‘Flat’ performance contracted Berbice economy in 2014

– Chamber says businesses crying out for major stimulus

The Berbice Chamber of Commerce has listed sluggish paddy prices, the inability of GuySuCo to achieve its crop production targets and falling gold prices as being among the primary reasons for the disappointing performance of the economy of New Amsterdam and its environs this year.

“For most businesses it was really a flat performance. Only a few businesses showed financial growth for 2014 when compared to 2013,” Chamber President Mark Roopnarine told Stabroek Business in a recent interview.

Roopnarine told Stabroek Business that even as the indifferent performance of GuySuCo had impacted negatively on both employment and earnings in the community, rice farmers were forced to absorb depressed paddy prices mainly on account of what millers asserted was the high cost of moving rice to Georgetown occasioned by toll rates for the Berbice River Bridge. Businesses in Berbice have been pressing government to reduce the toll rates for the bridge, a factor which they say has had a serious negative impact on the competitiveness of both agricultural commodities and other goods produced in those communities.

Berbice Chamber of Commerce  President Mark Roopnarine
Berbice Chamber of Commerce
President Mark Roopnarine

Roopnarine, meanwhile, told this newspaper that economic activity in the New Amsterdam business belt had also been suppressed by failed investments in a gold industry which, this past year, has buckled under the weight of falling prices. “When gold prices began to soar it drew a lot of our human resources as well as investment capital from a few businessmen to that sector and the Berbice economy began to benefit. Now with the falling gold prices we are also feeling the impact,” he added.

And according to the Berbice Chamber President one of the “major business disappointments” during this year was the non-passage of the anti-money laundering amendment bill. “While this is a national issue, the majority of Berbicians depend on remittances and many found that their normal amounts were either reduced in value or frequency,” Rampersaud said.

He told Stabroek Business that a lack of security, proper garbage disposal, and flooding continued to impact negatively on businesses in the community, while the “anticipated levels of business opportunities that were to be created from the West Coast Berbice area with the use of the Berbice Bridge did not materialize.”

The Chamber President also cited unemployment as a challenge for Berbice, asserting that “… The right skills sets and will to work are two attributes that seem not to come in the same person these days.” Rampersaud added, “The rate at which opportunities for employment in businesses, especially those in the commercial sector, are being created is slow, compared to the rate at which the number of unemployed persons is growing.

“Unless there is a major stimulus in Berbice’s economy that can lead to the expansion and creation of businesses, we will continue to have this problem.”

During the interview Rampersaud also alluded to what he described as unfair pricing “by illegal and parallel traders,” which he said “are forcing some [legitimate] businesses out of existence” and increasing the unemployment and crime rates in the region.

And according to Rampersaud the prospect of finding jobs for the unemployed in the short term was likely to hinge on “the development of macro-projects and plans for the long term.” He said that macro projects were likely to be the catalyst for the recovery of the Berbice economy and that these would include “the deep water harbour, the strengthening of the manufacturing and value-added sectors of our agro-industries, the Corentyne river bridge and the diversification of our tourism drive in Berbice.” He said that in the short term the revival of the Berbice economy will depend on “people drawing on their entrepreneurship drive and starting their own businesses.”

Rampersaud, meanwhile, wants the University of Guyana Berbice Campus to revisit its curriculum and to include “courses in entrepreneurship to help support small business development.”

Despite the gloomy overall perspective Rampersaud pointed to what the Berbice Chamber regards as “the major business success in New Amsterdam for 2014” including the cultivation of rice land along the East Bank Berbice, and in Canje; a development which he said had moved rice production in the area from approximately 3,500 acres in 2013 to around 8,000 acres this year. Additionally, he cited “the continued improvements in the Rose Hall estate performance, the opening of the Citizens Bank, Berbice Branch in New Amsterdam” and the very recent opening of the Caricom Cement Plant at Everton as being among the positive developments in the economy of the community.

Rampersaud says while there was evidence of growth in the small business sector that growth “is restricted mostly to the areas of small scale commercial retailing and service provision” and is not apparent “in the manufacturing or packaging sectors,” which he said were areas that can help reduce the region’s unemployment rate.

Rampersaud told Stabroek Business that allied to the sluggish performance of the New Amsterdam economy was the steady rise in the cost of living. He said that while there had been instances of increased prices for consumer goods “many households are now fulfilling an obligation to a commercial bank for property mortgages, soft loans, vehicle bill-of-sales etc, so their previously held disposable income has been reduced.” He said the vast majority of residents complain of high taxes, the “burdensome” nature of the levels of the value-added tax and what is often the hidden cost of doing business.”

Meanwhile, according to Rampersaud, commercial banks have been engaging in aggressive competition with each other “to provide loans for persons desirous of capital for business creation.” He added, however, that many of the banks customers are “repeat customers” since potential first-time borrowers are unable to qualify for loans for major capital investment. “I suspect that most of their loans now are either to micro or small scale investments,” Rampersaud said.

Accordingly, the Chamber President is advocating that government revisit the creation of a lending facility to help farmers finance their ventures at rates of interest that are favourable compared with those of commercial banks.