Co-operative movement needs 'enlightened management'

3rd April, 2018 0 comments

- Dean of UG Business School

Even as the local co-operative movement seeks to recover from its decades of doldrums, not least its countless failed and abortive excursions into start-stop business ventures that have left groups across the country in a condition of acute disappointment, a University of Guyana business Professor insists that there is a way back for the sector.

Dean of the School of Entrepreneurship and Business Innovation at the University of Guyana Dr. Leyland Lucas says that co-operatives and credit unions can be important tools in the pursuit of efforts to create a more robust entrepreneurial ecosystem in Guyana.

In an article scheduled for publication in The Guyana Review in April, Professor Lucas asserts that credit unions in their role as “guardians of significant financial assets” must begin to “see themselves as enablers of economic activity rather than guardians of savings,” a posture which he says, “changes their standing in the national economy.”

The observation is likely to resonate with many credit union members across the country who have, for years, challenged the  imbalance between the considerable liquidity of some of the country’s larger credit unions and their inability over the years to utilize the financial power to exert greater leverage on the country’s economy. When Stabroek Business put Professor Lucas’ perspective to a board member of one of the country’s largest credit unions the respondent replied that the decisions made by credit unions in the matter of the disbursement of their finances “is usually in the hands of the membership”.

But Lucas insists that “with enlightened management and not much risk” credit unions can play a pivotal role in helping to develop entrepreneurs and a new group of wealth generators. He offered as an example a retiring member of the security forces whom he said may be able to use support from the associated credit union to embark on a new post-retirement venture. According to Lucas “within the last five years we have seen institutions such as the US military establish programmes with universities to offer accelerated training in the basics of entrepreneurship.” Lucas says he believes that similar training can be undertaken by credit unions in Guyana to spur the growth of entrepreneurship among current and retiring members of the disciplined forces here.

Lucas contends that such initiatives by credit unions require both financial resources and a strong support system, “one that not only helps to educate the borrower/member of the challenges of entrepreneurship but provides the support mechanisms that will help to sustain them in challenging times.” Additionally, he says that the effective implementation of such measures also requires “personnel with the necessary knowledge to effectively perform these new duties and support programmes to aid entrepreneurship development.”

Meanwhile, Lucas says that like credit unions, cooperatives can also play a vital role in the entrepreneurship ecosystem, “one that not only helps to educate the borrower/member of the challenges of entrepreneurship but provides the support mechanisms to aid entrepreneurship development………Whether these are agricultural cooperatives intended to engage in value-added production, technological development or some other form of economic activity, they can play a vital role in sustaining the entrepreneurial ecosystem,” Lucas adds,

Meanwhile, Lucas says in his article that co-operatives can also contribute to the growth of the entrepreneurial system. Co-operatives, he says, “”can serve as the foundation for the revitalization of the village economies……..whether these be agricultural co-operatives intended to engage in value-added production, technological development, or some other form of economic activity. By combining their resources and members’ interests they provide a reinforcing mechanism whereby commitment to future success can be demonstrated,” Lucas adds.

And according to the UG Professor co-operatives can also serve as a safety net for new ventures. “The fact that benefits within co-operatives extend beyond economic rewards to include social and psychological benefits allow for a broader definition of entrepreneurial success to be embraced.”

Article adapted from: https://www.stabroeknews.com/2018/business/03/30/co-operative-movement-needs-enlightened-management/


The Oil Contract Debate

28th March, 2018 0 comments

By Dr Leyland M. Lucas

In the late 1990s, Guyana signed an Oil and Gas exploration agreement with Exxon’s subsidiary, EEPGL. That agreement not only permitted significant activity by Exxon, but also provided Guyana with a small subsumed royalty of no more than 1%. The agreement was also in clear contravention of Guyana’s laws, which stipulated the number of blocks that could be offered to a single entity. Though there were clear violations in law, Guyana has chosen to honour that obligation rather than raise it in other forums or attempt to invalidate it. As a nation, our word has been our bond.

Fast forward to our current situation where we find much being discussed regarding the current contract, and whether or not the nation’s best interests have been considered. In fact, in the past few months, we have been privy to an ongoing debate around the contracts signed by the Government of Guyana and Exxon. This debate has gotten so intense that some have even questioned the integrity and negotiating ability of governments in other developing countries, where the exploration of oil and gas is ongoing. Yes, in the case of Guyana, there is a great deal of evidence to suggest that better could have been done. But, who are we to question the outcome, when we were absent from the process? As my grandmother would often say when a family member chose to criticize others ‘make sure that your house is clean before telling someone else that theirs is dirty.’

In an earlier article on local content, I made the point that oil is no longer a critical commodity. There is an abundance of oil in the global market, prices are highly volatile, and the world has begun a gradual process of shifting from fossil fuels to renewable sources of energy. These are realities that cannot be ignored. For example, within our hemisphere, we see significant declines in oil and gas production, yet very little evidence of a major impact in the global marketplace. Likewise, the Kingdom of Saudi Arabia, a major oil producer with one-fifths of the world’s reserves, has also begun the process of delinking its economy from oil-dependency and looking for newer ways to stimulate growth and development. The Kingdom of Saudi Arabia has determined that, given the volatile prices, oil revenue can no longer be the foundation of economic development. Instead, the Kingdom has shifted towards renewable energy sources and undertaken significant activities towards transforming the foundation upon which the future economy will stand.  Guyana, as a country, has also committed itself to a policy of sustainable development and, in so doing, must balance issues of production and protection. Afterall, we exist in a very fragile ecosystem.

Having made these observations, I’d like to proceed with a small contribution to this debate. As one of my former bosses, Mr. Clarence Ellis, would say ‘no matter what the situation, if you are seen to be truthful, reliable, and honest in your dealings, people will work with you.’ Therefore, my contribution to this debate for the most part will center on the words reputation and position. These words should be at the heart of any conversation about contracts and the subject of renegotiation. I hope that the importance of these words will be reflected and help to either advance or bring some closure to the debate.

The Oil Contract

To some extent, what we are dealing with here is a Prisoner’s Dilemma. In a simple tit-for-tat version, players attempt to match/better one another’s moves, with the hope that the victor will emerge with the Lion’s share. However, research has shown that such strategies seldom succeed.  Eventually, parties come to recognize that continuous moves and countermoves are less productive, and that mutual cooperation works best. In essence, let’s find a middle ground rather than try to be the ultimate winner. This is an important point in the ongoing debate around the Exxon contract, because continuous negotiations and renegotiations will yield no fruitful results. Hence, the situation becomes one of finding an acceptable position of compromise, from which both parties can gain some benefit and continue to operate with mutual respect.

As we focus on the current contract, one cannot ignore the fact that a contract previously existed. How do we renegotiate this contract? Within a Prisoner’s Dilemma framework, moves and countermoves will only make sense if one party has something that is vital to the other and can force the latter to respond to the actions of the former. In this case, we have a product that the world wants but does not need. Any moves by our negotiators could be easily ignored. Consequently, it makes no sense to engage in efforts to renegotiate a contract from a position of weakness.

Moves and countermoves also influence one’s position. Subsequent moves by a party only makes sense if this is being done from a position of relative strength. Hence, I pose the question ‘What is our strength?’ The simple answer to this question is nothing. We do not own the wells, we do not have the skills necessary to exploit them, and we do not have the technology to provide the value-added products. In fact, truth be told, at this stage we are struggling to meet Local Content requirements. One cannot renegotiate a contract from a position of future possibilities, but must do so within the current context. So, any conversations of renegotiation will take place from a position of weakness rather than one of strength.

This brings us to the issue of reputation. What does it say about a country that signs an agreement and then seeks to change it? Over time, governments and countries develop reputations as either reliable or unreliable bargaining partners. Each reputation comes with costs and benefits. If Guyana develops a reputation for being an unreliable partner, then all options for future development are lost. As a nation and as a government, we must realize that our word is our bond. If we cannot be relied upon to honour our obligations, then there is no place in the world of nations for us.

Recently, some have suggested to me that we can do this on our own. As I listened to these suggestions, I sensed subtle tones of nationalism and nationalization. While such suggestions are laudable, one must admit ‘that boat has sailed.’ Guyana and the rest of the developing world are full of examples of the consequences of nationalization, in the absence of an appropriate skill set. While it served its political purpose, the benefits of so doing left much to be desired. Oil, like sugar and bauxite, are primary products with volatile prices and much of the value-added downstream.

Product Quality

One of the issues that has been raised in this oil contract debate surrounds the product quality. Yes, there is a great deal of literature that suggests the crude is of an exceptionally high quality. Like an exceptionally well-tailored suit, superior quality commands a high price, provided that a market exists. Hence, one must ask the question ‘can quality command a high price in a saturated market?’ The simple answer to this question is no. As we know, primary product prices fluctuate quite significantly. So, a high price today might hit rock bottom tomorrow. For those of us old enough to recall, Guyana sold its sugar at a high price on the world market in the 1970s rather than honour its obligations to existing contracts. Not too long after, the bottom fell out of the world market. As a nation, we were profitable in the short-term, but suffered in the long-term, particularly with respect to our reputation.

Moreover, the wells are not owned by the Government of Guyana. They are owned by Exxon and its partners. How do we exact additional tribute from these companies simply because we have a product of exceptional quality, when the owner opts to not sell it? Guyana cannot force Exxon and its partners to pay a higher premium when they can choose to not pump oil and gas from the wells. Not doing so provides the government and people of Guyana with zero revenue. Hence the need to be cautious in one’s approach to renegotiating of contracts.

Placing this issue of quality into the Prisoner’s Dilemma framework, how do two players arrive at a mutually beneficial position, when one player ceases to participate? More specifically, how does one arrive at mutually beneficial positions when the dominant player withdraws? The fact is, under these circumstances, the game ends and there are no winners. It’s like that childhood experience where the owner of the ball runs home with it because he is unhappy with some decision. What we have left is a group of disgruntled children who grumble and look for something else to do. Unfortunately, Guyana has very few options and even fewer resources that can be summoned into action.

Front-Loading

An interesting argument has recently been raised that Guyana would be better off receiving a sizeable up-front bonus, rather than waiting for later disbursements through royalties. While those numbers vary from the well-reasoned to the pie-in-the-sky estimates, one needs to look at the domestic reality. We are a nation with various needs from education to infrastructure. To address those needs, we will require a significant influx of financial resources. However, if that influx is not regulated, it will cause significant inflationary pressures. Such pressures will further damage the economy and leads to a significant decline in living standards. With a massive influx of cash, one does not speedily correct the errors of the previous decades. Engineers, scientists, agricultural experts, and doctors are not created overnight. It takes years of training to acquire these skills. If the nation is to acquire these skills, then it must be done over time. Let’s not forget that we are dealing with a product whose price is highly volatile. Where will the resources come from when an engineer needs specialized training in 5 years, but the bottom has fallen out of the oil sector? Yes, this may happen anyway. But, at least we would not recreate the conditions for another massive brain drain, as was experienced in the 1980s when resources for scholarship recipients were scarce.

Let me use a simple example to further elaborate on this point. Think of someone in the desert with no food or water for an extended period of time. He/she is rescued and immediately placed in front of a large quantity of food and drink. If that person consumes everything without control, then he/she dies. How-ever, if he/she consumes in moderation, until the body is once more accustomed to consuming solids etc, then there is a greater likelihood of survival. The point I am making here is that a massive unregulated inflow of cash through a significant bonus may entice policymakers to undertake massive investment projects, which the economy cannot embrace with its limited skills inventory. Instead, a gradual inflow and expenditure might prove more beneficial to the nation in the long-run. So, while front-loading of contracts and securing large bonuses might be politically popular, it may prove to be economically disastrous.

Book Value

In some circles, it has been suggested that Guyana deserves a larger bonus because of its contribution to Exxon’s bottom line. At least one commentator has made the point that, since the discovery of oil and gas deposits off the shores of Guyana, Exxon’s book value has increased significantly. In my humble opinion, to use book value as a basis for renegotiating a contract is not a sound position. Book values change on a daily basis. In fact, Exxon’s stock price like so many others in the market has been on a rollercoaster ride. One year ago, its common stock price was $82.83; today, it is $76.27; last month, the stock price reached a high of $89.07. Which stock price should we use as the basis for asserting book value and renegotiating this contract? Should both parties make offers and counteroffers? Following a pattern within a Prisoner’s Dilemma game, such uncertainty cannot be tolerated. Instead of embracing such uncertainty, both players will be forced to arrive at a mutually beneficial point. Moreover, how reliable a negotiating partner is a government when its position appears to change with every market fluctuation? Clearly, other nations and firms will not take us seriously, since stability is essential to the capitalist system of trade and exchange.

Geopolitics

Over the past decade, commentators have noted a change in global relations. That change has seen a decline in nation states and the rise of the corporate state. That corporate state takes the form of transnational corporations, which have been able to influence global politics through their actions. For instance, in the US, we see massive amounts of money being poured into political campaigns by individuals and companies such as the Koch Brothers, George Soros, and the professionals on K Street. Why is this important within the Guyana context? The emergence of corporate states is important because they have the ability to alter things within a nation and change the balance of power. As stated by former British Prime Minister Lord Palmerston, and later expressed by Henry Kissinger, ‘friends and enemies are not permanent, but interests are.’ In this case, the interests are Oil and Gas.

Understanding the permanence of interests is important within the context we are examining. Although there may seem to be a disagreement between Venezuela and the US, any perceived reluctance on our part to abide by negotiated agreements could significantly alter the regional balance. If Exxon or any other transnational deems it favourable to reengage with the Venezuelan government, then they will do so. A reliable bargaining partner is always better than an unreliable one. Who then will take up the mantle on our behalf if Venezuela flexes its military might against us? Are we to expect support from the US administration when we have acted against the interests of an American corporate giant? I think that an examination of history would reveal that the answers to these questions are not favorable.

Conclusions

Oil and gas have been found and they have the potential to offer a great deal of wealth to our beloved Guyana, if appropriately managed. This is already reflected in the International Monetary Fund (IMF) reports suggesting a change in our economic classification. Although we may argue about the royalty and signing bonus, it is merely an exercise in futility. We are in a Prisoner’s Dilemma, having originally negotiated a very bad deal. As a bargaining partner, one does not change the rules of the game unless one comes from a position of strength. Unfortunately, such strength does not exist in our case. We have a product that the world wants, but does not need; We lack the skills base and infrastructure to pursue this venture on our own; There is a global shift away from oil and gas towards renewable and sustainable sources of energy. As such, we are approaching all such negotiations from a position of relative weakness rather than strength.

As a nation, there is an expectation that we will honor our word. Our word is our bond and, as such, we must strive to establish and maintain a good reputation. Even within a Prisoner’s Dilemma framework, some reliability is expected. If a move is made, that player is expected to honour the consequences of that move, rather than default. When countries default on their obligations, their ability to reengage with other parties is seriously hampered. Particularly as a small and young country, we must strive to uphold a positive reputation, irrespective of the consequences. Good reputations are hard to come by, can be easily lost, and extremely difficult to regain. Let us focus on playing the hand we have been dealt, rather than continually questioning its validity. Maybe, for future generations, there is a lesson to be drawn from this experience. A nation should always focus on establishing high educational standards and building its skills base, lest it be found wanting.

Article adapted from: https://www.stabroeknews.com/2018/business/03/23/the-oil-contract-debate/


UG School of Business upbeat after first semester

18th March, 2018 0 comments

After we had spoken with Visiting Professor at the University of Guyana’s School of Enterprise, Business and Innovation (SEBI), Professor Leyland Lucas, and his support staff early last week, we headed across to the new facility created to house the School.

Stabroek Business had been told in an interview, months earlier, with the University’s Vice Chancellor, Professor Ivelaw Griffith, that much of the focus of SEBI would be on building a stronger ‘real world’ connection between the University and the business community, the thrust of his argument being that it made little sense having a University that was not really going anywhere in terms of helping to provide the skills needed to drive what has long been referred to as ‘the engine of growth,’ the private sector.

We had benefitted, as well, from an thorough earlier briefing from the Vice Chancellor, at a session that had also included SEBI’s Head, Professor Lucas, on the origins and purpose of SEBI and particularly on the role that local entrepreneurs and the wider business community had played in the conceptualization of the institution and including arriving at a determination as to the particular role that it would play.

An earlier attempt had been made to create just such a link between the University of Guyana and the business community under the Vice Chancellorship of Professor Lawrence Carrington. The reasons for its failure to get very far are unclear though there is really no persuasive evidence that the private sector was, at the time, keen on a long-term relationship with UG.

SEBI is currently focused on the staging of its May 20-22 Inaugural Entrepreneurship Conference, its first excursion into the kind of public discourse that brings  together the business and academic communities as much as the students which, hopefully, will throw up ideas that can be applied across a wide spectrum of challenges, not least, those that have to do with helping to address some of the broader economic challenges facing the country.

The School’s ‘Call For Papers’ for the May forum, shared with the Stabroek Business by its Director of Communications and Corporate Relations, Rennie Chester, provides clear insights into the agenda. Numbered amongst the issues listed for discourse amongst participants academics, business leaders, state-run institutions and students at the forum are entrepreneurship and economic development; women’s empowerment through entrepreneurship; entrepreneurship and the informal sector; the role of micro, small and medium-sized enterprises in economic development.

Professor Lucas holds the view that the institution’s role in providing a curriculum in disciplines that would lead to a formal academic qualification should not be allowed to obscure its responsibility to provide the sort of practical tuition directly related to enhancing entrepreneurial capabilities in the business sector.

Across the way from Professor Lucas’ office a small group of students had been kept waiting in the SEBI building to engage us. Three of them symbolized what we had earlier been told were the real objectives of SEBI. Paul Warner, Sean Langevine and Amika Persaud have enrolled at SEBI in order to further refine their business acumen in preparation for the task of enhancing the roles they already play in businesses.  Warner and Persaud are already involved in the management of family businesses, Warner in the beverages sector and Amika Persaud in the gold-mining industry. Sean Langevine is a manager with the popular Oasis Café though he appears to be busying himself to embark on an entrepreneurial pursuit of his own in the future.

We had met earlier with Tracey Alves and Cassandra Karran, two seemingly keen and energetic professionals who serve as Academic Advisors to SEBI and the School’s Administrative Officer, Tamika Profitt. Ms. Profitt’s job, Professor Lucas explained was to ensure a sense of administrative order. The role of the two academic advisors has to do with the intellectual welfare of the students. Meetings between prospective students and the academic advisors occur before students are enrolled, part of the purpose being to offer curriculum-related guidance and to help students respond to such challenges as they may encounter at the University.

We ended our visit on an upbeat note. There is evidence that (though still to a modest extent at this juncture) the public/private sector partnership that underpins SEBI is working. It showed, particularly in the energetic responses of the three students that we interviewed to questions relating to the nexus between their experiences at SEBI and their business ambitions. It appears to be a more than promising start.

https://www.stabroeknews.com/2018/business/03/16/ug-school-of-business-upbeat-after-first-semester/


UG Business Professor wants more commercial bank backing for business startups

3rd March, 2018 0 comments

Visiting Professor at the School of Enterprise and Business Innovation (SEBI) at the University of Guyana Dr. Leyland Lucas is advocating more robust support from the commercial banking sector for startup business ventures “in their greatest time of need” as one of the building blocks for the creation of an “entrepreneurial ecosystem” in Guyana.

In an article written for publication in the forthcoming issue of The Guyana Review, Professor Lucas argues that while “regulatory demands” place constraints on banks’ lending practices, this does not remove them from “the realm of responsibility” for promoting entrepreneurship and supporting the ecosystem. Commercial banks, Lucas contends, must “find ways to embrace entrepreneurship and the creation of new entities.” He says that “special programmes must be designed by banks to meet the needs of entrepreneurs, such that the ecosystem can thrive and become self-sustaining,” adding that “banks cannot survive by simply lending to established businesses…if banks are not there for entrepreneurs in the embryonic stage and their greatest time of need, then how can they expect to be embraced later? Such behaviour is tantamount to the absentee parent who, upon a child’s rise to a position of prominence, suddenly emerges and seeks to benefit.”

Lucas, meanwhile, is also calling for credit unions, which, he says, “are the guardians of significant financial assets” to play their role in the entrepreneurship system “as enablers of economic activity rather than guardians of savings,” a position which he says can be realized with “enlightened management and not much risk” and which can contribute to the creation of a new group of “wealth generators.” Such a move, Lucas says, requires personnel with the necessary knowledge to effectively perform the duties associated with the “new duties” of the credit union in terms of providing support for programmes designed to aid entrepreneurship.

According to Lucas, if an enabling entrepreneurship is to be created state policies must be designed to make it easy for entrepreneurs to access public sector systems and laws enacted to help promote entrepreneurship. Additionally, he writes that “regulatory frameworks must be developed to facilitate access to critical information, incentives created to support entrepreneurial ventures and effective enforcement mechanisms must be established.”

And while government has tagged the Guyana Office for Investment (Go-Invest) and the Small Business Bureau (SBB) as critical players in attracting both local and overseas private sector investment   and supporting local small and medium-scale entrepreneurial ventures, respectively, Lucas opines that these alone are “not sufficient for entrepreneurship to grow.” The Ministries of Business, Trade, Communications, and our foreign missions, he says, “have particularly important roles to play in the development and sustenance of an entrepreneurship ecosystem.” And Lucas says that while the one-stop shop system which facilitates access to all government services has been the focus of government’s promotion of the country’s openness to foreign investment, what is seldom emphasized is “the importance of trust” to the smooth operations of this system. “Unfortunately, within our own society, this is a scarce commodity, Lucas adds.

In adding his voice to those that have already bemoaned the absence of supporting physical infrastructure for the creation of a convivial entrepreneurial ecosystem Professor Lucas alludes to the need for products created and ready for market to be supported by “effective logistics systems, reliable power supplies, and communications networks”. He says, “National resources must be devoted to creating an exceptional road and air transportation system, a reliable power grid, and a telecommunication system that is dependable. Products must be delivered on time to customers; delays in production due to power outages must be minimized; contacts between producers and customers must be reliable.” These support mechanisms, he says, are particularly important “within the context of business opportunities associated with the discovery and production of oil and gas. Entrepreneurship cannot thrive if these essential support systems are not dependable.”

Part of an enabling support infrastructure for an entrepreneurial ecosystem, Lucas says is a stable environment in which prospective entrepreneurs can work in which context he is advocating the creation of “regionally clustered entrepreneurship parks” within which various services should be provided to enhance the prospective entrepreneur’s experience, with the nature of these parks varying from one region to another.

Article adapted from: https://www.stabroeknews.com/2018/business/03/02/ug-business-professor-wants-more-commercial-bank-backing-for-business-startups/


Lucas sees 2018 as breakout year for UG's School of Business

9th December, 2017 0 comments

Five months after the University of Guyana’s School of Entrepreneurship and Business, (SEBI) was launched, Dean of the new institution, Guyanese-born Professor Leyland Lucas has told the Stabroek Business that some of the challenges that repose in ensuring that the institution delivers on its mandate repose in the fact that “it is different. It is not an orthodox Business School”.

From the outset SEBI had committed to what it had determined from careful research was the need to respond to a counterproductive deficit in disciplines related to operating in both the public and private sectors in areas related to the effective delivery of goods and services. Not surprisingly, therefore, SEBI has found itself challenged by a student body that is anything but conventional, comprising as it does classes ranging from students with orthodox academic ambitions to those whose livelihoods depend on grasping the essentials necessary to run a business of their own.

“Some of our students have come to us with challenges that have nothing to do with academia. They are simply preoccupied with finding answers to those questions that have to do with running their own businesses,” Lucas told Stabroek Business. “Frankly, we recognize that some of our courses are still not fully developed to meet those needs. We hope that this will happen in the second term.”

But there is, he says, an upside to the complex mix of interests that comprise SEBI’s classes. Lucas embraces the outcomes of interaction on business issues that bring together the orthodox students and the ‘hard-nosed’ hustlers in exchanges that pit the orthodoxy of business theory against how it works in practice. Lucas believes that the outcomes of these exchanges   are almost always more rewarding. What has transpired since July has reinforced his view that SEBI itself remains a work in progress and that the tweaking to ensure that it becomes the ‘correct fit’ to meet the needs of the students will have to persist for some time.

For the lecturers the ‘journey’ has been an interesting one. Lucas says that they have learnt to deal with the dichotomy between and amongst the interests that obtain inside the classroom. “What this means is that we tend to have conversations rather than lecturers. They are structured in a manner that allows for conversations rather than lectures. We want the business people to be part of the conversations.

Long before SEBI had launched its classes it had been engaging both public and private sector institutions. Those discourses, Lucas says, persists, with agencies like the state-run Small Business Bureau which has already collaborated with SEBI to stage a business symposium.

Professor Lucas sees 2018 as a breakout year during which SEBI will intensify its engagements with both the public and private sectors with a views to determining how its offerings can improve the effectiveness of their operations. Outside of the state agencies that include entities like the Guyana Office for Investment (Go-Invest) SEBI’S 2018 ‘to do’ list also includes meetings with the Private Sector Commission, the Guyana Manufacturing & Services Association, the Georgetown Chamber of Commerce and Industry (GCCI) and the Guyana Association of Bankers.

In 2018 SEBI seeks to further promote what it has to offer. Professor Lucas told Stabroek Business that ongoing discussions with the banking community could lead to the rolling out of a Diploma in Banking and Finance. Next year will also see SEBI offering a Customer Service Certificate Programme for the medical sector.

Article adapted from: https://www.stabroeknews.com/2017/business/12/08/lucas-sees-2018-as-breakout-year-for-ugs-school-of-business/


Local Content policy must embrace strong regulatory practices to protect against 'fronting' - UG Business Professor

30th October, 2017 0 comments

Dr Leyland Lucas,  Visiting Professor at the School of Entrepreneur-ship and Business Innovation (SEBI) at the University of Guyana has said that the pursuit of an effective local content policy for the oil and gas industry must seek, among other things, to create a local content policy that seeks to bring an equity of benefits.

“Whenever new opportunities arise, there will always be efforts to accrue benefits by some who are not entitled to do so. Particularly in a country such as ours where control systems are stretched and dishonesty is pervasive, regulations must be enacted against such things as ‘fronting.’ Strong regulatory controls must be established to guard against firms using nefarious means to indicate their eligibility. While no fool-proof system can be designed, there must be enough sizeable penalties to serve as disincentives to those who seek to violate the rules,” the UG Professor writes in an article published in this issue of the Stabroek Business.

Professor Lucas says, meanwhile, that the building of a strong educational system is essential if Guyana is to benefit from an oil and gas-driven local content policy. “For me, a strong educational system is essential to benefitting from any local content policy. The educational system must provide the skills needed by local firms that are either positioned or are seeking to position themselves to benefit from any local content policy,” Professor Lucas says in a paper titled ‘Challenges to Local Content Policy’ prepared for publication in the Stabroek Business.

And according to Dr. Lucas, Guyana may, as yet, still not have such an education system. “Over the years, we have seen tertiary institutions receiving limited resources. One does not produce engineers, supply chain management experts, logistics personnel, managers and forensic accountants overnight, Lucas says, adding that “doing so requires years of investment in academic offerings.” The university academic says in his article that such investments “require the recruitment of highly qualified and committed faculty, capable and innovative academic administrators, provision of equipment on which state-of-the-art training can occur, construction of modern training facilities and a shift in the approach to learning,” which shift, her said, should emphasize both risk-taking and innovativeness “as against the current focus on rote learning and regurgitative practices.”

And Lucas says in his article that the requirement that a specific percentage of inputs be produced by local manufacturers represents one of the simplest ways in which local firms can benefit through backward linkages. However, he contends that in order to exploit these opportunities there is need for a vibrant manufacturing base, one that can deliver inputs in a timely manner. “To do so the manufacturing base must exist and delivery systems must be reliable. These are inseparable as products that cannot be delivered are valueless. Hence there must be some commitment, (locally) to building a manufacturing base supported by a reliable logistics system to ensure timely delivery.”

The strengths of a robust local content policy, however, do not gainsay the threatened downside of what he describes as a “Johnny come lately” effect on material supplies. He explained that firms capable of supplying items to the oil and gas sector, upon discovering that the prices being offered “are significantly higher than what is paid elsewhere may withdraw from the traditional market thereby creating an artificial shortage. “With that shortage comes rising prices and possible health consequences for the remaining populace. Thus, as part of local content policy one must attempt to ascertain the possible effects of supply diversion.”

Lucas says that similar instances of artificial shortages can also emerge for human capital in already undersupplied areas. He contends that “if nurses, doctors and other critical human resources determine that through local content policy they can benefit from increased earnings, then they will opt to pursue this option. By doing so it again creates artificial shortages in other already stretched areas.”

The UG Business Professor says, however, that amid concerns about artificial shortages, one possible unintended but highly beneficial consequence of any local content policy “could be a significant shift of population away from the coastline towards regions close to the oil and gas sector. He said that while it is possible that a significant number of supplies which can yield returns from local content policy are likely to come from the coastline and traditional regions of production, “incentives could be provided to encourage firms to relocate to areas currently underpopulated,” Lucas added.

Article adapted from: https://www.stabroeknews.com/2017/business/10/27/local-content-policy-must-embrace-strong-regulatory-practices-to-protect-against-fronting-ug-business-professor/


School of Business seeks to consolidate UG's role in responding to local skills scarcity headaches

7th August, 2017 0 comments

When the University of Guyana’s (UG) School of Entrepreneurship, Business and Innovation throw open its doors at Turkeyen and Tain to students for the first time later this month, the institution will be beginning its ascent to new heights in pursuit of the relevance of the offering of the institution to the development of Guyana.

SEBI’s Visiting Professor Leyland Lucas is unmistakably upbeat about the transformative effect that SEBI can have, as much on the informal sector as on the traditional public and private sectors. He points out that the significance of SEBI reposes in the fact that it is not an abstract academic contrivance but a response to what is felt to be a critical developmental need that has been overlooked for far too long.

SEBI, Professor Lucas says, emerged from three sets of considerations: the pronouncement made by President David Granger regarding the need to look beyond the traditional public service for viable employment options, the “vision” on the part of UG’s Vice-Chancellor Professor Ivelaw Griffith in seeking to take the institution in a direction that renders it more relevant and the feedback gleaned particularly from private sector institutions and entrepreneurs regarding the paucity of skills available to fuel the movement of the private sector.

What makes SEBI both unique and critically relevant to the country’s developmental needs is its distinctive flexibility, its ability to respond to both the training needs of students seeking a formal academic qualification as well as private and public sector entities hoping for the targeted upgrading of specialized disciplines and skills of their employees to render them more relevant to the entrepreneurial requirements of the enterprises that they serve. There is too, Professor Lucas says, a third rung on the ladder of education and training that allows for individuals (or groups) wrestling with the myriad challenges of managing modest entrepreneurial endeavours to benefit from SEBI’s practical guidance provided through structured programmes.

At the level of its academic programme SEBI will offer conventional degree programmes in disciplines that include Accounting, Finance, General Management, Tourism Studies and Supply Chain Management, among others. Beyond these there are more targeted programmes, fashioned out of the particular requirements of the participants and targeting the needs of individuals and public and private sector institutions. The latter focus of SEBI, Professor Lucas says, embraces a target group that ranges from those public and private sector institutions that have been forever clamouring over the lack of skills, to the host of individuals and groups in the informal sector including small vendors whose absence of entrepreneurial know-how have been largely responsible for the challenges they have faced in seeking growth for their businesses.

Long before the exhaustive consultations between UG and its various audiences that spawned the creation of SEBI had been concluded, representatives of deficient local public and private sector organizations had already found their way to Turkeyen to plead their various skills-scarcity cases and to seek the university’s help.

All of this is taking place against the backdrop of the reality of a university which is not only seriously cash-strapped, but still lacking in some of the requisites necessary for the effective delivery of its existing curriculum. Lucas himself admits that when consideration is given to offering the SEBI programme on both of the university’s campuses it becomes an undertaking that is beyond the capability of UG alone. He says that the recruitment of individual faculty, over time, is clearly necessary, but the many and varied national needs to which SEBI seeks to respond do not allow for any further prevarication in the launch of the initiative. To meet SEBI’s immediate needs, the existing corps of lecturers in the various disciplines, volunteer diaspora academics, and experienced and successful local entrepreneurs, managers and business support organizations will be pressed into service, as much for their formal qualifications as for their experience to help deliver a curriculum comprising both formal classroom instruction and field exercises as well as informal coaching designed to respond to the many and varied needs of the SEBI curriculum.

At the levels of both faculty support and student intake Lucas anticipates a measure of broader Caricom involvement. He anticipates what he says is likely to be “a measure of UWI support in the provision of teaching resources,” whilst two countries in the region, Antigua and St Lucia have already signalled to the university their interest in benefiting from the training that SEBI seeks to offer.

At intervals during his interview with the Stabroek Business Professor Lucas returned pointedly to the significance of the evolution of SEBI, not least, the fact that UG’ newest education and training compartment derives from what has been widely determined to be some of the critical human resource deficiencies in the society. The dialogue with the broader society – the public and private sectors and the modest entrepreneurial aspirants – he says, will persist through the creation of an Advisory Board that will seek to reflect the many and varied interests that spawned SEBI in the first place and which will play a central role in charting SEBI’s course, going forward.

Article adapted from: https://www.stabroeknews.com/2017/business/08/04/school-of-business-seeks-to-consolidate-ugs-role-in-responding-to-local-skills-scarcity-headaches/


UG launches innovative business school

10th July, 2017 0 comments

IN keeping with the constantly changing economic environment, the University of Guyana (UG) on Friday launched its School of Entrepreneurship and Business Innovation (SEBI) with the aim of moving away from conventional teaching.
Members of the private sector, the education sector and other stakeholders gathered at the Roraima Duke Lodge in Kingston to witness the unveiling of the banner bearing the insignia of the new faculty.

The new school, which is set to open at the start of the new semester in September, will offer new undergraduate and graduate degrees, executive degrees and short-term programmes.
Students who were engaged in management studies through the university’s Social Sciences Faculty will be able to continue their studies under the new school, and even be able to pursue areas such as accounting, finance, and supply chain management among other things.

“Some of what is happening is, we will be shifting the management department and offering new degree programmes such as entrepreneurship,” Vice-Chancellor, Professor Ivelaw Griffith said at the opening.
“Also, we will not be waiting to offer degrees, because we will have a number of courses and specifically tailored programmes that can be done in days, weeks and even months,” he added.
As opposed to the Faculty of Social Sciences, the school will be moving away from just creating opportunities for entrepreneurship in thinking and dreaming, and looking towards entrepreneurship in doing.

In order to ensure the desired outcomes, a thorough feasibility study into the project was done after the idea was first mooted in 2016.
The process included local, regional and international stakeholders, who explored several ideas that were later conceptualised into the school’s curriculum.
Professor Griffith alluded to the inclusivity of the project, pointing out that stakeholders visited areas in Regions Six (East Berbice-Corentyne), Two (Pomeroon-Supenaam) and 10 (Upper Demerara-Upper Berbice) in order to hear the views of persons who will potentially benefit from the SEBI.

DELIVERING THE PRODUCT

“We have come a long way, and we intend to start delivering the product this coming semester,” Professor Griffith said, adding:
“We have already sent out the implementation team, members of the technical unit and other persons in all the elements of the university who are working towards the actualisation.”

The team, he said, is now in the process of building the capacity of staff by hiring lecturers and administrative professionals.
The Dean Designate of SEBI, Professor Leyland Lucas, followed up on what the Vice-Chancellor said, adding that they have recognised the changes in the needs of the nation; therefore an institution that is responsive to its needs is necessary to ensure that the nation has the right skills, competence and capabilities.

“Everything we have set up here is geared towards providing the nation with what it needs to move forward in both the public and private sectors,” Professor Lucas said.
Their mandate is expected to be carried out through a system called “ESCAPE” (Ethics, Superiority, Academics, Professionalism and Engagement).
ESCAPE, he said, will be complemented by CEED-Centre for Entrepreneurship and Economic Development, which will let persons who are majoring in other fields join forces with those in the management fraternity and create a money-making initiative.

Mexico’s Ambassador to Guyana, Mr Ivan Sierra Medel, was also in support of the intervention, noting that SEBI can become the strategic asset to take advantage of international best practices and successful experiences in specific fields of doing business.
He, however, suggested that in order to have dialogue with the world, UG needs to introduce aspects such as foreign languages, internships, mentoring and confidence-building at the school.
Members of the private sector echoed similar sentiments, but pointed out that tertiary education has remained stagnant for a while, so in order to tap into new opportunities, the work of SEBI will be necessary in developing the countries’ human capital.

Article adapted from: http://guyanachronicle.com/2017/07/09/ug-launches-innovative-business-school


UG launches business school

9th July, 2017 0 comments

The University of Guyana (UG) on Friday evening launched its School of Entrepreneurship and Business Innovation (SEBI), with the goal of educating and developing leaders and managers to contribute to the advancement of the nation.

Speaking at the launch at Duke Lodge, UG Vice-Chancellor Professor Ivelaw Griffith thanked those who helped make the vision of the business school a reality, while saying that it represented a partnership to creating opportunities for not only entrepreneurship in thinking and dreaming, but entrepreneurship in doing.

Griffith said the SEBI would begin tuition from the next semester as a team, led by UG’s Deputy Vice-Chancellor of Planning and International Engagement Dr Barbara Reynolds, has already been created to start working towards delivery.

SEBI programmes, Griffith said, will facilitate significant cross-discipline collaboration, allowing students in other areas to participate. He also said its programmes and courses would be internationally-accredited.

Professor Leyland Lucas, Visiting Professor in Business Strategy and Dean Designate of SEBI, told the launch that while the nation needs change, it also needs an institution responsive to its needs and one that ensures that it provides the skills, competencies and capabilities needed to move forward.

He noted that SEBI’s programmes, which will include undergraduate degree programmes in Accounting, Entrepreneur-ship, Finance, General Management, Supply Chain Management and Tourism, and graduate-level programmes in Entrepreneurship, Management, General Management and Sustainable Develop-ment, can all move the country forward.

Lucas, who also addressed concerns about accreditation of the programmes offered by the school, said that it will be accredited by one of the premier accrediting institutions in the world. He assured those in attendance that the degrees earned from SEBI will be recognised globally as the institution is establishing relationships with other entities to ensure professional certification.

Giving his congratulatory remarks at the launch, Ambassador of Mexico to Guyana Ivan Roberto Sierra Medel was optimistic that SEBI will jumpstart Guyana’s economic development. He anticipated too that the school will bring together academia and the private sector, Georgetown and the hinterland, and Guyanese around the world. “Somebody has to provide the specific training not only in strategy to tap into markets but in harvesting the tremendous friendship that can be part in successful economic engagements with the world,” the Ambassador said. “SEBI can become the strategic asset to take advantage of international business practices and successful experiences in the specific field of doing business,” he added.

SEBI has emerged from exhaustive engagements between the university and both the public and private sectors, as well as the intellectual effort of a feasibility study team that included highly qualified Guyanese in the diaspora, many of whom hold key administrative and academic positions at highly reputable universities in the United States.

Article adapted from: https://www.stabroeknews.com/2017/news/stories/07/09/ug-launches-business-school/


UG partners with Mexico for School of Entrepreneurship & Business Innovation

26th June, 2017 0 comments

The University of Guyana(UG) is partnering with Mexico to deliver its School of Entrepreneurship and Business Innovation programme.

Vice Chancellor of UG, Professor Dr. Ivelaw Griffith at a recent press conference said that Mexico, through the local embassy, has committed to providing an instructor in the Spanish language for the new programme.

“We’re asking every student that graduates from that School of Entrepreneurship and Business Innovation has one language other than English. Spanish will be one of those languages; Mandarin will be one of those languages and Portuguese,” Professor Griffith explained.

“Mexico through its embassy and the UG have been developing over the last year several different strands of partnership,” the Vice Chancellor said. In May, the Mexican Embassy sponsored a presenter to participate in the Turkeyen and Taine Talks on the oil and gas sector.

The UG has been restructuring its curriculum to meet the practical capacities of the local business community.

UG has been developing partnerships and “friendships” with local and international partners as part of its renaissance movement. The Vice Chancellor noted the renaissance project seeks to take different non-traditional paths and build friendships and partnerships in a variety of ways to improve the functioning of the University.

Article adapted from: http://gina.gov.gy/ug-partners-with-mexico-for-school-of-entrepreneurship-business-innovation/


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