Georgetown, GINA, January 30, 2004

Minister of Finance Sasenarine Kowlessar has said that although the draft report on remittances to Guyana by United States Agency for International Development (USAID) claims approximately US$250 M is remitted to Guyana annually, that figure is highly overstated.
The USAID report titled, ‘Linking Back to Communities of Origin: Contributions of the Guyanese Diaspora’, was presented to the public today at the Le Meridien Pegasus. The report was prepared and presented by Inter- American Dialogue, Dr. Manuel Orozco.
Minister Kowlessar said that remittances do play an important role in the economic and social development of Guyana and the rest of the developing world.
He noted its contribution to the foreign exchange market, investment, development in education and health, and its assistance in poverty alleviation.
However, the Finance Minister said the Government’s views differ from that of the report with the level of the amount remitted, since nothing is reflected in the Balance of Payments - Current account, monetary aggregates - money supply and reserves.
Further, the Minister noted that if the figure was accurate, the total figures from other countries, such as Canada and the United Kingdom would be much higher.
Additionally, he noted that the report claims that remittance contributes 33 percent of GDP and 50 percent of debt relief, which would be enough to finance Guyana’s current account deficit.
Another flaw in the draft report is the omission of net remittances. Minister Kowlessar said that the report focuses on gross remittances and does not take into consideration flows out of Guyana. He noted that the cost of training – brain drain – is excluded from the report
As a result, Mr. Kowlessar noted that the analysis lacks a dynamism dimension and the total figure of remittance needed to be revised.
The report also encouraged structural changes and greater Governmental involvement in the remittance area of Guyana.
Minister Kowlessar noted that the private sector, especially the banking sector, needs to have greater involvement, since Government is merely the facilitator of the process.
He mentioned Government’s assistance to the financial sector in terms of providing the legislative framework – New Companies Act, Small Business Act, Investment Code – among others.
He said that Guyana needs to reduce its cost of remittance transfer and the financial incentives should provide the necessary framework for the banking sector to take up the slack.
It was also noted in the report that most remittances are sent on a sentimental basis and not as capitol investment.
Minister Kowlesar noted that many efforts have been made by Government to have the Guyanese Diaspora come and invest on a business scale.
The report noted that compared to other Latin American and Caribbean countries, the cost of remitting to Guyana is much higher. This was attributed to the volume of remittance, the amount remitted and competition in the remittance field.
Along with the Minister of Finance, United States Ambassador to Guyana, Roland Bullen, members of the diplomatic corps, the private sector and members of the general public attended the presentation ceremony.