ONE of the consequences of the Free Market System is the extent to which small firms and businesses are squeezed out through unfair competition with larger entities.

Evidence abounds that the larger entities are able to muster the resources needed to bid for large Government contracts — something smaller contractors are unable to do. In Guyana, this practice is most widespread in the construction sector and in some areas such as the provision of drugs to Government. The outcome is, of course, growth of monopolies, whereby a handful of contractors get access to most of the contracts and smaller contractors are marginalized or forced to leave the arena out of frustration. In the final analysis, this contributes heavily to the ever widening social and economic gap in the country.

While this complaint has been around for a long time, it escalated over the last two decades when political cronyism in the tendering process exacerbated the already uneven tendering process. Attempts by the then Opposition parties to reform and democratize the procurement process were frustrated because the then Government did not agree with the reform proposals.

It is therefore not surprising that the current Government has been under pressure to hastily do something to correct that situation. After all, we do live in a country where it is generally accepted that one of the major functions of Government is to protect the weak against the strong. Many were encouraged when Finance Minister Winston Jordan, in his budget presentation in 2015 announced that Government intended to invoke a little-known provision in the Small Business Act, enacted in 2004, which mandates that 20 percent of all Government contracts should be awarded to small and medium size businesses.

In the excitement generated by the immediate post-election environment, many of the stakeholders did not latch on to the Minister’s announcement. Some may have missed it entirely, while others may have thought that it was mere rhetoric. After all, this provision was there in the law for eleven years. Since then Minister of State, Joseph Harmon has made a similar commitment and was quite emphatic: “If the country gives out $10 billion in contracts per year, 20 percent of that should go to small contractors.”

It is even more encouraging that the Small Business Bureau announced last week that small businesses will get first preference for Government procurement once they have registered with the bureau. “Soon we will issue an advertisement that will include a link that says ‘click here’ on it…when you do it you will follow the guidelines and get registered… for example information related to the Guyana Revenue Authority (GRA) and the National Insurance Scheme (NIS) will be required…when done, once they meet the criteria they will get an ID,” Chief Executive Officer (CEO) of SBB, Dr. Lowell Porter told a recent press briefing.

Porter pointed out that for too long, micro and small businesses have been sidelined because of their larger competitors. “Sometimes you have businesses in Berbice where there is a Government project and a business with the same expertise gets the contract…we are trying to change this,” he said, adding that bidding could be opened for just businesses in the area for the project. Activating this “affirmative action” is necessary and long overdue. We are all too aware of what this means for economic democracy in Guyana. Not only would small contractors get much-needed work, but we feel that more poor men and women in our diverse communities would also benefit. It now behoves the smaller contractors and businesses to get their houses in order.