Manufacturers want new development bank

Last Updated on Saturday, 26 December 2015, 21:00 by GxMedia

As the decline in manufacturing continues, the Guyana Manufacturing and Services Association (GMSA) Wednesday night called for the re-establishment of a development bank.

Addressing the GMSA’s 50th anniversary dinner at the Pegasus Hotel, President Donald Ramotar lamented the decline in manufacturing. “Over the years, we have seen as a percentage of GDP (Gross Domestic Product), it has not grown. In fact, it has fallen in some ways,” he said.

He said that while the manufacturing sector has grown over the decades, new infrastructure is key to it reaching its full potential. The Guyanese leader recommended that commercial banks invest excess cash in the sector at competitive rates because there is a “very, very wide” gap in the interest rates between savings and lending. “I think that in this manufacturing sector, there is scope for bigger investment and possibilities to try and bring down the lending rates to have cheaper capital for us to develop even more,” said Ramotar, a University of Guyana graduate in Economics.

In a message on the occasion of the GMSA’s Golden Anniversary, Chairman of the Private Sector Commission (PSC), Ronald Webster observed that in 2012 the manufacturing sector grew by 2.4 percent, down from its 2011 growth of 6.8 percent . Webster cited the high cost of energy as the major constraint facing the manufacturing sector and recommended that Guyana finds ways of using its abundant natural resources to produce cheap energy for use in value-added production. “The most serious and limiting challenge facing manufacturing is the cost of energy. This has constrained the growth of the sector for many years and the looming threat of higher costs as fuel prices climb remains a nightmare for manufacturers and their employees alike,” he said in the 50th anniversary souvenir magazine.

The President of Guyana recommended that manufacturers engage in more branding and take advantage of more educated and technically qualified persons being churned out by public institutions.

GMSA Board member, Ramesh Dookhoo hailed the now defunct Guyana Agricultural and Industrial Development Bank (GAIBANK) for playing a pivotal role in funding the emergence and growth of several manufacturing entities. “We didn’t ask for our debts to be written off. The bad guys made the bank go bankrupt. We paid our debts and I can speak for many of the large companies in Guyana,” said Dookhoo, a former GMSA President. He called on government to re-establish a much needed development bank. “The quest of the GMSA to resolve and get a development bank in place is in fact a relevant one today and it is as relevant as it was then now,” he added.

Now the Chairman of the PSC’s Trade and Investment Committee, Dookhoo related that several Guyanese businesses have been forced to close their doors because of the global economic crisis and could not borrow from commercial banks.

He seized the opportunity to again appeal to Guyana’s political leaders to find a common position on supporting the need for cheap power. The opposition A Partnership for National Unity (APNU) has refused to support the US$850 Amaila Falls Hydropower project over concerns about indebtedness to Guyana and the actual cost of electricity because of a deficient Guyana Power and Light.