Factories and call centres are palliatives

Mar 26, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – The Minister of Agriculture is reported to have said that Guyana’s growing economy provides opportunities for business, trade and investment. However, it does not seem as if the growth of the economy, correspondingly, is providing greater opportunities for rural employment.
The economy has been growing for a long time and rural Guyana has been a contributor to that growth. However, rural employment is stagnated.
The Second Vice President, Bharrat Jagdeo is now on a mission to rein in rural unemployment. The newscast on the state-owned radio yesterday reported him as announcing that the government will facilitate investment for the Essequibo Coast by providing infrastructure for those interested in establishing call centres and factories. He was reported as saying that the government will construct the shell of the buildings for such investments.
The choice of call centres and factories is revealing. These are intended to create large swathes of employment opportunities.
For the 12 years in which he was President of Guyana, Bharrat Jagdeo failed to solve the problem of rural unemployment. Why does he think it will happen now that the situation is more abysmal?
A sense of foreboding and hopelessness pervades rural Guyana. There are limited employment opportunities for young people. So desperate is the situation, that highly qualified persons are willing to take entry-level jobs.
No wonder there is such a high rate of migration from the countryside to the urban centres and to overseas. Guyana has internal economic refugees. People are running away from where they were born and raised in order to seek greener pastures.
Over time, palliative measures were pursued but these have not stemmed the massive migration from the countryside. The most recent initiative called the Rural Enterprise and Agricultural Development (READ) Project was supposed to have provided assistance to some 5,200 poor rural persons.
These initiatives do not address the root causes of rural underdevelopment. And there is no reason to believe that the “call centres and factories” initiative will do any better.
The call centre initiative is not new. It has been tried before and has not been highly successful.
The “call centres and factories” plans offer false hopes. The infrastructure does not exist to excite investors to make those long-term investments that would generate large-scale employment.
Students in rural areas have complained bitterly about poor broadband. And electricity reliability is a problem. Unless these things change, no one is going to get excited about setting up a call centre which requires not only stable and advanced bandwidth but also hard- to-come-by overseas customers.
Stand-alone initiatives will not ease the high levels of rural unemployment and underemployment. What is needed is a rural development strategy. But none exists. The government has no grand plans for rural Guyana.
The revised Low Carbon Development Strategy only mentions investments in rural electrification, and the creation of small businesses, tourism and aquaculture as providing opportunities for women in rural areas. But there is no mention of a specific rural development plan. None whatsoever!
But no rural development strategy or plan will work unless it addresses the root causes of rural underdevelopment. The constraints to rural development are well known. Land ownership remains a major constraint. The majority of lands are owned by a minority of persons. The landless need land and this should be the starting point of any rural development plan. But the PPP/C is so attached to the landed classes that it is disinclined to engage in land reforms which would empower the landless.
An IDB report in 2017 pointed to some other issues in the agricultural sector. These included poor infrastructure, insufficient storage facilities, low production concentration, obsolete technology, low-value added and costly access to finance.
While the formal financial sector has expanded its roots into rural communities, feudal relations still exist, a development related not only to land use but also to money-lending licences which perpetuate such relations.
The PPP/C also does not wish to touch the issue of revaluation of properties so as to increase the taxes paid to local authorities. The APNU+AFC was also similarly disinclined. If realistic rates and taxes are paid, the economy of rural Guyana will be boosted.
The bulk of government’s Budget is recurrent expenditure. And most of that recurrent expenditure is spent in the towns and city where most of the Ministries and government offices are located. The government needs to devolve more of its operations to rural Guyana. It will save millions in the process because rates and taxes are far lower in rural areas than in the city. But it will also allow for greater spending in rural areas and this will boost the rural economy.
There are therefore, far better ideas available for rural development than Jagdeo’s “call centres and factories”. But piecemeal and stand-alone ideas will not suffice.
These must be incorporated into a rural development strategy. And who better to do this than someone who specialises in rural economics.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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