DDL Chairman calls for more attention to manufacturing sector

…says local exporters must lift standards

With Guyana’s Balance of Payment position showing a US$69.5 million deficit last year, Demerara Distillers Limited (DDL) Chairman Komal Samaroo on Thursday made a charge for more emphasis to be placed on developing the manufacturing and export sector.

Samaroo was at the time addressing persons gathered for the launch of the Georgetown Chamber of Commerce and Industry’s business magazine. The business executive warned that, with the global market as competitive as it is, more needs to be done to lift local standards.
He noted that to do this, high levels of technical competence and discipline are needed; but, he said, there are challenges even with these lofty goals. Here he was referring to the bureaucracy some manufacturers must deal with when transacting their business.
“In today’s world, the advance in the digital and artificial technology is transforming all aspects of business,” he related. “It is important that our education system in Guyana be revamped to produce people who are fully equipped with the skillsets to manage businesses in the Technical Age.
“Even today, about a quarter of the US economy consists of manufacturing of physical goods. When you add the distribution and sales to retail outlets, you are talking closer to three quarters of the US economy,” he disclosed.
Samaroo pointed to statistics that a quarter of the US economy is made up of manufacturing physical goods. This, he said, coupled with distribution and sales to retail outlets, means the superpower economy is built largely around manufacturing.
“We have to export to international and regional markets. The international market is very competitive, complex and constantly changing. If one is to be successful, one has to be equipped with the market data to respond to those changes,” he cautioned.
“Our production system must meet international levels at all times, and this requires a high level of technical competence and discipline in management of manufacturing companies,” Samaroo related.
Balance of payments
To record a deficit in the Balance of Payments, Guyana would have had to spend more on imports, among other things, that it derived from exports. And indeed, the 2017 macroeconomic report speaks to below projected merchandise export earnings.
According to the report, Guyana’s overall balance of payments in the 2017 fiscal year showed a deficit of US$69.5 million. This is a hike when compared to US$53.3 million the previous year. A breakdown of the figures shows disparities.
On the one hand, the Current Account shows a deficit of US$287.4 million for the year 2017. But in the previous fiscal year, the report notes, this was just US$12.4 million. The report admits that this is because of a negative balance on the merchandise trade account.
“The further weakening was due to the negative balance on the merchandise trade account. Merchandise exports were slightly lower than projected, mainly on account of lower export earnings of gold and other exports in the last two months of the year,” the report states.
When Finance Minister Winston Jordan presented the 2018 budget last year, he had announced that merchandise imports were estimated to grow by 9.6 per cent. This had been attributed to increased imports of mining machinery, chemicals, fuel and lubricants. According to the report, imports exceeded the Government’s projections.
“Imports were slightly more than the US$1.59 billion projected at the time of the presentation of the 2018 budget. As a result, the merchandise trade deficit of US$196.2 million was considerably higher than the projected deficit of US$147.2 million.
“Notwithstanding, the deficit on the services account was lower than estimated… the improvement in the services account more than offsets the weaker balances on both the non-factor services and unrequited transfers accounts,” the report states. (Jarryl Bryan)