Wood Matters

Kaieteur News
Editorial
11 April 2007

Wood Matters
We all know that practically three quarters of our country
is covered with trees of one type or another. We all know too, after
being assured by every politician even before independence, that this
offers us great “potential” for lifting us out of poverty since trees
translate into wood and wood products that are in great demand in the
rest of the world. Yet we still remain an officially recognised Highly
Indebted Poor Country while our forest resource is, at the very best,
mostly exported as logs for other countries to reap the benefits of
high value added wood products. There has been a heated debate about
the merits and demerits of our forestry policy but we believe that the
focus of the debate needs to be widened somewhat to include what we
ought to be doing in a pro-active way to make better use of our forest
resource.


There is no dearth of Guyanese trying to add value to our
logs. All across Guyana, in every village there is at least one
enterprising citizen who has established a furniture manufacturing
facility. We therefore have a resource and we also have the people have
the will to exploit that resource so as to improve their lot.
Unfortunately, the quality of the products is, by and large, very
spotty: we do not, evidently, have the requisite capacity. There are a
few companies, however, amongst the forest of producers who have
demonstrated that it is possible to achieve standards that can satisfy
the most stringent demands of the world market. Precision Woodworking
is one of those companies. After shipping garden furniture directly
into the European market for years, they announced last week that some
new regional markets were secured. While the latter may seem to be an
easier undertaking, the reverse is actually true because of the
entrenched lack of respect for Guyanese manufacturing capabilities and
standards in Caricom.


The question is, how can we transfer the sterling example
shown by the Bulkans of Precision to the rest of our manufacturers? One
way would be to let the “know-how” slowly filter into the field as
workers from Precision move into other companies or open up their own
companies. The benefits through this “externality” route, however, are
very uncertain especially given our extremely high emigration rates.
The Newly Industrialising Countries (NIC’s) in the Far East have
executed a different strategy that suggests a path for us.


When there is an identified industry that shows promise for
generating exports, profits and employment, those governments took an
active role in ensuring that the industry was nurtured and allowed to
take root and grow. They accomplished this task through several
stratagems. One, which could be adopted by us, was to provide funds to
create facilities to provide key services in industrial estates centred
on the given activity so that the costs of those services could be
shared.


Take, for instance, the manufacture of quality wood products for the
world market as demonstrated by Precision. The wood must be kiln dried
to the specifications of the importing country. This is one of the most
glaring omission of the bulk of our Guyanese manufacturing community
and has earned the ire of many importers (this was the major cause of
our regional black mark) who discovered too late that beautiful pieces
of furniture bought in Guyana quickly shrunk and separated. But it is
beyond the capability of vast majority of our manufacturers to
establish and maintain kilns on their own. The answer may seem obvious
that the costs could be shared but it just has not happened. Given the
nascent state of the industry, it is unlikely that it will occur soon.


This is where governments come in. When the community linkages and the
market forces have failed to institute necessary coordination to
produce a good, then the government must intervene to correct the
obvious market failure. Not that the government has to enter the
production process itself, but just to facilitate it through soft
loans, as it in a sense did in the necessary construction of Buddy’s
Hotel for the World Cup. The Government itself mentioned the creation
of a coordinated industrial estate for the wood industry a short while
back and it is time that it makes a concrete move.