A new Georgetown Chamber of Commerce and Industry (GCCI) survey has found that fewer city businesses recorded profits last year, amidst concerns about increased costs, corruption and a lack of political compromise nationally.
According to the GCCI’s Attitudinal Survey 2014, which was released yesterday, 75% of 80 surveyed members reported a profit in 2013, which represented a plunge from 91% in 2012. The 25% of surveyed members reporting a loss for last year represented the highest percentage recorded for such a position in the survey’s three-year history.
The survey also found optimism among the surveyed businesses is down for 2014, with only 53% indicating that they expect increased revenue this year, compared with 71% last year. Further, 38% expect revenues to remain stable, compared with 22% last year.
In addition, 73% of surveyed businesses rated their businesses as strong or very strong, which also represented a decline compared with 87% of those surveyed last year.
The survey also found that 78% of respondent businesses reported increased costs for 2013 and 91% expect costs to continue to increase significantly or somewhat this year.
In the area of government support, 45% of respondents indicated that the government attitude toward business was either “very supportive” or “moderately supportive,” 41% believed the government’s attitude was “neutral” and 15% believed that government’s attitude was “non-supportive.” Weighing in on political compromise, 59% of respondents were pessimistic that policy makers would compromise and cooperate in 2014, while 41% were optimistic that they would.
Nevertheless, 82% of respondents were positive and optimistic about the economy this year or expected things to remain the same.
GCCI hopes the findings of the survey are used as “a sounding board” to policymakers. Speaking at the launch of the survey at the GCCI offices yesterday, GCCI President Clinton Urling called out the National Competitiveness Council for not having a larger role in public-private advocacy to advance the economy in effective implementation of strategies.
Urling noted that 70% of the surveyed members believed corruption was high, while 28% remained neutral in their response. He added that an overwhelming majority, 89%, believed that the government is not doing enough to curb corruption, while the remainder felt that much was being done.
He said that the survey ventured into new territory by asking members about the various private and public institutions which needed to be strengthened or established. The Guyana Police Force topped the list among 72% of respondents. Urling said that there was definitely a correlation between perception of corruption and the business community’s utter lack of confidence in the police, which he acknowledged has been a longstanding issue.
While the police force topped the list, the City Council and Municipalities (62%), Parliament (50%), the Public Procurement Commission (47%), Go-Invest (43%), the University of Guyana (42%), the Integrity Commission (35%), a Development bank (34%), the Private Sector Commission (31%), the Financial Intelligence Unit (28%), the Commercial Court (27%), and the National Competitiveness Council (19%) also polled high among respondents. In addition, three respondents identified the Guyana Revenue Authority (GRA) for improvement. It was noted that GRA was not listed as an option but was suggested under the “other” category. As a result, the GCCI acknowledged that the omission might have affected the responses concerning the GRA.
Urling stated that the survey was conducted on an anonymous basis partially because businesses may feel that if they are named, the findings could be used against them. He did not expand on what exactly this meant. He added that next year there could be a more comprehensive assessment to ensure that the various business levels be separated to get a better understanding of what issues particularly affect small, medium scale and large businesses, rather than presenting just an average position.
The survey reported that the obstacles to business remained consistent from the findings of the 2013 survey. “In terms of major obstacles to business, respondents identified keeping good employees (36%), crime and security (30%), high taxes (30%), the high cost and unreliability of electricity (20%), and political instability (19%) percent as top concerns,” Urling said in a summary of the findings. Inefficiencies in the legal system (15%), inefficient government bureaucracy (14%), customs inefficiency (12%), and access to and cost of finance (11%) were also listed among obstacles.
Last year, 42% of the respondents cited finding and keeping good employees, 31% cited high tax rates, 22% cited high cost and unreliability of electricity and 16% cited crime and security as the main obstacles to business.
The survey found that 11% of respondents identified access and the cost of financing as an obstacle to business, which may correlate with the finding that only 27% sought financing. Of that figure, 86% were successful. Owing to the anonymous nature of the survey, it was unclear which businesses—small, medium or large—had the most issues with financing.
Meanwhile, Urling suggested that manufacturers should consider setting up businesses in locations where the government subsidised electricity, such as in Linden and Lethem, to take advantage of the low electricity costs. He said that the government has more responsibility to bear in terms of creating a better environment for business growth through subsidies and incentives. He noted that this was inclusive of training and ensuring that graduates of tertiary education systems have incentives to stay and work in Guyana.
The 80 members who participated in the survey represented 67% of the GCCI’s total membership and more than half of them have been in business for 11 or more years. They represented retailing (35%), technology/web developers (9%), manufacturers (9%), banking (8%), professional service (10%), PR and marketing (4%) and insurance (5%) industries. In addition, 49% of the respondents represented businesses with between 1 and 20 employees; 22% represented businesses with 21 to 50 employees; 21% represented businesses with 100 or more employees; and 9% represented businesses with between 51 and 100 employees.