Cross-border trade with Brazil has dropped from two years ago with commerce still largely weighed in favour of the Brazilian side, according to President of the Rupununi Chamber of Commerce and Industry (RCCI), Daniel Gajie who says activities will be held to promote Lethem.
“It’s not fair trade at the moment,” he told Stabroek News adding that trade is very “biased” towards Brazil. “They don’t allow any Guyanese products other than flour to enter the country” in commercial quantities, he said. The RCCI president said that even if an exporter wants to pay taxes on a product, for example, lumber, the Brazilians do not allow this.
Most of the cross-border trade that flows from Lethem to Brazil involves goods in small quantities, with the Brazilians coming to Lethem to purchase goods such as clothing and fuel which are cheaper here. Gajie said one of the hurdles that have to be crossed in terms of exporting to Brazil is translating labels of the products into Portuguese. It all comes back to the partial-scope agreement, he said.
However, as it relates to trade flows from Brazil to Guyana, this is much easier and occurs at a substantially higher level. “What we have at the moment is business persons bringing goods from China and Panama through Manaus,” Gajie said. He said that the importers pay duties and taxes here and it is easier to bring goods from Brazil because of the better road network in that country.
Among other things, Guyanese import construction material, foodstuff and appliances from Brazil which could be expensive but are of good quality, he said. In terms of construction material, Gajie pointed out that the Linden-Lethem trail cannot accommodate over a certain weight limit and because of the state of the road as well, items like tiles and glass can be damaged easily. He said that though these items might cost less in Georgetown, when transportation costs and damage are factored in, the cost rises. He also noted that the increased traffic has caused a deterioration of the road and there is now more destruction than before. It is also fairly easy to import from Brazil, he said.
Meantime, the RCCI president said that the flow of customers to Lethem has dropped by about 50% as compared to the level two years ago. Brazilians came to buy general goods such as clothing and some foodstuff but sometimes the Federal police take away a lot of these items although they are in consumer and not commercial quantities, he said. Among the items in demand are curry powder, pepper sauce and chowmein, Gajie said.
However, the main reason for the drop in consumers, according to Gajie is the growth of the Venezuelan town of Santa Elena across the border from Brazil. He said that fuel and items made from the by-products of the petroleum industry such as plastic products are cheaper in the Venezuelan town and now the Brazilians flock there. “They used to come [to Lethem] when the fuel price was lower,” he said adding that fuel in Santa Elena is less than half the cost in Lethem. The duty charged there is also less, he said. The Venezuelan community also has large hotels and activities that cater to travellers, the businessman added.
Gajie was elected President of the RCCI recently and he said that the chamber will be pursuing making Lethem a duty-free port and as well as undertaking initiatives to promote the community. Establishing a duty-free area in Lethem can encourage business and tourism, he said. “We need the support of the government in the duty-free port.”
The RCCI president said he also wants to begin a ‘Promote Lethem’ campaign in Boa Vista and Manaus using flyers and television documentaries as well as other promotional activities. He said that overnight activities in Lethem could also draw people to the community.
While Brazilians still pour into the community during holidays in the Portuguese-speaking nation, Gajie said business is not as booming as it was before and there are less people shopping during normal working days.
Despite the 50% drop in customers compared to two years ago, however, investment in Lethem has increased, Gajie said. Now there are lots of Brazilian and Chinese investors in Lethem, the RCCI president noted. “There are several large [businesses] going up and more and more going up every day,” he observed.
Asked about this and the fact that consumer levels have dropped, Gajie said that the businesspersons are considering this as “investment with the intention of looking at the future.”
