– says Finance Minister
GUYANA has seen a rapid growth in foreign interests and Foreign Direct Investments (FDI) since 2015 and the FDI is expected to grow further, reaching a record US$1.2 billion by the end of this year.
This was according to Minister of Finance, Winston Jordan during his remarks at the opening ceremony of Massy Mega, on Wednesday.
According to a report by the Economic Commission for Latin America (ECLAC), while FDI flows to Latin America and the Caribbean contracted for the third year in a row in 2017, to US$161.6 billion, a decline of 3.6 per cent relative to 2016 and 20 per cent less than in 2011, Guyana’s FDI flows had recorded a positive, upward trend.
Minister Jordan, who made reference to the report, added that from a low of US$58 million, in 2016, FDI flows almost quadrupled, in 2017, to US$212 million. These flows have continued this trend, rising to US$826.4 million by the first half of 2019, compared to US$514.8 million for the similar period in 2018. “Expectedly, FDI flows have concentrated on the extractive sector, in particular gold and bauxite mining and latterly, petroleum exploration. However, as the ECLAC report noted, FDI grew in all sectors, except in manufacturing,” said the minister.
In keeping with the policy to diversify the economic base of the country, in order to avoid heavy dependence on the oil and gas sector, the Government, through an attractive mix of policies and reforms, is positioning the country to take advantage of the international interest in the recently discovered oil reserves, in order to promote other sectors, such as agriculture and tourism.
And so, as the economy evolves, Guyana will continue to make every effort to facilitate foreign investments across the potential economic sectors in the country. Government, he said, is well aware of the role foreign investments play in the growth and development process of a country.
According to Minister Jordan, foreign investment is a major catalyst for economic development and modernisation. And, Government knows that foreign investment helps to create a more competitive business environment and enhanced enterprise development. “These are powerful reasons to welcome foreign investment into Guyana that needs such capital injections, in face of low domestic savings, technology and capability,” said the minister.
Guyana has been steadily growing. Following the 4.1 per cent growth rate achieved in 2018, the economy recorded a growth rate of 4 per cent by mid-year 2019, and is on course to grow by 4.5 per cent in real terms by the end of 2019. “While impressive, in the context of what this Government inherited in May 2015, these can still be considered moderate growth rates,” said Minister Jordan.
However, from moderation to explosion, Guyana’s economy is projected to grow by 33.5 per cent and 22.9 per cent in 2020 and 2021, respectively, prompting NASDAQ to label Guyana as the fastest growing economy in the world.
The achievement of such “dizzying” growth rates would signal Guyana’s emergence from the dark days of being the “sick man” of the Caribbean, perpetually wracked by ethnic and political conflicts, to what Jordan termed as the jewel in the Caribbean’s crown. He said Guyana is poised to become the Green Dubai of the Caribbean.
But as Guyana awaits the production of oil and burst of development the Government is making every effort to diversify the economy to ensure that the country is not overly dependent on oil revenue. The experience of other oil producing countries has shown that the development of other potential economic sectors, while oil is still being produced, protects the economy from economic shocks when oil is exhausted or when it is no longer profitable. Among the sectors with obvious potential is tourism.