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Diplomacy in Action

2011 Investment Climate Statement - Guyana


2011 Investment Climate Statement
Bureau of Economic, Energy and Business Affairs
March 2011
Report
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Openness to Foreign Investment

The Government of Guyana (GoG) publicly encourages foreign direct investment. While its track record in attracting government-to-government development assistance is strong, its long-term record in attracting private sector investment is poor, though recent developments could lead to large investments in coming years in the hydroelectric and oil and gas sectors.

The Government of Guyana supports a traditional investment agency, the Guyana Office for Investment (GO-INVEST). GO-INVEST focuses primarily on agriculture and agro-processing, tourism, manufacturing, information and communication technology, seafood and aquaculture, and wood processing sectors. Potential investors should note that GO-INVEST is the first in a long line of bureaucratic hurdles required to obtain necessary permits and tax concessions. GO-INVEST finds many prospective investors’ proposals lack sufficient capital; these inquiries generally do not further progress. Due to the state’s major role in the domestic economy and the GoG’s tendency to centralize decision-making, relatively large foreign investments receive intense political attention, often from the highest political level. Over the past decade, the government enacted new laws or amended existing ones to encourage foreign direct investment, with mixed levels of success.

An important consideration for prospective foreign investors in Guyana is the Low Carbon Development Strategy (LCDS). Launched on June 8, 2009, the LCDS is a plan to transform Guyana’s economy, conserve its forests, and adapt to global warming while reducing carbon emissions. Initially relying on donor assistance, but eventually drawing on private investment in a global market for carbon credits, the GoG intends to channel forest conservation payments into human capital development, climate change adaptation, and strategic investments in low-carbon economic sectors like business process outsourcing, hydropower, sustainable forestry and wood products processing, ecotourism, biofuels, aquaculture, and other high-value, export-oriented agriculture. A Project Management Office has been established within the Office of the President to attract and vet potential foreign investors in sectors complimentary to the LCDS.

Following the launch of the LCDS, the Government of Norway (GoN) entered into an agreement to protect Guyana’s tropical forest for its carbon storage and other ecological services. Norway will provide up to USD250 million over five years if Guyana demonstrates continued low rates of deforestation and forest degradation. The GoG believes this financial commitment and inclusion of incentives for forest conservation in the 2009 Copenhagen Accord will lead to higher levels of LCDS investment in coming years.

Sufficient legislation exists in Guyana to enable foreign investment in the country, but its implementation is sometimes inadequate. The Investment Act of 2004 aims to stimulate socio-economic development by attracting and facilitating foreign investment. Other relevant laws include the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. Outstanding regulatory actions are still required for much of this legislation to be effectively implemented.

The judicial system is generally perceived to be ineffective in enforcing legal contracts. Suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana. To redress this obstacle to investment, the GoG, with support from the Inter-American Development Bank (IDB), established a Commercial Court in June 2006. The court, however, has not functioned as envisioned.

Foreign ownership of companies is permitted. There is no mandatory screening of foreign investment. The government, however, conducts de facto screenings of most investments to determine which businesses are eligible for special tax treatment, access to licenses, land, and approval for investment incentives. In spite of recent efforts to remove discretionary power from the various ministries, ministers still retain significant authority to determine how relevant laws, such as the Investment Act, Small Business Act, and Procurement Act, are applied.

In general, foreign investors receive the same treatment as local investors in Guyana. One exception is the special approval required for local financing. Foreign borrowers applying for a loan of more than GYD2 million (USD10,000) must request permission from the Minister of Finance. This requirement reflects Guyana's preference for foreign investors to bring capital into the country. In most cases, foreign investors seek credit abroad to avoid Guyana's high interest rates.

Another exception exists in the mining sector, where ownership of property for small and medium-scale mining is restricted to Guyanese citizens. Foreigners may enter into joint-venture arrangements under which the two parties agree to jointly develop a mining property. There are no restrictions on the percentage of the investment shouldered by the foreign investor; these arrangements are strictly by private contract. Such relationships are highly risky, however, and the U.S. Embassy strongly encourages U.S. investors to exercise caution when exploring possible joint ventures with Guyanese mining entities.

Foreign investors generally have equal access to privatization opportunities. For some larger operations, foreign investment is openly preferred. Since 1992, the GoG has privatized 16 of 20 government entities. Only Guyana Oil Company Limited, Guyana National Printers Limited, Guyana Sugar Corporation, and Guyana Power & Light (GPL) remain as major state-owned enterprises (SOE). The head of the Privatization Unit/National Industrial and Commercial Investments Limited also serves as Chairman of Guyana Power and Light. There is little GoG impetus for further privatization of these SOEs.

Most large-scale investments in Guyana's infrastructure are government projects financed by international lending institutions, with the IDB – and by extension the U.S. taxpayer – as the largest lender. U.S. firms are generally given equal access to these projects, though many are too small to interest U.S. bidders.

In evaluating the ease of doing business in Guyana, a World Bank and International Finance Corporation Report "Doing Business 2011" ranked Guyana 100 out of 183 countries. The process to start a business in Guyana is challenging. For example, an entrepreneur can expect to go through eight procedures requiring an average of 30 working days total in order to launch a business. Similarly, the time to build a warehouse involves eleven procedures (including obtaining licenses and permits) and 133 days. To enforce a contract, some 36 steps are required with an expected timeline of 581 days to complete the process.

In assessing Guyana's competitiveness, the World Economic Forum publication "The Global Competitiveness Report 2010 - 2011" ranked Guyana 110 out of 139. The report identified the following as the most problematic factors for doing business in Guyana: tax rates, crime and theft, inadequately educated workforce, poor work ethic in national labor force, access to financing, corruption, inefficient government bureaucracy, tax regulations, inadequate supply of infrastructure, and inflation.

Guyana's economy is 48.4 percent free, according to the 2010 Index of Economic Freedom, which makes Guyana the world's 153rd freest economy out of 179 countries. The indicators used to determine Guyana's economic freedom were business freedom (63.4%), trade freedom (71.3%), fiscal freedom (55.9%), government spending (26.3%), monetary freedom (71.0%), investment freedom (30.0%), financial freedom (40.0%), property rights (35.0%), freedom from corruption (26.0%), and labor freedom (65.2%). Guyana's overall score remains unchanged from last year, improvements in three of the ten indicators were offset by declines in investment freedom and property rights. Guyana continues to rank 27th out of 29 countries in the South and Central America/Caribbean region, and its overall score of 48.4 percent remains well below the world average of 59.4 percent and the region average of 59.7 percent.

Year

Measure

Index/Ranking

2010

TI Corruption Index

116

2010

Heritage Economic Freedom

153

2011

World Bank Doing Business

100

2010

MCC Government Effectiveness

0.69

2010

MCC Rule of Law

0.20

2010

MCC Control on Corruption

0.30

2010

MCC Fiscal Policy

-8.5

2010

MCC Trade Policy

71.3

2010

MCC Regulatory Quality

0.08

2010

MCC Business Start-Up

0.943

2010

MCC Land Rights and Access

0.815

2010

MCC Natural Resource Management

73.60

Conversion and Transfer Policies

The Guyana dollar is fully convertible and transferable. According to the Bank of Guyana, the average exchange rate is USD1 to GYD201 (December 2009) www.bankofguyana.org.gy/. There are no limits on inflows or repatriation of funds, although there are spot shortages of foreign currency. Regulations also require that all persons leaving and entering Guyana declare all currency in excess of USD10,000 to Customs authorities at the port of entry. There is no limit to the acquisition of foreign currency, although the government limits the amount that a number of state-owned firms may keep for their own purchases. Regulations on foreign currency denominated bank accounts in Guyana allow funds to be wired in and out of the country electronically without having to go through cumbersome exchange procedures. Foreign companies operating in Guyana have experienced no government induced difficulties in repatriating earnings in recent years.

In practice, many large foreign investors in Guyana use subsidiaries outside Guyana to handle earnings generated by the export of primary products, including timber, gold, and bauxite. Those companies then advance funds to their local entities to cover operating costs.

The exchange rate is commercially determined according to market supply and demand using telegraphic transfers by the three largest commercial banks. The government has intervened in support of the Guyana dollar with some success. The government will likely continue to intervene in defense of the Guyana dollar and its international reserves.

Guyana is neither an important regional nor an offshore financial center, nor does it have any free trade zones. Money laundering is perceived as a serious problem, and has been linked to drug trafficking (principally cocaine), firearms, corruption and fraud, as well as to the influx of foreign currency that artificially supports the exchange rate of the Guyana dollar. Guyana has a large informal economy in which cash is preferred by both buyers and sellers for most transactions; it is highly vulnerable to money laundering.

Expropriation and Compensation

On August 16, 2001, the National Assembly approved the Acquisition of Lands for Public Purposes Bill 2001. This Act cleared the way for the government to acquire private parcels of land at prices below market value. Since its inception, the government has exercised the Act in a limited capacity, mainly for development purposes deemed to be in the national interest (e.g., clearing the way to build the Berbice River Bridge) and in breach of contract cases.

There has been no evidence of discrimination against U.S. investments, companies, or representatives in the application of expropriation laws.

The forestry sector is at greater risk for expropriatory or similar actions. Certain forestry companies and individuals have been subject to action under the aforementioned 2001 Act, due to breach of contracts with the government, non-use of their concessions and/or owing debts to the government.

Dispute Settlement

Guyana is a signatory to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. International arbitration decisions are enforceable under the Arbitration Act of 1931. Guyana is also a member of the International Center for the Settlement of Investment Disputes (ICSID).

There has been only one investment dispute in recent years involving U.S. interests in Guyana. U.S.-based Atlantic Tele Network (ATN), which owns 80% of Guyana Telephone and Telegraph (GT&T), is involved in a dispute with the GoG over the company’s legal monopoly on land-based telephony. Under an exclusive contract signed with the government in 1991, ATN has the exclusive right to provide such service in Guyana for 20 years, with an option to extend the contract for a further 20 years. Guyana's President, Bharrat Jagdeo, has repeatedly stated his intentions to open up the market prior to conclusion of GT&T’s contract in 2011, and is circulating draft legislation within the cabinet. Negotiations between ATN and the government began in 2008, but no definitive settlement has been reached.

Performance Requirements & Incentives

Although there is no explicit government policy regarding performance requirements, some are written into contracts with foreign investors. Some contracts require a certain minimum level of investment. Investors are not required to source locally, nor must they export a certain percentage of output. Foreign exchange is not rationed in proportion to exports, and there are no national ownership or technology transfer requirements.

The Status of Aliens Act allows a non-resident of Guyana to acquire and dispose of assets and moveable and immoveable property in the same manner as a citizen of Guyana. The government treats domestic and foreign investors alike with regard to investment incentives. There are incentives offered to all investors equally, as well as incentives available based on specific criteria such as location of an investment or investment in specific government-targeted sectors.

The Fiscal Enactments Act of 2003 allows the Minister of Finance to grant exemptions from Corporate Tax for a period of five years to an investor if the activity demonstrably creates new employment in certain regions of the country (primarily hinterland regions 1, 8, 9, and 10). In the case of new economic activity, the Minister may grant a tax holiday of up to ten years if the activity falls under the following categories: non-traditional agro processing (excluding sugar refining, rice milling and chicken farming); tourist hotels or eco-tourist hotels; information and communications technology (excluding retailing and distributing); petroleum exploration, extraction, or refining; and mineral exploration, extraction, or refining. The Minister maintains final discretion over which investors receive corporate tax exemptions.

The Income Tax Act of 1998 provides for accelerated depreciation of plant and equipment on applicable trades outlined in the Act; export tax allowances for manufacturing or processing of non-traditional products exported to countries outside of the Caribbean Community; and research and development tax allowances.

The authority to approve exemptions and waivers from customs duty, excise tax and value added tax on plant, equipment, machinery and spare parts lies with the Minister of Finance. Investors are expected (though not required) to submit business proposals to GO-INVEST that outline the proposed project, the value of the investment, and employment to be generated from the investment. GO-INVEST reviews the proposal and makes a recommendation to the GRA in accordance with the Customs Duties Order of 2003. The GRA determines whether imports comply with regulation and whether those materials are eligible for tax relief. If the project is deemed eligible for relief, GRA makes the final recommendation to the Minister of Finance that approval for exemptions and waivers from customs duty, excise tax and value added tax be granted.

Similarly, a tax allowance is granted for non-traditional exports outside of CARICOM. Traditional products ineligible for the allowance include rice, sugar, bauxite, gold, diamonds, timber, petroleum, lumber, shrimp, molasses, and rum. The allowance ranges between 25% and 75% and at least 10% of sales must be exported to qualify.

In certain circumstances, Guyana also offers duty-free imports and tax holidays to investors on request. A key factor in the determination of duty-free status and value added tax waiver is the creation of value added. The authorities note that blanket approvals are not given; instead each import consignment is reviewed individually. When granted, the duty and value added tax is often waived completely or lowered, based on the industry and item. The authorities note that tax holidays are less likely to be granted than duty-free status or a value added tax waiver.

A number of companies/businesses both foreign and domestic have benefited from investment incentives such as corporate tax exemption, income tax (In Aid of Industry) exemption, export tax exemption on non-traditional exports and, exemption from customs duty, excise tax and value added tax. These companies/businesses include Queens Atlantic Investment Incorporated, ETK Inc., Groundstar Resources Inc., National Milling Company of Guyana, Bounty Farm Limited, Barama Company Limited, Guyana Quality Seafoods, Guyana Sugar Corporation, and Engineering and Construction Incorporated.

Right to Private Ownership and Establishment

The right of foreigners to own property or land in Guyana is specifically protected under the Constitution. Private entities may freely acquire and dispose of interests in business enterprises, although some newly privatized entities have limits on the number of shares that may be acquired by any one individual or entity (domestic or foreign). Similarly, the articles of association of some firms prohibit the issuance of more than a certain number of share transfers to any one individual or company in an effort to prevent attempts to gain control of such companies in the secondary market.

Foreign and domestic firms have the right to establish and own business enterprises and engage in all forms of remunerative activity. Licenses are required, however, in mining, telecommunications, forestry, banking, and tourism sectors. Getting all the licenses needed to operate in Guyana can be a time-consuming task. Even according to GO-INVEST's optimistic Investor's Roadmap, the estimated processing time to obtain the approvals to lease state or government owned lands may take one year; some investors report much longer delays.

Protection of Property Rights

Upon independence, Guyana adopted British law on intellectual property rights (IPR). The GoG has taken some piecemeal steps to modernize IPR laws, but legislation does not meet international norms and enforcement is nonexistent. For instance, Guyana passed the Geographic Indication Act in July 2005, giving protection to local products that are uniquely Guyanese in origin, but no such modern legislation exist to protect the IP rights of foreign investors. Guyana joined the World Intellectual Property Organization (WIPO) and acceded to the Bern and Paris Conventions in late 1994. Registering a patent or trademark can take six months or longer, but there is no enforcement mechanism to protect intellectual property rights. It follows that patent and trademark infringement is common. Local television stations, including the state-owned and operated National Communication Network (NCN), pirate and re-broadcast TV satellite signals with impunity. Most music, videos and software for sale is pirated. Book piracy is also rampant, especially foreign textbooks; some estimates say illegally photocopied textbooks account for nearly one-third of local sales. Guyana has not ratified an intellectual property rights agreement with the U.S. Trade Related Intellectual Property Rights (TRIPS) draft legislation was prepared by the Ministry of Foreign Trade and International Cooperation and Ministry of Legal Affairs in 2001, but the government shelved it.

Transparency of the Regulatory System

Guyana has no anti-trust legislation. In April 2006, Parliament passed a Competition and Fair Trading Act, which targets offenses such as price fixing, conspiracy, bid-rigging, misleading advertisements, anti-competitiveness, abuse of dominant position, and resale price maintenance. The Act provides for a Competition Commission to have authority to review anti-competitive business practices, but the commission is not fully functional. A competition commissioner has been appointed and it has received complaints, however, it is not staffed to an adequate level.

Historical factors, Guyana's small population and economy have led many sectors to be dominated by one or two firms. Capital markets are immature and the allocation of investment takes place without reference to market-based alternatives. Bureaucratic procedures are cumbersome and often require the involvement of multiple ministries. Investors often receive conflicting messages from various officials and have difficulty determining where the authority for decision-making lies. In the current absence of adequate legislation, much decision-making is centralized. An extraordinary number of issues are resolved in Cabinet or in the Office of the President, a process that is not transparent and often results in long delays. Attempts to reform Guyana's many bureaucratic procedures have not succeeded in limiting red tape.

Generally, draft pieces of legislation are available in the Parliament Library for public review.

Efficient Capital Markets and Portfolio Investment

Guyana's banking system remains underdeveloped. Inefficiencies and delays periodically plague the foreign currency market. Businesses report that currency shortages can result in significant delays in converting Guyana dollars to U.S. dollars at some banks. Because Guyana has yet to develop an effective interbank trading system, some banks may be short of foreign exchange while others have currency available.

The Financial Institutions Act of 2004 gives the Central Bank power to take temporary control of financial institutions in trouble. Prior to the implementation of this law, the Central Bank had been criticized for not taking a more proactive role in helping insolvent local banks.

Interest rates on capital loans typically range from 10% to 20%. The Minister of Finance must give permission for a foreign investor to borrow more than USD10,000 (GYD2 million) from local banks. The government sells GoG Treasury Bills at auction to finance the public debt, and other government-controlled rates move with the Treasury Bill rate. Past private attempts at bond financing have been unsuccessful, and no private companies have made large bond offers in recent years.

The banking system in Guyana is liquid. Local bank statements reveal that deposits continue to increase even as loans remain flat; a trend that suggests the existence of a large underground, cash-only economy. Local analysts estimate that the underground economic activity accounts for 50 percent or more of Guyana's total economic activity. Eager to lend money, but skeptical of Guyana's legal system, banks claim that they are unable to find suitable local applicants for loans at prevailing interest rates.

The GoG encourages companies to finance new operations by offering shares on Guyana's stock market. In 2003 the Guyana Association of Securities Companies and Intermediaries Inc. (GASCI) http://www.gasci.com/index.htm registered with the Guyana Securities Council to operate a stock exchange and an association of securities companies and intermediaries. Its members, the stockbrokers who compete against each other in share trading, own GASCI. GASCI relies on trades to support the exchange's operations. The small volumes traded, however, have been insufficient to meet organizational expenses. Consequently, the association has struggled to maintain adequate staffing levels.

The Guyana Securities Council (GSC), the regulatory body for the securities industry, has been the target of two high-profile lawsuits by two of the largest local conglomerates (DDL and Banks DIH) over disclosure issues and the interpretation of the Act governing GSC operations. The GSC has also struggled to garner the support of listed firms that are unwilling to disclose relevant information. Individual investors generally prefer to utilize the banking sector to finance investments, although one Canadian company reported that it was able to successfully finance its operations using the stock market in late 2004.

Competition from State-Owned Enterprises

Private enterprises compete with public enterprises under the same terms and conditions of market access, credits and other business operations, and licenses.

Four SOEs exist in Guyana: Guyana Sugar Corporation (GUYSUCO), Guyana Gold Board, Guyana Oil Company Limited, Guyana Power and Light Inc and the Guyana National Printers. The corporate governance structure of Guyanese SOEs requires that the senior management report to the chief executive officer, who reports to the board of directors, who in turn report to a government minister. Political interventions occur in the management of SOEs since their boards of directors are filled through political appointments directed by the Office of the President.

The National Industrial and Commercial Investments Limited (NICIL), a private limited company, acts as subscriber and manager of the Government's shares, stocks, and debentures of any company, cooperative societies or other corporate body. It also manages government-owned real estate properties, including their acquisition, disposal or rental. The main objectives of NICIL are to systematically manage the Government’s shareholdings and minimize conflict of interests.

Guyana underwent a significant privatization process during the 1990s, divesting many of its holdings in the banking, telecommunications, agriculture, and manufacturing sectors. Since then the pace of privatization has slowed. Since 2003, the GoG has privatized only two entities: Guyana National Co-operative Bank, which now does business as Republic Bank; and National Edible Oil Company, acquired by a biofuels company. Furthermore, the State reduced its participation in two of Guyana's leading bauxite mining companies, the Aroaima Mining Company and Linmine Bauxite.

Public corporations are required by law under the Public Corporation Act to publish an annual report no later than six months after the expiry of each calendar year. The Public Corporations Act requires that the accounts of a public corporation be audited annually by an independent auditor.

Corporate Social Responsibility

Compared to corporate social responsibility norms in North America and Europe, Guyana-based businesses lag. Though many businesses engage in charitable acts, the totality of these deeds does not constitute good CSR practices. Guyanese consumers generally are not aware of CSR principles and do not demand them from local businesses they patronize.

Political Violence

 Crime is a major problem in Guyana, and it has deleterious effect on the economy and investment. U.S. companies and individuals have not been singled out as targets of politically-motivated violence. In the past, increased violence has occurred around elections, and this trend will likely continue as national elections draw near in the second-half of 2011. Long overdue local elections also contribute to political instability.

Serious crime, including murder and armed robbery, continues to be a major problem. The murder rate in Guyana is three-times higher than the murder rate in the United States. In 2008, an attack in the Georgetown suburb of Lusignan and in the Essequibo River town of Bartica by heavily armed gangs resulted in the deaths of more than 20 persons, mostly innocent Guyanese civilians. There were also several instances of random shootings at night at police headquarters or police stations in Georgetown. Guyana Security Forces shot and killed the leader of the gang thought to be responsible for these incidents, however, there is still concern that remnants of these criminal gangs, and others, exist and continue to operate. U.S. citizens are encouraged to maintain a high level of vigilance, consider security issues when planning activities throughout Guyana, and avoid traveling at night, when possible. More information for business travelers visiting Guyana is available at: http://travel.state.gov.

Some acts of violence are apparently politically motivated. On July 17, 2009, arsonists razed the Ministry of Health’s main building and an annex, destroying records and vehicles along with the building, in a major blow to the health sector. On November 4, 2009, armed gunmen went on a rampage in Georgetown attacking two police stations and setting fire to the High Court (equivalent of Supreme Court in U.S.) and a major public high school. Though these violent acts have not destabilized the GoG, they raise legitimate concerns about the government’s ability to maintain some modicum of law and order.

Corruption

Allegations of corruption are common. Transparency International's 2010 Corruption Perceptions Index (CPI) ranked Guyana 116 out of 178 countries surveyed, assigning the country a CPI Score of 2.7 (with 10 being very clean and 0 being highly corrupt). In the Americas, Guyana is ranked 22 out of 28 countries/territories. Although the government passed legislation in 1998 that requires public officials to disclose their assets to an Integrity Commission prior to assuming office, the Integrity Commission has never operated.

The Procurement Act of 2003 provides for the establishment of a National Procurement and Tender Administration Board (NPTAB). The members of this board are appointed by the Minister of Finance. There are widespread concerns about inefficiencies and corruption at the ministerial, regional, or national level in awarding of contracts. The Auditor General has noted continuous disregard for the procedures, rules, and the law that govern public procurement systems. The Constitution of Guyana provides for the establishment of a Public Procurement Commission to prevent corruption in the procurement of goods and services and the execution of works, but it has not yet been established by Parliament.

The Criminal Law Act classifies both corruption and bribery as illegal. Offences carry a penalty of GYD 390,000 and three to seven years imprisonment.

On April 16, 2008 Guyana ratified the United Nations Convention against Corruption. Guyana is neither a member of the Organization for Economic Cooperation and Development (OECD) nor a signatory to OECD Anti-Bribery Convention. As a member of the Organization of American States, Guyana ratified the Inter-American Convention against Corruption on December 11, 2000.

The World Economic Forum, “Global Competitiveness Report 2009-2010,” identified corruption as the third-largest obstacle to doing business in Guyana. There is corruption at every level of government as well as in the private sector. The report contends that widespread corruption discourages potential foreign direct investments and foreign investors, and it also undermines economic development and growth. 

Bilateral Investment Agreements

Guyana does not have a Bilateral Investment Treaty with the United States. Negotiations began in 1993, but broke down in 1995 due to disagreements on formal investment rules. There have been no continuing negotiations. Guyana has bilateral investment treaties with China, Cuba, Germany, South Korea, Switzerland, and the United Kingdom. Guyana has proposed bilateral investment treaties with Colombia, India, Russia, and Spain. Guyana has double taxation treaties with Canada, Kuwait, the United Kingdom, and CARICOM countries. 

OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) renewed its support for U.S. investors in Guyana in 2000 following the settlement of a long-standing dispute between an OPIC client, Green Mining, Inc., and the GoG. The EX-IM Bank offers insurance and short-term loans for the private sector, though there has been little recent activity. 

Labor

According to the Bank of Guyana’s Annual Report of 2009, Guyana's labor force comprises approximately 282,600 persons of which 22% or 62,172 workers are unionized. Approximately 33,064 persons are unemployed, resulting in an unemployment rate of 11.7 percent for 2009. Unionized workers are represented by 18 unions of which 13 fall under the umbrella Guyana Trade Union Congress; five others are breakaway unions. Four of these breakaway unions fall under a new umbrella organization, Federation of Independent Trade Unions of Guyana.

 Education and skills development are provided in primary, secondary, and technical schools, as well as at the University of Guyana and privately-owned institutions of higher learning. Individual companies mount various programs to develop human resources specific to their needs. The Trade Union Recognition Act of 1997 requires businesses operating in Guyana to recognize and collectively bargain with the trade union selected by a majority of its workers. Guyana adheres to the International Labor Organization (ILO) Convention protecting worker rights. 

Emigration, particularly of skilled labor, poses a serious problem to employers in Guyana. An International Monetary Fund study in 2005 found that 89% of university-educated Guyanese leave the country due to better employment options abroad; this represents the highest percentage of "brain drain" in the world. Large private sector companies report a turnover of about 20% to 25% of their workforce and experience difficulty in recruiting and retaining qualified employees. Skilled workers migrate to the United States, Canada, the Caribbean, and Europe.

 Foreign Direct Investment Statistics

Total FDI in Guyana decreased by 31.3% to USD71.3 million in 2009. The agriculture and agro-processing sector benefited from 6.0% of Guyana’s foreign direct investment from 2009, energy 4.9%, information and communication technology 32.4%, light manufacturing 30.0%, mining 6.3%, services 8.1%, tourism 3.9% and forest and wood products 8.5%.

 Following is a list of foreign direct investment compiled by the Guyana Office for Investment for 2007-2009.

Table 1: Foreign Direct Investment by Sector 2007-2009

Sectors

2007

2008

2009

Values in USD Millions

Agriculture and Agro-Processing

4.0

5.8

4.2

Energy Sector

0.0

1.2

3.5

Information & Communication Technology

15.5

42.2

22.9

Light Manufacturing

1.8

5.3

21.8

Mining & Quarrying

38.1

22.4

4.5

Services

11.0

2.2

5.7

Tourism

4.4

6.9

2.7

Forest and Wood Products

20.6

17.8

6.0

Total

95.4

103.8

71.3

Source: Guyana Office for Investment

Table 2: Foreign Direct Investment by Country 2007-2009

Countries

2007

2008

2009

Value in US$ Million

Australia

0.56

 

0.08

Barbados

0.74

0.26

0.28

Brazil

2.51

1.54

0.20

Canada

16.91

4.07

7.49

Cayenne

0.15

 

0.07

Chile

0.05

0.18

0.05

China

13.51

25.29

2.05

Colombia

 

 

0.11

Costa Rica

0.05

0.08

0.15

Denmark

0.13

0.01

 

Finland

 

 

4.00

France

0.03

0.11

 

Germany

8.09

 

 

Ghana

 

0.02

0.02

Greece

 

0.02

 

Grenada

0.01

0.08

0.01

Holland

0.70

2.00

0.15

India

0.40

0.13

3.01

Ireland

10.00

20.00

5.00

Israel

0.10

0.35

0.07

Japan

 

 

0.05

Malaysia

14.10

7.50

3.50

Mexico

1.00

1.50

0.80

Russia

10.01

0.01

0.39

Singapore

 

0.05

 

Spain

0.45

 

 

Sri Lanka

 

0.10

0.13

St. Kitts & Nevis

0.15

0.10

0.05

St. Lucia

 

0.05

0.11

St. Maarten

 

0.07

0.01

Switzerland

 

 

0.01

Trinidad & Tobago

3.43

3.26

0.68

Turkey

 

6.00

1.50

United Kingdom

0.33

0.31

0.48

United States

11.98

30.56

40.28

Venezuela

 

0.10

 

Total

95.39

103.72

70.73

Source: Guyana Office for Investment

 The following is a list of major foreign direct investors during 2009:

 - Capital Restoration Inc. (U.S.)
- Queens Atlantic Inc., joint venture, subsidiaries Global Printing and Graphics Inc.; Global Hardware Inc.; Global Textile (Guyana) Inc.; Health International Inc.; Healthcare Life Sciences Inc.
- Guyana Grain Farm Inc., joint venture with Guyana Manioc Development Inc. and Harry Stein Seed Company of the U.S.
- Fairfield Rice Inc., joint venture with John Fernandes Ltd. of Guyana and Seaboard Corporation of the U.S.
- CGX Energy Inc. (Canada), subsidiary CGX Resources Inc.
- Seaboard Corporation (U.S.), subsidiary National Milling Company of Guyana Inc.(NAMILCO)
- Princess Group of Companies (Turkey), subsidiary Princess Hotel.
- Samling Global Limited (Malaysia), subsidiary Barama Company Limited.
- China Timber Resources Group Limited (China), subsidiary Jaling Forest Industries Inc. and Garner Forest Industries.
- Atlantic Tele Network (U.S.), subsidiary Guyana Telephone & Telegraph, Inc.
- Digicel Group Ltd. (Ireland), subsidiary Digicel Guyana.
Source: Guyana Office for Investment

 Table 3: Total Investment 1999-2009 (January-June) 

Years

Private

(Local & FDI)

Public

(Government)

Total Investment

 

Value in US$ Million

1999

157.0

81.0

238.0

2000

152.0

98.5

250.5

2001

166.0

91.0

257.0

2002

162.0

101.5

263.5

2003

155.5

97.0

252.5

2004

152.5

98.0

250.5

2005

157.0

109.5

266.5

2006

205.0

209.0

414.0

2007

222.5

211.5

434.0

2008

259.5

209.0

468.5

2009

285.5

265.0

550.5

Source: Bank of Guyana



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