Says downsizing, job losses inevitable
Fears of worsening unemployment arising out of “the drying up of export orders from Europe and North America” have triggered a call from the Guyana Manufac-turing and Services Association (GMSA) for government, the banking community and the workers’ representatives to turn their fullest attention to yet another manifestation of a gradually worsening economic crisis, notably, its effects on the productive sector.
And GMSA President Ramesh Dookhoo told Stabroek Business in a telephone interview earlier this week that the private sector body will immediately begin a process of engaging “civil society” as the first step in what he envisages will be a collective initiative to the increasingly evident consequences of the widely predicted economic downturn. Dookhoo said that he intended to discuss the GMSA’s proposed initiative with both the Guyana Trades Union Congress (GTUC) and its rival organisation FITUG. He added that while it was inevitable that official input in any deliberations would be sought, the GMSA did not intend to involve government at this initial stage of the initiative.
The move seemingly seeks to both re-create and broaden what, for Guyana, has been an elusive stakeholder partnership to debate and proffer solutions to important national issues.
In a statement issued late last week the GMSA said that the nature and scale of the crisis will demand “tolerance” on the part of the banking system. In a clear hint that banks could face both repayment delays and further lending demands from the business community the GMSA statement says that banks should bear in mind “that money is virtually useless if it is not put to work.”
When Stabroek Business spoke with the GMSA President earlier this week he said that the Association’s call for the full involvement of civil society in its envisaged crisis response initiative had been driven by the potential scale of the crisis and the conviction that a meaningful response required the involvement of all of the critical stakeholders in the society. Dookhoo said that he would be moving quickly to communicate with labour representatives.
Meanwhile, the GMSA’s press statement has pointed out that the country’s export sector is certain to experience shortfalls in earnings “with the attendant domino effect of downsizing, layoffs and production contractions.“ With regards to the loss of traditional overseas markets, “There is little that can be done by our exporters, except to seek market diversification,” the statement said.
Asked to comment on the proposed GMSA civil society initiative GTUC President Gillian Burton told this newspaper that the labour body welcomed it and stands ready to join the rest of civil society in making recommendations that might mitigate the worst effects of the crisis. Asked whether the GTUC would serve in any stakeholder body that included GTUC representatives Burton said in “labour’s concern over the crisis and its implications for workers; jobs had to be put before its internal differences.” Burton noted that the call by the GMSA for a civil society response to the worsening economic situation had coincided with increasing labour concern over what was threatening to become a pattern of job losses.
And while Dookhoo told Stabroek Business that the GMSA was under no illusions regarding the serious nature of the crisis, he said that he believed that the situation also offered opportunities that Guyana can take advantage of. He identified the agro-processing sector as a potential growth area pointing out that there have always been serious weaknesses in the country’s ability to convert raw materials into finished products. Dookhoo said that the GMSA was currently partnering with NARI to explore the potential for more private sector activity in the agricultural and agro-processing sectors.
The GMSA President told Stabroek Business that he believed too that the downturn in the global economy also presented opportunities for the local construction sector, particularly the housing sector. He said that apart from the fact that there had been significant reductions in raw material prices in the building sector, there had also been significant improvements” in the state land distribution policy. The GMSA President also noted that there was now greater opportunity to access lending for house construction since titled deeds for leased lands were now “as good as titles for transported land” in negotiating mortgage arrangements with commercial banks. Asked whether he envisaged any major investment in the agricultural sector given the local, regional and international significance of food security Dookhoo said that he believed that the issue of crop insurance still remained a matter of concern for potential investors. He said, however, that he believed that the dramatic collapse of various investment instruments in the United States and elsewhere may well result in more investments in the “real sectors” and that this could work to Guyana’s advantage. “Rather than paying attention to what have now become risky external instruments we may well see a greater focus on the real sectors,” he said.