12 Jan

Private Sector to be affected – GO-Invest Chairperson

first_imgBrexit falloutWhile the United Kingdom’s exit from the European Union (EU) is said to have dire consequences for the Caribbean, what is more significant is the effect the move will also have on businesses.GO-Invest Chairperson Patricia BacchusChairperson of the Guyana Office for Investment (GO-Invest), Patricia Bacchus said the implications of Brexit for the Private Sector in Guyana and the Caribbean were many. She was among a group of speakers at a discussion organised by the Vice Chancellor of the University of Guyana, Dr Ivelaw Griffith recently.According to Bacchus, Britain remains a key market for many of the Region’s products and services even though there has been some general decline over the years. In 2008, she said, Caricom exports to the United Kingdom stood at some US$839 million. However, six years later, in 2014, it stood at US$495 million, a 30 to 35 per cent decline. That, she said, represents about two per cent of Caricom exports.In Guyana, based on information gathered, it was shown that for the first four months of the year, exports to the United Kingdom were somewhere around US$31 million or $6.5 billion. Bacchus said if the same momentum was maintained, there would be an anticipated $20 billion per annum in exported services and goods to the UK. For Guyana, it represents about seven per cent of total exports, which included commodities such as fuel and mining products; banana, sugar and rum; minerals, particularly gold, and fertilisers.Speaking about the direct implications, Bacchus said currency sensitivity and the exchange rate were set to affect businesses in the Region. “We all know that post Brexit votes there was a situation where the pound slide to a 31-year low. It has rebounded, but it is about 10 per cent below where it was trading against the US currency.”According to her, there are businesses and nations selling products and services in the UK market for which agreements are denominated in the pound currency. “That means now that the value that was being received by the seller is significantly reduced if they are being paid in pound sterling.”She said while there was some stabilisation going on right now, uncertainty would prevail and the currency sensitivity issue would also prevail.“So businesses and nations that are exposed to the currency fluctuation are going to be tasked with examining what it means to them. There will have to be some renegotiations with the UK or even seek out other markets,” she told the audience at Duke Lodge.Other implications Bacchus spoke about included access to the market on a free trade, free quota basis and operational exposure for businesses founded outside the UK that are operating within the country. She said because they have set up an office in the UK, they enjoy access to the UK market under a harmonised regulatory and tariff system with free cross border banking facilities and free movement of people and skills. The new situation will, however, pose some challenges.>>>>>>>>>>>>>>>>>>>>>Pic saved as BrexitCaption: GO- Invest Chairperson Patricia Bacchuslast_img read more

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