Competitiveness, innovation and equity By Phil Pascal
Guyana Chronicle
March 1, 2007

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IN JANUARY 2007, Guyana formally launched its National Competitiveness Council (NCC).

This marks a key decision to identify a suitable institutional mechanism to drive the “retooling” of the economy and make it “competitive” or more competitive, at least in key sectors.

The NCC as an instrument, like any instrument, is only as effective as it can be, depending on its leadership, users, composition, structure and operational modalities. More important is the broader vision of the national goals the economy intends to pursue.

Reference to these aspects in the Guyana situation will be addressed later but it is pertinent to note the timely announcement of the council’s agreement “to recruit a Director…and establish its Secretariat” (Stabroek News, February 6, 2007).

A rigorous and careful choice of a Director, hopefully without “political friendliness” being a major criterion in the selection, is of necessity a major requirement for an effective NCC but by itself, that will not be sufficient for the desired success.

The question of “competitiveness” for the economy ought to be treated with all the fundamental importance it deserves, given the objective conditions that the late President Cheddi Jagan, in his sound grasp of political economy, used to refer to. These are the dominant and prevailing ideological forces in the world, as a whole and the conditions of productive relation between states.

In today’s world, like it or not, the global balance of economic forces are driven by “cut-throat” capitalistic business practices of multinational and trans-national corporations in which there is only room for “survival of the fittest”. In simple language, this is what ultimately, so-called “free market” production and trade is all about.

If Guyana’s business enterprises, whether large like GUYSUCO or the many hundreds of small and medium enterprises (SMEs) making shirts, shoes or toilet bowls, cannot bring their cost of production to a level that the market will accept, then those products – sugar, shirts or shoes - just won’t find companies or persons to buy them. These products will then be described as just “uncompetitive” because other enterprises are making available the same or better products for the same or similar purposes at lower prices.

Understanding this objective condition at the global level was the underlying factor why the European Union, in March 2000, at its Summit of 15 Heads of State and Government in Lisbon, Portugal designed a strategic response.

The aim was to make Europe’s economies strong enough to fight off the competition from both the “American challenge” and the “new emerging giants” of China, India, the former Soviet Bloc in Eastern Europe and Brazil, for example.

In what has become known as the Lisbon Strategy, the EU crafted a common vision embraced by all its member states, aiming to become:

`The most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion.’

In those few words are captured the driving forces for European competitiveness. Central to this vision is innovation, technological research and development as the foundation of a knowledge-based economy. Such an economy must be “sustainable”, strong on “job-creation” and designed to ensure “social cohesion” so that growth in economic terms will not result in social inequalities or have a situation whereby people, who though working, do not earn enough on which to live a decent life above the poverty line.

The questions of technological advancement, scale of operations driving acquisitions and mergers, increasing productivity, longer working weeks, etc are now at the heart of extensive debate in Europe, with much concern on the part of increasing numbers that so-called “labour” reforms do not undermine social security benefits and subject health care and educational opportunities only to those who can afford to pay.

The drive for “competitiveness” in Guyana, as elsewhere in developing countries, faces a complex set of challenges from both the external environment and the internal demands for the survival of businesses to become competitive. Without depressing wages, reversing hard-fought workers’ benefits or sacrificing social cohesion and bringing about the creation, rather than reduction of poverty, the development model has to ensure a drive to be competitive enables public-private partnerships, trade unions and civil society organisations to have a greater stake in the society as a whole.

This has at least two main implications as countries set about the design and operating of Competitiveness Councils. First must be continuing reflection, rethinking and reinforcement of the basic national goals that the society wishes to achieve. Employment generation, jobs that are meaningful and allow reasonable returns to investors, access to education for all in society, health care and social security particularly, for those who are physically challenged but most important in multi-cultural societies, the abolition of any semblance of racial or ethnic discrimination. In Guyana’s case, that direction was set in the National Development Strategy of 2002.

Once this larger vision is kept in the forefront of drives for competitiveness, then the internal structure and operations of a council will be able to concentrate on efficient and effective policy formulation and the promotion of “innovative enterprises”.

In such a context, Guyana’s NCC may need little more than a small, tightly organised and sharply-focused secretariat utilising a matrix management approach in which task forces are convened and rigorously analyse a sector or sectors and prospective enterprises with a road map for investment and implementation.

This is a major task to encourage innovation and applied technologies, drawing heavily on work that may be ongoing or about to pursue at the Institute of Applied Science and Technology (IAST), for example, and in faculties and institutes of the University of Guyana or statutory agencies for various sectors.

The other major function for the NCC ought to be the regulatory obligations that ensure fair trade, good business practices and corporate governance that cover the legal requirements from standards applicable to the production and marketing of goods and services for local, regional and international markets.

With the broad-based participation of business and professional associations, engineers as well as economists, workers representatives in unions and civil society organisations, there is an abundance of talent, skills and legitimate interests for “competitiveness” to become a means and hallmark by which the innovative insights of many sections of society will retool the economy to achieve growth in jobs and an improved quality of life for the majority.

With less talk and more action, Guyana’s NCC can be on the road to success.