It appears that the local manufacturing sector – or perhaps more accurately its umbrella organisation, the Guyana Manufacturing and Services Association (GMSA) – has opted for deafening silence in the wake of what is widely known to be a condition of crisis in the local industry.
The evidence thrown up by the recently concluded International Building Expo does not suggest that the local manufacturing sector is on the rise. Indeed, prior to the Building Expo several local manufacturers had long been complaining about high energy costs; additional costs associated with installing independent electricity plants; high costs associated with the importation of raw materials and what in some instances have been exorbitant labour costs. Some manufacturers, too, have been complaining about a shortage of labour, which they have linked to the movement of people to the gold mining sector in the interior.
There are other problems that continue to confront the manufacturing sector, one of which has been its inability to find markets for the goods produced. Of course, before one arrives at the juncture of finding markets, there are issues of underproduction, quality and considerations of labelling and packaging that need to be addressed. In all of these areas manufacturers do not, in many instances, meet the standards necessary to effectively penetrate international markets.
What is not in doubt is that the vast majority of enterprises in the manufacturing sector, particularly art and craft and foods and condiments, fall into the small and micro-business category and simply cannot afford the financial costs associated with labelling, packaging and marketing. The limited support that is forthcoming from government – primarily through the Guyana Office for Trade and Investment (Go-Invest) – has to do mostly with subsidising representation at overseas trade fairs and exhibitions. That is nowhere near enough.
Even some of the bigger players in the manufacturing sector – like the sub-sectors of the forestry sector – are cash-strapped and cannot afford to make the kinds of value-added investments necessary to render their operations more viable. In essence, much of the local manufacturing sector is ensnared in constraints and limitations from which it cannot easily extricate itself.
Conceivably, things could get worse. However much manufacturing is touted as the next big thing, unless a way of providing cheap energy is found, production costs will continue to rise. Beyond that, there are considerations of international marketing, an area in which little or nothing has been done and investment financing for small businesses, an area in which the commercial banks have shown only limited interest.
Enter the Small Business Bureau; this state-run funding and credit support entity has promised much but at this stage, appears not to recognise the urgency associated with the undertakings that it has given. Truth be told, unless the Small Business Bureau opens its doors for business with a measure of alacrity it runs the risk of being dismissed as a false promise.
Since much of the local small business sector focuses on North American niche markets for local foods and condiments, it cannot pretend to be unmindful of the potential implications of the Food Safety Modernization Act (FSMA) a recent piece of US legislation which places a range of quality-related restraints on the importation of foods into that country. The available evidence suggests – and overwhelmingly so – that the vast majority of small food manufacturers know little if anything about the FSMA and about the conditions that they are required to fulfil and that those state agencies that ought to know a bit more do not really know as much as they should. The bottom line is that most small manufacturing entities are really sitting ducks, which really do not have a snowball’s chance in hell of fulfilling the requirements of the FSMA – at least not in a hurry. Against this backdrop, the GMSA and the manufacturing sector as a whole has, for some time now, maintained a discomfiting silence on its agenda in the period ahead, particularly pertaining to tackling those challenges outlined in this column. The GMSA, we are aware, cannot do it alone. Indeed, it would hardly be unfair to say that some of the key limitations of the manufacturing sector can justifiably be blamed on the failure of the government to create an enabling environment in which investment in manufacturing can take place. This having been said, the GMSA ought to be made aware that the local manufacturing sector – at least much of it – is caught fast in a proverbial bind and that it desperately needs the kind of guidance that can only come from bold and shrewd leadership.
