Dear Editor,
The ideas we have proposed in the paper justifying Unity and Human Development (UHD), can be downloaded at http://bit.ly/18odYmG. As ever, we welcome criticisms and comments. Here, we argue that sustainable development of our nation also depends on the sensible foreign trade and industrial policies along with the evolution of financial resources that attract foreign investors and help to fuel the creation and expansion of businesses.
With serious challenges to our border integrity, Guyana would need the most skilful team of diplomats to secure the integrity of the border and the economic resources contained within its borders. Also, with a population of fewer than 800,000, Guyana needs to promote an industrial strategy that is export-oriented. This requires securing the obvious ones within Caricom, and existing trade agreements between Caricom and the US. Diligent attention should also be paid to Guyana’s associations with Brazil, Canada, India, the People’s Republic of China, and the United Kingdom, as well as the EU, Unasur and, of course, the Commonwealth. The transfer of knowledge through technical exchanges should also be explored and developed where helpful.
It would be impossible to implement policies consistent with the outlined principles if they cannot be financed. Any development plan has to be financed. Borrowers face substantial borrowing constraints in Guyana. Businesses now have to borrow at around a 14% interest rate, and credit tends to be extended mainly to the traditional and established businesses. This is not to blame the present commercial banks which have served the nation well doing their method of risk management and screening. Solving the financing constraint involves developing other forms of finance such as bond and equity financing, which can be integrated with the existing commercial banking sector.
The borrowing constraint has to be solved using a system of comprehensive financial development, including the re-establishment of the state development bank. Because it will serve a different class of borrowers seeking initial financing, the state development bank would not compete with private commercial banks. Once new businesses are established, the private commercial banks will still have the opportunity to earn more fees and provide working capital. Privatization programmes can be conducted through the stock market to breathe new life into the moribund Guyana Stock Exchange. This could be one way of disciplining state-owned corporations, and allowing transparency of information so as to attract and secure investors using a stock market. The bond market could also operate better because of market transparency. Additionally, given the importance of food security, the re-establishment of the Agricultural Development Bank along the lines of the former Gaibank may be worth considering.
Yours faithfully,
Clyde Walcott
Terrence Simon
Hubert Wong
Tarron Khemraj