Micro, small enterprises remain the poor relations of the Guyana economy

Our efforts to track the fortunes of micro and small businesses in the COVID-19 environment between May and August have led us to the discovery that small businesses run by women and young business persons are being hit hardest by the fallout from the pandemic.

The constraints on trading arising out of the lockdown and curfew measures instituted to contain the spread of the virus and which have resulted in supply chain disruptions and significantly reduced demand in several sectors are really only part of the problem. If small businesses are to continue playing their crucial role in job- creation and improving lives and livelihoods, they must depend, increasingly, on an enabling business environment including, in cases of countries like Guyana, support for access to finance, information, and markets. These have not been sufficiently forthcoming here, notwithstanding the fact that these enterprises are the backbone of many households here. Data provided by the International Council for Small Business (ICSB) indicate that micro, small, and medium-sized enterprises comprise over 90% of all firms and account, on average, for 70% of total employment and 50% of GDP.

Not without significance, the United Nations General Assembly declared June 27 Micro-, Small, and Medium- sized Enterprises Day. The intention was to raise public awareness of their contribution to sustainable development and the global economy though no great attention was paid to the event in Guyana, almost certainly on account of the circumstance of the COVID-19 pandemic.

International Days are occasions to educate the public on issues of concern, to mobilise political will and resources to address global problems, and to celebrate and reinforce achievements of humanity. Pity indeed that Micro-, Small and Medium-sized Enterprises Day did not benefit from the attention that it merited here in Guyana.

Medium, Small and Micro Enterprises (MSME’s) are responsible for significant employment and income generation opportunities across the world and have been identified as a major driver of poverty alleviation and development.

MSMEs the world over customarily employ the lion’s share of the vulnerable sectors of the workforce, not least, women, youth, and people from poorer households. That is very much the case in Guyana. Indeed, MSMEs in Guyana are frequently the only source of employment in rural and hinterland communities. As such, MSMEs as a group are the main income providers for income distribution at the ‘base of the pyramid’.

There are cases in which smaller businesses are sometimes able to mount agile responses to sudden crises and there are some notable examples of this here in Guyana. It has to be said, however (and we have said this previously) that a great many of our smaller businesses lack the structural resilience to withstand a serious crisis hence the reason why many of them are falling by the wayside at this time. The simple truth is that in a great many instances it is their size that renders them vulnerable. It is of course decidedly redundant to make the point that here in Guyana, a paucity of access to finance is one of the primary reasons for the failure of small businesses. Other constraints include challenges associated with securing local and external markets and navigating trade-related procedures associated with doing business in foreign countries.