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    Guyana Invites Chinese Companies to Invest in Win-Win Partnerships

    Published in China Investment Magazine, March 2018

    In 1972, Guyana became the first English-speaking Caribbean country to open diplomatic relations with China.  Ever since then our two countries have maintained a deep and lasting friendship. Guyana is located at the doorsteps of both the Caribbean and South America. This unique position, combined with the country’s enormous natural resources, provide excellent opportunities for enhancing trade and investment with China and other countries.

    Guyana has recently discovered 3.2 billion barrels of proven oil reserves, placing the country on the launch pad for an economic lift-off. Economic performance in recent years has been extraordinary.  Sound, investor-friendly policies mean there is a stable and predictable environment for business.  This country offers lucrative sectors and is now a magnet for new investments.  More importantly, Guyana is a gateway for preferential access to profitable international markets.
     
    Resource and Market Access

    As the only English-speaking country in South America, Guyana is known for its high quality agricultural, mineral and natural products including rice, sugar, vegetables, fruits, wood, gold, diamonds, bauxite and rum. These are products of the country’s extensive natural resources – mineral deposits, extensive forests, valuable timber, rivers, waterfalls and fertile land for crop and livestock production. Rich natural resources have long been the driving force behind the country’s development. Mining, agriculture, and forestry are major industries.
    The word “Guyana” means Land of Many Waters. Marine and freshwater fish and seafood are exported. There is great potential for establishing aquaculture farms.  With over 50 rivers and 80 waterfalls there is also enormous interest in building hydropower facilities. Guyana seeks to establish multiple hydropower systems ranging from 50-250 megawatts each.  Likewise, the generation of wind and solar power offer attractive opportunities.

    Goods produced in Guyana enjoy preferential access to key markets in Europe, the United States, Canada, Brazil, Colombia and the countries of the Caribbean Community.  By virtue of these arrangements over 75% of Guyana’s exports are guaranteed to enter certain markets duty-free or with reduced duties.  The geographic proximity to North and South American markets give Guyana’s exports preferential access to over 277 million consumers and a US$130+ billion market with overall purchasing power of over US$2 trillion.

    Guyana is a member of the Community of Latin American and Caribbean States (CELAC), the Union of South American Nations (UNASUR), the group of Latin American and Caribbean States (GRULAC) and the Organization of American States (OAS): The country’s closest political, historical and cultural ties are with the English-speaking Caribbean.  Guyana is the home of the Caribbean Community (CARICOM) Secretariat. 

    Prospects for Investment

    Guyana's land area is the same size as Hunan Province, 215,000 square km, but with a population of just 750,000 and annual GDP of approximately RMB 10 billion. Limited industrial capacity is due to the unavailability of domestic energy sources and the absence of technological innovation. The lack of road and river transportation networks, port facilities and logistics deprive the nation of the benefits of regional and global integration.  Domestic output would be greatly expanded with infrastructure projects and energy generation in the form of hydro, wind and solar power.

    Guyana's path to sustainable development and economic prosperity lies in Foreign Direct Investment.  The country’s economic fundamentals are strong. Its currency and macroeconomic indicators have been stable for more than 25 years.  Since 1990, economic growth has steadily averaged about 4% per annum.  The debt, fiscal and external balances are within sustainable levels.  Growth in 2018 is expected to exceed 3 per cent.

    With the recent discovery of oil and gas, and also with greater government support for renewable energies, more natural resources are now being put into the country’s service. The exportation of oil will begin in 2020. The rapidly evolving energy sector adds an entirely new dimension to Guyana’s economy. The Government of Guyana’s preparations for future hydrocarbon production are being designed to ensure sustainable long term growth.

    Priority areas have been identified as Infrastructure, Clean and Renewable Energy, Agriculture, Mining, Forestry, Fishery and Tourism.

    Infrastructure is fundamental to the development of the other sectors.  A clean and renewable energy sector will boost productivity in primary sectors and spur job creation in others.  The Government encourages investments which promote sustainable development and achieve growth. 

    Foreign investors would profit from investment in this economic transformation.

    Those willing to look beyond Guyana’s national economic space to access additional markets in the Western Hemisphere would reap extra dividends.  Guyana’s emergence as the region’s newest oil producer would guarantee unprecedented spin-off effects for all other sectors of the domestic economy and would expand to the Caribbean Community. Guyana invites Chinese companies to invest in win-win partnerships in these sectors.
     
    Sector Details

    Details on each sector are outlined below:

    Infrastructure

    Guyana’s plans for infrastructural development fall within the framework of the China-CELAC Cooperation Forum and the  UNASUR Initiative for the Integration of the Regional Infrastructure of South America. 

    Ninety percent of Guyana’s inhabitants occupy less than ten percent of its territory. Nearly 80% of the land area is rainforest.  Transportation from the populated coast to interior areas and neighboring countries is arduous and costly for want of infrastructure. The creation of an air transport hub for passengers and cargo between North and South America is a major objective.  In anticipation of increased trade an airport on the border with Brazil is under consideration.

    The Government’s top priority is the construction of a 455km road corridor linking the northern part of Brazil with Guyana. This Linden-Lethem road link is the most direct means to connect Brazil  with the North Atlantic.  It is estimated that between 35,000 and 60,000 containers annually will travel this route. The construction of the first 122 km is expected to be completed by 2020.  For the remaining 330km, all financing options would be considered, whether PPPs, toll roads concessions or special economic zones.  The road will link up to a future deepwater port that would fulfil the transportation needs of Brazil and serve Guyana’s ambitions as a transshipment hub.

    Besides the Linden-Lethem road, the Government plans the construction of 600 km of new roads by 2025 to connect villages along the Essequibo River. This project will replace river transportation and open up access to a million hectares of land. These designs have been completed and interested partners are being sought to carry out the works.

    Energy

    Guyana's petroleum sector will be producing 120,000 bpd barrels per day from 2020 and should triple that quantity by 2025.  The three foreign companies that will be involved in this production are China’s Nexen, Exxonmobil and Hess. Further oil discoveries are highly likely. Chinese companies are welcome to take part in down-stream and processing activities. 

    Guyana's physical and climatic conditions feature year-round sunshine, strong sea breezes and an abundance of rivers and waterfalls, making it a prime candidate for solar, wind and hydro power generation.  Over 72 sites have been identified for potential hydropower generation, some of which are at the feasibility and pre-feasibility stages. 

    A clean and renewable energy sector would export surplus electricity and improve generation, transmission and distribution across the entire country.  This objective is supported by a five-point programme comprising the (i) sustainable exploitation of the country’s natural resources (ii) establishment of a solid waste programme; (iii) promotion of sustainable energy; (iv) promotion of the ecological integrity of the forests; and (v) implementation of green technologies.

    The cultivation of agricultural crops for the production of biofuels can be started immediately since lands have been specifically earmarked for such production. The by-products of Guyana’s extensive sugar industry can provide biofuels, such as ethanol.

    Forest Products

    The forests contain over 1,000 different varieties of wood. Currently, 120 species of hard and softwoods are being logged. Between 12 and 15 of these logged on a commercial scale through a system of concessions. Guyana exports timber in raw or semi-processed forms. It is a now requirement that value be added to forest products before export. Lucrative opportunities exist for investors interested in the production of hardwood and wicker furniture, plywood and veneers, molding, doors, parquet, floor tiles and other wood products.

    Agriculture

    Highly fertile soil in the coastal areas currently produce rice, sugar cane and other crops. Extensive savannahs have untapped opportunities for dairy, beef, mutton, cashews, legumes, soybeans and other products.  Foreign investors can easily develop high value niche markets such as aromatic rice and medicinal crops.  Organic produce may be farmed on lands which are free of agricultural chemicals.  Vegetables, fruits and herbs can supply China as well as the lucrative Caribbean and North American markets. Domestic or foreign food processors can be supplied with produce for the export of spices, livestock and dairy products, processed or semi-processed foods and animal products.

    Ideal physical conditions exist for a dynamic seafood and fisheries industry, including a 460 km Atlantic coastal zone and an extensive network of rivers. Guyana has a marine area of nearly 140,000 square kilometers in the Atlantic Ocean. China, the United States of America and Europe are key markets for most seafood exports. 

    Mining and Quarrying

    The mining sector is presently focused on the extraction of gold, bauxite and diamonds.  However, there are also untapped reserves of rare earth metals, semi-precious stones, laterite, manganese, kaolin, sand, radioactive minerals, copper, molybdenum, tungsten, iron, and nickel among others.  Guyana produces high-value refractory-A-grade bauxite.  The Government is interested in securing large-scale investors for the gold mining industry, for exploration of other reserves and to improve the efficiency and productivity of operations. The mining and quarrying sector represents a critical component of Guyana’s economy, accounting for 50 per cent of exports.  The sector has grown in value over the past few years as a result of increasing gold output and prices.

    Tourism

    Welcome to one of the highest levels of biodiversity in the world.   Guyana’s pristine features, unique cultural heritage and natural beauties make it an ideal destination for tourists.  The country offers a distinct product: virgin rainforests, open savannahs, mountains, rivers and huge waterfalls, the most famous of which is the majestic Kaiteur Falls, the highest single drop waterfall in the world.

    The country is home to some of the world’s giants namely, the Jaguar, the largest terrestrial carnivore in South America; the Giant River Otter, largest in the world; the capybara, the world’s largest rodent; the Arapaima, the world’s largest freshwater fish; the Harpy eagle, the most powerful aerial predator in the rainforest. Ants nests are taller than men. The Giant River Turtle and Black Caiman, endangered elsewhere, are numerous. With more than 900 species of birds, Guyana is emerging as a top birding destination.

    The capital, Georgetown, is famous for its picturesque, tree-lined avenues, bustling markets and wooden buildings, including the renowned St. George’s Cathedral, one of the world’s tallest wooden buildings.

    Guyana is an award-winning destination for its special brand of community tourism. Through community tourism, visitors have a unique opportunity to experience nature and the way of life of the native communities. These sites are served by high-quality eco-resorts in the rainforest. There are investment opportunities to develop and upgrade existing tourist facilities and services.

    Manufacturing

    Guyana's manufacturing industry contributes just 4 percent towards the country’s GDP and employs approximately 12 percent of the population. There is growing interest to expand value-added, export-oriented manufacturing industries such as:

    Manufactured forest products.

    Agro industries – processing, canning and bottling of agricultural produce; fertilizers and insecticides.

    Packaging – manufacture of packaging materials and containers for transport of finished products

    Leather craft – manufacture of leather products and souvenirs

    Ceramics – manufacture of articles constructed of clay, kaolin and silica sand

    Construction Materials – stone, cement, clay blocks, tiles, glass, glass products and machining

    • Expanding Guyana's garments and apparel manufacturing can build upon recent successes and take advantage of preferential access to foreign markets under existing preferential trade agreements.

    IT-Enabled Services

    Guyana has an open IT market and a growing IT enabled Services Industry. Technology is now at 4G and will extend to 5G within 5 years. Some investors have included Guyana as part of a network of business process outsourcing (BPO) centers located in Latin America.  Presently there are ten BPO call centre companies in Guyana.

    Investment Framework

    Features of Guyana's Investment Framework are:

    • No discrimination between foreign and domestic investors;

    • Private investments guaranteed by the Government;
    • Free repatriation of proceeds and profits;

    • Permission to hire foreign personnel and repatriate net earnings;

    • Legal guarantee for intellectual and property rights of investors;

    Legislative Framework

    Foreign Direct Investment is critical to Guyana's economic development. Therefore its legal framework offers protection to investors.  Legislation regulating investments guarantee the predictability, stability and transparency of the legal regime, promote the development of international best practices and streamline existing procedures for investments.

    The Investment Act of 2004 provides for foreign and domestic investors to receive equitable treatment, enjoy the right to establish, own and operate business enterprises and to engage in all forms of economic activity – with limited exceptions in certain mining and finance operations.

    Investment incentives are guaranteed by the law in the form of income tax holidays, tariff and value-added tax exemptions and so forth.  These may be general, special and/or sector-specific in the areas which include agriculture and agribusiness, manufacturing, forestry, mining, tourism, fisheries, housing, ICT and the garment and textile sectors.

    In addition to favourable market access for most manufactured products, Guyana provides a number of advantages to investors interested in establishing or expanding manufacturing operations:

    Competitive cost of labour – Guyana has one of the lowest manufacturing wage rates in the Caribbean and Central America.  The workforce is trainable, highly literate and English-speaking.

    Low 'time to market'/lead time – Guyana’s close proximity to markets in the Americas gives it a shorter time-to-market and is useful for companies wishing to find suppliers to meet their just-in-time delivery requirements.

    Access to local inputs – Guyana’s natural resources provide manufacturers in specific sectors with an abundance of locally-available and construction materials sectors.

    Availability of industrial parks – In an effort to attract manufacturing investments, the Government of Guyana has invested in a number of industrial parks with infrastructure and investment concessions for materials, vehicles, plants and equipment.

    A Final Word

    Any enterprising businessman would find it rewarding to invest in Guyana.  The country's favourable operating environment, access to preferential markets and investment incentives allow for the easy establishment and or expansion of operations in the aforementioned sectors.

    Guyana and China have always enjoyed particularly close and friendly relations. This relationship is founded on historical and cultural ties which are maintained through frequent high-level exchanges at the bilateral and multilateral levels, in the areas of politics, security, trade, finance, health and culture.

    Guyana has a Most Favoured Nation trade agreement with China and wholeheartedly welcomes Chinese investors as partners in our future growth and development.  Guyana is seeking win-win relationships with Chinese companies.

    We are committed to supporting investments which would lead to prosperity for the Guyanese people and to strengthening ties between Guyana and China.

     

  • Embassy of the Republic of Guyana, Beijing Tel:65321337 65321601
    Fax:65325741 Email: admin@guyanaembassybeijing.cn
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