WILL THINGS GET BETTER FOR BUSINESS?

Sep 12, 2011 Features / Columnists, Peeping Tom

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There are some persons who are hoping that the investment and business climate will improve for the better once President Jagdeo leaves office. While his policies have favoured businesses as a whole, they have also been heavily slanted in favour of particular interests and this has raised deep concerns within the local private sector and also among foreign investors.
Large investors, both domestic and foreign, want a level playing field. They want to have an equal opportunity at competing. They do not wish to make a large investment, only to find later than some company has negotiated far superior terms than they have that will force them out of business.
Small investors in turn look for some sort of protection so that they would not be swamped. They are worried that large players can come onto the market and push them into extinction.
During the launching of the Guyana Times newspaper, one of Guyana leading investors congratulated the company for negotiating a good deal and expressed the hope that other local companies would enjoy the same concessions.
This by all accounts seemed to have been a fair comment, implicit in which was a call for a level playing field and for all companies to be given the same possibility of enjoying generous concessions from the government.
This simple comment led to a mouth-lashing of the person making the comment and an invitation for him to attend a seminar so that he could familiarize himself with the system governing tax holidays.
As it turned out, it was the government that needed the lecture because certain tax holidays that were supposed to have been granted were in violation of the laws. Hasty steps had to be taken to pass legislation to put things right.
There are other concerns which face the business community in Guyana. One of these has to do with the fact that a small group of businessmen, all of whom have very close ties with persons within the government, seems to doing extremely well and in fact are cornering large sections of the economy, pushing out traditional suppliers. There are concerns that this oligarchy can attain such a stranglehold on business as to cripple all competition.
Another concern has to do with the competition faced by local businesses from retailers owned by foreign nationals. The foreign companies are taking over local commerce and many existing businesses are saying that they simply cannot compete against these new arrivals.
From the perspective of the consumers, the cheap items are welcome. Over the past month, for example, many families were able to source their school supplies very cheaply from these shops owned by foreign nationals. Families are glad for the low prices.
Questions are also being asked as to why all along the existing businesses could not be selling so cheaply. In response, the local retailers and wholesalers are baffled by how cheaply these new firms are selling some items. The local businessmen are complaining that there is really no competition between the businesses owned by foreign nationals and those owned by locals. They contend that the locals simply cannot compete.
There needs to be some evaluation of this situation to determine whether there is fair competition between business owned by foreign nationals and those owned by locals.
There is also a need for improved fair competition legislation to ensure that within the private sector itself some firms do not monopolize small markets. The private sector needs to have fair competition amongst its members.
Another concern is just who benefits the most from government procurement, especially when it comes to large contracts. There needs to be an evaluation as to whether there is a greater need for improvement in the system of competitive bidding, in particular whether large contracts are being dominated by a few firms and whether this is hindering opportunities for small firms to grow.
Many of these concerns have been privately expressed by members of the private sector who are always prepared to quietly make representation to the authorities. These representations have not, however, erased some of the major concerns that have been expressed. As such, it is time for the private sector to speak out publicly just as how they have been doing privately.
The private sector may be hoping that with the Jagdeo administration coming to an end, that a new President will make changes for the better.
But they had better be careful because a small group of businessmen has been exercising such powerful influence on official policy that it may be hard to reduce their power overnight unless there is a groundswell of pressure.
And the more powerful the oligarchy becomes, the more money they make, the harder it will be to constrain their influence.
Whatever happens in the next elections, if Guyana is to progress, if the private sector is to play a more important role in national development, many of the business policies of the Jagdeo administration will have to be dumped. Will the new President be willing to do this?

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