General Economic Information of Guyana
The National Development Strategy (NDS) sets out priorities for our nation's economic and
social development for the next decade. The draft document - which is made up six volumes -
contains careful technical analysis of problems and future prospects in all sectors of the
economy and in areas of social concern. It presents us with an opportunity to work together to
prepare Guyana for the challenges of the next century.
The draft NDS - which was launched on Monday 6th January, 1997 by the late President His
Excellency Dr Cheddi Jagan - is a result of over 300 hours of meetings by 23 "technical working
groups" consisting of over 200 Guyanese. These efforts were co-ordinated by the Ministry of
Finance, but the contributors came from a wide cross-section of organisations including the
private sector, government agencies, non-government agencies, and the University of Guyana.
The Carter Center assisted the Ministry of Finance with the overall co-ordination of the exercise.
This article summarises the key recommendations made by the NDS in the areas of
macroeconomics (Volume 2), the social sectors (Volume 3), the productive sectors (Volume 4)
and the infrastructure sectors (Volume 5). We encourage you to read the summaries and send
your comments and recommendations to the NDS Secretariat, Ministry of Finance, Main Street,
Georgetown (Tel: 02-67242; Fax: 02-73458).
The Macroeconomic Strategy (Volume 2)
The macroeconomic strategy put forward in the NDS is directly concerned with economic
growth, employment, the distribution of income, inflation, poverty and sustainability in fiscal,
environmental and institutional terms.
Principal Macroeconomic Issues and Constraints
In this chapter, the NDS looks at the issues and constraints facing Guyana at the level of the
economy as a whole, such as the level of debt, the lack of competitiveness of several of the
country's exports, and the weaknesses in the public sector. In some respects, a number of
improvements have occurred in the economy, including a reduction in inflation, smaller "fiscal
deficits" (the gap between government expenditure and revenue), higher foreign exchange
reserves, and a stronger banking system. The NDS identifies some remaining problems:
- a high level of external debt. A number of debt relief initiatives have reduced Guyana's debt to
its donors. However, debt payments remain high, which severely squeezes the funding for vital
infrastructure, social services, and salaries in the public sector. The NDS calls for continued
lobbying for additional debt relief and other debt reduction measures.
- uncertainty over preferential access to rice and sugar markets. This is serious given the
importance of these sectors and the fact that many of the producers are currently unable to
compete at the world market price. The NDS recommends continued lobbying for the
maintenance of preferential markets, and various strategies to modernise operations and improve
competitiveness.
- a lack of competitiveness of several of Guyana's exports. The NDS calls for a reduction in
import tariffs, as well as reforms in the banking sector to ease exporters' access to credit and
foreign exchange.
- a need for the clarification and strengthening of the incentive regime for private sector
investment. The NDS recommends a clear investment code that provides comparable treatment
to investors in all sectors; the simplification and greater transparency of the investment approval
process; and a review of consumption taxes and customs duties, so that different products and
sectors are treated more equitably. The NDS also calls for the acceleration of the privatisation
process.
- very low levels of pay in the public service, resulting in staff shortages (especially at the
management levels) and an inadequately skilled workforce. The low level of pay is linked to the
government's narrow revenue base. In addition to measures to increase government revenues,
the NDS recommends the progressive improvement of salaries in the public sector; reforms to
the budgeting system; and a more focused role for the government. The NDS suggests that by
concentrating on guidance through policies, the government can make the best contribution to
economic growth.
Principal Orientations of Macroeconomic Policy
The objectives of macroeconomic policy for the next ten years can be summarised as follows:
- Promote continuing high growth rates of output and employment.
- Ensure that inflation remains at relatively low levels.
- Ensure that the population's basic needs are met and that the growth process contributes to a
reduction in poverty.
- Ensure that the growth path is sustainable in fiscal, environmental and institutional terms.
In order to meet these objectives, it will be necessary to meet a number of sub-objectives:
- enhance the institutional and financial effectiveness of the public sector to fulfil its roles and
responsibilities.
- adopt policies that encourage exports and improvements in the international competitiveness of
Guyana's producing sectors.
- continue to improve the efficiency of the banking system, to promote both savings and
investment.
- promote policies that enhance the role of the private sector in the economy and encourage
greater levels of participation in decisions related to economic development and economic
management on the part of families, communities, associations, and local governments.
The External Sector and Monetary Management
The principal objectives of the NDS in this area are to promote the growth of output and
employment and to keep inflation at low levels. The NDS recommends:
- strategies to support the development of international trade. The NDS suggests, for example,
the creation of an Export Processing Zone (EPZ) which will provide substantial employment
opportunities, export earnings and foreign exchange. The NDS also calls for a review of the
fiscal regime; the improvement of the system of agricultural research to give sectors such as rice
the opportunity to enhance their technologies and become more competitive; the restructuring of
GO-INVEST to separate its investment promotion function from its investment approval
function; and the strengthening of technical vocational education and training (TVET) facilities
to enhance to the supply of skilled labour.
- measures to ensure an appropriate exchange rate.
- the maintenance of the government's "monetary policy", as it relates to interest rates, the supply
of money, inflation and legislation concerning the banking sector, the Bank of Guyana and the
financial markets.
Fiscal Policy and the Public Sector
In this chapter, the NDS looks at appropriate policies relating to government spending and
revenue, as well as at the problems faced in the public sector. The NDS recommends:
- the continued reduction of fiscal deficits. Domestic borrowing to pay for the excess of
spending over revenues received causes prices and interest rates to rise. This, in turn, reduces
the rate of private sector investment. Therefore, it is important to limit and prioritise
expenditures and enhance revenues.
- the prioritisation of expenditure on basic social needs for health, education, poverty alleviation
and social infrastructure such as potable water and sewerage systems. Other priorities should be
productive infrastructure (especially transport and electricity) and public sector salaries. In
addition, the NDS recommends that subsidies and transfers should be well targeted on social
priorities.
- the enhancement of revenues, through a review of the fiscal regime, the broadening of the tax
base, improved collection and staff training. The NDS stresses the importance of implementing
the Revenue Authority. The incorporation of the Inland Revenue Department and the Customs
and Excise Department into one body should reduce administrative inefficiency, informational
gaps, and the overlapping of responsibilities. The NDS also supports the proposed computerised
Unique Tax Identification Number to facilitate the sharing of information between agencies.
- the examination of the feasibility of introducing value added tax (VAT). With the move to a
lower Common External Tariff (for CARICOM countries), it will be important to move away
from consumption and import taxes in order to maintain current levels of revenue.
- the reduction of the high staff vacancies in the public sector. This will require action on wages;
the NDS recognises that the issue of wages must be tackled before any other reforms can be
properly implemented. In addition to consolidating some of the vacancies into more highly-skilled positions, the NDS calls for a review of the size of the public sector in line with its role;
the development of a transparent pay policy, an incentive structure, performance evaluations,
and clear disciplinary procedures; the introduction of retraining schemes to enable staff to fill
vacancies at higher levels; and, the training of managers in the management of change.
- the improvement of expenditure management, including the ending of the separation of capital
and current expenditure management; the move to "programme budgeting" which rationalises
expenditures based on programme objectives and results; the continued computerisation of the
budget process; and, a recognition of the important links between resource utilisation and the
NDS.
- the adoption of a more clearly defined and focused role for the government. The NDS sees the
private sector as the engine for growth, employment and higher incomes. It is recommended
that the government focus mainly on assuring the provision of basic social services and
infrastructure, and that it strengthens its regulatory and monitoring role, especially in the areas of
natural resource development and the financial sector. Above all, the government should ensure
that the basic needs of the poorest groups in the population are met.
- the continuation of the privatisation programme. This is recommended by the NDS as part of
the greater emphasis on the private sector. The NDS also suggests the establishment of an
updated regulatory framework for newly privatised utilities.
Debt Management
Guyana faces high debt payments for both domestic and external debt, despite declining interest
rates (in the case of domestic debt) and recent debt write offs (in the case of external). This has
resulted in a reduction in the resources available for important expenditures, such as social
infrastructure. The NDS recommends:
- strategies to deal with the domestic debt, including strengthened management of the money
supply and the use of appropriate levels of "treasury bills" (on which the government must pay
interest); prudent fiscal and monetary policies to lower inflation; and reductions in fiscal deficits
and the level of domestic debt.
- strategies to deal with the external debt, including policies to accelerate economic growth (to
reduce the relative size of the debt); further efforts to obtain debt write-offs; the paying off of
some non-concessional debts with concessional borrowing; and various mechanisms to reduce
the cost of debt servicing.
Banking Policy
The NDS seeks to promote the viability of the banking system while preserving competitiveness
and a sound financial environment. The commercial banks and other financial intermediaries
play an important economic role, such as by mobilising savings for investment purposes. The
NDS recommends:
- an improvement of accounting and disclosure standards, to ensure the harmonisation of
practices across different banks (including local operations of foreign-based banks).
- the introduction of regulations to prevent credit concentration (where significant amounts are
lent to a few borrowers) and the associated risk, as well as regulations concerning provisioning
for bad debts, in order to maintain the stability of the financial system.
- the establishment of a Legal Review Committee to look at existing financial laws and identify
areas of obscurity and uncertainty, and to make recommendations for tighter enforcement of
contracts.
- the strengthening of the Bank of Guyana's ability to supervise financial institutions. This will
require legislative reforms to provide it with sufficient legal powers.
- the involvement of Guyana in the consideration of a Regional Stock Exchange for the Eastern
Caribbean.
The Social Sectors (Volume 3)
Social policies are given a central place in the National Development Strategy (NDS); Volume
III (The Social Sectors) is the largest of the six volumes of the NDS. Social policies are crucial
to satisfying the national objectives of poverty alleviation, satisfaction of basic social and
economic needs, and sustainment of a democratic and fully participatory society.
Poverty Alleviation/Reduction
Despite recent improvements, poverty remains a critical issue for many people in Guyana. The
NDS has four priorities for poverty alleviation:
- the need to promote rapid and sustainable economic growth in a labour-intensive manner, since
this expands employment opportunities and raises income levels. As exports are generally the
most labour-intensive products, they should be promoted through, for example, an export
processing zone.
- the need to increase the productivity of the poor. For the poor to truly benefit from these
employment opportunities, emphasis must be placed on formal and non-formal education and
training, improved access to land for small farmers, and enhanced access to credit for micro and
small enterprises.
- reform of the institutional structure and operating procedures of social safety nets. Until
everyone is able to meet their own basic needs, effective social safety nets targeted at the poor
must remain a priority. The NDS also recommends the strengthening of the relevant Government
agencies, and sees an important role for non-government organisations.
- policy reforms to replace generalised subsidies with ones that are targeted on the poor.
Recognising that resources are not available for addressing all the problems of all groups
immediately, the NDS suggests that priority be given to women and children, youth, senior
citizens, the disabled, and the Amerindian communities.
Environmental Policy
Environmental issues affect the health, well-being and future of the people of Guyana. The
environmental policies of the NDS intend to promote the sustainable management of natural
resources and preserve a healthy environment in coastal, urban and hinterland regions:
- The NDS is strongly in favour of the Environmental Protection Agency as a body to focus on
issues such as, the management of renewable resources, environmental degradation, agricultural
and industrial pollution, public awareness and legislation.
- In coastland areas, the NDS calls for the rehabilitation and maintenance of the sea defences and
irrigation infrastructure, as well as protection of the mangroves.
- In urban areas, the NDS recommends strategies to deal with waste management and pollution.
- And for the hinterland, the NDS supports a National Forestry Code of Practice and a similar set
of standards for the mining sector; the use of "environmental impact assessments" for forestry
and mining operations; the development of non-timber uses of forests; the promotion of
"ecotourism"; and the establishment of a system of protected areas to preserve Guyana's unique
biological diversity.
Health Policy
The objectives of the NDS are to improve the population's access to health care and the quality
of that health care. Throughout, the aim is to ensure that no-one is denied access to health care
because they are unable to pay. Recommendations include:
- improvements to the referral system alongside improvements in local health care facilities. It
is also suggested that the Ministry of Health becomes the sole health authority in the public
sector, and that individual hospitals are given greater autonomy.
- improvements in the supply, management and distribution of drugs and medical supplies.
- increased investment in primary health care (with the establishment of a primary health care
division in the Ministry of Health). It is suggested that efforts be made to improve hinterland
access to primary health care, and that overall priority be given to children, adolescents, and
pregnant or lactating women.
- the tackling of the staffing and resource constraints in the sector.
- the upgrade of air and water ambulances and an expanded programme of rotating physician
visits to some of the more remote communities.
- the encouragement of private medical personnel to practice in hinterland areas.
Educational Policy
The NDS recommends strategies to boost the levels of literacy and numeracy in the population
and improve the availability of all levels of education from pre-school care and nursery, to
technical vocational education and training (TVET), adult education and university. The NDS
recommends:
- increases in funding, particularly for the primary level - which faces the greatest constraints,
and yet has the greatest payoffs for economic development. In addition, it is suggested that
regional variations in expenditure be reduced.
- increases in teachers' salaries and the introduction of performance incentives.
- improvements in teacher training (including for special needs education) through the setting up
of new training centres.
- improved targeting of subsidies.
- encouragement of private sector and non-government organisation involvement in the provision
of education and training.
- the development by the University of Guyana of a long-term plan for establishing centres of
excellence in areas such as tropical forestry and forest management, geology and mining, and
fisheries management.
Women, Gender and Development
This chapter of the NDS looks at the situation of Guyanese women in terms of poverty,
employment, health, education, the household, and the media. Recommendations are made to
tackle the higher incidence of poverty amongst women, the difficulties women face in the work
place (such as low pay), the high incidence of domestic violence, and the specific health
problems they face (including malnutrition and high maternal mortality). Specific suggestions
include:
- the promotion of microenterprises and the creation of a national credit institution.
- investment in distance learning education and training in non-traditional (and higher paying)
fields.
- the introduction of "family-friendly" working environments (through such things as "flexi-time", child care facilities at work, and maternal and paternal leave).
- increased investment in social services.
- strengthening of the Women Affairs Bureau alongside the establishment of a National
Commission on Women that will recommend and lobby for policy reforms.
- a greater role for the media in raising public awareness, as well as enhancing women's
understanding of their legal rights.
Amerindian Policies
The NDS seeks to tackle issues facing Amerindians in the areas of land, poverty and education.
Recommendations are made to tackle Amerindians' marginalisation in the development process:
- reforms to secure Amerindian land rights. Those communities affected by resource
development and extraction should share in the benefits.
- the expansion of the Amerindian Development Fund. It is recommended that funds be spent on
community development projects and training.
- increased investment in health facilities, schools and training centres, as well as improvements
to salaries of personnel working in hinterland areas.
- the development of more relevant curricula in schools.
- the strengthening of the Ministry of Amerindian Affairs.
Urban Development and the Housing Sector
The main objective is to improve access to housing, basic services and amenities in Guyana's
cities. The sector faces a lack of adequate planning; human and financial resource shortages; a
scarcity of land for housing; and poor water and sewerage systems. The NDS recommends:
- strategies to increase the supply of housing. One suggestion is to make land available in
freehold to entrepreneurs who will commit to constructing housing on the lots, while the
Government commits to supplying the necessary infrastructure services. It is suggested also that
the Government supply serviced lots to needy families.
- policies to enhance the capacity of lower and middle income groups to purchase and rent
housing. One method would be the use of rental and mortgage supplements for low income
families. In the case of State land occupied by squatters, an option would be to grant freehold
title in exchange for a supplemented mortgage.
- the strengthening of the municipalities.
- the development of export processing zones and industrial estates to generate employment in
urban areas.
- the allocation of land to the greenbelts to curtail urban sprawl.
The Role of Regional and Local Government
The objective of the NDS is to create a more decentralised framework of regional and local
government. Recommendations include:
- the clarification of the structure, roles and responsibilities of the Regional Democratic
Councils, the Neighbourhood Democratic Councils and the numerous other levels of local
government.
- various administrative and legislative reforms to give a greater degree of autonomy to regional
and local government.
- the streamlining of the local government structure and the strengthening of regional and local
agencies through staff training and improvements in the budgeting system.
The Productive Sectors (Volume 4)
- Agriculture and Forestry -
Agriculture is the single most important sector of Guyana's economy; more that 70% of
Guyana's population live in rural households and are primarily dependent on income generated
from agriculture and related activities.
Rice Development
Rice is Guyana's second major crop and a major source of income, employment and foreign
exchange. Despite improvements since the late 1980s, the rice sector continues to face a
number of constraints that hinder its development. The NDS makes the following suggestions to
address problems such as, the lack of competitiveness on the international market, inadequate
access to credit and land (especially for small farmers), and institutional weaknesses:
- strengthen the Guyana Rice Development Board (GRDB), in terms of its ability to conduct
forward looking analysis; regulate contractual procedures, payment mechanisms and rice
quality; and raise revenue from sources other than export taxes, which decrease the
competitiveness of the sector.
- reinvest the benefits from Guyana's preferential export markets back into the rice sector to
improve competitiveness. The rice sector may find itself in a precarious position if and when
the preferential markets provided by the "Lomé IV Convention" are lost or reduced. Efforts
should centre on focusing the sector on the CARICOM market; rehabilitating infrastructure,
such as wharf facilities, water channels, and D&I; the creation of a deep water harbour; and
diversification within the rice sector.
- increase productivity and promote technology development by, for example, improving access
to credit for both millers and producers. The NDS also calls for the promotion of research,
based on market demands and the experiences of farmers, to look at productivity, yield
variability, pest control, and the development of characteristics demanded by the export and
domestic markets.
The Sugar Industry
Historically, the sugar industry has played an important social and economic role within Guyana.
Today, it is the largest single employer in the country. The NDS makes recommendations to
reduce its high production costs and increase its competitiveness; particularly important given
the likely reduction in the preferential prices Guyana receives through the European Union:
- continue lobbying for the maintenance of preferential markets. There is currently uncertainty
over preferential access to sugar markets. This is serious given the importance of this sector in
the economy and the fact that less efficient estates are currently unable to compete at the world
market price.
- invest in the modernisation of the industry and reduce recurrent production costs. The NDS
calls for a thoroughgoing review of the industry's cost structure.
- pursue policies to improve the sector's competitiveness, including an appropriate exchange rate
policy.
- strategies to enhance the financing, management and efficiency of the sector, such as through a
participatory privatisation involving workers.
Other Agriculture
Non-traditional crops are labour intensive and generate substantial levels of foreign exchange.
Promoting the output of this sector will, therefore, increase rural incomes, employment and
foreign exchange earnings, and reduce rural poverty. The NDS recommends:
- the development of land and infrastructure. As part of this effort, the Lands and Surveys
Department should be strengthened to enable it to improve its surveying capability, provide
more efficient services to farmers, and co-ordinate with other land management agencies.
Government should also ensure reliable electricity and potable water supplies to rural districts.
In addition, it is suggested that participatory programmes be developed for the operation and
maintenance of drainage and irrigation schemes.
- the focusing of research on selected commodities and certain geographic zones based on
marketability and production potential. The Ministry of Agriculture should focus on developing
agronomic programmes for crop varieties that have assured markets, taking into consideration
their applicability to existing farming conditions and the varying economic resources of farmers.
It is also suggested that plant protection and quarantine services be improved.
- the encouragement of private sector involvement in the sector through workshops, the creation
of a computerised information centre, and the reintroduction of the National Science Research
Council. Private sector involvement should also be encouraged in agricultural extension.
- the assistance of farmers in accessing credit. For example, the government should support rural
development centres and agricultural co-operatives which can assist farmers in preparing
proposals to credit agencies.
- the establishment of an advisory services agency that informs farmers of market
opportunities, assists in finding inputs and obtaining access to markets, and directs farmers'
concerns to relevant agencies. One option is marketing centres managed by the private sector.
- the promotion of agriculture as a core subject in school curricula. Learning institutions should
be better equipped and practical agricultural training must be emphasised.
- the introduction of strategies to promote livestock nutrition and health, including the
development of energy based and protein feeds production; improvement of the productivity of
saline and acid soils to ensure adequate pasturage; and strengthening of abattoir and veterinarian
services, financed partly by cost-recovery measures.
The Institutional Framework for Agriculture
The institutional framework for the agriculture sector is made up of various agencies ranging
from the Ministry of Agriculture and the National Agricultural Research Institute (NARI) to the
producer organisations and Neighbourhood Democratic Councils (NDCs). The NDS makes a
number of recommendations to deal with the constraints these agencies face, such as limited
financial and human resources; weak linkages between national agencies; a weak policy review
capacity; and a lack of decentralisation:
- the development of a plan by the Ministry of Agriculture for the future direction of agricultural
support services, which would prioritise government functions and provide measures for the
development of the small farm sector.
- the provision of financial support for the development of the small farm sector by, for example,
targeting a proportion of the preferential gains from rice and sugar exports; introducing higher
rentals of State land and taxes on freehold; and initiating a system of charges for larger farms for
extension services.
- the strengthening of local level institutions, such as the Neighbourhood Democratic Councils,
non-government organisations, and producer organisations. It is suggested that the Government
grant NDCs greater scope in the determination of resource use, and provide technical training in
legal issues, management, finance, budgeting and resource mobilisation.
- the introduction of Government incentives to encourage banks to locate branches in rural areas,
and the consideration by banks of group lending schemes.
Agricultural Land Policy
The NDS makes recommendations to promote rapid growth through improvements in the
efficiency with which land resources are used, and to support poverty alleviation by increasing
access to land for the landless and small rural farmers:
- improve leasing practices by, for example, developing clear selection criteria for approval and
denial of leasing applications; ensuring both the land selection committee and the regional
committee be comprised of elected members; and speeding up the approval process.
- formulate a standard agricultural lease with provisions for 99 or 999 year limits; transferability
after 5 years; the ability to use leased lands as collateral or to sublet leased land without the
approval of the lessor; and the option to convert to freehold after 10 to 15 years beneficial
leasehold.
- annually adjust land rental rates to market values, with special provisions made for the rural
poor. The revenue generated by the new rent levels should be re-invested back into improved
land administration and agricultural development.
- promote better utilisation of freehold agricultural lands by eliminating unnecessary restrictions
on land rental practices; and introducing a rural land tax (to discourage underutilisation of land).
- design a National Land Use Plan to define sustainable land use practices, targeting areas in
need of reforestation or suitable for long-term agricultural development. The Plan should give
special priority to benefiting the indigenous population, and deterring illegal occupancy of
reservation lands.
Forest Management
The forest industry represents vast economic potential for Guyana. The NDS makes
recommendations to increase the economic benefits derived from the forests; improve the
sustainability of the sector; and spread the benefits of forest-based development to Guyana's
rural areas:
- conduct a review of forest fees.
- develop a policy framework for concessions that will make the process more transparent;
protect the rights of the investors; and enable the enforcement of their obligations. The policy
will address the location and size of the new forest management concessions; the length of
tenure; questions of transferability; the sustainable use of forests for non-timber products and
nature tourism; and log exporting.
- encourage labour-intensive wood processing industries through fiscal incentives.
- strengthen and streamline the Guyana Forestry Commission (GFC). The GFC should focus on
sustainable forest management and move away from commercial marketing of forest products.
The NDS also recommends granting the GFC more autonomy with regards to raising revenue. A
new organisation, with a board made up from the private and public sectors, should be set up to
provide marketing and product development support, research and training.
Fisheries Policy
The NDS aims to maintain and improve the nutritional, social and economic benefits from the
fisheries sector in a sustainable manner. The following recommendations are made:
- support artisanal fishermen by improving cold-storage and processing facilities and the
marketing system.
- strengthen Guyana's fisheries management system (such as the Department of Fisheries and the
Coast Guard) to promote a sustainable use of fish stocks; improve the enforcement of
regulations; accurately assess current stocks; enhance the extension system; and improve quality
control to strengthen export potential. It is suggested that the Department of Fisheries be
reorganised and reinstituted as an autonomous Guyana Fisheries Commission.
- focus efforts more towards deep water finfish, and introduce strategies to limit fishing of
marine prawn and seabob to sustainable levels. Regulations for gear types should be introduced.
- develop a policy for the long-term development of the aquaculture sector, which is the sub-sector of fisheries with the greatest potential for expansion of production, creation of
employment, and generation of foreign exchange. Improvements in access to freehold land or
secure leases of a reasonably long duration will be necessary. Expansion of aquaculture
activities in shrimp production may be an important way to sustainably manage shrimp
populations, and maximise their export potential.
The Productive Sectors Cont'd (Volume 4)
- Non-Agriculture -
Outside agriculture, there are various important productive sectors that are addressed in the
NDS. This section summarises some of the recommendations made. Also discussed is the policy
framework for the private sector, which applies to all the productive sectors.
Policy Framework for the Private Sector
In the NDS, a central challenge has been finding the most appropriate ways of combining the
power of market forces, as the primary impulses to development, with the role of the State in
providing the development framework, monitoring the process, and providing special assistance
to target groups. The NDS makes various recommendations to ensure that the private sector
continues to play a key role in the growth of the economy and that it is the major engine of
employment creation and improved living conditions:
- the provision of infrastructural support to the private sector by the government.
- a focus by the government on upgrading the human resources of the economy through
education and training, as well as through the provision of basic social services.
- the development of a definitive national policy aimed at stimulating investments, industrial
performance and commercial development. The government should involve the private sector in
this process.
- a review of the tax system, especially with respect to consumption tax and import tariffs, in
order to facilitate private sector production planning and investment. The NDS also suggests
considering the feasibility of a value-added tax (VAT) as a replacement for consumption tax.
- the setting up of Export Processing Zones (EPZs) to promote and facilitate investment, as well
as to create employment and generate foreign exchange.
- the publication and wide distribution of a clear and simplified investment code. It is
recommended that a "one-stop" investment approval office be established to improve the current
time-consuming approval process. It is also suggested that a separate entity, made up of
representatives of the public and private sector, be set up to deal with investment promotion.
- the improvement of the information database on external markets and market niches, so as to
assist the private sector to search for new markets, in addition to the domestic market and
CARICOM. The NDS also urges that the government support the private sector by sharing
information on the availability of development aid and technical assistance.
Mining Policy
Despite the decline of the bauxite industry, mineral development has the potential to once again
become an engine for economic growth in Guyana. The NDS makes several recommendations
to deal with the constraints experienced in all subsectors of mining, and to ensure the continued
growth of the mining sector as a whole:
- the enhancement of the mining policy so that it embraces a fiscal regime, marketing
arrangements, policies on technology, security of titles, training, the environment, and an
approach to social issues in mining communities.
- the encouragement of infrastructure development related to mining. The high cost of
transportation and lack of essential services in the hinterland often deters foreign direct
investment.
- a review of the fiscal regime. Specifically, the NDS calls for a review of royalties, export
duties, and income taxes. It also suggests the introduction of fiscal incentives to encourage
technology that is environmentally friendly.
- the replacement of the Guyana Gold Board with a system of licensed and bonded gold buyers
who will be responsible for remitting royalties to the Government.
- the strengthening of the Guyana Geology and Mines Commission (GGMC). The GGMC needs
to commission a national mineral resource inventory, continue to explore state of the art mining
and milling technologies, and construct a modern integrated laboratory for relevant analysis and
testing.
- the establishment of a commission to reconsider land rental policies.
- the development of a programme for the bauxite industry, including the privatisation of
BERMINE and LINMINE.
The Manufacturing Sector
Guyana's abundant endowment of natural resources provides an important basis for
manufacturing development. However, for the growth of this sector to be realised, a number of
constraints need to be addressed. The NDS makes recommendations to promote the rapid
increase of production and employment in the sector:
- the creation of at least one Export Processing Zone (EPZ), located in close proximity to
deepwater harbour facilities and to the Linden -Lethem road link.
- the development of adequate social and physical infrastructure. In addition to the
improvements in the social sectors (discussed in Volume III), the NDS suggests improvements to
the electricity supply (including the privatisation of the Guyana Electricity Corporation) and to
the all-weather road network (especially the Linden-Lethem link). The high cost of transporting
raw materials for processing and the undependable power supply are two key constraints to the
development of the sector.
- the development of a labour force educated and trained for the modern era.
- the improvement of the policy framework, including the framework for the industrial relations,
the tax regime and exchange rate policy.
- the improvement of access to credit through institutions such as the Institute for Private
Enterprise Development (IPED).
Science and Technology
the establishment of a co-ordinating body for science and technology; essentially a new
National Science and Research Council with a different definition of its organisation and
functions. The NDS also suggests that there needs to be a clear and appropriate ministerial
responsibility for science and technology. The co-ordinating body would also be responsible for
reviewing the role of information technology in Guyana's development.
Labour and Employment Policy
The NDS aims to reduce unemployment and underemployment and the accompanying poverty
by creating greater amounts of productive employment and greater labour flexibility and
mobility. The NDS recommends:
- the development of a macroeconomic framework (see Volume II) to accelerate economic
growth, which in turn will increase both employment and real wages. The growth path
recommended in the NDS is one that is as labour-intensive as possible in the short term.
Specific measures would include the promotion of small and micro-enterprises, and the creation
of an Export Processing Zone.
- the establishment of a small business development department which will co-ordinate agencies
and bodies involved in this sector, work to certify and register businesses, and implement
government policies. The NDS also recommends the review of the Companies Act; the creation
of legislation to ensure small enterprises pay household and not commercial rates for public
utilities; and the waiving of costs associated with the transfer of personal property to a business.
- the development of a highly flexible and trained labour force. This will require a strong focus
on technical and vocational education and training (TVET) guided by the needs of the private
sector and partially subsidised by a small tax on the industry. The private sector and lending
organisations such as IPED should play a central role.
- the increase of Central Government salaries. Two alternatives are setting public sector salaries
at 70 to 80% of the private sector salaries in corresponding job classifications and the increasing
of real salaries in the Central Government by 100% over the next 5 years. The NDS also
recommends that wages and salaries be linked to performance.
- the establishment of a labour market information system as a basis for formulating,
implementing and evaluating human resource policies and training schemes, as well as to give
workers timely access to employment information.
- the creation of an industrial relations framework to resolve disputes, including improved
structures and procedures for bargaining and a move away from industry-wide bargaining.
Tourism
Guyana possesses vast areas of interior that are still pristine, with untouched forests that are so
diverse they can show the entire spectrum of tropical rainforest at its best. The potential for a
thriving eco-tourism industry is promising but several key constraints to the sector's development
must first be addressed. The NDS recommends:
- a focus on high quality eco-tourism in controlled numbers that do not exceed scientifically
determined carrying capacities of interior sites. The NDS also suggests improvements in
marketing with better targeting and wider advertising, funded in a joint arrangement between
government and the industry.
- the development of the required institutional framework. This will involve laws and behaviour
codes for both eco-tourism operators and eco-tourists, as well as for monitoring activities. Since
tourism is essentially a private sector enterprise, the NDS recommends the establishment of an
incentive regime to attract private sector investment. Also, in all eco-tourism development,
priority must be given to Amerindian involvement.
- the establishment of a National Tourist Board. Its main responsibilities would be regulation,
marketing, research, and product development.
- the removal of impediments to investment in the private aircraft industry, and the
encouragement of international airlines to come to Guyana.
- investment in infrastructure to support the tourist industry, particularly in relation to airport,
airstrip and medical evacuation facilities, visitor security, the prevalence of malaria and the
deficiencies in the potable water systems.
The Infrastructure Sectors (Volume 5)
The infrastructure sector is basic to the functioning of any economy, and crucial to the success of
Guyana, given its geography and dispersed settlements. A growing economy requires a rapid
expansion of capacity and improvements in efficiency in the areas of electricity generation and
transmission; all modes of transportation; water supply and drainage; and sea defences. Guyana
faces a number of bottlenecks in the infrastructure sectors, damaging the economy's ability to
grow and the country's ability to compete on the world market.
Transport Development
The transport sector is critical to Guyana's economic development. The NDS looks at the areas
of road, maritime, and air transport and makes various recommendations:
Road Transport
The road system in Guyana - which has played a central role in the country's development - faces
a number of constraints, which the NDS seeks to address. The NDS suggests:
- investment to rehabilitate and expand the paved road system.
- the development of all-weather road links to mining, forest, and agriculture areas to facilitate
development.
- the completion of the Lethem-Georgetown road link. This will facilitate the economic
development of the southern parts of the country, and create opportunities for trade with
neighbouring regions in Brazil.
- investment in the construction of bridges across major rivers. Specifically, the NDS calls for
the construction of a bridge across the Berbice River.
- the encouragement of private sector involvement in the sector
- the institutional strengthening of the Road Administration Division (RAD).
- the introduction of measures to improve safety levels.
Maritime Transport
With the decentralisation of economic activity and the corresponding development of the
interior regions of the country, there is an increasing demand for water transport in Guyana. The
NDS makes recommendations to overcome the various constraints faced by the sector:
- the development of a deep water harbour. This is seen as critical to support to the
recommended Export Processing Zone, as well as the rapidly expanding exports of bulk goods,
such as rice, sugar and new kinds of wood products.
- the strengthening of the ports and harbours system. The NDS calls for improvements to the
administration of the ports and harbours; measures to increase the efficiency of the port handling
systems; and investment to enhance aids to navigation in harbours.
- the reform of the Transport and Harbours Department and its incorporation in the National Port
Authority.
- the strengthening of safety standards regarding coastal, regional and international shipping
Air Transport
As with the other two areas of transportation, air transportation is vital to the economic
development of the country. In addition, air transport plays a vital role in linking the coastal
areas and hinterland communities, many of which are inaccessible by any other means of
transportation. The NDS recommends:
- a review of civil aviation legislation in light of the evolving changes in the aviation
environment locally and internationally. The NDS also suggest the ratification of major
international conventions on civil aviation.
- the upgrade and expansion of airport facilities and navigational aids, many of which are in a
deteriorated state.
- the encouragement of private sector involvement in the sector.
- the introduction of measures to encourage international airlines to fly to Guyana, including the
expansion of the international airport.
- the establishment of an Airport Authority for the co-ordination and management of the
international airport and other facilities.
- the establishment of an effective and fully equipped Search and Rescue Unit within the air
transport sector to provide emergency services
Energy Policies
If Guyana is to realise its very considerable development potential, a reliable system of
electricity generation and transmission is essential. An inadequate system raises the costs of
production in all sectors of the economy - particularly for small producers - by requiring
companies to install their own generating capacity and by damaging equipment through severe
voltage fluctuations. This acts as a discouragement to potential investors. In addition, a poor
electricity supply effects a wide cross-section of households. The NDS makes recommendations
to overcome the various constraints faced in the sector, and to create a system capable of dealing
with the growing energy demands of an expanding economy:
- the upgrade of the transmission and distribution system.
- the encouragement of private sector participation in the power sector, including the
participatory privatisation of the Guyana Electricity Corporation (GEC).
- the consideration of alternative energy sources, such as mini-hydro, wind and solar.
- the establishment of a Guyana Energy Agency for national energy planning, including the
development of an energy conservation programme.
- the strengthening of the Public Utilities Commission's capacity to regulate the sector.
Water Management and Flood Control
Guyana's geography make effective water management and flood control crucial. The coastal
area of Guyana - where most of the population lives and where the main crops are cultivated -
lies below sea level and is subjected to flooding and erosion. The NDS makes several
recommendations to deal with the problems facing the country's sea defences and drainage and
irrigation (D&I) system. The NDS also considers the important role of the hydrometeorological
service, which evaluates the country's climate and water resources, and operates the National
Meteorological Station Network (NMSN) and the National Hydrological Station Network
(NHSN).
Sea Defences
- the rehabilitation of critical coastal protection structures, and the maintenance of the existing
infrastructure.
- the reorganisation and strengthening of the Sea and River Defence Board. The NDS also
suggests the establishment of a Shorezone Management Unit.
- the reduction of construction costs for sea defences. The NDS suggests examining means of
reducing the costs of production and supply of rocks to sites, including a review of current
designs.
- the protection of mangroves. The past failure to protect mangroves has contributed to the
deterioration of the sea defences. The NDS calls for a gradual mangrove reforestation
programme.
Drainage & Irrigation
-
the rehabilitation and maintenance of D&I works. Inadequate maintenance of drainage works
reduces yields and keeps some agricultural land out of production.
- a review of legislation governing the management and operation of D&I.
- the institutional strengthening of the sector. The NDS calls for an institutional framework
which identifies clear policy objectives; ensures adequate supervision and co-ordination;
prevents overlapping jurisdictions between agencies; and specifies clear roles for each agency.
The NDS recommends that the national D&I Board take a lead in developing the new
institutional structure.
- the encouragement of farmer participation in the development, operation and maintenance of
an efficient D&I system, through local Water Users' Associations. The current lack of
participation of users in decisions on maintenance has undermined the effectiveness of the
drainage and irrigation systems. The NDS also calls for the strengthening of the Local
Government Authorities to administer local D&I systems where farmers are satisfied with the
current institutional arrangement.
Hydrometeorological Service
-
the upgrade of existing stations; improved communication links to data collection centres;
automation of stations; and staff training.
- the introduction of measures to strengthen the financial position of the hydrometeorogical
service, including the introduction of charges to users (such as airports and the media).
The NDS Secretariat encourages your comments on the draft NDS, preferably in writing.
Alternatively, you are invited to attend and give your comments at any of the public consultation
workshops which will be held shortly in various regions of the country. The dates of these will
be advertised.
The NDS Secretariat
Ministry of Finance
Main Street
Georgetown
Tel: 02-67242
Fax: 02-73458
E-mail: nds@solutions2000.net
http://www.guyana.org/NDS/NDS.htm
Guyana Socio-Economic Data from the Inter-American Development Bank. This is the source for all the hard economic data you need. The particular country page is slow loading, but well worth the wait for you economic gurus.
Guyana Tourism
Guyana, its beauty unspoilt, is a real tropical paradise for naturalists the world over. Lying on
the shoulder of South America, Guyana is approximately the size of Great Britain, but with less
than 750,000 people. This land consists of vast open spaces, savannahs, virgin rainforests,
mountains, huge rivers and waterfalls, the most famous of which is the majestic Kaieteur Falls,
known to be the highest single drop waterfall in the world and five times the size of Niagara
Falls. Guyana boasts an abundant wildlife, numerous species of flora, a variety of fauna and
spectacular birdlife.
The climate is hot but pleasant for most of the year. The country is richly endowed with natural
resources, fertile agricultural land, vast stretches of unexploited tropical hardwood forest, rich
fishing and shrimping grounds and a wide variety of minerals. Georgetown, its capital, is well
known for its picturesque, wide tree-lined avenues, bustling markets, and wooden buildings, the
most famous of which is St. George's Cathedral (reportedly the world's tallest wooden building).
The main sectors of the economy are agriculture, minerals, including bauxite, gold and
diamonds, forestry, fishery and manufacturing.
THE TOURISM PRODUCT
Guyana, which has a fledgling tourism industry, offers a product which is distinct. Soft
adventure is available at Guyana's leading nature resorts and lodges and for the more trepid
traveller, an exciting array of trekking, horseback riding and boating are offered.
Regular flights to Guyana are available from several destinations such as Toronto, New York,
Miami, Trinidad and Tobago, Barbados, Jamaica, Venezuela and Suriname. Flights are also
available to seventeen locations in Guyana. The country attracts around 100,000 visitors per
annum. There are four large hotels - the Pegasus Hotel, the Tower Hotel, the Park Hotel and
the Ocean View Hotel, along with a number of smaller hotels such as the Woodbine, Embassy
Club and Cara Suites and other guest houses. Guyana has a total of 700 hotel rooms.
INCENTIVES
The Government is committed to private enterprise and the liberalisation of the foreign
exchange system makes it easy to do business.
Guyana has low operating costs, a stable economic and political environment, an easily
trainable and productive workforce and reliable air and sea transport to major cities.
In order to encourage more investment in this sector, a special regime has been put in place to
provide tax incentives.
Based on a project profile, concessions will be granted for basic furnishings and building
materials for new tourist facilities and for extensions.
In the case of resorts being developed in the interior, additional concessions such as transport
equipment and electricity generators will be granted.
Hotel Tax
Hotels with over 16 rooms are required to pay a 10 % room tax.
GOVERNMENT PLANS TO DEVELOP THE TOURISM SECTOR
Based on the present increase in the awareness of tourism potential, the government is
encouraging the development of the tourism sector. It is currently seeking technical assistance
from organisations like the Caribbean Tourism Organisation (CTO), the European Union (EU)
and the Organisation of American States (OAS) to help the private sector establish appropriate
guest accommodation and supporting infrastructure in areas with eco-tourism potential.
In addition, initiatives are being taken to:
* enhance the quality of the tourism product by establishing
facilities to monitor standards.
* extend tourism development into new areas in order to create
a more diversified product.
* strengthen linkages between tourism and other sectors of the
economy.
* develop cultural tourism in view of our rich and diversified
cultural heritage.
The government and the private sector are committed to protecting the environment and
maintaining a desirable ecological balance.
INVESTMENT OPPORTUNITIES
There is scope for investment in a number of areas:
Accommodation there is need for all types of accommodation,
particularly in the hinterland.
Activities the development of more recreational activities in the interior would be
welcome.
These activities include rafting, boating,
horseback riding and bird watching.
Transport more international airlines and charter
services are needed to operate scheduled
services to Guyana. Boat and car rental
services are also needed.
Restaurants there is need for more restaurants of
international standards.
Craft Shops Guyana has several established craft shops
but because of the expanding interest in
these items, there is need for more of these
outlets.
TRAINING
Various training workshops and seminars are being organised by the Tourism Division of the
Ministry of Trade, Tourism and Industry. These programmes cover areas such as skills and
attitude training, seminars for hotel employees, water sports personnel, craft vendors, car rental
agents, the police, customs and immigration officers, attraction operators, senior managers and
executives for the tourism support sector.
The Ministry of Trade, Tourism & Industry has responsibility for overseeing the development of
the sector.
The private sector is represented by the Tourism Association of Guyana (TAG) and the Guyana
Hospitality Industry Association (GHIA).
Guyana's Legal System
The U.S. House of Representatives Internet Law Library Laws of other nations Guyana
General Information
Guyana - Consular Info Sheet
Guyana Country Study Page from Library of Congress. A great source of information.
Living languages of Guyana
So, you think that English is the only language spoken in Guyana? Well, check this out!
Importing and Exporting
Import Restrictions and Duties: Guyana's tariff system is based on the
Customs Cooperation Council Nomenclature (CCCN). The tariff schedule
has one column which reflects the common external tariff of the
Caribbean Community (CARICOM) Common Market. There are some specific
duties and most of these are levied on an ad valorem basis. In
addition, most imports are subject to a consumption tax which is
determined on a product specific basis. Certain raw materials and
industrial products imported for use in manufacturing qualify for duty-
free importation.
Imported goods must be claimed within 30 days of arrival, or they will
be forwarded to a government warehouse. Goods which are not claimed
within three months will be sold at a public auction. Goods meeting
all mandated requirements may be warehoused for three months upon
deposit of 100 percent of the duty applicable to guarantee re-exporta-
tion at the end of that period.
TradePort's online tutorial on importing and exporting.
Reducing the Risk of
Trade Disputes for Exporters
U.S. Harmonized Tarrif Schedule
Marketing
International Trade Association (U.S. Dept. of Commerce dedicated to helping U.S. businesses compete in the global marketplace.
