"Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit."
So said fictitious corporate raider Gordon Gekko in the 1987 Oliver Stone movie Wall Street. The quote summed up a decade when blue-collar companies were bought by slick, suited, investment bankers, and their assets stripped in the financial junk bond yards of America; jobs were the last consideration. Michael Douglas' portrayal has fixed forever in the American psyche this image of the evil corporate raider.
Those phrases, predator, dawn raids, poison pills and scorched earth, all reflected the vicious, ruthless attitude of those times.
But in fact the effect of the eighties take-over boom was to serve notice to all too comfortable management boards that they must practise good corporate governance and always keep their shareholders happy. Ultimately the American economy was better off for it.
Because while we may remember the above phrase, Gekko also said, "Today management has no stake in the company... You own the company. That's right, you, the stockholders. You are being royally screwed over by these bureaucrats with their steak luncheons, hunting and fishing trips, their corporate jets, and golden parachutes."
Since then there have been numerous take-overs, many non-hostile, that have benefited all involved: workers, customers and most importantly the shareholders of both companies. Several studies have shown that the take-over method adds value in terms of increased share price, in particular for the target company.
Almost everyone would agree that Guyana's private sector is under-performing for various, well-discussed reasons. A recent IMF report talked about Guyana's weak private sector economy. Commercial bank lending to the private sector has declined from G$53.1B in December 2000 to G$35.2B in July of this year. Even when you factor in the G$8.7B in GNCB loans taken off the books it is a substantial decline.
This is a private sector practically dead in the water and being dragged along by the government, no less, that is actually increasing its share of the economy with large infrastructural projects.
So should we be concerned by the talk of Trinidadian firms coming in and buying up local companies as as some now fear? Why fear that which is outside when what is here now could hardly be worse?
Trinidadian firms could bring large amounts of capital to expand production to supply markets they already have access to. They could bring economies of scale that would mean cheaper goods for local consumers; they may have managerial and technical expertise to fill the gap caused by Guyana's brain drain; or they could import innovative and lean management practices.
Consider this, in 2003, Guyana's exports to Trinidad totalled $4.7B while Trinidad's exports to Guyana reached $28.8B - an overwhelming trade deficit.
The imports included many consumer goods many of which we use everyday from soap detergent to biscuits to beer. What if Guyana were to start manufacturing those same items instead of just consuming them? What if Guyana had exports of $28.8B to Trinidad? Guyana has for over a decade talked about building a manufacturing sector and moving away from commodity production. Becoming a partial satellite of the Caribbean's powerhouse could be the stepping stone on that path and might not after all be the worst of fates.