WHENEVER a small oil-producing country emerges in the world, a large number of predatory carpetbaggers congregate on the horizon, awaiting the opportunity to pounce on the new economy and exploit it.
Through well-practised techniques, they quickly edge out the local population from lucrative sectors, making the promise of a rapidly rising standard of living for the native population a mere pipe dream. Guyana, as a new oil-producing country, faced the same fate, but managed, in the nick of time, to protect Guyanese citizens through the Local Content Act, which reserves certain types of investment and employment for Guyanese, with the potential for expansion when needed.

One area of investment and employment escaped the protection of the Local Content Act. Through this loophole, a steady stream of East Asians, almost all Chinese, have been flooding into the country with the intention of displacing and taking over the local retail trade. This movement has been quick and organised, almost as if centrally directed. Local retailers and a growing body of consumers have been complaining about this apparent unfair exploitation.

The Georgetown Chamber of Commerce and Industry (GCCI), one of the Caribbean’s oldest and most respected trade organisations, has spoken out against this unfair onslaught on local retail businesses. Dr. Bharrat Jagdeo, as Vice-President and General Secretary of the PPP, the party in government, has also publicly acknowledged the problem. Local businesspersons, while accepting the entry of new players in the retail trade, believe the playing field is not level, with unfair competition presenting the real challenge.

The elements of this unfair competition can be attributed to lapses by government departments responsible for enforcing laws and regulations governing retail trade. Key officers in these departments appear to take a relaxed attitude when it comes to enforcing laws and regulations on East Asian retailers. This administrative inefficiency needs to be exposed and addressed by the relevant ministers. Below are some of these lapses that require immediate attention:

1: INCOME TAXES
Careful assessment of income taxes for each retailer is essential. Some East Asian entities evade income taxes, and even in cases where attempts are made to collect them, they resist payment. Recently, it was reported in the media that a large hardware store was assessed for $10 million in taxes. After initially agreeing to pay, it suddenly reversed its position and took the matter to court.
2: NATIONAL INSURANCE (NIS) CONTRIBUTIONS
National Insurance contributions are ignored by many East Asian businesses. Local businesses dutifully pay these contributions, especially the larger ones. If East Asian businesses complied, NIS finances would significantly improve, helping to establish a level playing field between local and East Asian retailers.
3: CUSTOMS DUTIES
The invoices of stock should be carefully examined. It is suspected that elements within the Customs Department allow goods to be corruptly admitted at undervalued rates or duty-free by attaching them to imports by several Chinese entities that qualify for duty exemptions. Local businesses are not afforded such privileges and must always pay customs duties.
4: EXPIRED GOODS
East Asian shops are known to sell expired or near-expired goods to unsuspecting customers at cheaper prices. These goods are acquired by the retailers at giveaway rates. Instances of altered expiry dates have also been reported.
5: LICENCES FOR DISTRIBUTION
The distribution of certain goods requires the distributor to be licensed. For example, selling specific types of drugs requires employing a qualified pharmacist and obtaining a special licence, as does selling alcoholic drinks. Local retailers comply with these laws, but East Asian retailers often violate them with impunity.
6: RECEIPTS AND WARRANTIES
East Asian retailers rarely issue receipts unless requested, making it difficult for customers to return or exchange unsatisfactory purchases. Additionally, warranties on consumer durables are minimal, often one to three months. In contrast, local retailers, while charging slightly higher prices, offer longer warranties and repair faulty purchases.
7: LABOUR LAWS
East Asian retailers disregard labour laws by forcing staff to work more than the standard eight-hour day and operating shops outside of normal working hours. Local retailers who violate these laws are swiftly dealt with by unions or the Labour Department.
8: TRAFFIC AND PARKING
Many East Asian retail entities are established in busy areas without provisions for customer parking, causing traffic jams and accidents. In contrast, local businesses like DDL and Survival Supermarkets have incurred the expense of providing customer parking.
9: VAT COMPLIANCE
These East Asian retailers often do not pay VAT, allowing them to undercut local retailers on price.
The foregoing issues demonstrate a lack of a level playing field, giving East Asian retailers an unfair advantage over local retailers. The State of Guyana has a responsibility, capability, and obligation to rectify this situation. Protecting Guyanese retailers aligns with the practical and philosophical principles of the Local Content Act.