Greater attention to be paid to small business development – to fight unemployment, empower young people
WITH the unemployment rate said to be hovering at around 40 per cent, greater attention will be focused towards the establishment and support of Small and Micro-Enterprises (SMEs) to address this burning issue. A recent study by the Caribbean Development Bank (CDB) indicated that regional countries with the highest persistent youth unemployment were Guyana and Suriname.
Since 2000, these two countries have consistently been above 30 per cent, with the rate in Guyana hovering around 40 per cent since that time. The study also found that total unemployment rates in Guyana were persistently high.
In Linden, Region 10, it is estimated that four out of every ten persons between the ages of 16-25 are unemployed; approximately 40 per cent of this group, with overall unemployment at 70 per cent.
Small business development
Minister of Business Dominic Gaskin in an exclusive interview told the Guyana Chronicle that the situation is worrying, and it needs to be addressed from all fronts. Strong attention, he said, will be placed on small business development.
This, he said, would also be used as a tool for youth empowerment.
“I don’t think we can say that any one initiative is going to solve this problem. I think small business is critical, I think big business is also critical; the key is more business, which would mean more jobs.
“But definitely, we have a very keen interest in small businesses, more from the point of view that we want to see our small business community becoming more competitive,” Minister Gaskin said.
Conducive environment
The Minister also said he wants small enterprises to become big businesses, pointing out that the Ministry of Business will be creating the environment, especially for those with the leadership skills, to grow and expand not only in Guyana but beyond these shores.
“This is something that we need to encourage, we need to make it a priority, a new culture of entrepreneurship that may start off as a small business but can quickly advance, rapidly grow to become big businesses. We will promote small business but they should not remain small, small business must be growing,” the Minister told this publication.
Development of these enterprises would require concessions from the state, but these are not offered by the Ministry of Business. The granting of concessions is laid out in the law. For example, the granting of tax holidays is spelt out in the In Aid of Industry Act; the Customs Act identifies the category of items for concessions, while the Investment Act outlines the requirements for businesses to be granted concessions.
Room for improvement
The granting of concessions, therefore, does not require the Minister’s discretion. However, in these legislations, there might be room for improvement.
“What we need to do on a constant basis is re-examine the existing legislation and look at new opportunities and new conditions and try to increase perhaps the areas.
“The Investment Act that identifies the priority sectors under which are eligible for concessions. We have to look to see if there are any deficiencies in that list, if there are any sectors that we are overlooking that should be included in that list that should also benefit and grow if they were to be granted concession. That is something that we have to do; it affects small businesses and large businesses the same,” Minister Gaskin told the Guyana Chronicle.
It is a well-established fact that SMEs contribute significantly to economic growth and serve as agents of change, innovation and pioneers for creating new technologies.
SMEs in Guyana are estimated to account for 40 per cent of total employment and also contribute significantly to Gross Domestic Product (GDP).
But though a significant contributor to economic development; the development of SMEs in Guyana has been faced with several challenges.
According to reports, these include limited access to finance, high cost of borrowing, and inadequate advisory services as well as business training and management skills.
In recognition of these challenges, the Small Business Act of 2004 became law, creating the legal and policy framework for promoting small businesses in Guyana.
The legislation provides for the establishment of support programmes and an incentive regime for small businesses as well as the creation of a Small Business Bureau (SBB), Small Business Council (SBC) and Small Business Development Fund (SBDF).
It also guarantees a minimum of 20 per cent of Government procurement to small businesses.
By Tajeram Mohabir
