Making high productivity thinking a critical objective

Guyana Chronicle
August 6, 2001

IN THE YEARS of the 1960s and 1970s, when brilliant West Indian and African development scholars were analysing the strengths, weaknesses and potential of Third World economies, most of them agreed on one thing. It was the reality that poor countries would never be in a position to control their destinies as long as they remain producers of raw materials and depended on the industrialised nations of the First World to purchase their products.

The stark truth was that under this regime of sending one's raw materials to the rich states, developing countries were constantly at the mercy of price manipulators in the international marketplace. While it is true that nations can sometimes reap a windfall when prices, for any number of reasons, are driven upwards (witness Guyana's harvest of sugar dollars in 1975), the converse can be devastating (note the not-too-recent drop in rice prices that now has farmers and millers in a quagmire of debt).

The East African writer Samir Amin was one of the voices deploring this raw produce dependency two and more decades ago. He had then urged developing nations to seek ways of sustaining their economies without relying on the industrialised world to buy their exports.

And in his classic study, "How Europe Underdeveloped Africa", Guyana's late scholar-historian Dr Walter Rodney illustrates how big multinational corporations exploited the resources of poor countries without even the pretence of making a contribution to local development. In one brilliant instance of ruthless exploitation, Rodney tells of the wonderful and myriad uses to which bauxite mined in a West African nation was put. The ore was used to help stimulate industries in many parts of the world, but in the country itself, the bauxite exploitation left "holes in the ground".

It is somewhat amazing that after nearly 30 years of being the helpless producers of raw materials, the countries of the Caribbean region (with the possible exceptions of Trinidad and Tobago, Barbados and Jamaica) are almost in the same situation today. Indeed, now the situation is much more critical with the tentacles of free trade and globalisation threatening to strangle or make useless all those industries which do not attain the standard and unit cost of production displayed by other manufacturers.

The recent issue of `Caribbean Export News' contains some insightful advice for political leaders and producers in this region. "For too long, the businesses of the Caribbean have engaged in low-productivity or `comparative advantage' thinking, whereby a nation looks to exploit the advantages that it has in abundance (raw materials, cheap labour, location and climate) and does not work to create wealth for the average citizen. If a nation seeks to export something that many other nations possess, it will tend to compete on the basis of price, driving wages and possibly quality down over time. This essentially becomes an export-fuelled poverty creation cycle, as opposed to the export-fuelled wealth creation cycle that is possible with a more strategic and differentiated focus.

"Going forward, the critical objectives for leaders in the Caribbean will be to engage in high productivity thinking, and to improve their capacity to add unique value to sophisticated and demanding consumers inside and outside their countries. It is these consumers who will reward Caribbean companies by paying higher and higher prices, resulting in higher profits, and, ultimately, wealth creation," notes the article titled, "Creating the New Competitive Advantage of the Caribbean".

While there are some encouraging signs that more investors, both local and foreign, are moving purposefully towards finished products for selective niche markets in North America and Europe, there has to be a wider sweep of this kind of value-added industry to make a more resounding impact on the Guyana economy. Perhaps over the next ten years, food technologists and scientists could work with the rice and sugar industries to develop, process and market ranges of breakfast cereals, semi-prepared meals, fruit beverages, skin lotions, face creams and other products made solely with Guyanese products and expertise. This nation will then be released from the whimsies of world market prices for local raw materials.