Dear Editor,
I read Dr. Clive Thomas’s weekly column in Sunday Stabroek of 2014-10-19 entitled, “The Minimum Wage, Trade Unions and Guyana’s Fight Against Surging Inequality and Poverty”. I would like to call on my fellow MP of the Sixth Parliament to look in a different direction, start at another end, and focus our attention on improving production, productivity, quality and competitiveness to bring about the improvements in our lives which we all want.
Dr. Thomas, as he says, puts three blunt propositions, focusing mainly on distribution and redistribution of income, and a living wage, without reference to production, productivity, quality and competitiveness. His blunt propositions, I admit, constitute the ‘gospel’ for most of us, “since morning”. But this ‘gospel’ has not gotten us far. I believe (from the evidence of so many years, and in comparison with a number of countries), because it kept us from focusing on the “main-chance” things – improving production, productivity, quality and competitiveness.
In the fight against poverty we should be guided by the story of teaching a man to fish and feeding him for life. Poverty is to be fought by somehow or other organizing for everyone to be working and working steadily more productively, to satisfy some needs near or far. Like a farmer sowing a crop with hopes for many bags of harvest and good prices at the marketplace, we will have expectations and aspirations; we can set targets, but earning levels, minimum wages living wages in their totality are outcomes, results of our production.
I take issue with Dr. Thomas that poverty, absolute poverty is surging but income distribution may well be widening – as economic activities occur some persons may happen to be in more favourable places. How to moderate a widening income spread? Dr. Thomas in one of his earlier columns allowed that our budgets with our relatively high tax levels are a major means of redistribution of income. Taking account of the calls from many sides during our last elections, for lower tax levels we have probably gone as far in this direction as our society would tolerate.
It has been, no doubt, natural for us to focus on the distribution and the redistribution of income, of the goods and services produced and available – but that has not got us far. To take, perhaps, the most extreme case which the Indian Arrival Committee (IAC) pointed out a few months ago, Singapore, like us, was in the US$300. per capita GDP in 1960, while now we are at US$3500., but Singapore is at US$54,000. – there are a number of other examples where the comparisons are not so unfavourable. One of the drives in Singapore was to “provide the world a German quality workplace at about 70% of what the Germans were paid”.
Improvements in Production, Productivity, Quality and Competi-tiveness cannot, and should not, be left to take care of themselves, or be left to others. Indeed, I have always felt that a fatal flaw of many of us of the socialist ‘left’, has been our ambiguity, if not reluctance to consistently call for, to advocate, and to celebrate steady improvements in production, productivity, quality and competiveness.
It is not that fairness in distribution and redistribution is to be ignored, but they are very limited in the improved lots which they can bring- a zero sum game; and the redistribution of goods and services must be coupled with the redistribution of responsibility for savings and investments, if the seed-grains needed to plant next year’s crops are not to be eaten today, with no crops in the future!
I referred to Dr. Thomas as my colleague of the sixth Parliament, because of what 1 understood him to say in the debate on the CARICOM Single Market and Economy (CSME), that although our hourly pay was then so abysmally low, nonetheless, our low productivity, low quality, high rates of re-work, etc., led to such a large number of labour-hours in each unit of goods or services that the customer would accept and purchase, that our labour cost in that unit was among the highest of labour costs, and we were uncompetitive!
I was hoping since then, and I would still like, to encourage Dr. Thomas, with his credibility and standing, particularly with Labour and Unions, to follow upon that insight, and lead in directing our national focus to improvements in production, productivity, quality and competitiveness. It must become the major concern and task of each of us – worker, manager or business person. As Dr. Bhoe Tewarie proclaimed some months ago, we are equally blessed with the human imagination, the ingenuity, the innovativeness, and we are equally placed to spot and implement opportunities for improvement in whatever production in which we are engaged.
We are talking, quite rightly, these days of moving along the value-added chain. Our economy is at a point where we need to spot and take profitable opportunities for the adding of value. It is not that exporting commodities is an abomination – the greatest added-value country, the USA, exports a lot of commodities, including wheat, to us – it is a matter of economics, and what we can make to work for us.
Improvements in production, productivity, quality and competitiveness are of even greater importance, as we correctly focus on adding value, for we must add value much faster than we add cost, for if not, we would (with our uncompetitive value-added products) be wasting whatever natural advantage we might have had at the commodity-stage.
We have had for many years now and, moreso, recently, much talk about banning the export of logs. There is no challenge in banning the export of logs – that is easy, with no more than the stroke of a pen. The challenge is for some of us, whilst paying competitive prices for the logs, to develop the people, the production plants, to convert the logs to wood-products which could be sold sustainably and profitably. If not, we could end up with no log sales, no added- value sales, nothing at all. We should be warned that it is not easy – we had an added-value wood-product which won prizes, which we celebrated, but which did not survive long in the market place.
What would have been required to sustain it? At what pay-rate would production have been continued, and the jobs saved? What productivity and quality improvements would have been needed? And, so on. Such questions we should have been addressing, resolving and reconciling.
Let me say that with my twenty-five years of chastening experience in our bauxite industry, I know that business success does not come easily, nor does it last long. As another aside, I have been concerned that we of the socialist ‘left’ have tended to under-estimate, under-value, and even belittle, the contribution of the “capitalists”, and set ourselves up to perform differently from, and better than them – which too often we could not. About 50% of business ‘start-ups’ fail within the first two years – the answer is to have a thousand ‘start-ups’ – let a thousand flowers bloom! Since failure-rates are so high, we have to encourage trying, and trying again. We must learn how to comfort each other when we fail, tend to our bruises and, in good time, send ourselves back into the fray to attain competitiveness, on the basis of the production, productivity and quality of our goods and services.
It should be informative and instructive to know that, at least up to some years ago, lots and lots of logs were exported from North America to, mainly, Asian countries, where they were converted to furniture and other wood- products, and re-exported to North America. We are not North Americans – can we attain the production, productivity, quality and competitiveness-level of the Asians? We need to – we can learn from them – for it is a common way to advance along the value-added ‘train’, learning from others who are already there and are often looking to move on.
Yes, we should be thinking of utilizing our commodities more, but we should not be thinking of banning the export of anything, once it is available to local producers at the equivalent price.
We should be aiming at utilizing our commodities more and more, at steadily-improving levels of production, productivity, quality and competitiveness, so that, in time, there is no more commodity available for export.
And indeed, then, and even before, we might be importing that commodity when, in given circumstances, it might be advantageous to do so.
Steady improvements in production, productivity, quality and competitiveness, should be the main concern and focus of us all. Let us, for the next five years, shift focus away from distribution and re-distribution (we already have a good set of labour-laws, which must be adhered to) and focus, rather, on production.
Yours faithfully,
Samuel A. A. Hinds,
O.E., M.P.,
Prime Minister.
