Survey riddled with flaws
Guyana Chronicle
December 20, 2001

Part of an extract from a survey conducted recently by chartered accountants Ram and McRae titled 'Business Outlook 2002', spoke about Governmentís failure to communicate its policies and to convince the business community on some of the more critical issues affecting them.

According to the Stabroek News article dated Saturday December 15, 2001, the initial aim of the survey was to 'provide an insight into Guyana's economic condition.

And the most critical issues cited by the report were cash flow management, access to capital and timely information.

Further, the survey said, "a surprising 33 of the companies (70 per cent) indicate that they prepare a formal business plan." One has to wonder why did Ram and McRae find this surprising? Is it because they know that many businesses operate in a manner, which will be considered by others to be less than businesslike, which in itself can lead to their demise?

A critical analysis of the survey will reveal a number of flaws, which are crucial to the entire survey. For example, when an analysis of this magnitude is conducted, separation of the sectors is important for a true assessment to be made.

Simply because one cannot compare investments and expansion by a service sector, such as, funeral parlours to a manufacturing sector, example sugar.

The results will vary because regardless of the state of the economy we can expect funeral parlours to grow and expand. On the contrary, our sugar industry produces and operates, based mainly on demand from the internal market and if that demand falls they will have a reduction in production and growth if they fail to secure alternative markets.

Therefore, a true assessment of the sectorís performance in terms of growth and investment will not be recognised.

Thus, taking examples of a few sectors noted in the survey, the financial and construction/architecture, we can expect these to grow together, since they rely on each other for financial growth.

Agricultural and manufacturing of agricultural-related products will also be deemed as having a positively correlated relationship because if sugar production decreases the supply of molasses will also be negatively affected.

These are just a few examples of the reliability or lack thereof when comparing two different sectors from the same economy. Individual studies should have been carried out to determine the true impact on the main economic variables that affect growth and development. This will ultimately return incorrect analysis of the economic performance. The conclusion therefore is different sectors respond differently to economic variables affecting the economy.
Nadine Smith.