How the manufacturing sector in Guyana was destroyed

May 10, 2016 Features / Columnists, Peeping Tom

Guyana has to go down in the Guinness Book of World Records for the most failed manufacturing enterprises. It is hard to contemplate a country with more failed and loss-making state-owned manufacturing enterprises than Guyana under the PNC.
The heyday for manufacturing was not in the 1990s. The heyday for manufacturing in Guyana was in the 1970s, when the State assumed control of the economy.
As part of that process, a number of private enterprises were taken over by the government and a number of state enterprises were created. These new entities as well as those nationalized, turned out to be disasters. Ironically, the heyday also turned out to be the haymaker, as one by one the manufacturing enterprises went under.
The PNC government was following the advice of Sir Arthur Lewis, who had suggested that Caribbean economies needed to be industrialized. For Burnham, this meant import substitution. So whatever Guyana was importing, Burnham decided that a substitute could be produced locally.
This is how the philosophy of self-reliance was conceived for Guyana. It was Burnham’s way of convincing the Guyanese people that his plan for industrialization would be feasible, because the industries would be producing what Guyana was importing.
It was a careless and reckless experiment. But who was going to stand-up and tell Burnham that he was wrong and that he was leading Guyana on a course of disaster.
Manufacturing establishments were created. Some took off only to flounder in flight. Others never got going at all, and left Guyana with a huge debt.
Guyana was supposed to have a factory to produce bicycles, so that Guyanese could ride to work and beat the fuel crisis. Burnham wasn’t riding any bicycle though. And neither were the thousands of Guyanese waiting for the assembled bicycles to roll off the production line.
In 1976, the government entered into a line of credit agreement with the Government of India to assemble Atlas bicycles. It was expected that Guyana would produce some 12,000 bicycles per year for local use and for exports to the Caribbean. The bicycle factory collapsed.
The government also established a cassava factory. Well, that worked for a time but also went under.
There were big plans for the extraction of silica from sand. A glass factory was constructed. It flopped. It was said that the aircraft passing overhead caused vibrations that cracked the glass produced. Some people took that joke seriously and still give it as the reason why the glass factory collapsed. The fact is that this was a case of poor planning, and there were no markets to sell the products to.
A paint factory was built. This also proved to be a failure. People complained about mildew. By the time the factory got it right, a severe foreign exchange crisis crippled its operations.
A leather factory was established. That too failed. It seems like everything the PNC touched in those days failed.
The Chinese came and with great fanfare established the Sanata Textile Mill. The mill was supposed to produce textiles from cotton grown at the National Service camps. Well, the National Service was another massive failure and could not supply enough cotton to make cotton wool much less to be weaved into fabric.
The soap factory produced bubbles. The snack food factory went packing. The factory that produced refrigerators fared well for a time, but then was destroyed by the foreign exchange crisis. GRECO, the radio manufacturing, went out of service. The Guyana Pharmaceutical Corporation fared better, but was always going to have to be privatized since it was operating way below capacity.
The PNC destroyed manufacturing in Guyana. The companies that did survive were those that enjoyed protection. But that is such a long story that it will have to wait for another day.

1 thoughts on “How the manufacturing sector in Guyana was destroyed”

Surujpaul Rampersaud May 10, 2016 at 12:57 pm

It was not mismanagement alone. Guyanese have a taste for foreign goods so the market was affected. So much for the experiment with state control. No one is disputing what you wrote. The next phase is to cover 1985 onwards