Above: the Takutu river bridge linking Guyana and Brazil (Photo: GINA)
By Alexander Britell
Guyana, which is one of three non-island members of CARICOM, has seen strong economic growth of late as it works to pull out from the downturn. In fact, the country was estimated to have a growth of 4.6 percent in 2011, according to the World Bank, the second-highest in CARICOM after Haiti. As the country looks to build upon that growth, it is diversifying its economy, from increased trade and interaction with Brazil to investment in its gold mining sector. To learn more, Caribbean Journal talked to Komal Ramnauth, President of the Guyana Chamber of Commerce and Industry, about the ways Guyana’s economy is expanding, the country’s interaction with the rest of CARICOM and the work currently being done in the gold sector.
How would you describe the state of the Guyanese economy?
I think currently we have a robust economy. In the first half of this year, we had a 5.9 percent growth rate, and we have had growth in many sectors. We’ve had growth in agriculture, fisheries and forestry, in crops, in mining and quarrying and in the manufacturing sector. We also had growth in wholesale and retail trade. So all in all, I think where we are right now is that we have a healthy economy.
What sectors in the economy have outperformed?
Well, the mining sector has. The gold mining sector is performing very well, because of the current world market price of gold. The rice sector is developing, the financial and insurance sector is booming, because we have had a lot of expansion in our housing industry, so more people are borrowing and the private sector is borrowing a lot of money through financial institutions. So we have had growth in the financial and insurance sector, around 16 percent in the first half of the year.
How is the country’s tourism?
The tourism sector is actually growing. Recently, we’ve had more tourists arriving in Guyana, and in another couple of weeks, we’re going to have a huge amount of tourists coming to Guyana for motor racing, which is one of the activities that his actually boosting our tourist sector. We have ecotourism that is growing and expanding, and there has been a lot of horizontal growth, where companies have gotten larger and are offering more services. There are one or two new players, but the existing players in the industry are actually enjoying greater benefits and a greater amount of business.
What are some of the initiatives the Chamber is working on?
Well, currently the Chamber is working along with the USAID on a citizen security awareness campaign for the elections [in November]. We have just launched our annual awards, and our awards dinner is on Dec. 9. In September, we worked on a presentation for tobacco legislation, because Guyana is about to pass legislation for the tobacco industry. We had Ian Burns from REDjet come to speak to members of the business community, and in July, we had an election specialist from USAID to talk about the different things you can do during elections times, and how to raise awareness. We also launched our second edition of our Business Guyana magazine.
How much does Guyana interact with the rest of CARICOM? Can the quality of that interaction improve?
I think it can improve, because I think Guyana has a good partnership and interaction with some countries in CARICOM, like Trinidad, Barbados, where we do a lot of business. We’re also doing more business with Jamaica. I think what we need to do in the region is interact more, where we can trade among ourselves and then trade as a bloc with other, global countries. Guyana also has our neighbour Brazil, with whom we have continued growth and trade. We’re seeing more and more Guyanese companies exporting commodities to Brazil.
In what ways can the Brazil connection continue to develop?
It all depends on the road [the country has a current project to pave the Linden-Lethem road from Guyana to Brazil]. Right now we have a road, but when it’s rainy, it affects the trade.
Where do you see Guyana’s economy heading?
I think right now, Guyana is moving from a poor country to a healthy economy. All I can see is positive growth for the next 10 years – and I say, how do you transform from being a healthy economy into being a wealthy economy. Some of the things are being addressed right now, like tax reform. We just had a 5 percent reduction of the corporate rate, and a raising of the threshold from $35,000 to $45,000 before you start paying tax. And Guyana has a lot of foreign investment that is happening. Guyana Goldfields, a Canadian company, is planning almost $1 billion in Guyana in the mining industry, and will be investing some $650 million before they start production. And then we have another company, Reunion Manganese, that just started their investment a couple of months ago.
How fast is the gold sector developing?
Very, very quickly. And that’s where have to focus on things like security – security is a grave concern in that sector right now.