THE Guyana Manufacturers’ Association (GMA)’s second biennial exhibition and fair got off to a spirited start late Friday at the Sophia Exhibition Site, with the opening ceremony taking on the air of a hot but amicable debate between President Bharrat Jagdeo and GMA President, Mr. Norman McLean.

The exchange was over the pros and cons of ensuring the growth of the manufacturing sector and investments.

Slated to make an opening statement, McLean drew first blood with the observation that Consumption Taxes ought not to be so burdensome as to render locally manufactured goods uncompetitive with imports.

At this, President Jagdeo, who was scheduled to make a “short address” before declaring the four-day event open, could be seen scribbling furiously.

And, with reference to the crisis in the rice industry and the tripartite arrangement that is in place with the banks, the government and rice millers in an attempt to bail the sector out, McLean said: “We need a similar approach in all aspects of our economy. In my view, there is no better recipe for success than a shared understanding.”

On the question of whether Guyana can survive on just five basic commodities, namely rice, sugar, bauxite, lumber and gold, McLean said: “We must ask ourselves whether we need to expand our manufacturing and production base and establish for ourselves niche markets favourable to Guyanese manufacturers and produce goods special to Guyana.”

If we do, he reasoned, then we have to attract investment.

“To help us achieve that goal,” he said, “we have to ask the government to ensure that the policies which are adumbrated are such that we can attract investment both local and foreign.”

But in order to attract this investment, he said, there needs to be bold concessions and initiatives to attract all businesses.

“The time has passed for the Ministry of Finance to ask whenever you’re looking for concessions - how will I get back the revenue,” McLean said.

“We have to look at this as an investment in our future, in the hope that three years down the road, you will not only get it back, but get it back ten-fold.”

“This is the climate and attitude we want to have the government embrace with us,” he added.

With regard to the scepticism in some quarters about the ability of local manufacturers to help turn around the economy, McLean observed that much as our regional brothers and sisters in countries like Barbados and Trinidad and Tobago “have had the benefit of a climate and opportunities which enhanced their ability to compete” on the international market, they are still having problems.

Buy local should become our mantra
“As Guyanese manufacturers,” he said, “we seek only a level playing field with the much-wooed foreign investor; we seek the same enabling environment; institutional support of the state; the donors and the Private Sector itself. We are ready to do our part; to invest; to take risks,” he added.

Noting that the theme under which this year’s exhibition and fair was being held - ‘Manufacturers Enhancing Made in Guyana for the Local and Export Market’ - was no accident, but the result of a conscious decision taken by the GMA.

McLean said the refrain ‘Buy Local: Made in Guyana’ “should become our mantra. Guyanese must invest in the future of our country and support our manufacturers and our industries, as it is our industries which give us our jobs and our employment.”

To give teeth to his argument, he recalled a recent incident in which Barbados’ Prime Minister, Mr. Owen Arthur, had occasion to implore importers there not to flood the country with cheap imports from the rest of the world.

He quoted Arthur as saying that while he could not impose a ban on imports by way of licences and quotas since such measures were in contravention of the rules of the World Trade Organisation (WTO), there should be some convention, some form of understanding whereby the distribution and manufacturing sectors could come to an agreement that each will keep the other going.

Advocating the need for a national consensus on the way forward, “where we agree to buy only those products that we do not produce; a national culture that makes us want to buy ‘Made in Guyana’”, McLean said such a change “will not come about until we all believe that we have an equal right to opportunity and to the resources that are necessary to express that right.”

He, however, posited that in creating the enabling environment needed to ensure the growth of manufacturing and investments, the economic policies must emanate from the state.

“We need government to join us in confidence and examine what are the factors necessary to promote and create an environment conducive to the growth of manufacturing,” he stressed.

But yet at the same time, he said, “we need… to avoid disincentives.” The Investment Code by itself will not do it, he said. “People must see rhetoric translated into action; we cannot have existing and established companies facing the government’s bureaucracy, which often seems bent on hindering progress.” Rather than encourage investment, he said, all this does is send a message to potential investors, whether local or foreign, that things are not what they seem.

Noting that this was part of the reason the GMA submitted to the government a proposal to try and streamline and reduce the C-Tax and procedures associated with that measure, McLean said “the bureaucracy is of such that large companies have to employ three to four members of staff just to satisfy the paper requirements of reporting on C-Tax.”

It is the reason, too, he said, that the GMA has had occasion to send delegations to the Commissioner of Customs and Trade Administration to overcome arbitrariness and difficulties in interpretation on a regular basis.

He pointed out that “it is not what is said, but what is done that creates the positive environment.”

True pioneers in a difficult sea
In closing, McLean observed that manufacturers were “…a much-maligned and misunderstood group of persons… true pioneers in a difficult sea,” in that they “are magically expected to produce products; find the capital to improve plant and machinery usually at great cost; produce cheaply at the same time to compete in this global marketplace; market the products; and make a profit in the face of government’s red tape and some scepticism.”

Seemingly unable to resist the barb, he said: “Is it so difficult to understand the challenges facing manufacturers and get our government to work with us hand in glove to move us forward?”

In rebuttal to McLean’s comment about the restrictive nature of the C-Tax, particularly where he said it was making local products uncompetitive with imports, President Jagdeo said nothing could be further from the truth as the rates are the same; that rather, it is the imports which are at the greater disadvantage as the tax levied on domestic production is on an ex-factory basis.

On the question of manufacturers being “a much-maligned, misunderstood group of persons,” President Jagdeo said that while he can sometimes understand, but not necessarily agree with the bureaucratic difficulties to which McLean alluded, what really bothers him “is that in spite of the years and years of collaboration between the government and the Private Sector, and years of explaining to each other what are the difficulties associated with developing our country… we, until today, do not understand each other.”

Some time ago, he said, it was agreed that the only way out for Guyana was to be export-oriented, “that our economy is too small to focus only on domestic production.”

Noting that this was why there has been so much talk of late about economies of scale, he said: “Our manufacturers will never be able to compete in the global economy if they only produce for the domestic economy.”

He said that while he strongly supports buying local, it must be on the basis of quality and price; “it must match quality and price from abroad, and not by the insulation of our markets from competition.”

As to the poultry industry and the oft-repeated question about whether he was willing to raise taxes, President Jagdeo said his stock response has always been that “taxes are already high for imports.” And, that should he raise taxes as was done in the past and prohibit some items, what would become of the consumers?

Hard experience, he said, has taught that “as soon as we increase taxes, not that the Private Sector expands to fill that void, but the prices go up and cut off demand at that level.”

Contending that he knows about the hardship that the manufacturers face: “I am not going to take this country back to the past and have it being insulated from the rest of the world, whilst aggressively urging people to buy and consume what we produce.”

Neither is he going to pander to the whims, or schizophrenia as he put it, of a selfish few, who would, whenever it suited their purpose, urge him to either open or close a sector. “That cannot happen; governments don’t operate that way. They have to look at the good of the country and the industry and not individuals.”

On the issue of concessions, President Jagdeo said: “I am willing to sit with the GMA once again and compare concessions that people receive around the Caribbean to those of our manufacturers here who are exporting.”

Contending that even a World Bank study funded by USAID has reached the conclusion that we have here an incentive regime that is as competitive as any in the region, he said that “notwithstanding this, I am willing to work to make sure that the regime becomes even more favourable.”

He said too that he was willing to work with people who are willing to move forward and not complain all the time. “I can promise you Mr. McLean that I will work with the serious firms; but one thing I cannot do, is to pass on to tax payers the cost associated with bad management.”

He also promised bold concessions “if it’s matched by risk-taking”; to spend more than the proposed $11.3B on good education for our people; expansion in infrastructure; competition in telecommunications; better water and housing; and some macro-economic management important to investment.

In return, he said, he will be looking forward to the GMA promising him a few things. He did not elaborate, other than to say he had hoped McLean would have dwelt a bit more on the role the association will be playing in the future in terms of servicing members and what commitments they were willing to give him.

The exhibition opens at 14:00hrs today and goes until 23:00hrs. Tomorrow, the final day, it opens at 15:00hrs and ends at 21:00hrs. There is to be a special opening from 09:00hrs to 14:30 hrs for school children in uniform who are chaperoned by teachers.