Weathering the storm
November 10, 2002
Three businessmen struggle with rampant crime and an economic downturn that has them questioning the future of their operations.
Three businessmen have found themselves standing at the crossroads in terms of the future of their activities in Guyana. They are not confident that crime, "which has now taken centre stage" will get any better in the near term and are beginning to wonder whether closing down is a better option.
Managing Director of C&F Supermarket on Regent Street, Paul Fraser; Managing Director of Farfan and Mendes and Mines Services Limited, Andrew Mendes; and Managing Director of Readymix Concrete Limited, Anthony Amres in separate interviews told Stabroek News that the current situation has had a significant impact on their operations.
Fraser and Mendes said business has plunged by a 30% to 40% margin this year.
Amres does not see an immediate solution to the problem coming from the political leadership at this time as they are not treating the situation with the urgency it deserves, and the major political parties are still at the stage where the Social Partners initiatives are yet to be signed. The recent shut-down by the business community, he said, was an expression of frustration as every section of society has been affected in every possible way, including psychologically.
He said the crime situation did not start with the jailbreak but it may have been the catalyst that people could relate to. The problems were there "even before." Since the downturn, Amres said, he has thought of shutting down the business and packing up "but when you spend ten years building a business, it is difficult to just walk away." However, he said "that's not to say that if someone comes in and offers the right price, I might not be tempted. Who needs to live in a war zone? I shop at Nigel's Supermarket and just the other night, five people were shot dead right in that vicinity. Look at the people who were shot dead in Kitty. It's not just on the East Coast, or Buxton, it's anywhere, at anytime."
Mendes feels that the major political parties need not only to sign on to the crime initiative, but the whole package being put forward by the Social Partners. He said there was need for a third party influence to deal with the blame game. While the blame game continues businesses are caught in the middle. Crime was being fostered, investments were drying up and there was no vision.
He said that the National Development Strategy (NDS), basically a civil society document, appears to have been rejected. "We are so polarised that there is no space for civil society. Because people are now recognising that this polarisation may be the source of the problem, they now see the need for civil society to take on a broader role to ensure a future for our country. Our elected representatives have failed considerably. We want to hear what will happen in the next ten years and not what has happened in the last 30 or 40."
Amres said he was heartened that in other countries on the continent people have turned away from traditional political leaders. "Brazil just elected a trade unionist for president; Argentineans have made their sentiments known where politicians are concerned," he said, adding that Ecuador is going to elections and the race will be between an army officer and a businessmen. To him, it appears that the solution to the country's dilemma will come from the civil society leaders. "All the bickering and hurling accusations by political leaders will get us nowhere."
Mendes said "people are voting with their feet... What's the use of making money if you don't feel you can spend it in relative safety?"
Fraser said apart from the safety issue his other concern is whether or not he would be able to pay his mortgages when his supermarket was not making a profit.
C&F Supermarket on Regent Street has been in operation since November 1967 and Fraser cannot ever remember when business was this lean.
If this state of affairs continues, he said, C&F may soon have to close its doors and move out. The business has significant overheads with electricity being "out of this world."
Mendes said while there has been a decline in the Mines Services Limited, Farfan and Mendes, known for its chainsaws, has been less affected. He observed that in any crisis situation people revert back to primary means of survival and if they could not get a job, especially in rural areas, some would seek to become self-employed and this could mean buying a chainsaw or a weed cutter.
Farfan and Mendes also maintained its sales this year mainly because a lot of effort was put into marketing as well as taking over businesses from competitors. There were no new investments and few businesses so the staff has channelled its energies into what was already there.
Not seeing any resolution to the economic situation given the current crime wave and political instability, Mendes said it was very difficult to make projections for the future. "Right now," he said, "the question was, do we invest here or take the money out of the country and invest elsewhere? That is the point we're at." In a way "we are trying not to let the situation dominate but if the situation prolongs there may come a time when there may be a straw that will break the camel's back," he said.
However, Mendes observed that some businesses failed not only on account of crime and political instability but also because of a lack of professionalism and sound management.
Asked about experiencing similar lean times, Mendes said that during the Forbes Burnham years, business had contracted significantly. He recalled that a US$500,000 wire-rope contract with the bauxite company was taken away and eventually the staff was reduced to ten. It was only after Burnham's death and Desmond Hoyte came into office that the company's operations improved.
In spite of the current downturn in the economy, he said that Farfan and Mendes has never laid off anyone. Instead if someone resigns no one is employed to fill the vacancy.
Speaking about the impact the crime situation has had on Readymix, in business since 1992, Amres said a number of projects have been either put on hold or cancelled. Many people are adopting a wait and see attitude as "many may be interested in paying for a visa rather than in building a house."
Noting that crime was out of control, he said that the focus is now on major crimes when literally hundreds of people are robbed regularly at the bus and car parks, houses are being burgled without being reported, and workers cannot get to work on time because of road blocks mainly on the East Coast Demerara. The East Coast Demerara Public Road along which 40% of his staff travel to get to their workplace, is shut down for several hours almost daily he said. This was affecting production as well.
Amres noted that profits were clearly down, and said his company has been forced to diversify to adjust to changing circumstances. Consequently, the company has begun making concrete piles and concrete paling blocks. "The choice is simple, you either shut down or find ways of weathering the storm. For me, right now, it is weathering a major storm." (Miranda La Rose)