Manufacturers Association want tax-based incentives model

- high energy prices still strangling sector

The Guyana Manufacturing and Services Association (GMSA) is pushing for an incentives model that will galvanize the sector by allowing local manufacturers to benefit from tax concessions based on employment levels.

GMSA President Eon Caesar says the association is advocating the implementation of an “employment tax rebate scheme” or employment tax credit aimed at incentivizing both some existing companies as well as local start-up entities. He says the scheme is currently in place in Jamaica “and can work here.”

Caesar, who was elected President of the GMSA earlier this year, told Stabroek Business that the growth and development of the country’s manufacturing sector continued to be stifled by high energy costs though he added that the promise of oil-production coming on stream here could change the fortunes of the sector.

 Eon Caesar
Eon Caesar GMSA President

“This is the single most important issue facing the manufacturers. Unless we have affordable, clean and predictable electricity we will not be able to build the sector,” Caesar said in an extended interview with the Stabroek Business earlier this week.

Guyanese manufacturers, Caesar said, continue to operate in an environment of high energy prices even as their competitors in Trinidad and Tobago prosper in an environment of cheap energy. “Local manufacturers compete with Trinidad which blatantly subsidizes their manufacturing sector,” Caesar declared, wondering aloud as to whether Guyana would be prepared to do the same when oil production becomes a reality. “That is left to be seen,” Caesar declared.

In June, the GMSA underwent a withering attack from one of its members, Chief Executive Officer of the East Coast Demerara-based Fibre Tech Industries, Somat Ali who told Stabroek Business that the GMSA needed to transform itself into “a far more effective lobby group.” Ali had told this newspaper that, over the years, one of the biggest failings of the GMSA had been its failure to mobilize small manufacturers. He had said while small manufacturers “probably comprise the bulk of the small business sector” there had been little if any evidence of a serious effort to tackle energetically “the real problems of the sector.”

This week, however, Caesar refused to go on the defensive, asserting that the criticisms of the association were, in some measure, the outcome of “the non-involvement of its members” in its work. He said that the organization tries as best as it can to deal with matters that affect the entire sector and “there is constant lobbying and advocating” ensuing on members’ behalf. “Members who have criticized the association may need to get involved and to guide us in our lobbying efforts. If the association does not know of the problem we cannot lend assistance,” he added.

Seemingly going to considerable lengths to proffer the first robust public defence of the GMSA in several years, Caesar declared that the association, which has amongst its members, the largest manufacturers in the country, “takes every concern seriously” and has “a competent Board of Directors.”This week’s extended exchange with the new GMSA President contrasts sharply with earlier failures to engage the body on critical issues facing the private sector. It derives from recent meetings between this newspaper and senior private sector officials including the Heads of the GMSA, the Private Sector Commission and the Georgetown Chamber of Commerce during which the desirability of more sustained and relevant reporting on the work of the business support organizations was made known.

Caesar, meanwhile, noting that the possibilities for the local manufacturing sector were “endless,” touched briefly on several issues during his exchange with the Stabroek Business. In the area of agro-processing, the GMSA president said he believed that more focused attention on “canning, bottling and labelling and the export of processed foods” can open endless possibilities for that sub-sector. Caesar said Guyana can also enhance “the size and scale of our pharmaceuticals by becoming licensed manufacturers” and producing “a range of non-prescription drugs based on our herbs that many Guyanese continue to use for minor ailments.”

He said too that if the manufacturing sector is to grow, the potential of the printing and packaging sub-sector must be realized and fed into the rest of the manufacturing sector; whilst the construction sector will benefit from an enhanced local capacity to manufacture spare parts for industry.