A great deal is said and written these days about the importance of raising the bar as far as adding value to goods produced locally is concerned in order to make these more competitive on the external market. By external one means both regional and extra-regional, even though the real promise for the significant growth of markets for Guyana’s agricultural and manufactured products lies primarily in North America.
In fact, we need to remind ourselves of the ceaseless political refrain about small businesses being the real engine of growth in the Guyana economy. That having turned out – at least up to this time – not to have been the case, we now find ourselves, increasingly, looking to gold. In that context the situation in the gold industry at this time is far from reassuring.
Apart from the fact that Guyanese in the diaspora appear to favour home tastes. It would appear that Guyanese and Caribbean eating houses in North America and parts of Europe have actually managed to popularise many of our local foods in the communities where they exist. We learnt recently, for example, that casareep is growing ever more popular in Guyanese and West Indian communities in Canada, while a recent visiting Canadian delegation let it be known that part of the aim of the visit was to put more Guyanese spices on the supermarket shelves in Toronto.
Volumes have always been a challenge for our local producers. The vast majority of value-added producers in the fruit and vegetable sectors operate at what is really no more than a subsistence level. Like in other local small business sectors they simply lack the resources to grow their businesses to a point where they can export their products on a reasonably large scale and on a sustained basis. It is the same in the local craft sector where we have failed to transform low level local representation at international trade fairs into the expansion of the participating enterprises or the creation of larger markets.
The issue as to what is missing from the equation has been the subject of unending discourse at a host of local fora. Some of the conclusions are:
1. That the lending sector does not take small business development sufficiently seriously.
2. That, over the years, government has not done nearly enough to support the growth of the small business sector.
3. That local small business development has been attended largely by initiatives undertaken by well-intentioned individuals and groups who have no training in the running of a business.
4. That the pursuit of small business initiatives has lacked the application of appropriate levels of technology.
5. That small business support organisations have traditionally been disorganised, poorly managed and generally incapable of providing the guidance needed for successful small business development.
Those reasons apart, there has been no evidence that over the years, government has sought to outline, far less implement a serious strategy for small business development. Doubtless the response will probably be that since 2004 there has been a Small Business Act in place and that we now have a structure and sufficient funding (US$5 million) to kick off a small business programme. Incidentally, it is now just a few months shy of a year since the formal launch of the project it has delivered nothing of substance to the small business sector and we have no clear idea as to when it will.
On the whole we have not had any overwhelming success with small business growth in Guyana though it is worth mentioning that there are some exceptions to this rule. A handful of enterprises in the local value-added sector have persisted against the most tremendous odds, some even managing to reach the point of securing modest overseas markets.
Apart from the spices and condiments which are mostly low-value items that are only exported in modest quantities to particular target markets, there has not been much of an external market for our value-added products beyond sugar and rice and those have had to endure the ebb and flow of the vagaries of international trading. The local media have ensured that we stay abreast of the problems of high debt and serious management problems confronting GuySuCo. And while the PetroCaribe market in Venezuela has given the rice sector some buoyancy, efforts to expand production must still be accompanied by even more diligent searches for more external markets.
Recently too – and this was reported in the Stabroek Business – we learnt of more potential threats to the immediate-term future of our food exports arising out of serious air transport limitations and challenges associated with meeting the food safety-related regulations associated with imports into the United States and Canada. These regulations are being applied with increasing seriousness by the authorities in those countries. The third challenge to our food exports is what is believed to be a fear of our reputation as a country where drugs are concealed in a wide assortment of food items and smuggled into other jurisdictions.
Each of these barriers to our value-added and agricultural exports is serious in its own right and if – as our state and private sector officials keep hoping – we are to increase our share of the international market for these goods, we are going to have to take measures to remove the barriers.
In each instance, those measures will involve increased financial investment and the application by government of strict and serious measures to ensure that standards are maintained and laws are adhered to. In this regard it has to be said that as far as drug-smuggling, for example, is concerned, considerations of corruption, under-resourcing and incompetence appear to be among the primary hindrances to going forward.
If, as would now appear to be the case, we now have to invest much more in technology, marketing, safety and health verification, transport and packaging to ensure that the goods produced by small businesses reach international markets then we are going to have to ask ourselves questions about the competitive pricing of those goods given that their production costs are likely to be higher.
The problems associated with reliable air cargo services to North America have long been creating endless headaches for our exporters to say nothing of the issues of higher freight costs and unreliability of service that arises. Some of the traditional exporters would appear to be coping with some difficulty.
There is, however, no question of new exporters simply hopping on board. Settling the issue of reliable and cost-effective movement of cargo to North American destinations is critical to the continued viability of the value-added sectors in Guyana. There is simply no way around that.
It is much the same with meeting the safety and health barriers erected by the US and Canada against the importation of untested foods into their respective countries.
More than enough has already been reported on the new waves of legislation and regulations that have surfaced in North America and while we have been discussing these and their likely implications for our exports for at least four years now, we have not, as a country, as a government, done anything to take the process of equipping ourselves to measure up to the required standards, forward. One of the notable retrograde steps which we have taken has been to destroy the testing laboratory that used to be part of the Food and Drugs Department in Kingston. The Marriott Hotel now stands in its place.
Reports that air and sea transport from Guyana have long been under scrutiny at foreign ports in view of the frequency with which drugs are smuggled out of the country are nothing new. What is relatively more recent is the news that has emerged from the visit here by the Canadian businessmen that some potential importers (at least in Canada, as far as we know) have now taken a position that Guyana is a high-risk country as far as the importation of goods is concerned. The cost of having that reputation repaired – in terms of stronger official mechanisms to suppress drug smuggling – may well be passed on to the exporters affecting the cost of their goods.
The point should be made that we have not seen much official evidence of efforts to address some of the problems associated with the security of our export markets. This may not be the case in every instance since, as regards air transport, for example, it is, in large measure, a matter of the feasibility of the routes and that is up to the airlines.
There are a few things that have become increasingly apparent about growing international markets for our exports. The first has to do with the sheer competitiveness of the markets. The second has to do with what, in the case of North America, has been fresh waves of safety and health and security-related non-tariff barriers and the difficulties we are facing in finding our way over or around those barriers. The third has to do with what is widely believed to be equal measures of official corruption and incompetence which make us vulnerable in various other ways.
The government needs to send far stronger and clearer signals that it is prepared to read a riot act on these things, otherwise we should at least stop playing games with ourselves.
The tragedy is that attempts to accelerate the growth of the value-added industries with all that that entails in qualitative and quantitative terms could well come to naught if, even as we encourage the growth of those industries, we continue to prove ourselves to be inadequate in trying to surmount those challenges to our goods being exported to more lucrative markets.
