Where is our manufacturing sector?

Nov 03, 2013 AFC Column, Features / Columnists

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By Dominic Gaskin
AFC Treasurer

GuyExpo can fairly be described as an annual display, by individuals and businesses, of what is available to the Guyanese consumer. It attracts thousands of visitors and is therefore a good vending opportunity for many exhibitors and concessionaires. From all accounts it has become a successful ‘lime’, providing nights of entertainment for a broad cross-section of the local society.
However, as a showcase of what Guyana has to offer, GuyExpo is disturbingly uninspiring. The familiar lament about the difficulty of finding locally-produced goods at this event rings louder every year, and at some point it must be acknowledged that we simply do not have much to offer in terms of locally-manufactured products.
This is not an indictment of GuyExpo itself. It goes way beyond that to reveal our failure as a nation to nurture and develop a sustainable manufacturing industry, capable of bringing significant foreign earnings into our economy and providing much-needed jobs. Unfortunately this is not an easily reversible situation, as each passing year of neglect sets us further back in the league of global producers competing within a single market space.
After twenty-one years in charge, the PPP-C Government must shoulder the blame for what currently prevails. A thriving productive sector cannot be wished into existence, and it is clear that the Government has given up on transforming the sector. This is evidenced by its reliance on platitudes and an accumulation of unapplied initiatives to indicate its “mek attempt” to encourage manufacturing in Guyana. It is unlikely that another twenty-one years of PPP-C rule will see the development of a modern local manufacturing industry.
Fortunately, this scenario is an unrealistic one, as that Party’s dwindling electoral support provides a real chance for a change in Government; and the beginning of a new phase of democracy and development, from which a diversified economy can emerge according to a sensible long-term plan.
The fact that many of the world’s strongest manufacturing centres were developed with the help of tariff protection and other subsidies in an era preceding WTO rules, should at least alert Government to the need for some effort on its part to jump-start the process here at home.
It may also be useful to reflect on those earlier attempts to build a manufacturing base in durable goods such as radios, refrigerators, bicycles and even automobiles – in particular the sense of pride that came with finally having our own brands. This pride has all but disappeared, as we no longer consider the importance of producing what we consume or consuming what we produce. Who would have thought the day would come when imported lumber or fruit would be competing favourably with our local produce?
It is imperative for Guyana’s long-term economic well-being that we increase our exports relative to our imports. Attempting to achieve this by simply exporting more gold, bauxite and rice is a demonstration of the Government’s lack of resolve when it comes to the, much chanted about, diversification of our economy. The hundreds of millions of US dollars worth of illegal narcotics exports that spike our economy each year, is a dangerous substitute for formal export earnings, and merely masks the failed policies of an inept government.
The term value-added is often heard when we contemplate various alternatives to shipping out our unprocessed timber, gold and bauxite. Indeed it’s a shame that we have not been able to develop industries to process and add value to these primary products, however, the world has changed from the days when industries were centred around locally available resources, and there is no limit to what we, here in Guyana, can produce once we get our act together.
However, it will take an ambitious government with conviction and determination to guide us onto the right path. A handful of sketchy projects will do nothing to create a truly multi-sector economy that can advance us towards Developed Nation status.
In 1991, then Prime Minister, Mahathir Mohamad of Malaysia unveiled that country’s Vision 2020 in which it set an almost thirty-year target for becoming a self sufficient, industrialized, developed nation by the year 2020. Today, twenty-two years later, Malaysia is on the way to achieving the status of Developed Nation by the year 2018, two years ahead of time. Guyana, in the meantime, has very little to show for the PPP-C’s loudly celebrated twenty-one years in office.
There are two key elements which must form part of the way forward for a successful local productive sector, namely; competitiveness and marketing. These ought to have been comprehensively addressed, and the implementation stage of some master-plan should, by now, have been well underway. The seven-year-old National Competitiveness Strategy (NCS) could have been the solution. However, despite its G$1.8 billion price tag, the NCS has so far failed to make an impact on the productive sector. This IDB-funded program is scheduled to end next year and will no doubt suffer the same fate as our much revered, but unused, National Development Strategy.
A government accustomed to tailoring its policies to achieve the most basic standards in the best of times, is hardly likely to harbour the ambition to formulate and implement strategies to be tested in the global marketplace. The unregulated economic swelling that has occurred during the PPP-C’s twenty-one years in power has not brought us any closer to penetrating external markets than when they first took office. The fact that in August of this year, at the National Economic Forum, stakeholders were still groping for creation stage solutions is evidence that we are not yet on a desirable trajectory.
The AFC understands the importance of cultivating a formal business environment: where producers can compete on the basis of quality and efficiency; where there is a level playing field to inspire investor confidence; where there is a national export strategy in place to guide investors; where there are specific sectoral strategies in place for all industries with export potential; where incentives are used to effectively attract investments according to national priorities; where modern legislation is constantly drafted and amended to protect investors. Moreover, the AFC also has the ambition to place Guyana on the map and brand us as a quality provider.
When it comes to manufacturing, the PPP-C has kept Guyana sitting on square-one for over two decades. One would have to be extremely optimistic to expect any sudden advancement in this regard without a change in government.

 

 

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