Undoubtedly, the private sector’s role in socio-economic development throughout the globe is rapidly growing as an increasing number of countries are adopting a private sector led model of development. This has been more evident since the collapse of the world socialist system. One of the countries which has made spectacular economic development through the integration of private enterprises with that of the state sector has been China through a policy of reform and opening up. According to the Asian Development Bank Institute (ADBI) since 1978, along with the rise of its political position, the private sector has played an increasingly important role and contributed to employment, tax revenue, economic growth and the cultivation of the market system. The number of private enterprises increased from 90,000 in 1989 to 3 million in 2003, an increase of more than 30 times.

The number of individual business during the same period almost doubled from 12.47 million to 23.53 million. The number of foreign funded enterprises rose from about 16,000 in 1989 to 226,000 in 2003, an increase of nearly 14 times.

In comparison with the rapid increase in the number of these enterprises, the number of SOEs and collective enterprises fell from 1.55 million in 1992 to 1.05 million in 2003 and from 4.16 million to 1.63 million, respectively. In recent years, the number of all types of enterprises except private enterprise has been declining.

It should be noted that Deng Xiaoping’s famous South China tour of 1992 led to high investment, and the number of private enterprises and registered capital registered a sharp increase in 1994 and 1995. However, this resulted in high inflation, and after 1994 the central government adopted tight monetary and fiscal policy in order to curb excessive investment and economic overheating. As a result, investment growth slowed. Because of this, growth in the number of private enterprises slowed somewhat, although it still continued to be high relative to those of SOEs and collective firms.

ADBI pointed out further the reform of SOE’s accompanied by increasing unemployment. This has brought with it social and economic instability. In the face of this problem, the government must find a way to address the unemployment issue. In fact, the private sector has become an important substitute for SOEs and has made a great contribution to solving the problems of unemployment and layoffs.

According to a Peoples Republic of China (PRC) statistics, in 2003 the number of employees working for SOEs was 68.8 million, a sharp decline compared with 112.6 million in 1995. By contrast, workers in individual and private enterprises in 2003 reached 89.5 million, exceeding SOE employees by about 20 million, and registering a big increase over 55.7 million in 1995.

Looking at the breakdown, the number of employees of individual business rose steeply from just 2.3 million in 1981 to 46.5 million in 2003, an increase of about 20 times. The number of employees rose even faster in private enterprises than in individual business, from 1.6 million in 1989 to 43 million in 2003, meaning an increase of 27 times within only 14 years. Foreign funded enterprises also employ many workers, even though their share of total employees is still lower than individual and private enterprises

Employees in private enterprises now make up 19.2% of total national employees.

Here in Guyana there was a long period when the private sector was marginalised and virtually stifled because of a policy of nationalisation and strict controls on importations and severe clampdown on the issuing foreign exchange.

However, today that situation has been reversed and the private sector is playing the dominant role in economic development. On his assumption to the presidency in 1992 Dr. Cheddi Jagan gave the assurance of the role of the private sector under the PPP/C government when he described it as the “engine of growth.” And in fact the private sector has boomed ever since then.

And so, it was most encouraging to hear the Chairman of the Private Sector Commission (PSC) Captain Gerry Gouveia pledging that the private sector will put the development of Guyana first, walk the road of reason and will not take political sides.

“We are not going to take political sides. We are always going to take the side which we believe will be the side of Guyana and, to do that, we have to establish and earn the trust of all the parties involved,” Gouveia declared.

This is exactly how it should be and is a firm indication that the private sector intends to forge a closer partnership with government and all stakeholders to push Guyana’s advancement as we strive to create a better life for all the people of this wonderful country