Chargé d’affaires a.i. Mark Cullinane’s Remarks
American Chamber of Commerce (AmCham) Guyana Luncheon
Thursday, February 20, 2020
12:00pm – 1:40pm
U.S. Partnership Opportunities: Development, Finance, Investment, and Trade
Thank you for that kind introduction, Zulfikar, and I want to express my deep appreciation to you and the AmCham Board for inviting me to speak with you today and to receive your questions and comments.
For those who do not know me well, I hail from Massachusetts, in the Northeastern quadrant of the United States, where, unfortunately, cricket is known as a grasshopper and not as the magical sport it is. I have the pleasure of being married to a former U.S. diplomat, Marcia Bosshardt, and we have served together in four Latin American countries along with our now 22-year old twins. Guyana is our first experience living in a Caribbean Nation. There are probably one-hundred reasons why I wanted to come to Guyana, but leading the list is the plain fact that Guyana is at a point of inflection.
As some other nations have before it, Guyana could succumb to the resource curse in which more wealth yields less democracy, stability, and production, or Guyana can use its wealth to promote transparency, economic diversification, and social welfare. It will fall to Guyana’s leadership, including the private sector leaders in this room, to choose the better path for the benefit of all of Guyana’s citizens. The role of U.S. diplomats is to support Guyana’s journey to reach its full potential over the next decade.
It is in that spirit that I want to talk with you today about U.S. partnership opportunities in development finance, investment and trade. The topic is near and dear to me, as I have devoted most of my career to economic and commercial issues. Here in Guyana, one of our top mission priorities is to support Guyana’s economic transformation by leveraging private and public sector participation in International Development Finance Corporation (IDFC), Export-Import Bank (Ex-Im), U.S. Trade and Development Agency (USTDA) and similar programs. If these titles are unfamiliar to you, I promise to circle back and explain then in more detail.
Businesses in Guyana have a wide variety of international partners from which to choose and your options will only increase as the economy grows. Currently, the United States is Guyana’s second largest trade partner for imports and exports. With the hope that we will become Guyana’s partner of choice, the U.S. Department of Commerce approved the U.S. Embassy as a partner post last October, meaning we can provide the full range of Commerce services to U.S. investors through contact lists of Guyanese business and counselling on market conditions.
In a lot of ways, a closer economic relationship between the U.S. and Guyanese private sector seems natural. Given the proximity, local familiarity with American goods and services, and the existing familial and cultural ties between our two countries, Guyanese consumers already know and may prefer U.S. products over those from other markets. Our goal is to make it easier for you to access those goods and services and offer them to your customers.
For those reasons, we want to ensure that AmCham members take full advantage of U.S. programs and policies designed to attract bilateral investment and grow trade. So, let’s talk about those programs, starting with the Caribbean Basin Trade Partnership Act (CBTPA) which is administered by the United States Trade Representative (USTR).
CBTPA and programs like it are important elements of U.S. economic relations with neighbors in the Caribbean because they aim to: (1) facilitate the development of Caribbean Basin economies; (2) provide enhanced access to the U.S. market; and (3) provide duty-free treatment to originating goods of partner countries. CBTPA makes the United States a preferential import market for certain Caribbean products by offering NAFTA- equivalent tariff treatment for certain items. The list of over 5,800 tariff lines is long, but it includes: petroleum products, certain chemicals, apparel, footwear, leather goods, and many others.
Last September, USTR’s director for this region visited Guyana and had several meetings with GO-INVEST, private sector organizations, individual companies, and CARICOM to discuss this legislation and how it can be used to expand economic opportunity for local exporters. Did you know that Guyana is leaving money on the table under CBTPA by paying tariffs it does not have to pay? Here are some examples:
- Over half of U.S. imports of chemical and related products, energy-related products, and textiles and apparel (and a little under half of agriculture products) eligible for duty-free treatment under CBERA/CBTPA are needlessly paying duties.
- Guyana exported no textile and apparel to the United States under the program in the past two years.
- Are Banks DIH or DDL in attendance today? Did you know that CBTPA provides duty-free treatment to certain liqueurs and spirituous beverages made from Caribbean rum?
- I know AmCham has seafood companies on its roster. Did you know there are tax exemptions in your sector as well?
- In 2018, Guyana exported (and paid duties on) over 700,000 U.S. dollars in transportation equipment that was eligible under CBTPA.
USTR offered to identify sectors that are ripe for growth and to improve ease of doing business and trade facilitation, and we are happy to put you in touch with the right folks to get that process started. The Embassy’s Political and Economic team can provide you with the full list of eligible products as well as the necessary forms, and a manual on the program with customs procedures. We want you to benefit from this opportunity!
Shifting our attention from trade to investment, I am pleased to tell you about the Development Finance Corporation (DFC), a government agency created in 2018 as America’s investment bank. It is a reincarnation of the Overseas Private Investment Corporation (OPIC) and USAID’s Development Credit Authority, but it more than doubled the previous investment cap to $60 billion. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world. In doing so it aims to create strong international markets based on transparent competition and rule of law.
DFC offers equity and debt financing, political risk insurance, and technical development to companies that submit proposals for worthy overseas projects. Its priority areas of investment are energy, healthcare, infrastructure, technology and supporting small businesses and women entrepreneurs.
- In Energy: DFC’s investments help countries meet the growing demand for energy in remote and developing areas, expand access to renewable energy, and promote energy independence.
- In Healthcare: By investing in healthcare, DFC projects provide ready access to medical professionals, facilities, and lifesaving treatments, as well as promote critical water, sanitation, and hygiene projects.
- In Infrastructure: DFC’s investments in critical infrastructure projects, including roads, bridges, and ports to create jobs and economic growth through increased trade and regional connectivity.
- In Technology: By investing in the technology sector, including next generation telecommunication equipment and services, DFC helps connect emerging markets to the world by creating new opportunities for the developing world to leapfrog traditional boundaries.
- In the area of Financing for Small Businesses and Women Entrepreneurs: DFC puts an emphasis on investing in women entrepreneurs and small businesses to create jobs and opportunity at the local level that can be reinvested to grow communities.
Ambassador Lynch met with DFC officials this past Monday in Washington and they are enthusiastic about Guyanese companies approaching them for loans or political risk insurance. In fact, the DFC wants to work closely with AmCham organizations around the region and challenged AmCham Guyana to develop five proposals from its private sector membership. Again, our Political and Economic section will be glad to talk you through the process.
If your company is interested in purchasing U.S.-made goods and services, consider Ex-Im Bank as a financing source. The Export-Import Bank of the United States is a U.S. government agency whose mission is to support the export of U.S.-made goods and services. Ex-Im is usually the most cost-effective source of financing for international customers, including end-user project developers. Much of Ex-Im Bank financing is provided to international customers via loan guarantees. With the loan repayment 100% guaranteed by the U.S. Government, the interest rates are lower, and the repayment terms longer, than might otherwise be the case. Ex-Im Bank can provide corporate loans to creditworthy buyers based on analysis the borrower or guarantor’s existing financial condition. Please contact us if you are considering applying for an Ex-Im backed loan to finance a major international purchase. Our Political and Economic section can advise you about credit standards, environmental requirements, and other details.
I would be remiss if I did not mention today the Department of Commerce Trade Mission to the Caribbean in June.
I know that many of you have traveled to the United States for trade conferences such as the Offshore Technology Conference in Houston, Texas. But this is the first time that an event like this is coming to Guyana. During the first week of June, representatives from U.S. companies across a diverse range of sectors who have identified Guyana as a market of interest will travel to Georgetown. And they want to meet you! They will be looking for local joint venture partners, licensees, franchisees, distributors, and more. There is a major role for AmCham and its members to play in making this trade mission a success and ensuring that the participants return home with the right information and connections to facilitate major investment here.
- As time gets closer, we will share which U.S. companies will participate and we will ask for AmCham’s assistance in arranging business-to-business meetings.
- Additionally, this event is a huge undertaking and we will be looking to contract and train a small professional support team, so we’ll ask you to publicize those opportunities to your networks.
Before I open the conversation to your questions, I would like to close with two observations; the first about governance and the second about Guyana. On governance, I want to congratulate the AmCham board for taking its fiduciary responsibilities seriously. I had the pleasure of attending the January AmCham Board meeting, and I can tell you the Board’s duty of care for the mission and duty of loyalty to member interests were evident in the discussion. So, keep doing what you are doing to maintain active board participation.
My observation about Guyana goes to its comparative advantages in a global economy, starting with its people and including its natural resources. While much is made of Guyana’s burgeoning mineral wealth, I am talking about the fact that there are precious few countries on this planet where you can hop into a plane and see pretty much nothing below you but unblemished, green expanse for 30 minutes. Some might refer to this as unproductive land, but it truly represents Guyana’s sovereign holding of what is in limited supply globally. I encourage you as you think about infrastructure projects and expanded energy grids that you consider biodiversity corridors to retain one of the many things that makes Guyana special.
Let me stop there to take any questions you may have.