The onslaught against local companies

Dear Editor,
In an article by Matthew Bristow and Ezra Fieser, the IMF is quoted as saying that Guyana’s economy will grow by 86 per cent in 2020. Naturally, everyone is buoyed by the oil find and are desperate to secure a piece of the action. None are more deserving or better positioned than our local companies that have battled and survived against dreadful odds.

However, it has not been easy for them. Local companies have no expertise in the oil and gas sector and this has opened the doors to the foreigners. The Trinidadians, for example, have been buying up land here since 2015 and with their oil expertise, they are taking the hog’s share of what is loosely referred to as local content.

In fact, the only thing Guyanese seem to supply at the moment is hotels and taxis and that will not last very long either with the vast acreage which has been gifted or sold to foreigners. Guyanese in every sphere of business should brace for increased competition from new companies which are rapidly being established here.
The following suggests that the Government and key Government agencies have been discriminating against or acting without consideration for local companies:

1. Whereas Guyanese are generally unwelcome in most Caricom states and our citizens are not allowed to own, operate or conduct business, our Government has thrown open the pantry to all and sundry.
2. Our Government waives compliance and taxation requirements for foreign companies while local companies are forced to comply. This creates an uneven playing field as KN has highlighted, which makes it easy for foreign companies to underbid locals. This is not only prevalent in the oil and gas sector.
3. Agencies such as the EPA have been vigorously pursuing local companies to comply in innumerable ways. For example, the EPA is monitoring noise levels, pesticides, hazardous substances, waste discharge, fuel storage, fuel spill safeguards, fuel storage licensing, disposal of waste oil, just to name a few.

While this is all and good, contrast it with the oil and gas sector where the EPA has abrogated its responsibility, leaving it exclusively in the hands of the oil companies to do what they think is best for Guyana.

4. The Govt has been granting concessions to foreign companies that have never been contemplated for locals. A recent example is the gifting of hundreds of acres of prime agricultural land from Wales Estate to a foreigner who wishes to plant coconuts. This is a waste.

Coconut does not require prime agricultural lands. It can be grown on the tough seaside and heavy salted lands where nothing else can be cultivated. In addition, a coconut plantation requires relatively very little labour so jobs will be few and far.

5. The Government is so enthralled with foreign companies that it has agreed to pay the taxes of oil companies from its meagre share of oil revenues. This needs no gloss – it is simply treasonous.

Many of the foreign operators are imposing their own international standards on local companies which are seeking to get involved in the supply chain. It is tough for local companies since the buyer will not wait for the locals to get certified when there is always the option to outsource or import. To add salt into the wound, local companies are being ridiculed that they cannot compete.
Local companies are already being squeezed by a high cost structure, where the cost of energy is prohibitive, high taxation, where the Minister of Finance has implemented some 200 new taxes in recent times, shortage of foreign currency and the energy-sapping bureaucracy for securing permits, compliances and licenses, all of which are waived for the foreign competition.

Locals also have to deal with the high level of crime, and over the last year, an illegal Government that has been violating the Constitution and in so doing, shrinking the economy further and creating more uncertainty for business.

It was, therefore, no surprise that local companies were largely unrepresented at the GIPEX Petroleum Summit billed as The Gateway to the Future. This is yet another gateway that remains closed to Guyanese, compliments Granger, APNU/AFC.

Sincerely,
Ravi Ram