Like so many of the recent public pronouncements that have been made by the new political administration regarding its agenda for development, those recent ones made by Minister of Business Dominic Gaskin about government’s plans to create an enabling environment in which small businesses can better thrive, amount to commitments, the actualization or otherwise of which could help determine the shape and state of the economy in the period ahead.
In circumstances where there are simply not sufficient jobs in the public and private sectors to adequately respond to the country’s prevailing high unemployment levels, encouraging numbers of enterprising young men and women have demonstrated a willingness to pursue the self-employment option, many of them displaying not only a commendable determination despite their lack of what one might term a ‘business background,’ but also in some instances an admirable sense of innovation and inventiveness.
Much of the growth in small business development has occurred in the service sector, in the beauty industry and in various facets of agriculture and agro-processing. There has been too, a significant proliferation of urban vending and poultry rearing, pursuits that are used as income subsidies and have also become full-time jobs in some instances.
As it happens, the growth of the small business sector in Guyana has traditionally been stymied by a host of well-known constraints, including a scarcity of investment capital, limited access to borrowing from the formal financial system, high operating costs, particularly in those sectors that are heavily dependent on electricity and competition for market share in both the products and services sectors. One consequence of these constraints is that a host of small businesses come and go on account of their lack of sustainability.
Whilst much of the growth in the local small business sector has occurred in the agro-processing sub sector, export market opportunities have been undermined by problems of product quality and presentation insofar as many local products have been unable to meet the food import requirements set by legislation in the major markets of North America and Europe, notably, in recent times, the USA’s Food Safety Modernization Act.
One can argue too that while the previous political administration managed to create a facility to support small business growth in the form of a Small Business Bureau supported by REDD Plus funding for grants and collateral coverage under the so-called Micro and Small Business project, much more could have been done for the sector during its tenure in office. One particular area of failure was government’s failure to activate bilateral agreements with Brazil, for example, to secure training for locals in various facets on agro-processing, including the establishment of small factories here. What is also true is that our local business support organizations have not been doing nearly enough to support local small business development.
Funding apart, the local agro-processing sector continues to suffer from other limitations that restrict its ability in areas like packaging and labelling and in the instances of riverain and hinterland communities, transportation to move their produce to coastal markets.
On the whole, governments, over the years, have not produced a particularly encouraging report card on the development of the small business sector and we believe that it would do Minister Gaskin a power of good if, at the outset, he were to have a clear understanding of both the nature and the magnitude of the undertaking.
To take the MSED project, for example, it should be noted that it begun on a less than sure footing and that the protracted delay in the launch of the project would have compromised the deadline for its first anticipated job-creation outcomes. Beyond that, there is the critical official monitoring responsibility particularly as it relates to beneficiaries’ of disbursements of grants, many of whom, despite exposure to some measure of training as a component of the project, are inexperienced in business.
If the creation of a convivial environment in which small business can thrive is a demanding task there is more than sufficient information available with which to fashion a road map for small business development.
We believe that some of the best opportunities for the small business sector repose in agriculture and agro-processing sectors chiefly because of their export potential though the development of these sectors will depend on training in some key areas including the enhancement of local packaging and labelling capacity, the improvement in the efficiency of manufacturing methods through investment in equipment and machinery, meeting food safety standards necessary for entry into the lucrative markets of North America and Europe and more aggressive overseas marketing for our value-added products.
On the whole it is a matter of fashioning a genuine commitment to small business development rather then what has always been a more or less half-baked approach to fashioning and executing a clear cut and persistent policy. Which, given the requisite official support can not only significantly reduce unemployment but help build a more robust economy.
