Forwarding this article on Business in Guyana 101
Today we introduce this course by providing some examples of the fascinating way that Business is conducted in Guyana.
Over the course fo the coming semester, we will get into the details of competition Vs Party Politics. Your facilitators for this course will include many persons who have had the experience of doing (or not) business in this wonderful country.
In many countries there is legislation and regulation – as in Guyana. But, in many countries there are independent commissions that oversee competition, consumer affairs, utility pricing etc. In Guyana we have these similar commissions. However they themselves provide a barrier to comeptition by being compromised by either the businesses or by the Government.
There is no independent functioning competition commission if there continues to be a Government appointed lackey in that position. In fact, the current “commission” is headed by an employee of a company that has been the prime example of predatory pricing as well as replication of products to destroy competition.
Here is an example: A (start-up) company decides to introduce a beverage in Guyana. Let’s assume that this beverage is manufactured and distributed in St. Lucia. Let us sat the beverage is named “The Star”.
Upon launch, of Star, a local beverage company will, within 3-4 weeks launch “Star power”, a new beverage, similar ingredients, exact packaging. It will then use its power to leverage against the distribution chain, the customs clearance systems and finally, it will take its local beverage and flood the St. Lucia market. In weeks, if not days, the imported product is dead and the duopoly continues, supported by the Government and its compromised commission.
The same commission is loud in its silence on the sheer volume of business handed on a platter to Government-based and Goverment-friendly businesses/ This creates a huge barrier for independent and clean business in Guyana.
A business person has to “know” some politician and has to have some slippery cheque leaves in his cheque book.
Over the past 10 years, the Government was instrumental in setting up certain private businesses. Let us take an example:
– A private business applies for duty-and-tax concessions to start a “new” business.
– The Goernment grants permission outside of the boundaries of the law to that person.
– That person then “wins” government contracts for huge sums of money. Each contact provides a pre-payment which is used to procure the needed items and fulfil the order.
Another example, the Favoured Company wins a contract to supply PVC pipes and fittings; it takes the pre-payment and procured the equipment and raw material to manufacture the items. It then receives duty-free concession for import and fulfuls the contract. It then owns another manufacturing arm, compliments of the Government. The examples are many.
Here’s another: A company is granted huge contracts by the Government to build a bond to help store the Government’s purchases. It received duty free concessions and waiver of taxes toward the project. From year 2, the company charges the Government to use its private storage space.From year 3, only that company can win contracts because it is the only one with storage space.
Yes, Guyana busines arena is filled with these examples.
There are people who sit on Government boards and, using insider-information makes investments, therby fleecing the National treasury. Yhe items are ordered from the makers of fake products in China – or that the local construction or manufacture is substandard. But the insider knows the maintenance budget too and plans well to use that in the long term.
Another example, the Government grants broadcast license to a small group of its friends and families. It exhausted the spectrum in the process. There can never be any real competition in TV or Radio in Guyana – ever!
The Business-Interest groups have sadly become compromised over the years. They are offered seats in Government boards, they are paid by the Government, they win contracts and apply successfully for tax exemptions (using insider information) – and they better dance to the tune or else. Some of the business-interest groups have had these same “contract winners” as their prime members and presidents, making the business waters even murkier. An example is one person who, as part of a government board, voted for the upgrade of a government facility – and after the upgrade, voted for it to be sold – and his was the winning tender.
But, unless you dance to the tune, there will be scandals, arrests and audits. Be prepared to hear that you own more property than you know of. Be prepared for every bit of attack, just because you dare to speak out.Be preapred for a fall out with “friends”, be preapred to be slandered about your wife, children, lovers or whatever in the gossip columns of the newspapers that they own and control. And, Be prepared for an income tax audit.
Meanwhile the corrupt heads of boards and commissions have had their pockets lined from the big businesses.
Maybe this is why this Course will be facilitated by a number of persons lest there be more martyrs like Satyadeo – All with the compliments of the Government of Guyana.
End of Business in Guyana 101.
Next in line for discussion, the Negaholics.