-Business minister says commercial sector needs a paradigm shift to cope with COVID-19
…Gov’t rolls out measures to assist small businesses

AS a consequence of the Novel Coronavirus (COVID-19) pandemic, the local commercial sector has been dying a “natural death” because of decreased spending and reduced economic activities, but Minister of Business, Haimraj Rajkumar, believes that a change in the business culture could save the sector.

Guyana, like many other countries, has been at the mercy of COVID-19 for about four months, and with no end in sight, new methods of doing business will have to be adopted in order to sustain the economy and ensure that jobs and livelihoods are maintained.
Methods, including changing marketing strategies and channels of distribution, will have to be examined, especially given the existing restrictions and measures, which are geared at reducing the spread of COVID-19. These measures, while necessary, have cost the business sector because operating hours have been adjusted and customers have resorted to “safer” modes of shopping.

“As it is now, we are trying to encourage people to think of ways of carrying on their businesses amidst the pandemic…they need to look carefully at their options and carry on their business in a safe manner,” said Minister Rajkumar in an invited comment, on Thursday. Considering the prevailing situation, he said businesses need to examine new, innovative ways of marketing their business and distributing their stock. These initiatives would be more applicable to retail businesses, which rely on daily sales to sustain their operations.

Online marketing
The Ministry of Business has been encouraging retailers to focus on online marketing and the utilisation of social media to sell their products/goods. “This will eliminate face-to-face interaction and will help businesses to reach their customers in a safer way… we know businesses have their fixed costs to meet, so I believe this will be one way of ensuring that they sustain their businesses,” said Minister Rajkumar.

Preliminary surveys done by the ministry has found that a few businesses have already adopted new methods and are adhering to control measures in place, while some are still trying to catch on. The Ministry of Business had conducted an online survey to ascertain how businesses have been affected by the pandemic, but the minister was not in a position to say what the findings of the survey were.

Small business grants
Minister Rajkumar, however, said his ministry, through the Small Business Bureau, is offering relief grants and services to registered small businesses. Guyana Chronicle had reported that the aim of the bureau’s initiative was to strengthen and sustain small businesses, through provision of relief grants to sustain business operations and retain employees, along with training and development support to establish and market businesses through online platforms, diversify businesses and forge supply partnerships.

Though the bureau has approximately 10,000 businesses on its database, by law, the bureau can only work with those businesses that have been compliant. Only 400 of the registered businesses have been compliant. “There are a lot of expectations on what the SBB can provide to these businesses that are not true. The SBB doesn’t lend any money; we’re not a lending agency, there’s nobody repaying us for anything,” said Chief Executive Officer of the Small Business Bureau, Dr. Lowell Porter, in a previous report.

He suggested that small businesses band together and assess ways in which they could even help each other out. “I advise that they start working together. For example, if you own a restaurant, arrange with a delivery service. I believe there are opportunities, but we need to talk to the clients first and see what is going on, and we just started that process,” Dr. Porter said.

The bureau is also helping clients with the setting up of online platforms and according to Dr. Porter: “They have to maintain an interface with their clientele. If the business can be done online, they can utilize an online portal. If they do not have one, we are reviewing how to help them have an online presence,” Porter said. Persons interested in the grants and services being offered can contact the bureau on email: funding@sbb.gov.gy and telephone 633-7101, 633-7102 and 608-8494.

Growth for Guyana
Despite the current situation and ailing sectors, the Economic Commission for Latin America and the Caribbean (ECLAC) had predicted that there could be light at the end of the tunnel for Guyana, which is projected to record growth of 56.4 per cent this year.

Guyana, being the only country that is projected to “weather the storm”, was recently warned by the World Bank, that the effects of an incomplete general and regional elections, coupled with the effects of the COVID-19 pandemic and falling oil prices, could stymie the country’s potential economic boom. The World Bank in its semi-annual report said, real gross domestic product (GDP) growth at constant market prices will be 51.7 per cent.
“Guyana’s economy expanded by 4.7 per cent in 2019, with anticipated oil revenues spurring an expansion in non-trade sectors. Oil production is projected to boost GDP growth to unprecedented levels in 2020.

“While this could transform Guyana, there are risks, as illustrated by a still incomplete election outcome, and compounded by falling oil prices and the COVID-19 epidemic. Weak public service delivery and monitoring systems constrain the development of policies to reduce poverty and protect the vulnerable,” said the World Bank.

The International Monetary Fund (IMF), in a report last year, had said Guyana’s $4B annual GDP is expected to expand to about $15B by 2024. The financial institution had said the commencement of oil production will substantially improve Guyana’s medium and long-term outlook. Guyana is projected to be among the world’s largest per-capita oil producers by 2025.

The oil sector is projected to grow rapidly, accounting for around 40 per cent of GDP by 2024 and supporting additional fiscal spending annually of 6.5 per cent of non-oil GDP on average over the medium term, which will help meet critical social and infrastructural needs.

ECLAC had also said the Guyana Government will receive approximately 14.5 per cent of all oil revenue in 2020.