US$9M quality enhancement project to boost ailing manufacturing sector – Business Minister

Dec 23, 2017 News

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By Kiana Wilburg

Guyana’s manufacturing sector has significantly underperformed in recent years. In fact, Business Minister Dominic Gaskin recently stated that the dreary output of the sector is an issue that has plagued Guyana for decades. He emphasised nonetheless, that it is a matter the Government intends to address.

Gaskin asserted that it is important for Guyana’s economy to have more manufacturing activities. He noted, however, that there are a number of challenges in the sector, one of which is the availability of accredited testing facilities.

Gaskin then revealed that his Ministry is addressing this matter with the execution of a USD $9M project called ‘Enhancing the National Quality Infrastructure for Economic Diversification and Trade Promotion’.

The Business Minister said that this is primarily intended to strengthen the manufacturing sector and promote value-added exports by ensuring the provision of a world class quality infrastructure.

He said that the broader National Value Added and Export Promotion strategies are also components of this project and will be developed in 2018.

Gaskin revealed that his Ministry is also exploring the possibility of undertaking a study for developing Special Economic Zones (SEZ) in Guyana. He said that this would fit naturally with some of its infrastructure developments that will occur in the next few years.

He added, “We believe that SEZ is one of the ways in which we can stimulate manufacturing in Guyana.”

Despite the expectation that rice and other manufacturing will expand in 2018, by 2.5 percent and 2.4 percent, respectively, the decline of the sugar industry will depress the overall growth of the manufacturing sector, which is expected to remain virtually the same. This is according to the Ministry of Finance.

PROTECTIONISM

Some members of the manufacturing sector have advocated over the past few months that the Government should move swiftly to implement some barriers, so as to provide a level of protectionism against foreign products which benefit from a far more enabling environment and fiscal regime.

Finance Minister Winston Jordan made it clear, however, that this is just not possible. He said that there are certain agreements which fall under the World Trade Organization (WTO) partnership and the Common External Tariff (CET) arrangement which Guyana has signed on to, which speak to non-discriminatory treatment in the application of tariffs on imports and domestic production.
He said that very little can be done in terms of a level of protectionism through that mechanism.

By way of a specific example, he made direct reference to the discriminatory application of the environmental tax on imported bottles.

A bottling company successfully prosecuted its case before the Caribbean Court of Justice (CCJ), costing the Government in excess of $1.5 billion. Other bottling companies have since approached the CCJ for similar judgments.

The Finance Minister stressed, however, that there are other measures which can and will be considered by the administration.

RED TAPE

Minister Gaskin said that his Ministry is currently engaging various State agencies with a view to reducing bureaucratic red tape and making official procedures easier to navigate. It is currently seeking financing to implement the Single Window Automated Processing System (SWAPS).

When established, the SWAPS will link licensing bodies along with the Customs and Trade Administration to facilitate the sharing of information and to enhance the efficiency with which trade transactions are carried out.

These improved procedures will not only reduce the amount of time that private businesses spend mired in paperwork, but also increase government accountability, reduce corruption, and make data and information more accessible.
The Ministry of Business has already established a Help Desk for businesses, which acts as a single point of contact for information and advice for businesses, traders, and the Government.

Furthermore, while consumers and large businesses can access loans, Gaskin said that the Government is very much aware that small businesses commonly face a financing gap. He emphasised that this is being addressed by the Government through the implementation of the Micro and Small Enterprise Development (MSED) initiative which will be implemented by the Small Business Bureau of the Ministry of Business.

To build both generic and sector specific skills, the Business Minister said that training opportunities for small businesses will be expanded to cover all 10 Administrative Regions. The politician said that this year, 400 individuals are targeted to benefit from training.

He noted, too, that a newly appointed Small Business Council chaired by Commonwealth Woman Entrepreneur of the Year (2015) awardee, Ms. Valrie Grant, is now in place and tasked with significantly improving the work and expanding the reach of the Small Business Bureau over the next few years.

REVAMPED GOINVEST

It has also been noted by the administration that efforts must be geared towards enhancing Guyana’s brand and visibility as an investment destination. As such, it is expected that the Guyana Office for Investment (GO-Invest) would work towards improving agency websites and develop partnerships with other investment promotion agencies worldwide.

Gaskin said that GO-Invest is now overseen by a competent Board of Directors and headed by a knowledgeable and energetic new Chief Executive Officer. He said that the Ministry of Business’ Strategic Plan calls for the development of a national export strategy and the design of a sustainable national investment strategy.
Gaskin said, too, that GO-Invest will play a key role in the implementation of these initiatives. He explained that the national export strategy will also be supported by enhanced quality infrastructure, made possible by the upgrading of the national laboratory network, to allow for testing and certification of products by accredited facilities, thereby assisting manufacturers to meet the requirements of foreign markets.

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