Political impasse portends disaster for Guyana economy: GMSA survey
Just days after the release of its sectorial survey identifying key elements of the impact of COVID 19 on the country’s manufacturing and services sectors, the Guyana Manufacturing & Services Association (GMSA) has tagged the ongoing post March 2 general elections impasse and what it says is “the absence of a functional government” as impediment to the smooth operation of the business sector to operate. In calling for an end to the four-month-old imbroglio the GMSA asserts that “a continuation of this current situation will have disastrous consequences on the business community and the economy.”
The Association’s June needs assessment meanwhile, asserts that the ongoing coronavirus has left the business sector with a slew of challenges that will require robust responses from both the state and the banks if businesses are to survive the still rampaging pandemic.
The worst-affected among the stricken businesses, according to the June 5th survey were primarily small agro processing operators employing a range of one to ten persons and many of which have now stopped operating altogether. The findings of the survey suggest that job losses in the sector are likely to be high, asserting that about 50% the enterprises surveyed have either already dismissed some members of their staff or plan to do so in the foreseeable future.
About seventeen per cent of the businesses surveyed by the GMSA have now stopped operating altogether on account of COVID-19.
According to the results of the survey, among the key issues that the affected business entities now face are inadequate cash flows with which to both maintain staff and keep their business operations open, which challenge 81% of the businesses surveyed now face.
Meanwhile, 89% of the surveyed say that the circumstances of their own customers/clients have meant that demand is “lower than normal.”
With 55% of the enterprise surveyed asserting that they lacked either their own funding or access to alternative sources of funding to simultaneously maintain operations and staffing levels the return to a normal business environment could witnesses the ‘dropping out,’ either temporarily or permanently of several enterprises.
The survey, meanwhile, alluded to what it said was “the disruption in the supply chain, a circumstance which sixty two per cent of the overall number of respondents was the result of “disruption of the supply chain,” resulting from suppliers being unable to fulfill orders. Seventy two per cent of the respondents said that they had also been affected by the impact of the environment on their business partners.
Administered virtually, the survey included 37 businesses including enterprises in the agro processing, forestry and wood products sectors that employ between 20 and 250 workers.
Meanwhile, 58% of the respondents are calling for access to finance “in the form of affordable loans, subsidies and cash grants” to help businesses survive. Twenty per cent of the respondents, meanwhile, have indicated that they would wish for various forms of tax relief including “suspending employees’ taxes; waiver of VAT on products and reduction of corporation taxes. Twenty per cent, meanwhile, are proposing initiatives to restore demand for local products by effectively implementing existing rules that allow for government
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procurement of locally produced goods and services, promotion of local consumption and requiring foreign entities to support local goods and services.”