Business
(This interview was provided at the request of the Guyana Review)
GR: Can you give us your own assessment of the impact which the political climate has had on the business environment?
NDB: The GCCI recently surveyed our membership to examine the effects of the current political impasse on business. With a sizable and material representative of the Chamber’s membership responding, the survey revealed that 94.4% of membership believes that the current political impasse has affected their business while 5.9% indicated that their business was not affected. When asked who they deemed responsible for the current impasse, 54.9% said GECOM, 24.5% said the larger political parties and 1% of respondents said the media.
The GCCI has observed a shift in spending towards household and other essential items. This indicates that other segments of the service sector will experience a downturn in their business. The political situation may also cause a spike in demand for US dollars as businesses project a devaluation in the GY dollar, thereby spiralling inflation. Further, the catering and entertainment sectors may experience dwindling business and eventually, the cascading effect can be, among other things, defaulting loans. These outcomes will place pressure on the financial sector which is the backbone of our economy, thereby presenting a bleak outlook.
The Chamber is mindful that the swearing in of a presidential candidate based on flawed election results would not only be undemocratic, but also illegitimate and will not be recognised by the international community. In this globalised world, no democratic country is an island and our economic and social prosperity is inextricably linked to our nation’s relationship with our trading partners. We remain concerned that powerful trading partners whom we rely on, not just to purchase our exports, but also to provide us with essential imports, have also indicated that there will be repercussions if an illegitimate government is sworn in.
If Guyana were to face sanctions, our fledgling economy would be crippled and the gains that we would have made over the years would be squandered. Sanctions would threaten the prospects that a new and emerging oil and gas sector presents and this would set us back for many years to come. Our major export commodities of oil (new), gold, sugar, rice, timber, liquor, among others, will all suffer if we are unable to access the level of trade that we currently enjoy.
Rebuilding these relationships, if lost, may not be easy as they may be quickly taken up by trading partners in other parts of the globe. It is also possible that Guyana would be subjected to a “due diligence” process and adherence to international best practices all over again to regain entry and penetration into these lost markets.
GR: The significant increase in the numbers of micro and small businesses, particularly in agro-processing, would appear to provide a challenge for the Chamber in terms of opening up its membership doors to allow for access and to benefit from what the Chamber has to offer. Could you tell us, first, what the Chamber’s position is on the admission of micro and small businesses to its ranks and secondly, the various ways in which you think the Chamber is equipped to help these businesses ‘raise their game’.
NDB: The GCCI is open to and encourages membership by MSMEs [Micro, Small and Medium sized Enterprises]. Over the past decade, the GCCI has strongly advocated and championed MSMEs and we have provided networking opportunities, research material and programmes to guide and enhance small businesses in the areas of packaging, marketing and financial literacy.
The GCCI has four categories of membership and we have created an affordable tier for MSMEs which allows such businesses to pay an annual subscription fee of just $12,000. The idea is that we welcome these businesses into the Chamber and help to nurture them and build their capacity. Over the past year, the GCCI facilitated the following projects and events with the aim of mentoring and providing technical assistance to MSMEs:
● Business Development Forum – In 2018, the GCCI held its inaugural Business Development Forum (BDF). This forum serves the purpose of providing MSMEs and large businesses with a “roadmap to success” by providing them with critical information and assistance in a number of areas such as branding, marketing, financing, IT, sales and much more. In 2019, the BDF post-evaluation survey revealed that 98% of participants considered the presentations to be relevant to their businesses while 100% of participants believed that the information presented could be applied to their businesses to improve growth. In 2019, at the BDF, the GCCI launched its $300,000 Vision Fund Grant to assist up-and-coming entrepreneurs in bringing their business ideas to life. Attendees were asked to submit a business plan and applicants were judged against a given set of criteria including the business’ capability, potential for growth, profitability and environmental benefits. Dr. Dason McKenzie emerged as the winner with the business plan for a telehealth app called “Home Care Guyana.” The GCCI is in the process of working with Dr. McKenzie to develop the app and finalise other aspects of the project.
● Caribbean Development Bank (CDB) & GCCI Projects – The GCCI partners with the Caribbean Development Bank through its Caribbean Technological Consultancy Services arm on a number of projects with the aim of building capacity for MSMEs in Guyana. In November, 2017, a project to expand the Apiary Industry in Guyana through training and technical assistance was successfully completed. Currently and in an effort to build the capacity and improve the standards and capabilities of local agro-processors, the GCCI is undertaking a US$134,000 project titled, “Improving Standards of Agro-Processors Through Training.” The project, which will be funded by the CDB, aims to enhance the managerial, technical and operational capacity of MSMEs in Guyana. Training will be provided in packaging and labelling, good manufacturing practices (GMP) and hazard access critical control point (HACCP).
GR: You, and the business sector as a whole, have been interacting with the expatriate ‘players’ in the oil and gas sector for some time now, on particularly, matters to do with local content and ways in which the Guyanese business community can benefit from the ongoing oil and gas pursuits. Can you (a) comment on the experiences that you and the private sector, as a whole, have gained from that interaction? (b) say whether you are satisfied that there has been, up until now, sufficient provision for the local private sector to secure Local Content benefits and; (c) The sort of planning that is taking place at the level of the GCCI and the BSO’s as a whole, to benefit further from the ongoing oil and gas pursuits.
NDB: Local content has been an interesting challenge for us and while we appreciate where we are, there remains more work to be done. The Chamber has advocated for the implementation for a local content policy and the drafting and implementation of Local Content legislation. We find that there has been some degree of recognition on the part of the expatriates that they need to play a pivotal role in capacity building for locals in order to enable them to qualify for opportunities and employment and we are conscious that effort in this area has commenced.
The GCCI fielded a delegation to the Offshore Technology Conference (OTC) in 2019 and that was an exemplary forum where local businesses were able to promote what they can offer to the oil and gas sector and build smart partnerships with foreign businesses interested in entering the market.
GR: Some time ago there had been a public announcement about a planned initiative by the GCCI to reach out to the other Chambers across the country in order to provide support in enhancing the vibrancy of the business sectors in the various communities. First, can you tell us (a) what you consider to be the key weaknesses of the business communities in the non-coastal regions and (B) Whether any progress has been made with the reaching out initiative which the Chamber has said it would undergo?
NDB: This is actually the remit of the Private Sector Commission (PSC) which is the national body for all Private Sector Organs and Business Entities and it is something that they have been making progress on. From the GCCI’s standpoint, the biggest weakness of businesses in the non-coastal regions appears to be lack of, or, limited access to Government and banking services.
GR: Over the past week or two we have seen several worrying developments in the global community in response to the outbreak of the coronavirus. Has the Chamber been discussing this issue and what is its assessment of the likely longer-term impact of the virus on the well-being of the business sector?
NDB: The Chamber’s response to the COVID-19 outbreak has been two-fold:
A. Firstly, the GCCI is in the process of understanding the gravity of the COVID-19 virus as it continues to be a very fluid matter. In response, the GCCI has taken a proactive stance by developing a COVID-19 response plan which comprises three main pillars:
● EDUCATION for our membership and the general public by sharing credible information on the coronavirus disease;
● ADVOCACY on matters faced by the business community during this public health emergency;
● RESOURCE MOBILISATION.
The Chamber understands that dialogue is important and over the past two weeks the GCCI has engaged in the following:
● Virtual Webinars where subject specialists were invited to share information on the virus, and knowledge on best practices’ that businesses can implement during this pandemic;
● Developing a Communication Plan to share credible information with the wider public;
● Partnering with sister organisations such as the PSC, AMCHAM, CARICHAM and the Energy Chamber in Trinidad to disseminate information and share solutions;
● Joining the National Task Force for COVID-19.
● Stakeholder engagement with Ministerial officials to find solutions addressing the COVID-19 pandemic on a national level.
B. Due to a decrease in consumer spending on non-essential items, some businesses may face corporate layoffs or bankruptcy. The implementation of strategic fiscal and monetary measures can lessen the negative impact of COVID-19. If these measures are not in place, the commercial sector will whittle down to ‘the survival of the fittest’ with the ‘fittest’ being those businesses that can adapt to changing times and those who are able to justify their relevance to the consumer.
Projections from McKinsey Insights suggest businesses globally should begin recovery by Q2 of 2021.