These past few weeks the Stabroek Business has been engaging small business owners in order to determine the extent of the impact that COVID-19 has had on their enterprises. Some of them have ‘gone under’ while others reside in a precarious zone of uncertainty having been in a somewhat ‘wobbly’ position even prior to the advent of the pandemic.
One would have had to be following closely, the gradual rise of the small and micro-enterprises, particularly in the agro-processing sector in recent years to understand the impact that they have made. It has not been simply a matter of these small businesses generating significant levels of employment and creating additional income streams for their owners, it was also, in many instances, a matter of ordinary people proving to themselves that they possessed skills and capabilities that they could use as vehicles to lift themselves. Over time, we have been fortunate to become intimate with the multiplicity of outstanding talents that emerged from the agro-processing sector.
Talent however, was never going to be enough for longer term continuity. Building small businesses from the ground requires stamina, persistence, self-belief, some measure of business acumen, as well as financial support. Given what we know of some of the small agro-processing ventures that have emerged in recent years, we make no secret of our surprise over the fact that some of them have survived for as long as they have.
Beyond the limitations of the investors in these enterprises, there always appeared to be a certain lack of confidence in what they were bringing to the table amongst most of the financial institutions that were positioned to help them. Under-resourcing, understandably, created its own limitations, the unaffordability of high standards of packaging and marketing costs being among the most important.
Some small business ventures require, by their very nature, longer periods of hand-holding than others. The problem has been that there has never been a sufficiently significant level of financing to enable protracted hand-holding periods. From our perspective (and this is not the first time we are saying this) the Small Business Bureau is saddled with a level of responsibility for the growth of the small business sector that far exceeds the resources that have been placed at its disposal. The Bureau, truth be told, is resourced to a level that will cause its clients to grow only so much before they have to begin to look elsewhere for material support if they are to grow any further.
Some of the institutional mechanisms that can play a role in the growth of the small business sector – particularly in the farm products and agro processing sub-sectors (the Guyana Marketing Corporation is the example that comes readily to mind) – are themselves hamstrung by resource-related limitations. In areas such as business training, product presentation and marketing, there are simply not enough human and material resources to go around. More than that, the marketing capabilities of the GMC are limited by the smallness of its own direct distribution capabilities which are concentrated largely in the capital.
Among the very real weaknesses of the agro-processing sector are the limits placed on the scale of production on account of a lack of investment in the plant and machinery that can increase production levels as well as our palpable underperformance, over many years, in the significant penetration of regional and international markets. We appear not to have learnt that modest volumes of a product (or even a few products) at small trade fairs somewhere in the region and where vendor participation is frequently constrained by a scarcity of funds, will simply not ‘cut it.’ Impactful global promotion of Guyana brands will require levels of investment that will have to come from the state itself and those marketing efforts are going to have to be overseen by experts in the field.
What we can at least take away from the past few months is that our small and micro-businesses in the agro- processing sectors did not simply ‘dry up and blow away’ under the gale force winds of COVID-19. It is worth noting that many of them have survived, even if barely so, in some instances. The sense we get from being in constant contact with many of these business owners over the months is that they are prepared to pick themselves up and go again. It would be unkind, to say the least, if government, the financial sector, and our Business Support Organizations (BSO’s) are not there to help them up… meaningfully.
Many of them, their unbridled optimism notwithstanding, will probably not recover. If we would like to tell stories of iron will and steely determination conquering all, there are limits to that kind of altruistic thinking. It needs to be borne in mind that in the instances of many small businesses, it took every ounce of the physical and emotional energy and financial resources that they could muster to build their fragile businesses to the pre-COVID-19 stage. For these, keeping their businesses going from one day to the next was an unrelenting battle of attrition that relied on ensuring that stocks of product, whatever those were, remained available and that turnover was encouraging enough to keep their enterprises afloat. That, we know from first-hand knowledge, has not in some instances, been the case.
Once COVID-19 not only put serious barriers in the way of production but shut down trading as well, it became a battle of attrition which some small businesses were simply not equipped to win. For those that face extinction, the road ahead has to do with more than just seeing their businesses ‘fold.’ The collapse of small businesses has implications for employment and earnings and by extension for the well-being of individuals and families.
It would, of course, be an exercise in self-delusion to imagine that the small-business sector, farmers and agro-processors, in particular, are – as we say in Guyana – ‘sitting pretty,’ cushioned by significant returns from their ventures that create a comfortable cushion. Most of these types of businesses – and this newspaper ventures to suggest that it has a fair understanding of those businesses – have persisted partly out of sheer will and partly out of a sense of pride that says to the proprietors that their businesses will not fail. With the limited state support afforded through the vehicle of the Small Business Bureau (SBB) and their own resources as well as a conviction they harbour that if they try hard enough, they are optimistic that an avenue will open up for them.
Speaking of the Small Business Bureau, it needs to be said that far more resources need to be allocated to this state institution of government if it is even remotely serious about the creation of a robust small business base. Additionally, it is not our view that the mainstream banking sector has evinced a sufficiently significant level of interest in the growth and development of small businesses even though some of these have the potential to help transform the country’s agro-processing/manufacturing sectors in the years ahead and create money-earning opportunities. Frankly, without wishing to appear to be trivialising shareholder interests, the time has come for us to ask searching questions about the true extent of interest of commercial banks in giving support to the creation of robust business in Guyana.
