Demerara Bank Limited opened its newest branch at Diamond on the East Bank Demerara yesterday, with its Chairman Dr Yesu Persaud calling for the creation of a business climate that would lead to more jobs.
A beaming Persaud recalled the journey from when he conceived a dream of an indigenous bank back in 1991 to the opening of the first bank on July 23, 1994. The Diamond location is the bank’s fifth branch and was built at a cost of $460 million. Alluding to his pride in the achievement, Persaud—who also founded beverage giant Demerara Distillers Limited (DDL)—recalled that Demerara Bank has gone through serious times but has come a long way. He pointed out that the Diamond area is developing rapidly and said that the government must be complimented for this.
A new branch is also to be established on the East Coast Demerara soon, Persaud said, the investments testimony to confidence in the nation. The renowned businessman said he hoped he would be around long enough to see a lot more development taking place, even as he noted the calls by some for him to slow down. “As long as… the Lord grants me the health and strength, I’ll continue to do what I can as long as I can to the best of my knowledge and ability to make Guyana a better place, where we can find and create job opportunities for young people ’cause this is one of the things that are missing: jobs. Creation of jobs is the most important thing in any nation,” said Persaud.
He pointed to other countries, where incentives such as tax-free holidays, free land and assistance in developing the land are offered to companies who invest there, just so jobs can be created. “That should be our aim in this nation of ours: create employment, create the atmosphere of this is a free, good country to invest and others will follow,” he said.
The businessman noted that DDL has been investing in many areas and one of its projects has seen the company’s bottling plant producing for an international Mexican company. “So, if we can create jobs, create the confidence there’s no reason why Guyana cannot be a prosperous country and that it shall be in time,” Persaud said. He added that this depends on all putting their shoulder to the wheel and working together.
‘Pride’
President Bharrat Jagdeo, in delivering the feature addressing, however, differed with the statements, recalling the Chairman of Caribbean conglomerate ANSA McAL saying that Guyana is the best destination for investment today. Sometimes Guyanese companies here don’t portray Guyana as such and this needs to be changed, Jagdeo said. “There’s always a temptation to see things greener outside of Guyana,” he said. The President referred to Persaud’s statements about the (Caribbean) islands being very favourable to investments and said that if an investor has to buy a piece of land, they have to get permission often from the Prime Minister and a lot of the islands have foreign currency exchange controls. “Yet we think that they have a better investment climate than ours, their labour is much more expensive and often less productive, yet we run away with this philosophy that they have a better investment climate,” he argued.
Jagdeo said those islands that did not have an income tax before the global financial crisis are moving to put this in place. “So we must not use anecdotal evidence to think that they have a much more favourable environment than ours,” he said. “We have to start feeling pride in our own achievements…and we should also understand that this is linked in a deliberate way to policies.” He also highlighted the unemployment rate in the region, saying that in some of the islands it reaches up to 25%. “We need to update our understanding of what’s happening just in the region around us,” he said. Pointing to the effects of the global financial crisis on countries in the region, he said that Guyana largely escaped that because of the policies put in place by the government.
Earlier, he pointed to the success of banks here. “If you look at the growth in their return and their profitability, you can only conclude that its good to be in banking in Guyana and that there is a market. It speaks about the nature of the market in Guyana because no matter how efficient you are, if there is no market for banking services, if there is no market for loans, if there is no feeling of confidence, you will not deliver the type of returns that we’ve seen coming from the various banking institutions,” he said.
Jagdeo pointed out that there has been huge growth in deposits in the banking system in the last five years from $155 billion to $248 billion. Total loans to private sector companies were $62 billion in 2006 and in 2010 this was $112 billion, he said also pointing to the growth in Gross Domestic Product and reserves. The successes seen in the private endeavours have been mirrored in aggregate numbers and also in the central bank, he said. “This is largely because our economy is expanding, there are more opportunities and there is a conscious policy to make sure that as we open up the country to more opportunities that are externally related, we do so carefully,” he said.
In referring to the period when the state was involved in banking, Jagdeo said that a big success was being able to disengage from the entire financial sector without placing the burden significantly on the treasury and it took a lot of work to do that. In addition, he said, prior to liberalising the economy the tough Financial Institutions Act was passed and today it stands as the bedrock of Guyana’s solid financial system. It allowed Guyana to avoid some of the problems that our neighbours have, he said. “We mustn’t sleepwalk to think that our successes happen because of chance,” Jagdeo said, while adding that other countries when faced with a similar situation, made different choices and Guyanese must be happy to have avoided those extremes. “So when we were deliberately cautious on this philosophy, which says that the best way to high levels of return and your money will be safer in foreign assets, today we feel vindicated by it,” he said, adding that assets are much safer here.
Jagdeo congratulated the company on the new bank and urged that it also look to electronic banking. He said that everyone will benefit from the services being offered and expressed the hope that it will lead to the expansion of business in the area.
He noted the plans for the development of the area, pointing out that developers are already working to build houses. “This is an inevitable growth in housing development and it brings with it the demand for so many other services but it brings also thousands of opportunities,” he said.
