THE DEARTH OF SOCIAL CAPITAL IN GUYANA

January 15, 2015 | By KNews | Filed Under Features / Columnists, Peeping Tom, Source - Kaieteur News

Earlier yesterday, I toured Fun City located at the Princess Hotel. It is an impressive game arcade that matches any that I have seen in the developed world. Those visitors to Guyana, who always complained that when their children come to Guyana with them on vacation there are not sufficient activities for them to engage in, are going to find Fun City the answer to their concerns.

As I gazed at the many offerings at Fun City, I noticed that foreign nationals were involved in the management of the area. I later found out that foreign interests had actually acquired the hotel in which is located this grand entertainment and fun arcade.

I asked myself a question, why it is that a group of Guyanese entrepreneurs did not come together and establish something like this, preferably outside of the city where it could have catered for the hundreds of thousands of children that do not reside in Georgetown or near to Providence.

The answer as to why we have seen phenomenal development in the form of buildings and businesses being established throughout the country, but a lack of entrepreneurial drive to establish something like this Fun City is because of the dearth of social capital amongst the Guyanese people.

Francis ***uyama expounded on the value of social capital – the trust that exists amongst individuals and groups of people. It is this social capital that is claimed as the basis for the success of capitalism, since individuals from disparate backgrounds and resources are able to come together to form enterprises and corporations, the backbone of the success of the capitalist system.

Trust is what allows this to happen. Trust is what allows a person with an idea to be able to make millions off of this idea, because he knows that there are persons with capital who are going to help him to turn this idea into a tangible product or service. It is social capital that allows business people to come together and to combine their efforts to fund major investments.

One of the reasons why Guyanese entrepreneurs never conceived of a project such as Fun City is because of the challenges of social capital. The business sector of Guyana does not have that reservoir of social capital to fall back on. And therefore what we have is more or less individuals venturing out on their own.

The limitation of this, of course, is that the financial resources at the disposal of the individual more or less would, in Guyana, determine the scope of size of the operation financed.

Thus, if one individual cannot raise the funds to open a facility like Fun City, the idea would die, because unlike what happens in other parts of the world, the absence of social capital in Guyana simply means that people do not trust each other sufficiently to come together as a group for large investment projects.

The dearth of social capital means that there is simply not the incentive for Guyanese persons to pool their resources and to get into major investments in Guyana. Obviously there are partnerships in Guyana and there are corporations and companies. But if Guyana is to really develop, we have to have much more of this. Guyanese have to think big and to think about doing things with other Guyanese.

Nothing better reflects the absence or dearth of social capital in Guyana than the proliferation of vending. No one has yet come up with an idea to bring together these small entrepreneurs with their market knowledge so that they can grow beyond vending.

The vast majority of vendors will not outgrow vending. They will not become importers. They will not become part of the manufacturing class. They will for the greater part remain peripheral elements of the commercial class. They will in other words continue to be marginalized, because there is not the reserve of social capital that would allow them to venture into other businesses.

We know, for example, that one of the fastest growing sectors of Guyana is the importation of motor vehicles. There has been a tremendous growth in motor vehicles in the country. Each of these vehicles has to be washed and service.

This creates a huge market for wash bays and low cost servicing. But is this happening in Guyana on a massive scale? Are state-of-the-art wash bays being established at a rapid rate to cater for this huge increase in vehicles? The answer is no. And why not? The answer is the absence of social capital in this country. Unless we correct that, we are doomed to failure as a capitalist economy.