“Part of the problem has to do with the fact that there is a heavier representation from the service sector than the manufacturing sector in the GMSA. There is a feeling among some members that their interests are not being served and that the GMSA does not speak for them.”
Chief Executive Officer of Fibre Tech Industrial Plastics Somat Ali is advocating the creation of a government ministry with direct and exclusive responsibility for manufacturing and industry, which he said is critical to the growth and development of the local manufacturing sector.
“In the same way that housing, for example, is benefiting from a strong government focus resulting from a vigorous lobby, so too the manufacturing sector should have its own ministry and its own minister,” to make a case for the sector, he said.
Ali told Stabroek Business that he believes sectors like manufacturing and industry ought not to be linked with trade under one portfolio. “The problem there is that you become preoccupied with the business of imports and exports and areas like manufacturing and industry tend to get left behind.”
And the re-migrant businessman told Stabroek Business that the failure of the Guyana Manufacturing and Services Association (GMSA) to serve the interests of the manufacturing sector had given rise to calls by some small operators in the manufacturing sector for the setting up of a local small manufacturers association. “Part of the problem has to do with the fact that there is a heavier representation from the service sector than the manufacturing sector in the GMSA. There is a feeling among some members that their interests are not being served and that the GMSA does not speak for them.”
Ali told Stabroek Business that he had been personally approached by some local manufacturers advocating the creation of an association to serve the interests of small operators. “They say their voices are not heard, that they are not even notified of meetings of the GMSA.” And according to Ali, while he understands their problem, “I told them that I prefer to advocate for change within the GMSA itself.”
According to Ali there is a dire need for strong institutional support for small manufacturers in Guyana. “Small manufacturers need help. Many of them want to move on but they do not know where to go or what to do to get to the next level. There are hundreds of bottom-house operations in various parts of Guyana that are actually doing quite well. Many of them are employing up to ten or twelve people. It is not that they do not want to grow but they do not know how to. Significantly, a large number of them are involved in agro-processing on which there appears to be a focus these days,” Ali told Stabroek Business.
Asked whether his optimism about the potential for growth in the manufacturing sector may not be misplaced given that the provision of electricity is unreliable, Ali said that while reliable power supply continued to be the bane of the manufacturing sector’s existence the problem was not insurmountable. “We need to come to terms with GPL’s limitations. There is an argument to be made for beginning to scale back the operations of the power company to provide electricity to the capital and its environs only. “Both existing businesses and new investors may well wish to invest in smaller cogeneration facilities which can then be used for both industrial and domestic purposes. The investors can sell power to consumers.”
And Ali told Stabroek Business that while he believed hydropower could ultimately prove to be the best, Guyana needs to ensure that “we get the best expertise and the best technology if we intend to pursue hydroelectricity as a long-term option.”
Asked to comment on the current state of the country’s economy Ali said he believed it was largely being fuelled by the government’s housing drive. “The housing is undoubtedly a major driver of the economy. Actually, it is responsible for lessening the effectiveness of the underperformance of other sectors of the economy; like sugar and bauxite, for example. “The construction boom is driving up the demand for materials of one kind or another and is also having an impact on the demand for consumer and household goods. What is happening too is that the housing boom is keeping hundreds of small contractors employed. In fact, we may even be facing a shortage of both skilled and unskilled labour.”
According to Ali, the difficulties being faced in acquiring skilled labour may well be a function of a school curriculum which, in recent years, has placed insufficient emphasis on vocational education. “We have students coming to us in the manufacturing sector with CXC qualifications but who do not have the vocational skills needed to work in industry. If we are to remedy this we need to tackle the issue of training children in subjects like handicraft and plumbing and other vocational skills at the school level.”
And in an invited comment on the budget Ali said that “in general terms” he was impressed with it. “You have to give credit where credit is due,” he said. However, according to the businessman, significant receivables from Value Added Tax now meant that the government could begin to focus on abolishing income tax for wage earners. “I support the Value Added Tax entirely but I believe that we should begin to look at further increasing the threshold until we get to a stage where we can remove taxes from wage earners altogether. Taxes should be applied to those people who can afford to make those payments.”
