Business Editorial
The newly elected executive of the Private Sector Commission (PSC) has outlined a raft of strategic initiatives, which it says will be on the front burner of its 2010 agenda. Tax reform to no one’s surprise is very much at the top of that agenda. Since the introduction of the value added and excise taxes at the beginning of 2007 the PSC has sought to step up the pressure on government to address tax reform though it has to be said that government has not, during that time, appeared to be in any undue haste to address the issue. Some discourse involving, we understand, foreign consultants and a framework paper that envisages the direction of the substantive discussion has ensued but those private sector officials to whom this newspaper has spoken – and we have spoken to many – have all expressed a healthy measure of frustration over the fact that not much in the way of progress has been made towards tax reform and they have used the facility of off the record comment to make it clear that they blame government for the protracted delay. The PSC has also identified the upgrading of an inadequately educated work force and access to financing which limitations were flagged in the 2009/2010 Global Competitiveness Report prepared by the World Economic Forum as factors that impact negatively on the local business climate.
Also numbered among the 2010 objectives of the PSC are legislative measures that seek to remove archaic laws pertaining to business, the creation of e-legislation and the streamlining of the commercial court and in this regard the PSC has indicated that it regards these objectives as achievable within the framework of the public/private sector National Competitiveness Strategy. These are all important measures that have to do not only with enhancing the performance of the private sector but also with creating an enabling environment for investment by foreign entrepreneurs. Another important target identified by the PSC is the improvement of port facilities which, presumably, includes putting more effective pressure on the local maritime authority to move to clear the badly blocked Demerara River channel used by vessels to move cargo to and from Guyana and the improvement of the attendant port facilities including pilot boats.
The initiatives on which the PSC has promised to focus this year number more than 20. Some of them are major ones and one wonders whether – given the many internal limitations to which they confess – all of the goals that they have identified are doable or whether the new executive headed by Banks DIH Ltd. Executive Ramesh Dookhoo is simply not seeking to make an impression early in its tenure. There is, of course, nothing wrong with seeking to make an impression except, of course, that where such an impression is simply not made the PSC executive must be prepared to take the flack that goes with failure.
Also numbered among the PSC’s 2010 list of things-to-do is the pursuit of the creation of a Small Business Development Fund. This is not the first time that the PSC has made a commitment to supporting the small business sector in its quest for greater access to financing. Indeed, such measures as have been announced by the commercial banking sector to make available lending windows for small and micro businesses have to be credited much more to the banks’ own recognition to the continual growth of the small business sector than on any energetic lobbying effort on the part of the PSC.
In fact, if the truth be told, the PSC has been preoccupied mostly with the concerns of mainstream businesses which, apart from tax reform, have included the flight of skills and consequential workforce unavailability, energy costs, quality of services, environmental regulations, infrastructure and in the case of the manufacturing sector particularly, market size.
Arising out of the pervasive need for a skilled workforce the private sector has begun to examine workforce development initiatives in collaboration with the University of Guyana. Arising out of this, hopefully, will come an enhanced classroom focus on producing the skills necessary to fill the new technology-related positions that will continue to surface in the private sector. Certainly, one expects that ongoing investments in telecommunications infrastructure, which ensure that high-speed bandwidth communications become available for business is likely to spawn a new generation of entrepreneurial enterprises and create additional demand for skilled workers.
Setting these aside the PSC will also have to consider other initiatives taken by developing countries in consonance with changing trends in the global business climate. These include lobbying for tax breaks and other incentives for businesses that are expanding locally; advocating that income tax be kept as low as possible in order to ensure higher worker net pay and the attendant maximizing of purchasing power; sustained insistence on the creation of one-stop centres to streamline the process for obtaining business permits and support for the development of affordable housing in order to attract and retain key workers who may otherwise be priced out of the local housing market in a growing economy. In other words the agenda of the PSC must take account of factors that go beyond profit and profitability and must take a broader view of what will be required to ensure the growth and expansion of the business sector.
The other challenge which the PSC will face in pursuit of the initiatives that appear on its 2010 agenda is that many of the key ones fall within the ambit of the National Competitiveness Strategy and, by extension, depend on the pace at which government, the private sector’s ‘strategic partner’ is willing to work. It is no secret that the private sector continues to mutter under its breath about the crab-like pace of progress on issues like improving the customs regime, tax reform, the full implementation of the Small Business Act, the repealing of outdated legislation governing the private sector and the framing of a national entrepreneurship policy.
The truth of the matter is that for all the talk about a strategic partnership between government and the private sector, the relationship has been known to ignite periodically and most of the incendiary incidents have centred around restrictive state practices and the sloth of the government bureaucracy in taking processes forward. For all its setting out of an ambitious 2010 agenda the PSC will be challenged to meet many of its goals.