COMMENTARY: The Caribbean’s Comedy of Errors for Promoting Entrepreneurship – Agencies mandated to grow businesses kill them by not paying their bills.

 

Meegan Scott

I am left to wonder if irony is being used as a randomized trial for facilitating the evaluation of the impact of some Caribbean development agencies and governments with a mandate for poverty reduction and supporting entrepreneurship.

The incredible comedy of errors: existing businesses— usually small and medium sized consultants or service providers delivers services to development agencies; government departments or international development projects being implemented by one or more of the two aforementioned players.  Contracts are issued with penalties for delivering services late.  Services are delivered on time and within budget however, the service providers go for months at a time without compensation. At times there is no sign-on payment, yet SMEs are expected to thrive and grow while allocating operations time and cost without compensation for four or more months at a time.

In 2017 alone, several consultants and service providers across the region suffered the woes of not getting that cheque for valuable services they provided. One lost office space rented because the rent could not be paid. Others earned bad credit reports and or could not access loans. Relationships suffered as a result of consultants working 60-hour work weeks in order to deliver outputs —accepted and used without pay leaving them unable to finance their portion of household bills.  Others have lost friends as a result of defaulting on loans they intended to pay with monies earned but not received while development agencies and government departments sit on their monies.  Your SMEs should not be called upon to fund development at that level. One consultant even had her car seized while hundreds of dollars US was owing to her.

It is mind blowing to think the leaders of such organizations are not aware of the relationship between cash, the survival and growth of businesses.  How can so many of these entities continue to receive awards and recognition when it is clear that they have lost pieces of their missions and forgotten the scripts of their purpose?  I hope those failures are not born of a disregard for their own and a culture void of service.  IBM, left this message with me many years ago as a student member of the UWI-IBM Leadership Quality Circle, “You can’t spell Quality without “I”.

How do we allow hypocrisy and disregard of our own to retard economic growth and development?

How do we pay lip service when the Region faces a threat to its development and there is a marked absence of high performing businesses in the region as well as in its diaspora markets?  The high performing businesses to which I refer employ 100 or more (individuals) and make close to or more than US $500,000.00 per annum. I use those benchmarks because we are talking earnings, employment creation, growth and competitiveness globally. But I need not go that far you can use your own Caribbean benchmarks. The Region is old enough to have delivered dozens of Golden Krusts (a Caribbean food chain based in New York). Of course, the agencies have made significant contributions, it is just a pity they create with one hand and destroy with the other.

It is ironic that the staff of the very development agencies receive pension, health insurance and all kinds of benefits while the service providers must foot their own cost. Staff in those agencies look forward to their monthly cheque in order to pay their bills. How can entrepreneurs grow businesses when they are incurring debt, paying additional cost on credit cards and utility bills, are unable to take advantage of sales or bulk purchases or to pay for their health care?  In some agencies leadership were content to go home with their Christmas bonuses while service providers where not paid. But more than that they did not feel any obligation to say when service providers would be paid.

It is high time that Caribbean consultants and service providers make it clear that they operate businesses and manage operations against cash flow. Do not cower in the hope of getting another contract. Write those letters to those agencies and government departments; then engage the services of a lawyer if necessary.

It cannot be business as usual when the very entities charged with poverty reduction and facilitating the growth of businesses are creating poverty, strangling existing businesses and wiping out any chance for some entrepreneurs to attain financial wellbeing and economic security. Consultants should not have to name and shame entities in order to collect!

How many employees of those agencies can go for two months without their salaries? How then do they expect consultants and service providers who operate on a feast and famine cycle to survive? Overdue— is the need for additional indicators and penalties for agencies who feel it is within their power and ethical practices to so wilfully create poverty and kill businesses already in the growth phase or exiting the start-up phase, while claiming to support start-ups and other poverty alleviation initiatives.

Black history month is the perfect time to rewrite that plot or change the actors; respect and support your Caribbean and Black SMEs or get out of business. Acting should be left for the theatres.

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7 Comments

  1. Concerned
    April 11, 2018

    This, like other serious issues need to be highlighted for the public’s attention since we’re all stakeholders in development. Governments, Agencies, as mentioned above, even big companies should be held accountable when they’re at fault because the small business get their share of discipline when they fall short.

    I agree that small business should seek the intervention of their lawyers when and where necessary in resolving such matters.

  2. CCS
    February 6, 2018

    I completely concur with this statement and something have to be done to stop that trend .

  3. Michelle Scott
    February 4, 2018

    Agencies have long been able to access sources of loans and debt forgiveness unlike SMEs.
    Now when credit history and debt payment is so crucial to growth especially in small businesses these same agencies have failed to live up to the expectations of the very policies they claim is vital for growth and regional advancement .

    These failure to pay stifle growth. How do these agencies claim to support SMEs and expect to achieve
    to help with reducing poverty and achieving the Sustainable Development Goals?

    It is time service providers speak up and these entities and organizations be fined for destroying businesses and not be allowed to act as thought they promote growth and development when in fact they do not
    Crime and poverty stem from some of these very actions and poor business practices should not be rewarded. Pay for services received it is business not charity.

    Risk reduction and management , investment growth and regional growth results from honest business…

  4. Meegan
    February 4, 2018

    Roger, having entrepreneurial experience, or not having it is part of the problem indeed. But I believe respect and a culture of service could also prevent some of the problems. I can imagine you incurred cost whether in time lost preparing for the event instead of earning from something else or monies invested.

  5. February 4, 2018

    I could right books about that subject. Let me just say: you are so right. Sadly this is the reality. And even sader: those pencil pushers actually think they are doing a job.

  6. Anonymous
    February 3, 2018

    Great article, this is a topic which has been neglected and requires much attention!

  7. Roger Burnett
    February 2, 2018

    The crux of the problem is that those who comfortably sit behind desks in developing agencies and related government departments have never run a struggling business of their own.

    One such agency, at short notice, begged me to host a studio visit for visiting funding agencies. I moved heaven and earth to freely accommodate the visit, but it was cancelled, without notice, because their tour was running behind schedule.

    Having a degree in business management is a different kettle of fish to practical experience.

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