institute for Co-operation on Agriculture (IICA) 18 Brickdam, Georgetown Tel: (592) 226 8347 Fax: (592) 225 8358 / 227 8792 Email: iica@networksgy.com, aletha.isaacs@iica.int Website: http://www.iica.int/Eng/Pages/default.aspx
International Organisation for Migration (IOM) 59 Main & New Market Streets, Georgetown Tel: (592) 225 3745 Fax: (592) 227 3675 / 226 4732 Email: rasingh@iom.int Website: https://www.iom.int.com
Office of the World Bank 87 Carmichael Street, South Cummingsburg, Georgetown Tel: (592) 223 5037-9 Fax: (592) 225 1384 Email: ssammslindsay@worldbank.org, eemanuel@worldbank.org, jduffalleyne@worldbank.org Website: http://www.worldbank.org/en/country/guyana
Forum of the Caribbean States (CARIFORUM) Turkeyen, Greater Georgetown Tel: (592) 222 0117 Ext. 3231,3233 Fax: (592) 222 0171 Email: aowen@caricom.org Website: http://www.caricom.org/jsp/community_organs/cariforum/ cariforum_main_page.jsp?menu=cob
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