Really Put Guyana First
By Christopher Ram
October 31, 1999
Once the Garden City, Georgetown is now more correctly but sadly the Garbage City of the Caribbean. Sad because no matter how much and how often one laments the fact, those who are in a position to do something about it appear totally unconcerned. Once considered the Breadbasket of the Caribbean we now import the most basic of food commodities including importing water both natural and sugared. In the name of globalisation we have abandoned any attempt to encourage domestic consumers to support domestic producers by buying their products and services.
Self-sufficiency, once the guiding principle of our economic programmes has been completely abandoned with the result that our food import bill continues to mount financed by balance of payment support from the multi-lateral financial institutions with implications for our exchange rate, cost of living, economic independence and domestic providers of goods and services.
The programme of self-sufficiency embodied in the infamously unsuccessful slogan "Feed, Clothe and House the Nation" of President Burnham was clearly taken too far apart from being appallingly poorly executed. It was a feature of that era that many Guyanese considered it a legitimate political statement to act in defiance of the official policy. Those individual acts were imposed as national policies when in return for financial assistance the country had to "liberalise" the economy by removing all forms of restrictions on imports whether by way of quotas, tariffs or import bans.
This article does not advocate the return to those days or to a policy of "autarky" under which a country seeks to become economically independent of other nations by having no trade with them. Such a policy deprives the country of the incontrovertible benefits of the laws of comparative advantage, which is an extension of the principle of division of labour. One of the worst features of the policy was the poor quality of items forced on consumers who because of protectionist measures had no choice. Not only did producers not take advantage of the trade regime then in place but they also invited a backlash from consumers which continues to this day.
Autarky whether practised voluntarily as in North Korea or involuntarily as in the case of Cuba, Iran and Iraq has clearly not worked and most countries which had previously attempted it abandoned it. The price of the independence, which it offers, is simply too high - bleak, colourless dreary life devoid of any material comfort - a price which no ordinary citizen is willing to pay.
Yet, while we live in an increasingly interdependent world the well being of the country is largely determined by a country's ability to produce, build its assets base including physical infrastructure and foreign reserves and develop the productive capacity of its people. What purpose does our education serve if the individual is unable to contribute to the enhancement of his and the country' s well being?
The same Tony Blair who calls for a computer in every classroom also wants to brand Britain and exhorts his people to Buy British. And at the recent Entrepreneur of the Year Award Ceremony in Port of Spain, the 1998 winner unabashedly claimed that the five most important words in the new millennium will be "Made in Trinidad & Tobago". Britain is not an economic island but a member of a highly integrated trade bloc and as we know Caricom is planning to move rapidly to a single market.
As the recent GMA Exhibition demonstrated we are capable of producing high quality goods which can compete with the best available anywhere. Quality production is largely driven by technology that is widely available and often reducing in price. What we seem to need badly is a policy articulated by the government, facilitated by fiscal and other measures and supported by the consuming public. For too long rice and sugar have been expected to produce the foreign exchange to pay for the country's import bill and the interest that finances it. It is time that the Government make its collective position known on this matter and not leave it to individual Ministers to make occasional pronouncements in a disjointed fashion.
The Starting Point
As is so often the case the difficulty which appears to induce inaction is to decide where to start. Should one start by restricting imports and allow the domestic producer time to develop? Do the rules under which we operate in fact allow us to do so? Can domestic producers compete given the uneven playing field? Can taxation play a role in helping the local producer? Given market size can we ever realistically produce world class product? Should the government be selective in the type of product that it should encourage and support? What form should government support take?
The Role Of The Government
In any attempt, drive or campaign for local entities the role of the government is absolutely critical. Government is in the unique position of being lawmaker, dispenser of favours and major consumer as well. Its travel budget for example must exceed by far those of any other entity. Its support for GA2000 in which it still holds a major stake can be one of the critical success factors in the early stages of that business. Through its various ministries and departments it hosts large numbers of visitors and holds a significant number of meetings and conferences. There are many locally owned and operated hotels that could benefit from a greater share of that business.
As regulator it can help locally operated businesses to migrate to higher, acceptable standards. For example it can provide assistance through scholarships, training programmes and various schemes to develop their products and services including ISO 9000 compliance.
It can re-design the tax system to assist entities to develop in a manner that is not dysfunctional and which encourages the sale of quality goods to the local consumer. Under the existing tax regime manufacturers are discouraged from making their goods available on the domestic market by high rates of consumption tax on local sales and extremely generous tax concessions on exports. The tax system seems to ignore the basic point that foreign exchange saved is as good as foreign exchange earned.
Most importantly the government will be sending a clear psychological message that it is putting Guyana first and that it recognises that to do this it must put Guyanese interest first.
Businesses Supporting Businesses
Our business community needs to recognise its interdependence. Best able to understand the consequence of aggravating an already small domestic market when foreign suppliers are chosen over them they must be willing to support other local businesses. We have a large number of advertising agencies capable of high quality stuff but yet an increasing number of the advertisements on the television especially are made abroad. Do those companies which commission the foreign advertisements stop to think that they are reducing the spending power in the economy and depleting the country's already scarce foreign exchange resources? Do they understand that even if they operate in the export arena that the performance of the rest of the economy will determine the type of concessions they can receive and the quality of the society in which we live?
Taking the case of GA2000 does it have a policy of supporting local businesses whether in printing, catering, technical and professional services including advertising?
The Guyana Manufacturers' Association with support from the Private Sector Commission and other representative goods and services providers should mount programmes for the promotion of a Buy Local drive among themselves and in the country at large. This programme will have greater credibility if businesses are seen to be supporting other businesses. '
One criticism of any buy local campaign is that by implication it expects consumers to accept poor quality. It also suggests that everything imported is necessarily good and better than the local equivalent. It is true that in the seventies and eighties we were forced to accept sub-standard locally-produced goods and that those experiences are still etched in our memories. Whilst being critical we must be both understanding and fair. The packaged rice produced by Kayman Sankar Limited is as good if not better than its foreign equivalent. The furniture we produce competes with the best and we have some outstanding food products.
We need to encourage more of these. The Government and the private sector should be working together to ensuring that all our companies achieve manufacturing excellence.
One hundred per cent relief for research and development and the cost of meeting ISO 9000 standards and public recognition of those companies can have dramatic impact.
So often we hear that the local service provider is not up to standard. Foreign competitors did not reach their current level of excellence overnight or without some form of assistance from their national or state government. Yes we are in an adjustment programme, which sets significant limitations on what we can and cannot do. If we are not prepared to help our professionals, manufacturers and service providers then we will continue to live in a state of dependency at the peril of others. Our producers have to operate with enormous odds stacked against them. Low skills base, unavailability and expensive cost of capital, small market and an uneven playing field are formidable challenges. It is in fact surprising that we survive at all.
The style of Marks & Spencer of the UK and Levi Strauss of the US and indeed more relevantly perhaps Courts in Guyana is instructive. They identify potential producers, set standards and specifications, provide finance and technical assistance and work with the entity to produce goods and services worthy of bearing their name and carrying their guarantee.
The development of the country will not be possible without the development of business whether small scale, self employed, professional and technical class or the larger enterprise. This fact must be recognised and given meaning at every level of our society. Consumers need to be educated about the benefits derived from supporting locally produced goods and services. Businesses must promote and support each other in their own interest. The government must recognise the wide and powerful role it can play in developing local interests. A successful entrepreneurial and business community provides jobs, goods and services, saves foreign exchange, strengthens the economy and creates a strong society, which is so vital for democracy.
These indeed should be the goals of a national strategy for economic and social development. If we are to take our place in a region let alone a world, which is becoming increasingly inter-dependent we cannot do so if we continue to depend entirely on others for the things we produce and for the things we consume. We need to add value to those natural commodities with which our country is endowed and to encourage the use of locally produced goods and services even as we seek to promote and sell them abroad.
A © page from: Guyana: Land of Six Peoples