By Joycelyn Williams
Joycelyn Williams is a Lecturer at the University of Guyana and a Programme Management Consultant.
In the last piece, we emphasised why a growing manufacturing sector has uniquely strong effects on the growth of an economy. The key reasons are: a) demand for manufactured goods responds strongly to rise in global incomes, b) manufactured products are more diversified and sophisticated, enabling a country to have a more diversified export portfolio.
Manufactured goods come in all shapes, sizes, colours and variations, presenting more scope for allowing a country to sell a wider range of gadgets. Increased manufacturing production has significant spillover and positive effects on other sectors in the economy such as services and agriculture, as manufactured products use the raw material from agriculture, forestry, fishing and the land and requires services for finishing into final products. It is for these reasons that the strong growth of manufacturing enabled the high growth rate of the newly industrialised countries.
Deliberate planning for the growth of manufacturing and industrial development as a whole, are first steps to achieving the structural transformation as was achieved by High Performing Asian Econo-mies (HPAEs) in the 1960s to 1990s, and later by Brazil, Russia, India, China and South Africa (BRICS).
These countries put in place a deliberate infrastructure to plan for and to implement effective strategies and programmes for growing their manufacturing and the industrial sectors. Deliberate, conscious and systematic implementation of programmes and interventions must take place for the required growth of the sector. Governments have never depended on the market alone to bring about the growth of manufacturing and industry, because of the several “market failures” that exist in underdeveloped countries. Some of the key failures widely identified in the literature relate to the failure of the market to coordinate the industrial development – so governments must do it; failure in credit markets; the failure of the market to provide adequate information to businesses; structural problems in the economy and so on. There is thus wide agreement that the state must play the role of this grand coordinator of manufacturing and industrial development. Further, the state needs the support of other coordinating agencies to roll out the plan.
What is the current administrative infrastructure in Guyana doing to coordinate the implementation and the plan for manufacturing and industrial development?
What is the status of the institutions mainly responsible for industrial development?
Recently, this writer conducted some consultations among key stakeholders in both state agencies and the private sector to enquire about the commonly agreed causes on perceptions of the underperformance of the manufacturing and industrial sector.
This addressed administrative and coordinating issues. The following were the key concerns and recommendations of stakeholders: First, there is need to enhance the intellectual and programme implementation capacity of the key administrative agencies currently mandated with industrial development. Stakehold-ers admitted the dire need to increase the core staff of the Ministry of Tourism Industry and Commerce, which is the subject ministry with responsibility for manufacturing. In this ministry, there is an Industry Department which holds responsibility for matters related to manufacturing and industry in general.
The National Develop-ment Strategy (2006 page 91) had noted that: “Currently, the Industry Division of the Ministry of Tourism Industry and Commerce which is responsible for managing the industrial estates and setting policy has staff contingent of only three people and there is not currently in place an overarching strategy to bring together the disparate attempts of various agencies in developing the sector.” This writer is aware that over the years this department has benefited from the internships by the UK Department for International Development (DFID) Fellows, who have made sterling contributions in the sector.
But for a systematic and concerted national commitment to industrial development, the Industry Department requires much more institutional strength of a permanent nature. The complement of staff in the department needs to be increased so that the department can become more involved in the development of the manufacturing/industrial development and provide the kind of leadership and services that contribute proactively to the growth of the sector.
The department has some committed officers of long tenure who need to be complemented with more senior economists, analysts, and above all programme implementation specialists, since there seems to be no shortage of funding for industrial development, but a great lack of capacity to mobilise, harness and implement plans and programmes in collaboration with the private sector.
Second, some stakeholders closely related to the Guyana Manufacturers and Services Association (GMSA) asked that a Standing Working Group consisting of public and private sector representatives be installed to have a Plan of Action to address the various strategic issues in the sector.
This will allow for much more formal collaborative work between the various state agencies and the GMSA and other associations that deal with manufactured products. This Standing Working Group, equipped with a strong work plan can become a focal point for discussing and addressing the needs of the manufacturing sector.
Given the convincing global empirical facts of the importance of growing manufacturing sector, it is hoped that with the young, vibrant Minister Irfaan Ali at the Commerce Ministry, some of the observations of stakeholders on institutional strengthening of the Industry Department and the establishment of the Standing Working Group for growing the manufacturing sector can be addressed. In fact, we understand that a programme is already underway to start the institutional strengthening of the Industry Department.
