A tragic closure
August 15, 2002
The announcement last week of the closing of the operations of Industrial Engineering Limited (IEL) was a shock both to the business and the general community. It showed, if proof were needed, how vulnerable even well established and well run businesses are at these difficult times. Moreover, IEL was at the high tech end of our manufacturing sector with a large number of highly trained and skilled employees. The closure is also, of course, a great blow to the employees and the owners.
From all accounts the closure was due to a number of factors. In the first place, there was a continuing exodus of highly trained workers. The reality is that such persons find it easier to emigrate now when self sponsored emigration to Canada is available. Moreover, many of them are increasingly disenchanted with the quality of life in Guyana given the never ending criminal attacks. There can be no doubt that the exodus of skilled persons will continue until and unless this situation is rectified and some kind of peace and stability is restored. In addition, as Mr George Jardim, the chairman of IEL has reportedly said, continuing political instability is not conducive to investment or economic development.
Secondly, it seems that there was a considerable falling off in business and there were not enough orders to enable the business to be run profitably. This situation of falling orders and sales is no doubt being experienced by many others who are struggling to survive. The economic slowdown is not at this stage peculiar to Guyana, but the effects here tend to be particularly severe because of the already low base of economic activity.
For some time our manufacturers have been under pressure from competition from other producers in Caricom. In the printing industry, for example, a lot of annual reports and other documents are printed in Trinidad and over the years printeries here have closed. The manufacturing sector in Trinidad, Barbados and Jamaica is much more developed than ours. They never went through the long process of strangulation (licences, lack of foreign currency) that ours did some time ago and in most cases have better and more modern equipment and trained and experienced workers (their Guyanese counterparts can now be found in the USA and Canada).
The rot did not set in yesterday, it goes back a long time. But the situation has been exacerbated both by the global economic slowdown since September ll, 200l and the wanton crime that seems increasingly out of control. There is obviously no quick fix available but it would perhaps be useful for the Private Sector Commission, the Guyana Manufacturers Association and the Chambers of Commerce in Georgetown and elsewhere to have a meeting to discuss the problems facing businessmen and to prepare some proposals for discussion with the government aimed at providing some measure of relief. Several businesses have already been put into receivership by their bankers and the immediate prospects are not bright.