Blog Post

27 Jul
By: Tanika Jones 0

Address by Minister of Finance at Linden Business Summit

Linden Chamber of Industry Commerce and Development

Business Summit, Watooka House

 (July 25, 2019)

Remarks delivered by Hon. Winston Jordan

Minister of Finance

 

Mr. Chairperson

Mr. Victor Fernandes

President, Linden Chamber of Industry,  Commerce and Development

Other Members of the Head Table

Distinguished Ladies and Gentlemen

 

Good morning!

I am honored to have been invited to address you at the opening of this inaugural Business Summit that brings together experts from the public and private sectors and the Diaspora. My deep appreciation goes out to the organizers of this Business Summit.  This event provides us with an opportunity to bring together a vital cross section of peoples and organisations dedicated to the sustainable development of the Linden community against the backdrop of the natural beauty of this region. Please allow me, Mr. Chairman, to extend a special welcome to everyone present, especially those from the Diaspora. I wish you a very pleasant and productive stay.

 

Mr. Chairman, though I keep a busy schedule, I am always happy to come and break bread with Lindeners, whenever I can. Since becoming Minister of Finance, I have visited Linden frequently, and have assisted in a number of areas, including providing beds for dormitories, lights, bus sheds and an early learning centre. I have also supported social and other worthy causes. This support comes from a minor vote, which comes under my purview. And I am always happy to assist within the constraints of the available resources.

Mr. Chairman, this Business Summit may be the first of its kind, but I certainly hope that it is not the last. I anticipate that it will evolve into an annual event. I am particularly happy to see here today, many participants from outside of Linden, but who are integrally involved with business and commerce in the town. I expect that this Summit will strengthen these ties, and that it will create new vistas in trade and commerce not merely in the business sector, but across the spectrum of positive people to people relations. In these turbulent times, where partisanship seems to trump partnership, one can only hope that that this Business Summit contributes to advancing the principles and foundation on which this Coalition Government was built.

I note from the programme, that this Business Summit will be addressing a number of key issues affecting business opportunities and development in Linden. While you are at it, I hope that you will also discuss green businesses and oil and gas, two emerging sectors that have the potential to shape Guyana’s trajectory in the medium to long term.

Mr. Chairman, I observe that the theme for this Business Week and Exposition is “New Horizons, New Opportunities in 2019”. Well we are way past half of the year, already. And, with a mere 5 months to the end of 2019, I am not sure about the suitability of this theme. However, it becomes apt if you were to drop “in 2019”. I would then find the revised theme “New Horizons, New Opportunities” to be fitting, at this juncture, when Guyana is poised to become a major oil producing country.

Mr. Chairman, I am here to reiterate that Guyana is open for business. Over the last 4 years, we have been constantly reforming and adjusting our policies, rules and regulations to make the investment climate more favourable, predictable, facilitative and friendly. This is unlike what we met, when we entered Office: a situation of who knew whom and who could have ‘hobnobbed’ with the then political elite, were favoured with concessions, prime land and property at peppercorn rates, and other giveaways. Today, those who benefitted are being called upon by their ‘handlers’ to show their appreciation by confronting the Coalition Government and the independent, Guyana Elections Commission (GECOM). My Government has taken the courageous step to remove this parasitic approach to one in favour of equity. In short, we want to establish a welcoming economic environment for all, not a select few. Among our notable achievements have been comprehensive reform and simplification of the tax system, including: reduction in Company tax for non-commercial companies from 30 percent to 25 percent; reduction in the Value Added Tax from 16 percent to 14 percent; increase in the VAT threshold from $10 million to $15 million; implementation of a special income tax rate of 25 percent for Small Businesses (This is in addition to the numerous concessions available to such businesses under the various Tax Acts); increase in the threshold for filing a property tax return from $0.5 million to $40 million, and reduction in the property tax rate on chargeable property; exemption from Customs Duty, Excise Tax and VAT on a range of capital equipment, intermediate and consumer goods; removed remaining restriction on accessing the Export Allowance to “soft currency” areas in Caricom; and made it easier for individuals and companies to get refunds of taxes from the GRA. At the individual level, we have reduced the personal income tax from 30 percent to 27.5 percent, increased the personal income tax allowance from $600,000 to $720,000 or 1/3 of gross income, whichever is higher; removed income tax from the employee’s contribution to NIS; and given equal treatment to Vacation Allowance across the public and private sectors. While these business-specific reforms have been direct, the tremendous increase in Government’s expenditure on health and education, housing and water, and the physical and economic infrastructure, while maintaining low, single digit inflation and a relatively stable and free exchange rate; and rigorous measures to fight corruption have contributed immeasurably to the facilitative climate for investment in Guyana. And weaving all these into a strong, durable fabric is the Green State Development Strategy (GSDS) which, in turn, is linked to the Sustainable Development Goals (SDGs), which we aspire to achieve by 2030. Permit me to say, too, that our reforms have extended to measures aimed at greening our economy, including the imposition of an environmental levy; the banning of Styrofoam used in the packaging of beverage, food and food products; removal of taxes on bio-degradable containers; the waiver of all taxes on motor cars and motor cycles; the lowering of taxes on new vehicles and tyres; the restriction on the importation of re-conditioned vehicles; and the banning of the importation of used tyres.

As a result of the bold, dynamic approach to economic reforms, we have recorded positive growth for each of the years 2015, 2016, 2017 and 2018. Indeed, in 2018, our real growth of 4.1 percent was the highest over the past 4 years and the highest since 2014. In the words of the recent Article IV Consultation Mission of the International Monetary Fund (IMF) – an impartial observer – this growth was spread across most sectors. It was to a large extent due to the energy and enterprise of private sector participation such as your good selves. And, many of you would, by now, be familiar with the report of a NASDAQ contributor, which was reported widely in the local press. Here is an extract, as reproduced in OilNow, an online news outlet:

Fueled by mega oil discoveries and production set to hit close to 1 million barrels per day by the mid-2020s, the South American country of Guyana is listed at number 1 among the 5 fastest growing economies in the world.

With a projected growth rate of 16.3% during the four-year period 2018-2021, a Contributor at NASDAQ, the second-largest stock exchange in the world, says Guyana is the fastest growing economy globally. “With a GDP size of $3.63 billion (2018 Rank: 160), a growth rate of 4.1% in 2018 and 4.6% in 2019, Guyana’s economy is expected to grow by 33.5% and 22.9% in 2020 and 2021 respectively,”

With this great outlook for our country, it is truly amazing that we have those in this country who continue to peddle misinformation about the state of our economy and of our future. For too long, we have allowed a small, but influential group, to paint a negative picture of our country. It is time we change that narrative and begin to champion that panoramic view that shows the immense potential of this country, in general, and Linden, in particular.

We recognize the grave challenges we have to face and overcome. From the very beginning of our term in office, our Government identified as a national priority the imperative of bridging the coast with the hinterland, of the need to achieve balanced growth among our regions. In that framework, we recognize that, in spite of the progress made, there is a lot more that needs to be accomplished. We have to address economic and social issues that constrain greater progress and development in Linden. All of us must play a role in laying strong foundations for the sustainable development of this town.

Today, we should be focusing on all forms of investment which, when made with imagination and foresight, and implemented with responsibility and dedication, could play a crucial role in putting Linden’s development trajectory on track. So, this Business Summit should present to you a yet barely explored side of Linden— brimming opportunities and warm and friendly people, all eager to be part of the development adventure. Every dollar spent by our Government, every dollar disbursed by our development partners and every dollar invested by the private sector is a vote of confidence in the resilience and potential of Linden and its people.

Ladies and gentlemen, Region 10 should be congratulated for being the only region thus far to complete the Plan of Action for Regional Development (PARD). This is intended to guide the economic, social, environmental and other development of the Region. Our Government has put together a range of exciting investment projects to be implemented in Linden, inclusive of the Linden-Lethem road, of which the first leg – Mile Zero to Wisroc Junction – will commence in the third quarter of this year. We have secured financing from the Caribbean Development Bank (CDB) to design the Mackenzie-Wismar Bridge. Construction is expected to start in 2020. A study is currently on-going for the upgrading of the Soesdyke-Linden Highway, including the installation of lights. Already we have received a budget support loan, which Cabinet has determined will be used to finance the upgrade and lighting of the highway. Ladies and Gentlemen, coming out of the representation by the residents of Linden from the recent Government Outreach, is a decision to reconstruct the Christianburg Primary School at an estimated cost of $105 million. We have put in our pipeline a Linden Waterfront Development Project. Most important of all, we will ensure that the benefits obtained from these and other projects are shared equitably amongst the communities of Linden.

A sector scintillating with potential is tourism. It is the one sector that, perhaps, has the greatest potential for growth and to make Linden a destination town. Your Government recognises the importance of tourism in the development process, and has been putting the necessary infrastructure and policies in place to promote the development of the tourism sector in Guyana.  And we have begun to be rewarded for our efforts: as you are aware, Guyana was only recently recognized as the Best of Eco-Tourism destinations in the world. Linden is strategically located and endowed with tourism products to provide services at the international standards. The massive oil discovery has given Guyana prominence on the world map. The influx of tourist will continue to increase, so take advantage of this market niche that you have. You have the recently-renovated Watooka Guest House, which was once classified as the most prestigious of its kind in the then British Guiana. There must be some truth to this description when one considers the dignitaries who have stayed at this facility. This is the facility where many members of the royal family stayed, including Queen Elizabeth II. This tells me that there was much class and elegance attached to this facility. And so, I urge the current managers of renovated Watooka Guest House to return it to the same class and level of service that is offered to your customers.

Tourists crave extraordinary scenes like the Gluck Island, where the blossoming of Guyana’s National Flower and unusual species of caiman and otters can be viewed. The success of the Annual Rockstone Fish Festival that attracts large numbers of tourists, is another indication of Linden’s tourism potential

But let me emphasise that although you have great tourism potential, tourism cannot operate on its own. You need to create linkages with other types of businesses to expand and develop all sectors and increase economic gain. Tourists need good accommodation, they need food prepared to a certain standard, and they need entertainment. These should be some of the areas of focus in your short to medium term business plans. Take advantage of information technology to boost tourism. The internet can help to reduce cost, enhance operational efficiency, improve access to customers and improve service delivery.

Other sectors that offer great potential for investors include agriculture, livestock breeding, aquaculture and forestry, manufacturing, textiles and garment industry, power generation and distribution, education, health services, infrastructure and real estate, as well as industries that can produce value-added products for export. The potential of Linden, with its highly-skilled workforce, to contribute tangibly to the emerging oil and gas sector should be exploited vigorously. As you can see, the list of possibilities in Linden is long and it could go on expanding.

It is the foremost responsibility of a sovereign, democratically-elected Government to provide for the needs of their people in ways that nurture unity and harmony, particularly in a country such as ours, with its vast richness of diversity. Development for one should contribute towards development for all. And there is a role for all to play in working for responsible, visionary development grounded in goodwill, good sense, expertise, industry and creativity.

Our private sector partners, the Diaspora and our young entrepreneurs must bring an invigorating blend of urgency and pragmatism, a ‘can do attitude’, and a willingness to roll up their sleeves to get things moving. Your energy and enthusiasm, and your innovative approach can help to discover what others have overlooked, that is, the vast potential and promise of Linden and the wider region.

Distinguished ladies and gentlemen, the elevation of Linden to the status of a town, in 1970, was initiated because the Government of the day, the People’s National Congress, recognized that Linden was endowed with an abundance of resources, and had the potential to efficiently manage its own affairs. Let me emphasize, however, that although your community was one of the most neglected ones for a long time, your Government still has that positive view of Linden, and we will continue to support your endeavours to development this town and the Region. I’m aware that bauxite is a far cry from those halcyon days when the product defined Linden, but you have an abundance of other resources, and, if they are efficiently utilized, can make Linden into a major business hub, servicing all poles of the country.

The Linden Chamber of Industry Commerce and Development has a critical role to play in the economic development of this town. I expect that you will stimulate and galvanize economic development by creating and developing business opportunities and job creation. But to successfully achieve this objective there must be collaboration between the government and the business community. Success is a destination that you must define for this region.  It must represents the vision of a new vista; a new horizon; a new set of possibilities for the region – a change.  That means you will need new skills and competencies.  You will need to change to deal with success.

Change will be a key element in your journey.  Some people will resist change, and leaders are people too.  But when a leader resists change, it slows progress toward the new horizon even more because it is up to them to lead the way.

The journey toward this new horizon brings new challenges and opportunities.  How you handle these new challenges and opportunities will directly impact the speed at which you reach your destination, or if you ever reach your destination at all!  Without change, growth is not possible.  Without growth, new levels of success are out of your reach and you will never experience the new vistas that you seek.

And so, I am heartened by the fruitful discussions that have started between the Chamber and NICIL. It is my hope that stemming from these discussions you will be better equipped to help residents to turn what they know and do best into profitable small, medium and large scale businesses, and provide guidance and advice on business expansion and sustainability.

I understand that one of the main bugbears you identified in your meeting with NICIL is the regularization of industrial land, and I also understand that the Head of NICIL and the Head of the Guyana Lands and Surveys Commission (GLSC) are working to bring about a speedy resolution to this problem. The Linden Economic Network (LEN) financing facility is also accessible and I want you to encourage the people in this community to take advantage of this facility and narrow the financing gap.

Distinguished ladies and gentlemen, the impressive developments in the petroleum sector provide new opportunities for private sector businesses. The Government is putting in place an appropriate local content mechanism, but in order for local businesses to benefit from this new resource they have to operate at the requisite standards and pay close attention to the evolving demand for goods and services at every level of the oil and gas supply chain. An efficient Chamber of Commerce can play a critical role in this process by providing the necessary guidance and advice to its members and the business community.

Mr. Chairman, with the anxious arrival of first oil in 2020, our Government intends to pursue economic diversification while oil is profitable, to ensure that the country is not heavily dependent on oil revenue, to the detriment of other sectors. We will ensure that Guyana does not fall into the trap, like other oil producing countries, including some of our immediate neighbors that took this initiative only after oil revenues began to dwindle. Our Government is aware that the role of the private sector in the diversification process is inevitable, and we are facilitating private sector development and expansion by removing bottlenecks to doing business and making the business environment more attractive.  I have already outlined a number of reforms and measures that we have taken. You will recall, too, the introduction of the Trusted Trader Compliance Certificate, which allows for faster clearing of containers at wharves; and the Automatic Issuance of Temporary Income Tax and NIS Compliance Certificates. More recently, the passage of the Customs and Trade Single Window System Bill 2019 will allow parties involved in trade and transport to lodge standardized information and documents with a single entry point to fulfill all imports, exports and transit- related requirements. And, if you need to be reminded, an entire fiscal incentives regime has been in place for Linden and the Surrounding Communities for over two decades. It is unfortunate that advantage has not been taken of these bounties to turn Linden into a paradise.

Mr. Chairman, our new oil find is receiving attention globally. But your Government is aware that that oil resources are exhaustible and oil prices are volatile, hence the need for efficient planning to ensure that the revenues are spent wisely and the economy is insulated from shocks stemming from price volatility. I’m sure that you are familiar with the various unsolicited proposals in the press about what we should do with our new found wealth. At the level of Cabinet, we have not discussed any of those or other proposals. What I can say, however, that the business community, especially Small Businesses, can expect support both in terms of access to affordable financing, additional concessions and more tax reforms to stimulate businesses. I hope that your Chamber will play an integral part in determining how we should use our new found wealth.

To safeguard against the risks stemming from the petroleum sector, the Natural Resource Fund Act (NRFA) was passed in the National Assembly, in January of this year; we are now in the process of putting the relevant systems in place to operationalize the Fund. The private sector has a critical role to play in the administration and oversight of the NRF. Among other things, the Act stipulates that representatives from the private sector must be part of the Public Accountability and Oversight Committee and the Macroeconomic Committee. I am happy to report that we had received the full support of the immediate past leadership of the Private Sector Commission (PSC). We have written to the PSC to name their two representatives, and we hope that the new leadership will move with alacrity to do so.

In closing, let me once again congratulate Linden Chamber of Industry Commerce and Development for organising this Business Summit. I would like to invite you to join in making this Business Summit the successful launching of a great economic venture. Our Government will champion all those who invest responsibly, who respect the environment and who have at heart, the achievement of peace and prosperity of our people.

I look forward to a time when we can look back on this Summit, not just as the dawning of a splendid new era in the history of sustainable development for Linden and Region 10, but also as one of the landmarks of economic progress in Guyana.

Ladies and gentlemen, I thank you for the courtesy of your attention.

 

-END-

 

To view more images of this event visit our gallery.

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