Dialogue between public/private sectors needs to be increased
-President says at turning of sod ceremony for GBTI’s main branch

Georgetown, GINA, April 28, 2008

“The financial sector of itself is the key factor in driving economic growth and often it is a good predictor of future economic growth capital accumulation.”
            This is according to Head of State Bharrat Jagdeo who delivered the feature address today at the turning of the sod ceremony for the construction of the new Guyana Bank for Trade and Industry’s (GBTI’s) main branch, Kingston.  
            President Jagdeo noted that if the above theory is subscribed to then there will be a deepening in the financial sector which would present a good picture of future economic growth and capital accumulation in the country which, according to the President is absolutely vital for Guyana to fulfill its true potential.
            “We will have to jointly, that is the authorities and the players in the financial sector, evolve an optimal structure for the financial sector in Guyana and one of the instruments and institutions that are most suited to our conditions, but bears some similarity to countries that have a similar general economic structure as ours,” he underscored.
            It was in this light that the President stated that dialogue between the public and private sector in the financial area needs to be increased given the importance of the sector for the economy currently and in the future and to ensure that ‘we assist in evolving those instruments that can best serve our people in the economy and in the process make money for these institutions because they are there not as philanthropy, but as businesses’.     
            President Jagdeo congratulated the principals of the Bank on the momentous occasion in the life of the institution as he acknowledged the amount of work which had to be done for the Bank to get to that point.
            “I hope that this, we are told, would not become another beautiful building in the city…but the construction of this building will give further impetus or innovation in the financial sector. We have seen many other financial institutions over the recent past also attempting to put in place head office structures and I’m very pleased with this trend,” he added.
            President Jagdeo pointed out that there has always been a theoretical and empirical debate about whether the healthy financial sector is a product of a healthy economy or whether the financial sector is the impetus to a healthy economy.
            The Head of State is of the view that the financial sector forms a derivative and is not a passive evolution nor off spin of the economy.
            “And to support my point about the importance of the financial sector to economic growth, we can observe around the world some very practical examples of how devastating it is to real sector growth, struggle in the financial sector,” he said, but pointed out that this depend to large extent on the level of integration with world capital markets.
“We have to very vigilant that the type of instruments that we develop here in Guyana, that they are suited to our specific needs, the needs of the private sector, the needs for the real sector of the economy, but they don’t import the level of risk some of the instruments that are developed in other capital markets do,” the President emphasised.
            He said Guyana is optimistic about its future as he stressed that this is why Guyanese are being urged by the administration to take up world challenges, especially the current food crisis and make this into a positive opportunity where it can gain more especially from the Regional food market.   
            “Many of our sectors are growing. Last year, the currency market, the transactions were US$3.5 B, credit grew from $48B in 2004, that’s credit to the private sector in 2004, to $73B in 2007. This is a healthy sign of a recovering economy,” he underscored.
            Preceding the President’s address were addresses by GBTI’s Chairman Robin Stoby and Chief Executive Officer of the Bank, Radhakrishna Sharma. In his address, Sharma also alluded to the food crisis and rising food prices.
            “As an agricultural producer, Guyana’s source of strength potentially lies in capitalising on its natural advantages in agricultural production and developing and implementing positive and proactive approaches,” the CEO said.
            In this light, he said the Bank applauds the initiative of the President in spearheading the focus on Agriculture at the CARICOM level.              
            Sharma noted that in early 2004, in keeping with the strategic vision of the Bank, the Board of Directors decided on the establishment of a Head Office of the Bank, which would reflect the forward looking approach of the Bank to being a strong financial player in the country’s growing economy.
            The Bank’s main Branch is currently located at Water Street.   

            At the forum as well were Ministers of Finance, Dr. Ashni Singh and Tourism Industry and Commerce, Manniram Prashad and other banking officials.

     

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