Guyana’s manufacturing sector…Too many traders, too few manufacturers

May 09, 2016 News

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By Kiana Wilburg

In the 90s, Guyana’s manufacturing sector was crawling with innovators. There was an insatiable desire to manufacture almost everything that was needed for local consumption. In those days, manufactures produced matches, jams and jellies, mosquito coils, even the detergents needed by the housewife.

Manufacturers then also got involved in producing pasteurized milk; they established a ham and bacon factory and constructed several facilities to generate canned products.
Today, the manufacturing sector makes a marginal contribution to the overall Gross Domestic Product (GDP).
Fifty years later, it is bloated with hundreds of foreign products like those it once produced for domestic consumption. We have packaged plantain chips from Trinidad…packaged coconut milk and coconut oil from the United States.
It has left many wondering whether the sector consists of merchants instead of manufacturers.
Sharing his thoughts recently on the matter was Kaieteur News columnist, Fredrick Kissoon. He believes that in the immediate post-independence period under the late President Forbes Burnham’s, there was a greater emphasis on manufacturing as a policy of economic development. The political activist said, however, that the late President Desmond Hoyte’s economic recovery programme adopted a neoliberal approach to economic development. Kissoon opined that this impacted adversely on the manufacturing sector and since then, it has never recovered.
“We continue to build an economy based on the export of raw materials and what has essentially happened is that the economy has become one of trade with no serious manufacturing dimensions. And what we do have in terms of manufactured products cannot compete internationally. We manufacture sweets, we assemble some types of industrial goods and cooking condiments and those cannot compete even regionally…”
Sharing his thoughts on the issue recently was University Professor, Dr. David Hinds. He opined that manufacturing is certainly one of the ways to reinvigorate the village economy which is something President David Granger has spoken about.
The University professor said that Guyana has a history of small manufacturing initiatives that could be used as a template now.
He said that in the 1970s many such initiatives had sprung up across the country. He said that there has been a tendency in developing economies like Guyana’s to put all the emphasis on attracting large foreign investments and not paying enough attention to small and medium sized manufacturing.

Dr. Hinds said that that is an inadequate model which Guyana has been guilty of following. The University Professor said that it is important for Guyana to embrace a mixed model, which partly asks the following question – How does this policy benefit our poor people?
The political activist said that what has affected the sector in his belief is the Free trade principle which has led to a liberal flow of foreign goods into Guyana’s market.  Dr. Hinds said that is always going to be a challenge but he is sure that the government can guarantee that local manufacturing is protected and given prominence in its own markets.
While Kissoon and Hinds share similar views, Finance Minister, Winston Jordan believes otherwise. He has been unashamedly critical of the Guyana Manufacturing Services Association for crying out about the challenges it faced; challenges which have been affecting the sector “since Noah built the ark.”
He actually made his disappointment known as he bemoaned the fact that no product of Guyanese origin is a household name in Caricom, save and except El Dorado rum.
Jordan acknowledges that efforts and strides have been made by some in the sector. Regardless of this, the Finance Minister is of the firm belief that the sector can do much more and has been doing much more in the past.
The Minister said, “I reflect on the 1970s and 1980s – periods in our history that were characterized by economic crises that led to banning and restrictions of many items. And I recall the inventions, innovations and the sheer will to survive that those crises called forth.”
“In those trying times, more goods were manufactured, canned or assembled domestically: vehicles, bicycles, refrigerators, freezers, radio, matches, tooth paste, etc. In the agriculture sector, we had canned pineapple and orange juice, smoked and other forms of ham, salted fish, and so forth.
“Even in the 1980s, an enterprising Frenchman took heart of palm, canned it in a place not known for its electricity, and exported the finished product to French Guiana and France.”
The Finance Minister said, that too many of Guyana’s private sector players seem content to chase after the quick dollar by importing a lot of cheap products to be sold in a low-wage economy. He said that some of the items are of such poor quality and low standard that he marvels at how they could find a market in Guyana.

“But if Barbados can sell us sugar cake, Trinidad can sell us fried channa in plastic bottles, assorted tamarind balls and fudge in boxes; if we can import matches from as far away as Czech Republic and Poland or plantain and cassava chips from Central America, why can’t we manufacture these basic products, where we have all the ingredients grown locally and sell to our neighbours?,” inquired the Minister.
He also hammered home the stark reality that Guyana has no multinational or mainstream international companies.
Jordan said, too, that Guyana has exporters and resellers as well as a few manufacturers and even fewer who actually export to CARICOM and further afield.
The Minister said that a sober analysis of the Private Sector would reveal several characteristics. He noted in this regard that the Private Sector is technologically unsophisticated having never gone through an industrial revolution. “Our infrastructure, technology, marketing sophistication, global competitiveness and industrialization stage confirm this,” said the Minister.
“The Private Sector, for the most part, has been inward-looking in its orientation; a paradox in itself given that the domestic market is small while Guyana enjoys tremendous comparative advantages in many areas and has several bilateral and multilateral trade and economic agreements.”
Given this state of affairs in the sector, Jordan said that manufacturing in Guyana must become a key driver of rapid economic growth, and the associated creation of employment, both directly and indirectly.
Jordan said that there is considerable accumulated evidence that manufacturing still functions as the heart of the economic development process. Jordan said that to transcend the dominant and traditional revenue earners, “we must manufacture. We must add value.”

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