There were forty-three responses to the ninety-two questionnaires
sent out to companies operating in Guyana. Of the forty-three
respondents, only two companies (4.6%) are
emphatically confident about
the economy's outlook for 2002 while six companies (13.9%) are fairly
confident. Thirty-four companies were either not confident (25.6%) or
not very confident (53.4%) about the prospects for the economy in 2002. Unlike earlier
years, there was no "Don't know".
This compares with last year's results when twenty-one respondents
were either very confident (6%) or fairly confident (36%) about the
When asked to assess their performance in 2001, 27 respondents (63%)
consider theirs to be in line with expectations. Only 2 companies (5%)
consider their performance better than they had projected while fourteen
companies (33%) suffered from a decline in their anticipated
performance. Of the
fourteen companies reporting a decline in performance, eight have an
annual turnover of over $1,000Mn, two of between $600Mn and $700Mn, one
of between $700Mn and $1,000Mn, one of between $600Mn and $700Mn, one of
between $100Mn and $200Mn and one with less than $50Mn. These companies
operate in a range of industries including distribution/retail,
manufacturing, mining, agriculture, financial and services.
Companies were asked to rate the national and international events
that made them more or less optimistic about the economy. There was
overwhelming pessimism on most of the issues. Issues on which greater
optimism than pessimism was expressed were the PPP/C-PNC-R relationship
and the publication of the Investment Code. This year's respondents
showed more confidence in the country's political situation due perhaps
to the Dialogue between the leaders of the country's two major parties.
The majority of the respondents are less optimistic about the world
economic outlook, international terrorism/war, the level of business
failures and corruption. Other significant causes for pessimism are
crime/drugs, the value of the Guyana dollar, management of the economy,
smuggling and Government support for business and investment.
Respondents were asked to indicate their agreement with the
Government's action on three highly publicised issues. Seventy-six
percent of the respondents (76%) express disagreement with the
compulsory acquisition of the Toolsie Persaud Ltd. land for development
into a market area for street vendors while Government's support for
businesses in distress found respondents equally divided while eight
companies (20%) had no views.
Only two respondents (5%) agree with the publication of the
Investment Code without legal force while an overwhelming twenty-seven
respondents (64%) disagree. Thirteen respondents (31%) had no views on
weighted average basis, respondents identified lowering direct taxation
(69.8%), reducing interest rates (65.1%), and controlling inflation
(53.5%) as the issues they most want Government to take action on. The areas which a significant number of respondents
consider likely to impact their businesses in 2002 include consumer
spending/demand (33.8%), political stability/risk (33.2%), exchange rate
(32.2%), electricity supply & rates (31.8%) and interest rates
(31.2%). While political stability remains a significant issue, its
weighting has fallen from 43.8% in 2001 to 33.2% in 2002.
When asked what operating issues they consider most important to
their business, respondents identified electricity supply and improving
product/service quality. Last year the preparation of financial
information was considered the most important operating issue but is
ranked only third this year. As last year, Customs procedures and
inventory management are considered important while environmental issues
are considered least important.
Cash flow management, access to capital and timely information are
as the three most critical financial issues respondents face. Of less importance
are foreign currency availability, debt servicing and the build-up in
A surprising thirty-three of the companies (79%) indicate that they
prepare a formal business plan. Of these, 14 (40%) prepare their plan
over a three-year period, ten (29%) for one year, 5 (14%) for 2 years, 5
(14%) for five years and one 3% for more than five years.
50.2% of the Survey's respondents identify employee productivity as
the human resource issue most important for success. Other important
issues are retention of key personnel (49.8%) and recruiting of key
personnel (42%). Employee fraud, industrial relations and incentive
schemes were the least critical human resources issues. The top three
issues all speak of the importance of recruiting and retaining efficient
and qualified personnel to the success of a company.
Eleven of the companies surveyed (26%) have workforces between 100
and 250 employees, ten (23%) with between 251-500 workers and nine (21%)
with less than 50 workers. Sixteen percent had between 51-100 employees,
nine percent between 501-1000 workers and two percent had 1001 or more
Twenty-two companies (52%) had a change in the size of their
workforce in 2001, a smaller percentage compared with 2000. Among those
with changes, 8 companies (36%) had increases averaging 10.5% and 14
companies (64%) had decreases averaging 17%.
Thirteen of the respondents (30%) indicate that they anticipate their
staff levels to grow in 2002 with seven companies expecting more than 5%
growth. Ten companies (23%) anticipate decreases in their workforce of
up to 20% while nineteen companies (45%) anticipate no change in the
number of staff they employ.
Thirty-four of the respondents (89.5%) reward their employees with a
performance-related pay component while only seven companies (21.9%)
allow their employees to participate in the equity of their companies.
However, thirty-one companies (84%) offer a company-wide bonus programme
to their employees and twenty-eight companies (75.7%) share their
financial results with their employees.
Sixty-seven percent (67%) of the respondents are engaged in domestic
sales while the remaining thirty-three percent (33%) are engaged in
varying degrees of export. This coincides with the results of the 2001
Survey where 64% of the respondents had a domestic focus and 36% were
involved in regional/international business.
The majority of respondents (54.8%) consider that they are exposed to
a great deal or fair amount of competition compared with 60.0% last
year. Ten respondents (23.8%) consider that they are exposed to very
little competition while 19% feel that they are not exposed to any
competition at all. One respondent was unsure of any competition.
Twenty respondents (46.5%) consider that competition will increase in
2002 while fourteen (32.6%) expect the level of competition to remain
the same. None of the respondents expect a decrease. Nine respondents
(20.9%) either did not know or did not answer the question.
Despite their gloomy outlook of the performance of the economy for
2002, thirty-four of the survey respondents (83%) indicate that they
expect their company's profitability to increase but only twenty-three
(57%) anticipate increases in turnover. Eight percent of the respondents
did not know whether to expect increases or decreases in turnover while
twenty-seven percent anticipate a decrease. Seventeen percent of the
respondents expect a decrease in profitability in 2002. The expectations
of company performance contained in the 2000-2002 Surveys are as
2000 2001 2002
% % %
Turnover to increase 78 76 57
Profitability to increase 80 82 83
Turnover to decrease 13 12 27
Profit to decrease 15 18 17
No increase or decrease in turnover 4 6 8
Don't know 2 6 8
The respondents who expect their turnover to increase attribute the
principal reasons for this increase to improvement in their
products/services (33.3%), competitive pricing (32%), increased
productivity (30.5%), and acquiring competitors' market share.
In the event of limited financial resources, respondents intend to
cut back on capital investment programmes (41%), advertising and PR
(28.7%), research and development programmes (24%), employment cost
(21%) and employment levels (20%).
Despite the gloomy outlook for the economy and the views expressed
thereon by respondents, seventeen respondents (39.5%) still foresee an
increase in the size of their operations. Twenty-two companies (51.1%)
are not planning to change the size of their operations while four
companies (9.3%) are planning to scale back.
Those respondents that are planning to scale back their operations
gave as the main reasons the performance of the economy over the past
year, government policy and political uncertainties.
Top growth strategies identified by those respondents who are
planning to expand over the next year are the improvement of existing
products (30.3%), the development of new products and /or services
(29.8%) and the expansion into new domestic markets (27%).
In order to drive the projected growth of their business, twenty-five
respondents plan to raise capital for the following reasons:
To fund new products/ services – 36%
To embark on capital expenditure/expansion programme - 32%
To retool - 28%
To fund an acquisition, joint venture or strategic alliance -28%
To expand into new geographic markets - 28%
To fund current operations such as working capital - 28%
To re-finance debt - 20%
The remaining 41.8% do not plan to raise capital.
The sources of capital that respondents are most likely to use are
internally generated funds (28.8%), long-term bank debt (17.6%),
disposal of assets (14.5%) and short-term bank debt (15%).