Last week, Halim Khan, the head of Region Three Private Sector Inc., declared in an article in the Guyana Chronicle that “the nation stands as a prime destination for investments.” While Khan and other government officials depict Guyana as a flourishing investment hub, they overlook an opportunity to candidly address the underlying concerns that must be resolved before Guyana can truly be considered a universally prime destination for all investors.
The mention of geopolitical uncertainty, as noted by Dolla Financial Services Limited impacting their decision to wind down operations, cannot be overlooked. It should be noted that the Foreign Investor was severely castigated by a so-called Economist and government mouthpiece, for daring to share an honest view of the environment in which they were forced to operate. Halim is hardly qualified to understand the nuances of international investments and the risk-reward assessments that foreign companies make before they risk stockholder wealth in economic caldrons like Guyana.
Political uncertainty often stems from complex and multifaceted issues which might include political instability, changes in government policies, disputes within the region, and a government’s rampant racial / ethnic discrimination, that could affect long-term business operations. Such factors can deter investment as they introduce a level of risk that may not be acceptable to all investors, particularly those from international markets seeking stable environments. Halim Khan’s business interests would be better served if he held the government he outwardly supports to the basic principles of equality, justice, equal opportunity and decency. This would be a practical solution and would serve to reduce political risk in Guyana.
Furthermore, while the Finance Minister Ashni Singh and VP Bharrat Jagdeo boasts of a resilient economy and a skilled workforce, what they do not say is that the economy is dangerously overdependent on the oil and gas industry and that Guyana’s workforce has sufferred years of neglect by the Ministry of Education, the consequences of which is a workforce where the vast majority of workers did not finish high school. The rush to roll out overnight online degree programs should be seen for what it is, an attempt to build a solid foundation on sinking sand.
Additionally, anyone who has done business in Guyana will attest to the ineffectiveness of the regulatory environment and the spectacular difficulty of doing business in Guyana without paying bribes or being guided directly by a minister of the government. The World Bank’s Ease of Doing Business index, which assesses aspects like obtaining permits, getting electricity, registering property, and enforcing contracts, is a critical gauge that potential investors consult and Guyana continues to rank poorly.
Additionally, infrastructure issues cannot be ignored. While the government may be making strides in developing major sectors like oil and gas, consistent and reliable infrastructure support in terms of roads, ports, and telecommunications is essential for a wide array of businesses. Without this, sectors outside of oil and gas will continue to struggle to achieve their potential, limiting overall economic diversification.
Another point of concern is the alignment of local business practices with international standards, particularly in terms of transparency and corporate governance. Investors are increasingly cautious about the ethical standings of their investment destinations, and any signs of corruption or inefficiency can be a deterrent. Corruption remains a massive sorun in Guyana.
While government cheerleaders like Halim Khan attempt to sell Guyana as a ‘promising investment destination’, foreign investors are not naive and will not be easily fooled. Guyana needs to systematically address the very real concerns outlined by international businesses regarding geopolitical uncertainties and other operational challenges or risk becoming a stage where investors hear, take a look and walk away. The vision of transforming Guyana into a prime investment destination is commendable, but it requires a balanced narrative that also considers the legitimate concerns and barriers faced by the international business community.