It requires no great knowledge of the manufacturing sector to recognize that – in the main – manufacturing has traditionally been a considerable underperformer in the Guyana economy. Even a cursory profile of our imports suggest that we continue to import some manufactured products which, arguably, can be made at home. On the other hand, rum apart, Guyana has not been known to get serious attention from the international community for any other manufactured product.
There had been some modest efforts under the previous political administration to create a manufacturing base of sorts. The fact is, however, that much of this took place at a time when the country’s economy could not afford the imported technology necessary for creating and equipping factories. In the absence of those resources the political administration resorted to what was then described as “appropriate technology,” sub-standard ‘inventions’ that not only did little if any justice to our manufacturing sector but which, by and large, were quietly rejected by the Guyanese people. After a while, these inventions hung around as no more than political showpieces.
The underperformance of the manufacturing sector has persisted over all those decades and there are several reasons for this. Some of them have to do with what one might call historical circumstances, though there are countries – Singapore, for example − that have not allowed their longer term economic fortunes to be shaped altogether by historical circumstances. In our case it has to be said that successive political administrations, whilst vocally advocating the creation of a modern manufacturing sector, have not done nearly enough to give practical expression to that advocacy.
Mind you, it has to be said, first, that some local entitles like the iconic Banks DIH Ltd, and Demerara Distillers Ltd, among others, have done their fair share for manufacturing as have some of the value-added entities in the agricultural and timber sectors in more recent times. Still, manufacturing has continued to be an underperformer for Guyana and it has to be said that government’s enthusiasm for the sector has come in fits and starts. Indeed, there are those who contend that official enthusiasm for the manufacturing sector may well have disappeared altogether since the increase in gold prices and the attendant expansion of the gold mining sector.
This year, the Guyana Manufacturing & Services Association (GMSA) itself put the situation into perspective, asserting in its 2014 report that the contribution of the manufacturing sector to the country’s economy was “about 4 per cent.” That would have come as no surprise either to manufacturers themselves or to those outside the sector who have followed its fortunes.
The men and women who have invested mostly in small businesses in the manufacturing sector – the majority of whom are part of the agro-processing sub-sector – have been investors of considerable courage. Many of them, having been turned away by commercial banks, dug deep into their own pockets, or else secured loans from other sources, often at exorbitant rates of interest. In the case of agro-processors, many, perhaps most of them, transformed their own kitchens into ‘factories,’ so determined were they to start a business. These have been self-starters, having relied on their own business ideas and modest startup capital and having begun their operations in a less than convivial production environment with no official outside support. Some have come and gone; others have survived and persist without ever having become high-fliers.
Even amongst those who are, these days, members of the GMSA, there exists a fierce sense of independence, a disposition of cynicism towards officialdom and a feeling that as far as the development of their respective enterprises is concerned, they owe nothing to either government or the GMSA. Indeed, some of them have been openly critical of the quality of representation that the GMSA has provided. As far as government is concerned they have pointed out that the emergence of a Small Business Bureau decades after such an institution was advocated has still seen nothing of substance done for small operators in the manufacturing sector one year after the Bureau was declared by President Ramotar to be up and running.
Beyond that, there have been instances in which our questions about the role of the GMSA posed to some of its own members provoked dismissive or derisory responses.
The GMSA itself is frequently less than frank about government’s historic lack of serious and sustained support for the creation of a robust manufacturing sector. It is felt in some quarters that the association’s posture is due to a ‘policy’ of being reserved in its public comments on officialdom, out of concern over likely reprisals.
What this newspaper has also detected is a dichotomy between the sustained underperformance of the manufacturing sector and the lengths to which the GMSA goes, year after year, to create a chimera of progress. It is not as if it neglects to mention many of the challenges that affect the sector, but these are invariably alluded to whilst omitting to pay any detailed attention to those issues that have to do with official indifference to and/or lack of support for the sector. We believe that where a business support organization neglects to serve as a robust advocate for its members, even in cases where that advocacy reflects strong criticism of official policy then its right to provide the service which it purports to give is bound to be called into question.
If this posture might be perceived by the association as what is loosely known as image management, it fools no one. As a collective many manufacturers, mostly the small ones, have long been far too grounded in cynicism to accept the GMSA’s offerings.
There was evidence of more of the same in the association’s recently promulgated 2014 Report. Most striking was its clinical listing of the GMSA’s litany of ‘achievements,’engagements at one level or another which, presumably, were intended to impact directly on the performance of the sector but which failed to do so. That kind of dichotomy between promise and performance has become commonplace with the GMSA.
If there are things, like high electricity costs and raw material costs, that are beyond the control of either the sector or the GMSA the association can take little if any credit for winning concessions in areas such as securing a more manufacturing-friendly tax regime, and enhancing manufacturing capacity by influencing the cementing of bilateral deals with countries (like Brazil) based on pre-existing bilateral agreements in order to secure access to factories, equipment, technical expertise and international marketing support.
Nor has there been any persuasive evidence of GMSA involvement in pushing government to build capacity in areas such as quality control, which has become a key and critical element in securing and sustaining markets in Europe and North America.
Closer home, it is no secret that despite the announcement in the GMSA’s report regarding the accomplishments of two of the association’s members at the level of the regional trade support body, Caribbean Export, the vast majority of local entities in the manufacturing and services sectors are less than ideally positioned to benefit from what Caribbean Export has to offer, a circumstance that is due in large measure to the tenuous nature of the formal relationship between Caribbean Export and the local private sector.
Nor, for that matter, has there been nearly enough action on the part of the GMSA to help protect earnest manufacturers against the threat to our exports posed by widespread belief in foreign markets that seemingly legitimate manufactured exports are being used as conduits for the movement of drugs; neither has the association been sufficiently vocal on the proliferation of the local market by providing substitutes for some goods that can be manufactured here in Guyana.
No one is suggesting that the GMSA’s reporting must not reflect its activities, including its bilateral and multilateral engagements with organizations that can support the growth of the manufacturing sector, though it surely must understand that when there appears to be no real nexus between those pursuits and the growth of the sector, questions about its effectiveness are bound to arise.