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… Chinese take over Lethem’s Commercial Zone
Decades ago, Marlon Jardine’s rendition, “Guyana looking just like China,” became very popular locally. This year, this hit remains relevant as Chinese construction companies, restaurants, clothing and hardware stores get even more comfortable in here.
A recent trip to Lethem revealed that China’s heavy presence is not relegated to Georgetown. Chinese dominate several areas—Lethem is one of the main locations.
Locals inhabiting Lethem say that Chinese nationals began appearing some 15 years ago. However, they say that the Chinese nationals have been managing to increase their strength each year with operations growing in size and number. Now, the Chinese enjoy almost full control of Lethem’s main economic activity.
Lethem only became a town less than two years ago—on October 20, 2017. The town, which is still considered a remote area, has just about 1,158 persons living there.
But, no less than 20 stores are owned and operated by Chinese in the Lethem Commercial Zone. These stores are big and well stocked. In fact, some of them can even be compared to a few of the better known Chinese stores on Regent and Robb Streets in the city.
SO, WHY ARE THEY THERE?
China’s market is Brazil. This newspaper understands that 90 percent of Chinese customers are Brazilians. Brazil has over 209 million people.
The three towns in Brazil closest to the Guyana border are Bonfim (just as you cross the Takutu Bridge), then there are Boa Vista, and Manaus.
Manaus alone boasts a population of 1.7 million people. The other two towns—Bonfim and Boa Vista—have 10,951 and 277,799 people respectively.
Now that is a good market. The demand can be measured by the fact that no fewer than three truck loads of goods go to Lethem per week.
So good is the network of Chinese Nationals in Georgetown and Lethem that “the one set of trucks supply all the stores. So they use about two or three trucks and those bring goods for everyone.”
WHAT IS GUYANA GETTING?
When Kaieteur News visited Lethem, the obvious question was, “How is Guyana benefitting from this takeover”?
There was not much that the locals could have pointed to.
However, a few were quick to note that some local food joints benefit. “When the Brazilians come over, they have to eat.”
Another fact that was pointed to was that about 30 locals have gained employment as sales representatives. But many believe that this is mainly because of the language barrier. Most Guyanese living in Lethem speak Portuguese so they can relate to the Brazilian customers.
This newspaper spoke to some of the sales representatives. They view their pay as “reasonable” but indicated that they do not make contributions to the National Insurance Scheme (NIS).
Many of the stores are said to be “subsidiaries” of commercial establishments in Georgetown and have ‘temporary’ licences.
Therefore, when goods are being transported to Lethem from Georgetown, no taxes are paid as it is assumed that relevant taxes were paid in Georgetown. This newspaper understands that random searches are sometimes executed at checkpoints.
WHAT IS VAT?
Information received by this newspaper suggests that the Chinese stores operating in Lethem usually do self assessment to pay ‘regular’ taxes. But they do not pay Value Added Tax (VAT).
In fact, most of these stores are not even registered for VAT. Further, there is little or no monitoring of the quantity of goods sold.
No bills are issued. One shopper bought one item each from about five of the stores and it was the same thing at all the locations—no cash register, no receipt.
WHAT ABOUT US?
Many business owners from Lethem and Georgetown that had a place in Lethem Commercial Zone before the “takeover” are lamenting loss of revenue.
Locals at Lethem said, “Them Guyanese businesses had to go because they could not compete with the Chinese. Chinese offer nice, nice price.”
Kaieteur News understands that in the beginning, the locals were not as upset as they are now.
Initially, when they went out of business, some of the locals rented their buildings to Chinese and “fall back on rent money.”
But now even that feature is being eliminated. The Chinese are now moving to erect their structures. When this newspaper visited, construction was ongoing on two buildings. Some were already completed.
The Chinese are enjoying the area.
THE ROAD
The main economic activity in Lethem is commercial. Probably with the exception of Rodeo, nothing much happens there.
Yet, Government is seriously examining constructing a road from Manaus to Georgetown.
Several Ministers had indicated that China is expected to fund the project. In 2017, Minister of State, Joseph Harmon, was asked about this.
At a post-Cabinet press briefing, he said, “This was one of the matters that was raised – the question of the road between Lethem and Linden and going through…That is really one of the major public infrastructure project; this has actually been on our agenda from the time we came into office.”
That was even before Guyana signed on to China’s Belt and Road initiative. The road would be to whose benefit?
Brazil or course, Guyana’s neighbour, needs access to the Atlantic. But another major beneficiary would be the Chinese. This is known on the international stage.
Just last month—February 18—, Global Research reported, “Further adding to the explosive geopolitical cocktail of the region is the fact that China has formally incorporated Guyana into its Belt and Road Initiative and is building a highway link from Manaus in Northern Brazil through Guyana giving Brazil far more efficient access to the Panama Canal, cutting thousands of miles off the shipping route.
Earlier in the year, on January 28, Dialogo China reported, “Today, the Rupununi border town of Lethem is a 14-hour ride along dirt roads from the Guyanese capital, Georgetown. Red dirt is set to be replaced by asphalt and Lethem converted into a major trading hub. China is expected to provide the required capital and carry out construction work.”
Important to note, too, is what Research professor, Dr. Evan Ellis had to say in his paper, titled, “The future of Latin America and Caribbean in the context of the rise of China.”
He wrote, “They (China) also will likely include enhanced river and multimodal routes linking Brazil to the Atlantic in a southerly direction through Paraguay, Uruguay, and Argentina, and north to the Atlantic through the Guiana Shield, with improved highways through northern Brazil to the Atlantic coast of Guyana and Suriname.
“This infrastructure will increase the flows of people and goods across all ten countries’ land borders which will focus Brazil’s attention to the security of those borders and foster coordination with its neighbours, while increasing Brazil’s interest in their internal affairs, affecting that coordination and security.”
Comments
In my opinion, this situation is a failure of the Guyana government, past and present, to develop the region.