THE DOWNTURN IN COMMERCE

Jul 08, 2015 Features / Columnists, Peeping Tom

It is difficult to find parking in certain parts of the city on any Saturday morning. Parking is extremely difficult to obtain outside of Guyana Stores and on Regent Street.
This past Saturday and the Saturday before, at 10 a.m. you could have easily obtained parking in these two areas. This was surprising, and lends support to those who argue that commerce is not as brisk as it usually is.
Even if you do not wish to believe the businessmen who are claiming that there has been an appreciable decline in sales since the elections, you have to take note of the decline in traffic on a day of the week when many persons take to shopping.
The businessmen are complaining that there has been a significant fall-off in sales. The signs are that they are not lying, that indeed there is a downturn in commercial activity since the last elections. People are not shopping as much as they did before and one has to ask why.
The Peeper investigated the seeming downturn in commercial sales by the most practical method possible: walking around and gauging what was happening.
Not all businesses were doing badly. Food still has to be put on the table. The supermarkets at month’s end are usually swamped with buyers. The numbers, from observations, tell me that this past month was not as high as is usually the case, but it was not poor at all. This indicates that the problems may not be about people buying less than it is about some people not buying at all.
A great many people still patronized the markets. The rainy season usually leads to an increase in the prices of vegetables and fruits. The prices are high; and people may not be buying as much as before because of these high prices.
Some stores seemed to be doing well. I visited a store that sold ladies’ accessories. I could barely find my way to the cashier, because of the large numbers of women in that store buying all manner of ‘bling’. Then I visited a cosmetic store and found that business was brisk. So it would be wrong to say that all businesses are experiencing a decline in sales. But there is an appreciable reduction in the number of shoppers, at least in the city.
I did try to find out what was happening, why people felt that the consumers were not buying. Some people felt that it had to do with the fact that government had not yet passed its Budget, and therefore a reduced amount of money was circulating in the economy.
This argument is based on a premise that government spending translates into increase spending on consumer items. This is a questionable premise, because the government does not go shopping in the supermarket to buy food or to buy clothes. The government spends on stationery, office equipment and construction items.
It is the payment by government to their workers in the form of wages which is more impactful on the sale of consumer items. But the government is still paying its workers; these workers are not short of cash to go out and make their purchases. So why is there a decline in commerce?
But even if one concedes that because the government has not yet passed its Budget that this is responsible for the fall-off in commercial activity, this raises another important issue. Is our economy, and particularly our commercial sector, so dependent on government spending? What about private sector spending? Should this not be able to prime the economy?
Whichever way you look at this issue, it does present some serious challenges for the government. If the fall-off from commercial trade is because of a lack of government spending, then the role of the private sector in our economy needs to be re-examined, because it would mean that the private sector is either not generating enough wealth or is engaged in massive capital flight.
If on the other hand, the problem is not the lack of government spending, then it needs to be asked what is really happening that is leading to this dramatic decline in spending in our economy.
There are no indications that the economy is in decline. There are some sectors that are doing badly. But that has always been the pattern of the Guyanese economy. All the sectors have never simultaneously done well together. If they did, the Guyanese economy would have been growing faster than China. It has always been that some sectors grow while others do not.
Nothing has changed in that respect. Growth is being maintained. But that growth is not being reflected in commerce. Why?

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THE DOWNTURN IN COMMERCE

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