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Greenbacks for Guyana?
Mexico Business / May 1996

By Larry Luxner

In one of South America's fastest-growing economies, calypso and reggae are vastly more popular than salsa, nearly everyone speaks English and the national sport isn't soccer but cricket.

Welcome to Guyana, an Idaho-sized nation of 750,000 whose GDP grew 6-7% last year. That growth, topped in the region only by Chile and Peru, was fueled in part by large foreign investment in mining, timber and agriculture. Even a massive cyanide spill at the huge Omai gold mine south of Georgetown, the capital, couldn't derail the country's economic boom.

"Guyana is on the brink of becoming the most dynamic emerging market in the Western Hemisphere," claims Colin Vickerie, CEO of New Jersey-based Carivest Distributors Inc. "Its economy has made a 180-degree turnaround since 1992."

Vickerie and his three Guyanese-born business partners -- Osmond Adams, Samuel Johnson and Winston G. Saunders -- believe their native land offers potential investors a far better return on their money than much bigger countries like Argentina, Brazil or Mexico, and have embarked on a three-nation road show to prove it.

Carivest's goal: to raise $100 million via the Guyana Liberalization Fund, which seeks to collect money from ethnic Guyanese in the U.S., Canada and Great Britain, and invest it in promising enterprises throughout the once-Marxist South American nation. Those enterprises include everything from garment factories and power plants to highways, pineapple-canning facilities and shopping malls.

"Our marketing strategy is to attract as many investors as we can," said Vickerie, formerly vice-president of the investment manager services division of the United States Trust Company of New York. "We're marketing Guyana as Latin America. The investment world will look at anything in that area, and Guyana is an emerging market."

Carivest's road show coincides with the fund's registration in the Cayman Islands, which qualifies it for offshore tax-exempt status. The minimum investment is $3,000. During the first year, participation will be limited; thereafter, it will open quarterly.

"Most Guyanese have thought of investing in their country, but would lose their shirts in the process," said Vickerie, who has also worked for Bankers Trust Co. of California, Chase Manhattan Bank and Citibank during his career as an investment banker. "If we can attract 15,000 Guyanese for an entrance fee of $3,000 each, that's $45 million."

Half the capital, he said, will be invested in road construction and repair, housing, electricity and telecommunications projects; many of these projects will involve imports of capital and related equipment, technology and expertise. The other 50% will be invested in U.S. government securities as a less risky source of capital generation.

Vickerie says Carivest will be taking a particularly close look at manufacturing. Recent studies suggest that the cost of labor in impoverished Guyana is 65% lower than other nearby manufacturing sites -- even after a 300% cost-of-living adjustment. Agri-business is another lucrative possibility, with Guyana poised to export cassava starch, hot pepper sauce, tomato paste, nuts, coconuts and pineapples to nearby Caribbean islands.

"Latin America's top funds have lost an average 20% in value over the last 12 months," Vickerie said, adding that in contrast, "we'd average 11% in returns by the second year and 15% in the third year."

Nevertheless, partner Samuel Johnson suggests the fund shouldn't be seen as a get-rich-quick scheme, but rather as a sound investment -- and an act of patriotism.

"Our mission is to rebuild Guyana, one community at a time," he said. "We will not stop until the job is done."

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