May 24, 2002
Articles on economic concerns
In a recent interview on Christopher Ram's Plain Talk programme, Nigel Baptiste the outgoing managing director of NBIC delivered his personal opinions on the Guyanese private sector.
Baptiste set out three commitments companies here need to undertake to achieve true business success. The first was commitment to company. In other words the financial requirements of a company must take precedence over the material needs of the owner.
Taking too much money out of a new business is a sure fire road to failure and does not allow a company to retain earnings for future investments and growth.
Baptiste also mentioned a commitment to honour obligations which means paying off loans, freely entered into, in a timely manner and honouring debts with suppliers. Both of these commitments directly affect the fortunes of a company and despite the fact that they are often neglected in Guyana, are obvious to anyone who wants to build a financially sound and credit worthy entity.
But it is the final commitment to country which is perhaps the most significant.
The private sector does not operate in a vacuum. It requires the use of labour and infrastructure: healthy educated workers, roads to transport containers, to distribute goods, water for factories. This is supposed to be financed by companies and their employees paying their taxes. But too often, companies try all they can to avoid paying their fair share. Under invoicing is endemic and rewards businessmen who have the contacts, and are willing to corrupt officials at the expense of those who want to play by the rules. That is not legitimate business. It is white collar crime and the responsibility lies squarely on the private sector to be honest.
Recently a number of well known companies have been brought to court for not paying their employees' P.A.Y.E. contributions. The sums were in the millions but not one CEO appeared before a judge to explain their company's actions. Contrast this to the sentences passed down for petty larceny. Some well established businesses reportedly pay no taxes at all but appear to prosper year after year. It is common to blame the IRS for its failure to move against such tax evaders but once again the ultimate responsibility lies with companies to voluntarily pay their fair share.
Meanwhile it is always amusing to listen to Regent Street retailers complain about how "business bad" and "money not circulating." At the same time a number of them actually pay their store clerks as little as $3000 a week for six days work. They fail to make the connection between their starvation wages and the lack of customers.
Companies have to take a larger view of their role in society. The government obviously bears responsibility for the health, safety and education of its citizens but with limited revenues it is constantly having to beg or borrow from international agencies to make up the shortfall.
Companies can and should do more, first by honouring their tax obligations in full. But that is not enough. They should actively seek out meaningful projects in the social sector which they can adopt. Some corporations are already doing this and they should be commended. Good business is not just about making money today. Helping to create a better society means business will thrive tomorrow.