Dear Editor,
In my estimation Barama sending home 274 workers is the ultimate smoking gun, the glaring evidence that labour wise Guyana is far from being ideal for major investments. Compounded with the atrocious crime environment I cannot help wondering where Guyana is heading as a nation in this new global market place.
Since the disastrous breaking news I have been trying to decipher Barama’s strategy. Over the period of the Guyana investment Barama faced, sometimes unnecessarily, criticism from local activists and a tremendous push-back, demanding certification, from scared competitors in the plywood industry on the world stage.
Having a timber investment in the middle of a timber mine, with hundreds of marketable wood species to choose from, instead of seeing an expansion of the business, Barama’s recent move is an indication of down-sizing. Contrast that to BR111, an American timber investment in Brazil, expanding and pushing out quality flooring products, and American Tree Farms in Costa Rica, expanding in plantation the farming of many of our own wood species, including purpleheart.
Why isn’t Barama expanding in a big way? A recent letter by Janette Bulkan displayed evidence of Barama’s waning production numbers. When Barama began the investment I was a small concession owner very much in need of financing. Barama had started purchasing peeler log species – that are in abundance on most concessions and otherwise would not be touched – from small concessionaires.
There was a lot of excitement but that soon dwindled into exasperation as activists, headed by the said Ms Bulkan criticized the subletting arrangement in what I consider to be a credible business arrangement as long as sustainable forest management was maintained. That thwarted the potential development of small concessionaires, restricted job growth and placed Barama in a box.
Barama is also wobbling on a worrying trend that has boiled to the surface and reared its ugly head within the last two years. I am not sure if labour organizations in Guyana are aware of the new dynamic the worker plays in the workplace of the new global economy. If they do they are certainly not educating the workers.
The trend began with Precision Woodworking, one of our more successful companies, folding under threats of higher wages and unionization. Then came the uproar in the bauxite industry, some uneasiness at the Pegasus involving a local investor, followed by a major stand-off in the sugar industry as the government begs workers not to listen to their unions and go back to work.
Regardless of who or what is pushing this activity the reality is that the timing is ill-advised, considering the shaky world economy and Guyana’s need to garner scarce investment to push its development. What would the potential investor think about the situation as they look on from a distance? What kind of investment advisory would Guyana be credited with in this environment?
Before the financial crisis hit I approached Precision Woodworking and Guyana Furniture Manufacturing to market their beautiful products in Dallas. Their FOB prices in Guyana were higher than the retail prices for comparable products coming from Asia and the US itself. That meant their cost of production was already too high to make an impact on the American market.
President Obama’s response to the financial and job crisis told Americans that many of the jobs lost are not coming back. The reason is that they are already outsourced and taken by persons in countries where the wages are lower and competitive. The Republicans, if they get their way will remove a minimum wage requirement in the US. They think that the minimum wage is harsh on businesses and contributes to much needed jobs going overseas.
How does Guyana fit into this? Well, why can’t Guyana tap into this market? Why can’t we attract these businesses? Many developing countries are establishing the environment to attract these businesses. Why can our workforce not be presented as ideal for investment? The answers are reflected in the silly season that persists in Guyana today.
There is a need for the education of the role of workers and the part they could play in the new global market place. Government, opposition parties and labour organizations must come together and have an understanding and develop a long-term strategy to keep the investments they now have and attract more investments. One of the things necessary would be to stall minimum wage increases and maintain the existing dollar value for at least another ten years.
I also believe that the bargaining agreement with investment companies should be scrapped and replaced with an unemployment and workers compensation fund similar to the structure of the NIS.
Both workers and business should pay into the fund, so in the case of dismissals or business closure, workers can tap into the fund for financial assistance while they job hunt. This will ensure that a business would not have to keep a non-productive worker on the payroll for fear of stimulating devastating general strikes.
One of the biggest misconceptions allowed to run wild in the minds of the Guyanese workforce is the perception that companies invest to create jobs, to uplift living standards and that a worker should be able to own a home and maybe a car on one minimum wage job. It must be explained that the main motivation for most businesses is to create profits for shareholders and backers. These activities give persons the opportunity to earn. Of course, workers are important to ensuring the success of a business venture. Investors recognize that, but it is expected that a worker must put in a fair day’s work for a fair day’s pay. Not a wage that will cripple the business. And definitely no business owner wants to be saddled with a workforce that cannot be fired for doing a poor job.
That’s where I think Barama is at this point. This boiler issue has given them an escape route. Barama probably saw great potential in Guyana. Certainly there was a lot of motivation when they started. I remember the piles of logs bought from small concessionaires at the Land of Canaan site. There was the potential of a lot of spin-off activities. All this dwindled because of a lack of vision in some quarters.
Barama seems to be resorting to shipping logs to be processed offshore. If they were motivated about the plywood factory in Guyana the boiler could be replaced in a jiffy. If Guyana was providing a reasonable and reliable labour force the company would be setting up more mills to do value addition in Guyana.
Who is going to invest if there is no profit? Workers must have the understanding that it is a two-way street or no street at all. Guyana needs a lot of activities, but trying to kill the few geese to get the golden eggs is disastrous. Maybe Guyanese can learn to accept the need for a second job as is popular even in the mighty US of A. Many potential productive hours are spent in beer gardens and rum shops. Many of the barrels going back home are compliments of second jobs. I see kitchen gardens, poultry rearing, honey production, craft manufacturing, charcoal production and further education as good after-work options. Check out Go-Invest; let them suggest cottage industries that can make an impact supplementing workers’ wages.
I wonder about Simon and Shock’s proposed investment? What’s causing the delay? Could it be the work environment? I have dealt with the workforce personally. I know about workers in the timber industry breaking for more than a month for the Christmas and Easter holidays.
I looked at the recently published Invest-ment Guide and noticed 15 holidays in one year. That’s three weeks not including normal vacation and sickness. Employers have to pay double if they want to push production on these days. How can this be conducive to investment? We’ve got to do something about these uncertainties if we are serious about getting our country moving forward.
Yours faithfully,
F. Skinner
