Business Guyana 2017

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Contents features 32/ T he Promise of Oil While oil brings wealth, prosperity is no panacea, it’s problematic too.

By Sheryl Nance Nash 40/ S creen Savers Reel Guyana gives new developments the Hollywood treatment.

By Dave Martins 44/ T he New Deal Will Guyana’s recent oil find breed conflict or cohesion?

By Collin Constantine 60/ A Nation In Suspense To build or not to build an oil refinery

By Dr. Terrence Blackman

departments 4/ The Chamber’s message

By Deodat Indar 6/ The President’s Message

By His Excellency David Granger 8/ The Promise of Oil

By Sandi Bowen 10/ N ew Frontier Guyana prepares for the budding oil industry.

By Hon. Raphael G.C. Trotman 12/ T he Promise of Prosperity

By Minister Dominic Gaskin 14/ T he Board of Change

By Kirk Hollingsworth 16/ Research and Assessment 26/ Fast Facts 86/ World Exchange 92/ Ram & McRae Investment Supplement 96/ Onward

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Contents columns

28/ O il Guyana A new narrative, a new day for Guyana…But we must tread with caution. By Carolyn Walcott 30/ O ut Front Exxon Mobil is leading the exploration of a whole new industry. By Lorraine Ince-Carvalhal 50/ C limate Control With new industrial prospects Guyana has a renewed green state ambition. By K. Wilburg 52/ T he Sky’s the Limit Sustainability is the secret of Roraima Airways’ success.

By Dellon Murray 54/ G rowth & Gain Are there opportunities for small businesses in the oil & gas sector? By Gillian Griffith-Edwards 56/ L earning Curve The University of Guyana prepares its students for emerging industries. By Carinya Shaples 58/ S triking Oil 50 years of opportunities for Guyanese industries in oil & gas. By Lars Mangal 68/ D oing the Right Thing Corporate social responsibility in Guyana’s oil sector.

By Dr. Veronica Broomes 70/ L ead and Serve The Promise of Oil commands ‘Dispersed Leadership’

By Sherronie James 72/ G reening Our Black Gold The Development of Renewable Energy must not be lost among the Promise of Oil.

By Kiran Mattai 74/ C hanging Faces New business courts a consumer evolution.

By Bernard Nelson 78/ T he Road Ahead The content of a developmentally hungry nation.

By A. Rockcliffe 80/ A Possible Dilemma Will Guyana’s oil be a blessing or a curse?

By A. Rockcliffe 84/ W ho’s Who in Business A who’s who of business contacts and private sector organisations in Guyana

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I am honored to give remarks in the capacity as President, of the Georgetown Chamber of Commerce (GCCI), an institution which, having been established since 1889, is considered to be one of the oldest private sector organizations in Guyana. In this, our eighth (8th) edition of the Business Guyana publication, we have turned our focus to the horizon of opportunities before us. We have engaged notable individuals and institutions in the business community who today drive conversations on the way forward. We trust that you find them useful in your reading of the articles that are carried herein.

Message from the President of the GCCI

The Chamber believes that for Guyana to be the investment destination we envision it can be, a thorough elucidation of the challenges facing the business community must be done. Further, and more importantly, a look into how Guyanese business cope with the expectations of an Oil economy should be studied and looked at more carefully.

This 8th edition of Business Guyana also seeks to align the views of eminent persons and businesses of the state of Guyana’s readiness for the Oil and Gas sector and provides more of a layman’s view of the challenges, opportunities and risks of doing business in Guyana. It also provides investors with a snapshot of the abundant opportunities, which can be found in Guyana.

It is our fervent hope that you will find this publication helpful in answering the questions you may have of Guyana. Whether you are an investor or a tourist, we hope that you will see the need to invest in a country that has tremendous potential which is slowly being realized.

In closing, I wish to take this opportunity to thank the members of the GCCI who have participated in no small way in the building of our great country. I wish to encourage them to continue actively participating in the discussions that will shape our country and to be vigilant of the opportunities that may present themselves in the next two decades. I also wish to express my gratitude to the advertisers, contributors, publishers, and the dedicated staff of the Chamber’s Secretariat led by our vibrant and dynamic Executive Director, Kirk Hollingsworth for their input and for making this publication a reality.

I look forward to your views and comments and encourage you to send your feedback and comments to email: gccicommerce2009@gmail.com Sincerely, Deodat Indar President, Georgetown Chamber of Commerce and Industry

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Cour tesy of Saajid Husain

The main focus of this edition is to highlight some of the challenges before us as we consider Guyana to be an investment destination. Firstly, while the outlook for Guyana’s economy remains positive with a projected expansion by 3.8% at the end of 2017, we are mindful that this growth is only premised on the unprecedented growth in the mining and quarrying sector.

With the discovery of Oil by Exxon Mobil it is expected that Guyana’s economy will grow even further. For this reason we have premised the focus of this magazine to touch on Guyana’s new found black gold.

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president’s message Guyana has much to learn about the petroleum industry. Guyana has had decades of experience in gold-mining, bauxite-mining and manganese mining. Guyana, however, is a newcomer to the oil and gas sector. This period of exploration, therefore, represents an important experience which we intend to use to secure the best technical and financial advice on developing and regulating the new ‘black gold’ sector.

Guyana’s natural resources, including its petroleum reserves are part of our national patrimony. We must ensure that these resources are sustainably exploited so that they will be of benefit to this and future generations.

The expected revenues, similarly, must be managed responsibly through the establishment of a Sovereign Wealth Fund. This will ensure that future generations will enjoy the benefits of revenues from our natural resources.

We are equally keen on protecting the environment. Guyana is irreversibly committed to a green trajectory of development. The allure of petroleum revenues will not distract, or deter us from this path. We will establish a ‘green state’ by marrying sustainable development with a low-carbon, low-emission pathway to economic development.

The ‘green state’ will promote opportunities in agriculture, agroprocessing, renewable energy, value-added manufacturing and solidwaste management. We are confident that the ‘green state’ will yield an economic bonanza for our people and for investors.

I welcome this edition of Business Guyana Magazine. I applaud its focus on Guyana’s emerging petroleum sector.

David Granger President of the Co-operative Republic of Guyana

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Since its resurgence in 2010, the Georgetown Chamber of Commerce and Industry’s (GCCI) Business Guyana Magazine (BGM) has been an essential resource for investors, known for bringing you the information needed to navigate the business landscape in Guyana, and providing constructive commentary on key issues affecting private sector development.

This year, we’ve revamped the magazine with the aim of bringing more value to our audience, while delivering the information you need in a modern and minimalist package. From a strategic change in magazine dimensions and material, to a minimalist but captivating cover, fresh graphics and crisp images, this year’s magazine is a rather handsome publication.

Once you get past its bold design, you’ll find that its content is also impressive. In the year 2017, Guyana is on the brink of something remarkable – word is buzzing on the international scene that we’re poised to become a major player in the oil and gas industry, and the effects of ExxonMobil’s latest oil discovery are numerous. In light of this, the GCCI’s editorial team saw it fit to title the Eighth Edition of the BGM, “The Promise of Oil”.

The Eighth Edition, like its precursors, has something special for everyone. We’ve curated high-quality and relevant content that answers the questions we’ve all been asking ever since Exxon announced that it had struck black gold on the Stabroek Block at the beginning of the year.

For a developing country like Guyana, the Promise of Oil comes with a tinge of uncertainty. Guyanese at home and in the diaspora all want to know how a major oil discovery affects them, and most importantly, how they can position themselves to get a piece of the pie.

Moreover, Guyana has attracted the attention of some of the biggest oil companies in the world who recognize the country as a novice in the handling of rich natural resources.

In our cover story, “The Promise of Oil”, we explore Guyana’s susceptibility to “resource curse” as we offer an in-depth analysis of the upsides and challenges that come with being an oil-rich developing country.

We delve even deeper into the ramifications of the oil discovery with a socioeconomic feature that opens up a sensitive but necessary conversation on the racial and social underpinnings of wealth distribution in Guyana, and how such historical implications must be considered at a time like this.

Meanwhile, small business owners have been reading the headlines and questioning where they fit in to the equation. Here, the Small Businesses Bureau examines the possibilities that exist for small and micro-businesses to benefit from the emerging oil and gas sector.

We’ve also brought you insights into burning issues such as how the government intends to balance its Green State ambitions during Guyana’s transition to an oil producing nation; what mechanisms are in place to guard against corruption – a major problem in developing countries rich in oil and gas and other natural resources; the facts on the feasibility of a local oil refinery; how international oil and gas companies may incorporate effective and development aligned Corporate Social Responsibility (CSR) policies while in Guyana, and much more.

For the Eighth Edition of the Business Guyana Magazine, we asked the hard questions. We’ve given our readers varied perspectives of what the promise of oil means for Guyana, and we’ve set the stage for a frank conversation on what the future holds as Guyana prepares to enter a new era as a big oil producer in the Western Hemisphere.

We hope that you will enjoy this edition, and we welcome your thoughts and ideas as we continue to work to support sustainable Guyanese enterprises and the development agenda of the country.

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By Sandi Bowen (Editor in chief)

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Hon. Raphael G. C. Trotman, MP Minister of Natural Resources, Guyana *The following article was written and submitted in January 2017

Guyana is preparing for a new frontier in its natural resources management with the advent of oil and gas. The offshore discovery by ExxonMobil and its joint-venture partners Hess and Nexen in May 2015 in the Liza-1 exploration well, and the subsequent find in the Payara exploration well in the Stabroek Block underscore the need for the country to press ahead in preparation for the herculean governance that would be required to manage oil and gas revenues.

Experts have agreed that Guyana starting with a ‘clean sheet of paper’ has the opportunity to ‘get it right’ and avoid the pitfalls of the sector.

Guyana has entered the petroleum industry at a conservative and watchful time when literally every cent matters more than ever. We are compelled to consider the possible returns on our investment into oil and gas and how to maximize them for the benefit of our nation not just today but for generations to come.

Development of the oil and gas sector is notorious for the risks and threats that it poses to economic and political stability, and the environment – and of this there are numerous examples.

Management of the sector is a major challenge for Governments and domestic institutions.

New Frontier Guyana prepares for the budding oil industry

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The emerging consensus on mitigating risk is basically twofold: (a) Governments must put in place institutions and regulatory frameworks that allow for transparent and efficient management of oil revenue; and (b) oil windfall should be directed towards productive investments in physical and human capital so that long-term sustainable and equitable growth can be generated.

Against this backdrop, Guyana has sought and received support from a number of International experts and agencies for the development of its regulatory framework, prudent fiscal management policies and transparent processes for good governance.

Our partners include the United Nations Development Programme (UNDP), the Commonwealth Secretariat, the United States Government through their Energy Governance Capacity Initiative (EGCI) programme, the Canadian Government through interactions with the University of Calgary on resource management and sovereign wealth funds and the Government of Mexico in an initiative to establish our own Petroleum Scientific Institute.

Coming out of these partnerships, a suite of new policies addressing governance, regulation and development of our petroleum sector and the establishment of the institutional framework and agencies and legislation is soon to be presented for review through public consultations. These include:

Cour tesy of GINA

The Government of Guyana is cognizant that we are living in a moment that will not pass this way again. Embracing this reality, Government has embarked on a process of resource management that will recalibrate our performance and change our trajectory to better align our nation with her destiny.

• National Oil and Gas (Upstream) Policy • Local Content Policy • Petroleum Exploration and Production Legislation and Regulations • Petroleum Commission Legislation (Regulation and Oversight) • Petroleum Taxation and Fiscal Legislation • Sovereign Wealth Fund Legislation, which will include provisions for a Stabilisation Fund, Infrastructure and Social Development Fund, and a Citizens Participation Fund • Public Communication Framework Guyana is being proactive in its approach to this emerging sector to ensure that all mechanisms necessary for the effective management and the best outcomes for its people are in place even before the first barrel of oil is sold.

The Government of Guyana, with support from its external partners, is seeking to build the capacity of our policy makers, officers, technicians, private sector professionals and other interest groups on the issues and challenges surrounding this emerging sector.

The need for a highly skilled workforce is recognised and therefore revamping the public education system and integrating the supply and demand of labour into a flexible, technical vocational education and training system to rapidly raise skills are two key initiatives being undertaken so as to make the non-oil sectors competitive internationally. The aim is to create avenues and opportunities for participation, transfer of knowledge and dissemination of the unique “calibre” of the petroleum sector into other local industries.

The Government is committed to having an open and inclusive approach to the development of the resource.

The people of Guyana can be assured that their government will utilise the national patrimony in their best interest. This will be critically reflected in steps being taken to strengthen legal and policy frameworks within the natural resources sector, hiring of international experts, and in plans to set aside a substantial percentage of everything earned from oil as well as from gold, diamond, forest, bauxite for future generations - to be managed in the Sovereign Wealth Fund.

These steps are all critical and necessary for the responsible utilisation of the oil resource for the benefit of Guyana and its people.

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Minister of Business Remarks

As Minister of Business, I am delighted to contribute to this exciting eighth edition of Business Guyana Magazine titled “the Promise of Oil”. I congratulate the Georgetown Chamber of Commerce and Industry on, yet again, delivering this much looked-forward to annual publication.

Oil can make a valuable contribution to the economic development of our country but the industry is unlikely to create all the jobs that Guyana will need over the next few decades. A well-diversified economy, on the other hand, can sustain long-term GDP growth and significantly reduce unemployment.

Guyana’s non-renewable resources must be used to create long-term wealth capable of improving the lives of Guyanese for generations to come. The “Promise of Oil” is therefore a long-term promise that cannot exclude any section of our population or sector of our economy.

The promise of prosperity must be backed by private investments across the spectrum of existing opportunities and I encourage readers to bear this in mind when contemplating the “promise of oil”. Investors are encouraged to explore economic opportunities in value-added sectors such as tourism, Business Process Outsourcing, agro-processing and forestry products and services. I also encourage new and innovative start-ups to show confidence in the “Promise of Oil” and to seek maximum participation in making it real.

Promise of Prosperity Dominic Gaskin Minister of Business

Guyana is on the cusp of real development and this must be the common understanding that guides all stakeholders.

Oil is about to become part of our economic reality and it comes with many promises – good and bad.

I take this opportunity to welcome readers to the pages of the Georgetown Chamber of Commerce and Industry’ Business Guyana Magazine and to explore what the future holds for investors in Guyana.

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Cour tesy of GINA

While the news of significant oil deposits off our shores is no longer fresh, the excitement has been kept very much alive by the “Promise of Oil”. This promise resonates not just within Guyana but globally, and its steady evolution towards reality is being followed far and wide.

As development progresses and we approach first-oil, Guyana can expect strong levels of interest by both domestic and foreign investors. However, it is important that this interest is not limited to oil alone and that other sectors of Guyana’s economy are paid attention to.

The competitiveness of Guyana’s economy will benefit from the accelerated infrastructure development in the areas of transportation, energy and communications being pushed by our government. New economic opportunities are expected as a result, and the diversification of export earnings through increased value-added products and services remains a priority.

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the board of change A few words from the chair of the Executive Director—Kirk Hollingsworth

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Heraclitus once said that “the only thing constant is change” and the constantly evolving nature of the global business environment is a true testament to that statement.

The Georgetown Chamber of Commerce and Industry (GCCI), for example, was established back in 1889 as a means through which business persons with similar interests could unite to speak out on issues affecting private sector development, with hopes of influencing decision making. 128 years have passed since then, and Guyana’s business environment and culture has undergone significant changes which as a result has tasked businesses to adapt in order to remain competitive.

Businesses compete in a far different environment today than that which existed just a few years ago, and with commercial oil production set to commence in Guyana in just 2 years (2020), we will undoubtedly see further transformation of the business environment and the way business is done.

So where does a 128 year old Chamber lie in the grand scheme of things? Well, in the year 2017, it is now more compelling than ever that we must adapt to the evolving business environment in which our member businesses operate.

The business world is an increasingly complex one and the GCCI recognizes the need for repositioning and rebranding in order to better meet the needs of its members. There is a growing imperative for us to change the way we do business and the GCCI has begun the journey of modernization so that we are better positioned to

Cour tesy of Travis Phyll

Standing L-R: Timothy Tucker, Kirk Hollingsworth, Christopher Ram Jr. Sitting L-R : Christine Bennett-Blair; Deodat Indar, Doris Lewis

support private sector growth, and the development agenda of Guyana.

Change and modernization requires us to learn from our past – relying on valuable institutional knowledge while not allowing outdated practices and tradition to stymie growth.

The GCCI’s membership is a growing, multigenerational one and we must learn to communicate in a language that both the traditional business people and the millennial entrepreneurs can understand. In order to retain relevancy, the GCCI must be willing to make changes that, while uncomfortable, support growth and development as a modern chamber and are relevant to the core interests of its members.

Modernization requires us to embrace a new leadership style – one that is adaptive, pro active and responsive. We must lead in such a way that businesses see the value in fostering interdependent relationships and being proactive. GCCI’s leadership style should steer membership is such a way that businesses do away with old habits of dependency. We want members to see the value in participating, in lending their voices to advocacy efforts, and actively seeking out value added opportunities.

Finally, as we adapt, we must always remember that our first priority is the wellbeing of our members and as such, we must

commit to demonstrating positive Return on Investment (ROI).

How can we make investment and development opportunities more accessible to our members? How can we lend our services more to our member’s interests? How can we support our members to increase their competiveness? There is immense value in Chamber membership and we must be able to clearly demonstrate and communicate how the investment of membership is repaid. This requires the GCCI to review its menu of services to ensure that our offerings are aligned with the constantly evolving nature of the business environment and consequent needs of our members.

Modern Chambers of Commerce are centers for business, innovation and economic development. Modern Chambers of Commerce are vibrant, proactive and progressive organizations that strategically partner with business and industry groups, decision makers and other key industry bodies with the aim of promoting economic prosperity. Modern Chambers of Commerce adapt and evolve.

I believe, the GCCI has embarked on that journey and we are optimistic about the way ahead.

Something new is in store for Guyana and transformation is on the horizon. The only thing constant in life is change, and as such, we must make a decision – evolve or perish.

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1 RESEAR

CH & RISK ASSESSMENT Preliminary research has brought Guyana’s many wonderful attributes into clear focus to the extent that a potential investor can now readily contemplate setting up a business here. The next step in the research process is to gather the information needed to ensure the investment decision is worthwhile and feasible. The following sources provide the solid starting point to consult and gather the information to make a confident decision: • GO-invest: Guyana’s main investment agency • Your country of origin’s embassy, high commission or consulate • Chamber of Commerce or sector-specific organisation • Business investment consultancies and accounting firms • Commercial banks or the Guyana Americas Merchant Bank Inc. • National budgetary presentations, as prepared by Guyana’s Ministry of Finance • Consideration of tax related issues (see Supplement on page 92) The table below summarises a body of Guyana Law that is most relevant to investment-related business activity in the country TITLE

PURPOSE

Bank of Guyana Act (Chapter 85:02)

Central Bank and foreign currency regulations

Business Names (Registration) Act (Chapter 90:05)

Registration and use of business names

Capital Gains Tax Act (Chapter 81:20)

Taxation on capital gains

Companies Act (Chapter 89:01)

Business regulations

Competition & Fair Trading Act (Chapter 90:07)

Competition and fair trading regulations

Consumer Affairs Act (2011)

Consumer protection

Copyright Act (1956)

Protection for copyright

Corporation Tax Act (Chapter 81:03)

Taxation on corporate income

Credit Reporting Act (Chapter 84:01)

Credit Bureau

Deeds Registry Act (Chapter 5:01)

Purchasing and leasing of private land

Environmental Protection Act (Chapter 20:05)

Environmental regulations

Environmental regulations

Competition and fair trading regulations

Financial Institutions Act (Chapter 85:01)

Commercial banks and other financial institutions regulations

Fiscal Management & Accountability Act (Chapter 73:02)

Accountability and transparency

Foreign Exchange (Miscellaneous Provisions) Act (Chapter 86:01)

Dealing in foreign currency

Gambling Prevention Act (Chapter 9:02)

Restrictions on gambling

Factories (Hours and Holidays) Act (Chapter 95:02)

Labour related issues

Income Tax Act (Chapter 81:01)

Taxation on income

Income Tax (In Aid of Industry) Act (Chapter 81:02)

Taxation

Insurance Act (Chapter 91:02)

Pension Funds

Insurance Act 2016

Insurance

Investment Act (Chapter 73:03)

Investment Regulations

Labour Act (Chapter 98:01)

Labour related issues

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Labour (Conditions of Employment of Certain Workers) Act (Chapter 99:03)

Minimum wage, overtime and other labour related issues

Land Registry Act (Chapter 5:02)

Purchasing and leasing of private land

Leave with Pay Act (Chapter 99.02)

Periods of leave for workers

Mining Act (Chapter 65:01)

Mining regulations

National Insurance Act (Chapter 36:01)

Labour related issues

Occupational Safety & Health Act (Chapter 99:10)

Accident prevention, risk mitigation

Partnership Act (Chapter 89:02)

Partnership regulations

Patent & Design Act (Chapter 90:03)

Registration, use and protection of patents

Pesticides and Toxic Chemicals Control Act (Chapter 68.09)

Regulations on exploration and production

Prevention of Discrimination Act (Chapter 99:09)

Equal Employment Opportunity

Public Utilities Commission Act 2016

Public Utilities

Procurement Act (Chapter 73:05)

Government procurement regulations

Partnership regulations

Partnership regulations

Property Tax Act (Chapter 81:21)

Taxation on Property

Revenue Authority Act (Chapter 79:04)

Taxation agency

Securities Industry Act (Chapter 73:04)

Stock market regulations

Small Business Act (2004)

Small business regulations

Tax Act (Chapter 80:01)

Licences, Stamp duties

Telecommunications Act 2016

Telecommunication services, broadcasting

Termination of Employment & Severance Pay Act (Chapter 99:08)

Labour related issues

Trade Act (Chapter 91:01)

Import and export control and licensing

Trade Mark Act (Chapter 90:01

Registration, use and protection of trade marks

Trade Union Recognition Act (Chapter 98:07

Labour related issues

2 LAND

SITE SELECTION Once investors and potential business partners are confident and satisfied that Guyana is an ideal location for the business startup, the focus turns to the real estate and land market for setting up the office and operations.

Guyana has qualified real estate brokers to consult for this purpose. Foreign investors also are treated in the same manner as domestic investors when acquiring or leasing land.

PRIVATE LAND

Private property in Guyana is registered under two legal forms: • Transported (governed by the Deeds Registry Act) • TITLED (Land Registry Act) For those interested in purchasing private land for operations, the first step is to sign an Agreement of Sales and Purchase with the owner of the property. The agreement should contain the names and addresses of the buyer and seller, the agreed purchase/ selling price and the location and description of the property.

Then, investors must secure the services of an attorney to prepare an affidavit to explain the intent and particulars of the purchase. The owner of the priority is also expected to file a similar affidavit.

The agreement and both affidavits are then submitted to the Deeds Registry, which places an announcement in the official gazette of record. Once the documents have been published, the public is allowed 14 days to register any opposition to the sale.

Opposition might be based on a claim from someone who indicates the seller owes him some form of payment or compensation obligation or there is an existing lien on the property. If no protest is filed, then the passing of the transport (deed) is processed in two months’ time. business GUYANA 17

For titled land, the process is the same except that the transaction does not have to be filed for gazette publication. Also, any contention from an outside party would be lodged with the Lands Registry.

It is advisable that buyers check in advance with the Registry to verify if any claims have been made on the property in question.

In Guyana, the State Lands Act (Chapter 62:01) and the Land Development Act (Chapter 59:01) govern the acquisition or leasing of government owned land.

GOVERNMENT OWNED LAND

The process of land identification begins with checking its availability and zoning status with Guyana’s Land and Surveys Commission (GLSC). If the land is available, an inspection is requested and one half of the fees are paid up front. A GLSC officer visits the site and completes an inspection report so that the application form for lease can be successfully completed and submitted to the respective regional GLSC office.

If the application meets the minimum information standard required, the filing fee is paid and the application is then forwarded for review by various regional and public agencies. If no objections are received, the application is forwarded to the GLSC’s head office, where the Management Information Unit reviews and verifies the application before it is sent to a processing unit for a confirming round of verifications. The final schedule is prepared and submitted to the GLSC Commissioner who then forwards the package to the President and the GLSC board chair for final approval. If it is approved, the final lease is prepared and granted.

3 ENTRY

& REGISTRATION Visas and Work Permits

In Guyana, the Department of Citizenship and Immigration of the Ministry of the Presidency is responsible for visas and work permits. The Department should be consulted on the requirement for a visa or other permit to enter Guyana.

For tourism, individuals can apply for a visitor’s visa, which is valid for an initial 30 days and can be extended by immigration officials for two additional one-month periods.

For business or employment, business representatives and investors can apply for business visa good for five years, which can also be extended with official approval as necessary. Individuals and companies can apply for work permits and employment visas, respectively.

Business Registration Businesses can legally register with the Commercial Registry in one of the following forms and statuses: single owner proprietorship, partnership or incorporated company. The Business Names (Registration) Act and the Partnership Act govern sole proprietorships and partnerships, respectively, and the Companies Act covers the registration of an external company (branch) or incorporation.

Incorporation Incorporation involves more time than registering an unincorporated company and submitting the required articles of incorporation which should include the following items: • The proposed name of the company • The proposed address of the registered office in Guyana • The classes and any maximum number of shares that the Company is authorised to issue • If there will be two or more classes of shares, the rights, privileges, restrictions, and conditions attaching to each class of shares must be specified • Minimum issue price in respect of shares or classes of shares • Number of directors; minimum/maximum number of directors • Restrictions on the type of nature and business the company may carry out, if any • The names, addresses, occupations and signatories of incorporators • Statements naming the first directors and secretary and their consent to serve Investors also should take note that individuals younger than 18, or who have an undischarged bankruptcy, or who have been determined by a court to be incapacitated in terms of making legally binding business decisions cannot be involved in the incorporation process.

After the articles of incorporation have been submitted, the fees due will be calculated. With issues such as a name that actually is a previously reserved name for another company, the applicant will be notified and directed to change the name.

In two to three days, the certificate of incorporation is ready to be uplifted, which represents conclusive proof of incorporation of the company named in the certificate and the date of its incorporation.

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Foreign Firms There are special provisions for firms incorporated outside of Guyana, or what are called “external companies” in the Companies Act. Additional information and documentation must be filed including the country within which the company was incorporated; its name, manner of incorporation, corporate instruments and the extent to which the liability of the shareholders/members of the company is limited. There is also a different fee structure.

Trade Mark Registration For companies needing to protect specific trade names, invented words and other distinctive marks, an application to the Registry of Patents, Designs and Trade Marks is required. The Registry will check for any previously registered trademark for similarities and if none is found, it will be published in the gazette for public scrutiny. After one month, if there are no contested issues filed, the applicant will be approved for a certificate of registration, which is good for seven years and can be renewed indefinitely every 14 years thereafter.

For ease of navigating the registration process, it is strongly recommended that investors utilise the services of a company service provider, an attorney, and/or a trademark agent licensed to practice in Guyana.

4 REGISTRATION WITH TAX AGENCIES The next step is to register the newly formed company with the statutory tax agencies, namely Guyana Revenue Authority (GRA), the National Insurance Scheme (NIS) and the respective municipal authorities.

GRA All individuals and firms must register with the GRA to receive a Taxpayer Identification Number (TIN) which is required to conduct business with any government and public entities. To apply, representatives can complete registration at GRA Headquarters at 200-201 Camp Street, Georgetown or at any GRA Regional Office in Guyana.

The GRA collects licences, customs duties and taxes including the following taxes: value added, income, corporation, property, capital gains, professional fees, withholding, travel voucher, environmental and excise.

NIS All individuals and firms must also register with NIS, the national social security organisation, to obtain a unique registration number. The application process can be readily completed at any NIS office.

Companies must file monthly contributions for their employees. Self-employed individuals must also file monthly returns on their earnings.

See Investment Supplement on page 92 for further details.

Municipal Authorities There are nine municipalities in Guyana: Georgetown, Anna Regina, New Amsterdam, Corrivertown, Rose Hall, Linden, Mabaruma, Bartica and Lethem. Property owners are required to pay the duly outlined rates and taxes, including property taxes and can register at the respective municipal office.

5 FINANCING There are several options for locally based financing in Guyana. Guyana has six private commercial banks with operations spread throughout the country.

• Republic Bank • GBTI • Demerara Bank • Citizens Bank • Bank of Baroda • Scotia Bank These banks provide many services with loan interest rates averaging around 10.65 per cent.

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6 SITE

DEVELOPMENT At this stage, the investor and business principals are ready to develop the acquired land or property to establish operations. This process, as standard in any country, entails key steps, approvals and permits. In Guyana, the process includes the following: a. Find a reputable architect to design and complete architectural renderings of the proposed building. All permits and approvals are contingent upon those blueprints. b. Completed renderings and plans are submitted to the engineers department of the regional municipality or town council for review and approval. The review encompasses factors including spacing, sanitation and disposal facilities, drainage, boundaries, lighting, ventilation, structural soundness and others. c. Once plans are approved and the Council agrees with the recommendations of the City Engineers, the application is then passed onto the Central Housing and Planning Authority (CHPA). The CHPA will request multiple copies to distribute to various permit agencies, where applicable. d. After CHPA has received notification and approvals from the relevant permit agencies, it approves the plans and returns them to the municipality. e. The municipality then issues a building permit to commence construction. The permit is usually valid for two years. f. Find a reputable construction firm to carry out the project. The architect or the local Chamber of Commerce can recommend few for consideration, as based on specifications. g. Once construction has commenced, a business principal must inform the city engineers department within 30 days from the beginning of construction and again once the construction is completed.

Permit agencies include but are not limited to the following: Guyana Fire Service Department, Occupational Safety and Health Authority, Environmental Protection Agency, Food and Drugs Department, Public Health Department and Guyana National Bureau of Standards.

7 UTILITIES

During before or after construction, utility services can be established and coordinated through the following entities: The Guyana Telephone & Telegraph Company Ltd. (GT&T), Digicel and E-Networks for landline, phone, voice, cellular connections and data.

There are also other providers of Internet connectivity that can be found in the yellow pages of the GT&T telephone directory or by contacting the local Chamber of Commerce.

Other important utility providers include the Guyana Power & Light Inc. (GPL) for electricity, the Guyana Water Inc. for water. For businesses in Linden, there is the Linden Power Company that supplies electricity.

***GRAND OPENING!!!*** As in many other countries, when all of the steps have been completed in preparing a new business, Guyana’s communities enthusiastically celebrate a grand opening.

There are professional marketing and public relations agencies which can facilitate event planning but in instances where cost management is important, key business personnel can do much to plan their own grand openings.

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8 IMPORTATION

OF GOODS & MATERIALS

All items imported for the new business must pass through the Customs Department of the Guyana Revenue Agency (GRA).

While one can navigate this process without assistance, a registered customs broker can prove effective in expediting the process, saving time and money.

For individuals pursuing process independently, the required documents include bill of lading/airway bill, invoice, completed declaration (Form C 72), Taxpayer Identification Number (TIN), and permits and licenses, as applicable. Other documents to support the transaction (i.e. valuation) should be attached.

The process includes the following steps: • The importer, consignee, broker and agent lodges the required documents for vetting at the customs lodging area in GRA’S headquarters. If documents are not in order, they are returned to the importer, consignee, broker or agent for required revisions. A lodgement number is assigned to the completed set of documents and the entry will then be processed usually in one day, but may take up to three to five days, especially for a large shipment of multiple items.

• If the payment is greater than $GY30,000, the importer, consignee, broker or agent is issued an assessment notice which is paid at the office where tax assessments are satisfied. After payment, the broker or investor receives official receipts and copies of the entry before proceeding to the Transit Shed (T/Shed), where the goods are stored and the shipping agent will release the goods once the receipts and entry are presented for claiming the shipment. The officer-in-charge arranges for the transferring of goods to be examined prior to final release. The physical goods inventory is checked against items listed in the invoice. As experienced investors soon discover, the customs protocol in Guyana is similar to many other countries. Rather than inspecting every single item in a claim lot, customs officers employ risk-profiling techniques in which random checks may be conducted even if the risk profile is low for a particular item. The percentage of items to be examined is determined by criteria identified in the Total Revenue Integrated Processing System (TRIPS).

• Once all documents and inspections have been completed, the importer, consignee, broker or agent obtains delivery of the goods and the documents are stamped for release.

9 INSURAN

CE Insuring investor and owner assets is an important part of the business start-up process and Guyana offers several channels for handling insurance needs. These include the Guyana & Trinidad Mutual Fire & Life Insurance Companies (GTM), the Hand-inHand Group of Companies, North American Life Insurance Company Limited, Demerara Mutual Assurance Society, CARICOM General Insurance Company and Assuria Life and General. Companies unfamiliar or unsure about which firm to use for insurance needs are encouraged to contact a well-known insurance brokerage firm.

10 HIRING EMPLOYEES

Guyana’s workforce is advantageous for its youthful energy, its large skills base in a variety of agricultural and manufacturing industry sectors and its capacity to adapt to and adopt technologies that are critical to today’s economies. Job postings are most widely disseminated in local newspapers and their popular classified advertising sections, especially for quick response from qualified applicants. The country’s daily newspapers include Stabroek News, Kaieteur News, Guyana Times and Guyana Chronicle.

Another option is to procure the services of a local recruitment agency and some accounting firms coordinate and facilitate activities for hiring. The local Chamber of Commerce and Guyana Ministry of Labour do effective advocacy for identifying solid job candidates 24 business GUYANA

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FACTS & FIGURES Numbers and notes on the world’s newest hub for natural resources

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Economy GYD Profile Currency: Guyanese Dollar (GYD) GDP per Capita:U.S. $3,800 Inflation: 0.80% Coins: Freq Used: $1, $5, $10 Banknotes: Freq Used: $20, $100, $500, $1000 Central Bank: Bank of Guyana Other Banks: Guyana American Merchaant Bank, Scotia Bank, Republic Bank (Guyana) Limited, Citizens Bank, Guyana Bank for Trade & Industry, Bank of Baroda, Demerara Bank Industry: Bauxite, sugar, rice milling, timber, textiles Agriculture: Sugar, rice, wheat, vegetable oils; beef; shrimp Exports: Sugar, gold, bauxite/ alumina, rice, shrimp

26 GUYANA business

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Exchange Rate: Buy Sell 205.98 208.44 152.47 154.24 230.31 233.26 266.95 270.34 102.78 92.29 76.13 23.37 1.61

GUYANA business 27

Oil Guyana A new narrative, a new day for Guyana…But we must thread with caution

By Carolyn Walcott

I’ve asked myself many times how can a country whose geographic landscape measures only 83,000 square miles possess such wealth yet be classified as poor. Guyana’s economic landscape, built upon a foundation based on agriculture consisting mainly of rice and sugar, served as major export earners for decades. Alongside these major products, gold and diamond extracts are also part of Guyana’s natural resource wealth found in its vast ores within hilly, sand and clay regions of the country. The decline in Bauxite production starting in the 1980s marked another economic setback for the once-lucrative sector although there has been a resurgence of foreign interests in the exploitation of bauxite primarily by Russian and Chinese mining establishments.

Gold has remained constant for the country’s mineral and mining industry as a major earner of foreign exchange. However, the sugar industry has suffered economic misfortunes over the years based on the institution of austere trade arrangements by Britain that once guaranteed its former colony preferential treatment. This has led to a shift in the nation’s economic gains.

It is time for a new story! Guyana’s black gold signals the awakening of hope for the country to arise from the ashes of “poverty and underdevelopment,” the labels that have accompanied the nation’s narrative for decades.

Guyana’s story need not be Africa’s story where oil wealth has not redounded to economic prosperity for citizens. I speak here specifically of Nigeria, West Africa, where poverty is pervasive in the most populous West African country. Civil unrest and political complicity in corrupt practices mar the country’s progress. Even closer to home, Guyana’s story does not have to be Trinidad and Tobago’s story. Guyana’s story can be one for the world to marvel based on prudent political and economic stewardship of its newly discovered wealth for the people of Guyana. Such stewardship can benefit from the expertise of Guyanese at home and the Diaspora, including those who fled for economic and other reasons thus contributing to the brain drain that undermines transformative development. It is time for everyone to be apprised of the prospects, implications and national economic trajectory that will translate to human development and an improved standard of living for all Guyanese. At the same time, it is incumbent upon the state to discern and protect itself from prospects of external reframing of our new narrative in a manner that presents the world with a paradoxical outlook-Poor Oil Nation. We must thread with caution!

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Cour tesy of Google Images

A small English-speaking nation located on the northern coast of the continent of South America, Guyana is said to be on the cusp of wealth based on the discovery of oil and natural gas in the country’s seabed where experts estimate 1.4 billion barrels of oil reside. This presents an opportunity for the country to rewrite historical narratives that tell the international community only one side of the nation’s story-Poverty, ethnic tension based on political partisanship and the infamous Jim Jones mass suicide tragedy.

This tripartite narrative does not consist of three diametrically opposed themes, but rather, they are fruits from the seed of agriculture exploitation initiated by European colonists whose resort to slave and indentured laborers from Africa and India respectively, saw the development of a massive agriculture estate called Guyana.

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By Lorraine Ince-Carvalhal With more than a century of successful, innovative oil production experience, ExxonMobil is the largest publicly traded petroleum and petrochemical company in the world; manufacturing products that fuel modern transportation, power cities and help keep the wheels of industry turning around the world.

EXXON Mobil is leading the exploration of a whole new industry

EEPGL continues to evaluate the full potential of the broader Stabroek Block with ongoing exploration activity.

The company is also taking the necessary steps to responsibly develop the Liza world-class resource, which can provide long-term, sustainable benefits to the people of Guyana.

EEPGL submitted an application for a production license and the initial development plan for the Liza Field in December 2016. The Liza Phase 1 development is approximately 190 kilometres offshore in water depths of 1500 – 1900 meters. This development will utilize a Floating Production Storage and Offloading (FPSO) vessel with an oil production capacity of 100,000 barrels per day.

ExxonMobil has a long history of working with governments to build sustainable workforce and supplier capabilities, and on making strategic investments in the local community. The company is committed to working collaboratively with Guyana to develop opportunities for Guyanese nationals and local businesses in a structured and sustainable way.

By the end of 2016, approximately 50% of the workforce was Guyanese, with 345 Guyanese personnel out of the total 682 employed. There were more than 175 Guyanese suppliers utilized in 2016 in support of EEPGL’s operations in Guyana, including the shore base, fuel, food, hotel, supplies, security, transport, aviation, medical and IT services. These figures and disciplines will continue to increase as the company and its contractors work to expand local content.

*The preceding article was written and submitted in March 2017.

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Although still in the early stages of ExxonMobil’s presence in Guyana, the company projection is that they will be in the country for decades to come. The long-term vision is one in which stakeholders benefit from resource development today, while protecting and building opportunities for the future.

Cour tesy of Exxon Mobil

Out FRONT

ExxonMobil’s affiliate Esso Exploration and Production Guyana Limited (EEPGL) began exploration of the 6.6-million acre Stabroek Block, located approximately 120 miles offshore Guyana, in 2008 and has since safely drilled offshore wells up to 5,512 meters in depth in 2,030 meters of water. Seismic data, geologic analysis, and well results have revealed multiple oil discoveries.

The first world-class discovery in May 2015 was made in the Liza field and subsequent discoveries in the Payara and Snoek fields were made early in 2017. The success in the Stabroek Block brings the total discovered resource to somewhere between 1.4 and 2 billion oil-equivalent barrels.

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The Promise of While oil brings wealth, prosperity is no panacea, it’s problematic too

By Sheryl Nance Nash

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N

o doubt, Guyana’s discovery of oil is a game-changer. What remains a mystery is how it will play the game and who wins?

Will an opportunity of a lifetime be squandered, or shall the stage be set for a stronger, vibrant, nation for years to come?

Oil is expected to flow possibly as soon as 2020. The discovery of oil would seem to be a sure pathway to prosperity. However, getting into oil production is a complex adventure, particularly for a country the size of Guyana. “The discovery of oil can be both a blessing and a curse to the nations that inherit it. Even countries with impeccable macroeconomic management and good governance face challenges when they start pumping oil,” says Philip Allan, an economic policy analyst in Bulgaria.

The Upside

Large oil reserves can provide a country with vast wealth. It can bless a government with ample funding for infrastructure and education, the ability to lower their tax burdens, and new economic influence that can grant it more leverage in trade negotiations, points out Allan.

Then there are the jobs. Infrastructure construction will provide opportunities in the near to medium term, with the oil and gas services hub already set to create 600 local jobs. “More broadly, the infrastructure and economic developments coming as a result of the discovery of oil stand to be transformative for the wider Guyanese economy, which will benefit from the logistical and infrastructural improvements many of which are long overdue. Additionally, as royalties start to flow to the government from 2020 onwards, revenues from oil can be reinvested into further improvements to infrastructure and socio-economic development, as well as the country’s substantial hydro-electric and renewable energy potential.

The sudden availability of abundant, cheap energy also raises the prospect of economic diversification and the development of a broader manufacturing sector in the country,” says Daniel Gray, associate director of The Caribbean Council in London.

While ExxonMobil has committed to training local people for offshore oil work, hiring won’t be massive for development and

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Cour tesy of Exxon Mobil

The big news is that Guyana’s offshore oil reserves are located in high porosity sandstone reservoirs and are comparable to those that have been harnessed with success off the coast of West Africa, according to the Economist Intelligence Unit. Once oil production is running like a fine-tuned machine, Guyana could well be a leading oil producer in the region. According to the EIU, the Liza field alone could hold as much as 1.4 billion barrels of oil mixed with natural gas, comparable to some of the larger fields drilled in South America, and estimated to be worth US$70 billion at current prices, says Ketaki Sharma, senior economist, researcher, CEO and founder of Algorithm Research in Ras Al Khaimah in the United Arab Emirates.

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maintenance of oil fields, but they will be high paying jobs, says Robin Shoemaker, an oil and gas industry analyst in New York for three decades. But the trickle-down effect of oil production, directly and indirectly will be significant. There will be increased demand for services, boosting the need for restaurants, hotels and more.

G

uyana imports goods and services worth 75% of its GDP and fuel constitutes a major component of its import basket. “The offshore oil reserves have the potential to fetch significant windfall gains in terms of savings on import, as well as export earnings from oil. In economic terms, this translates into a healthier current account balance (with reduction in import bill and increase in exports) and improvement in fiscal outlook over the medium term. Given that the Guyana economy is heavily reliant on gold and sugar exports, diversification towards oil will help make growth more inclusive. Further, improvement in private sector confidence due to a strengthening labor market, large scale construction activity and consequent pickup in business sentiment will bolster economic growth in the medium term,” says Sharma.

In the short term, however, she expects the government’s finances to remain in substantial deficit in 2017-18, due to weak revenue growth and the commencement of mega public investment projects. This will likely increase public debt in the short term.

The Challenges Where will the money come from to pay for the push into oil production? There will be huge needs.“There is a huge opportunity for local companies as the ancillary service industry required will be substantial. This includes improving airlift and building hotels and apartments to accommodate foreign oil and gas workers, as well as improving roads, port terminals, healthcare and telecommunications networks; many of which are underdeveloped, even to meet current needs,” says Gray.

Infrastructure in the large but sparsely populated hinterland of the country also needs substantial improvement in order to address the time and cost burden of moving cargo and people across the country. “There is a recognition on the part of the Guyanese government that these infrastructure

developments need to be tied to a wellintegrated plan to avoid bottlenecks. For instance, improving airlift and upgrades to the Cheddi Jagan International Airport will need to work in tandem with improvements to the road network linking the airport to Georgetown - a 40km route which currently takes over 50 minutes to navigate. Similarly, the development of roads adjoining Brazil, the Guyanese hinterland and Georgetown, would be better still if developed in conjunction with a deepwater port which could serve as an export hub for Brazilian soya for markets to the north, including the United States,” says Gray.

Given that Guyana has been running both current account and fiscal deficits, the largescale investments around oil extraction has to be funded through borrowing externally alongside Public Private Partnership (PPP), says Sharma.

Of its US$2.3 billion exploration and production budget for 2017, Hess has slated US$475 million to develop the Guyanese fields. ExxonMobil is expected to invest around US$500 million in 2017.

Given Guyana’s near lack of oil processing infrastructure, in January the government declared Cabinet approval to establish an onshore oil and gas facility at a cost of US$500 million. However, the actual investment has since become mired in political discussions and debate, says Sharma.

Allan points out that while the oil majors currently involved in Guyana’s burgeoning petroleum industry will be willing to foot the bill for further upfront investment, it will be conditional on assurances of a stable regulatory and tax regime. “The major responsibility of the Guyanese government, aside from stable governance, will be a major port expansion; to accommodate oil tankers, as well as imports of extraction equipment, and the consumer goods that may be associated with an oil boom. This will increase the need for a larger and reformed customs and trade administration. Port expansion could potentially be accomplished through large government-to-government loans.

However, considering the scale and expertise required, it would likely require private investment; potentially complete private ownership of Guyana’s port,” he says.

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Striking oil would seem to be the best thing that could happen to the country, but it’s complicated.

“Guyana will need to rapidly assess how it will protect its key industries going forward so that it remains a diversified economy not overdependent on oil and gas in the way that Trinidad has become,” says Gray. Part of the answer, he says is make longterm capital investments like sugar and rice and move them up the value chain, such as producing confectionary and other higher value goods which require energy to produce.

Temptation will need to be kept at bay.

“Governments can be tempted to dish out lavish subsidies and ignore an ineffective tax collection system, only to find themselves struggling when oil prices inevitably drop. High oil prices can dramatically strengthen a country’s currency, putting a heavy burden on other export industries, flooding the country’s market with imports, and leaving domestic competitors struggling,” says Allan.

Then there’s temptation of another sort. Revenue from an oil boom can create or worsen corruption and governance issues, as governments receive revenues irrespective of the economic health of its population. Guyana’s prospects in particular are further clouded by the potential for territorial conflict with Venezuela, points out Allan.

But perhaps the greater unknown is how the revenues from oil production will be spent. “It’s key that the money is spent to stimulate the economy so that Guyana isn’t reliant forever on oil. But very few countries do this well, look at Venezuela, and even Saudi Arabia hasn’t done a good job of diversifying its economy,” says Shoemaker.

He points to Norway as a good example, because it puts oil revenue in an investment fund that will carry the country forward long after the oil disappears.

“There are cases after cases where revenue was used to subsidize the country’s budget. The challenge is to use the windfall wisely to make life better for the people,” says Shoemaker.

Gray adds that the country’s legal and regulatory environment needs modernizing and careful calibration to ensure that the country’s incoming oil wealth is managed effectively. “Importantly for investors, the government is already working on

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Demonstrating that the governance procedures associated with oil and gas are of the highest quality will encourage the best and widest possible range of investors to the country.

Cour tesy of Arron Brown

this and appears keen to convey that investors have a stable and clear policy environment in which to operate. Having engaged international organizations on these issues, the government is setting up the institutions and legal framework needed to establish best practices in managing the industry and the revenues. This includes a regulatory Petroleum Commission, competitive local content requirements, and the establishment of robust health and safety and environmental standards,” says Gray.

Oil and gas finds like Guyana’s need to be protected for future generations, and there is a need to avoid overwhelming the economy with inflationary pressures. To address this, the government has also created a Sovereign Wealth Fund intended to manage revenues equitably, and ensure that the benefits accrued are used to develop the country effectively. Recently, says Gray, the government also proposed accompanying Integrity Commission Laws intended to mitigate the governance and corruption risks associated with a sudden influx of resource wealth.

“Demonstrating that the governance procedures associated with oil and gas are of the highest quality will encourage the best and widest possible range of investors to the country,” says Gray.

Guyana, says Allan, must learn from the mistakes of others and take steps to avoid them like passing transparency laws addressing traceability of the oil revenues, creating a wealth fund with strict spending rules based on oil prices -- surplus revenues must be saved when oil prices are high, and spent slowly when prices are low, allowing oil production to remain in private hands, and using some oil revenues to invest in value-added businesses (e.g. oil refining), and that’s just the short list.

Finally, says Allan, “The potential for a major influx of revenue and economic activity into Guyana should be cause for celebration. However, that should not be reason for the government to become complacent, nor to allow the oil discoveries to mask underlying issues. The right time to take the necessary precautions is now; and only after taking them will the country ensure its long-term prosperity.”

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Screen Savers Reel Guyana gives new developments the Hollywood treatment

By Dave Martins

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Cour tesy of Reel Guyana

A

s 2017 unfolds the indications are that Guyana is on the cusp of a development surge propelled in the short term by immediate projects – a new international airport at Timehri; new bridges across the Demerara and Essequibo rivers; expansion of the major East Coast and East Bank highways – and, by 2020, the arrival of our oil/gas industry built on the recent extensive offshore finds.

At micro level, the impact of these changes can already be seen in the upsurge in new facilities in various sectors, and of new technologies appearing in a number of established companies as well as in emerging ones. One of the latter is a new company, Reel Guyana, already heavily engaged in creating an archive of professional-quality videos covering all aspects of the country.

The brainchild of a mother-and-son combination – Annette and Alex Arjoon – Reel Guyana has covered subjects as diverse as the new Hope Canal drainage project in East Demerara, to the Iwokrama Reserve, and the Rupununi Rodeo. Using GoPro cameras with wide-angle lenses attached to helicopters and light aircraft, as well as drones, they are generating high-quality footage of interior locations, not often seen by the general public, and thereby creating a product that has already begun appearing in international video productions such as footage of our mangrove forested coastline in CCTV’s documentary on the oil industry.

Annette, already known as a pilot, photographer and environmentalist, with a wide knowledge of the interior and its indigenous cultures, sees the opportunity for initiatives such as Reel Guyana to capture the extensive span of Guyana’s landscape and culture in video for use in commercial and private ventures. She is enthused about the country’s growing emphasis on tourism as Guyana possesses all the necessary elements for tourism to be a key player and central pillar in its economy. As she put it, “Guyana is off the beaten path and has remained largely unexplored and undiscovered.

There are many attributes, such as our largely intact rainforest which is counted among only four remaining in the world. Guyana offers authentic and unique experiences in a setting full of natural beauty and rich heritage; it has particular appeal for visitors who are in in search of something cutting edge, enriching, and unique.”

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This niche market has benefitted local film enthusiasts and now, for the first time, there is a local company, Reel Guyana, that offers unparalleled video footage of Guyana’s landscapes.

This niche market has benefitted local film enthusiasts and now, for the first time, there is a local company, Reel Guyana, that offers unparalleled video footage of Guyana’s landscapes. The company has covered Guyana from east to west and north to south, capturing Guyana “in every season and for every reason”.

Some of the satisfied clients so far are the Ministry of Education, Civil Defence Commission, Conservation International, Iwokrama International Center and the Caribbean Aqua Terrestrial Solutions (CATS).

Green is the new Gold and Guyana’s Green Economy initiative bodes well for development of not only sustainable industries such as tourism but also speciality services such as those provided by Reel Guyana.

Reel Guyana stands ready to supply or generate video footage for an individual project or particular approach dealing with the landscape of the country.

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Will Guyana’s Recent Oil Find Breed Conflict or Cohesion?

By Collin Constantine

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Cour tesy of Google Images

The New Deal

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In The Rise of Income Inequality in Guyana, I show empirically that the richest 10% were able to defend their income share (40% of household income) since 1960, while the bottom 50% lost income share over the 1960-2013 period. This is a remarkable finding given Guyana’s experimentation with “Socialism”. The central message here is that notwithstanding changes in political and economic systems, commodity booms and busts, democratic turnover etc., the rich are able to defend their income share. This historical account does not augur well for the expected distributional gains from the oil economy.

The economic transformation we observe in recent years is largely a story about the top 50% but this transformation was not without creating new dividing lines. The nineties marked a fundamental change in Guyana’s mode of regulation—status was no longer obtained in the public accumulation of wealth, therefore, bureaucratic elites fell from grace—rather, prestige was sought in the private accumulation of wealth. When Guyana’s new mode of regulation is juxtaposed with political change and unequal ethnic occupational distribution it created today’s upper middle class—largely composed of a select group. This recent experience demonstrates why initial conditions matter for future distribution as the form of wealth accumulation change. Make no mistake, the pending oil economy is a root and branch change in the form of wealth accumulation.

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B

y now Guyanese are well aware of the paradox of plenty or the so-called Dutch Disease associated with oil economies. Also, it is common knowledge that many oil economies engender or exacerbate various forms of social conflict but outliers such as Norway provide useful utopias for Guyana. The recent oil discovery puts Guyana at a cross roads—do we take a decisive break from the past and promote a more egalitarian society or do we deepen dividing lines? I argue that we must transparently and honestly discuss initial socio-economic conditions and how these place some groups in a more advantageous position vis-a-vis the oil economy. Failure to appreciate unequal initial conditions ensures that policy reinforces these and that the oil economy sows seeds of conflict. By unequal initial conditions I mean high concentration of top incomes (e.g. richest 10%), ethnic & gender income inequality, unequal ethnic distribution in the public and private sectors, unequal access to quality education and political power. Initial conditions matter. Norway’s success is in part explained by how its oil economy was leveraged to reduce dividing lines and the converse can partly explain failure elsewhere, especially those cases related to armed conflict.

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It is expected that Guyanese educated in oil related fields would find high-paying employment as the oil economy comes on stream. But this expectation needs to be qualified—it is only Guyanese with access to quality education would find high-paying employment. Quality education in this case can easily mean international qualifications, which require either scholarship funds or high-income families. Automatically, the great share of the bottom 50% is left behind. Even public education in Guyana is not without unequal access to quality schooling. The better schools educate students that come from higher-income households and can therefore source funds for key associations like PTAs etc. Without drastic changes, the educated worker who benefits from the oil economy is likely to come exclusively from households in the top 50% and thus, increase overall wage inequality.

To make matters worse, the educated workers might be overwhelming of a select ethnicity from select regions.

Given initial conditions, it is likely that the educated worker is male. This is especially alarming given the extent of domestic violence against women.

Norway has undertaken deliberate policy to promote gender parity in access to schooling. But even this is inadequate; policy must undermine the social constructs of gender specific employment and education. Women have a right to the same oil related employment as men do. The expected oil economy presents an opportunity to change the calculus of gender and marital relations in Guyana—will Guyana break from the past or reinforce it?

Constitutional change must enhance the likelihood of democratic turnover, decentralize political power and provide better representation for the peoples divided by race, class, gender and geography. It is not the purpose of this article to provide specifics here but suffice to say, these reforms may include post-election coalition and abolition of the list system.

It is fanciful to think that the expected oil gains will bridge socio-economic fault lines with a political system that thrives on fundamental cleavages. It follows that governance reforms related to fiscal prudence, sovereign wealth fund and the slew of oil related legislations are necessary but insufficient for

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Politicians are usually big on rhetoric and symbolism so the points raised in this article are part of the common discourse.

But the proof is in the pudding. The recently drafted reports on Social Cohesion and Green State Development are both short on substantive policies that reduce key disparities in income etc., though they both mention that Guyana is a highly unequal society. The lack of detailed statistics is surely part of the problem but this presents an opportunity for policy on distributional statistics rather than an excuse. We must be cognizant of the political mal-incentives associated with the collection and presentation of such sensitive data but these mal-incentives are themselves determined by the present political constructs. The principal point here is that oil fertilizes the seeds of conflict when we cannot objectively determine the distributional payoffs—it is striking that this dimension of governance reform is lacking.

The nineties marked a fundamental change in Guyana’s mode of regulation—status was no longer obtained in the public accumulation of wealth, therefore, bureaucratic elites fell from grace—rather, prestige was sought in the private accumulation of wealth.

Promoting a more egalitarian society inevitably alters the political calculus.

But this is unsurprising—the present political constructs serve the purpose of reinforcing existing dividing lines. Part of the governance reforms that are needed to support the impending oil sector is fundamental change in the rules of political engagement. I submit that our Constitution is not fit for purpose.

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effective management and distribution. It is uncontroversial to say that Guyana prides itself in unenforced rules—we should take the sceptics seriously when they remain unimpressed with on-going governance reforms. Radical change in the rules of political engagement is wholly consequential and the minimum we should expect if Guyana intends to sow seeds of cohesion.

Institutions like SARU and SOCU serve as the first pillar of redistribution—to reclaim supposedly stolen assets and property rights. But the modus operandi of these institutions seem to engender symbols of disintegration, social fracture and conflict. One pertinent example of irresponsibility is the casual dissemination of “facts” of stolen assets/rights without objective means of verification available to third parties. These “facts” do more to divide than inform our society. This allows us to peep into the future—if on the eve of an oil economy dividing lines are redrawn and deepened—the oil discovery is the discovery of conflict seeds.

Collin Constantine is a PhD student in Economics at Kingston University and a Member of the Political Economy Research Group (PERG). His dissertation investigates the determinants of the Eurozone current account imbalances but his research interests extend to institutions, inequality, development economics and new political economy. He holds a MSc in Development Economics from SOAS, University of London and is a recipient of a PhD studentship from Kingston University in 2015.

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Climate Control With new industrial prospects Guyana has a renewed green state ambition

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Since 2015, Guyana has accelerated its efforts towards achieving the green state ambition. One aspect of this aspiration involves the promotion of sustainable exploitation of Guyana’s natural resources. Another facet sees an intense focus on restructuring political actions so as to protect the environment with renewable and cleaner forms of energy.

But on the flipside of this coin, the nation is advancing towards the crucial development of an oil and gas industry; a sector that is well known for increasing carbon emissions thereby driving one of the biggest challenges facing the world today: climate change.

The two scenarios leave one to question if Guyana can pursue both without one affecting the other to a debilitating extent.

In the eyes of the Government, the ideal of a thriving oil and gas sector and a green state economy is an attainable one. In fact, several government officials believe that one is dependent on the other in order to truly succeed.

Specifically speaking on this point, Finance Minister, Winston Jordan asserts that in order to achieve the goals of the “green state” economy, money will be needed. In this respect, Jordan believes that the funds which will accrue from the oil and gas sector will be useful towards developing and realizing the projects that have been planned to float the “green state”fantasy onto the shore of realism.

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The economist argued that oil and gas will even accelerate Guyana’s move to a green state.

Jordan said, “The Green State Development Plan is a fantastic idea that can even be woven into the national development plan. But attaining a green state economy will take finances. You will need funds for solar projects, wind farm projects, hydro-power plans. You will need money to support and harness the skill set needed for green state goals.”

While it is logical to conclude that with the coming of oil, Guyana’s fuel consumption will increase, Jordan believes that spinoff activities will not catapult Guyana to the position of being a significant contributor of carbon emissions. “Remember, we are still a major part of the lungs of the world,” the Finance Minister added.

Former President Bharrat Jagdeo is of the view that the Government is yet to clearly outline how it intends to pursue the two objectives—Green State and Oil and Gas—in a manner that will enhance the country.

Jagdeo recalled that the approach by the People’s Progressive Party in the past, was to have a Low Carbon Development Strategy (LCDS). He said that this move was intended to ensure that oil and gas initiatives and low carbon projects did not contradict each other.

In this regard, the Leader of the political Opposition said, “Our country’s per capita emission is less than two tons, in the USA it’s about 17tons, in China it is about seven tons. Many of the countries have a higher rate of emission.”

With the nation’s forest as a net sink, and efforts made to de-carbonize the energy sector, Jagdeo contended that even if Guyana produces oil and gas, at the end of the day it would most likely remain a net green house gas sink for the world.

“But the objectives (LCDS and oil and gas) were not contradictory because we said through the Paris Club Agreement, there is a carbon tax or a cap-and-trade system on fossil fuel. The penalties would have to be borne there (by oil and gas firms) and therefore, we had no contradiction from that approach.”

The former President noted however that for Guyana to move from LCDS to a Green State Development Plan, then it brings to the fore, an entirely different scenario.

He said that an explanation is needed

as to why only the oil and gas sector, and a polluting one at that, is receiving much focus at this time when there are others that have the potential to generate green growth. He believes that this direction would lead Guyana down an incongruous pathway.

Sharing another perspective, Minister of Natural Resources, Raphael Trotman believes that Guyana indeed can have the best of both worlds without any issue of conflict.

Trotman said that he is using Norway as his guide post as to how to strike a balance between sustainable development of natural resources and environmental protection.

“The two are not mutually exclusive.

I recently had a meeting with a delegation from Denmark and the very subject was discussed. Denmark has oil and gas as well. Support has been offered and we are keen on saying yes in a definitive way,” revealed the Minister.

When oil comes on stream it’s logical for one to assume that consumption will increase thereby increasing carbon emissions due to spinoff activities. The Minster said that while he understands concerns that this may pose a problem to the green state ambition, he cautions for one to bear in mind that Guyana is already moving in the direction of relying more on renewable sources of energy.

“This means therefore that our use of petroleum will diminish,” added Trotman.

Professor Suresh Narine, who held the Ontario Research Chair for Green Chemistry at the same time that he was Chair of oil exploration company CGX Energy, is no stranger to the debate around the exploitation of oil and gas and the need for the world to move towards more climate friendly Green development.

In the developed world, he explains that greening of the economy often relates to incremental changes designed to reduce carbon footprint by increasing the utilization of alternative sources of energy, increasing the efficiency of existing processes, changing consumption patterns to be more energy efficient and environmentally conscious and increasing the accountability of systems and processes to account for the life cycle of materials.

However, Professor Narine points out that this process is necessarily different

from the considerations that countries like Guyana must make. In this regard, he commented, “the essential difference here is that Guyana’s carbon footprint is among the lowest on the planet, so the focus is not on reduction of the carbon footprint, but rather, managing the relative increase of our carbon footprint as a necessary function of economic growth.”

Referring back to Adam Smith’s Land, Labour and Capital as the tripod of variables which determines the “Wealth of Nations,” Professor Narine posited that without Capital, Guyana cannot unlock the potential of its latent sustainable industries: Agriculture and Agro-Processing, Eco-Tourism, Alternative Energy and the Knowledge Based Economy.

The reality, he posited is that “Guyana and theCaribbean receives a paltry fraction of the Foreign Direct Investment flows worldwide.” Therefore, he is of the opinion that unless Guyana exploits its Oil and Gas to generate the capital necessary to unlock its vast potential in the sustainable sectors of the economy, it shall continue to be saddled by poor economic growth and unrealized potential.

“The question is not whether we should exploit this patrimony”, he says, “It’s ensuring that we adopt, adapt and develop the correct models, using the best examples from around the world, like Norway for instance, and adapting their approach to our needs and special economic and environmental situation. It’s realizing that we need strong, robust and multi-stakeholder supported policies which ensure that the proceeds from Oil and Gas will be utilized to inject the transformative capital required by our sustainable industries and sectors.”

In the case of Guyana, Professor Narine said that he sees no conflict between the careful and environmentally conscious exploitation of the nation’s Oil and Gas Industry and the concurrent development of the green sectors of the economy.

“Indeed, Guyana will continue to be a net Carbon Sink country if it ensures that oil and gas does not become the only driver of the economy, but that the economy is diversified into the sustainable sectors. Almost all of these sectors require massive sums of capital to unlock their potential: Oil and Gas and a Green Agenda are the keys.”

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The Sky’s the Limit Sustainability is the secret of Roraima Airways success.

By Dellon Murray

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Cour tesy of Roraima Air ways

1992, when Roraima Airways began, was a time of transition for Guyana. “Free market systems had just started to be introduced into the country,” says Captain Gerry Gouveia, CEO of Roraima Airways. “Our economy depended on products – gold, and diamonds, and bauxite – and we didn’t have much of a service industry at the time. I had spent fifteen years in the army as a pilot, and in that time I’d learned a lot about Guyana’s hinterland. So I started Roraima Airways with my wife Debbie, who is also a pilot, to cater to the needs of tourists and investors. To start with, we didn’t have any planes, so we used to rent them, and we only had four employees. It was a gamble on the future of the country.”

The gamble paid off. Today, Roraima Airways employs two hundred people, and in addition to owning their own planes, the company has two hotels and an eco-adventure resort in the rainforest. “We’ve developed a synergy of travel and tourism services,” says Captain Gouveia. Now, a traveler can fly from New York to Guyana with one of Roraima’s international partners, get picked up at the airport by a Roraima chauffeur, eat and drink at a Roraima hotel in Georgetown, catch a Roraima flight to an investment site or the Kaieteur Falls, and then take a Roraima boat to the Roraima resort. “And then when they’re leaving Guyana, they’re at our check-in counter at the airport, and they can wait for their flight in our executive lounge,” says Captain Gouveia.

Low Carbon

“Guyana has a national development strategy which is called the Low Carbon Development Strategy,” says Captain Gouveia. “That means all economic development has to result in minimal carbon emissions.

At our hotels, we make sure the air conditioning is environmentally

friendly. We make sure the materials we use are environmentally friendly. Even the washing detergents and conditioners we use are environmentally friendly.

Then, when we fly clients into the rainforest, we pay a lot of attention to ensuring those clients operate in an environmentally friendly way as well, and comply with that strategy. Our staff also have regular meetings where we discuss potential impacts on the environment, and how we can avoid those. We’re very conscious that, as a country, we can’t ring-fence ourselves away from the practices that all countries in the world need to practice. We embrace those things because it makes sense from an economic standpoint, and from a social standpoint too.”

Beauty and Grandeur

A representative example of Roraima’s emphasis on environmental sustainability is the Arrowpoint Nature Resort.

The resort is situated deep in the rainforest, not far from one of the world’s most spectacular single drop waterfalls, the Kaieteur Falls, which, at 741 feet high, is four times the height of Niagara Falls. Arrowpoint itself is located in an Amerindian village, and visitors can go hiking, mountain biking, kayaking, and birdwatching in the jungle.

“The architecture of the buildings was done in keeping with the architecture of the community,” explains Captain Gouveia. “The material used was material from the area. There was minimum clearing of the rainforest around the resort, to protect it and not to disturb the wildlife. We use solar power for green power, we use rainwater, we bury our garbage when it needs to be buried, and we use waste food for compost. It’s important to us that we engage in environmentally responsible activity. My national service took me all over the length and breadth of Guyana, and it gave me an enormous appreciation of the beauty and grandeur of our

country, in terms of the diversity of the human cultures here, and the biodiversity of our rainforest and our wildlife.”

Next for Roraima will come an expansion of their domestic fleet. “We’ve expanded into the international market with our partnership with Dynamic Airways,” says Captain Gouveia. “So we run five flights a week into New York, and we’re expanding into Toronto later on this year. Roraima Airways is working to showcase Guyana to the world. The future here is very exciting. The Brazilians want to build a US$15 billion, 4,500 MW hydro station here; and there’s lots of solar farms going up to power villages in the hinterlands.”

National Responsibility

For Roraima, the reward of success is greater prosperity for the whole country. “We recognized that, even if our company was doing well, if the rest of the society around us wasn’t then we wouldn’t be sustainable,” explains Captain Gouveia. “I’ve been involved as a private sector advocate in the Chamber of Commerce, in the Hotel and Tourism Association, and in the Private Sector Commission, to contribute to making Guyana a better place socially, economically, and politically. I came from a very poor family, and the government gave me a scholarship to go to one of the best universities in the world, the Embry-Riddle Aeronautical University in Daytona Beach. So when I came back, I felt obligated to this country, to give back. Today, we are very proud of giving the opportunity to young, ordinary Guyanese boys and girls to come and work with Roraima, and we develop them into adults that are doing extraordinary things. We have staff who’ve been working with this company for ten, fifteen, twenty years. They’re amazing; they make this happen every day. That’s my proudest achievement.”

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By Gillian Griffith-Edwards (Small Business Bureau)

Impending oil and gas production in Guyana is surrounded by much buzz and anticipation. Guyanese are expecting that investments in this sector will give rise to new opportunities for income generation. This expectation is quite acute, especially within the context of an economy under challenge because of declining returns from its primary productive sectors. Amidst the air of optimism and excitement the announcement of two large oil finds (2015 and then 2017) brought, it is hoped that the words of caution by Mr. Jeff Simmons, Country Manager of Exxon’s local subsidiary, did not go unnoticed. He clearly indicated that not many direct jobs are to be expected as a consequence of investments in the local oil and gas sector.

This should come as no surprise given the very specialized skills required and Guyana’s virtual lack thereof. In terms of opportunities being made available to local enterprises, Mr. Simmons confirmed that services procured to date have included: accommodation, fuel, food, security, waste management, aviation and medical services. The latter of course would have been procured from medium-sized small enterprises.

Growth and Gain Are there Opportunities for Small Businesses in the Oil and Gas sector?

One wonders whether the other services were provided by small businesses, given the expected demand by Exxon for extremely high quality services and products. It is against this background that the Small Business Bureau recommends that our local small businesses take a step back and reflect on their individual capacities and what is required to ensure they can access both current and impending opportunities, not just within the oil and gas sector but in general.

A paradigm shift is definitely required in the way local enterprises do business, particularly in the face of inevitable changes in the business landscape concomitant with the growth of the oil and gas sector. Small enterprises need to recognize the potential benefits of collaborations and clustering. The saying “collaboration is the new currency” is very popular and is applicable across sectors! Business consultant Daskal’s view of the importance of collaboration should be taken to heart—“If you’re not sharing, partnering, or collaborating, you’re failing to engage in the new currency of business”. Significant changes in revenue as a consequence of economies of scale can be achieved with joint efforts and pooled resources.

In 2016, Exon Mobil was still ranked the most profitable and the most valuable oil and gas company in the world and therefore its local subsidiary is expected to be profit driven while it purports

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to support the development of local businesses. Government is clearly taking steps to ensure the latter is done, as demonstrated by the draft local content policy prepared and currently in the public domain for review. It is hoped that regulations to support this policy will quickly follow and will include clear provisions with requisite limits which serve to also secure the inclusion of local small businesses as well as local employment, for all foreign investments, not just those associated with the oil and gas sector.

The value of investments and resultant high revenues of the oil and gas sector lends to demands for the highest quality of goods and services. It is against this background that small enterprises should do some introspection. Responses to the following questions should hopefully lead to strategic actions towards surviving in a changing business landscape: • What new skills are required to address the demands of the market?

• What training/capacity building opportunities are available for acquiring enhanced skills?

• How can the quality of product/service offerings be enhanced?

Small businesses need to research the options and keep abreast of developments both locally and globally. Some firms have already begun to prepare themselves for expected new service demands. One small surveying firm, for example, in an effort to expand its services to include marine surveying and upgrade its team’s skills accordingly, has been actively pursuing the requisite certified training programmes offered by entities in the Caribbean. Likewise, local training institutions and business support organisations such as the Small Business Bureau, need to review their programmes to ensure they can offer the required support to local enterprises.

Investors will follow the money—revenue anticipated with oil and gas production. It is therefore imperative that small businesses step up to be able to survive and grow.

Collaboration through clusters and partnerships, capacity building and training towards enhancing skills and quality, are expected to support their survival in this changing environment.

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In just over two years’ time, ExxonMobil and partners will start pumping oil from Guyana’s seabed. While expertise will need to be brought in from overseas, there is hope that jobs will be made available to local talent, too. In preparation, the University of Guyana (UG) is looking at how best it can train its students, so that they can capitalise on the emerging oil sector – and the resultant boost to business. To find out more, we spoke to Dr. Leyland Lucas, Principal of UG’s new School of Entrepreneurship and Business Innovation (SEBI); Elena Trim, Dean of the Faculty of Technology; and Dr. Thomas Singh, a lecturer in the Department of Economics.

What role do you envisage SEBI playing in Guyana’s

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emerging oil sector?

Leyland Lucas: SEBI must offer both degree programs and short courses that not only cater to current needs within this emerging sector, but also those that we can anticipate will be demanded in the future. Areas such as Logistics & Supply Chain Management, Taxation, Environmental Sustainability, Customer Service, and Customer Development, just to name a few.

It’s also important to note that the role of SEBI will extend beyond business-related training. For example, SEBI must liaise with other units to develop a joint program in Sustainable Development…Likewise, it will have to work with the Sociology department to address issues around balancing business opportunities created by the

oil sector and social consequences.

Our experience in the mining sector presents valuable lessons for us to consider.

Joy St. Hill

How will UG more generally benefit from the oil sector?

Elena Trim: We will have more expertise and that will help us to shape our present programs, which we revised recently. We have already designed a program in Petroleum Geoscience, which is in high demand by the private sector. And within this, we have a course called Petroleum Economics…

What we’re also looking at right now is a Master of Science in Safety Engineering management, because when you’re working on a rig you should be aware of certain things in safety management. I was planning to give that program to the business school [SEBI].

We could gain a lot from it.

Have you been approached by any companies working in the oil sector?

ET: TechnipFMC came to us, indicating they would like to recruit our recent graduates. They will choose around 15 who’ll be sent on training in Brazil and Houston. They also indicated that they would like to bring people into our programs; engineers who are working in the gas and oil industry, and they could actually teach part of the courses. They are excited about our graduates. They say we have good people in Guyana…We have had some collaboration with TOTALTEC too, and they have already made some recommendations about how we could adjust our programs.

What would you say to encourage investors to seek out UG? TS: What the private sector will have to worry about is the loss of competitiveness once we get the oil revenues, because the currency will appreciate. So the private sector will have to do two things: look for a more productive labour force and become forward thinking…People like myself and Elena, we’re trained to take a longer view of things and that’s one of the reasons they might have to come to us. …What we’ll get from the oil sector will be primarily revenues for government. There will be lots of civil works and infrastructure development, so training will be required for engineers. We probably will have to invest heavily in schools too. Indonesia is one of those countries that didn’t experience a resource curse—precisely because of investment in education.

ET: We’re not only talking about engineering, we could build factories, we could can our food... And that is going to develop jobs – not only in the oil sector. For example, we’re

technology and business operations.

That proposal was accepted. It’s a big, big deal…I’m in the process of developing an executive course on the green economy in a resource-based environment. That will be offered in August hopefully and is one of our responses to what we see happening in oil and gas.

Why is SEBI’s focus on innovation and entrepreneurship so important now?

LL: Although there is much global talk of ‘STEM’, we at SEBI prefer to focus on ‘STEAM’. We add the ‘A’ for agriculture because that sector of our economy cannot be ignored…

Businesses in the agricultural and other sectors must start thinking about value-added activities. Those of us who travel to North America would see a simple product as flavoured plantain chips. Virtually no difference from the ordinary plantain chips we produce and enjoy in Guyana, yet we are not players in this market segment.

One of the units highlighted within SEBI will be the Center for Entrepreneurship

LEARNING CURVE

The University of Guyana Prepares Its Students for Dr Singh, what role could your Emerging Industries department play?

TS: The Economics Department

By Carinya Sharples actually has a Business Economics developing a program right now for program. It’s relatively new, but & Economic Development. We intend the civil aviation sector. the intention is that it will support to use this facility to provide our TS: Elena, you’re actually agreeing business development…We should students and the business community with me in a sense: we have to look also be interested in contract design, with training and support needed to beyond oil. For me, a strategic otherwise we’ll end up making the make their businesses successful. We concern should be the fact that same mistakes: we’ll issue contracts, also intend to expose our students Guyana has huge rainforest cover we’ll haggle over who really was to guest lectures and webinars awarded a contact, then we’ll complain and the world is concerned about involving successful and unsuccessful hydrocarbons. At ExxonMobil’s annual about the contractors and supervisors businesspersons. There are a lot of shareholder meeting there was actually lessons to be learned through such not doing their jobs. So I see lots of a proposal by the Church of England opportunities for us as economists to exposure. Even the vendor in the that ExxonMobil begins to report ensure that we have a good outcome arcade has a valuable story to tell our on the climate change impact of its from the oil revenues. students.

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There are no givens in business and probably less so in the Oil and Gas industry. The recent changes in the price of oil shows that – 75% of the drilling rigs onshore in the U.S. were demobilised with the attendant loss of jobs, bankruptcies etc.

Experts have agreed that Guyana starting with a ‘clean sheet of paper’ has the opportunity to ‘get it right’ and avoid the pitfalls of the sector.

The above caveat is just to anchor the title of this article – 50 years of opportunities for Guyanese Industries in Oil and Gas. The recent ‘elephant run’ of discoveries made by ExxonMobil and its partners is lending great credibility to the longevity of this new industry in Guyana. An anecdote comes to mind. Before Phillips Petroleum (now ConocoPhillips) discovered the ‘Elephant’ Ekofisk field in 1969 (‘First Oil’ Production in 1974), the main industry of Sardine canning was ‘dying’... oil saved the day and Norway now is one of the richest countries in the world. This required willing investors, good government, local industry learning over the first decade on how to cost effectively replace or joint venture with foreign suppliers and a labour force that was constantly being upskilled.

We all firmly believe that, our past history notwithstanding, there is the opportunity now for us to have the ‘Guyana story’ of development.

All parts of society have a role to play – firstly by continuing to welcome investors to Guyana. We all know that capital moves at lightning speed and is extremely skittish especially after the 2008 financial crisis. We do depend on our government to be sagacious in looking after the interests of Guyana and the Guyanese as well as the interests of our foreign investors.

Industry in Guyana needs a step-by-step plan to rapidly bring themselves up to speed to ready itself to serve the Oil and Gas industry. This starts with upgrading both management and workers to the stringent new standards required to participate in this industry. Industry also has to learn about the services required in Oil and Gas and then to select the niches they feel the most affinity to. Then comes the working for foreign suppliers as sub-contractors and potentially partnering with them upon a good joint performance together.

Workers in Guyana and the diaspora need to know their responsibilities to themselves and the companies they work for to know that sustainable long term prospects and wages are dependent on a constant striving to upgrade their skills and competencies.

Guyana has been blessed with the basic resource discovered by ExxonMobil and its partners. For that resource to be converted to prosperity for Guyana, its people and its industries, there is a long road ahead to configure local society to be able to participate in a direct manner.

This starts with education – the GCCI has a unique possibility to fulfill part of this educational component. This can be done with the cooperation between the Operators currently active here and in the future as well as with the Guyana Oil and Gas Association and active service companies here in Guyana.

With the initial caveat in mind and the inspiring story of how one country with a declining traditional industry of fishing used responsible oil development to secure its future, we all look forward to setting the framework for a smoother road ahead to bring the benefits of Oil and Gas to all our industries here in Guyana and its workers for the next 50 years.

The Centenary of Guyana’s independence shall then be something to look forward to.

Striking Oil 50 years of Opportunities for Guyanese Industries in Oil and Gas

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Cour tesy of Lars Mangal

By Lars Mangal, President & CEO of TOTALTEC Oilfield Services Guyana Inc.

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A Nation in

Suspense

To Build or Not to Build an Oil Refinery

By Dr. Terrence A. Blackman

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G

uyana and the Guyanese people, at this juncture of our history, face a decision, a once in a lifetime question, whose answer, yes or no, will determine the trajectory of Guyana and her people for the next one hundred years.

Pedro Haas, consultant from the British-based international thinktank Chatham House, has estimated that building a 100,000 barrel per day refinery in Guyana would take upward of sixty (60) months, i.e., five (5) years, cost five billion USD and generate a net present value of negative three billion USD. Haas notes that even under the most optimistic scenarios that it is very likely that such a plant would still incur a two and a half billion USD loss. He cautions that even investing in a small modular refinery would be an extremely expensive undertaking.

Haas may be correct on the economics of building a refinery and policy makers must take his assessment very seriously. It is possible that Guyana can use the five billion USD it would cost to build a refinery in other ways that might better benefit. There is considerable refining capacity globally and Guyana might be able to drive a good bargain to gain access to that excess capacity.

The world’s hydrocarbon markets are volatile, and it may be that twenty years from now hydrocarbon prices are too low to generate reasonable returns on an investment in a refinery. Environmental pressures to switch to renewable energy sources are considerable and they will, in the long run, reduce the demand for petroleum based products. Can we, under these conditions, justify investing five billion dollars over the next five years in pursuit of a refinery?

There is also the very real danger that a refinery will produce an enclave economy instead of spreading wealth and development widely and that the concomitant socio-political consequences of the oil boom will deepen, exacerbate and make concrete, the current, deplorable, levels of inequality evident in the Guyanese society. Do we, have the ability to build a five billion USD refinery without becoming mired in graft and corruption? We reiterate that the Haas assessment must be taken very seriously. The issues raised as we examine this assessment span the ideological, economic, and social spectrum of Guyanese thought and it is very clear that we need a thorough and rigorous approach to the question of building or not building a refinery in Guyana. A failure to study carefully its conclusions can lead very easily to a bankrupt nation.

We believe that the Guyanese oil story does not have to end in tragedy. There are many positive examples of successful approaches to oil development and new found wealth management that ought to be a part of our discussion. We note for the record that Norway is a very successful steward its oil wealth and that Alaska has effectively managed its oil extraction taxes and further Botswana has successfully managed its considerable diamond wealth. Our actions in this moment matter, they matter profoundly. Our strongly held view, taking careful account of the Haas’ assessment, is that making this investment, at this juncture

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Environmental pressures to switch to renewable energy sources are considerable and they will, in the long run, reduce the demand for petroleum based products. Can we, under these conditions, justify investing five billion dollars over the next five years in pursuit of a refinery?

of Guyanese history, in the interest of Guyana’s national development, is a once in a lifetime opportunity that cannot be missed. It will determine the trajectory of Guyana for the four generations. We believe that if this investment is managed effectively, grappling with and solving its economic and technical challenges will be the catalyst that catapults Guyana into the first rank of modern states. This investment will set the foundation for a high quality education system and engender the internal technical capacity necessary for enhancing the resilience of our infrastructure and for building disaster risk management capacities. It will prepare the ground for a robust private sector development which can sustain broadly shared and purposeful economic growth across all sectors.

This investment, we believe, will improve the business climate, engender private sector confidence, reinvigorate construction activity, and drive productivity-enhancing reforms in key sectors, including agriculture.

In this essay we identify for the public and key stakeholders some fundamentals of the petroleum refining industry; establish a Guyanese context for the analysis of this assessment; and make the case for an aggressive pursuit of Guyanese petroleum refining capacity.

Petroleum refining is a unique and critical link in the petroleum supply chain. The other links add value to petroleum mainly by moving and storing it (e.g., lifting crude oil to the surface; moving crude oil from oil fields to storage facilities and then to refineries; moving refined products from refinery to terminals and end-use locations, etc.). Refining adds value by converting crude oil (which in itself has little end-use value) into a range of refined products, including transportation fuels. The primary economic objective in refining is to maximize the value added in converting crude oil into finished products.

Petroleum refineries are large, capital-intensive manufacturing facilities with extremely complex processing schemes. They convert crude oils and other input streams into dozens of refined products. These include: liquefied petroleum gases (LPG), gasoline, jet fuel, kerosene (for lighting and heating), diesel fuel, petrochemical feedstock, lubricating oils and waxes, home heating oil, fuel oil (for power generation, marine fuel, industrial and district heating), and asphalt (for paving and roofing uses). Of these, the transportation fuels are typically assigned the highest value and fuel oils and asphalt the lowest value. Many refined products, such as gasoline, are produced in multiple grades, to meet different specifications and standards (e.g., octane levels, sulfur content).

More than 660 refineries, in 116 countries, are currently in operation, producing more than 85 million barrels of refined products per day. It is important to note that each refinery has a unique physical configuration as well as unique operating

characteristics and economics. A refinery’s configuration and performance characteristics are determined primarily by the refinery’s location, vintage, availability of funds for capital investment, available crude oils, product demand (from local and export markets), product quality requirements, environmental regulations and standards, and market specifications and requirements for refined products. A refinery’s cost depends on a number of factors such as the refinery’s configuration and its complexity, the type of crude to be processed, its overall capacity, and the feasibility of the location. Socio-economic and political imperatives also play a role in developing local refining capacity. For example, most refineries in North America are configured to maximize gasoline production, for evident reasons, at the expense of other refined products. Elsewhere, most of the existing refining capacity and virtually all new capacity is configured to maximize distillate (diesel and jet fuel) production and, in some areas, petrochemical feedstock production, because these products are enjoying the fastest demand growth in most regions of the world.

What then ought to guide our decision making on the need for a refinery in Guyana? Let’s look into our external and internal mirrors. Our initial conditions matter immensely to the decision we make vis-à-vis the development of a Guyanese refinery.

The World Bank overview for Guyana states that, agriculture and natural resources are important sources of economic activity in Guyana. In 2015 agriculture, forestry, fishing and mining industries accounted for 28 percent of total GDP. Furthermore, bauxite, sugar, rice, gold and timber made up 83 percent of exports. These sectors are also a large source of jobs. The World Bank notes that Guyana’s economic fortunes in recent years have reflected the path of global commodity prices. Between 2005 and 2014, the economy grew by 4.7 percent per year on average. Real GDP growth, however, decelerated to 3.1 percent in 2015, as commodity prices collapsed for Guyana’s major exports. The Guyana Country Engagement Note (CEN) argues for (i) enhancing resilience of selected infrastructure and building disaster risk management capacities; (ii) setting up the foundations for high quality education; and (iii) laying the ground for private sector development.

To round out the external context, we note that the International Monetary Fund’s (IMF), 2017 Article IV Consultation found that low agricultural commodity prices and adverse weather conditions led to a contraction of agriculture, with negative spillovers to manufacturing and services. Additionally, it stated that delays in public investment remained a drag on construction.

It is expected that the start of oil production in 2020 will

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provide a significant boost to exports and official reserves of foreign currency in the medium-term, and while Guyana’s debt-toGDP ratio is projected to reach 61 percent of GDP by 2019, debt sustainability risks remain moderate. IMF experts further noted that the debt to GDP ratio will decline rapidly after the start of oil production, dropping to under 50 percent by 2020.

The IMF notes that sustaining growth hinges upon improvements to the business climate, private sector confidence, reinvigorated construction activity, and productivity-enhancing reforms in key sectors, including agriculture. The mission welcomed progress in plans to increase the contribution of low cost renewables to the energy matrix, improve transportation links, and modernize the payment system. Addressing these long-standing structural impediments, they argue, will stimulate construction, raise productivity in traditional sectors, facilitate diversification into higher added-value activities, and make growth more inclusive.

It is instructive to note that both the World Bank and the IMF strongly encourage Guyanese leadership to target high valueadded economic activities and make public investments in support of the business climate, private sector confidence, reinvigorating construction activity, and productivity-enhancing reforms in key sectors, including agriculture. In this context, the catalytic socioeconomic value of building an oil refinery in Guyana is clear. This is a project which, if properly implemented, can galvanize the entire society. We agree with the IMF and the World Bank that Guyana’s economic vision must be predicated on moving up the value chain in all our industries. As the context assessment makes clear, overdependence on commodities in the global marketplace is a recipe for economic failure.

Energy is essential to all production processes, and its use is inextricably linked to all of our economic and social activity. Energy policy must play a central role in our national planning and central to this planning process is the task of ensuring the presence of the infrastructure to provide an adequate, reliable, and affordable supply of electricity to the Guyanese people and industry. As any regular visitor to Guyana knows that our electricity sector, has been, and continues to be deficient. Accordingly, a principal policy objective for the Guyanese energy sector must be to ensure that an adequate and dependable supply of electricity is available for Guyana’s future economic development. We believe that need for stable and reliable electricity argues most forcefully for a Guyanese refinery.

The principal sources of Guyanese energy are petroleum products, all of which are imported. Petroleum products take up and will continue to take up an ever increasing proportion of Guyana’s foreign currency earnings as Guyana moves along its development trajectory. We argue that diminishing the costs of imported

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In this context, the catalytic socio-economic value of building an oil refinery in Guyana is clear. This is a project which, if properly implemented, can galvanize the entire society.

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fuels and minimizing the accompanying fiscal transfers and our dependency on imported petroleum products necessitate a Guyanese refinery.

We also believe that our stated commitment to environmentally sound and sustainable energy generation and consumption policies must play a critical role in the refinery debate and that our discussions must speak to the near and medium term feasibility of the development and increased utilization of new and renewable (solar, wind, and hydro) domestic energy resources. We note, counterintuitively, embarking on building a “green” refinery will refine, amplify and clarify the Guyanese sustainable energy generation and consumption discourse.

It is our view that finding the required twenty (20) to thirty (30) square kilometers of land somewhere along Guyana’s coastal belt and building a modern efficient oil refinery there and a deepwater channel with a one kilometer width to access it from the Atlantic Ocean will be the engineering project of a generation whose technical requirements will catapult Guyana into a leading Caribbean state.

On an elementary level, with an operational refinery, Guyanese will quickly realize some of the benefits of being citizens of an oil producing country. The positive economic impact of lower prices at the gas pump and lower energy and electricity bills cannot be overstated. For example, low energy costs are a major incentive for investors considering Guyana as an investment location.

Exxon Mobil and its partners have recently approved $4.4 billion USD to develop these oil finds off the coast of Guyana. This approval is among a very small number of approvals of deepwater projects to be moving forward at this time. According to energy research company Wood Mackenzie, the Liza field contains enough oil for Exxon Mobil and its partners to break even at $46 a barrel. The Exxon group believes the Liza field, which lies 118 miles off the coast of the Guyana contains up to 2.5 billion barrels of oil equivalent. The project will include the construction of a $1.2 billion USD floating production storage and offloading facility.

Once completed, the project will pump 120,000 barrels a day by 2020 from 17 wells. It is estimated that in ten (10) years Guyana’s Liza-Payara development could pump close to 330,000 barrels a day. Exxon is making a $4 billion USD bet that there is value to be had in producing Guyanese oil. Guyanese must, similarly, play a meaningful role in the exploitation of these resources.

We close by returning to the fundamental truth of the petroleum production value chain: refining of crude is the only value adding activity. It is the first and only step for us to the next rung of the petroleum producing ladder. It is evident to us, that in order for us to survive and thrive in our moment of oil we must develop our own petroleum refining capacity. The only question, as we see it, is how do we most optimally do this? The decision clock is ticking.

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Exxon Mobil and its partners have recently approved $4.4 billion USD to develop these oil finds off the coast of Guyana. This approval is among a very small number of approvals of deep-water projects to be moving forward at this time.

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By Veronica Broomes

In Guyana, CSR or Corporate Social Responsibility has different interpretations among stakeholders. This is not surprising as such differences have occurred in other countries. For example, CSR is viewed by some as philanthropy and a way of creating opportunities for businesses to ‘give back’ to communities in countries where they operate. CSR has been used also to describe initiatives and projects financed by corporations for the benefit of disadvantaged groups in society or for local communities in specific geographic regions. Such initiatives include employee volunteering programmes, creating foundations to channel charitable giving and funding projects to support micro-enterprises and protect the environment.

Another interpretation of CSR that has emerged more recently is linked with ‘local content’ as a way of encouraging multinational enterprises to include local businesses as suppliers of goods and services purchased by corporations. CSR has also been associated with corporations as responsible corporate citizens and including corporate governance. However, irrespective of definition, an inherent feature of CSR is acknowledgement of the role businesses play (or could play), to strengthen the local private sector, enhance economic growth and foster development in host countries whose resources corporations harness to generate profits.

doing the right thing Corporate Social Responsibility in Guyana’s oil sector.

In the context of oil explorations in Guyana being driven by global petroleum corporations, opportunities abound for CSR to be used strategically to enhance benefits to present and future generations. There is, however, a need for awareness raising and a deeper understanding of CSR among a wide cross-section of stakeholder groups and the general public. This will enable social and economic interests in society to view CSR as a strategic tool that can be employed in oil companies. Through embedding CSR strategies as part of core business operations, oil corporations stand to benefit through savings as a result of increased efficiencies in use of raw materials and energy, promoting sustainability and fostering innovation and creativity. Moreover, benefits to local communities can be realised through enhanced capacity building and strengthening private sector businesses for meaningful engagement in supply chains of multinational enterprises operating in Guyana. Furthermore, fiscal policy incentives and investment frameworks can be applied in a way to enable strategic use of CSR and as a catalyst to achieve national development goals and local development priorities.

Corporations have embedded CSR in their core business operations to deliver positive impacts on evolved ‘Best

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Cour tesy of Veronica Broomes

With the advent of commercial oil exploration in Guyana, the term ‘Corporate Social Responsibility’ or its acronym ‘CSR’ has become part of the discourse among policymakers, civil society organisations and sections of the wider society.

In the main, these discussions caution against wanton waste of revenues generated through oil exploration and ensuring, instead, that natural resources benefit present as well as future generations of Guyanese.

Practice’ in areas such as sustainability, environmental, labour and procurement. At the same time, policymakers have opportunities to consult on and create relevant policy frameworks that facilitate responsible corporate citizenship by businesses. In the process, there are wider societal benefits that contribute to achieve development priorities in countries in which they operate.

In order for CSR to become a catalyst in achieving national development priorities, it is imperative for CSR in Guyana to be much more than philanthropy that funds specific projects or initiatives, issue grants to promote capacity building or even enact legislation and regulations in support of local content to enable meaningful engagement of local companies in the supply chains of petroleum corporations. Instead, Guyana’s interpretation and application of CSR should embrace a strategic approach, act as a catalyst in achieving national and local development goals and be linked with the country’s strategy on inward investment.

Veronica Broomes PhD is a UK-based researcher and sustainability consultant. Current research, as part of a Masters of Law (LLM) degree, undertakes a comparative legal approach in assessing how legislation and regulations can facilitate participation of local businesses in supply chains of oil corporations. An experienced, Consultant, Trainer and Facilitator, Dr. Broomes’ has written articles and case studies on strategic CSR, inward investments and organisational governance and is author of the book ‘Who Invests Wins’. Her book provides insights into how CSR can be used by CEOs, Investors and Policymakers to create ‘Triple Wins’ for people, businesses and economies.

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By Sherronie James

To Lead and Serve The Promise of Oil Commands ‘Dispersed Leadership’

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The promise of oil has captured the attention of the nation and the wider world and has placed Guyana’s leaders firmly at ‘the promise of oil’ table. The expectations of the nation are immense and the changes required voluminous; and with every leadership position comes significant responsibility. This promise of oil has triggered enormous excitement; and so it should for this country with a population of less than a million people. This promise of oil presents a great opportunity for those in leadership positions to lead and serve those they lead. The emergence of Guyana is imminent, be it in comparison to its neighbours in South America, as a Caribbean

Community member, or as an international partner; and when that happens all eyes will be fully focused on how oil revenues are being handled and who is benefiting.

Knowing this is on the horizon means that Guyana can emerge from a position of strength. But to achieve this will require a collective mindset shift, one that dispels the belief that leaders must be exceptional persons with innate qualities and instead focuses on crafting a multidimensional leadership approach where the focus is on developing a ‘leaderful’ environment where leadership is a collective responsibility.

Like it or not, Guyana’s landscape has now been redefined and to embrace this change and tap into its many opportunities means that it is now time to change the view of leadership. Rather than seeing leadership as being vested in one or a handful of persons leadership has to be viewed as process involving many leaders who work together to determine what the ‘promise of oil’ will deliver for Guyana and its people.

Leadership as we know it tackles the big issues that face a group or an organization, and core issues are usually classified as strategic, task based, or people related. What should leadership look like in this new emerging Guyana with its promise of oil? Well, the view is that leadership in this context should be dispersed. There has to be a realisation that there can be several leaders in any group with each tackling different aspects of any issue. Such an approach by its very nature will facilitate more effective communication, encourage and promote diversity, and champion empowerment. This archetype will drive innovation and embody emotional intelligence. The knowledge and expertise of many leaders will be part of a chain that assists in tackling issues, in their entirety or in part.

As Guyana surges towards this promise of oil there should be no fear that a dispersed leadership model will not work, since one of the underlying principles of leadership is that people can only be leaders if others in the group accept their influence and view them as leaders. This acceptance will undoubtedly be founded on the knowledge and expertise that the person brings to tackling the issues at hand.

The promise of oil affects the political environment, the ecosystem, the business environment, and people. It is time to recognise that not only those who are at the top of the hierarchy, and believe they are the ordained leaders, can tackle the issues that will arise from the promise of oil, but there are many other substantial leaders from diverse groups, be these indigenous, business, community, or youth groups. They must be incorporated in the chain of solving the promise of oil issues because it is only by being at the table that these diverse leaders can ensure that the promise of oil will deliver the right sort of benefits for the groups they represent.

The promise of oil calls for leadership that spearheads innovation and welcomes change; leadership that champions diversity and embodies emotional intelligence; and leadership that is resilient and driven by the needs and desires of the population.

Dispersed leadership has to be the bedrock of Guyana’s promise of oil as after all it can only be realized through the expansive engagement and talent of the Guyanese people.

Sherronie James (shezinluanda@hotmail.com) is a Leadership and Transformation Management professional with several years of experience working in emerging Oil and Gas producing countries globally. Ms. James is the founder and CEO of LYRIC.

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By Ms. Kiran Mattai (Head, Legal & Licensing Division, Guyana Energy Agency)

As an emerging economy that is geographically surrounded by major oil producing nations, the operations of offshore exploration in Guyana have created the expectation of promise, risk and reward as the recent discoveries by Exxon Mobil have heralded a new national resource base. However, inherent in this newfound status must remain Guyana’s independence and sovereignty over these natural resources, for which the Energy Sector must be prepared to strengthen regulatory and fiscal regimes upon which investment relations may be established between Guyana and the wider world.

GREENING OUR BLACK GOLD The Development of Renewable Energy must not be lost among the Promise of Oil

For Guyana, a ‘green economy’ is not premised solely on renewable energy, rather, it encompasses the practice of sustainable living dependent on environmental, economic and political systems to satisfy national demand for energy services. Conversely, our country which is rising among global ‘Big Oil’ states cannot sustain an equitable society solely on oil. As propounded in our National Energy Policy, there must be complementary interdependency between oil and renewable energy, ‘to provide a stable, reliable and economic supply of energy, reducing dependency on imported fuels, promoting the increased utilization of domestic resources and ensuring energy is used in an environmentally sound and sustainable manner.’

Considering this landscape, investors may visualize Guyana’s natural environmental heritage evidenced through forestry, rice, sugar and water resources, which supports the vast potential for the exploitation of renewable energy. One current example is the practical execution of the Hinterland Electrification Strategy, which was developed to extend energy to unserved areas, particularly remote hinterland areas, where traditionally, barriers of access have existed. With Guyana’s land area of 196,850km2, of which approximately 80% is forestcovered in which 9.2% of the indigenous population resides, this Strategy encompasses RE projects to support and preserve their economic and cultural way of life.

Through this instrument, more than 1750 solar photovoltaic systems and 507 solar cooking stoves have been installed in hinterland communities where access to grid power is a challenge.

Therefore, while oil may provide the future revenue stream to advance such localized projects through maximizing the capital and infrastructure base in the

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It is these investment relations which balance maximization and preservation of energy resources. In this regard, while our country of El Dorado prepares for its ‘black gold’, it is our pathway to a ‘green economy’ that propels the mandate of the Guyana Energy Agency through continued research into alternative and renewable energy sources. The development of renewable energy must therefore not be lost among this promise of oil.

long-term, Guyana must be considerate of preserving our own culture and the ability to increase economic growth while reducing greenhouse gases and climate change through investments in low-carbon economic infrastructure, as under the REDD+ Programme. In fact, a balance between resources has been globally demonstrated by other countries through the establishment of Green Levy Funds (e.g. Trinidad) where revenue generated from petroleum activities may be allocated to support renewable energy initiatives. Such policy mechanisms have fueled the execution of the objectives declared by His Excellency Brigadier David Granger, President of the Co-operative Republic of Guyana at the signing of the Paris Agreement in 2015, which mandates the movement to- wards ‘100% renewable power supply by 2025, conditional on appropriate support and adequate re- sources.’

With this forward momentum, the energy sector must prepare for reform through transposed regulatory and promotion

policy mechanisms to liberalize the energy market and drive competitiveness for maxi- mum economic recovery. However, Guyana must also be prepared to face the inevitable challenges of ensuring revenue distribution and strengthening its fiscal regulatory framework. One associated challenge is ensuring effective tax rates across the entire energy industry, with according incentives to avoid possibilities of ‘goldplating.’ These incentives for investment, such as zero rating of imported machinery for use within the oil industry and renewable energy technologies, will allow deployment into the market through exploitation of onshore renewable and offshore oil resources.

The ‘promise of oil’ must therefore not devolve to the ‘curse of oil’, neither must oil be a panacea to Guyana’s future. Perhaps Guyana’s resources may offer the exception where oil and water CAN mix to encompass a diversified energy supply, characterized by sustainable development to enable fair sharing of wealth between investor and country.

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Changing Faces New Business Courts a Consumer Evolution

By Brevard Nelson

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Changing Faces Guyana is currently courting the perfect storm, with steady waves of infrastructural, legislative and economic change set to flood the market. A groundswell of international business, fuelling increased urbanization, and driving technology adoption will create a business environment ripe for a customer evolution. With 300,000 plus internet users, more than 600,000 mobile subscribers, a pending end to a telecommunication monopoly, and upgrades to the existing broadband network; coupled with a significant oil and gas discovery at the heart of an anticipated economic boom; Guyanese business owners and their customers are standing at the fringe of a market transformation.

Solid Gold to Liquid Gold For countries like Guyana, whose economies are largely driven by natural resources, an oil and gas discovery of this magnitude would require a shift to incorporate the development of nontraditional industries. With the Liza-1 & 2 wells set to yield 1.4 billion barrels of oil and other crude opportunities buried in the Stabroek block, there will be the need for wide ranging infrastructural development to deal with production and export initiatives. In addition, there will be knock-on impacts on the travel and tourism industry, telecommunications, education, real estate and healthcare sectors, among others.

Market Evolution The evolving needs of the new urban Guyana will continue to propel change to become more economically viable, socially inclusive and globally sustainable. An increasing number of burgeoning cities are recognising the introduction of technology solutions to help meet these needs.

Songdo International City in Incheon, South Korea is a great example of a brand new, urban city. Though smart cities like Songdo may seem further off, the injection of ICT investments and infrastructural support will lead to an almost immediate change in the way we transact business. Local businesses will be forced to adapt to the needs of hundreds of technologically savvy 76

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expatriates as well as their own changing labour force.

Guyana Telephone and Telegraph’s (GTT) broadband upgrades are due to deliver improved data connectivity by the end of 2017. Liberalization of the sector and the operationalization of the Telecommunication Agency should be on stream by end of May (2017), both initiatives are expected to have long reaching impacts on the ICT industry. In 2005, Barbados completed their phased move toward liberalization, in order to drive greater integration into the global market and as a direct response to the needs of their developing local consumers. Guyana’s approach is even more proactive, with telecommunications shifts being driven by forecasts of their future telecoms needs and implementation of measures to effectively deliver these.

Technology Solutions and Business Success Businesses hoping to ride the wave of success brought on by the anticipated economic boom, would do well to start charting their course to embrace technology solutions delivery. The folks at McKinsey Global Institute (2016) have posited that there is an increase in “spending by consumers in emerging economies as their incomes rise to thresholds where consumption of services such as communications, transport, restaurants, and catering takes off.”

As Guyana’s workforce develops to meet the country’s new production needs, and urbanization pulls larger numbers of consumers into the city, companies must likewise shift their thinking. Forward thinking businesses must learn how to market their products and services along parallel tracks – dynamically adjusting to serve the new customer demographic, while keeping their existing brand audience happy.

One of the largest hurdles local businesses can face during this market transformation, becomes that of service delivery. A more diverse, technologically savvy, mobile workforce means that businesses are faced with a growing consumer base with greater purchasing power. How they make their buying decisions may change, moving from

the attraction of flashy ads, to seeking brand reviews and customer stories about brand experiences. Not only will their consumption patterns change, but their expectations around service delivery will also change. Brands serious about staying in business and keeping their customers happy, must think about adapting their service delivery processes to treat with the demands of this new audience.

Just Jump In In 2011 at our Caribbean Digital Expo Conference, Facebook’s Global Head of Agency Marketing – Jennifer Katula, shared advice with an audience of regional business owners, entrepreneurs, sales and marketing leaders. Where digital solutions were concerned, she advised, “Just jump in!”

As business, sales and marketing leaders trying to navigate this new market transition, our teams will be waiting for our direction. When we let our fear dictate the pace of our progress, we’re severely hampering its success. Not only are we impeding our success but we’re allowing our braver competitors to forge ahead.

How do you eliminate fear around technology adoption and manage the pending market shift? Often, our fear is driven by a series of assumptions, which may or may not be grounded in data. To address the concerns and apprehension you should: 1. D o the research – Whether on the specific technology, shifts in consumer habits, or adoption in your industry.

2. T rust a knowledgeable source – Tap into various sources that can give you reliable information 3. I mplement in small stages –We are firm believers in the crawl, walk, run methodology and have seen many businesses adopt a steady and strategic approach to implementation 4. E nsure your team is sold on your decision – you will be relying on your team to execute, so it would be prudent to ensure you have buy-in before moving too far ahead 5. T rain your team – Ensure that your team has the necessary skills to execute for themselves or manage the resources (internal or external) given the responsibility.

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Some who have dwelled in, or know much about developed countries, may want to go as far as to use the word starved. But, for modesty’s sake, let us stick with hungry. Guyana is a state that remains hungry for development.

Yet, this famished nation seems to be contented with the crumbs thrown its way by large companies who are managing to benefit from the country’s natural resources and via commercial business.

Those companies feel little obligation to contribute to the social and environmental wellbeing of the nation; a principle that fits into the framework of Corporate Social Responsibility (CSR). In fact, this notion is almost nonexistent in Guyana.

CSR generally refers to the voluntary involvement, or investment, of companies in social projects. These help to advance the society/community in which they operate.

These can be in areas such as health care, housing, education, safety, and the environment, among others.

A number of international standards inform the framework for what has become a universal understanding of the concept of CSR. The challenge for CSR in developing countries is framed by a vision that was distilled in 2000 into the Millennium Development Goals—“a world with less poverty, hunger and disease, greater survival prospects for mothers and their infants, better educated children, equal opportunities for women, and a healthier environment.”

the road ahead The content of a developmentally hungry nation

Unfortunately, these global aspirations remain far from being met in many developing CARICOM countries including Guyana.

Companies in CARICOM are being pushed to adopt a more strategic approach to CSR. In this approach, initiatives must be aligned to a nation’s development.

In some countries, CSR is used as a road map to development; a reality that is lacking in Guyana.

In South Africa, CSR is not only a frequent topic for conversation and debate, but also a tangible effort by many companies. Although the South African Companies Act 61 of 1973 does not oblige companies to engage in CSR projects, there are polices that explicitly address the need and relevance for corporations to acknowledge all stakeholders.

As part of their social responsibility a company in South Africa set 10 sustainable development priorities (including communities, HIV/AIDS, human rights, waste, pack-

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Cour tesy of Joy St.Hill

It is so unpopular that many Guyanese do not even understand the concept. It therefore underscores why “crumbs” are accepted.

aging, responsible drinking, water, energy and carbon, enterprise development and, transparency end ethics) that they pay special attention to and periodically monitor in every one of their affiliates.

“gift” worked out for Guyana’s 50th anniversary but noted that a more meaningful delivery is in the making. The Minister also indicated that the consultation process between Government and Exxon is ongoing.

Some companies coordinate and manage various sustainable development initiatives in the areas of education and training, capacity building, socio-economic development and health care.

Trotman said that his Ministry has four primary areas to which it wants ExxonMobil to commit. These, are land reformation, establishing green spaces, youth membership schemes, and a youth innovation fund.

In France, the government has strict CSR policies which are aligned with international developmental goals. Companies are so guided as to where help in that nation is most needed.

The road ahead It has been established that there is need for a more strategic approach. Where will that come from? Will it be a collaborative effort between government and private sector? Or will government take on the task single handedly? Whichever way, there is a need for a national strategy on CSR.

Closer to home, Trinidad is pegged as the CARICOM member of state with the most advanced CSRs. This is mainly as result of its energy resources which have attracted a large number of multinational and international organizations over the years.

Given the presence of such entities, investment in CSR-related activities has been growing. A study conducted in 2007 reported that Trinidad’s private sector played a major role in the provision of social and environmental services in that country.

What does CSR mean for Guyana?

Companies operating in Guyana get a free ride. The country does not take CSRs seriously and there is no known policy held by the APNU+AFC government on this concept.

For many decades, Guyana’s natural resources have been exploited by foreign and local companies some of which are yet to pay their dues. The current economic crisis has only added greater weight to the need for companies to do their part.

However, many companies are clinging to CSRs which can only be appreciated for their aesthetical value.

At least two arches have been erected within the last two years in the name of CSR. How is that going to impact the ordinary man; much less, the nation’s development?

Currently, the gold industry has two major companies but very, very little is known about the CSR taken on by those entities.

Chinese logging company BaiShanLin Development Inc. is one that has engaged in no known sustained form of CSR. Residents of Region 10 even complained of how the company destroyed their roads and refused to repair them. The government will soon ink new agreements with companies for logging; it is instructive to know if provisions for CSRs will be included in those deals.

However, it must be tailored to suit the existing needs of the country.

CSRs in developing countries are directly shaped by the socioeconomic environment in which firms operate and the development priorities this creates. For example CSR in Nigeria is specifically aimed at addressing the socio-economic development challenges of the country, including poverty alleviation, health-care provision, infrastructural development and education. This stands in stark contrast to many Western CSR priorities such as consumer protection, fair trade, green marketing, climate change concerns, or socially responsible investments.

The variety of social needs of Guyana in areas such as education, health care electricity, housing, roads entrepreneurial development, among many others offer a wide spectrum for corporations to launch valuable CSR initiatives that not only help solve pending social issues, but also empower local individuals to be part of their own communities’ economic growth.

Corporations could even opt to form partnerships with nonprofit organizations or with governmental agencies in an effort to expand the reach of its CSR actions and to serve local communities in a more efficient and impactful way.

Also, despite governments talk about a green economy little attention has been given to environmental issues and sustainable development.

Hopefully, in the near future, Guyana may know what it is to benefit from developmentally aligned CSRs.

Recently, Minister of Natural Resources, Raphael Trotman said that Oil giant, ExxonMobil will be making a meaningful contribution to the social fabric of Guyana.

He said that Exxon is very willing to do CSRs. So far, this multi-billion-dollar company has erected a fountain in the Botanical Gardens, falling comfortably in the theme of “aesthetical” CSRs. Trotman indicated that that was part of the

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A Possible Dilemma Will Guyana’s oil be a blessing or a curse?

Already, some are making the point that, in local parlance, Guyana can end up losing corn and husk following its graduation to an oil producing country.

Meaning, the resource will be depleted but Guyana may have nothing to show.

In fact, Opposition Leader, Bharrat Jagdeo has gone as far as to suggest that Guyanese may very well end up worse off with oil money than without. According to him, it is all about how the government goes about handling the money.

He is on record as speaking of a GY$80 billion “secret deal” that the government of the day made with the Demerara Distilleries Limited (DDL). According to Jagdeo this deal has in real terms meant that 10 years of oil royalties has been “given away”. This former president of Guyana goes on to stress that GY$8 Billion per year is in itself not enough to solve Guyana’s current economic problems. There are some who concur with the points made by Jagdeo. Others chalk it up to political rhetoric. But let us examine the facts.

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ExxonMobil is scheduled to start oil production in just over two years (by 2020) and since this significant oil find, Exxon has been busy making the required preparations to ensure that it is in a state of readiness to commence production as per its outlined timeline.

ExxonMobil has received its Environmental Permit from the Environmental Protection Agency (EPA) and it has also been granted its production license; the two things Exxon had to secure before it could validate its final investment decision.

On June 16, 2017 Exxon Mobil Corporation confirmed that it had made a final investment decision to proceed with what is to be the first phase of development for the Liza field.

But what does Guyana need to do to make sure that that it too is ready? Let’s take a look at what’s been done thus far.

Local Content Policy While many voices have been lamenting the scarcity of opportunities for local enterprises, the government has indicated its commitment to having in place a fit for purpose Local Content Policy, anda draft local content policy framework document has already been circulated to stakeholders (including the Private Sector representative groups) for review and comment. The feedback so far on the draft policy has been mixed with concerns about limited job opportunities, the safeguarding of Guyanese businesses and sector knowledge transfer amongst other things. Nevertheless, the general consensus is supportive of the government’s collaborative engagement with the private sector. Local content legislation is, after all, a matter of national interest where the private sector’s input as a legitimate participant should carry weight. Policy makers must ensure that the finalized local content framework is one that achieves general acceptability and places Guyana’s people and national development first.

Guyana’s local content policy must be viewed as an evolving framework and should be developed with that in mind. Furthermore, Guyana does not have the luxury of time on its side. The absence of a local content policy is affecting jobs and services for Guyana and its people right now.

For each day that the local content policy is under deliberation is one more day’s loss of benefit that could have been derived from a local content policy framework had it already been in place. So perhaps greater impetus needs to be thrown behind ensuring that Guyana is able to quickly have in place a framework at least to provide guidance on the direction government is taking when it comes to Local Content. A system, which facilitates the quick reaction to changes in the oil and gas sector in regard to local content policy enhancement should be the key topic of conversation as should the local content foundation pillars. In the words of Heraclitus “the only thing that is constant is change”, so realistically all stakeholders should be receptive to the idea that Guyana’s local content policy will evolve as the oil and gas landscape goes through its defined stages of introduction, growth, maturity and decline. Only an immediate local content policy will ensure that Guyana benefits from every stage and many commentators agree that Guyana is already behind the line in terms of it’s the definition of what Local Content may mean for the people of Guyana.

The Sovereign Wealth Fund (SWF) A Sovereign Wealth Fund (SWF) is an investment fund that is owned and operated by the state with a purpose to protect or boost the national economy. Minister of Natural Resources, Raphael Trotman has floated the idea of flowing both oil and gold revenues into that fund. It is of paramount importance that there is a SWF policy framework to guide the establishment and manage the ongoing operations of this very important fund, as per the government’s own admission.

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The importance of getting the SWF policy right is very important as the purpose of this key instrument is to safeguard Guyana’s national patrimony. Although, to date not much information is available on the details of the draft SWF policy, we do know that the Ministry of Natural Resources completed the draft in January of this year (2017) and it was sent to the Ministry of Finance for fine tuning.

We can only assume at this stage that the silence on the SWF policy is down to government not yet arriving at an agreed position and once this is done the details will be released to all stakeholders. However, it is imperative that Guyana is in a state of readiness and the policy surrounding the establishment of the SWF and its management is one of the facets that need to be, like the proverbial ducks; lined up. Several countries around the world have been able to make the best out of oil money because of their SWFs - Norway often being cited as a good example of this. Guyana is just over two years away from becoming an oil producing country, so the SWF policy has be lined up in readiness to receive its first proceeds in 2020.

Extractive Industries Transparency Initiative Full membership of the Extractive Industries Transparency Initiative (EITI) appears to also be a work in progress.

However, becoming a member of this global standard that is there to promote the open and accountable management of extractive resources is no easy feat. There was word that Guyana has its eyes set on a July submission of its application but there has been very little more publicly said on the progress of the application.

Even after the application is submitted, it is not a case that membership is granted immediately after. Although the drip of public information on this may be disappointing, it is pleasing to see that the government has sought fit to embark on being part of such initiative. At the same time readers might find it interesting to note that

a number of developed countries including the United States of America have still to sign up to the EITI. Institutional Strengthening Strengthening of Guyana’s institutions is yet another issue of priority as the country emerges into an oil & gas production nation. Much work is needed in this area and this cannot be done overnight as alluded to earlier, developing and building almost always takes more time than demolition. In order to ascertain a timeframe for the strengthening of Guyana’s institutions one may have to first determine how long it took to weaken these institutions. It is no secret that institutions like the Guyana Revenue Authority (GRA) need to be strengthened. By its own admission GRA has made public, cases of in-house sabotage of tax collecting information. With a vibrant ‘oil and gas’ sector, Guyana can expect the inflows of tax to be higher.

A weak tax collection agency in any country provides presents greater opportunities for exploitation. If the Guyana Revenue Authority (GRA) does not strengthen itself it will fall prey to all those who wish to evade oil and gas related taxes. Nonetheless, albeit the Guyana Revenue Authority (GRA) may not presently be where it needs to be, its recent announcement that it is establishing an Oil and Gas Unit must be viewed as a step in the right direction. As mentioned throughout the article, sober preparedness for the country’s ‘oil and gas’ sector has to be the order of the day and the readiness of the Guyana Revenue Authority’s (GRA) is an integral part of that sober preparedness.

Exxon Mobil Contract with the Government of Guyana It may be true to say that there is not much known about the specifics of the agreement, however, what has been widely touted is the 50:50 profit split and Guyana’s two percent royalty.

This 50:50 profit split sounds all well

and good to the uninformed mind. But the thing about oil is that profit is calculated after expenses are taken out. It should be made clear at this point that there has been no sight of the Agreement, so there is no way of knowing what expenses will be taken into consideration. However, research shows that Exxon’s expenses range from the heavy duty machinery and high technology equipment (i.e. capital items) used to get the oil out of the ground to its food bill. The pessimistic view that could be taken from this is that by the time Exxon is finished taking out its expenses, there could be very little or no profit; thus leaving Guyana void of oil profit proceeds for years. However, the optimistic view must focus on the fact that the Guyana Exxon relationship is a long term one and hopefully the Agreement has been sensibly negotiated. After all, Exxon will agree that the resources under the sea bed are Guyana’s and it’s in Exxon’s favour to ensure that Guyana is able to quickly able to realise noticeable development as this will facilitate greater public buy in and support.

The two per cent royalty is another much public discussion. Studies including one done by Wood McKenzie, show that oil prices will most likely stand anywhere between US$80- US$100 per barrel by 2020.

It stands to reason that the higher the price per barrel the higher the royalty will be. But, we were taught to never count our chickens before they hatch. So let’s not count on the hiked oil prices just yet. Let us look at what gives at this point--US$50 per barrel. At US$50 per barrel, Guyana will secure no less than GY$8B per year.

Two percent of US$50 works out to US$1per barrel.

This is to be multiplied by the amount of barrels that Exxon plans to produce a day (120,000), but let us take a minimum of 100,000. That works out to US$100,000 per day, which when multiplied by 365 days (one year) works out to US$36M the rough equivalent of which is around GY$8B a year. This should be something that excites Guyana’s population, because it is GY$8B a year that Guyana does not receive presently. However, the government must not take payment of royalties for granted and Guyana must not bury its head in the sand and see itself as being immune from a situation like Chad or other countries that ended up with bad deals.

Hopefully this article provides food for thought not only to those who are completely in the dark as to the pitfalls to be averted following this exciting discovery oil and the realisation of the wealth this oil should deliver to Guyana; but also those who need to guarantee that Guyana is in a state of readiness to ensure that Guyana’s emerging Oil & Gas will not be a curse but a blessing.

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NATIONAL NETWORK A Who’s Who of Business Contacts and Private Sector Organisations in Guyana

Private Sector Commission Umbrella organization for most private sector business and employer organizations. 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 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 Manufacturers’ & Services Association 157 Waterloo Street, North Cummingsburg, Georgetown Tel: 592-223-7405-6 Fax: 592-225-5615 Email: gmsaguyanaltd@gmail.com Website: www.gma.org.gy Guyana Rice Producers’ Association Public Road, Crane, West Coast Demerara.

Tel: 254-2012/13 Institute of Private Enterprise Development 253 South Road, Bourda, Georgetown.

Tel: 592-225-8949, 225-64675 Fax: 592 223 7834 Email: iped@ipedgy.com Website. www.ipedgy.com, Tourism & Hospitality Association of Guyana 157 Waterloo Street, North Cummingsburg, Georgetown.

Tel: 592-225-0807 Fax: 592-225-0817 Email: thag.secretariat@gmail.com/ info@exploreguyana. org Website: www.exploreguyana.org CHAMBERS OF COMMERCE Georgetown Chamber of Commerce and Industry 156 Waterloo Street, North Cummingsburg, Georgetown.

Tel: 592-227-6441; 225-5846; 592-226-3519 Email: gccicommerce2009@gmail.com Website: www.gcci.gy Berbice Chamber of Commerce and Development 12 Chapel Street, New Amsterdam, Berbice.

Tel: 592-333-3324 Email: wbcic2015@gmail.com

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Linden Chamber of Industry and Commerce 84 Riverside Drive, Watooka, Linden.

Tel: 444-2901 Rupununi Chamber of Commerce and Industry Block ‘A’ Takatu Drive, Lethem, Rupununi, Region 9 Tel: 592-772-2213 Email: rupununircci@yahoo.com, rupununircci@ hotmail.com Upper Corentyne Chamber of Commerce & Industry 157 Line Path ‘B’ Corriverton, Berbice.

Tel: 592-339-2935 Fax: 592-335-3738 Email: uccci.chamber@gmail.com Central Corentyne Chamber of Commerce 65 A Public Road, Rose Hall Town, Corentyne, Berbice.

Tel: 592-337-4778; 592-337-5120 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; 592-269-0030 Fax: 592-269-0022 Email: sase_shewnarain@hotmail.com, rose. ramdhan88@gmail.com BUSINESS ORGANIZATIONS Consultative Association of Guyanese Industry 157 Waterloo Street, North Cummingsburg, Georgetown.

Telephone# 592-226-4603; 592-225-7170 Fax: 592-227-0725 Email: ramchancagi@aol.net.gy/ goolsarancagi@ gol.net.gy GOVERNMENT OFFICES & AGENCIES Ministry of Business (with Responsibility for Tourism) 229 South Road, Lacytown, Georgetown Tel: 592-225-8949 Hotlines: Small Business & Consumer Affairs: 225-0665 Commerce: 225-2280; 225-6011; Licensing: 227-2718 Email: info@minbusiness.gov.gy

Ministry of Foreign Affairs Takuba Lodge 254 South Road & Shiv Chanderpaul Drive Georgetown, Guyana Tel: 592-226-9080 Fax: 592-223-5241 Email: minister@minfor.gov.gy Guyana Office for Investment (GO-INVEST) 190 Camp & Church Streets, Georgetown.

Tel: 592-227 0653 Fax: 592 225 0655 E-mail: goinvest@goinvest.gov.gy Website: www.goinvest.gov.gy Guyana Rice Development Board 117 Cowan Street, Kingston, Georgetown.

Tel: 592-225-8717 Fax: 592 225 6486 Email: singhjagnarine@gmail.com Guyana Tourism Authority National Exhibition Centre, Sophia, Georgetown.

Telephone: 592-219-0094/6 Fax: 592-219-0093 Email: info@guyana-tourism.com Website: www.guyana-tourism.com REGIONAL ORGANISATIONS Caribbean Community Secretariat (CARICOM) P.O. Box 10827, Turkeyen, Greater Georgetown.

Tel: 592-222-0001/75 Fax: 222 0171 Email: piu@caircom.org/ caricompublicinfo@gmail. com Website: www. caricom.org INTERNATIONAL ORGANISATIONS The World Bank 87 Carmichael Street, South Cummingsburg, Georgetown, Guyana Tel: 592-233-5036 Email: gmcdaniel@worldbank.org Inter-American Development Bank (IDB) 47 High Street, Kingston, Georgetown, Guyana Tel: 592-225-7951 Fax: 592-225-7951 Email: IDBGuyana@iadb.org

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WORLD EXCHANGE A List of Foreign Countries Already Represented in Guyana

Embassy of the Russian Federation Public Road Kitty, Georgetown Tele: (592) 225 2179; 226 9773 Fax: (592) 227 2975 Email: embrus.guyana@mail.ru

Indian High Commission 307 Church Street Georgetown Tele: (592) 226 3996; 226 8965; 226 3240 Fax: (592) 225 7012 Email: hoc.georgetown@mea.gov.in

Embassy of the Bolivarian Republic of Venezuela 296 Thomas Street Georgetown Tele: (592) 226 1543; 226 6749; 226 9041 Fax: (592) 225 3241 Email: embve.gygto@mppre.gob.ve

Embassy of the Federative Republic of Brazil 308 Church Street Georgetown Tele: (592) 225 7970; 226 9693; 227-5789 Fax: (592) 226 9063 Email: brasemb.georgetown@itamaraty.gov.br

Embassy of the People’s Republic of China Track ‘B’ Mandela Avenue Georgetown Tele: (592) 227 1651; 227 1652 Fax: (592) 225 9228; 226 4308 (Commercial) Email: chinaguyana@yahoo.com

British High Commission 44 Main Street Georgetown Tele: (592) 226 5881-4 Fax: (592) 225 3555 Email: bhcgeo@networksgy.com

Embassy of the Republic of Suriname 54 New Garden & Anira Street Queenstown Georgetown Tele: (592) 226 7844; 225 2631; 225 2846 Fax: (592) 225 0759 Email: surnmemb@gol.net.gya

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Embassy of the United States of America Young & Duke Streets Kingston Georgetown Tele: (592) 225 7960; 225 7960; 225 4900 Fax: (592) 2270240; 592 227 0221 Email: GeorgetownExecOffice@state.gov

Embassy of the Argentine Republic 66 Brummel Place Stabroek, Georgetown Tel: (592) 231-9521-22 Fax: (592) 231- 9505 Email: eguya@mrecic.gov.ar

Canadian High Commission High & Young Street Kingston Georgetown Tele: (592) 227 2081-2 Fax: (592) 225 8380 Email: grgtn@international.gc.ca

Embassy of the Republic of Cuba 46 High Street Kingston Georgetown Tele: (592) 225 1883; 226 8842 Fax: (592) 226 1824 Email: emguyana@networksgy.com

Delegation of the European Union 11 Sendall Place, Stabroek Georgetown Tele: (592) 226 4004; 226 5424 Fax (592) 226 2615 Email: delegation-guyana@eeas.europa.eu

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advertisers index Air Services Limited

9

Assuria 69 Bank of Nova Scotia

27

Banks DIH Limited

85

Camex Restaurants Inc

12

Caribbean International Shipping Services

87

Chetsons 19 Exxon Mobil Georgetown Chamber of Commerce & Industry (GCCI) Guyana Office for Investment (Go Invest) Hand In Hand Insurance Harris Paints IMON Wireless Solutions

1 77 7 75 100 88

Impressions 59 Integrated Security Services

91

Interweave Solutions

90

John Fernandes Group of Companies

11

KPMG 43 Machinery Corporation of Guyana (MACORP)

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Massy Limited Insurance

31

Meditron Inc.

91

National Milling Company of Guyana Inc. (NAMILCO)

87

National Hardware

65

New Thriving Restaurant

21

N&S Algoo

71

Pegasus Hotel

49

Pricewaterhouse Coopers

83

Ready Mix Concrete

81

Republic Bank

15

Rid-O-Pest 81 Roraima Airways

3

RRT Enterprises

23

SEBI- University of Guyana

67

Sterling Products

25

Sueria Manufacturing Inc.

95

The Brain Street Group

73

Toolsie Persaud Limited

93

Umami 89 Woods Direct

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BIOS Veronica Broomes PhD is a UK-based researcher and sustainability consultant.Current research, as part of a Masters of Law (LLM) degree, undertakes a comparative legal approach in assessing how legislation and regulations can facilitate participation of local businesses in supply chains of oil corporations. An experienced, Consultant, Trainer and Facilitator, Dr. Broomes’ has written articles and case studies on strategic CSR, inward investments and organisational governance and is author of the book ‘Who Invests Wins’. Her book provides insights into how CSR can be used by CEOs, Investors and Policymakers to create ‘Triple Wins’ for people, businesses and economies.

Brevard Nelson is the CEO and Co-Founder of a digital business solutions company—Caribbean Ideas Limited, an agency focused on delivering digital sales and marketing services to Caribbean businesses. www.caribbeanideas.com Collin Constantine is a PhD student in Economics at Kingston University and a Member of the Political Economy Research Group (PERG). His dissertation investigates the determinants of the Eurozone current account imbalances but his research interests extend to institutions, inequality, development economics and new political economy. He holds a MSc in Development Economics from SOAS, University of London and is a recipient of a PhD studentship from Kingston University in 2015.

Sherronie James (shezinluanda@hotmail.com) is a Leadership and Transformation Management professional with several years of experience working in emerging Oil and Gas producing countries globally. Ms James is the founder and CEO of Lyric.

Lars Mangal, President & CEO of TOTALTEC Oilfield Services Guyana Inc. Mr. Mangal is a senior professional with extensive international executive experience in the oil and gas industry.

Mr. Mangal founded TOTALTEC Oilfield Services in 2016, where he serves as a Company Director and Chairman. In addition, Mr. Mangal is currently an independent Advisor for a private venture in Denmark and a major international investment broker in oil & gas. Mr. Mangal also serves as an Advisor on the advisory board of WINS, an oilfield service technology development company based in Trondheim, Norway. Additionally, Mr. Mangal, serves on the advisory board of PETROGO.ORG, as an Executive Advisor. Mr Mangal is also a Company Director for TOTAL-BASE Services. Prior to founding TOTALTEC, Mr Mangal was Chief Commercial Officer and Senior Vice President for Welltec UK, Europe, Russia and CIS from October 2010 to August 2015. Welltec is a leading provider of robotic & completion solutions for oil and gas wells.

Before this, Mr. Mangal worked for 20 years at Schlumberger, a provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. Prior to leaving Schlumberger, Mr. Mangal was Global Vice President of Stimulation Services (2009-2010), responsible for managing the global business and technology development for Stimulation/ Hydraulic Fracturing Services & Acidizing Services.

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Ram & McRae Investment Supplement Corporation Tax Payable by companies on taxable profits at the following rates: Activity Rate Non-commercial activities

27½%

Commercial activities

40%

Telephone companies

45%

Commercial activity is defined as “an activity carried out by a company trading in goods not manufactured by it, and includes an activity of a commission agency, a telecommunication company, a body corporate licensed to carry on banking business in Guyana, and an insurance company carrying on in Guyana insurance business, other than long-term insurance…”

A minimum tax of 2% of turnover (revenue) applies to commercial companies unless proven to the satisfaction of the Commissioner General that tax payable using the rate of 40% is lower.

Special provisions are applicable to Gold and Diamond mining companies, companies with petroleum operations, insurance companies, non-resident shipowners and several other types of companies.

Corporation taxes are payable quarterly in advance with the tax return and final payment due on 30th April.

Income Tax Payable by individuals on gains or profits from any trade, business, profession or vocation; from any office or employment; from rentals, royalties, etc. on a graduating scale: Tax Bracket Rate

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First $720,000 or 1⁄3 of total income

0%

Next $1,440,000

28%

Remainder

40%

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Employee contributions to the National Insurance Scheme and interest paid on mortgages meeting certain conditions are deductible.

Income taxes are payable quarterly in advance except for employees where taxes are payable under the PAYE scheme.

The tax return and final payment are due on 30th April.

Loss Relief Tax losses for both companies and individuals may be carried forward indefinitely but may only be used to reduce taxes payable by 50% in any one year or, in the case of commercial companies, to no less than 2% of turnover.

Withholding Tax There are four forms of withholding tax: Rate istributions or gross payments to nonD residents, interest on savings accounts, interest on loans secured by bonds and similar instruments

Insurance premiums other than for long term insurance paid to non-resident insurers • Not having a place of business in Guyana • Having a place of business in Guyana

20%

10% 6%

Payments on account of any contract to nonresident companies

10%

Payments to contractors in excess of $500,000 per contract

2%

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Ram & McRae Investment Supplement Withholding tax on the first two items are final taxes while on the second two items are creditable against Corporation or Income tax as appropriate.

Withholding tax is generally payable within thirty days of the payment.

Capital Gains Tax Payable by companies and individuals on net capital gains at the rate of 20%. Gains are calculated by reference to market values on 1 January 2011 or cost thereafter.

Gains on acquisitions and disposals within 12 months are taxed as ordinary income while gains on disposal of assets held for more than 25 years or on the transfer of shares or stock held in a public company are exempt.

Property Tax Payable by companies and individuals on net Companies Individuals Rate First $10 million First $40 million

0.00%

Next $15 million

0.50%

Remainder Remainder

0.75%

Net property is valued by reference to market values on 1 January 2011 or cost thereafter.

Double Taxation Relief Guyana has entered into treaties for the avoidance of double taxation and the prevention of fiscal evasion with the member states of CARICOM (except Suriname), Canada, and the United Kingdom.

Value-Added Tax Applies at a standard rate of 14% with certain goods and services being exempt or zero-rated. The registration threshold is annual taxable supplies of $15 million.

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Fiscal incentives These include: •T ax holidays for activities which create new employment in certain regions or in certain activities; •W aivers of import duty on specified machinery, equipment and raw materials; •E xemption or zero-rating of certain goods and services for Value Added Tax, including transactions with a per unit price greater than $200,000 falling under an investment agreement entered into with the Government; •A ccelerated and annual capital allowances on industrial buildings and structures, machinery and plant, mines, oil wells, patents, scientific research and workers dwellings to certain key trades and businesses; •E xport allowances for non-traditional products to extra regional markets; National Insurance (Social Security) Payable by employees and employers at the rate of 5.6% and 8.4% respectively with a monthly insurable earnings ceiling of $220,000.

Payable by self-employed persons at the rate of 12.5% with minimum insurable earnings of $68,750.

The information presented in this supplement is necessarily summarised to provide an overview of tax and other matters relevant to the investor. The laws on which we rely may also change at any time. We therefore ask that you make contact with the firm for further details and assistance in doing business in Guyana.

Ram & McRae Chartered Accountants Professional Services Firm 157 “C” Waterloo Street, Georgetown, GUYANA Telephone: (592) 226-1072 E-mail: info@ramandmcrae.com Website: www.ramandmcrae.com

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Illustration by A h mad B arber

onward

Guyana 2020 It’s Oil or Nothing!

Publisher /P. Nigel Killikelly @ Dock Media Group Editor in Chief / Sandi A. Bowen Creative Director / Ahmad Barber Editor / E. Monique Johnson Art Director / Michael Angelo Chester Advertising Coordinators: / Charlene Stephen • Monique Tiwari Photo Editor / Christabelle St. Hill Contributors / Terrence Blackman • Lorraine Ince-Carvalhal • Abena Rockcliffe-Campbell Collin Constantine • Gillian Griffith-Edwards • Sherronie James • Anije Lambert • Lars Mangal Dave Martins • Kiran Mattai • Dellon Murray •Sheryl Nance Nash • Brevard Nelson Ram & McRae • Carinya Sharples • Ailene Torres • Carolyn Walcott • Kiana Wilburg Copy Editor / Pat Feimster Editorial Assistant / Nkosi Killikelly

Directors / Errol McCollin • Asha Rodney Contact Info: Business Guyana is an annual magazine published by the Georgetown Chamber of Commerce and Industry (GCCI).

156 Waterloo Street, Georgetown, Guyana, SA. Tel: 592-225-5846/592-226-3519 | Email: gccicommerce2009@gmail.com www.gcci.gy

Business Guyana 2017 was published by Dock Media Group, Omega Building, Suite 2, Dayrell’s Court Business Centre Dayrell’s Road, Christ Church, Barbados, West Indies. All rights reserved@2017 Phone: (246) 267.1688 / (592) 626.4575 Email:dockmediagroup@gmail.com / www.dockmagazine.com

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