Evidence of the emergence of an increasing number of micro and small business initiatives in recent years has raised questions about the longer-term future of the small business sector as a whole. Some of those questions have had to do with competition amongst those emerging businesses in what remains a small local market. More than that, there is also the issue of competition from imports that continue to find their way into our open economy.
In the matter of the limited local market the problem of retarded local demand has been compounded by the challenges associated with limited market access in other Caricom countries; the hype and hoopla associated with the regional single market notwithstanding. The truth of the matter is that however attractive the sound bite has been, intra-regional attempts at the actualization of the single market have been responded to by some territories with a thicket of non-tariff barriers, some designed to protect fledgling local industries and others that seemingly seek to do no more than keep foreign goods out.
In the course of relatively recent interviews with local exporters this newspaper has been told several stories of a particular Caricom country that appears to have struck a posture designed to keep Guyanese goods out.
Then, of course, there is the other side the coin, that is, the openness of the Guyana economy to imports not only from other countries in the region but also to goods that come here from as far away as China.
The government has long pronounced on the economy’s openness to Chinese merchants who have needed no second invitation to open myriad outlets for Chinese-manufactured goods.
Over a relatively short period Chinese goods have not only changed the face of retail trading in Guyana but has also brought an unbearable competition to the local garment-manufacturing sector, significantly reducing market share for locals involved in that sector. While they are not inclined to say so publicly, some Guyanese businesses remain deeply unhappy with the extent to which Chinese goods have been allowed to impose themselves on the Guyana economy.
Reduced external markets and competition associated with a profusion of imports, particularly from China, now coincide with what would appear to be pointed efforts to boost small business entrepreneurial pursuits in the productive sectors. Projects like the Guyana Bank for Trade and Industry’s (GBTI) Women of Worth (WOW) project and, more recently, the US$5 million small business initiative being run by the Small Business Bureau are aimed at bringing even more small businesses into the formal economy. Most of these are involved in agriculture, agro-processing, the creative industries and various forms of limited manufacturing. What is also encouraging is the fact that the Small Business Bureau project embraces commercial banks as partners in the process.
Once these enterprises are fully developed and begin to optimize production of their various goods and services the issue of markets will inevitably arise. Indeed, that issue may have already arisen in some interior communities where the potential of some high-quality products (peanut butter manufactured at Aranaputa is a good example) is being stifled both by the logistics of moving products from the interior to markets on the coast and by what are limited markets anyway. In the meantime, export prospects are hindered by, among other things, labelling, packaging and other types of limitations that give rise to the imposition of non-tariff barriers in other countries.
Down the road, our export prospects for food products that target extra-regional markets will be challenged even more by what now appears to be the increasing likelihood that Guyana will not, any time soon, meet the prerequisites of the US Food Safety Modernization (FSMA) Act, an imposing piece of legislation that sets strict standards for accessing its food market.
Since it seems unlikely that local demand will keep pace with the anticipated growth in agriculture, agro-processing and perhaps even in limited areas of manufacturing the need will arise to look increasingly to external markets that appear more and more unappealing. What makes the issue of market access intriguing is its linkage to the survival and growth of an entirely new generation of local businesses and our attendant dependence on these entities to provide employment for Guyanese.
These are issues that require the attention of both the government and the private sectors; the former because it must find ways of ensuring that local goods benefit from greater regional market access to better meet the needs of the local productive sector. At the same time, government must ensure that a balance is struck between the retention of an economy that remains open to foreign competition and one that guards against the crippling of local industries by a profusion of imports that compete directly with our weakest sectors.
From a private sector perspective, there have been some indications over the past year or so that the business support organisations might be prepared to pay greater attention to the interests of smaller local businesses. This then might be a worthwhile opportunity for them to mount a vigorous lobby, both at home and abroad, to ensure that local small businesses are better positioned to surmount the challenges they will doubtless face in the period ahead.
