Georgetown: Investors are continuously reluctant to enter Guyana’s manufacturing and trade sectors because of the present electricity rates which by the world’s standards are very high, according to Trade and Industry Minister Irfaan Ali.
Ali who hold dual portfolios, the other being Minister of Housing and Water said Guyana has a largely untapped potential in the manufacturing sector and it may remain that way for a long time if something is not done to address the high cost of generating energy.
He nonetheless explained that although Guyana has seen eight years of consecutive economic development, the country still has a far way to go, but growth is being stifled by the stalled developmental projects.
Making specific reference to the Amaila Falls Hydro Electric Project, Ali pointed out that it could result in a huge fall in the current prices for generating electricity in Guyana; hence, making the sector more viable.
He added that with lower energy costs, investors would be more inclined to invest in sectors such as manufacturing and service since they would be able to compete on a global scale.
Ali said that by attracting investors, more jobs would be created in the aforementioned industries.
He contended that those factors could propel Guyana into the future and add to the country’s development rate.
“Whilst Guyana has grown tremendously over the last eight years, while we have had positive economic indicators in almost all the segments of economic measurement, there is still a lot more that could have been done if Guyana as a country and the Parliament as a unit would have understood the importance of various transformational projects and allowed those projects to blossom and bring its economic empowerment, improvement and opportunity to the Guyanese people,” remarked Ali.
He explained that for Guyana to achieve its true levels of economic growth, there is need for Government and Parliament that is cognisant of the reality that some risks have to be taken.
“Economic development is not a static process. It requires innovation, it requires bold thinking, it requires a Government that understands the transformational aspect of moving the economy into the future,” he said.
He went on to add that “while we have grown, we have not allowed ourselves to reach the full potential that we should have achieved”.
According to Minister Ali, with the successful implementation of the Amaila Falls Project, Guyana is projected to see economic growth beyond five per cent when compared to a flat growth rate without the implementation of the project.
Referring to present energy costs, Ali said: “It makes it uncompetitive… we will then be able to complete with all of the countries in the manufacturing sector,” adding that “because the Opposition is so inhibitive, they have not allowed Guyana to mature into this stage of economic prosperity”.
Already, Caribbean Development Bank (CDB) President, Dr Warren Smith said the region must unlock the opportunities for competitiveness and growth through the capitalisation of renewable energy, contending that for far too long, Caribbean countries have been affected by the high cost of electricity.
According to an enterprise survey conducted by the World Bank in 2010, at least 30 per cent of Caribbean firms identified electricity costs as a major constraint to doing business.
“The combination of high diesel and heavy fuel oil costs and the inherent inefficiency of diesel technology, which accounts for the majority of the generation in Borrowing Member Counties (BMCs), are the principal contributors to these high electricity prices. Further, these fuel prices are subject to the volatility of international oil markets which are highly responsive to shifts in geo-politics,” Dr Smith explained.
This problem, he said, is further compounded by small market size and the absence of economies of scale in the generation of electricity; with many of the generation facilities gradually approaching the end of their useful lives.
As a result, he said these facilities do not benefit from the efficiencies inherent in the new technologies built into generators of more recent vintage.
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