Even as levels of formal unemployment raise increasing concerns about creating more opportunities for self-employment, one of Guyana’s most respected and successful entrepreneurs has criticized the slow pace of the implementation of the country’s six year-old Small Business Act.
Designed, according to the legislation “to provide for an incentive regime and support programme for small business,” the Act has attracted considerable controversy in the business sector including among small and medium-sized enterprises having regard to the protracted delay in implementing its provisions.
Writing in the 2009 Annual Report of the Institute of Private Enterprise Development (IPED) Board Chairman Dr Yesu Persaud said that IPED was disappointed by the pace at which the Small Business Act is being implemented and the lack of attention and focus by the Small Business Council in adequately handling issues of the sector.” Asserting that the operating environment for small business is inadequate to meet the needs of the sector Dr Persaud declared that there was a need for a national policy on micro, small and medium enterprises.
The remarks by the man widely regarded as the dean of the local business corps contrast sharply with the deafening silence of the rest of the private sector over the pedestrian pace of the implementation of the provisions of the Act and what has been a near ‘policy’ of silence on the issue by the Ministry of Tourism, Industry and Commerce, the body responsible for implementing the provisions of the Act.
In his comments contained in IPED’s 2009 report Persaud says that “MSME’s are important to the success and growth of the local economy,” a point made previously by advocates of a speeding up of the process towards the full and effective implementation of the Act. While, on paper a Small Business Council exists, questions have been raised regarding its effectiveness in pursuit of its mandate which includes the preparation of a Small Business Policy and Administrative Reform Agenda that should include “recommendations for the addressing of development issues, the granting of incentives to small business and the facilitation of measures affecting them.” However, sources close to the Tourism, Industry and Commerce Ministry and members of the council have said the limited financing has stymied the council in pursuit of its mandate.
Persaud, who heads various large local business enterprises including Demerara Distillers Ltd and Demerara Bank says MSME’s “usually constitute the bulk of the business that operate within a country. These enterprises,” he says, “face lots of difficulties in areas such as financing, marketing and entrepreneurship.”
The Small Business Act provides for the establishment of a Small Business Development Fund the mandate of which includes providing “support and access to financing for small businesses” and providing “institutional support for organizations representing, promoting, supporting and strengthening small business.” Funding for the Small Busi-ness Development Fund is expected to come from funds appropriated by the National Assembly and monies raised by government through loans and grants. The Small Business Bureau is designed to be the Secretariat of the Council and is to be responsible for the day-to-day administration of the work of the Council.
When Stabroek Business checked with the Tourism, Industry and Commerce Ministry a few weeks ago we were told that the bureau was on the verge of being set up and that it was likely that a Chief Executive Officer and a limited number of additional staff would be appointed immediately. Among the functions of the bureau are the promotion of developmental issues relating to or affecting small business at a governmental level and coordinating programmes for small business development with funding provided by government and other agencies.
Critics of the Small Business Act have pointed to the considerable influence which government has on the appointment of key personnel within both the Council and the Bureau and the influence which it wields in determining those entities which qualify for the designation small business. While privately some officials in the business sector have express-ed concern over both the structure of the Small Business Act and the protracted delay in its implementation, Persaud is the first private sector functionary to comment publicly on the legislation.