New entity to inherit predecessor’s assets, sustain support for its projects
Stabroek Business has secured information setting out the organizational outline, management structure and key objectives of a new body that is to replace the Linden Economic Advancement Programme (LEAP) and lend continuity to providing technical and financial support to strengthening the base of the fragile private sector in one of the country’s key administrative regions.
The Demerara Enterprise Ltd. (DEN) a state-run corporation will succeed the European Commission-funded LEAP. Funding for ongoing technical assistance programmes undertaken by LEAP during the life of the programme will be available up to the end of December this year while infrastructure projects in Region 10 created to support LEAP initiatives and implemented through the Government of Guyana will continue until December 2011.
In a letter to Stabroek News on Saturday, International Project Manager Kathleen Whalen said “The Financing Agreement between the GOG and the European Commission for the LEAP will come to an end on December 31, 2010. The technical assistance services for the implementation and management of LEAP will end December 31, 2009. Following this the management of remaining activities will be transferred to the Guyana National Authorizing Office Task Force within the Ministry of Finance. These arrangements will permit the full completion inclusive of Defect Liability and Maintenance Periods of a number of infrastructure projects as well as the required programmed closure activities. The activities of LEAP in Region 10 have been laid out and financed through a series of work programmes.” She pointed that the 6th and final work programme of the programme ended on July 31.
Stabroek Business has not secured a date for the formal launch of the new corporation in which the Government of Guyana will, initially, be the sole owner, however, this newspaper has learnt that DEN will assume control of all of LEAP’s assets including its Revolving Credit Fund, the Region 10 Business Centre, leases for the business incubators established within the Business Centre as well as equipment owned by LEAP.
DEN will be governed by a Board of Directors representing stakeholders from Region 10 as well as national stakeholders and eventual private sector involvement in the corporation is envisaged.
The range and scope of services to be provided by the new corporation will be identical to those that were provided by LEAP and will include credit facilities for business enterprises, general business advisory services, marketing and financial planning, and incubator management and support. An additional feature of the new organization is that it will now share a formal relationship with the Guyana Office for Investment (Go-Invest) that will allow the two agencies to plan and execute projects designed to push investment promotion in Region 10.
DEN has targeted a number of Region 10 entities for support including LEAP’s former industrial and business incubator clients, new and potential Region 10 investors and state agencies and projects in the region.
Information made available to Stabroek Business on the new corporation raises several critical issues regarding the feasibility of a state-run successor to the European Union-funded project including continuity of adequate funding to support the business development needs of Region 10, securing a professional management team to ensure the efficient running of the organization and whether or not it will find acceptance with and support particularly from private sector stakeholders in the region.
The new corporation also faces further key considerations that will impact on its operational efficiency including the future of the credit facility operations which it inherits from LEAP, a likely key role in the management of DEN by the Region 10 regional administration and any future role and position of private sector organizations within its structure.
The advent of DEN is unfolding against the backdrop of the need for increasing support for private sector initiatives, particularly small business projects in Region 10 given the continued loss of jobs in the mining sector on account of bauxite production decline linked to reduced global demand. Additionally, DEN’s operations will have to take account of any future major industrial investments in Region 10 including envisaged commercial agricultural investments in the region as well as private sector investment opportunities that could arise from the impending creation of a reliable road link between Guyana and Brazil.
The pending termination of LEAP funding and technical support for private sector projects in Region 10 has raised questions in the community regarding future assistance for new entrepreneurs, support and management for already existing LEAP incubators, funding for small and medium-sized enterprises in the community and technical support to assist in building capacity and improving services within key Region 10 agencies. Questions have also been raised regarding a replacement for LEAP that will prove competent in attracting investors to the region in order to create more employment opportunities in an area where unemployment continues to be worryingly high.
DEN has set itself the broad objective of seeking to fill the gap to be created by the departure of LEAP by creating employment opportunities and fashioning an enabling environment that will encourage the pursuit of private business ventures as an option to salaried employment.