Dear Editor,
Turn around, and in the blink of an eye, there is a new business venture on the rise. It is as if everyone experiences irrational prosperity and success at the same time, on the first try, and in perpetuity. However, closer scrutiny reveals seriously flawed fundamentals, and numbers lacking in substance and credibility.
Pick a business: pots and pans, electronics, appliances, vehicles. Ascertain target population; couple this to the subset of buying traffic, buying interest, buying power, and buying volume, circumscribed further within the arc of financial constraints. In the interim, cognizance is urged regarding product life-cycles and replacement horizons; and, for good measure, add competitive clones and copycats. When all of this is searchingly considered within the Guyana context, serious issues arise concerning revenues, profitability and legitimacy. Issues further compounded when other components of financial statements are taken into account.
Factor in wages, duty, taxes, and overheads, and the picture reddens. Of necessity, one must include the under-pricing tactic that has plagued the few genuine enterprises remaining; a tactic that tells its own sordid story. When reduced to nuts and bolts, there is not enough revenue –holding expenses to zero – to justify or explain the extravaganzas that mushroom across the landscape; to keep entities as ongoing business concerns; or to legitimize the wealth of operators. To elucidate, a few questions might be appropriate at this juncture.
How many vehicles are (or can be) sold in Guyana per month? How many refrigerators? How many zippers and how much cloth? The latter question may be moot, given that the principals departed in ways not of their choosing. The last question, dear to the heart of anti-money laundering folks is: what is the source of wealth?
For regular people, it is inheritance or winnings; these are a small number. For most, it is the long hard road of frugality, savings, and from the bottom, step by painful step. Gates, Buffett, and some of the successful men around are living examples of this way. But in the upside down world of Guyana (all gains, no losses, no risks), the wunderkinds start at the very top. Their grubstake can be so huge that they can erect a Bank of Guyana building, and stock it to the rooftop; some call it venture capital, vice capital would be more accurate. Here is seed money by the tractor-trailer load, and planted in vast vertical acreages. A sowing of the toxic, and the harvesting of returns on the scale of an exponential green(back) revolution.
Editor, the classic laundering scheme consists of three parts – placing, layering, and integrating. It involves usually a foreign consortium’s gossamer web of funding; a local business face; wash activities; and inflation of records. Most importantly, unlike regular businesses, profit is not the driving motive. Think of this: a multimillion dollar outlay for start-up and structure (the cost of doing business) is easily and quickly recovered through fictitious revenues – revenues irrefutable given the preponderance of cash in local transactions. Stated differently: sell a dollar, but record and deposit ten (or a hundred). Even pay the taxes, because at the beginning of the next day, clean money flows out of the banking system (or insurance industry). Last, repatriate to sponsors the agreed fifty cents on the dollar (US), with the remainder part of the local nouveau riche accumulation. Since billions of US dollars are locked out of the mainstream, this is small change, but every dollar ‘processed’ counts. The result is that everyone is happy: backers get clean dollars; business people retain their fifty cents’ cut for being a front; shoppers find bargains; and the government trumpets economic activity.
Some of this was first touched upon about ten years ago. Today, the flawed fundamentals and mysterious alchemies practised undermine any and every claim regarding individual bona fides and legitimate economic endeavours. It is clear that, all things considered, not even steroids and rocket fuel could power the runaway business successes realized in Guyana. Perhaps, it is something simpler; something white and powdery, and valiantly supported by a neutralized and accommodating administration.
Yours faithfully,
GHK Lall
