The Private Sector Commission (PSC) says it is willing to work with the government in all of its endeavours but it needs to increase spending in the economy.
Chairman of the PSC, Edward Boyer told Stabroek News (SN) yesterday in an invited comment, that they have noticed that there is a decline in the economy but acknowledged that when a “new government takes the helm, there is a correction period.”
Boyer’s statement comes in the wake of increasing concerns in the private sector that business activity has slumped significantly for a variety of reasons and citizens are withholding spending.
Boyer says he does not know how long the period of decline would last but said government needs to put money into the economy to fast-track contracts and create a momentum so that there can be growth.
With half of the year gone already, there is only about 17% to 20% of the expected spending in the economy, Boyer asserted, noting that there needs to be an increase in government spending.
He also hopes that there would be a higher level of production so there can be an increase in wages. He said the PSC would also support the government in anything to do with the national interest of Guyana.
His remarks followed a declaration on Thursday by Junior Vice-President of the Georgetown Chamber of Commerce and Industry (GCCI), Nicholas Boyer that his businesses and others he knows of, are experiencing about a 30 to 40 percent decline in sales, due to falling commodity prices and reduced employment.
Nicholas Boyer was speaking at a luncheon hosted by the Guyana Manufacturing and Services Association (GMSA) which was addressed by Minister of Business, Dominic Gaskin.
“All of these are going to trickle through the economy. My question is very simple: ‘What policies are you going to put in place over the next 12 months that may have the effect of improving these on the ground…’”, Nicholas Boyer had asked of Gaskin.
Gaskin’s reply was that there is no short-term solution to tackle fluctuating global commodity prices but there has to be a continuum of systematic measures to ensure that the country has other means of garnering revenue.
Yesterday, Stabroek News spoke to some companies in the retail sector about their experience this year so far.
Adrian Heywood, the area manager/internal auditor of the American Stores on Water Street, told this newspaper that since the year started business was slow, even during the jubilee period.
He has seen a slight increase in sales over the past weeks but “comparing this year to last year, this year is far worse… like a 50% decline for us in customer purchases, to the extent that we have had to make some cuts, in terms of the amount of supplies.”
He said too that sales in NA “is like zero to nothing” and that the store was forced to reduce its “full complement of staff to the minimum so that it could be cost effective for us…”
Heywood noted that while “there is foot traffic, it is just for people to go in and browse or engage mostly in window shopping. I hope that by year-end for the Christmas period, business would pick up.
Asked if the recent GuyExpo had benefitted his business, he said “it gave us some exposure, because not many people remembered that the store was still in operation.” It had also helped them to attract a lot of sales”.
He said they would fix their prices based on comparisons from their competitors and also offer discounts to customers to try to meet their needs.
“In order to drive sales,” he said, “we have a [promotional] discount of 20% to 50% on selected items.
Asking prices
Over at the RCA store at Giftland Mall, a senior staffer, Shirwyn, also reported a reduction of sales at that location and at the other two branches at Fogarty’s building and on Sheriff Street.
Shirwyn, who is responsible for sales, said that last year at this time the sales were low but he had noticed a boost from the end of June, which lasted until August. While speaking to this newspaper, about three people walked into the store asking prices and he related that that has been happening a lot.
At the Singer Guyana Inc. store on Water Street that sells mostly home appliances and household furniture, the report was different.
Robyn Lord, the general manager, told this newspaper that she would not say that there was a decline per say, because business there was more seasonal.
“I would say we have our peaks and we have our valleys; there are some months when it is really hectic and some months when sales are slow but that is traditional in our kind of business,” she told SN.
She added, “I can say that for the first half of the year we have not seen a decline. We’re actually doing better than we did in the first half of 2014 and 2015. The Berbice location, especially Springlands is a tough sell though; it’s the worst we’ve had in five years.
According to her, “NA has some months when it meets its target and some months when it doesn’t. But it is almost on par with what our plan is supposed to be.”
They have not seen a drop in sales for furniture and said it is not just because they are competitive. In May for the jubilee season, it was a “phenomenal month” for NA and GT branches. She said it was probably due to customers trying to purchase new items to accommodate their overseas relatives.
In Corriverton, however, it was business as usual during the jubilee, even though Singers ran countrywide promotions and did a localized promotion on radio and television in that area. She is not sure what the government’s plan is, but said she found that “when they talk about what they want to do, they tend to concentrate on Georgetown as if that is all of Guyana.”
Lord pointed out that, “If we were to take Singer in general, we haven’t seen a decline, but if we are to break it up location by location, I’d say Georgetown and New Amsterdam are holding its own and Corriverton is certainly in trouble.”
Smuggling
She is aware that Corriverton has a huge issue with smuggling but said something needs to be done to jumpstart that area. She believes that people tend to look at prices over brands or quality but in the long run they end up losing because the items would be damaged within a few months.
The store has not seen so much business in June but when they prepare their business plan they “take into considerations, all the valleys and the peaks.”
Their peak period is “between October and December and in July and August but in September, nothing happens because that is the back-to-school period. So we plan around that and try not to make the target too unrealistic.”
She has heard complaints from friends who have said that businesses were not going so well.
Speaking in terms of the low earners, Lord said the government should have a better plan in place, where, instead of giving someone a plot of land, they should develop it and even build the houses and put in all the amenities.
“Instead of selling them that plot for $500,000 or $1.2M, do the housing schemes…like what was done in Barbados. In that case, the buyer only has to find the downpayment and then they pay the government like a mortgage.
“A lot of people have been granted house lots but they do not have the finances to start. Even though the government is giving the land, they are really not solving the problem.”
At the GMSA business at the Pegasus Hotel on Thursday, Gaskin acknowledged that there has been a slight downturn in business, due primarily to falling commodity prices and unemployment.
Not in crisis
He insisted though, that Guyana’s economy is not in crisis, telling attendees: “…there is a long-term vision for Guyana that has evolved from our experiences and from the experiences of other countries into something that we can all proudly own and work towards achieving,”
“Our government will prioritize the long-term sustainable development of Guyana’s economy; and our government would like to do this in partnership with a strong and independent private sector,” he added.
President of the GMSA Eon Caesar, in his address, had told the gathering which included members of the diplomatic corps, that Gaskin was brought to the forum to talk about government’s strategies and programmes “to bring the economy out of its current slump, while simultaneously building the environment that will create a business class out of ordinary citizens.”
Caesar pointed out that the GMSA for years, has been calling for the development of value-added industries, as for too long, Guyana has been stuck in a mode of primary production and export of primary products, such as rice, sugar and lumber among others.
“We are aware that the entire world caught a cold when the prices for oil and gas took a nosedive more than a year ago. Then, Guyana’s economy was knocked sideways when global prices for gold slumped. Our mineral prospectors lost a lot of money and equipment. Venezuela cancelled our main rice market, while the sugar industry struggles to regain some measure of balance,” said Caesar.
He believes that government needs to assist in broadening the availability of skills for the entire sector so that the country moves away from being vulnerable to international prices and market availability.
“We have to witness the start of outreach programmes that are badly needed and, for example, show to growers of lemons in Mahaica Creek the best ways to get their produce to city markets or to importing countries like Aruba and Dominica. Perhaps then, these farmers will be able to earn money from their produce, and people in the city won’t have to pay $200 for one lemon,” Caesar asserted.
