– says local economist

WHILE it is apparent that investors are zeroing on Guyana, Senior Economics Lecturer at the University of Guyana (UG), Dr. Thomas Singh, has emphasised that the barriers to investments should be addressed so that the country can avoid poor quality investors.

Regional experts have highlighted that it is crucial for Guyana to improve its ease of doing business, since it has been, comparatively, more difficult to engage in business activities here. Previously, Trinidadian Senior Economist, Dr. Roger Hosein, told the Guyana Chronicle that if the country is successful in improving ‘doing business’ in Guyana, greater private capital injections and foreign capital injections will be facilitated.

According to the World Bank’s Doing Business Report for 2020, Guyana was rated 134 out of 190 countries in terms of the ease of doing business. But, this ranking was made known since October 2019, months before the novel coronavirus began spreading around the globe, resulting in significant disruptions.

“We have to address the impediments to investment. If not, the investment promotion effort will attract only poor quality investors and high-risk ventures that are looking for a high return,” Dr. Singh posited.

He, however, explained that alongside investment promotion activities, there must be government spending geared towards improving the “doing business” indicators. A country’s ease of doing business is determined through the use of numerous indicators. These include: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

This past week, President Irfaan Ali highlighted that the central government will be engaging the regional bodies on the modernisation of the institutional and legislative infrastructure to establish the single window approval system for building permits and construction permits. This, he emphasised, will greatly enhance competitiveness and improve productivity.

Dr. Singh also warned about ‘over-investing’ in activities within or closely aligned to the oil and gas industry. Instead, he said that emphasis should be placed on diversifying the economy.

“We must think of oil and gas as another in the string of commodities that Guyana has had. Commodity dependence does not make for easy diversification,” he contended.

But, should Guyana focus on real diversification where new and novel sectors are opened up, where there will be leeway for increasing economies of scale, the country would be able to reap greater benefits. Importantly, the economist also highlighted, “It is easy to have a more equitable economy when the production base is diversified with lots of sectors contributing to the economy.”