We are yet to know how last week’s partnership agreement signed between the Caribbean Development Bank (CDB) and the Geneva-based International Trade Centre (ITC) will affect the business community in the Caribbean and whether, specifically, there is room in the arrangement for boosting the growth of the emerging but patently needy small business sector in Guyana.
At the signing ceremony last week the President of the CDB Dr. Warren Smith was quoted as saying that the region will seek to deploy the framework of the Agreement as a mechanism that will enable it to work with the ITC “to implement innovative projects that will boost competitiveness and productivity, especially for micro, small and medium-sized enterprises.”
The fact that the Agreement targets “small and medium-sized enterprises” ought to be a matter of considerable interest to both the government and the private sector in Guyana where we are faced with the emergence of a seemingly energetic and expanding group of agro-processing enterprises many of which now appear to be chomping at the bit, so to speak, in circumstances where what is very much in evidence is a lack of domestic resources with which to serve as a launch pad for their takeoff into the areas of product enhancement and the expansion of regional and international markets and more significantly growth and job-creation in the country’s economy.
A stated objective of the ITC is to provide opportunities for SMEs in developing and transitioning economies to become more competitive and to access international markets for trade and investment, raising incomes and creating job opportunities, especially for women, young people, and poor communities. This is precisely the narrative that has emerged here in Guyana insofar as the role of SMEs is concerned though what is clear is that the push by small business operators to consolidate the entrepreneurial base of SMEs particularly in the agro-processing and craft sectors, is being stymied by a paucity of resources with which to grow those sectors sufficiently for them to make a significant impact.
Here, the limitations of the infrastructure for the growth and development of SMEs in the aforementioned sectors to the point where they can meaningfully impact the international market, are manifested most clearly in the limited availability of funding for investment in areas like product development and the acquisition of inventory associated with the building of robust businesses. Just recently, in a frank interview with this newspaper, the Chief Executive Officer of the Small Business Bureau (SBB) Dr. Lowell Porter conceded that the extent of the funding available to SMEs through the Bureau’s grant funding programme is altogether inadequate for really meaningful investment in building impactful SMEs and that this (among other things) was reflected in what, until now, has been the strictly limited positive outcomes derived from the programme.
What, up to this time is patently obvious about the fast-unfolding small investor interest in the manufacturing sector is the gap between the enthusiasm level of the hopefuls and the extent to which both government and the banking sector have been able to respond to their needs. One of the inhibiting factors is the difficulties being experienced by small business owners in providing banks with the formal assurances which they need to offset lending risks. This was alluded to in last week’s issue of the Stabroek Business by a former regional banking executive. But that is not the only factor. The reality has been that while there has emerged, in the past few years, a seeming greater preparedness on the parts government and the business support organizations to create relationships that can help drive the growth of SMEs, the historical shortcomings in what has been a frequently touted public/private sector partnership has robbed SMEs of the opportunity to gain much more than they have from that partnership.
When it comes to cementing partnerships that can help drive the growth of the SME sector in Guyana both government and the private sector have long been steeped in a counterproductive sloth in getting things done, or otherwise, in a sort of a start-stop posture which persons keen to get on with their lives and their businesses find difficult to countenance. It was just a matter of a few months ago, for example, that we were being told uplifting things about a High Level public/private sector engagement involving at least a quartet of government ministers and various senior private sector officials and which was designed to create a more robust enabling environment for the opening up of opportunities in the agro processing sectors. We were told, for example, that on the agro-processing side government would be asked to provide support to the private sector in acquiring inventory with which to support startups and small enterprises in the agro-processing sector. That was quite a few months ago and nothing has been heard since.
Not only are the objectives of the ITC – “fostering inclusive and sustainable economic development,…strengthening the integration of the business sector of developing countries and economies in transition into the global economy………..improving the performance of trade and investment support institutions for the benefit of SMEs and improving the international competitiveness of SMEs” – both clear and specific, they are also consistent with the stated official ambitions (of both the public and private sectors) for SMEs. Up until now government, particularly, has not done enough to tap into the opportunities for SME growth afforded by initiatives deriving from agreements like the recently inked one between the CDB and the ITC. There may well be an opportunity in the current agreement to kickstart a critical phase in the growth of the SME sector. We must seek it out and seize it.
