Pressures on business


Stabroek News
March 16, 2000


"Retrenchment, redundancy, and dramatic organisational changes will continue in the government and private sector in the future. It's hard not to feel nervous in today's working environment. I think there is an unhealthy level of fear in many organisations and companies. Distrust and negativity have become ingrained in our business culture in Guyana". Those are not the words of an opposition politician but of the executive chairman of one of our leading companies. In his speech to Banks DIH Limited shareholders last Saturday at the company's 44th annual general meeting Mr Clifford Reis went on to say: "The year l999 was no better than the previous year. We were called upon to face the usual challenges: inflation, rising unemployment, negative population growth and low wages. While we were prepared for these challenges and designed and implemented strategies to overcome them, we could not find a suitable strategy to cope with the continuing problem of political instability in Guyana".

Mr Reis's sentiments will be echoed in every boardroom in the country. Businessmen have had to live through the lengthy protests that followed the l997 election and virtually destroyed Christmas that year, continuing political uncertainty, the public service strike and the weakening Guyana dollar. They now face another gruelling election campaign with the strong possibility of a rushed and inadequately prepared election. Survival rather than rapid expansion will in many cases be the preferred option.

With the budget imminent one wonders what the Minister of Finance will do in an effort to create confidence and stimulate growth. We desperately need new investment. Can we hope to attract it in these circumstances? Are we heading towards a kind of stability that will encourage investors? It is a genuine predicament. In his speech Mr Reis called for lower corporate taxes and reduced consumption taxes for manufacturers. That would help, but the major fear in every businessman's mind, as indeed in the minds of most citizens, is the threat of further disruption due to political unrest.

Banks DIH profits before tax were down about 5% though gross sales had risen ll.5%. That was mainly due to increased selling prices for core products due to the depreciation of the dollar. Mr Reis referred to other well known problems that face the business sector, unreliable public utilities (electricity surges still damage equipment), high interest rates and the shortage of technical and managerial skills. President Bharrat Jagdeo cannot be faulted for failing to consult the business sector. He has done this, himself, since he took office. What tends to be lacking, on both sides, is the kind of follow up that leads to implementation. Committees are set up to consider various issues and the matter tends to fizzle out.

Political instability cannot be solved by budgeting initiatives. But institutional life must go on and the minister of finance has a job to do. One does not envisage new taxes at this time. The focus in his budget, surely, must be on creating growth. That is not only a matter of creating tax incentives. What is required, as Mr Hamley Case had outlined in a letter to this newspaper, is a much more aggressive approach to securing new investment. President Jagdeo made his pitch in Miami and that was useful. But that was a one off shot. Mr Kowlessar should consider a much strengthened Go-Invest with a larger budget which can mount missions to the investment capitals of the world seeking to attract businessmen. To be effective, these visits require a great deal of preparation. They also require us to work out in detail the areas in which we are seeking to promote investment and exactly what we have to offer. The National Development Strategy which is due to be published soon should help considerably in this regard. The pace of development is too slow to create the jobs desperately needed and the minister should seek to address this directly in his budget.