Global economic crisis could hit remittances sector hard

BY Staff
Published: October 3, 2008 in Business

The local remittance sector is bracing itself for what could be “a hard knock” arising out of the unfolding crisis in the United States economy and the slowdown in the remittance rate to Guyana could begin to impact significantly in as little as two weeks time, according to President of the Georgetown Chamber of Commerce Chandradat Chintamani.

Empty sleigh: The continuing slowdown in the US economy could hit the remittance sector hard this Christmas.

The local business community has good reason to be concerned over the unfolding global market meltdown that now appears more ominous in the face of the rejection of the United States House of Representatives of a US$700 billion bailout that would have allowed the US Treasury to finance the purchase of bad mortgage debt from struggling commercial banks, Chintamani told Stabroek Business. The US Senate has since passed a revised bill and the House is to vote on this today.

“Remittances from the United States contribute significantly to economic activity in Guyana. One only has to observe the increase in the number of remittance services to understand the extent to which people who live and work in the United States support economic activity in this country,” Chintamani said.

Stabroek Business has spoken with two local remittance companies about the likely impact of the downturn in the United States economy on the sector. While one declined to comment on whether or not there had been a fall in remittance levels in recent weeks the other confirmed that there had been “a slowdown in the inward movement of money” through the remittance services. “It is not a question of what will happen in two weeks’ time it is a question of what has already been happening, the official who spoke with Stabroek Business on the condition that the remittance agency not be named, said.

Chintamani said that he was concerned that a possible slowdown in remittances had come just before Christmas, a period during which the business sector realizes more than 60 per cent of its trading activity.
Meanwhile Chintamani told Stabroek Business that the Chamber will shortly be securing “an expert” to engage GCCI members in discourse on the likely impact of the downturn in the US economy on Guyana and the region. “We expect to secure someone who has an understanding of both the US economy and the economies of this part of the world and we expect to do so “within the next ten to twelve days,” Chintamani said. “I believe that it is important that the local business community have clear understanding of what could lie ahead and I believe that that is the responsibility of the Chamber.” Chintamani said.

Meanwhile, according to Chintamani those businesses that focus on their “internal efficiencies” will ultimately be better positioned to survive the current crisis. “We have to focus on the expansion of our manufacturing and service sectors so that whenever there is a challenge that is external the impact will be lessened by the fact that we have rendered our economy sufficiently resilient to absorb those shocks.” he said.

Meanwhile Chintamani told Stabroek Business that the extent of vulnerability of small, fragile economies like Guyana’s, meant that there are factors which, “however much we seek to improve our internal efficiencies,” are likely to be beyond our control.

“The message that we really want to send to our members is that they need to look at areas of opportunity that may exist even at a time of economic crisis. We want to have our members break their businesses down into various cost centres and address the challenges of cost within those centres.”

According to Chintamani it will not always be practical to pass price increases on to consumers. “There will be a time when consumers will resist price increases irrespective of whether a monopoly exists or otherwise. Part of the reason why we must address those internal efficiencies is because there will be times when businesses will have to absorb those price increases,” Chintamani added.

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2 Comments

Joe Coxall says:

October 9, 2008 at 6:31 am

Here’s a great proposal to end the crisis in America and the remittance problem is Guyana.

> I’m against the $85,000,000,000.00 bailout of
> AIG.Instead, I’m in favor of giving $85,000,000,000 to
> America in a ‘We Deserve It Dividend’.To make the
> math simple, let’s assume there are 200,000,000
> bon-a-fide U.S. Citizens 18+.Our population is about
> 301,000,000 +/- counting every man, woman and child. So
> 200,000,000 might be a fair stab at adults 18 and up. So
> divide 200 million adults 18+ into $85 billon that equals
> $425,000.00.My plan is to give $425,000 to every person 18+
> as a ‘We Deserve It Dividend’.Of course, it would
> NOT be tax free. So let’s assume a tax rate of
> 30%.Every individual 18+ has to pay $127,500.00 in taxes.
> That sends $25,500,000,000 right back to Uncle Sam.But it
> means that every adult 18+ has $297,500.00 in their pocket.
> A husband and wife has $595,000.00.What would you do with
> $297,500.00 to $595,000.00 in your family?Pay off your
> mortgage - housing crisis solved.Repay college loans - what
> a great boost to new gradsPut away money for college -
> it’ll be thereSave in a bank - create money to loan to
> entrepreneurs.Buy a new car - create jobsInvest in the
> market - capital drives growthPay for your parent’s
> medical insurance - health care improvesEnable Deadbeat Dads
> to come clean - or elseRemember this is f or every adult U S
> Citizen 18+ including the folks who lost their jobs at
> Lehman Brothers and every other company that is cutting
> back, and of course, for those serving in our Armed Forces.
> If we’re going to re-distribute wealth let’s really
> do it…instead of trickling out a puny $1000.00 ( ‘vote
> buy’ ) economic incentive that is being proposed by one
> of our candidates for President. If we’re going to do
> an $85 billion bailout, let’s bail out every adult U S
> Citizen 18+!As for AIG - liquidate it. Sell off its parts.
> Let American General go back to being American General. Sell
> off the real estate.Let the private sector bargain hunters
> cut it up and clean it up.Here’s my rationale. We
> deserve it and AIG doesn’t. Sure it’s a crazy idea
> that can ‘never work’ But can you imagine the
> Coast-To-Coast Block Party!How do you spell Economic Boom?I
> trust my fellow adult Americans to know how to use the $85
> Billion ‘We Deserve It Dividend’ more than I do the
> geniuses at AIG or in Washington DC.And remember, This plan
> only really costs $59.5 Billion because $25.5 Billion is
> returned instantly in taxes to Uncle Sam.

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michael tannassee says:

October 14, 2008 at 8:56 am

You need to send this to ” Capitol Hill ” ! or are u hoping that the new ambassador ( johnny -come - lately ) is goin to notice it and perhaps ,,, just perhaps,,,, u get lucky ,, that ur math ,,— simple as it tis —,, would still be including the avaricious malcontents who has us in this “slow slide ” into the abyss of decadence ! doesn’t make make sense to me ,,

i say we take their share ,, — beyond me how any one could think of them to give them a share in anything — an feed them 2 meals a day for the rest of their lives and make them live in squalor in hovels — that of course is after ” We the people ” take away everything they have accumulated — which reminds me that
SN ,, may have axed the post ,, in which i spoke abt crime being a tool employed
in the accumulation of any wealth by anyone — have them picking up litter on the highways ,, and cities ! since they are — most of them anyway — from wall st,, in NY,, which is a dump any way ,, talking abt the 5 borroughs,,, let them clean that up ,,

many AMERICANS live the way and ,, worse,, right amongst us ,, some are veterans ,,, no less !…….

much has been said and written abt “avarice” ,,, being not much of a believer in any thing religious ,,– except say,, for my interest in the behavior of those who ultimately bcome totally consumed ,, and are categorised as extremists and live according to the fundamentals of their religious beliefs — i take with a grain of salt ,, what is said abt greed in the bible ,, the bible being the most widely read and,, sold book on the planet ,, says that greed is one of the 7 most deadliest sins ,, should man cultivate any of them — ,, !

the great roman orator Cicero spoke with brevity on avarice ” avarice ,,, he said,, in old age ,, is foolish ; for what can be more absurd than to increase our provisions for the road the nearer we approach to our journeys end? ,,,

Pliny,, we all read Pliny ,, those who haven’t should if the are so inclined ,, or capable ,, cos ,, it is what u deduct from what u read ,, that bcomes ur intellectual property ,, an to correctly arrive at an anology to juxtapose anything said or written ,, therein lies ur intelligence !,,,,,,but back to Pliny,,, here’s what he said abt greed !,,,,

” the lust of avarice has so totally seized upon mankind that their wealth seems rather to possess them ,, than they to possess their wealth “,,,,,

forgive me but i have to take this last dig at those whose greed will be thier undoin,, Cowley ,, when he contemplated on greed expressed his thoughts thus ,, ” poverty wants some things ,, luxury many ,, avarice ? all thing !…….

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