On March 29, 2018, the Georgetown Chambers of Commerce and Industry (GCCI) held its Annual General Meeting, wherein two senior Government Ministers were in attendance. There, the Minister of State delivered the feature address, in which he posited that the private sector businesses should select business models that would employ a greater number of persons as a solution to tackle the high unemployment rate in Guyana. The Minister further noted that: “It is the private sector, it is the GCCI, that will drive this economy. The Government has set the structure and framework within which businesses will flourish; it is the businesses that will generate employment”. These are, of course, well received statements coming from the Minister of State as an official Government position insofar as they relate to the high level of unemployment in Guyana.
This article, however, seeks to evaluate the legitimacy and authenticity of the Government’s take on this by examining the efficacy of the structure and framework that the Minister had alluded to, and to determine how sensible the ideology is to rather suggest to the private sector businesses to adopt business models with Guyana’s unemployment rate in mind. In a strict and prudent business sense, such a suggestion does not synchronize with the fundamental aims and pursuits of businesses in general when adopting a business model. Businesses operating within a fierce competitive environment, and taking into consideration the external volatilities of the global business environment within which they operate, find it imperative to achieve a high level of efficiency and precision; and in doing so, technology is largely a driving force in this regard. This means that business models are designed inevitably to employ only an optimal level of employees. So, to suggest to the private sector that they should select business models with Guyana’s high rate of unemployment in mind, when in reality the central focus of businesses is about precision and efficiency and minimizing operational and administrative costs at all cost, is to present them with an impracticable and unrealistic proposal.
With respect to the bold assertion made by the Honourable Minister: that the Government has set the framework within which businesses will flourish, this assertion is reduced to insignificance, and is by and large weightless when measured against Guyana’s ranking on the World Bank’s Ease of Doing Business Report 2018, which covered 190 countries in the world. In that report, Guyana is ranked 126 for ease of doing business. Countries like Trinidad &Tobago, Singapore, China, Costa Rica, Jamaica, Panama, Ghana and Uganda are just few that received better rankings compared to Guyana. To lend some bit of context, the World Bank’s annual ‘Doing Business Report’ provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional levels. The report captures several important dimensions of the regulatory environment as they apply to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The report also measures features of labour market regulation. The full report on Guyana can be accessed here: http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Profiles/Country/GUY.pdf.
Turning now to the Guyana Labour Force Survey report, March 2018, which covered the period up to the third quarter of 2017, which highlighted an unemployment rate of 12 percent. According to the report, the total labour force population for the reporting period was 550,831 persons, of which the participation rate is 56 percent or 308,188 persons; and the employed population is 271,068, giving rise to an employment to population ratio of 49.2 percent. It should be noted, however, that the report did not account for the 10,000 plus sugar workers that became unemployed in 2018, together with the 40,000 plus dependents who would be adversely affected both directly and indirectly as a result of the largest retrenchment in Guyana’s economic history, as was established in previous writings by this author. With the exception of some 1,000 persons who are claimed to be re-hired on a contractual basis with the re-opening of the Enmore Sugar Estate, it would be prudent to adjust these figures, taking into account this current reality facing the Guyanese economy. So, if one were to add 9,000 unemployed sugar workers, plus a conservative 40,000 dependents, that’s 49,000 plus 37,120 persons, which is what the 12 percent unemployment rate is reflective of in the report. One would arrive at a real unemployment rate for 2018 of 27 percent, and not 12 percent. An unemployment rate of 12 percent, and much less an adjusted real unemployment rate of 27 percent for 2018, is regarded as being too high; and as such, stronger policy debates are warranted on how to reduce Guyana’s rate of unemployment, as it is not a good economic indicator for a developing economy especially. It is hoped that this article can stimulate such debates at the level of the nation’s policymakers.
*The Author is the holder of a MSc. Degree in Business Management, with concentration in Global Finance, Financial Markets, Institutions & Banking from a UK university of international standing.
