Guyana’s large informal business sector poses a serious threat to its formal private sector, through unfair competition at all levels. While data on informal businesses is not widely available, the Ministry has recognized that geographical disparities in the provision of Government services in Guyana may be contributing to the problem, by making it difficult for businesses in certain regions to conform with legal requirements.
As such, the Ministry established two business registration hubs in Lethem and Mahdia in 2017, and will seek to establish an additional four in 2018. This allows businesses of all sizes to register with the Commercial Registry each year in a timely and cost effective manner and thereafter operate legitimately. The impact of this initiative is best appreciated when one considers that for decades, the only option for businesses in Regions 8 and 9 to get registered was to travel all the way to Linden or the Essequibo Coast respectively, make an application, pay a fee, return home and then travel there again one week later to complete the transaction.
Repeated “considerable speculation” regarding the extent of business confidence in the country’s economy has prompted the Ministry of Business to conceptualize a Business Confidence Index (BCI) designed to assess the level of optimism or pessimism felt by business managers about their businesses’ prospects in the prevailing economy and which it says will help form the basis of business environment reforms.
Periodic speculation on the extent of confidence in the Guyana economy has become par for the course locally with some analysts expressing the view that such assessments as are articulated locally may even be influencing the attitudes of potential foreign investors to undertaking investments locally. While in its Column published in this Stabroek Business the Ministry says that reported loss of business confidence is based largely on anecdotal evidence, it has nonetheless opted to introduce the BCI mechanism as a means of replacing speculative assessments with more reliable, data-driven analyses.
The Ministry argues that while “careful analysis on relevant indicators” has not supported negative speculation on the state of the country’s economy it believes that “it is important for Government to understand the mood of the local business community” hence the conceptualization of the BCI. A report on the Index is to be produced annually. Issues of business confidence, the Ministry of Business says, is an area around which there has been “considerable speculation” with questions being raised about “intended solutions to address the reported loss of business confidence” though it insists that careful analysis does not support these suggestions.
Meanwhile, and against the backdrop of what it says are “serious threats” posed by the country’s “large informal business sector” to its formal private sector, “through unfair competition at all levels,” the Ministry of Business says in its column that it will be moving to establish more business hubs across the country in order to ensure that difficulties being encountered by businesses based in remote communities in conforming to legal requirements are removed.
Conceding that “geographical disparities” in the provision of Government services in Guyana may be contributing to the problem, the Business Ministry, in this week’s column, points to the creation of two business hubs at Lethem, and Mahdia last year and its intention to create four more in 2018, in order to allow businesses of all sizes to register with the Commercial Registry each year in a timely and cost-effective manner and thereafter operate legitimately.” The Ministry says that the impact of its move to increase the number of business hubs across the country is best appreciated “when one considers that for decades, the only option for businesses in Regions 8 and 9 to get registered was to travel all the way to Linden or the Essequibo Coast respectively, make an application, pay a fee, return home and then travel there again one week later to complete the transaction.”
The Ministry, meanwhile, says it has moved to further improve existing mechanisms for expediting business transactions by reducing the length of time it takes to process import and export licences from the two days which it took prior to 2015 to “within twenty-four hours.” It says that in a further step towards improving the efficiency of business transactions and “following its own analysis of the World Bank’s Doing Business Reports in the area of Trading Across Borders, it is now seeking to pursue the design and implementation of an Electronic Single Window (ESW) platform for trade transactions locally. The Ministry of Business says that the project, upon completion, will “revolutionize Guyana’s trade transactions by enabling a trader to make a single online submission and have all the necessary “paperwork” automated within minutes, for final retrieval and/or clearing at the wharf.”
The Ministry says it is “excited” about the progress towards making the ESW a reality in Guyana, adding that the source of funding for the execution of the project has already been identified and that government is collaborating with the Inter-American Development Bank to complete preparatory work.