Subsidise Manufacturers

The biggest impediment for our private sector manufacturing firms to compete in a global market place is the high cost of electricity. In my previous post, I outlined the need for Guyana to look at structural changes to the economy and diversify into high productivity industrial or manufacturing activities.

With the high charge on electricity, our companies just can’t afford to compete. At a news conference, I announced that the government should charge a lower rate or subsidise electricity to Manufacturers. I also suggested that they consider establishing electricity free manufacturing zones across the countries (places like Linden and Lethem would be primary targets). This is necessary as a short-term measure to assist manufacturers.

Currently, these manufacturers are paying a higher rate than residential customers to the power company. This should be reversed if we are serious about diversification of our economic profile and if we want to ensure the creation and sustenance of jobs and economic growth.

Government seems to be putting all its eggs in one basket when it comes to the manufacturing industry and waiting until we realize hydro-power generation for the costs and reliability of electricity to improve. Well, while we wait, the country continues to be exposed to external price forces for our commodities and our manufacturing industry continues to hobble along to the edge of a deep cliff.