THE importance of foreign direct investment to economic growth and development has been widely recognised, documented and accepted; consequently, most countries are working towards improving their respective investment climates by developing a skilled labour force; refurbishing, modernising and expanding their infrastructure; enacting pertinent legislation and ensuring a cheap and reliable power supply.

Nimal Sanderatne in his article: “The importance of Foreign Direct Investment:
IMPERATIVES FOR ECONOMIC DEVELOPMENT”, points out:

“There is a strong relationship between foreign investment and economic growth. “Larger inflows of foreign investments are needed for the country to achieve a sustainable, high trajectory of economic growth. There are several irrefutable reasons for this. For the economy to grow by seven to eight per cent a year there is a need to invest around 35 to 40 per cent of GDP. National savings fall far short of this by nearly 10 per cent. Foreign borrowing and foreign investments have to meet this investment-savings gap. This is generally recognised and successive governments have attempted to provide various incentives to foreign investors. However, the Sri Lankan record of foreign investment has been far below expected levels and low in comparison with many other Asian countries.
Now that there is peace and security, the biggest hindrance for attracting foreign investments has been removed. Therefore, higher amounts of foreign direct investments are expected. Will this be realised? Peace and security are necessary conditions, but not sufficient conditions to attract foreign investment. This is clear from the fact that foreign direct investment (FDI) has been below expectations in 2010. What are the reasons for the sluggish inflows of FDI?
“What are the other conditions that must be fulfilled to attract FDI? There are many conditions that have to be put in place to attract FDI. It is important to ensure an attractive investment climate. Consistent macroeconomic policies, good governance, economic stability, guarantee of property rights, the rule of law and absence of corruption are among the conditions required to attract FDI. Consistency and predictability in economic policies and political stability are preconditions to attract FDI.”
With respect to our country, the political opposition during the post- 1992 period claimed that the PPP/C government was incapable of attracting foreign investment and the government was benefiting from investments secured by the Hoyte administration.
However, the reality was that because of the mayhem and terror that was deliberately unleashed by the opposition, the political climate became unstable and this obviously discouraged foreign investment. In fact, the opposition used the ethnicity of Mrs. Janet Jagan during her presidency to whip up political tension and lay the groundwork for political turmoil. It was during this period when we lost a major investment by the Canadian company Saskpower, which was on the verge of clinching a deal to take over the power sector.
Mrs Jagan’s ethnicity was used as the occasion for the war and not the cause of the war, to scare away investors and economic sabotage so as to destabilise the government, creating a similar situation to the early 1960s.
Nevertheless, the PPP/C government was able to bring back stability to our country and the country has been able to attract sizeable foreign direct investments and we have had impressive economic growth rates for eight consecutive years.
Unfortunately, the political opposition seem to have gone back to their old ways of scaring away investors and stalling progress. They have been instrumental is stalling the Amaila Falls hydro project and to some extent the specialty hospital project and the CJIA modernisation and expansion project. And their more recent “success” has been the pulling out of Muri Brasil which the local private sector has described as being most unfortunate.
The agenda of the opposition is very clear and therefore the Guyanese people have to make a clear decision as to whether they will allow the halting of progress and prosperity of our dear land.