Given the fact that both the Government of Guyana and the multilateral financing agencies appear to have a particular proclivity for alluding to the importance of the national Poverty Reduction Strategy I was more than mildly surprised over the fact that the Inter American Development Bank’s (IDB) recent Country Report on Guyana – Guyana and the IDB – Partners for Progress – made no reference whatsoever to small business and its role in the country’s development. I believe – and it would surprise me if this were not obvious to any objective analyst of the Guyana economy – that the realization of the objectives of both the national Poverty Reduction Strategy and the global Millenium Development Goals are contingent of the fashioning and implementation of an effective regimen for the development of small and micro businesses in Guyana.
I say this because it must surely be obvious to all concerned that small and micro businesses contribute as much to poverty alleviation as does investments that are driven by collaboration between MFI’s and government. What I personally like about people owning and operating their own small and micro businesses is that apart from the fact that well run, they can, in many instances provide an adequate living, they do offer the owners a modicum of self-esteem as well.
Just recently I become aware of just how important small and micro businesses are as income subsidies when I discovered that more than 80 per cent of a small community in an East Coast village were engaged in one or another form of small or micro business.
The enterprises ranged from poultry-rearing to the manufacture of preserves and while I could see some clear flaws in their operations that were not consistent with orthodox business practice I felt compelled to applaud the energy and intensity which they were applying to what they were doing.
I can see a role for both government and institutions like the IDB in providing funding and other forms of technical support for initiatives that are designed to teach people the orthodoxies of running a business. Sometimes I fear that there is not enough thinking goes into MFI-funded projects that directly encourage people to take initiatives, to be responsible for themselves. In the East Coast village that I visited people were shelling shrimp, drying fish, pickling mango, rearing meat birds and layers, selling eggs and slaughtering sheep for sale and they were going about these various chores with a commendable diligence that is fully deserving of official support.
In this context I have often wondered whether the MFI’s – the IDB included – may not wish to revisit their approach to dispensing development assistance to poor countries like Guyana. I am concerned, for example, that far too much is actually spent on the administrative procedures associated with the disbursement of such funding including, regrettably, spending on measures specifically aimed at curbing the profligate disbursement of monies and worse, corrupt practices. Accordingly, I believe that the recently publicly expressed desire on the part of locally-based aid agencies to establish closer links with their legitimate stakeholders is a vitally important step since I am convinced that a more hands-on approach will minimize the role of government and that will be decidedly a good thing.
Here, I do not question the conventional wisdom that the agendas of MFI’s ought really to be shaped by the agendas of the countries in which they serve. My point, simply, is that MFI/State collaboration appears, invariably, to focus on high profile projects that attract media attention. It is not that these kinds of projects are not worthwhile in their own right; I made the point earlier, however, that more specific attention to small and micro-sized businesses have more to do with poverty-alleviation and empowering people than some of the projects undertaken by these MFI’s.
Part of the problem, of course – and I have said this on more than one occasion previously – is that there is really no appropriately equipped national small business infrastructure to interface effectively with MFI’s. The other problem, of course, is that it will require a significant paradigm shift on the part of the MFI’s if they are to accustom themselves to dealing more with small businesses both directly and through stakeholder representatives and less with public officials who can never really know more about what people need than the people who are actually in need. Of course, the nature of politics is unlikely allow government to relinquish the current heavy influence that it wields with MFI’s.
The recent Transparency International Report on Global Corruption alluded to the irony of development funds which, rather than being directed towards poverty-alleviation were in fact disappearing into the pockets and bank accounts of public officials. Part of the reason for this has to do with the way in which these funds are administered. In advocating a more direct path for MFI funding to beneficiaries for the purpose of investment in self-uplifting small businesses I posit the view that not all politicians and governments are supportive of small businesses. Poverty, from their perspective, provides assurances of a pool of people to whom handouts can be given.
The IDB report, while alluding to the fact that Guyana has experienced ‘renewed growth’ over the past four years and that the country has experienced an alleviation in its debt burden, introduced far-reaching reforms and benefited from improvements in terms of trade, overlooks the fact that much of this growth has been jobless and that during the period of this growth salary levels have never really been able to keep up with inflation. Preoccupation with the kind of MFI support that simply allows us to make pronouncements about “tangible enhancements in the infrastructural, institutional and social frameworks of the country” without being able to make any meaningful assessment of the particular impact of these “tangible enhancements” of people’s material lives may look good on paper but we need more than that.
The good thing about more support for small and micro businesses is the role that these play in directly empowering people. One tendency that more support for small and micro sized businesses will bring about is a lessening of the prevailing public indifference to many of these MFI-funded projects which are often undertaken without any real consultation with those who are the intended beneficiaries. Hopefully, some good will come of the expressed desire of the MFI’s to interface more closely with those whom they seek to help through one rather suspects that the spectre of the state will forever hand over these institutions.
I believe that if MFI’s are to have a greater impact on poverty alleviation through support for small and micro enterprises we must begin to contemplate the creation of more cooperatives – properly-run cooperatives, that is – perhaps along village/community lines. Larger groups make for tidier administration and a great deal of work is going to have to be done to actually teach people how to run businesses. If we can accomplish this without what is often the stultifying bureaucracies that are created by government that break spirits and create pockets of disillusionment then small and micro businesses will probably have a much better chance. I suppose what I am saying in other words is that we probably have a better chance at real development if people were simply to be left alone to shape their economic lives benefiting in the process from the kinds of material and other forms of support which the MFI’s are ideally positioned to give. The outcomes of the effort of a people imbued with a sense of self-reliance and an acute awareness of what it takes to surprise might surprise us all.
