Dear Editor,
Evidence suggests that entrepreneurship holds much promise as a source of empowerment for those in economically adverse circumstances (Slvinski). A significant study in the United States (2015) indicated that States with the highest rates of entrepreneurship demonstrated the most considerable reduction of poverty over six years, while the lowest rates of entrepreneurship corresponded to an increase in poverty- for every 1% increase in entrepreneurship there was a 2% decrease in poverty. A study by the ASPEN Institute showed that 72% of poor micro-entrepreneurs increased their household income over five years, enough to move 53 % of the microentrepreneurs out of poverty. Over forty-three million Americans-14% of the population, live in poverty. The U.S. spends $1trillion annually in cash, food, housing, and medical care for low-income families.
Globally, 736 million people live in extreme poverty, with half of the world’s poor, around 368 million, living in just five countries: India, Nigeria, the Democratic Republic of the Congo, Ethiopia, and Bangladesh. In Guyana, there is scant data on programs to address poverty reduction and no data on studies focused on poverty reduction through entrepreneurship. Guyana’s ambitious Poverty Reduction Strategy (2001) did not contain the element of entrepreneurship as a poverty reduction strategy. Guyana’s last official poverty measurement was in 2006. However, according to the Inter-American Development Bank (IDB), the poverty rate in Guyana, measured as the percentage of people living on less than $5.50, reached 41.2% in 2017. Results showed that 36.1% of the population in the country were living in poverty, including 18.6% that were living in extreme poverty.
Studies from twenty-nine developed and thirty-seven developing countries found that higher levels of entrepreneurship resulted in lower poverty levels. There is a link between informal sector entrepreneurship and poverty reduction in developing countries. As one of the poorest countries in the Hemisphere, Guyana continues to struggle with poverty. Despite the country’s natural resources, poverty in Guyana has a crippling effect in vital areas, leaving much to be done to improve the situation. According to experts in the field, the brain drain of highly skilled workers in Guyana hinders necessary contributions to developments in various economic sectors such as healthcare. Factors such as severe financial constraints, substandard literacy, and school dropout, lack of transportation, inadequate housing conditions, poor diet, and unaffordable health care directly impact entrepreneurial behaviour. Other factors that impede the profitability and sustainability of start-ups in Guyana include intense competition, difficulty establishing legitimacy, little differentiation, price-based competition, and the lack of entrepreneurial mentors and requisite knowledge.
Public policymakers may become more active by improving basic infrastructure, increasing literacy, and liberalizing financial institutions. Integrated literacy programs, training, mentoring, consulting, and apprenticeship should be a broad community effort to support entrepreneurship. Establishing shared physical spaces to incubate ventures is critical for entrepreneurship. Guyana should develop a strategy for poverty and entrepreneurship with a proactive approach of tax credits and exclusion, income subsidies, business loan guarantees, preferential access to government procurement, regulatory relief, and waiving license or permitting fees.
Sincerely,
Dr. Wayne Forde
