Title Page
 Main Abbreviations adn Acronym...
 Table of Contents
 Executive Summary
 Part 1: National Competitiveness...
 Chapter 1: the rationale for competitive...
 Chapter 2: Key Elements of Competitiveness...
 Part 2: Current Situation in Guyana...
 Chapter 3: Core Competitiveness...
 Chapter 4: Sector Strategies
 Chapter 5: Policies targeting strategic...
 Part 3: Supporting the National...
 Chapter 6: Overarching enabler...
 Part IV: The Strategy Development...
 Chapter 7: the Partnership...

Title: Presidential summit on private sector development : Turning words into action
Full Citation
Permanent Link: http://ufdc.ufl.edu/UF00084204/00005
 Material Information
Title: Presidential summit on private sector development : Turning words into action
Physical Description: Book
Creator: Guyana.
Publication Date: 2006
Subject: Development
Private sector
Action plans
Caribbean   ( lcsh )
Spatial Coverage: South America -- Guyana -- Georgetown
 Record Information
Bibliographic ID: UF00084204
Volume ID: VID00005
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.


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Table of Contents
    Title Page
        Title Page
    Main Abbreviations adn Acronyms
        Page 1
        Page 2
    Table of Contents
        Page 3
        Page 4
    Executive Summary
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    Part 1: National Competitiveness Strategy Rationale and Key Elements
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    Chapter 1: the rationale for competitive strategy
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    Chapter 2: Key Elements of Competitiveness Strategy
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    Part 2: Current Situation in Guyana - National priorities for enhancing competitiveness
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    Chapter 3: Core Competitiveness Policies
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    Chapter 4: Sector Strategies
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    Chapter 5: Policies targeting strategic sub-sectors
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    Part 3: Supporting the National Competitiveness Strategy - overarching enablers
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    Chapter 6: Overarching enablers
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    Part IV: The Strategy Development Process
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    Chapter 7: the Partnership Approach
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Full Text
Version II

Enhancing National


A National Competitiven
Strategy for Guyana
Government of Guyana
Partnership with the Private Sector

May 2006



Main Abbreviations and Acronyms


African, Caribbean and Pacific Group of States
Business Development Services
Basic Education Access and Management Support
Build, Operate and Turnover
Build, Operate, Transfer
Consultative Association of Guyanese Industries
Caribbean Community
Forum of the Caribbean ACP States
Caribbean Basin Initiative
Caribbean Development Bank
Canadian International Development Agency
Cheddi Jagan International Airport
CARICOM Single Market
CARICOM Single Market & Economy
Demerara Distillers Ltd.
Department for International Development (United Kingdom)
Economical Interest Groups
Economic Partnership Agreement
European Union
Farmers' Groups
Forestry Products Marketing Council
Free Trade Area of the Americas
Fast-Track Sector Development
Guyana Association of Securities Companies and Intermediaries Inc.
Gross Domestic Product
Guyana Economic Opportunities project
Guyana Manufacturers and Services Association
(Nci%\) Guyana Marketing Corporation
Guyana National Bureau of Standards
Government of Guyana
Guyana Office for Investment
Guyana Power and Light Company
Guyana Securities Council
Guyana Trade and Investment Support project
Guyana Sugar Corporation
Hazard Analysis Critical Control Point
Institute of Applied Science & Technology
International Development Association
Inter-American Development Bank
International Labour Organization
International Monetary Fund
Investment Promotion Council
International Standards Organization
International Technology Centres
Jamaica Promotions Corporation
Micro Finance Institutions
Ministry of Tourism, Industry & Commerce
Ministry of Education

MoF Ministry of Finance
MinLA Ministry of Legal Affairs
MinPW Ministry of Public Works and Communications
MOFTIC Ministry of Foreign Trade and International Cooperation
NAC National Accreditation Council
NACEN National Advisory Committee on External Negotiations
NARI National Agricultural Research Institution
NCC National Competitiveness Council
NCTVET National Council for Technical and Vocational Education and Training
NGO Non Governmental Organization
N-TNC National Trade Negotiations Committee
NTS National Trade Strategy
OAS Organization of American States
PMU Program Management Unit
PPD Public-Private Dialogue
PSOs Private Sector Organizations
SBC Small Business Council
SIMAP Social Impact Amelioration Program
SMEs Small and Medium Enterprises
SSRP Secondary School Reform Project
TA Technical Assistance
TVET Technical and Vocational Education and Training
TWG Technical Working Groups
UG University of Guyana
UNIDO United National Industrial Development Organization
USAID United States Agency for International Development
WTO World Trade Organisation

Table of Contents

Main Abbreviations and Acronyms 1
Executive Summary 5

Part I: National Competitiveness Strategy
Rationale and Key Elements

Chapter One: The Rationale for Competitiveness Strategy 14
Guyana's Ever Rising Competitiveness C Ii,,//ii ,g C hii, i,,igA New Way Forward 14
Chapter Two: Key Elements of Competitiveness Strategy 17
Three Key Elements of Government Policy 22
Four Key Enablers 22
Five Guiding Principles 22

Part II: Current Situation in Guyana
National Priorities for Enhancing Competitiveness

Chapter Three: Core Competitiveness Policies 26
Incentive Policies 26
Macroeconomic policies 26
Trade policy 27
Competition Policy 31
Taxation Policy 33
Supply Side Policies 36
Investment Promotion and Facilitation 37
Export Promotion and Facilitation 41
Access to Finance 45
Human Resources 52
Business Development Services (including Technological Support and Standards) 57
Infrastructure 64
Bureaucratic Procedures 68
Enterprise Registration and Operation 68
Export and Import Licenses 71
Land and Property Markets 71
Commercial Dispute Resolution 74

Chapter Four: Sector Strategies 77
Strategic Focus: Diversification for Future Growth 77
Traditional sectors 78
Sugar 78
Forestry 83
Mining and Petroleum 84
Key Diversification Opportunities 86

Non-traditional agriculture 86
Fisheries 89
Manufacturing 91
Tourism 93
Information Technology 96

Chapter Five: Policies Targeting Strategic Sub-sectors 97
Selection ofStrategic Sub-Sectors 97
Strategic Sector Profiles and Action Plans 101
Need for Further Action: Developing a Framework for Fast-Track Sector Development 112

Part III: Supporting the National Competitiveness Strategy
Overarching Enablers

Chapter Six: Overarching Enablers 114
Policy Coordination and Leadership 114
Appropriate Public-Private Collaboration 114
Adequate S lppi, ng Technical/Analytical Capabilities 115
Improved Donor Harmonization

Part IV: The Strategy Development Process

Chapter Seven: The Partnership Approach 118
Origins of the Partnership 118
Principles for Partnership 121
Overall Approach to Initial Period ofPartnership 121
Progress to Date: Wave I Consultation 122
Next Steps: Wave II Consultation and Beyond 124

(available on request)

Appendix A: Results of the Focus Groups and List of Participants
Appendix B: List of persons and companies consulted for consultancy reports
Appendix C: NCS References

Executive Summary

The Need for Competitiveness Strategy: Guyana's Rising
Competitiveness Challenge

Important progress has been made in Guyana in recent years in managing the process of adjustment to
the new world economic environment through exercise of monetary discipline, improvements in the
environment for private investment, reform of the tax system, creation of a property market, investing
in basic education and infrastructure, and boosting productivity in traditional sectors of the economy.
But important and pressing challenges still remain to be tackled. At the forefront is achieving the
economic imperative of improving national competitiveness and diversifying the economy.

Whilst economic diversification has long been and remains a major aspiration of Guyana's
policymakers, as a country we have historically been highly dependent on the exports of only a
handful of natural resource commodities. This continues today with sugar, gold, rice, shrimp, timber
and bauxite accounting for 86 % of exports (and 69% of GDP).

In the past an excessive burden of debt, high and unpredictable inflation, unmanageable fiscal and
balance-of-payment deficits, and an absence of legislative foundations to give security to investors
provided the explanation for why it was impossible for Guyana to compete and win in the global
market place. However, today many of the necessary foundations are now in place, yet our economy
remains dominated by exports of a small number of commodities. This lack of diversification would,
in itself, not amount to a significant problem if the existing economic base was sufficient to generate a
renewed momentum for growth and prosperity. But per capital income is not yet growing sufficiently
fast to raise standards of living to those aspired to in the National Development Strategy. Moreover,
the situation is now more critical than ever because the mainstay of Guyana's economy, Sugar, is
under threat from the EU's reform of the Sugar Protocol which will reduce the landed export price
received for Sugar by 36% over four years and could potentially amount to a loss equivalent to 5.1%
of GDP and 5.4% of merchandise exports annually.

Guyanese stakeholders both public and private sector strongly support the need for diversification.
But since the publishing of the National Development Strategy just five years ago, the rapid
liberalization of trade, investment and technology flows, the real threat of imminent preference
erosion, and the increasingly intense competition felt from other developing countries, have created a
much more formidable set of challenges.

But globalization not only brings challenges; it also brings opportunities to tap into international
markets and take advantage of increasing capital and technology flows which can lead to greater
income and employment opportunities. For example, the Caribbean Single Market and Economy
(CSME), the flagship of the Caribbean Community, will create a single economic space which will
allow for the more efficient utilization of regional resources, provide access to a market of over 14
million consumers and encourage international standards of production. In time, Guyana will have
increased access to capital, skills, and other inputs from across the region and the strengthening of the
legal framework to facilitate the pooling of CARICOM resources will enable Guyana and all the
Community to be more effective in international negotiations. This environment will provide the
platform to enable Guyana and all the Community to integrate effectively and competitively with the

rest of the global economy through creating the conditions to enable our goods and services to
compete and win in both intra-regional and extra-regional markets.1

Nevertheless, the CSME also poses many competitive threats for Guyana. Neighboring countries are
moving rapidly to prepare for success in new product areas and will leave Guyana behind if action is
not taken today to seize the opportunities presented by CSME, particularly in promising sectors which
can be engines of diversification and growth into the future.

As a country, we must therefore become more successful in developing value-added export potential.
Although a number of our sectors have comparative advantages due to the availability of land, water,
competitive wages, and an advantageous position as a potential exporter to CARICOM, in most
sectors, Guyana has not been successful at building up competitive advantages.

What then is needed now is long term strategic analysis and planning by the Government, coupled
with more effective and vigorous entrepreneurship by the private sector to ensure that we rise to these
challenges and seize the opportunities through the formulation of policies aimed at enhancing national
competitiveness and diversifying the economy. The rationale for National Competitiveness Strategy
thus comes from the need to deliver on the goals of the National Development Strategy. It is necessary
to chart a new way forward to generate a new momentum for growth and prosperity that is consistent
with these more challenging competitive realities, with the ultimate objective of delivering a better
quality of life for all Guyanese.

Partnership Approach to Building International Competitiveness
and Diversifying the Economy

Stakeholders have expressed optimism that the aspirations of the National Development Strategy can
be attained with the right application of effort and an understanding of the economic challenges the
nation faces. The Government, Private Sector and other stakeholders must now work together to
deliver on these goals by effectively upgrading the competitiveness measures in the National
Development Strategy to take account of the new contemporary realities, changes in the national
economy over the last five years, and the urgency to build on the foundations of recent years to create
a new momentum for economic development.

Critically, the approach must acknowledge that the Government can only do so much, and that the
emergence of a massively expanded, progressive and dynamic private sector is also critical to the
economic expansion that must now be achieved. The Government's role is to pursue a pro-active
policy agenda that is responsive to the needs of the Private Sector, while the role of private enterprise
is to provide the impetus to achieve sustainable export expansion, employment, income generation,
and economic growth in Guyana.

The National Competitiveness Strategy

The National Competitiveness Strategy is the practical expression of this partnership between the
Government and Private Sector which recognizes the dual responsibilities that each must play in
delivering enhanced national competitiveness and greater economic growth. It is the expression of the

1 His Excellency, President Bharrat Jagdeo (Dec. 2003), Realizing the CSME: Prospects for National
Development,, Seminar on CSME, Georgetown, Guyana.

need for a practical, action-orientated, solution-driven approach to working that is embedded in a close
collaborative relationship between Government and the private sector.

Three Key Elements of Government Policy

The Government's work in National Competitiveness Strategy has three essential components:

1. Core Policies to improve competitiveness are economy wide measures which cut across most
sectors of the economy and consists of incentive (or demand side) policies including
macroeconomic policy, competition policy, taxation policy, and trade policy and supply side
policies including policy measures with respect to education and training, business
development services (including technology and standards), finance, investment promotion
(including FDI), infrastructure, export promotion, red tape, and aspects of the legal system
(including commercial dispute resolution).
2. Sector Policies are sector strategies to address the particular obstacles and opportunities
facing enterprises on a sector specific basis.
3. Strategic Sub-Sector Polices aim to target centers of dynamism which provide the greatest
opportunities for growth and diversification, so avoiding spreading effort and resources too

Current Situation in Guyana: National Priorities for Enhancing

Over the last few years much progress has been made in relation to these three key areas of policy.
This progress is now being built upon and strengthened. Over the past six months, extensive
consultations have taken place on the priority areas and the agenda for action has been expanded
following the contributions gathered through the Partnership approach outlined above.

Core Policies

Incentive Policies: Over the last five years the Government has successfully maintained a stable and
predictable macroeconomic environment with stability in the real exchange rate, inflation and the
budget and balance of payments deficits. In addition, Guyana has secured extensive debt relief in
recent years particularly under the E-HPIC and Multilateral Debt Relief Initiatives. The graduated
system of taxation is becoming fairer and more transparent which will act as a long run catalyst to
productive investment. Introduction of the VAT and Excise Taxes will lead to a broadening of the tax
base and the elimination of extreme variations in rates. Nevertheless, significant challenges remain. As
the VAT and Excise Taxes move to implementation in 2007, new priorities for the Government are
emerging such as the need to unify and lower the Corporate Income Tax to a rate which will enable
Guyana to be regionally and globally competitive, as well as improving the efficacy of the current
system of fiscal and duty incentives and tariff structures.

Guyana has been taking a proactive stance on several fronts in relation to trade policy on issues such
as Preferences erosion, Special & Differential Treatment, SPS and Small and Vulnerable Economies
(SVEs) and the Government has also consulted widely to complete the National Trade Strategy.
Nevertheless, in the arena of trade policy Guyana is unable to successfully defend its economic
interests in international trade negotiations and further action is now required to concentrate efforts on
priority trade relationships and to re-focus efforts on implementing a limited number of priority
recommendations from the National Trade Strategy.

Steps are also being taken to break down barriers to domestic competition through the passing of
Competition and Consumer Protection legislation and the setting up of a National Competition and
Consumer Protection Commission.

Supply Side Policies: There are currently a number of factors inhibiting the competitiveness of
Guyana's productive sector on the supply side of the economy. The Government is committed to
systematically addressing these factors:

Investment Promotion and Facilitation: Whilst the Government has delivered a more
predictable and transparent legislative and regulatory regime for domestic and international
investors, the challenge now is to ensure effective implementation of these measures through
development of appropriate regulations and other measures, and the setting up of the
Investment Promotion Council. Steps have been taken to accelerate institutional strengthening
at GO-Invest and a number of additional measures will now be taken to further enhance
Golnvest's ability to act as a facilitator for investment and deliver more dynamic investment
promotion activities to local and foreign entrepreneurs.
Export Promotion and Facilitation: The institutional framework for export promotion has
performed well in recent years owing to strong sector representation, effective agency
collaboration, and the provision of valuable policy advice on new or on-going policies. Steps
will now be taken to improve collaboration between sectors on supply chain issues, improve
private sector representation in the framework for export promotion, further empower the
export promotion agencies, introduce an effective system for monitoring export performance,
evaluate and identify corrective action to overcome new bottlenecks, and improve the system
of export taxes, incentives for export, and export efficiency.
Access to Finance: Government is taking steps to improve access to finance, and will
consider further steps to strengthen the legal and regulatory foundations for a competitive and
effective commercial banking system (enabling environment), encourage an active
competitive market-place for financial institutions (supply side), and enhance the capacity of
enterprises to access and deal with the banking system (demand side). However, the
Government believes that the commercial financial sector does not take advantage of existing
commercial opportunities and must deliver a more competitive financial services sector.
Human Resources: The focus of Government strategy in this area is two-fold: i). to improve
the quality of technical and vocational training; ii). to ensure that new knowledge, skills and
competencies can be retained by the country, and are not simply exported via the so-called
"brain drain." Steps have recently been taken by Government towards fundamental reform of
TVET through formation of the National Accreditation Council (NAC) and the National
Council for TVET (TVET Council). The challenge moving forward is to ensure effective
implementation of these measures through improving public-private collaboration on TVET,
improving the efficiency and effectiveness of the TVET system, and overcoming systemic
problems in the TVET framework.
Business Development Services (including Technological Support and Standards): Some
steps are being taken to improve marketing support and business information services, deliver
more effective technology promotion, provide more effective organization and management
support services, and to improve the infrastructure for supporting standards, certification and
sanitation issues. But considerable further strengthening will be required to promote a
systemic increase in the quantity and quality of services supplied by the current BDS
Infrastructure: Currently there are a number of large scale projects underway with respect to
most major aspects of the road, air, and water transport infrastructure. Steps are also being

taken to reduce the cost and improve the reliability of electricity, and improvements have also
been made with respect to the telecommunications infrastructure. Nevertheless, many
challenges remain and there is a need to continue the momentum generated over recent years
to deliver modem, efficient and flexible infrastructure for Guyana. This will help the country
compete effectively in the global market place through (i) completion of the rehabilitation of
the primary road, water and air network; (ii) liberalization of the telecommunications market
place to deliver better service, lower costs, and support the emergence of new strategic growth
poles within the economy; and (iii) expansion of the electricity grid, reduction in technical and
commercial losses, and the introduction of alternative energy sources.
Bureaucratic Procedures (enterprise registration, land and property markets,
commercial dispute resolution): The Government has recently increased its efforts to
streamline procedures, particularly in relation to enterprise registration, export and import
procedures, land and property markets, and resolution of commercial disputes. These
measures will have far reaching implications for competitiveness. These improvements will be
reinforced by additional measures planned in the areas of business registration, land and
property markets and commercial dispute resolution. Nevertheless, further measures will be
required to support the reform process, particularly in the area of land and property markets.

Sector Strategies

Traditional Sectors

All major traditional sectors of the Guyanese economy including sugar, rice, forestry, and mining are
being provided with strong strategic leadership and have measures in place for restructuring to
improve competitiveness. The last year has seen the bauxite industry return to growth and an ability to
compete globally. These efforts should of course continue. But further measures will be required
particularly in the areas of Sugar and Rice in order to maintain the positive expansions of recent years
and ensure that both sectors have realistic prospects of remaining competitive in the absence of
preferential margins. For Sugar this will require implementation of measures identified in the Sugar
Action Plan such as the construction of a sugar refinery for production of value added sugar products,
installation of a packaging plant, continued mechanization of operations, and construction of further
co-generation plants. For Rice this will require an emphasis on further international market
diversification, production towards higher value added products, and increased support for research
and development to improve productivity.

Key Diversification Opportunities

Whilst steps are being taken by Government to support the development of key diversification
opportunities in Non-Traditional Agriculture, Fisheries, Manufacturing, Tourism, and ICT, full
realization of the aspirations of the NDS will require substantial additional efforts to inject new
momentum into these sectors that will allow for the creation of new skill and technological

Non-Traditional Agricultural Products (NTAPs): Initial export supply chains in fruit and
vegetables and beef will be supported through the Agricultural Diversification Programme but
planning for the success of NTAPs in world markets will require further support to implement
a livestock census, and increase the capacity of agri-extension services, as well as implement
other competitiveness enhancing measures.
Fisheries: To fulfill the potential of the fisheries sector as a significant contributor to the
national product, the Fisheries Act is being updated to meet current national and international

requirements. Further action is needed to create a semi-autonomous Fisheries Authority to
address critical human and technical capacity issues confronting the sector, rapidly assess the
Seabob resource and the potential for exploiting deepwater resources, and implement
complementary measures to significantly increase the quality of fish that Guyana produces.
Manufacturing: Ensuring the future growth and development of the manufacturing sector in
Guyana will require a targeted approach focusing on developing value-added activities in
areas such as agro-processing and forest products complemented by a bold strategy to quickly
create competitive niche sectors in global markets through the targeting of niche contract
manufacturing/call centers.
Tourism: Despite considerable growth in the tourism sector in recent years, unleashing the
untapped potential of Guyana's wealth of world-class tourism attractions will require adequate
support for rapid implementation of the new Five Year National Tourism Development
Strategy to complement existing measures supporting development of the sector.
ICT: Catalyzing development of the ICT sector as a crucial overarching enabler for the
development of Guyana's productive assets will require rapid completion of the National ICT
Strategy and a swift move to implementation. Critically it will also require a competitive
telecommunications sector as discussed previously.

Policies Targeting Strategic Sub-Sectors

As part of the NCS, work has taken place to determine strategic sub-sector priorities using a wide
range of economic development indicators. The most promising strategic areas include aquaculture,
contract manufacturing and call centers, followed closely by convention tourism, non-traditional
agriculture and agro-processing, forest products, eco-tourism, and organic food products. Whilst
Guyana has made recent progress in targeting these dynamic areas of activity, efforts in targeting
resources towards these growth poles need to be urgently revamped. There is now a need to develop a
rapid response mechanism to help these strategic sectors quickly mobilize around priority actions to
accelerate the development of complete supply chains required for exportation of goods and services.

The Strategy Development Process

Strategic collaboration between the private sector and the Government is the only way of uncovering
where the most significant obstacles to competitiveness lie and what type of interventions are needed
to remove them.

Historically, all parties in Guyana have recognized the need for a genuine partnership as expressed at
the 1999 Presidential Business Summit which resulted in 28 specific agreements, 21 of which have
subsequently been met. However, notwithstanding the importance of the Summit, it was nevertheless a
one-off event which has not been repeated. Since then considerable consensus has been built which
recognizes the need for a set of sustainable institutions that will enable all stakeholders to take part in
the partnership process.

A process involving sustained dialogue and collaboration between Guyana's public and private sectors
has been traversed over the last six months in completing this draft of the NCS. This has resulted in
the achievement of the following goals:

1. Agreement on a set of a) policies and other actions to be implemented by the relevant
agencies b) policy recommendations for further consideration. These are set out in this
draft of the NCS.
2. Design of the Support for Competitiveness Program to address key priorities.

3. Agreement to establish a National Competitiveness Council to formalize the public-private
partnership for competitiveness and a Donor Harmonization Group to maximize the
effectiveness of donor interaction in this area. These institutions will now pave the way for the
establishment of a more permanent platform that will ensure that the concept of partnership is
embedded within the entire national framework for competitiveness on a moving forward

Implementing the National Competitiveness Strategy

Action Plan for Enhancing National Competitiveness

Implementation of the NCS is being implemented through:

Regular activities of various Government agencies and private sector actors.
Existing programs: A number of programs are already working on the ground to support the
achievement of the NCS objectives. Key among these include Guyana Trade and Investment
Support, the Commercial Court Program, the Agricultural Support Services Program, the
Linden Economic Advancement Program (LEAP), EU Support to the Competitiveness of Rice
Industry in the Caribbean, private sector support programs, and numerous infrastructure
New programs. This includes the Support for Competitiveness Program (also referred to as
the IDB-funded Competitiveness Programme) and the Agricultural Diversification Program
(also supported by the IDB).

In addition, the Sugar Action Plan has been designed in the context of the objectives and priorities
established by the NCS the two documents are complementary and mutually supportive. However,
large tracts of the Sugar Action Plan remain unfunded, and large front loaded investments will be
needed in the near future to support the policy recommendations of the Sugar Action Plan.

NCS Institutional Structure: Policy Formulation

Moving forward, The National Competitiveness Council (NCC) will take ownership of the NCS and
act as central point of public-private leadership to ensure ongoing strategy development and
implementation. It will be made up of representatives of the Government, Private Sector and organized
labor. The NCC will promote and communicate the strategy locally and internationally, search for
solutions for key cross-cutting issues challenges facing the country's economic development, and
search for synergies among donors to improve effectiveness of donor and lender institutions. The NCC
will be supported by a new National Competitiveness Strategy Unit (NCSU) to provide the policy and
technical support required for the ongoing development and implementation of the NCS and to act as
the Secretariat to the new NCC.

NCS Institutional Structure: Implementation

The NCS will be implemented by numerous Government and private sector agencies across a whole
gamut of different policy areas. In many instances, this will be done through the normal activities of
the Ministry or agency. In other instances they will be done through specific programmes or projects.

Monitoring and Evaluation

To ensure that the NCS has the desired bottom line impact on jobs, investment, an overarching
monitoring and evaluation structure will be put in place. This framework will incorporate progress
against the latest competitiveness indices developed internationally by important institutions such as
the World Economic Forum (WEF) and the World Bank in order to effectively to track progress and to
benchmark progress against Guyana's competitors.

Part I


Rationale and

Key Elements




"Guyana relies too heavily for its economic existence on the production and export of afew virtually
unprocessed commodities. In other words, the country's economy is almost totally dependent on the
production and export of raw materials. Moreover, most of these products are sold in guaranteed
preferential markets at prices which even now are generally higher than those that are obtainable in
the non-preferential world. As a consequence, the Guyanese producer has had no incentive, indeed no
overwhelming reason, to be competitive, to be as efficient as possible.... Moreover, because of the
ready acceptance of certain of our export products in these favourable conditions, we have tended to
concentrate on only a few products, and to continue to employ outmoded production practices. It is
evident, however, that within less than a decade, primarily because of the inexorable process of
globalisation and the pervasive influence of the World Trade Organisation, this special treatment will
be removed. Indeed, the prices obtainable from the preferential markets are already being reduced.
We must therefore both diversify our economy and increase our productivity, not only because of the
impending worsening of trade conditions in our traditional markets but, more important, because it is
intrinsically in our best interests to widen our production base, to become competitive, and to be as
profitable as possible"

National Development Strategy, pg

Guyana's Rising Competitiveness Challenge: Charting A
New Way Forward

Important progress has been made in Guyana in recent years in managing the process of adjustment to
the new world economic environment through the exercise of monetary and fiscal discipline,
improvements in the environment for private investment, reform of the tax system, creation of a
property market, investments in education and infrastructure, and boosting productivity in traditional
sectors of the economy. But important and pressing challenges still remain to be tackled. At the
forefront is achieving the economic imperative of improving national competitiveness and diversifying
the economy.

Whilst economic diversification has long been and remains a major aspiration of Guyana's
policymakers, as a country we have historically been highly dependent on the exports of only a
handful of natural resource commodities. This continues today gold and sugar account for over half
of our exports, and when combined with four other commodities (rice, shrimp, timber, and bauxite),
they account for 86% of exports (and 69% of GDP).

In the past an excessive burden of debt, high and unpredictable inflation, unmanageable fiscal and
balance-of-payment deficits, and an absence of legislative foundations to give security to investors
provided the explanation for why it was impossible for Guyana to compete and win in the global
market place. However, today many of the necessary foundations are now in place, yet our economy

remains dominated by exports of a small number of commodities. This lack of diversification would,
in itself, not amount to a significant problem if the existing economic base was sufficient to generate a
renewed momentum for growth and prosperity but per capital income is not yet growing sufficiently to
raise standards of living to those aspired to in the National Development Strategy.

Moreover, the situation is now more critical than ever because the mainstay of Guyana's economy,
Sugar, is under threat from the EU's reform of the Sugar Protocol which will reduce the landed export
price received for Sugar by 36% over four years and lead to a reduction in the value of the existing
quota by 31.5 million (US$ 37 million). This could potentially amount to a loss equivalent to 5.1% of
GDP and 5.4% of merchandise exports annually.

Guyanese stakeholders both public and private sector strongly support the need for diversification
through widening the productive base of the economy and improving competitiveness. But since the
publishing of the National Development Strategy just five years ago, the challenges to be overcome to
achieve this overriding goal have become ever more demanding. These challenges come from many
sources all related to the forces of globalization which continue to fundamentally alter the speed and
suddenness with which international competition affects our economy.

International agreements such as the Doha Round in the WTO and the EU's Economic Partnership
Agreements (EPAs) continue to facilitate the rapid liberalization of trade, investment and technology
flows, making competition ever more immediate and intense. At the same time, Guyana's traditional
patterns of preferential treatment in trade with the EU under the Cotonou agreement are not just being
eroded but are now in real danger of being eliminated altogether. Rapid technological progress also
means that competition continues to take on new and constantly changing forms and the acceleration
in the spread of globalised value chains means that technology is moving across countries ever more
rapidly. Moreover, the competition that Guyana faces from other developing countries for low-cost
exports has intensified with the emergence of competitors such as China, India and Vietnam.

For Guyana, this situation represents a much more formidable challenge than faced us even five years
ago. Nevertheless globalization not only brings challenges but also opportunities for us to tap into
international markets and take advantage of increasing capital and technology flows which can lead to
greater income and employment opportunities.

For example, the Caribbean Single Market and Economy (CSME), the flagship of the Caribbean
Community, will create a single economic space which will allow for the more efficient utilization of
regional resources and provide access to a market of over 14 million consumers. It will also encourage
international standards of production, enforced by the Caribbean Regional Organization for Standards
and Quality. In time, Guyana will have increased access to capital, skills, and other inputs from across
the region and the strengthening of the legal framework to facilitate the pooling of CARICOM
resources will enable Guyana and all the Community to be more effective in international negotiations.
This environment will provide the platform to enable Guyana and all the Community to integrate
effectively and competitively with the rest of the global economy through creating the conditions to
enable our goods and services to compete and win in both intra-regional and extra-regional markets.2

However, the CSME also poses many competitive threats for Guyana. Neighboring countries are
moving rapidly to prepare for success in new product areas and will leave Guyana behind if action is
not taken today to seize the new opportunities that CSME presents Guyana's private sector, especially
in promising sectors which can be engines of diversification and growth into the future.

2 His Excellency, President Bharrat Jagdeo (Dec. 2003), Realizing the CSME: Prospects for National
Development,, Seminar on CSME, Georgetown, Guyana.

As a country, we must therefore become more successful in developing value-added export potential.
Although a number of our sectors have comparative advantages due to the availability of land, water,
competitive wages, and an advantageous position as a potential exporter to CARICOM, in most
sectors, Guyana has not been successful at building up competitive advantages. The natural factors are
there, but other integral parts of the system necessary for translating comparative into competitive
advantage are missing.

What then is needed now is long term strategic analysis and planning by the Government, coupled
with more effective and vigorous entrepreneurship by the private sector to ensure that we rise to these
challenges and seize the opportunities through the formulation of policies aimed at enhancing national
competitiveness and diversifying the economy. The rationale for National Competitiveness Strategy
thus comes from the need to deliver on the goals of the National Development Strategy. It is necessary
to chart a new way forward to generate a new momentum for growth and prosperity that is consistent
with these more challenging competitive realities, with the ultimate objective of delivering a better
quality of life for all Guyanese.




Competitiveness, at the micro level, means the capacity of our firms to compete, to increase their
profits and grow. It is based on costs and prices, but more vitally on firms' capacity to use technology
and on the performance of their products determined by a wide range of factors including price,
quality, design, packaging, delivery time, range and variety of products, and innovation in new
products. At the economy wide level, competitiveness means our ability to make products that meet
the test of increasingly open, domestic and international markets whilst at the same time
simultaneously expanding our domestic real income.3

Building national competitive advantage is not a matter of a fixed production structure predetermined
by a given and unchanging set of endowments. Competitive advantage does not simply exist. It has to
be created. It has to be carved out of initial conditions through the right enabling environment, through
conscious investments in technology, education, training, information search, engineering and even
research and development to create new skill and technological endowments that can allow the
economy to grow by diversifying and deepening the productive base.

Identifying the means to create this competitive advantage has been done through a partnership
approach where the Government, Private Sector and other stakeholders have been working together to
effectively upgrade the competitiveness measures in the National Development Strategy to take
account of new contemporary realities.

This approach acknowledges that the Government can only do so much, and that the emergence of a
massively expanded, progressive and dynamic private sector is also critical. The Government's role is
to pursue a pro-active policy agenda that is responsive to the needs of the Private Sector, while the role
of private enterprise is to provide the impetus to achieve sustainable export expansion, employment,
income generation, and economic growth in Guyana.

That said, the National Competitiveness Strategy specifically addresses Government policy, and this is
set out in more detail below.

Three Key Elements of Government Policy

The National Competitiveness Strategy has three essential components; core policies, sector policies
and policies targeting strategic sub-sectors of activity.

Core Policies

Core policies to improve competitiveness cut across most sectors of the economy to generate a
business-friendly investment climate. Core policies include two types of interventions.

3 Based on definition by OECD (1992), Technology and the Economy: The Key Relationships, Paris: OECD

Incentive Policies: Policies which provide for a stable, predictable macroeconomic
environment and those which exercise performance pressure on firms to become competitive.
These policies include macroeconomic policy (including monetary, fiscal, and exchange rate
policy), competition policy, taxation policy and trade policy.

Supply Side Policies: Policies which are geared to overcoming systematic market failures in
factor markets which impede the building up of competitive advantages by enterprises. These
include policies with respect to education and training, business development services
(including technology and standards), finance, investment promotion (including FDI),
infrastructure, export promotion, procedure regulations (red tape), and aspects of the legal
system (including commercial dispute resolution).

Note that some elements of these policies (e.g. investment and export promotion, skills
development, finance, and business development services) naturally have to be geared towards
strengthening the competitiveness of particular strategic sectors of the economy. In line with
the supply chain approach, for these policy instruments, the focus should not be horizontal in
terms of for example, "sanitation," "credit," or "research and development," but rather focused
on those same activities carried out in the context of fostering and strengthening a specific
chain of production/exports.

These core elements of competitiveness policy are summarized in Figure 2.1. Many of these policies
are touched upon by the National Development Strategy especially Chapter 4, Macro-Economic
Strategies and Management of the Economy which tackles trade policy, monetary policy, exchange
rate management, the taxation system, investment promotion, export promotion, quality standards, and

Sector Policies

Sector strategies are strategies to address the particular obstacles and opportunities facing enterprises
on a sector-specific basis. If National Competitiveness Strategy is to build up the competitive
advantage of the economy, it is therefore necessary to make an assessment of the competitive position
of the major sectors of the economy to identify their strengths and weaknesses in order to determine
what is required at the level of policy to enhance their competitiveness.

Policies Targeting Strategic Sub-Sectors

Whilst National Competitiveness Strategy, in-line with a systemic approach, should aim to deploy an
arsenal of measures to provide a broad-based support framework for competitiveness including a
strong business climate and the development of broad sector based strategies for enterprise
competitiveness, it is not possible to address simultaneously all factors relevant for policy in all sectors
of the economy.

If unlimited resources were available, the Government could intervene vertically and horizontally to
address obstacles constraining sector-level competitiveness, unlocking bottlenecks across many
complete sectoral supply chains simultaneously. But there are not enough resources to experiment
with multiple export chains; such an approach would spread effort and resources too thinly, with little
possibility of having significant impact. There is therefore a need for a focused strategy which targets
key points for concentrating resources, programmes, and action to select market-driven public goods
interventions that allow promising sectors to grow by alleviating bottlenecks across the supply chain.

There exists a strong natural symbiosis between the three instruments of competitiveness policy. The
components each have prescribed goals but they are mutually reinforcing and supportive of one
another and natural synergies and feedback effects exist between them. These elements mould
together to provide the systemic platform for improving the national system of competitiveness. This is
illustrated by Figure 2.2 which shows how the respective elements of competitiveness policy fit
together to provide the overall platform for enhancing national competitiveness.

Figure 2.1: Core Elements of Competitiveness Policy

Core Elements


Quality and

Rules on entry,
ownership and

targeting and


Ports and Water


Research Institutes
and Universities

Extension services esp.
for SMEs

Set up



Land and
Property Markets

Organizational and
Management Support

Access to long-
term finance

information 20

Figure 2.2: Competitiveness Policy: Targets and Instruments

Strategic Sub-Sector #3
Organic Food Products

Strategic Sub-Sector #4
inc. fresh fruits,
vegetables and beef

Strategic Sub-Sector # 5


Strategic Sub-Sector # 2 Y ersificaton OpportU, ict

Strategic Sub-Sector # 1

Strategic Sub-Sector # 6

Strategic Sub-Sector # 7
Forest Products

- E \


traditional Sector



nw -- >

Strategic Sub-Sector #

Four Key Enablers

Supporting the effective formulation and implementation of measures in these three areas of
competitiveness policy requires four key overarching enablers:

1. Policy Coordination and Leadership. To ensure ongoing competitiveness policy development
and implementation requires policy leadership to not only monitor and coordinate the
development of competitiveness policy, but also to ensure that the goals of competitiveness
strategy are adhered to, the policies and programmes are implemented according to a strict
timetable, the results are monitored, policies and programmes are altered in light of performance,
and new policies and programmes are devised as necessary.
2. Public-Private Collaboration for Competitiveness: Strategic collaboration between the private
sector and the Government is crucial to uncovering where the most significant obstacles to
competitiveness lie, determining what type of interventions are most likely to remove them, and
engaging public and private sector stakeholders in the implementation of activities that strengthen
the competitiveness of the economy.
3. Improved Analytical/Technical Capabilities: It is crucial to combine the ability to coordinate
policymaking with the analytical/technical capabilities to inform the policy decisions of higher
level decision-making bodies.
4. Donor Harmonization: Successful coordination of competitiveness policy requires mechanisms
to ensure harmonization in the scope, volume and timing of development assistance.

Five Guiding Principles for the NCS

Competitiveness policy is guided by five principles:

1. Systematic Approach to Competitiveness: The factors inhibiting competitiveness are not isolated
to one area, but rather relate to a number of factors which inhibit the conversion of comparative to
competitive advantage. Therefore, a holistic and systematic approach to competitiveness is
needed, with an adequate focus on factors affecting the general business climate and incentives to
2. Export Bias: Given the small size of the domestic market in Guyana, diversification must be
sought in viable export activities; only export markets can provide ample space for supply
3. Targeted Support: Many promising sectors still in the process of commercial development will
need help in kick-starting the long and unpredictable process of "learning to become
competitive"; this will inevitably mean Government providing some targeted support to the
private sector to ensure that private enterprises have the capacity to compete, to increase their
profits and grow.
4. Subsidiary Principle: Government interventions supporting the private sector should be strictly
targeted to what is essential for success and should not compete with, replace, or crowd out
private initiatives.
5. Complete supply chain approach: Support for the development of new exports in any sector
requires working on the complete chain linking primary production with final markets.4 For
growth to occur the complete chain from resourcing to production, to post production, and
eventual transportation and trading at the final destination must be in place and working properly.

4 Whether the product is an agricultural product or an export service such as a tourism service/product.

In recent years much progress has been made in relation to the key areas of policy. Part II (Chapters 3 to
5) and Part III moves on to track this progress and indicate priorities for the next stage of strengthening.


Part II

Current Situation in


Priorities for





The following chapter analyses the current situation in Guyana with respect to core policies designed to
enhance competitiveness i.e. the centre pie of Figure 2.2. It illustrates national progress in each area and
highlights those areas of policy deserving attention for the next stage of strengthening.

Incentive Policies

Macroeconomic policies

Over the last five years the Government, through the operations of the Bank of Guyana and the Ministry
of Finance, has successfully maintained a stable and predictable macroeconomic environment which is a
sine qua non for improved national competitiveness; this position was commended by the IMF in its Fifth
Review under the PRGF arrangement in February 2006.

Thanks to tight monetary policy, inflation has remained low at around 5% in recent years.5 Whilst
inflation rose to around 8% in 2005, largely due to the effects of high oil and food prices (due to flood
damage), corrective actions have been taken to ease the monetary situation through the lowering of
consumption tax on several occasions and non tariff measures to support the operations of utilities.6 Over
the last few years the exchange rate has also remained stable at a fairly competitive rate characterized by
only mild real depreciation against the dollar.7

There has also been a substantial recent improvement in the overall position of the balance of payments,
with a surplus of US$8.1 million in 2005 reflecting higher capital inflows that more than compensated for
the deterioration in the current account brought about by oil price hikes and lower export volumes of key
commodities affected by the floods. Corrective measures have also been taken to reduce the central
government fiscal deficit, which stood at just 6.9% in 2004.8 In spite of the particular difficulties
experienced last year which necessitated higher expenditures for flood-related activities and to meet the
rising fuel bill, a satisfactory performance was still returned in the management of the central Government
deficit which is not expected to deteriorate substantially in 2006.9
The Government has secured extensive debt relief in recent years, first under the E-HIPC initiative and
more recently through the G8 debt relief initiative, also known as the Multilateral Debt Relief Initiative

5 The rate was 5.5% in 2004 (Ministry of Finance, Budget Feb 2005)
6 Ministry of Finance, Budget Jan 2006
SMinistry of Finance, Budget Feb 2005 and Jan 2006
8 Ministry of Finance, Budget Feb 2005
9 Ministry of Finance, Budget Jan 2006

(MDRI). Under the MDRI the Government will receive 100% cancellation of debts owed to the
International Monetary Fund (IMF) and the International Development Association (IDA). As a
consequence of this debt relief, the prospects for debt sustainability in Guyana have been greatly
improved. However, unlike African nations included in the MDRI which had debt owed to the African
Development Bank (ADB) cancelled, Guyana and other non-African countries have yet to receive
cancellation of debt owed to the Inter-American Development Bank (IDB), Guyana's largest creditor.

Actions in Progress and Planned Activities

MF.A1: Continue to adhere to a sound macroeconomic framework including: monetary and exchange
rate policies geared to meeting inflation objectives and maintaining competitiveness; and fiscal prudence
to maintain debt sustainability and to enable the resources set free under the MDRI to be used effectively
in support of economic growth and poverty reduction.

MF.A2: Pursue a strategy to seek debt relief from outstanding non-Paris Club bilateral creditors
and Guyana's main multilateral lender, the Inter-American Development Bank.

MF.A3: Promote the operations of the Ministry of Finance's Aid Strategy Task Force (ASTF) with
the key aims of diversifying donors, mobilizing additional high-quality grants and concessional loans,
accelerating disbursements, reviewing the laws governing the aid and debt management process, and
implementing the National Capacity Building Plan for Aid and Debt Management.


No further actions proposed at this time

Trade policy

Over the last decade, Guyana has significantly liberalized its trade regime with market access having been
significantly enhanced under the process of progressive liberalization in CARICOM. In addition, under
the WTO, Guyana has bound its entire tariff at a ceiling of 50% for non-agricultural products (with some
exceptions) and at 100% for all agricultural products.10

Currently Guyana faces a number of fundamental challenges with regard to successfully defending our
economic interests in international trade negotiations. These challenges are confounded by the rapidly-
changing conditions for international trade with the appearance of new competitors and new treaties and
agreements which result in the increased liberalization of trade, and of new technologies and quality
requirements. Currently Guyana, together with other CARICOM member states, is simultaneously
engaged in several key trade negotiations that all promise tremendous changes to the international trade
environment in which Guyana's products will have to compete. These include the World Trade
Organization (WTO) Doha Round, the European Union (EU) CARIFORUM negotiations, and the

10 Regarding import tariffs Guyana has bound its tariff regime at a general ceiling of 50 percent (with some
exceptions leading to a simple average applied tariff of around 58 percent) for non-agricultural products and at 100
percent for all agricultural products. Under CARICOM's Common External Tariff (CET) regime Guyana applies a
maximum tariff of 20 percent on industrial products and 40 percent on agricultural products (on goods entering from
outside CARICOM) with a number of exceptions. Like other CARICOM countries Guyana may grant full duty
exemption on some goods (on the Conditional Duty Exemption List).

potential Free Trade Area of the Americas (FTAA).1 Combined with resource and institutional
constraints, most countries within CARICOM, including Guyana, will find it a constant struggle to keep
up with all international developments and have enough capacity to dedicate effort to autonomous trade
strategy. Nevertheless, these are the contemporary realities and challenges which face us and we must
now make building the capacity to defend our national interests a strategic priority.

In 2003, the Ministry of Foreign Trade and International Co-operation (MOFTIC) led the completion of
the National Trade Strategy (NTS), which identified ways to improve the defense of our national interests
by improving identification of negotiating objectives, internal and external coordination, and by
enhancing MOFTIC's resources.

Since then, capacity constraints as well as diversion of key human resources to deal with issues such as
the EU Sugar Reform have meant that MOFTIC continues to suffer from a lack of capacity to strengthen
its trade strategy, negotiation, and implementation capabilities. This prevents Guyana from maximizing
its ability to participate in significant trade negotiations, delays implementation of trade agreements, and
limits the benefits to be realized from existing trade agreements.

Recent progress has been made in dealing with these issues. For example, MOFTIC and other trade
related agencies have been working to accelerate progress in implementing the NTS with support from
the Guyana Trade and Investment Support (GTIS) project.12 Furthermore, MOFTIC has recently been
taking a proactive stance on several fronts, in collaboration with many other agencies and like-minded
alliances both regionally and internationally, on issues such as Preferences erosion, Special & Differential
Treatment, SPS and Small and Vulnerable Economies (SVEs). Moreover, Guyana is among the first six
countries to implement the CSME by the scheduled January 1, 2006 date, although there are still some
outstanding actions which are to be completed in early 2006. In addition, the Guyana/Brazil trade
agreement has recently been implemented by both sides and the agreement disseminated widely to the
Private Sector.13 MOFTIC has also taken a strong lead in creating the National Coalition of Service
Providers whose goals include, among other things, assisting policymakers in the development of
positions to be pursued in GATS and other services negotiations.

Nevertheless, for the aspirations of the NTS to be realized substantial effort will now have to be made to
ensure implementation of those outstanding elements of the strategy that are most important and relevant
to Guyana's current reality; and that the strategy is constantly updated in light of changing international
trade conditions.

" The completion of the WTO negotiations promise more tariff cuts and the removal of additional barriers to a
wider range of goods and services as well as new rules by which WTO members will be required to conduct their
trade; the European Union (EU) CARIFORUM negotiations will replace the current preferential arrangements
(guaranteed and duty-free access) for Guyana's major commodity products with an "Economic Partnership
Agreement" EPA that provides for reciprocal access to each others' markets; the Free Trade Area of the Americas
(FTAA), if completed, could replace Guyana's preferential access to the United States and Canadian markets with a
treaty providing for reciprocal access to each others' markets and those of the other countries in the Western
Hemisphere (excluding Cuba).
12 Sub-components 1 and 2 (of 4) of the GTIS project are designed to help support implementation of the NTS by 1)
providing crucial public and private sector training to ensure a deeper national institutional understanding of trade
issues; 2) to put in place systems that will support the work of MOFTIC; and 3) to ensure that current and future
efforts have a positive impact on the private sector's ability to take advantage of emerging trade opportunities.
13 The Brazil-Guyana Joint Commission, which is tasked with addressing implementation of the Brazil-Guyana
agreement is due to meet in the next few months to monitor progress.

Actions in Progress and Planned Activities

TP.A1: Enhance knowledge and understanding of trade, business and investment issues within
relevant agencies by training a cadre of professionals that are sufficiently aware of trade fundamentals
and have an ability to effectively participate in negotiations

TP.A2: Facilitate the flow of trade information between public institutions by developing a secure
online knowledge management tool to provide trade officials with trade related information (legal
documents, statistical databases) and to allow the exchange of sensitive negotiating documents.

TP.A3: Facilitate implementation of commitments and obligations by developing an inventory of
trade obligations and action plan for implementation

TP.A4: Assess civil society's role in the trade negotiation process by an assessment of current
mechanisms for public-private consultations before and during trade negotiations and development of an
action plan to strengthen current mechanisms.

TP.A5: Develop a civil society outreach program to provide outreach to and facilitate dialogue,
consultation, input and participation of civil society groups, in the context of negotiating trade
agreements. The focus of this will be on sensitizing the public and private sectors to the opportunities that
the CSME presents through development of a Public Education Initiative.

TP.A6: Strengthen the private sector's capacity to advocate its interests in the trade negotiation
process and the development of policies affecting the business enabling environment by enhancing
the private sector's ability to analyze key private sector, sector-specific issues and to develop and present
their positions to counterparts in government.

TP.A7: Create Trade Point Guyana at Golnvest and linked to the other trade related agencies to
provide the private sector with product and market-specific information about the requirements for entry
into key export markets14 (this action supports IP.A3 in the section on Investment Promotion and

Policy Recommendations

TP.R1: Concentrate on trade negotiating positions and trade relationships which:

i. Maximize use of preferential access and margins while they exist but prepare for their loss
in the near future;

14 Trade Point is a multi-faceted network of services including: a) a trade facilitation center, where participants in
foreign trade transactions are grouped together under a single physical or virtual roof to provide all the necessary
services for trade transactions. These participants include chambers of commerce, customs, banks, freight
forwarders, transport agencies and insurance companies b) a source of trade-related information, providing actual
and potential traders with data about business and market opportunities, potential clients and suppliers, as well as
trade regulations and requirements. c) a gateway to global networking, in order to increase the participation of
traders, particularly SMEs, in the emerging electronic commerce economy. The Trade Point network comprises
over 120 member trade centers and is operated by the World Trade Point Federation (WTPF), of which each Trade
Point center is a member. At least three Caribbean countries have already adapted Trade Points and re-engineered it
to meet their specific needs. These include Trade Point Port of Spain
(http://www.tradetnt.com/marketintelligence.shtml), Trade Point Jamaica (http://www.jamaicatradepoint.com), and
Trade Point Curacao (http://www.tpcuracao.com).

ii. Develop time-limited, product-specific requests for Special and Differential Treatment
aimed at addressing the non-tariff barriers that strategic non-traditional products face on
world markets;
iii. Support Guyana's position as a Small and Vulnerable Economy; and
iv. Protect Guyana's advantages in the priority markets of Brazil and CARICOM, by:

Facilitating the flow of information to the private sector about the export opportunities to
these markets (this is supported by the action to invest in Trade Point above);
Ensuring that the mechanisms exist to defend the promised access by Guyanese goods to
these markets (this is related to and supported by a policy recommendation to strengthen
existing mechanisms to defend trade interests below); and
Focusing input into multilateral trade negotiations on ensuring that Guyana's advantage in the
Brazil and CSM markets are not undermined in the immediate future by concessions granted
in the course of multilateral and bilateral negotiations.

TP.R2: Refocus efforts on implementing a limited number of priority recommendations from the
National Trade Strategy:

i. Update the list of Guyana's future trade negotiating objectives in light of international
trade developments since 2003.
ii. Strengthen the National Advisory Committee on External Negotiations (NACEN) and
supporting Technical Working Groups; this framework is central to the process by which
Guyana can improve formulation of a proactive trade negotiating agenda. This effort must ensure
more meaningful private sector input is received by; a). translating materials disseminated for
discussion into layman's language; b). ensuring that smaller, successful businesses are
incorporated into the process.
iii. Ensure staff attending WTO workshops also participate in World Trade Organization
(WTO) activities while in Geneva;
iv. Pursue the option of using the resources of the Agency for International Trade and
Cooperation (AITC) in the absence of a permanent presence at the WTO in Geneva
v. Address gaps in the collection, analysis, and dissemination of trade data

TP.R3: Invest adequate resources in trade-related agencies to enhance capacity and achieve
institutional strengthening. Investments should be prioritized towards providing additional:

i. Sector specific trade specialists in MOFTIC covering agriculture, goods, services and
ii. Trade specialists to other trade-related agencies such as the Ministry of Agriculture and to
the private sector to improve their ability and readiness to participate in the Technical
Working Groups of NACEN.

TP.R4: Strengthen existing mechanisms to defend Guyana's trade interests. Trade interests and
benefits, once negotiated, need to be defended. We must ensure that existing mechanisms support proper
discussion, negotiations, and where necessary, litigation of our trade interests, focusing on the priority
partnerships of Brazil and CSM (to support the work of Caribbean Court of Justice and a Brazil-Guyana
Joint Commission). Mechanisms in need of strengthening include i) reporting mechanisms for exporters
who believe their goods are being subjected to unfair trade practices; and ii) mechanisms to investigate
and pursue relevant claims (some of which could be settled using the alternative dispute resolution
methods permitted within the CSM while others would require representation before the CCJ or political
resolution at the level of the Joint Commission).

Competition and Consumer Protection Policy

Like exposure to international competition, local competition can be an important factor in providing
incentives to our local enterprises to invest in improving their competitive capabilities; the greater the
competition that our firms face, the greater the incentives provided to gaining cost and quality
competitiveness quickly.15 In Guyana, historical evidence suggests that barriers to domestic competition
have been damaging to firm-level capability building.16 International evidence shows a positive
relationship between competition and productivity, and between competition and the rate of productivity
growth, which in turn is one of the main sources of economic growth. Moreover, whilst the existence of
competition in national markets is not all that is required to achieve international competitiveness, a lack
of domestic competition greatly reduces the prospects for domestic producers successfully entering export

In recognition of this the Ministry of Tourism, Industry and Commerce (MINTIC) drafted the
Competition and Fair Trading Bill (CFTB) to conform closely with regional and international best
practices.18 The aims of this Bill are to; (a) promote, maintain, and encourage competition and enhance
economic efficiency; (b) prohibit anti-competitive business conduct which restricts competition or
constitutes the abuse of a dominant position; and (c) promote the welfare and interests of consumers. The
Bill provides for the setting up a Commission and Fair Trading Commission which will be responsible for
pursuing these aims. The legislation also allows for the establishment of the Community Competition
Commission (CCC) which CARICOM are establishing as part of the CSME; this body will work closely
with the national authority to ensure that the benefits of CSME to Guyanese business are not undermined
by cross-national anti-competitive business practices.19

After extensive public consultation and appropriate scrutiny by a cross-party Parliamentary Sub-
Committee, the Competition and Fair Trading Bill was recently passed by Parliament [April 2006]. In
parallel MINTIC has drafted complementary consumer protection legislation for enactment at roughly the
same time. The aims of the Bill are to; (a) promote and protect consumer rights; (b) represent the
collective interests of consumers before judicial or administrative bodies; (c) represents consumers'
interests to Government and enterprises supplying or distributing goods or providing services; and (d)
collect, process and disseminate objective information for the benefit of consumers. Like the CFTB, the
Bill provides for the setting up a Commission, the Consumer Protection Commission, which will be

15 Lall, 2001, Competitiveness, Technology and Skills, Cheltenham, Edward Elgar
16 See Gafar, John, 2003, Guyana: From State Control to Free Markets, Nova Science Publishers
17 The experience of many countries has been that industries lacking domestic competition have greatly reduced
incentives to innovate by adopting improved processes and introducing improved or new products. Competition law
also promotes equal opportunity for smaller entrepreneurs. With free entry, smaller entrepreneurs and those who
lack social or network connections, have a better chance at undertaking productive activities. Studies have also
shown that the benefits of competition do not depend on having large numbers of firms. To obtain the benefits of
competition some degree of competition, but not always competition by a large number of firms, is needed.
Moreover, it is not just market structure but also the threat of entry either by firms or by products that determines
the degree of competition in domestic markets.
18 The current draft of the Competition and Fair Trading Bill is based on the CARICOM draft model legislation; this
was developed by CARICOM during 2003 to ensure as much harmonization as possible of national competition
laws within the context of CSME. Through consultation Guyana's draft Bill has undergone various amendments to
take account of Guyana's specific local circumstances. Nevertheless it retains the essential features of the
CARICOM model legislation; as such it is in-line with Guyana's commitments on competition policy law under
19 For example, conduct by public and private enterprises to divide up markets geographically, fix prices, bid rig,
engage in predatory behaviour or limit competition through exclusionary distribution agreements, amongst other

responsible for pursuing these aims. The Consumer Protection Act has recently been submitted to
Parliament for consideration [April 2006].

The objectives of both pieces of legislation have strong synergies and are strongly inter-connected;
together they will provide for a comprehensive competition and consumer protection system for Guyana.
The strategy for implementation of the new system will be a progressive approach tailored to Guyanese
circumstances and designed to maximize the benefits of the policies, minimise costs, and be
administratively feasible. The system will also ensure the maintenance of incentives to invest for both
local and foreign firms, preserve efficiency arising from economies of scale and scope, and avoid excess
capacity and waste.

With regard to Competition Policy, the strategy recognizes that the Competition and Fair Trading
Commission will not have from the outset the resources and experience to go after every suspicious anti-
competitive case and that the business community requires adequate time to understand and prepare for
implementation of the law. As such the proposed implementation strategy sets aside a considerable
amount of time for appropriate training of staff before any formal investigations are initiated, as well as
the development of an extensive outreach program with the business community. In order to build
credibility from the outset, businesses will have the proposed framework and rationale properly explained
to them, and be given an explicit timeline for implementation.

Actions in Progress and Planned Activities

CP.A1: Set-up the Competition and Fair Trading Commission (CFTC). A Commission will be set up
and assigned adequate financial and human resources using space currently available at the SOFIA

CP.A2: Set-up the Consumer Protection Commission (CPC). A Commission will be set up and
assigned adequate financial and human resources using space currently available at the Sofia complex.
Existing staff currently engaged in handling consumer complaints in MINTIC, the PUC, and GNBS will
be transferred to the new institution to provide the initial kick start required.

CP.A3: Ensure adequate training and internships. To provide consumers and firms with efficient
responses and adequate handling of information and cases within each authority, in the short term there
will be programs for training and internships for staff. In the case of the CFTC, moving forward, options
will be explored for offering Graduate Scholarships in law and economics to ensure the long term
availability of qualified and motivated human resources committed to the Commission. Options will also
be explored for promoting a joint academic program in Competition Law and Economics between the
University of Guyana and the University of West Indies to strengthen competition-related concepts in
undergraduate students.

CP.A4: Develop an outreach program with the business community to create awareness among firms
and the general population on the value of the system, its nature and impact. Short courses on
Competition and Consumer Protection will be offered for interested parties.

CP.A5: Strengthen the consistency and public awareness of commercial legislation by reviewing
relevant laws and developing a guide on commercial legislation in Guyana.

CP.A6: Conduct dialogue with private and public stakeholders on Mergers and Acquisitions
(M&A), anti-dumping, and structure of institutional regulatory framework.

CP.A7: Develop the collection and management of statistics at market, sector or business level to
ensure the availability of statistics to use as inputs for the production of material for case resolution and
information diffusion.

CP.A8: Coordinate actions on the widespread use of purchase receipts between Guyana Revenue
Authority and Competition and Consumer Protection Commission. This will provide a framework
that allows for consumers to enforce consumer protection law by providing them the proof of their
transactions. The proposed commercial invoice and VAT system will facilitate this activity.

CP.A9: Strengthen consumer associations to ensure the enforcement of the consumer protection

CP.A10: Participate in CARICOM competition and consumer protection policy coordination to
ensure harmonization of regional and national consumer protection and competition policies.


No further actions proposed at this time

Taxation Policy

General Taxation

Taxation policy is important for national competitiveness because it helps to either retard or stimulate
productive investment. The graduated system of taxation for competitiveness should where possible be
fair, transparent, and progressive.

Since the early 1990s, Guyana's tax system has undergone a series of reforms aimed at stimulating
investment. In recent years, the tax reform programme has accelerated significantly, and in 2000, the
Government established the Guyana Revenue Authority (GRA) to lead the implementation of the
accelerated programme. In addition, in 2004 various fiscal tax laws were amended to minimize discretion
in the granting of fiscal incentives. For example, the Custom's Duties (Amendment) Order was issued to
minimize discretion in the granting of exemptions.

The most important recent reforms, which have either been adopted or are in the pipeline are:

Introducing Value Added Tax and Excise Tax to replace the Consumption Tax system. The
effective date for the introduction of the Value Added Tax and the Excise Tax will be January 1,
2007; this timeframe will help ensure that the private sector and other stakeholders have sufficient
preparatory time to ensure successful implementation of the system. The new system will help
broaden the business tax base and help flatten the tax schedule by eliminating extreme variations
in rates. The new excise tax schedule has been adapted accordingly to ensure a revenue neutral
impact. To support these reforms, under the Ministry of Finance's Fiscal and Financial
Management Programme, an integrated information technology system is being established at the
Guyana Revenue Authority (GRA) to complement the recent establishment of a modem system
for controlling and recording tax exemptions.
Increasing the annual threshold of personal income tax beginning in 2006 from G$240,000 to
G$300,000 and replacing the current rates of 20% and 33 1/3% with a single rate of 33 1/3%; this
will ensure higher take home pay and removes approximately 20,000 persons from the income
tax net.

As the VAT and Excise Taxes move to implementation in 2007, the next major challenge for the
Government will be to unify and then lower the Corporate Income Tax to a rate which enables Guyana to
be regionally and globally competitive whilst not unduly eroding the revenue base. In the recent past, a
lower CIT has been delivered to companies through tax exemptions, but there is an argument that an
across-the-board lower CIT not only broadens the tax base, but (importantly for Guyana, with our
resource constraints) has a much lower administrative burden than exemptions.

In 2006, the Government will be commissioning a study to examine the various options for lowering the
CIT, in conjunction with streamlining further the system of incentives provided (see following section).

Ongoing Actions and Planned Activities

TaP.Al: Implement the new VAT and Excise Tax including an outreach program with the local
business community to sensitize them in the workings of the new system.

TaP.A2: Carry out a study to examine the various options for lowering the Corporate Rate of
Income Tax (CIT). Following the results of the study, reduce the Corporate Rate of Income Tax
(CIT) to a level that will be effective in stimulating higher levels of private investment whilst not
unduly compromising Government revenue.


No further action proposed at this time.

Incentives for Attracting Investment

In order to facilitate investment and expansion in key sectors of the economy, the Government provides
an array of across-the-board investment incentives, including benefits for industrial estates, accelerated
depreciation, export allowances, loss carryforward, construction allowance, and research and
development allowances. Guyana also offers several sector-specific programmes to promote trade and
investment in several strategic sectors of the economy including tourism, fisheries, mining, forestry,
manufacturing, and agriculture. Locals and foreign companies are treated alike with respect to these
incentives. The In-Aid-of-Industry-Act also provides for the acceleration of depreciation on specific
capital expenditures to specific industries and under the Industries Aid and Encouragement Act,
prescribed items may be imported duty-free for the purpose of establishing a new industry or developing
an existing one. Furthermore, Guyana offers duty-free imports and tax holidays to investors with a key
consideration being generation of value added. The Small Business Act was also recently introduced to
allow small businesses to enjoy incentives that are not currently available to them.

However, the world is changing to an open multilateral / regional regime i.e. one not based upon bilateral
trading patterns and preferences, but one of multilateral competition and mobile investment. Within this
environment it is particularly challenging to attract FDI.

The Government is cognizant of the view that the array of investment incentives currently offered does
not always correlate with increased levels of investment, particularly FDI. Moreover, delays still afflict
the approval process, and elements of the present incentive system including tax holidays may distort
allocative efficiency, skew benefits towards large and established companies, and place a large
administrative burden on Golnvest and MINTIC. Certain aspects of the system also remain discretionary
in nature, leading to uncertainty among investors. In addition, the current tariff structure tends to favor
raw material inputs over intermediate and capital goods; this affects the competitiveness of valued added
products and Guyana's attractiveness for investment vis-a-vis producers/exporters in countries that have

across-the-board lower tariff rates. The duty exemption/drawback system has been used in the past as a
solution to this issue, but there is an administrative overhead to this solution which should ideally be
removed. Moreover, the system is of questionable usefulness as a means of reducing duty rates on
intermediate and capital goods as many enterprises, especially SMEs, buy these goods locally.

For these reasons, in parallel with the study to determine the optimum level of Corporate Income Tax,
options to improve the system of incentives and ensure that incentives are used only when they deliver
significant competitiveness-enhancing value will be examined. To complement this, options will be
explored to improve the tariff structure to attract increased investment and enhance the competitiveness of
Guyanese enterprises.

Ongoing Actions and Planned Activities

TaP.A3: Carry out a study examining options for improving the efficacy of the current system of
fiscal and duty incentives and tariff structures, as part of the same study that will be looking at the
options for unifying and reducing Corporate Income Tax (CIT). Following the results of the study,
refine the system of fiscal and duty incentives and/or tariff structure in a way that improves the
business friendliness of the tax environment without unduly compromising government revenue.


No further action proposed at this time.

Supply Side Policies

There are currently a number of factors inhibiting the competitiveness of Guyana's productive sector on
the supply side of the economy. Table 3.1 presents the basic problems relating to the core supply-side
drivers of enterprise competitiveness. The Government is committed to systematically addressing these
factors through the identification of a set of solidly-founded recommendations of policy actions and
associated investments.

Table 3.1: Core Supply-Side Impediments to Competitiveness

Skills/Workforce Finance Infrastructure Technology Red Tape Other

Workforce with low
productivity and
narrow skill base

Mismatch between
supply and demand
of skills
in the labour

Weak vocational and
technical training
that does not tailor
skills to needs of

Shortage of
professional business
management skills

Absence of firm or
sector specific
specialised training

Too little emphasis
on vocational and
technical training
versus academic

Insufficient FDI
inflows as a source of

access to
finance for
investment and
working capital

Market failure
within banking
sector (e.g.
inability to
assess risk)

Insufficient FDI
inflows as a
source of capital

export related
assistance e.g. no
pre and post-

High cost and
unreliability of
electricity supply

High cost of
shipping and long

Insufficient supply
of affordable
factory space


capital goods
imports, and
FDI as sources
of foreign


Low level of

Lack of
awareness of
standards and
access to

procedures e.g.
lengthy duty
investors have to
visit numerous
agencies for
permits etc...

Lengthy customs

Over-regulated and
complex regulatory
and legislative

High level of
labour turnover

Low emphasis
on quality,
standards and

Lack of strong

Investment Promotion and Facilitation

A predictable and transparent legislative and regulatory regime for domestic and international investors,
coupled with dynamic and effective investment promotion institutions, are essential to Guyana's national

In recognition of this, the Government is following a two-prong strategy to deliver these two key
ingredients: (i) through the implementation of world-class investment legislation and regulation, starting
with the passing of the Investment Act in 2004; (ii) through the acceleration of institutional strengthening
at GO-Invest, which is the critical interface between business and government on investment and export-
related issues.

Investment Act 2004

The Investment Act was passed in 2004 to lay the foundations for improving the investment climate and
providing reassurance to investors regarding foreign exchange, equal treatment, and expropriation. The
objectives of the Act are to:

provide legal protection for investment;
increase the predictability, stability and transparency of the legal regime for investment;
promote the development of international best practices regarding investment;
streamline the existing procedures for investment;
establish the structure, role and responsibilities of a new public-private Investment Promotion
Council (IPC).

Box 3.1:
Guyana's Investment Act: Key provisions

The Act covers investments made by individuals and by legal entities;
There is no discrimination between foreign and domestic investors;
Investors may invest in all fields of lawful economic activity;
Investments may be made in existing enterprises, either joint ventures or wholly-owned, by
domestic or foreign investors;
Private investment are guaranteed by the Government;
Expropriation can only take place based on the laws of Guyana, promulgated on non-
discriminatory basis and providing for fair and prompt compensation;
Proceeds and profits from investments may be freely repatriated and out of the country business
expenses in foreign currently are also permitted. Limitations may be placed on enterprises which
are under bankruptcy or declared insolvent or the investor has a pending criminal proceeding;
Investors can hire foreign personnel and these also have the right to repatriate their net earnings;
Intellectual and property rights of investors are guaranteed under Guyanese laws;
In case of disputes, mediation is the recommended form of conflict resolution. However, if
settlement is not made amicably, the investor may seek international arbitration under the rules
of the International Center for the Settlement of Investment Disputes (ICSID).

The challenge now is to ensure the effective implementation of the Act through the appropriate
regulations and other measures, as well as setting up the Investment Promotion Council. Once these
improvements have been delivered, the next set of reforms will be considered, including:

Examining the number of conditional insurances within the Act to ensure that the discretionary
aspects of the Act do not place excessive administrative burden on the Government, in particular,
GO-Invest (when the resources of the agency could be better spent on more valuable investment
promotion activities).
Enhancing the legislation to enable the IPC to strengthen its role as a high-level public-private
advisory council on all investment and export related policy issues. Currently, the act envisages a
limited initial role for the IPC an annual review of the Priority List (under the Income Tax Act);
and annual recommendations to the regime of fiscal incentives.

Actions in Progress and Planned Activities

IP.Al: Ensure effective implementation of the Investment Act through a) development of
appropriate regulations and other implementing measures b) setting-up the Investment Promotion


IP.R1: Review the Investment Act (and other related legislation) to:

i. Revise Go-Invest mandate's to i) make its facilitation, generation and advocacy mandate
stronger ii) maximize the efficiency of Go-Invest's role in incentive administration iii) reflect its
role with respect to export promotion iv) clarify the role of the Go-Invest Board and its
relationship with the new IPC.
ii. Review and expand the role of The Investment Promotion Council to give the IPC a
stronger mandate including:

Making it a pre-eminent, high-level public private dialogue advisory mechanism.
The Council should consist of an equal number of representatives from private sector
organizations and from key government agencies that provide support to the traditional
and non-traditional sectors. It should report to the National Competitiveness Council.
Expanding its mandate to include export related issues and revising its name
accordingly to the Export and Investment Promotion Council (X-IPC). The X-IPC
will act as the lead coordinator of a cohesive investment attraction and export strategy.
See also Recommendation EP.R8 in the section on Export Promotion and Facilitation.
Progressively ensuring that its role in incentive "fine tuning" does not compromise
its effectiveness.


GO-Invest has a crucial dynamic role to play as the main interface between business and Government on
investment and export related issues. In recent years, GO-Invest has been expanded with impressive

*The latest client survey from 2003 conducted by the GEO project (supported by USAID) found
that 91 percent of all respondents found the service provided by Go-Invest satisfactory or better.21
Furthermore, customer satisfaction has improved substantially based on a comparison of the
findings of the 1999 and 2003 client surveys.

20 Golnvest has received some support in recent years from the Guyana Economic Opportunity (GEO) Project
(USAID) and now from its follow-up project, Guyana Trade and Investment Support (GTIS).
21 GEO Project (annually 2000-03), Results of a Client Satisfaction Survey for Go-Invest, (Guyana: USAID).

*A Report from 2002 by FIAS noted "a more dynamic Go-Invest [as] the most significant
improvement ... identified," and that the more active involvement of Go-Invest and the
Government in the facilitation of key investors was an important step forward in Guyana's reform

However, as the international economic environment evolves, and Guyana increasingly needs to compete
globally instead of regionally, GO-Invest will have to change further. This will involve:

Utilizing a limited human and financial resource base to deliver more dynamic investment
promotion activities in the key areas country image building, facilitation, investment
generation, and policy advocacy and spend less time on incentive mediation.
Further improving GO-Invest's ability to act as a facilitator for investment. Table 3.1 shows the
number of agencies with which an investor or potential investor may have to deal. This is
contrary to the role envisaged for GO-Invest by many private investors as the key autonomous
facilitator for investors in Guyana.22

Table 3.1:
Ministries and Authorities that the Investor has to Potentially Deal With

1. Central Board of Health
2. Customs and Trade Administration
3. Deeds Registry
4. Environmental Protection Agency (EPA)
5. Fire Services Prevention Section
6. Food & Drug Department
7. City Engineer's Department
8. Guyana National Bureau of Standards
9. Guyana Power and Light
10. Guyana Revenue Authority (GRA)

11. Guyana Telephone and Telegraph
12. Guyana Water Inc.
13. Land & Surveys Commission
14. Ministry of Foreign Trade & International Cooperation
15. Ministry of Home Affairs
16. Ministry of Labour, Human Services & Social Security
17. Ministry of Tourism, Industry & Commerce
18. National Insurance Scheme (NIS)
19. Occupational Safety and Health Commission
20. Secretary to the Treasury

Source: www.goinvest.gov.gv

In order to support Go-Invest in enhancing its effectiveness as a dynamic investment promotion agency, it
will be necessary to improve the agency's resources and incentive structure, reduce its role in mediating
discretionary incentives, and make its facilitation, generation and advocacy mandate much stronger.
Partly this is about improving the capacity and capabilities of Go-Invest, but it is also about raising its
profile in the investment and export promotion framework, reducing the administrative functions in its
mandate, and ensuring that it influences the investment policy process.

22 For example, see the results of repeated Client Satisfaction Surveys for Go-Invest, 1999-2003 (Guyana: USAID).

Box 3.2 What Should Golnvest Be Doing?

Investment Promotion

Go-Invest should be active in the four areas of investment promotion, and continue to expand its operations in a phased
manner, concurrent with its capacity, and Guyana's state of investment maturity.

Proactive image-building without devoting large budgets and numerous overseas activities. In the short-term, this
can be helped by a professional web presence, although regional investment generation efforts could be valuable.
Guyana should be careful to state the facts and not "over-claim". The best strategy for image-building for Guyana is
to continue to improve the investment environment and develop a reputation for increasing investor-friendliness.
Solid progress will advertise itself.
Investment facilitation is of prime importance, but this should progressively be less about negotiating discretionary
incentives, and more about proactive relationship building with existing investors, large and small (the latter through
business groupings perhaps); facilitating inclusive public-private dialogue; mastering the procedures that businesses
must navigate (rather than just capturing the theory about how they are supposed to work); and serving as a source of
information on administrative procedures and business resources (e.g. supplier infrastructure, training resources,
certification, and so on).
Investment generation is important in a holistic sense. Along the spectrum of investment generation activities costly
promotional missions are not as important as supporting domestic sectoral strengthening efforts, and helping shape
public policy and investment decisions.
Policy advocacy is an important extension of both investment facilitation and generation. On both fronts Go-Invest
needs to provide high-quality advice to the government. It should do that through a more systematic and active
relationship with its supervisory body, the Office of the President.

Export Promotion

GO-Invest is also currently charged with export promotion (see also section on Export Promotion). Investment and export
promotion are closely linked in Guyana and much new investment (foreign and domestic) will be export-oriented. At the
same time, Go-Invest ultimately must grow to serve investors throughout Guyana's large territory. In many ways, Go-
Invest will have enough to do just fulfilling the investment function. The existence of NGMC, and of good investment
and export promotion skills within Go-Invest offers a valuable possibility for NGMC and Go-Invest to work together as
sister organizations in the future whilst concentrating on their own specialty.
For the next year or two Go-Invest could continue to expand its export promotion skills and client base building
upon the strong reputation it has, especially in the Georgetown area. In due course, Go-Invest's Export
Promotion Officers could move to NGMC and act as the solid bridge between the two complementary
In due course, Go-Invest will also need to expand services to domestic investors which will require field offices
that Golnvest does not currently have. After one or two years a few of the expanded cadre of investment
officers at Go-Invest could (in rotation perhaps) be deployed to joint regional offices established with NGMC.

Ongoing Actions and Planned Activities

IP.A2: Create a new vision for Golnvest to reflect its increasingly important role in country image
building, facilitation, investment generation, policy advocacy, and export promotion by approving a
new expanded charter through a revised Order under the Public Corporations Act. This action
complements Recommendation EP.R9 in the section on Export Promotion and Facilitation.

IP.A3: Expand the capacity and capabilities of Go-Invest. This will initially involve partnering with a
senior investment advisor to develop an institutional strengthening action plan to ensure Golnvest can
fulfill its new expanded Charter including i) setting annual targets in new areas of responsibility ii)
aligning organizational procedures and resources to achieve these targets; and iii) developing an
appropriate governance structure in order to implement its targets. The plan will likely include:

i. Recruitment of at least four additional investment officers to spend much of their time developing
relationships with existing and potential new investors. Each officer should have a portfolio of
clients, a sectoral lead responsibility, and a primary focus on domestic or international clients.
ii. Recruitment of a long-term advisor to support Go-Invest in strategic investment facilitation and
generation activities for a period of up to two years.
iii. Study tours to good practice IPA countries (e.g. Jamaica, Costa Rica)
iv. Development of a more comprehensive investor tracking system.
v. Development of practical sectoral investment guides
vi. Creating a remuneration plan that rewards proactivity and performance.
vii. Helping to connect Golnvest to trade point software and provide complementary computer
equipment and training material geared to providing export market information to businesses (see
also TP.A7 in the section on Trade Policy).
viii.Helping develop a business information access centre to host Trade Point (see also BDS.R7 in the
section on BDS).
ix. Strengthening Golnvest's investment facilitation role by simplifying the investment application
process involving different steps at different agencies;
x. Developing in-country image-building and product promotion programs in CARICOM countries
xi. Developing strategic investment attraction programs
xii. Developing an export support department providing export-readiness assessments and value-
adding business advisory services in coordination with other export-development agencies (see
also EP.A1 in the section on Export Promotion and Facilitation).
xiii.Developing public training courses in business skills and investment procedures.
xiv. Pursuing a stronger policy advocacy role
xv. Developing and tracking investment performance and export indicators
xvi. Developing a business model to assist in building, operating and maintaining turn-key industrial
park facilities, along with support to evaluate sites and locations, establish the appropriate
ownership/title structure, develop a master plan for refurbishing/construction, and market the idea
among potential investors (see also Chapter 4 on Manufacturing).

IP.A4: Complete and disseminate an updated Go-Invest Investment Guide: "Doing Business in
Guyana" for use as a marketing tool for attracting potential investors.


No further actions proposed at this time.

Export Promotion and Facilitation

An efficient and effective export promotion framework is a key prerequisite for export competitiveness.
Most of Guyana's export promotion initiatives are currently performed under the aegis of three

i. GO-INVEST, which as well as its Investment Promotion services, offers a full complement of
services to exporters including; providing current and potential exporters with trade information
for the successful exploitation of overseas markets; assisting exporters in promoting their
products through participation in national and international exhibitions and trade missions;
working closely with other exporting organizations to ensure that problems affecting exporters
are expeditiously addressed; recommending to Government practical measures to stimulate
export trade; advising the Government on the formulation of national export policies and the
implementation of such policies; and collaborating with donors on identification of firm-level

exporter needs and endorsing/supporting the establishment of such programs to the private sector
in key growth sectors

ii. The New Guyana Marketing Corporation (New GMC) which provides more finely-honed
assistance than GO-INVEST by helping to facilitate and coordinate the development of quality
non-traditional agricultural produce for export. It provides assistance on export facilitation (e.g.
advice/filling out of customs forms etc., to small exporters for a nominal fee); information on
post-harvest technology and training programmes; monitoring of daily prices on local markets;
and participation in trade fairs and expositions. Of exceptional value to Guyanese exporters are
the New GMC's country-specific export marketing bulletins which provide profiles of key
markets for products with strong export potential.23

iii. The Forestry Products Marketing Council (FPMC); launched on 3rd December 2005 with a
mission "to ensure the sustainability of Guyana's forest products industry by increasing value
adding and improving its competitiveness through enhanced market access and increased trade
opportunities". Its functions include market intelligence, trade missions, developing industry and
product information and providing advice on export-related services such as product packaging
and handling etc. The Council reports to the Ministry of Agriculture, Fisheries, Other Crops and
Livestock and has guaranteed funding from Government for the first two years of operations. The
FPMC has listed 15 activities and 13 desired projects in its first annual work plan (for 2005 -
2006). Of the 13 projects, 3 industry training, legal and sustainable verification, identifying and
promoting lesser-know species are earmarked for immediate start up/technical assistance.

This institutional framework for export promotion has performed well in recent years, with a number of
key strengths including good sector representation and a high degree of inter-agency collaboration.

The World Bank's Doing Business team recently compiled procedural requirements for exporting and
importing a standardized cargo of goods into and out of Guyana, which indicated that Guyana's
documentation processes are on par with the region and close to that of OECD countries.

Nevertheless, despite these strengths and recent achievements, there are a number of key challenges and
issues confronting the system for export promotion which must be overcome to provide the type of
conducive environment required for a step change in exports, especially of higher value added goods and
services. For example, at the operational level:

As outlined in the section on Investment Promotion, GO-INVEST only has a professional staff
contingent of 8 and is operating at full capacity. As such it will not be able to contribute much
more without: a) increasing its operating capacity; and b) concentrating on its core functions only.
Whilst NGMC has been reasonably effective in providing developmental support to non-
traditional producers and exporters, the agency still lacks the technical knowledge to provide
support on value-added market development strategies.
The FPMC was only recently established and, in the short term, is unlikely to make major
contributions to the value-added thrust that is needed in the forestry/wood products sectors.

In the policy arena, a number of issues are also salient:

23 Funded by USAID these rapid reconnaissance surveys provide pertinent information on export market
requirements, market size, competitors, and Iho\ to" information for potential and existing exporters.

There is limited collaboration between sectors on supply chain issues in terms of optimizing
overall export potential and there is insufficient coordination on export development agendas i.e.
there is no overarching coordinating mechanism for export promotion/export development
Private sector representation at the policy formulation, strategic and operational levels is
GO-INVEST and GMC currently have no formalized legal mandates to carry out their export
promotion activities.24
There is an absence of export performance targets and systems for monitoring, evaluating and
identifying corrective action or areas for improvement to overcome new bottlenecks or
There is no institutionalized capacity to assess/identify synergies along the supply chain that
emerge as new markets open up for traditional and non-traditional products.
Export promotion is focused almost entirely on producers and manufacturers with limited
attention given to buyer priorities.

The framework for export promotion also faces a number of challenges in the area of laws, regulations,
and export facilitation including:

1. The special incentives created to exempt profits on international exports only, are now
inconsistent with the emerging strategy to increase exports to CARICOM markets.25
2. Variations in export taxes, which range from 5% to 20%, favor some industries over others; high
rates (e.g. 20%) make exports less competitive internationally and reduce the amount of retained
earnings to finance improvements in operating systems by exporting firms.
3. The current tariff structure favors raw material inputs over intermediate/capital goods; this affects
the competitiveness of Guyana's valued added products vis-a-vis exporters in countries that have
across-the-board lower tariff rates (as before).
4. The duty drawback system is of questionable usefulness as a solution to high tariffs on
intermediate or non-zero based goods (as before).
5. In terms of export efficiency, time to export for Guyana is about one-third longer than the average
for the region and three times as lengthy as the average for Organization for Economic Co-
operation and Development (OECD) countries.

Actions in Progress and Planned Activities

EP.A: Refocus Golnvest's export promotion services to offer two key services at the firm-level:
exporter readiness assessments and specific "value-adding" advisory services. See also Action IP.A3
in section on Investment Promotion and Facilitation and Action BDS.A6 in section on BDS.

EP.A2: Improve export facilitation efficiency to internationally-benchmarked standards by:

i. Conducting a trade transaction study with Customs, wharf operators, freight forwarders and a
sample of exporters from traditional and non-traditional industries to develop an action
plan/programme for improvements in export facilitation efficiency;
ii. Implementing "quick hit" solutions identified by the study;
iii. Reviewing and endorsing longer term improvements by relevant Government entities.

24 In both cases, export promotion is not mentioned under their respective Acts.
25 These incentive programs may be short-lived anyway because of Guyana's commitments under the WTO

EP.A3: Carry out a study examining options for improving the system of export taxes and
incentives for export (as part of the same study that will be looking at the options for unifying and
reducing Corporate Income Tax (CIT) and improving tax incentives) to:

i. Give equal treatment to exports to CARICOM (i.e. allow net profits earned from exports to
CARICOM to be exempt from income tax)
ii. Reduce or eliminate export taxes

Following the results of the study, refine the system export taxes and incentives for export to
effectively stimulate exports (especially of higher value added goods) in a way which does not
unduly compromise government revenue.

EP.R4: Study policy options for designing incentives to Business Development Services (BDS)
providers to encourage the provision of firm-level business to business export promotion services,
as part of the same study that will be looking at the options for unifying and reducing Corporate
Income Tax (CIT) and improving the general structure of incentives. See Recommendation BDS.A4
in section on BDS for more detail.


The following recommendations are not focused on radical reform to the regulatory and institutional
framework for export promotion and facilitation but instead focus on strengthening the roles that export
promotion plays, in terms of its contribution to Guyana's export-led growth.

EP.R1: Maximize use of NGMC's limited resources by re-focusing its export promotion efforts on
the provision of information and advisory services that support value added initiatives.

EP.R2: Maximize the initial impact of activities delivered by the FPMC by focusing resources on
seeking out investment linkages with North American wood processors and CARICOM
importers/distributors (in-line with the challenge of increasing Guyana's regional market share).

EP.R3: Increase the provision of firm-level assistance to firms to strengthen their capacity to
penetrate new markets with value added products. This activity should be market-driven with
importers acting as both collaborators and key sources of information on market development
opportunities. The activity would initially provide a) assistance to 50 100 firms in value-added product
development; and b) support in-country image-building and product.

EP.R4: Develop in-country programmes to continually promote: a) Guyanese products in
CARICOM markets; and b) integrated investment promotion/export promotion strategies for
investors/exports. The objective of this policy measure is the same as for EP.R3. This recommendation
is a second complementary part of EP.R3. While EP.R3 is focused on strengthening export capacity (i.e.
on producing aspects of the supply chain) EP.R4 places emphasis on market penetration or the nmrkering
end of the supply chain. Under this measure, funds will be made available to GO-INVEST, New GMC
and FPC to implement "Buy Guyana" promotional awareness programmes in importing CARICOM

EP.R5: Strengthen the capacity of Guyana's Export Promotion Agencies (Golnvest, NGMC,
FPMC) by: a) charging user fees; and b) marketing fee-based project management services to
clients. Initially private sector contributions should be minimal but should be increased on a sliding scale

EP.R6: Increase private sector representation at executive decision-making level in the Export
Promotion Agencies. In the short term this policy measure requires the three export promotion agencies
to increase private sector representation on their executive boards/councils to at least 50% within 12
months. In the long term it requires an across-the-board adoption of the same policy at decision-making
levels in all key export development entities.

EP.R7: Expand the role of the IPC to act as: a) lead coordinator of a cohesive export strategy; and
b) a central government-private sector interface on national export development issues (see
Recommendation IP.R1 in the section on Investment Promotion and Facilitation for more detail).

EP.R8: Revise Go-Invest's and NGMC's charter to reflect their roles in the provision of export
promotion services through a revised Order under the Public Corporations Act (see also
Recommendation IP.A2 in the section on Investment Promotion and Facilitation for Go-Invest).

Access to Finance26

Access to finance at competitive interest rates (for working capital and capital investments) is an obvious
requirement for creating and sustaining competitiveness and is a critical element in investment decisions.
It is Government policy that most finance for businesses should be provided through the commercial
banking system, and not by the Treasury.

In line with this policy, Government strategy to improve the ability of enterprises to access finance is built
on three planks:

Providing the legal and regulatory foundations for a competitive and effective commercial
banking system (enabling environment)
Encouraging an active competitive market-place for financial institutions (supply side)
Enhancing the capacity of enterprises to access and deal with the banking system (demand side)

Major challenges faced by enterprises in these three areas are summarized in Table 3.2.

26 Note that policy options to increase access to finance, reduce its cost and to solve issues related to secured
transactions have been identified and prioritised on the basis of feasibility within the current local financial services
environment and expected impact (magnitude and period in which impact can be expected) i.e. short term (one
year), medium (one to three years), long term (more than 3 years). Note also that a number of policies were
identified during preparation of this draft of the NCS which were considered not feasible for priority consideration at
this time and/or are likely to have little impact; these include the establishment of venture capital funds, extending
leasing, linking savings with access to loans/collateral substitutes, strengthening the operating capacity of the stock
exchange market, provision of additional funding to DFLSA, and facilitation of long term matching grant funds for

Table 3.2: Challenges facing Enterprises in Accessing Finance

Supply side (financial institutions) Demand side (enterprises) Legal and regulatory framework
Limited range of financial institutions Export credit insurance to cover Legal framework restricts access to
and services limiting the supply of commercial and political risk of foreign currency accounts for
short and medium loans exporting enterprises enterprises working principally with
locally purchased inputs
Relatively high interest rates Lack of information about financial Legal framework does not permit
services and the requirements for (exporting enterprises) to borrow
accessing finance. abroad
Banks try to reduce the impact of risk Weaknesses in the area of accounting, Time consuming and costly procedures
factors to a minimum financial management and marketing to realize collateral

Limited capacity of the banks to Limited quality of business plans and Time consuming and costly procedures
appraise long-term projects, especially investment proposals to register mortgages
in non-traditional export areas
The credit information collection could Quite a number of businesses do not Land tenure not completely regularized
be improved in terms of cost reduction comply with the type and value of and information systems not updated
and risk prevention collateral required by the banks and accurate

Financial institutions (banks) prefer
immovable property as collateral and
the value of required collateral is
relatively high

Providing the Legislative and Regulatory Framework

The Bank of Guyana has statutory responsibility for authorizing and supervising all licensed financial
institutions in Guyana. The BoG exercises its supervisory functions under the Bank of Guyana Act 1998
and the Financial Institutions Act 1995 which were recently amended to strengthen supervision and
fiduciary oversight of the financial sector.

Despite the Government's position that the legislative and regulatory environment is adequate for a
better-functioning banking system, the Government will continue to seek ways to improve the overall
framework. In particular, the following issues will be further analyzed:

Restrictions governing the opening and use of foreign currency accounts and on borrowing
abroad: Currently only enterprises which import more than 35% of their materials are allowed to
open foreign currency accounts and must use the foreign currency in these accounts for business
purposes. Businesses/banks have to apply to open such accounts to the Bank of Guyana. This
means that enterprises exporting goods prepared with locally purchased machines and inputs do
not have the opportunity to open a foreign currency bank account and to receive export earnings
on this account.

Weaknesses in the framework for secured transactions: Despite recent improvements, large
numbers of enterprises in Guyana do not have the collateral preferred by banks (immovable
property and high value collateral). A number of factors contribute to this situation; buying and
selling land is still a relatively time-consuming process (and banks want to be able sell the land of
a borrower in case of default), legally unclear and uncertain titles remain with the resulting
difficulties to use the property as collateral; a backlog exists in the registration of collateral; and it
is still difficult to reinforce secured interest (execution of collateral). The impact of these issues
on enterprise development and export competitiveness is that enterprises often have no access or

access under less favorable conditions to i) loans for working capital ii) loans for investment in
modem production techniques.

Ongoing Actions and Planned Activities

This action supports and complements work described elsewhere in the NCS which will assist in the
resolution of issues concerning secured transactions and the execution of collateral.

AF.Al: Establish a commercial court (this action supports CDR.A1 in the Resolution of Commercial
Disputes section). This action addresses the issue of seizure and sale of immovable property and the
establishment of secured interest in movable and immovable property.


As above, these recommendations reinforce, support and complement work recommendations presented
elsewhere in the NCS.

AF.R1: Develop a comprehensive land and property markets policy (this recommendation supports
LPM.R1 in the land and property market section). Particularly relevant for access to financing are i)
support to the on-going transformation of government land into freehold land and ii) involving the
financial sector in this process addressing issues such as investment and land and property markets.

AF.R2: Improve land administration procedures (this recommendation supports LPM.R2 in the land
and property market section). This action should include the review of the procedures to establish and
perfect secured interest in land.

AF.R3: Promote understanding of property-related economic opportunities (this recommendation
supports LPM.R4 in the land and property market section). This action proposes activities to make the
public aware of the possibilities to use their possessions (property, leases) as collateral.

AF.R4: Review the legal framework in relation with establishment and perfecting secures interests
in other property than land (both movable and non movable property)

AF.R5: Establish a legal framework which enables profitable leasing activities whilst providing
adequate protection to licensed financial institutions.27

AF.R6: Conduct a study examining options for reducing restrictions on borrowing abroad, opening
foreign currency accounts and on the use of foreign currency. Following the results of the study,
revise regulations governing borrowing abroad, opening foreign currency accounts and on the use
of foreign currency to improve the efficiency of business transactions for export (without unduly
risking large scale capital outflows).

27 Financial leasing is a service which is almost similar to lending but which has some advantages compared to
lending. Leasing is a typical medium term form of financing (3 to 5 years) with the advantage that the ownership of
the leased equipment remains with the bank or leasing company, which purchased the equipment. Leasing can be an
advantage for enterprises who do not have additional collateral other than the equipment. In this case the equipment
can be used as collateral without the transaction cost involved in establishing and perfecting secured interest
because the equipment is already owned by the bank and the risks involved can be covered by higher interest rate
and insurances.

Encouraging an Active and Competitive Banking Market-Place

The Government believes that the commercial banking system needs to address a number of fundamental
issues in order to deliver the kind of financial services that will allow our enterprises to be competitive,
expand their profits, and grow. It is imperative that the commercial banking sector rises to the competitive
challenge and adapts to the new demands of the global market place in the delivery of high quality and
efficient financial services.

The Government can support the process of change but ultimately the financial services sector needs to be
proactive and work to develop effective strategies to address current weaknesses in the financial system.
This includes addressing the following key issues:

Limited access to financial services for enterprises: The range of financial institutions in
Guyana is fairly limited and Banks currently do not offer financial services, fee rates and interest
rates which differentiate between sub-sectors of the economy. Moreover, the relative importance
of investments of the banking system in the enterprise sector has been on the decrease. In
particular, access to long-term finance is limited and the absolute and relative importance of total
loans and advances to the productive enterprise sector in the portfolio of banks has been on a
downward trajectory in past years.28 Funds are increasingly being used to purchase government
treasury bills or for investments overseas. Thus the banking sector is very liquid yet shy to invest
in productive economic activities, limiting itself to providing short-term working capital loans or
advances.29 Moreover, exporting enterprises are currently unable to access a number of financial
instruments which would help facilitate their operation in international markets. For example, the
financial sector does not currently offer comprehensive export insurance, transport insurance, and
insurance against foreign currency exchange losses. In many countries banks pre-finance
exporting enterprises on the basis of letters of credit or other types of draft but this service is not
widely used in Guyana, partly because of the non-availability of export insurance.

The relatively high cost of finance: High interest rates affect the competitiveness of Guyana's
products and determine, with other factors, which products are profitable and which are not. In
general the same factors affecting access to finance, also affect the cost of finance. Progress has
been made in recent years in reducing lending rates; the Bank of Guyana weighted average
lending rate was reduced from 14.73% to 9.7% in the period July 2004 2005. This rate is
currently only a little higher than rates in surrounding CARICOM countries such as Trinidad and
Tobago, where prime lending rates are roughly 9%. Yet Banks visited during the October 2005
specified annual rates of up to 18% (on a declining balance; floating according to inflation rates);
the exact rate depends on the type of client, the loan term, the size of the loan, the risk involved
on the one hand and the availability and value of the collateral on the other. Additionally, banks
charge various fees which can go up from 1% to 3% calculated over the loan amount. 30 Annual
micro finance rates fluctuate around 15% flat.

28 The absolute decline is, for the major part, explained by writing off non-performing loans of the period before,
which was characterized by a poorly-performing banking sector.
29 The micro finance sector provides, per definition, only short-term loans and its influence is rather limited The
total amount of funds used for micro finance must be limited to USD 7.5, while the total number of clients does not
exceed 10,000 on a national level. Other financial institutions providing services to the enterprise sector are non-
existent or embryonic.
30 Some commercial banks cite the reserve requirements required by the Bank of Guyana as the main reason for the
high interest rates, but these are similar to requirements in the other CARICOM countries and even more advanced
economies such as the US.

Figure 3.1:
Typical interest rates for lending to enterprises in other Caribbean countries

Guyana 8- 18%
Suriname 14.5- 18%
Trinidad and Tobago 9%
Barbados 6- 12%
Grenada 9% and above

Financial institutions try to limit the impact of risk factors to a minimum: Historically, banks
in Guyana have been poor at identifying risk factors and managing the risk of lending. This is still
true but progress has been made over the last five years with Banks starting to pay more attention
to client and project selection, to introduce more professional instruments to do this, and to apply
selection criteria in a stricter way.

Box 3.3: The Financial Services Sector in Guyana

There are currently six commercial banks' operating in Guyana, which offer a range of banking
services; together commercial banks make up over 70% of the assets of the financial system.' In
addition to these financial institutions, DFLSA was recently established in Guyana with the
participation of the European Investment Bank and a US$ 2.5 million loan from the Multilateral
Investment Fund (IADB) for extending medium to long term loans to SMEs and selling bonds on the
local market. There are also currently two Private Sector Organizations (PSO's) engaged with financing
micro and small enterprises which accept more flexible forms of collateral and offer small, short-term
loans usually with interest rates higher than commercial banks. These include the Institute of Private
Sector Development (IPED) and the Small Business Development Finance Trust. The stock exchange is
an alternative source for financing long-term investments; nevertheless, the Exchange is still in an
embryonic stage and as such has an organizational and legal framework which will limit its potential
for rapid growth in the short to medium term. There is a notable lack of credit unions and other such
community-based financial organizations in Guyana.

Banks in Guyana mainly provide loans and advances to enterprises. Bonds offered by larger enterprises
were traditionally popular but this financing instrument has slowly diminished in popularity with the
introduction of regular taxes on dividends. Long-term loans with terms above three (3) years are rare,
with the exception of DFLSA which will provide loans with terms of up to ten (10) years. Scotia Bank
and Citizen Bank provide leasing facilities services but on a very limited scale. DFLSA has recently
established a micro finance institution called MicroFin.

Limited capacity of the banks to appraise long-term projects: As mentioned above, it is
currently difficult in Guyana to obtain medium- to long-term loans for productive purposes. This
is partly the result of constraints within the banking system in terms of capacity to appraise longer
term projects, especially in the area of non-traditional exports.

Collection of credit information on clients is time consuming, costly and unreliable: Credit
information is information about the credit worthiness of a borrower. At present, Banks in
Guyana collect this information in two ways i) at the bank itself, if the client is an existing one; ii)
through other financial institutions and other types of institutions that sell goods or services on
credit. The interchange of credit information between banks is currently informal, the process is
lengthy and voluntary, and there is no guarantee concerning the reliability of the information. In
contrast, in many other countries, private and/or public credit bureaus have been set up with this

information, which is normally available electronically and in real time. Improved quality and
accuracy of client credit information, for example through credit bureaus, enables banks to reduce
risks, and thus approve more loans. Furthermore, the availability of better information about the
client reduces the relative importance of collateral.31

Strict collateral requirements of the banks: Despite having given more weight to project
appraisal and client selection in recent years, banks in Guyana still maintain strict collateral
requirements which limit access to financing. Like elsewhere in the world, banks in Guyana
prefer immovable property such as buildings and land as collateral. The most important reason
for this is that the ownership is easy to establish and the property cannot be removed easily.32
Land is immovable property, but in Guyana historically most land was leased from the
Government instead of being owned by those who use it. However, this situation has been
changing rapidly and improvements have also been made by Government to lengthen lease terms.
Nevertheless, little reduction has been seen in the requirements of the banking sector. In addition
to the preference of banks for a certain type of collateral, the value of the collateral required by
banks is relatively high in Guyana and is an obstacle to accessing financing.

Ongoing Actions and Planned Activities

These actions and planned activities can help to support the activities of the commercial banking sector
but they are only part of the answer to delivering a globally competitive financial services sector. The
commercial financial institutions must also be proactive and work with Government towards delivering
this objective.

AF.A2: Determine if the competitive situation in the financial sector is delivering value to customers
and the wider economy. If it becomes clear that the existing financial services sector in Guyana is not
able to provide access to finance at regionally or globally competitive terms, then a study will be carried
out to determine what actions are necessary to stimulate a more competitive market.

AF.A3: Adjust the Financial Institutions Act to allow for regulation in the use of confidential client
information by credit bureaus.

AF.A4: Study policy options for extending temporary tax incentives for long term lending and
investing in enterprises, as part of the same study that will look at options for unifying and
reducing Corporate Income Tax (CIT). This recommendation builds on local experience related to
bonds, which were in fashion before corporate tax had to be paid on profits, and local experience
concerning tax incentives for loans for low income housing.

31 The results of a study based on information on more than 100 developed and developing countries show that on a
macro level, the existence of credit registries is associated with a higher private credit to GDP ratio, after controlling
for other country level measures. See Margaret Miller J. 2003, Credit Reporting Systems around the Globe: The
State of Art in Public Credit Registries and Private Credit Reporting Firms. In Margaret Miller, ed., Credit Reporting
Systems and the International Economy, Cambridge MIT press. A 2003 World Bank study found that more than
50% of banks reported that the presence of credit registries cut processing time, costs and defaults by 25% (Doing
Business, 2004). In Chile, the use of credit reports is found to increase the volume of lending, while credit reports
with longer historical records and more complete information have greater impact on credit decisions (Cowan and
De Gregorio 2003).
32 On the other hand, movable property is often unregistered, there may be doubt about the ownership, and it can
disappear, be damaged or depreciated.


AF.R7: Develop an awareness program for financial services institutions designed to outline
progress made in the areas of property rights and commercial dispute resolution and involve the
financial services sector in all future activities related to property rights and commercial dispute

AF.R8: Establish a credit bureau with international links to improve the efficiency of the banks and
the reliability of the information about the credit worthiness of their clients. The objective of this
policy is to make available reliable information on a cost effective basis for financial institutions in
Guyana which will reduce the risk and cost of lending and therefore makes lending to enterprises more
attractive. It will also increase lending volumes to enterprises and improve lending conditions. Credit
bureaus have a track record worldwide of providing reliable information in a cost reducing way.
Furthermore, credit bureaus ensure that the whole financial sector have access to the credit information
and not only the bank of the client; this results not only in a better client selection, but also pressure for
the client to pay. Credit bureaus are especially useful for SMEs, because information about the client is
relatively more important due to the lack of reliable business information. There are several models for
credit bureau's, each with advantages and limitations; private, public, joint venture between state and
banks, joint venture between member banks and foreign private bureaus among others. All will need to be
explored in more detail to choose the most appropriate option for Guyana.

AF.R9: Establish an export credit insurance scheme and appropriate legal framework to reduce the
commercial and political risk of exporters. The issue of political and commercial risk is not dealt with
sufficiently by the financial services sector in Guyana. Only export credit insurance can cover political
risk and commercial appropriately. Export insurance can be used by banks as collateral for a loan
bridging the time between shipment of the goods and payment and so result in increased pre-financing of
exporting enterprises on the basis of the insurance. Similar to the case of the credit bureau, different
options can be established in which the government and already established private insurance companies
may have a stake and a share. These options will have to be explored in more detail to define the most
appropriate option for Guyana.

Enhancing the Capacity ofEnterprises to access and deal with the Financial System

Reflective of Guyana's relatively recent development of an entrepreneurial business class, many
businesses (particularly small and medium enterprises) in Guyana do not have the skills to access and deal
with the financial system. Moreover, some businesses, especially small businesses and farmers, do not
have enough collateral to comply with strict Bank requirements. The Government is addressing these
issues through:

i. the provision of Business Development Services to assist companies address weaknesses in their
ability to grow and expand their businesses such as in preparing investment proposals and
business plans, accounting, financial management and marketing. This is covered extensively in
the section on BDS, and is not discussed further here.
ii. the provision of support about the types of financial services available from the banking system
and their costs.
iii. the provision of direct financial support in the form of loans through PSO's such as the Institute
for Private Enterprise Development (IPED).
iv. the continuing transfer of Government land to freehold titled land.

Ongoing Actions and Planned Activities

No major actions planned at the current time.


AF.R10: Establish a Matching Grant Fund to address weaknesses enterprises in the area of business
planning, project appraisal, accounting, financial management and marketing and also improve
capacity of local financial institutions to appraise long term projects in non traditional exports. This
recommendation will increase the capacity of financial institutions and BDS providers to appraise and
elaborate long-term projects/business plans and to provide follow-up assistance to overcome weaknesses
in enterprises. This should include improving the knowledge about strategic export sectors selected by
Government to promote (see Chapter 5) and about the critical issues of enterprises in these sectors. The
fund would be run independently from participating banks and BDS providers and entrepreneurs would
match funds with their own contribution; banks would have to justify the use of the fund by showing
clients are getting access to bigger and/ or longer-term loans or at better conditions, and by informing the
Fund manager of the realization of Technical Assistance activities. The Matching Grant Fund can also be
used to strengthen the capacity of the banks themselves, BDS providers and entrepreneurs in project and
business plan preparation and appraisal. A number of banks have already expressed interest in the policy
measure on the back of successful relationships established with existing BDS providers such as

AF.R11: Develop an awareness program for the business community about the availability of
typical export finance services in Guyana for the (potential) exporter and prepare a catalogue
describing the various services including costs, requirements of accessing them and possible

AF.R12: Establish a Mutual Guarantee Fund with the involvement of small businesses,
participating banks and the government to address the limited availability of collateral affecting
principally small businesses and small farmers. This policy recommendation will help to overcome
obstacles facing small enterprises and their suppliers regarding the collateral requirements of banks and
the problems facing enterprises to provide acceptable collateral. The Fund would be formulated on the
basis of tentative proposals already put forward by the Small Business Association for a portion of the
Small Business Act Small Business Development Fund. Successful precedents for such funds already
exist in Guyana, namely that of the Building Society which provides housing loans with contributions
from the Society and homeowners. The proposed Fund would be managed strictly separately from other
activities such as BDS or the Small Business Bureau/Council and will not cover more than 50% of the
loan amount.

Human Resources

Within the new globalized era it is critical that workers are equipped with a diversity of skills to succeed
in a fast-changing environment. Access to new knowledge, skills and competencies, and lifelong learning
to cope with rapid changes to improve employability and entrepreneurship will be critical factors in
ensuring that Guyana can adapt to a fast changing global economy.

As such, investments in skills at all levels are a vital pre-condition for improved national competitiveness.
So too is ensuring that these skills can be retained by the country, and not simply exported via the so-
called "brain drain". These two areas are the focus of the Government's strategy in this area.

Technical Training

The main education sector in Guyana has been accorded priority attention for the past several years by the
Government firstly through focusing on increased access to basic education, and now moving to
improving the quality of education. There are currently a number of large programs at various stages of
implementation geared towards improving the quality of basic education, modernizing assessment and
streaming at the secondary school level, and revamping the teacher training frameworks necessary to
rebuild the foundation of the education system.

However, the next set of challenges in education relate to vocational and technical training where there
are large gaps in existing provision and a resulting shortage of skilled, technical labor.

Approximately 3,500 people are trained in technical and vocational areas annually in Guyana. The
Ministry of Education (MOE) is responsible for the formal TVET system comprising six technical
institutes and a Craft production and Design Division.33 The Ministry of Labour has oversight for an
apprenticeship program through the Board of Industrial Training; the majority of its apprentices work in
the sugar industry (approx. 60%), with another 20-25% engaged in mining and quarrying activities.
Although the Board has the authority to train over 1000 persons, enrolment has been declining rapidly to
about 300 a year. The drop out rate is approximately 25%. All formal programs are free to students, with
Government wholly funding the TVET system.

Some private and state organizations also conduct training for their own operations; for example, Guyana
Power and Light Company accepts apprentices for a rigorous 5 year training scheme and GUYSUCO and
other leading corporations such as DDL and Banks DIH, also conduct their own training in-house through
highly structured programmes (see Box 3.4). Also, training is offered in technical and vocational skills by
NGOs and UG (the Institute of Distance and Continuing Education offers courses in Architectural
Drawing and Woodworking). Higher level tertiary technical courses are also offered by UG in
mathematics, the sciences, engineering and information technology which will become increasingly
important skills if Guyana is to enter into progressively more complex value added activities. There are
few private training agencies for TVET.

33 The Carnegie School of Home Economics (1933), the Government Technical Institute (1951), Guyana School of
Agriculture (1963), the Guyana Industrial Training Centre (1968), the New Amsterdam Technical Institute (1972),
the Craft Production and Design Division. One technical institute each in Essequibo and Linden. TheUpper
Corentyne Industrial Training Centre to be opened shortly...

Box 3.4: Guyana Power and Light Company
An Example of Good HRD Practices

The example of Guyana Power and Light (GPL Inc.) which has a very low turnover of staff at all
levels is indicative of what can be achieved even in a difficult context.

The company has an in-house training school and conducts a comprehensive training program for
apprentices (in collaboration with the BIT) for five years. GPL also encourages continuous training
for its staff and has an incentive system for employees engaging in lifelong learning (they are
encouraged to attend outside training programmes relevant to their work). Career guidance is also
offered. The company offers what is considered fair wages, salaries and benefits and other incentives
based on collective agreements and performance. Recently, GPL started a rapid response programme
of training for new recruits to meet the demands of its rural electrification plan. The company also
showcases its operations, employee skill requirements, and its human resources programme at the
annual University Day at the University of Guyana.

The GPL manages to train and retain its staff in an environment of increasing prices for its key
production input of fossil fuel.

The company expects to continue its upgrading plans to Amerindian communities and schools etc. in
support of the Government's development agenda.

Based on an interview (Jan 5, 2006) with GPL

The Government acknowledges that it is imperative to modernize TVET as one of the foundation stones
of the NCS. Pre-vocational training in the revamped general secondary school system will provide a more
solid foundation for TVET including enhancing the image of TVET. Moreover, there have been a number
of small successes from recent projects with respect to vocational and technical training including the
CPEC Project (Caribbean Regional Human Resource Development Program for Economic
Competitiveness)34 completed in July 2003 and the Guyana Training Agency (GTA) project.

Very recently more fundamental steps have been taken towards reform of TVET by the Government in
line with delivering on the objectives of the NDS. In July 2004 a major step in the reform of TVET was
completed with the Government successfully tabling two important legislative bills in Parliament which
provide for the establishment of:

1. a National Accreditation Council (NAC) which will have among its responsibilities the
the establishment of standards for qualifications in education and training in tertiary
the establishment of accreditation criteria and procedures for the various levels of
ascertaining equivalencies for levels of certification obtained both locally and overseas;
compiling and disseminating information related to accredited institutions and
programmes regionally and internationally.

2. the National Council for TVET (TVET Council) which will function as a semi-autonomous
agency under the MOE and have oversight over all TVET and monitor the operations of the

34 See http://cpechrd.org for details

technical institutes and the Board of Industrial Training. The TVET Council will have the
responsibility for developing and implementing a reform agenda and for ensuring that TVET
remains relevant to, and effective and efficient in meeting the human resources needs of
Guyana's economic development strategy.35

The challenge is now to ensure effective implementation of these measures. Specific challenges to be
addressed include:

Private/public sector collaboration on TVET is sporadic and limited which results in the output
of TVET system bearing little relevance to actual labor market demand; best practice globally
shows that that public/private sector partnerships in developing the training policy framework and
implementing agreed plans is crucial for TVET success.
The TVET system lacks efficiency and effectiveness and budgetary constraints have had and
continue to limit investment in the system;
Systemic problems relating to the entire framework for TVET that require large scale reform and
interventions at the policy and investment levels.

Ongoing Actions and Planned Activities

HR.A1: Strengthen the National Council for TVET (TVET Council) and National Accreditation
Council (NAC).


Short-Medium Term

HR.R1: Develop rapid response skills training by:

i. Providing support for a rapid response to urgent labor demands and unemployment
ii. Improving the private sector's capacity to formulate and implement training programs to
meet urgent needs for different types of technical skills through a multiplicity of training

HR.R2: Design and implement a pilot development project for the forest products sector in
partnership with the private sector (especially the FPMC) to test and agree on best practices for
developing policy for future sector specific training with multiple partners. The forest products
sector is recommended as it is well-established, knowledgeable, has been well-studied, and has a number
of interested stakeholders from the public and private sectors including the Forestry Commission, the
newly-formed FPMC, wood and wood products manufacturers, Iwokrama, and the University of Guyana,
among others. Important expected results include a recorded process for private-public sector partnership
to develop sector specific training that can be used as best practice for other strategic sectors in Guyana.

35 More specifically, the TVET Council will have responsibilities including; undertaking curriculum review, analysis
and design; establishing training and apprenticeship programmes and vocational qualifications that are relevant to
the needs of Guyana; undertaking the development and implementation of a national system of Competency-based
Modularised training; establishing national training standards and performance testing; establishing an inspectorate
to ensure that curricula, standards, schemes and guidelines that are formulated are implemented by every registered
Training Organisation and Technical Institute; and to monitor and evaluate the delivery of all technical and
vocational education and training programmes.

HR.R3: Develop a public education and awareness campaign on TVET to i) enhance the image of
TVET; and ii) increase awareness of the opportunities for obtaining employability skills through TVET,
the importance of public/private sector partnership in reform of TVET, the value of TVET to enhance
competitiveness, and success stories in TVET provision.

Long Term

HR.R4: Formulate with full participation of all stakeholders a comprehensive long-term, systemic,
and multi-faceted National Policy Framework for TVET to initiate the modernization of TVET. The
national policy framework should be designed to develop of a dynamic system of education and training
that meets the demands of the economy for skilled human resources in important/strategic sectors. Initial
phases should involve setting up a multi-sector Steering Committee consisting of representatives from the
private sector, the University of Guyana (especially the Faculties of Natural Sciences and Technology),
training associations, the Government and civil society to work with the National Council for TVET
(TVET Council) to elaborate the operational guidelines and legal framework for the modernization of the
TVET sector.

HR.R5: Improve current mechanisms for the collection, analysis and dissemination of labor market
information and establish a proper industrial classification of occupation, wage structure and
trends in employment.

Addressing the "Brain Drain"

High levels of migration, especially of skilled people, is continuing to create a huge gap in the supply of
labor. While remittances to Guyana offset the economic impact of the skills drain to some extent
(estimated to be around US$119m in 2005), it is unlikely that these private funds can compensate for the
sunk and opportunity costs of the migrant human capital. Moreover, there is some uncertainty about third
or fourth generation members of the Diaspora being disposed to providing a similar level of support or
have the same strong ties as first time migrants. In addition, regional certification of skills to which
Guyana is committed to under the CARICOM Single Market and Economy (CSME) could further
contribute to the loss of skilled persons.36

A number of key push and pull factors help to contribute to the skills situation lower local wages,
disparities in income and familial ties, and the ageing populations and low growth rates in many
developed countries which is leading to increasing demand for skilled labor abroad.

Improving economic conditions in Guyana via the NCS to provide enhanced job and self-employment
opportunities, increase skills, improve pay and working conditions, and provide a more conducive and
facilitating business climate is a long term process and is not likely to significantly reduce the outflow of
skills in the short to medium term. It may very well be that there has to be a higher increase in the number
of people trained and working conditions improved so that a sufficiently acceptable number of skilled
people will remain in Guyana.

It is critical that Guyana explore strategies to mitigate the impact of the huge loss of skills from Guyana.
For this reason the Government is committed to exploring this issue in more detail through further
research on the effectiveness and applicability of migration policies being discussed by most developing
countries now. Possible policy options include:

36 It is questionable whether Guyana can attract regional skilled persons to the country, given the current level of

Strengthening links with the Diaspora communities. There are many well-educated and
wealthy Guyanese in the Diaspora who might be encouraged to return or to invest in particular
sectors via the use of special incentives which do not contravene international trade agreements.
Currently, there is evidence that much new investment in Guyana is generated by Guyanese
living abroad, through their own funds or by encouraging foreign firms to enter the market as
partners in joint ventures, using their knowledge of local conditions. Stronger links with the
Diaspora and innovative use of their skills, experience, wealth, and emotional and familial ties to
Guyana could lead to increased investment and "mobile visiting skills". In the short term,
reviewing, updating and promoting wider distribution through offices overseas of the Remigrant's
Information Manual which advises about the special concessions for remigrants would be a useful
Maximizing remittances by supporting international electronic fund transfer capabilities via
interchange venues; establishing strategic alliances between money transfer organizations and
banks that support the deposit of money received into a recipient's bank account; and forging
alliances between banks in the United States and Canada and Guyanese banks.
Exploring the issue with CARICOM relating to agreements with third countries regarding
controlled migration for specific labor contracts.
Exploring possible special incentives for retention of skills. Creating incentives for training
programs for the private sector and for trainees, interest-free loans for public servants, bonus pay
for teachers who engage in continuing training, improved working conditions, projectising work
to facilitate higher salaries, reducing tax bands are all options that could increase disposable
incomes and help to mitigate pull factors.
Donor modalities: Creating project management units for donor funded programs in Guyana to
offer higher salaries and benefits often draws skilled labor out of the public service. Options
should be explored with donors to ensure the retention of specialist staff within the public service
by offering appropriate incentives but without elevating levels of resentment within the

Ongoing Actions and Planned Activities

No major actions planned at the current time.


HR.R6: Assess the strengths and weakness of the current policy framework for the retention and
attraction of skills and identify policy options for improving skill retention and attraction. Work
should focus on options for:

i. Strengthening links with the Diaspora communities
ii. Maximizing remittances
iii. Agreements with third countries regarding controlled migration for specific labor contracts
iv. Possible special incentives for retention of skills
v. Changing donor modalities

Business Development Services (including Technology and Standards)

A fiercely competitive world of rapidly changing technologies, long learning cycles, and high technical
standards dictated by consumers and buyers in developed country markets presents Guyanese firms with
formidable challenges to adjust to new economic realities. To be competitive firms need to compete based
on costs and prices, but more vitally being competitive is dependent on their capacity to use technology

and on the performance of their products determined by a wide range of factors including price, quality,
design, packaging, delivery time, range and variety of products, and innovation in new products.

At the current time, many Guyanese enterprises suffer from a number of deficiencies in these areas which
affect their ability to effectively compete. Table 3.2 summarizes these issues.

Table 3.2: Deficiencies Affecting Ability of Guyanese Enterprises to Compete

Product and related matters Human Resources Management, Practices R&D, Technology,
and Related Matters Techniques

Export fragmentation Shortage of skilled human Lack of management and Inconsistent conformity with
Often volumes of products resources marketing know-how required international
available for exports are divided The educational system Some enterprises find it certification
into small lots that do not fit big does not provide enough difficult to access export Good Agricultural Practices
importers' requirements in the skilled people, especially in markets because products do (GAP); Good Manufacturing
countries of destination. Little technical and vocational not fulfill needs adequately, Practices (GMP); Forest
consolidation of volumes exists subjects, business customers do not identify with Stewardship Council (FSC);
among exporters, there is a lack management and computer products, and there is an Non Timber Forest Products
of economies of scale in all science. This has a direct overall inability of clients to (NTFP); Hazard Analysis
preparation stages of exports, effect on production costs rely on exporters' capacity to Critical Control Point
and fragmentation makes and thus on competitiveness deliver. (HACCP), International
logistics difficult to organize and Standards Organization (ISO)
expensive, and organic certification are
required certification for
exports into most key world
markets including the US and

Low value added production Poor skills upgrading High production costs
Guyana's export profile is There are few opportunities Compared to other countries
concentrated on raw products to upgrade technical and production costs are relatively
and commodities and not management skills, high. Contributing factors are
primarily on added-value low productivity and lack of
products economies of scale

Lack of product diversification
Exports are generally
concentrated on only a few
products per sector

Poor product quality
Quality is often poor and
inconsistent e.g. packaging,
recipes, labelling or the product
itself do not follow customer

Lack of export market
Guyana's main export volumes
(especially for non-traditional

products) only go to a few
markets, related all too often to
the Diaspora (Miami, New York,
Toronto, UK).

The deficiencies summarized in Table 3.2 are common to many enterprises across the Guyanese economy
and must be placed within the context of a productive sector traditionally used to a relatively protectionist
environment. As a result many enterprise and strategic sectors need help in kick-starting the long and
unpredictable process of "learning to become competitive;" this inevitably means providing support along
all phases of the supply chain to ensure that firms have the capacity to compete, increase profits, and

The whole gamut of support services required to help in the learning process may be termed business
development services (BDS) and can be divided into four main fields of action i) technology ii) standards
and certification iii) marketing support and business information services and iv) management support.

In Guyana several types of operators provide or could be considered for providing BDS, namely:

Public and Quasi-public Institutions and Agencies: GO-INVEST, NARI, IAST, National
Dairy Development Board (NDDB) and GMC are examples.
Donor supported Programmes: GTIS, EMPRETEC are examples.
Private Sector Associations: PSC, Chambers of Commerce, GMA, Small Business Association,
Private Companies: e.g. Small Business Development Finance Trust. Additionally, there are
individual consultants working on their own or as subcontractors for consultancies.

Figure 3.1: Main BDS Actors in Guyana

Public institutions

GO-INVEST: Investment and
marketing promotion

GNBS: Standard, certification,
conformity assessment

IAST: Advice to food processors,

NARI: Research extension to farmers

NDDB: Service provision in the dairy
and meat sector

NGMC: Market information,
packaging service provider etc..

Private operators

Private associations:
PSC, Chambers of Commerce, GMA,
Small Business Association

IPED: Management and marketing

Empretec: BDS to small business

Chartered accountants: Controls and
account certification, advice

Consultants: Mainly stemming from
universities and overseas

Private operators: farmers, middlemen, food processors, wholesalers, exporters

These actors develop different types of tools of support and act at different levels of the BDS landscape:
directly with private companies (on a one-on-one basis), with groups of companies through associations,
for a specific sector, or at the regional or national level.

Substantial progress has been made in delivering effective BDS services to the enterprise sector in recent
years. For example, the recent successes of Golnvest in delivering effective investment and export
promotion services Guyanese companies has already been commented upon elsewhere. Similar successful
service provision has also been delivered by NGMC in relation to non-traditional agricultural products.
Furthermore, the Guyana National Bureau of Standards has been particularly successful in recent years in
a number of important areas in relation to standards. For example, the GNBS is presently helping
industries to improve competitiveness by offering technical assistance in the implementation of the ISO
9001:2000 (quality management systems) and ISO 14001 (environmental management systems). The
bureau has also begun the process of aligning its conformity assessment activities to international

The GNBS has recently developed an SME standard which is currently being implemented in
collaboration with EMPRETEC in the form of technical assistance based on guidelines for good
management practices for SME's. Moreover, to support the recognized need to deliver quality BDS
services and other support the SME sector, as mentioned before, the Government recently passed the
Small Business Act. The Act makes provision for an incentive regime and BDS support programme for
small business and also provides for the establishment of a Small Business Council, a Small Business
Bureau, and a Small Business Development Fund.

A number of agencies, private sector associations, and enterprises in Guyana have been the recipients of
BDS technical assistance in recent years from a number of current and past projects such as GTIS, GEO

and CPEC. These projects offered services such as sectoral and feasibility studies, training and technical
advisory services, marketing, development of standards, and various other activities usually provided on a
sector specific basis.

The Linden Economic Advancement Programme (LEAP) also offers a variety of BDS and other related
services to enterprises in the Linden area (region 10) delivered through its Business Incubation Centre
which is nurturing fledging businesses, provision of training and business support services, facilitation of
new investments, and rehabilitation of economic infrastructure. A complementary micro-credit scheme
has also been established for the provision of accessible micro small and medium credit facilities in
support of economic activities.

Despite strong recent performances by a number of Guyana's main BDS actors, as a country we still face
a number of critical challenges with respect to the provision of an adequate BDS support infrastructure.
Regrettably the BDS market in Guyana in a number of critical areas is deficient in both quality as well as
quantity. There are not actually many BDS suppliers currently operating in Guyana and their range of
services is relatively limited. In some areas, BDS programs are completely non-existent (e.g. commercial
analytical services for the provision of accredited quality control, safety analysis and research evaluation).
Furthermore, in some cases, a mismatch can be observed between the existing supply of services and the
demand and often programs are not sufficiently complementary or widely disseminated. The following
represent the key challenges in the four main fields of action areas detailed above:

Marketing Support and Business Information Services: Despite the recent successes of
Golnvest and NGMC, in almost all sectors, companies still suffer from a lack of information
about, advice on and assistance with accessing foreign markets. SMEs need tailor-made
information solutions, i.e. business information services that assess, verify and apply information
to a specific business problem. BDS activities unfortunately have all too often simply consisted of
sporadic activities, studies and consultancies funded by international donors that were dispersed
due to the limited duration of the programs. Moreover, the work carried out by international
programs is often underutilized as there is a lack of coordination between institutional, public,
semi-public and private organizations when it comes to facilitating market information

Technology Promotion: The situation regarding technology promotion is also critical. Despite
progress in reactivating the Institute for Applied Science and Technology under the stewardship
of a new head, the relatively small size of various sectors hinders the development of a
sustainable technology promotion policy. The list of bottlenecks in this field is long: inadequate
service provided by technology transfer institutions due to human and financial capacity
constraints, insufficient technological learning due to poor understanding of technological needs
and technical alternatives, and a shortage of skilled personnel especially in the food science and
technology sector. These insufficiencies all lead to a limited knowledge base in Guyana that is
heavily dependent on expensive foreign intervention. Access to information on domestic and
foreign technology is a major problem for many firms, especially small and medium enterprises.

Organization and Management Support: Adequate BDS programs of this type are available to
enterprises in Guyana but for a fee. Therefore, only private operators of a certain size can afford
and access these services. At the same time too, management support services primarily consist of
providing advice on accountancy and finance. These services need to be expanded to also include
strategic planning and business organization at all levels in order to target the factors that affect
efficiency and productivity. Additionally, there is little cooperation among professional actors

horizontally or vertically along the supply chain and no support to address this lack of

Standards/Certification/Sanitation Issues: While institutions such as the GNBS are relatively
strong and have made significant progress in recent years in developing and implementing
reforms to improve product quality, the GNBS is in dire need of further training, skills,
technology, testing, and calibration facilities to assist local manufacturers in providing assurance
to overseas customers of conformity with standards.37 Currently, demand for ISO 9001:2000 far
outweighs the GNBS's capacity to deliver these services. Additionally, in the agricultural sector
at the farm level, state extension services are struggling to adequately respond to the increasing
requirements with respect to plant and animal health, pesticides residues, and traceability in the

Actions in Progress and Planned Activities

BDS.A1: Develop a training program targeting the development of a National Conformity
Assessment System for a number of international standards, including ISO 9001, ISO Guide 65 and
ISO 17020.

BDS.A2: Update Weights and Measures act (1981) and the Guyana National Bureau of Standards
Act (1984) to reflect regional and international metrology standards best practices. Updating the
laws and regulations will help fulfill Guyana's WTO obligations in relation to the WTO Technical
Barriers to Trade (TBT) Agreement and facilitate regional efforts to harmonize standards within

BDS.A3: Assist firms and Government agencies in their efforts to receive certification in ISO 9001,
14001, 17025, 17020, 22000 guide 65 and GYS 231.38 Activities will involve a compliance assessment,
with follow-up support possible, depending on respective performance gaps in standards compliance, to
help the parties receive proper accreditation.

BDS.A4: Establish a poultry laboratory and upgrade Guyana's veterinary diagnostic capacity.
Once established, the laboratory will provide Guyana with the capacity to ensure the safety of poultry
products, removing a major non-tariff trade barrier that has impeded export opportunities in the

BDS.A5: Upgrade the capacity of the Food and Drug Department to carry out nutritional analysis
and risk based certification testing including for pesticide residue, dioxin, veterinary drug residue,
and hormone detection and quantification. This capacity is important, as most export markets require
that agro-processed goods meet risk based certification standards and include nutritional information.
This activity will contribute to the ongoing upgrade of the FDD's capacity to provide the testing and
analytical capability that will help Guyanese agro processors receive the accreditation and meet food
safety/standards necessary to access international markets.

37 WTO (2003), Guyana: Trade Policy Review
38 ISO 9001-Quality Management Systems Requirements, ISO 14001- Environmental Management Systems
Requirements, ISO 17020-General Criteria for Bodies performing Inspection Services, ISO 17025-General
Requirements for the Competence of Testing and Calibration Laboratories, ISO 22000-General Requirements for a
Food Safety Management System, ISO Guide 65-General Criteria for a Body operation a product
certification programme, GYS 231- Guidelines for Good Management Practices for Micro and Small Enterprises.

BDS.A6: Provide BDS support to targeted non-traditional exporters to develop the systems,
standards and capability to grow and become competitive in export markets39 (this action
complements Action EP.A1 in the section on Export Promotion and Action IP.A3 in the section on
Investment Promotion and Facilitation).

BDS.A7: Study policy options for designing appropriate investment incentives that do not introduce
overly burdensome administrative overheads to encourage the development of private BDS
networks of service providers, farmers, and enterprises as part of the same study that will be
looking at the options for unifying and reducing Corporate Income Tax (CIT) and improving the
general structure of incentives. See also action EP.A4 in section on Export Promotion and Facilitation.

BDS. A8: Continue to foster entrepreneurship and enterprise for economic development in the
Linden area through effective implementation of the LEAP programme.


The following prioritized policy recommendations consist of encouraging and promoting the
implementation of a more efficient BDS infrastructure with an updated framework of regulations with a
particular emphasis on the food safety system (this should be integrated into a regional initiative in order
to benefit from synergies within CARICOM).

BDS.R1: Strengthen the institutional structure for delivering support to the SME sector through
initial institutional strengthening of the Small Business Council and Small Business Bureau.

BDS.R2: Maximize the efficiency of existing BDS programs by stimulating existing networks of
BDS service providers through the development of an organizational structure designed to:

i. Create networks of farmers' groups to strengthen their performance.
ii. Facilitate the creation of Economical Interest Groups (EIG) of exporting enterprises
iii. Facilitate the creation of export/trading companies that provide BDS to attain consistent export
volumes of goods appropriate for foreign markets.
iv. Create networks of food processors to consolidate volumes of products through partnerships
among groups of food processors.
v. Create networks of suppliers and clients to strengthen the supply chain through forms of vertical
vi. Piggyback on networks of big exporters as facilitators to reach foreign markets.
vii. Create networks of BDS providers to improve the quality of BDS through competition,
duplication and the search for synergies.
viii. Promoting permanent quality networks among private enterprises e.g. setting up "quality circles"

BDS.R3: Enhance certification quality management systems by focusing efforts in a number of
strategic areas through:

i. Introducing FCS and NTFP certifications for export markets in the forestry sector and
ii. Enhancing organic certification for export markets in the fruits and vegetables sector.

39 These services are to be provided in the short term by GTIS. The project is not planning to provide direct
assistance in export promotion in 2006 and the scale of its programs will be relatively small (e.g. US$10,000 per
intervention) because of its limited budget.

BDS.R4: Increase support for ISO certification to enhance enterprises quality management systems
in strategic sectors.

BDS.R5: Strengthen the technology promotion infrastructure by:

i. Creating a food incubator linked to IAST to promote modernization, innovation and
ii. Revamping and reactivating the IAST in order to have a fully functioning technology center
providing BDS to companies.

BDS.R6: Update the legal regulatory framework for BDS by:

iii. Creating a "Guyana food label" with a coordinated quality insurance system
iv. Enacting the food control bill

BDS.R7: Establish a Business Information Center / Knowledge Center affiliated to Go-Invest to
provide marketing support and business information services through Trade Points software (this
complements TP.A7 and IP.A3 in the sections on Trade Policy and Investment Promotion and


An efficient infrastructure transport (roads, water and air), telecommunications, and energy is
necessary for improved national competitiveness. Providing and maintaining infrastructure is one of the
most costly activities undertaken by Government yet its adequate provision, particularly to serve key
points of dynamism in the economy, is a critical factor in the determination of Guyana's ability to
compete internationally.

Transport -Roads, Water and Air

Currently, Guyana has adequate infrastructure coverage to support production, communication and
access to regional and international markets in the short term. With over 2500km of paved and unpaved
roads connected by the key coastal and inland arteries, the road network provides access to all the central
services provided in the Georgetown area, as well as providing commercial links between urban and rural
areas. In recent years, the key inland road to Brazil has been developed in conjunction with private
operators and for the first time in Guyana's history, is accessible all year round, opening up opportunities
for trade with the vast untapped markets of Brazil and South America.

Other major transport hubs in Guyana also have reasonable short term capacity. For example, with over
40 separate wharves, the Port of Georgetown has sufficient capacity to serve Guyana's current regional
and international water traffic and with around 1000 km of navigable river waterways, most centres of
economic activity in Guyana are easily accessible by boat to facilitate trade in goods and services.

Guyana's current air transportation system provides direct links with the United States, Canada,
Barbados, Brazil, Trinidad and Tobago, and Suriname and the recently refurbished Cheddi Jagan
International Airport at Timehri is able to accommodate a wide range of large aircraft.

Improving the road network is an ongoing Government priority. Currently there are a number of large
scale projects underway with respect to most major aspects of the road infrastructure. Recent
achievements include the rehabilitation of segments along the coastal road, the construction and

upgrading of numerous bridges along the coastal road, upgrades to the four-lane Demerara Bridge
Highway. Progress continues toward the construction of a US$35 million floating bridge over the Berbice
River to replace the existing ferry, the completion of which (expected in October 2007) will greatly
improve east-west travel.

The Government is also committed to improving the air transport infrastructure to meet world class
standards. Improvements to the terminal at Cheddi Jagan International Airport at Timehri have recently
been completed and private operators have been working to double the size of the Ogle runway to
accommodate small to mid-size regional aircraft for passenger flights to Caribbean destinations. These
improvements are being complemented by Government funds to help bring the airport into compliance
with the standards of the International Civil Aviation Organization.

Although significant improvements have been made or are in the pipeline with respect to numerous
aspects of Guyana's transport infrastructure, the Government recognizes that many challenges remain.
There is now a need to continue the momentum generated over recent years to deliver a modem, efficient
and flexible transport system for Guyana that will help the country compete effectively in the global
market place. The private sector has a role to play in achievement of this goal and Government is
committed to liberalizing the sector and to increasingly the role of the private sector in transport

In order to achieve these goals, the Government recently engaged funding from the EU to develop a
coherent approach to the transport sector based on a comprehensive analysis of the sector. This study will
now help Government to formulate a coherent and consistent strategy for development of the transport
sector over the next ten years responding to needs in the areas of policy, legislation, regulation,
institutional arrangements, service provision and implementation. The strategy will allow for the
sustainable growth of the sector through implementation of an indicative investment programme
consistent with the Government's anticipated financial capacity.


Guyana has better availability and reliability of telecommunications services than it did in the early
1990's. This includes a significant increase in the number of working landlines from 13,000 in 1991 to
114,000 in February 2006. Guyana's landline infrastructure (excluding mobile telecommunications) is
owned and maintained, on a monopoly basis, by the Guyana Telephone and Telegraph Company
(GT&T). GT&T links several remote villages via satellite and provides international connectivity via the
Americas 11 cable (by way of overland links through Suriname and French Guiana). Three companies
currently provide cellular service in Guyana, with GT&T being the dominant service provider. There are
currently around 277,000 cellular subscribers and this number is growing rapidly. Internet is offered via a
combination of Dial-up, DSL and wireless technologies.

Though there have been significant improvements in the sector since 1991, the current monopoly results
in a lack of agility in responding to the emergence of new, dynamic ICT-enabled growth poles in the
economy. This results in higher costs and lower quality of services. The Government wishes to see
liberalisation of the telecommunications market-place in Guyana, believing that the properly-regulated
introduction of market forces will reduce the costs and improve the quality of services to all customers.
This will be particularly valuable for the newly-emerging ICT-enabled services sector which has the
potential to generate large numbers of jobs and exports.

40 Guyana: Transport Sector Study 2006


The cost and reliability of electricity is also recognized by Government as a major constraint for
profitability and smooth business operations, especially in energy intensive industries such as mining and
manufacturing. A combination of Government and private sector initiatives suggests that measurable
improvements in the supply and distribution of electricity could nevertheless be achieved in the near
future. Several larger businesses have recently set-up operations to generate their own power facilitated
through various incentives offered by Government. This will help to reduce pressure on the grid. A
roadmap has also been drawn up for the re-introduction of private participation in GPL to help improve
its operating efficiency. In the meantime GPL is steadily moving forward on a US$120 million plan to
introduce 50 megawatts of new generation within two years and reducing transmission losses-estimated
at 44 percent of total power output in 2004. The Unserved Areas Electrification Programme is expected
to link at least 30,000 additional households in 200 under-served and unserved communities to the
electricity grid. As part of Guysuco's Skeldon Modernization Project, a new co-generation plant is also
expected to contribute 10 MW of power to the national grid. Moreover, in March 2005, Omai Services
Inc. (OSI), whose diesel plant has an installed capacity of 12 MW, was granted a licence to supply
electricity to the Linden Electricity Company.

While these developments in the energy sector will have a positive short-term impact, the most promising
option is the development of Guyana's hydropower potential. In this regard, GPL and other investors are
currently negotiating a power purchase agreement that once completed could lead the way for three
projects, including a 100 MW scheme at Amaila Falls in western Guyana. In other alternative energy
plans, the Guyana Energy Authority is facilitating a private investor to construct a wind farm at Good
Hope, which is expected to have an installed capacity of 12 MW.

Ongoing Actions and Planned Activities

I.Al: Complete reconstruction of the Mahaica/Rosignol road including the Ithaca section.

I.A2: Construct and rehabilitate bridges along the Timehri/Georgetown/Rosignol highway through
implementation of the Road Rehabilitation Programme Phase II (Bridges Rehabilitation).

I.A3: Complete rehabilitation of Moleson Creek New Amsterdam Road.

I.A4: Consolidate structural reforms in the electricity sector, promote the development of markets
for energy efficiency, and promote rural energy development through implementation of Unserved
Areas Electrification Programme.

I.A5: Complete construction and rehabilitation of paved road network through completion of four
lane highway, the Harbour Bridge to Ruimveldt, resurfacing of Demerara Harbour Bridge and
replacement of wooden bridges along West Demerara Road.

I.A6: Rehabilitate the non-paved road network through implementation of the Rural
Transportation Program.

I.A7: Support reforms to i). address Guyana's capacity to finance, operate, maintain and expand
urban infrastructure and services on a sustainable basis; ii) rehabilitate infrastructure and
reestablish municipal services in Guyana's six urban municipalities through implementation of the
Urban Development Program.

I.A8: Prepare a Secondary Towns Development Plan to improve the governance systems,
infrastructure and the quality of basic services provided to Charity, Supernaam, Parika and
Bartica through implementation of the Towns Development Project.

I.A9: Complete Berbice River Bridge project to improve access to the Berbice region and
commercial links with Suriname.

I.A10: Work with Brazil to encourage successful completion of the Takutu Bridge Project to
improve access to Lethem and other interior locations, Brazil and the rest of South America.

I.A11: Steadily upgrade and improve maintenance of the Linden-Lethem road including bridges to
support container trucks.

I.A12: Support the private sector in completing the expansion of Ogle Aerodrome to enable
development of regional air linkages with Caribbean and South American markets.


I.R1: Construct a deep water berth in Berbice, to reduce transport costs (note: this is a
recommendation of the Sugar Action Plan see Chapter 4). Currently the Port of Georgetown is limited
in its ability to handle large cargo vessels because of its low tide water depth, which ranges from about 5
to 6.5 meters. For sectors such as Sugar, this restricts the volume of produce that can be loaded at the
Demerara Shipping Terminals (DST) per vessel, thus limiting Guyana's ability to obtain reasonable
freight rates. Options could also be explored to re-instate the level of dredging previously put in place by

I.R2: Develop a legal framework and policies for public-private-partnerships (PPPs). Part of this will
involve reform to the institutional and statutory framework governing water (sea & river) and aviation
and airports (CDJI and Ogle) to deliver increases in efficiency, autonomy and competitiveness in the two

I.R3: Develop more advanced road maintenance and bridge construction schemes, such as BOAT,
to deliver higher quality roads and bridges along the entire transport chain.

I.R4: Revise the legislative and regulatory framework governing the telecommunications sector so
as to encourage, facilitate and effectively regulate a fully competitive sector that will act as an
engine of growth for the economy.

I.R5: Assess the feasibility of providing air cargo space storage with refrigeration facilities at CJIA
and Ogle. Export operators have indicated that the lack of such a facility is an important constraint on
export development.

I.R6: Assess the feasibility of introducing an Integrated Management Information System (MIS)
and Electronic Data Interchange (EDI) for the shipping community. This would be designed to
establish a platform of information needed to monitor port performance, utilization of existing facilities,
and assessment of future port development requirements.

I.R7: Develop an action plan for short term priority infrastructure improvements for the Cricket
World Cup in 2007.

I.R8: Strengthen the maritime sector by reorganizing MARAD's operating structure to enhance
planning and regulation of the port and maritime sector.

I.R9: Conduct a spatial analysis of the location of strategic sectors likely to drive growth and
diversification and develop an action plan to serve their immediate, medium, and long term
projected transport needs.

Bureaucratic Procedures

Striking the right balance between appropriate legislation and regulation of business, and freeing
enterprises from excessive "red tape" and inefficient, duplicative and time-consuming procedures greatly
enhances enterprise competitiveness.

Recognizing that recent legislative and regulatory reforms have increased the burden on businesses
(largely due to more comprehensive international requirements), the Government has recently increased
its efforts to streamline procedures, particularly in four areas:

Enterprise Registration and Operation
Export and Import Procedures
Land and Property Procedures
Resolution of Commercial Disputes

Note that improvements in these areas will have far reaching implicationsfor competitiveness aside from
their direct effects in reducing the administrative burden on business.

Enterprise Registration and Operation

Enterprise registration is the set of administrative processes by which a business sets up as a unique legal
entity in order to engage legitimately in commercial activities. From an economy-wide perspective,
efficient business registration is important for several reasons:

Efficient business registration procedures help make business ventures less risky, and increase
their longevity and chances of success.
Formalized companies have better access to finance and public services including recourse to the
judicial system in the case of commercial disputes.
Business registration provides information on the business sector and so can help inform
Government public policy and investment decisions.
Business registration is also the first contact of business with Government and so strongly
impacts perceptions of the investment climate.

In terms of the number of days and procedures required to establish a business, Guyana performs
relatively well. Most companies interviewed in preparation for the NCS did not find the procedures
particularly burdensome41; this was true for the key procedure of business registration as well as for the
other procedures involved in starting a business: filing for a tax identification number, registering for
PAYE, registering for consumption tax, registering employees with the social security administration, and
making the company seal. Nevertheless, whilst many businesses do not find the procedures overly
burdensome, many use a lawyer to complete the process which makes the costs of registration in Guyana

41 Although smaller companies tend to be less aware of some of the procedures required

high. A useful comparison is with Jamaica, the Caribbean's acknowledged leader in business registration
Figure 3.2: Starting a Business in Guyana and Jamaica (2005)

Indicator Guyana Jamaica Region (LAC) OECD
Procedures (number) 8 6 11.4 6.5
Time (days) 46 9 63.0 19.5
Cost (% of income per capital) 101.4 8.3 56.2 6.8
Min. capital (% of income per capital) 0.0 0.0 24.1 41.0
Source: Doing Business 2006

Hence, whilst the process of registering a business from a user's perspective in Guyana is relatively
unproblematic, business registry in Guyana is in need of improvement mainly to enhance Government
efficiency and gather legitimate information on business activity which would have multiple benefits for
Guyana including enabling crucial economic oversight and being able to provide potential foreign
investors with reliable information about possible business partners.

Presently the Deeds Registry is charged with registering businesses in Guyana. The registry currently
faces a number of challenges with respect to the procedures for business registration:

All registration processes are currently manual
There is no in-house legal expertise.
Registration turnaround times are not set and turnaround times are thus inconsistent (the
official registration turnaround time for company incorporation can be anywhere between 3
days and 2 weeks).
Storage facilities for companies and business name records are poor and because records are
not maintained properly, the search facilities at the Registry are inadequate.
The agency has inadequate links with other complementary government agencies such as the

Some recent progress has been made by in addressing these challenges. Although not directly in relation
to improving enterprise registration, recent improvements were made to the operations of the Deeds
Registry to strengthen the legal framework and administration procedures for secured transactions in
movable and immovable property. The Deeds Registry Authority Act was drafted a number of years ago
as a model for modernization of the Deeds Registry by establishing it as a semi-autonomous body to
promote its efficient and orderly operation as an executive agency. However, although the legislation is
"ready to go", detailed implementation plans have not been prepared.

Box 3.5:
Business Registration Reform Process in Jamaica: The Gains from Turning a registry into Semi-
autonomous Agency

Pre-reform: In Jamaica, prior to when major reforms commenced in business registration (BR), there were lengthy registration
turnaround times, manual work processes, high delinquency rates among companies, registration backlogs, registration fees below cost
and the numbers, levels and competencies of staff were inadequate to meet service demands. In 1996, the Office of Registrar of
Companies (ORC), under the Ministry of Industry, Investment and Commerce (MIIC) operated BR, but did not have autonomy to
spend any of the revenues it earned. Pre-reform, the World Bank observed the ex-ante situation:
14 day turnaround time for registration of business names and companies
Weak legislative framework out of step with modern business practices and international practices
Weak compliance unit with high delinquency rate and low penalties for businesses
High volume of unregistered businesses leading to weak regulatory framework and tax collection
Weak staff skills/academic qualifications and many temporary staff, all using inadequate facilities

Foundations for Reform- Preparation/Drivers/Champion: In mid-1990s, Office of Prime Minister established a public sector
modernization program Reforms encouraged by World Bank Private Sector Modernization Program loan (1996-2002). Business
registration reform was championed by Cabinet Secretary in Office of Prime Minister and the Minister with portfolio responsibility for

Reform Process: Non-radical institutional reforms, updating company legislation, and ORC's newfound autonomy as an agency
resulted in new incentives and efficiencies.

Ex-Post Impacts: ORC's semi-autonomous status and improved organizational management has resulted in the following ex-post
situation: 4 days for normal service and 1 day for expedited, compliance rates for filing of statutory returns up from 12% to 35%,
accessibility of company information improved through searchable database, improved skills among staff and customer service-
oriented through training & incentives

Ongoing Actions and Planned Activities

ER.Al: Bring the Deeds Registry Authority Act into effect and make the Deeds Registry semi-
autonomous by giving the agency the ability to manage its budget, retain a portion of the fees it
earns, charge higher fees commensurate with the cost of providing services, and hire more qualified

ER.A2: Reorganize the Deed's Registry's workforce and develop a training program for staff to
learn new automated procedures and to establish methodologies for ensuring that they meet new
set targets for registration turnaround times.

ER.A3: Expand the use of Information Technology to allow for the automation of all registration
procedures, the conversion of all manual records into digitized images, and the backward
integration into the new Tax Identification Number (TIN) system at GRA. This will ensure the
lowering and standardization of registration turnaround times, better search facilities, the introduction of
new fee structures where necessary, and ensure that the registry is hooked into the tax administration
system (both technologically and organizationally this makes sense given that registration software has
already been developed for the GRA tax system, collecting much of the information needed for business


No further actions proposed at this time.

42 The following recommendations draw heavily on the knowledge and experience of the lead business registration
consultant in reforming, and now serving as CEO of, the Jamaican Companies Registry.

Export and Import Licenses

An efficient import licensing process is important for the smooth transaction of goods imports for use by
consumers and as inputs into the productive process. An efficient export license procedure is important
for similar reasons i.e. to allow the smooth transaction of goods exports in traditional and value added
product sectors.

Considerable progress has been made in this area; the number of items requiring an export license has
now been reduced to modest levels and complementary efforts have been made by the Government to
streamline licensing procedures by offering a web-based presence for explaining processes and uplifting

Ongoing Actions and Planned Activities

No major actions planned at this time.


No further actions proposed at this time.

Land and Property Markets

There is a general consensus on the positive relationship between making land rights more secure and
transferable, and the promotion of investment.

In recognition of this, the Government has been strengthening land and property markets, which have
been historically weak or non-existent in Guyana. These reforms will:43

i Guarantee that land will not be appropriated by the Government or other agents and so
encourage long term investments in land;
ii Improve the chances for productive enterprises to obtain loans to finance investments
through the development of an efficient land market and;
iii Relax the obstacles to factor mobility and enable the allocation of land towards the most
productive agents.

Recent improvements in Guyana's lands and property markets include:

The establishment of the Guyana Lands and Survey Commission (GLSC);
Computerisation of land information (by GLSC, GGMC);
Development and dissemination of a transparent mechanism of land distribution;
Introduction of a new type of lease with duration of 50 years and the right to transfer,
sale, sublet, renew and inherit;
Development of standard operating procedures for processing leases;
Computerisation of application and lease issuance process;

43 Studies looking at the impact of property rights on investment normally find a straightforward empirical
relationship between individual property rights and incentives to invest in land. For example, see Field, Ericka,
Property Rights and Investment in Urban Slums, Journal of the European Economic Association Papers and
Proceedings, MIT Press. April-May 2005, 3(2-3) and the World Bank's World Development Report 2005 which
found that firms in Poland, Romania, Russia, Slovakia, and Ukraine, that believed their rights were secure reinvested
between 14 and 40 percent more of their profits than those that did not.

Processing of more than 15 000 claims, issuing either a 50-year lease or a certificate of
title (most of the coastal area is already complete);
Completion by GLSC of 90% of a Cadastral Plan index;
Considerable progress in Land Tenure Regularisation (LTR); and
Establishment of an adjudication procedure to address disputes.

The program of institutional strengthening over the last few years at the Guyana Lands and Surveys
Commission stands out as an especially important development. GLSC recently established standardised
operating procedures in order to improve the administration of leasing of public lands and conversion of
"leasehold" to "freehold" lands. Efforts have also been made to organize land systems procedures,
standardise formats, train personal and clarify information given to investors. In this respect, the
Commission has computerized the application and lease issuance processes and the parcels database has
also been computerized using the geographic information system (GIS) which enables the monitoring of
leases on the ground in a parcel-by-parcel basis. The Commission's financial sustainability function was
also recently automated, allowing for networking between its finance and lease issuance divisions through
the rent portfolio, as well as the tracking of revenues against costs. In 2004 the GLSC tenured leases and
titles of 5 900 parcels of land, and titles were registered for more than 200 urban parcels.

Recent progress has also been made elsewhere. For example, the Land Registry is on track to meet its
goal to reduce the time for Land Registry Transfers by private landowners. Bureaucratic procedures in
general involved in land administration are more agile and less complex than before; lengthy procedures
are now more of an exception than a rule as a result of more efficient administrative processes.

Nevertheless, despite this progress, there are still issues that hinder security of land tenure, as well as the
land administration system, and thus continue to adversely affect private investment in Guyana:

1. Guyanese land administration continues to have different regimes and systems that generate
different procedures governing the allocation or sale of land, that are still complex, time-
consuming and costly.
2. As a consequence of the variety of regimes and systems, land administration functions are
fragmented between many different agencies including; the Deeds Registry and Land
Registry; the Guyana Lands and Surveys Commission; the Guyana Geology and Mines
Commission; the Guyana Forestry Commission, the Ministry of Tourism, Industry and
Commerce (MTIC) Go-Invest and the National Industry and Commercial Investment Ltd.
(NICIL); and the Central Housing & Planning Authority (Ministry of Housing) (see Table ?).
This is another factor that makes the sector complex and inefficient for potential investors.
3. Even though improvements have been made, a complete, accurate and institutionally
comprehensive land information system is required for the accuracy of lease and ownership
documents and for avoiding or reducing conflicts that undermine tenure security over land
4. Besides a legal and institutional framework that allows property rights to be bankable44, the
promotion of potential development opportunities as a consequence of new property rights is
5. Even though significant advances had been made in improving land and property markets,
there is no integrated national policy to ensure a pattern of growth and use of land that
supports sustainable land development in Guyana.

44 The State Lands Act established the "right to mortgage", providing one way for property rights to become bankable.

Figure 3.3: Agencies in Charge of Land Administration in Guyana


Publicly Owned Land

Freehold Private Land

Transport System

Index of Land
Transfer of Title

Registration of
Deeds Registry transactions related to
transported land
Registration of
Land Registry transactions related to
titled land
Guyana Lands and Mapping and
Survey administration of
Commission public lands
Guyana Geology
Guyana Geology Administration of State
and Mines
SMis mineral lands
Guyana Foresty Administration of State
Commission forest lands

MTIC, Management of
Go-Invest, NICIL Industrial Estates

Ongoing Actions and Planned Activities

LPM.A1: Improve land administration by streamlining the land lease allocation system,
standardizing procedures in order to reduce elements of discretion, and establishing a fast track
system for allocation of land leases for small farmers and export oriented producers (note: this is an
ongoing action of the Sugar Action Plan see Chapter 4)



LPM.R1: Development of a Comprehensive Land and Property Markets Policy. Even though
significant advances have been made in improving the Lands and Property markets, there is currently no
integrated national policy to ensure a pattern of growth and use of land that supports long term land
development while addressing specific key issues, in order to achieve a sustained system as a whole.
Many Caribbean countries face the same situation and are currently carrying out projects for land policy
development. Guyana must develop and implement a comprehensive land and property markets policy

1. Addresses key issues such as (i) title security; (ii) regimes and systems of land tenure; (iii) land
administration processes; (iv) unregistered land; (v) access to land; (vi) land information systems;
(vii) economic development through security of tenure; and (viii) environmental sustainability.
These issues should be addressed in a systematic and participative way, in order to guarantee the

definition of a coordinated and integrated national policy. The policy would be integrated into the
overarching strategic framework behind enhancing national competitiveness and fostering
economic growth.
2. Continues the process of transforming state-owned lands into freehold private lands and considers
redefinition of constraints related to the current limits set for transformation45 (even though limits
were originally conceived in order to protect the most vulnerable, alterative ways should be
evaluated to protect the vulnerable that would not be an obstacle to the greater tenure security
guaranteed by the transformation).

Specific reforms

The development of a comprehensive land and property market policy requires significant research efforts
to further diagnose the situation and integrate all policy issues into an ideal and feasible legal framework.
However, given the existence of urgent issues to be addressed, specific short to medium-term reforms
should be addressed promptly while a national policy is designed and formulated.

LPM.R2: Further improve land administration procedures by i) transferring delegation of the
transports certificates administration from the Land Registry to the GLSC ii) medium term transformation
of transported into titled land iii) consolidating processes relating to land administration into the GLSC,
including mapping of parcel boundaries iv) training staff accordingly

LPM.R3: Establish a complete, accurate and comprehensive Land Information System, by
expanding existing efforts. Relevant institutions should survey the unregistered areas for them to be
included in the system, update existing information, maintain and upgrade the digital records
continuously, and train key staff members.

LPM.R4: Promote tenure security as an opportunity for economic development, through i)
information campaigns to generate a proactive population with incentives to register their properties and
remain formal ii) improving coordination between projects for property market reforms and other projects
with which synergies may be created, and iii) raising awareness among financial institutions of progress
with respect to titles as sources of more secure collateral.

Resolution of Commercial Disputes

Guyana's judicial system which is responsible for upholding the sanctity of contracts plays an important
role in affecting investment decisions and therefore national competitiveness.

The judicial system currently faces a number of challenges and does not have the physical capacity to
uphold its legal mandate; this ultimately acts to discourage investment and undermine national
competitiveness. It can sometimes take several years for a case to move from filing to completed trial in
the High Court, and this erodes the courts' ability to settle investment or contractual disputes, which can
cause particular concerns for foreign investors.

These issues have a direct impact on business in Guyana because the limitations of the judicial system
affect disputes such as:

Enforcement of contracts (of any kind).
Recovery of debt (arising from promissory note, bill of exchange, check, guarantee, trust,

45 Lands must measure less than 15 acres and the corresponding leases must be of 25 years

Recovery of goods (on property for land or movable goods or for security payment);
Companies stake-holders disputes;
Company reorganization and bankruptcy.

These problems mentioned above seem to originate from the following causes:

A litigation culture that stimulates the filing of judicial cases (litigious tendency) and
impedes the promotion of alternative dispute resolutions methods. This cultural
conditioning seems to be promoted by low cost court filing fees.
Complex procedural rules and judicial practices that allow delay in process. These rules and
practices allow unnecessary adjournments, delaying tactics (used by lawyers) and stays of
Lack of modem organization and equipment (technology) in Courts. At the current time,
records are kept manually and there are old practices for Court Administration (and
management of cases). This situation creates problems in finding case files, noticing, etc.,
sp adding more complexity to the judicial processes.
Limited productivity of the judiciary and limited number of magistrates.
Lack of appropriate support staff.

Although the problems mentioned above are generalised for all the judicial system and affect all
Guyana's sectors, their direct effects on debt-collection processes and the enforcement of contracts
particularly damage business development, restraining financing and reducing levels of economic activity
and Guyana's overall competitiveness.

The main policy option in the short-run for tackling these deficiencies in the judicial system is the
establishment of a Commercial Court to deal specifically with disputes among businessmen or firms for
issues related mainly to debt-collection and enforcement of contracts. Even though comprehensive
judicial reform is the ideal long term scenario in order to address the structural problems behind dispute
resolution, this option is not feasible in the short term and hence partial reform of the judicial system the
commercial court route will help to address specific problems relevant to competitiveness.

The Government is committed to the establishment of a Commercial Court. To bring effect to this
objective, Guyana has recently received a grant from the Inter-American Development Bank (IDB)
toward the cost of establishing a Commercial Court. Two implementation scenarios for the Commercial
Court are possible: i) a Commercial Court with alternative dispute resolutions mechanisms (ADR)
included in the system or ii) without ADR included. Currently, in Guyana there is no mandatory ADR
system and no formal link with the judicial system. However, a mediation centre has been established
with the cooperation of The Carter Centre and USAID (a pilot project).46 This system is currently
voluntary but is supported by the High Court Judges and the Bar Association. Some cases, with the
agreement of the parties, are already referred to the Centre for mediation. The grant from the Inter-
American Development Bank (IDB) toward the cost of establishing a Commercial Court nevertheless will
provide for the setting up of an ADR system.

However, it is important to note that not everybody in Guyana is confident with ADR. In particular,
Banks and others in the financial sector are concerned about the dysfunctional use of the ADR system
which can potentially be used to delay issues in relation to difficult debt-collection, mortgage execution

46 This project has trained lawyers in mediation. It is trying to create public awareness about the advantages of
mediation and giving support to the cases referred to the mediation centre. Currently, the trained lawyers are
working in mediation pro bono.

and other court orders. Hence, it is imperative that any ADR system exclude very clearly situations where
there is certainty and no real conflict (for example in cases of debt recovery, mortgage execution and
other securities).

Despite these issues, in the case of Guyana's litigious tendency, ADR should be studied as a
complementary system to discourage litigation. Mandatory ADR would increase the costs of litigation.
By increasing the costs for frivolous litigation (considering that one more step means higher costs in time
and resources), a reduction of judicial litigation should be expected.

Ongoing Actions and Planned Activities

CDR.AI: Set up Commercial Court and appropriate ADR mechanism


Whilst the Commercial Court and ADR mechanism is already in the process of being established, there
are certain activities that should be reinforced

CDR.R1: Develop a public awareness and promotion of accountability campaign with members of
the Bar, academia (university professors), NGOs, international cooperation agencies and other
governmental authorities to draw public attention to the judiciary's role and specific advances in
the establishment of the Commercial Court.

CDR.R2: Set up a Coordination or Consultative Board, integrated by representatives of the
institutions mentioned above, to receive information and reports about the establishment of the
Commercial Court.

CDR.R3: Identify and measure factors having an impact in the judiciary and administrative staff
productivity and make recommendations to strengthen judiciary and administrative staff

CDR.R4: Evaluate the benefits of establishing a mandatory ADR system and make
recommendations for establishment of a potentially suitable system taking into account experience
with the USAID-Carter Centre including the issue of financial sustainability.


SECTOR /.-.. .



The following chapter analyses the current situation in Guyana with respect to selective aspects of
sectoral performance and key sectoral policies designed to enhance competitiveness. As described above,
the fundamental concern of National Competitiveness Strategy is to build up the competitive advantage of
the economy. For this purpose, it is necessary to make an assessment of the competitive position of the
major sectors of the economy to identify their strengths and weaknesses to determine what is required at
the level of policy to enhance their competitiveness. Hence, in addition to implementing core broad-based
policies to enhance the competitive environment, the policy must draft strategies to address the particular
obstacles and opportunities facing enterprises on a sector specific basis. This Chapter will help to track
national progress at the sectoral level and highlight those areas of policy deserving priority attention in the
development of National Competitiveness Strategy. These are summarized in a list of actions and policy

Strategic Focus: Diversification for Future Growth

The productive side of the Guyanese economy can be divided into nine broad sectors in line with those
identified in the National Development Strategy. As discussed previously, the strategic focus of a
competitiveness strategy must be diversification for future growth and competitiveness. Hence, for our
purposes, these nine broad sectors can then be divided into two categories; traditional sectors and key
diversification opportunities i.e. the middle pie of Figure 2.1.

Figure 4.1:
The Productive Sectors of Guyana's Economy for the Purposes of
Competitiveness Strategy
Traditional Sectors

1. Sugar
2. Rice
3. Forestry (logging)
4. Mining

Key Diversification Opportunities

5. Non-traditional agriculture
6. Fisheries
7. Manufacturing
8. Tourism
9. Information Technology

Traditional sectors

Generally, all the major traditional sectors of the Guyanese economy are being provided with strong
strategic leadership and direction and have measures in place for restructuring to improve sector
competitiveness. These efforts should of course continue.


Guyana is heavily dependent upon the Sugar Sector both economically and socially. Sugar now accounts
for 18% of GDP, 57% of agricultural GDP and 30% of merchandise exports. However, in the early 1990s
the industry was experiencing difficulties; sugar production had declined to just 132,000 tonnes and it
was recognized by Government that GuySuCo would need to be given greater management autonomy to
improve its performance and productivity. An experienced management from Booker Tate was therefore
contracted to lead an effective programme of rationalization. This culminated with the 1998 launch of
GuySuco's Strategic Plan.

As the largest and leading producer in the Caribbean, GuySuCo's aim, as expressed in the Strategic Plan,
is to reform the industry into a competitor on the world market and reduce its dependence upon
preferential markets. The industry plan aims to cut estate production costs from an average of 17 US
cents/lb in 2005 to 12 US cents/lb in 2010. The Sugar industry is also looking to expand its production to
460,000+ tonnes per annum, through the development of new markets especially in the Caribbean. The
main elements of this Action Plan for the development of the industry until 2015 are:

Expand production in line with new marketing opportunities;
Add value by producing direct consumption brown and refined sugars, branding and
packaging for retail;
Increase sales to CARICOM countries in addition to the EU and US markets;
Implement an agricultural improvement plan covering improved agricultural practices and
mechanization aimed at increasing yields;
Improve sugar quality through factory upgrading;
Introduce a refinery for production of value added sugar products;
Introduce electricity co-generation; and
Diversification into ethanol production.

Since the difficulties of the early 1990's the Sugar industry has grown and performed well due to
improved management and strategic direction. There have been notable improvements in terms of
boosting output, brand development and marketing of value added products. For example, whilst
producing only 132,000 Mt in 1990, production of the industry had expanded to over 300,000 Mt by
2004. The sector currently employs 18,000 permanent workers and 4,000 temporary workers. In addition
there are 5,000 workers on independent cane farms and cooperatives. In total around 125,000 persons, or
some 17% of the population, are directly reliant upon the sugar industry. In addition the Sugar Sector
provides a wide range of social services to its workers and their communities, including health, education,
housing, infrastructure and other community services.

Despite progress, massive challenges still confront the industry, most notably, the industry's continued
reliance on preferential access to the EU market; preferential sales of sugar to the EU market still account
for half of production volume and 70% of industry revenues. But as touched upon in the introduction this
preferential access is under imminent threat; the recently announced scheduled changes to the EU Sugar
Regime will result in a total price cut of 36% over four years starting in 2006 which will reduce the
landed export price received for raw sugar from 523.7 per tonne to 335 per tonne by 2009/10. This will

lead to a reduction in the value of the quota by an estimated US$ 37 million per annum, equivalent to
5.1% of GDP and 5.4% of merchandise exports annually.47

Such a severe shock will be reflected in the balance of payments, Guyana's reserve position, the exchange
rate and capacity to service debt. Reduced revenues to the Sugar Industry could also jeopardize the
implementation of its Strategic Action Plan. Nevertheless, with the post EU reform price set at
approximately 18.2 cents/lb, should the industry succeed in fully implementing the Strategic Plan,
Guyana does have realistic prospects of being competitive in Sugar.

In March 2006, Guyana launched the National Sugar Action Plan designed to present a comprehensive
strategy to respond to the EU sugar price cut. It has been prepared in response to draft EC Regulation
issued in June 2005 that invites Sugar Protocol countries to prepare multi-annual adaptation strategies as a
basis for requests for financial and technical assistance from the European Commission.

The overall objective of the National Sugar Action Plan (SAP) is to generate economic growth by i).
bringing about sustainable improvements in the competitiveness of the sugar industry ii). promoting the
growth and development of specific non-traditional agriculture sub-sectors, and iii). providing
infrastructural and human resource development support to achieve i) and ii).

The major thrust of the Action Plan is to support the first of these three objectives by leveraging funding
from the European Commission to allow the industry to make the investments necessary to enable it to
remain competitive following the EU price cut. The Sugar Action Plan has been designed in the context
of the objectives and priorities established by the NCS the two documents are complementary and
mutually supportive. However, large tracts of the Sugar Action Plan remain unfunded, and large front
loaded investments will be needed in the near future to support the policy recommendations of the Sugar
Action Plan.

Below presents ongoing actions, planned activities and recommendations for ti, ,ihli,,,, the sugar
industry; considerable more detail can be found for each of these activities in the SAP. Recommendations
from the SAP pertaining to the development of non-traditional agricultural products (NTAP) and
providing infrastructural and human resource development support for NTAP and are located elsewhere.

Ongoing Actions and Planned Activities

S.A1: Construct a raw sugar factory, Skeldon: This factory will increase production from 40,000
tonnes to 110,000 tonnes of sugar annually. In addition the factory will provide value added opportunities
from co-generation.

S.A2: Construct a co-generation plant, Skeldon. Power generation will commence in 2007 with the
incorporation of a 10Mw diesel plant and in 2008 from bagasse fired high pressure boilers. This facility
will provide a continuous source of power to the Berbice region.

S.A3: Improve agricultural practices and mechanisation aimed at increasing yields by
implementing the Agricultural improvement plan. The aim of the agricultural improvement plan is to
raise cane yields from around 70 tonnes cane per hectare to 91 tonnes cane per hectare and to raise the
sucrose content of sugar (pol%cane) from 10.55% to 11.66%.

S.A4: Brand new products such as Demerara Gold, for value addition. GuySuCo intends to further
develop new markets for branded "Demerara" sugars in North America and Europe, aiming initially at the

47 LMC/OPM (2003) 'Addressing the Impact of Preference Erosion In Sugar on Developing Countries'.

Caribbean communities in the Diaspora and "fair trade" shoppers. The large European tourist sector in the
Caribbean will also be targeted.


S.R1: Construct a sugar refinery at Skeldon for production of value added sugar products.
GuySuco's current marketing plan projects sales of refined sugar to CARICOM will reach 130,000 tonnes
per annum by 2015. The planned refinery will have an initial capacity of 120,000 tonnes pa, but will be
expandable to 180,000 tonnes pa.

S.R2: Construct a distillery at Skeldon. GuySuCo plans to enter into a joint venture for a distillery to
be sited adjacent to the factory at Skeldon.

S.R3: Upgrade factories at Albion, Blairmont, and Enmore to improve productivity and operating
efficiencies, reduce costs, and raise the quality of the finished product. The planned investments will
include projects for increased extraction, improved recoveries and better sugar quality at all factories, the
manufacture of Very High Pol (VHP) sugar at one factory (Albion) to supply the additional sugar needed
for the proposed refinery (Skeldon), and the enhancement of the facilities at the factory currently
producing packaged sugar (Blairmont).

S.R4: Install packaging plant at Enmore. GuySuCo presently sells around 2,000 tonnes of packaged
sugars per annum into the local and CARICOM markets under the Demerara Gold brand name and has
recently secured a 1,700 tonne market in the EU. There is the potential to increase sales of packaged sugar
and GuySuCo expects to sell around 20,000 tonnes by 2010.

S.R5: Upgrade the Enmore Factory to facilitate production of high value Demerara Gold direct
consumption raw sugar to meet strong demand for the Demerara Gold product.

S.R6: Expand the Blairmont operations. GuySuCo has considered expanding production beyond the
target of its current marketing plan given the strong possibility of additional access to the EU market,
increasing demand for refined sugar in Caricom, declining regional sugar production and changes in
stocking policy to match the needs of a market driven business strategy. Blairmont estate can be expanded
to increase annual sugar production from 50,000 tonnes to 80,000 tonnes by taking in a further 4,300
hectares of land to raise the area under cane to 11,500 hectares.

S.R7: Continue mechanization of operations. In order to reduce dependence on costly manual cane
cutting and stacking there is the need for GuySuCo to progressively convert field layouts to allow fully or
semi-mechanized operations.

S.R8: Construct further co-generation plants at Albion and Enmore. To create further substantial
energy savings for GuySuCo but also to provide a more secure power supply to Guyana's national grid.

S.R9: Diversify into ethanol production from sugar cane. As clearly illustrated by Brazil there is great
potential for the production of agricultural ethanol for vehicle fuel use. Ethanol as a renewable fuel does
not increase net CO2 in the atmosphere. The recent sharp escalation in petroleum prices has resulted in an
improved market value for fuel ethanol.

S.R10: Provide support to private cane farmers for the establishment of farmer organizations,
provision of land preparation, harvesting, husbandry and drainage equipment for use by private farmers,
and construction of a Link Canal from the Skeldon Private Farmers to the Skeldon Estate to enable the
movement of cane by water from the farmers land to the new factory under construction.

S.R11: Improve drainage and irrigation at Wales and Uitvlugt to improve cane yields. Drainage is a
major problem at Wales and Uitvlugt, mainly as a result of the lack of investment over the past 20 years,
but also because of the rising sea levels and silting of the river outfalls.

S.R12: Address the storage, shipping and logistical constraints facing the Sugar industry. The
anticipated increase in production, inadequacies in existing storage, the advent of new products and the
increasing rates for stevedoring, road transport and sea freight require that urgent attention should be
given to addressing problems of storage, and shipping and logistics, with a view to developing a least cost
and more efficient system.

S.R13: Provide support to the West Indies Central Sugarcane Breeding Station. The West Indies
Central Sugarcane Breeding Station in Barbados undertakes breeding of improved cane varieties for the
Caribbean sugar producing countries. This function will be particularly important over the next few years
because new varieties will be required that are suitable for co-generation and ethanol production. In order
to meet this demand there is a need to strengthen human resources, improve laboratories and conduct field
and factory tests of available germplasm.

S.R14: Address basic human capital constraints facing the sugar industry by offering training in
basic literacy, numeracy, computer and book-keeping skills for workers in the sugar industry.

S.R15: Reduce flooding amongst settlements and farmlands adjacent to the sugar estates by
increasing regular maintenance work on drainage and irrigation structures through the
development of a water-user management scheme. Because of the interconnecting nature of the D&I
coastal network, flooding in adjacent areas causes severe problems with drainage in the sugarcane

S.R16: Improve access to sugarcane cultivations and farms in backlands neighboring the sugar
estates through the development of a programme of all-weather road construction and
improvement to assist producers in accessing their lands and reducing transport costs and post
harvest losses by more timely delivery to the market place. There is a general need to improve access
to sugarcane cultivations and farms in backlands neighboring the sugar estates.

S.R17: Improve the supply of more highly skilled workers needed by the sugarcane industry
through the expansion of the Technical Training Programme at the Guysuco/ Port Mourant
Apprentice Training College and the creation of a new college at Enmore.

S.R18: Implement recommendations of SAP concerning agricultural diversification (see later).


After Sugar, Rice is the most important agricultural sector in the economy. Rice contributes around 4% of
total GDP and 12% of agricultural GDP. Since the problems experienced in the early 1990s, the Rice
Industry has experienced strong growth, with an average annual growth in production since 1992 of 7.1%
and export growth of 13.9%. In 2004 the production of Rice stood at 500,474 tonnes with a value of
US$54.8 million exported. These improvements have partly resulted from improvements in productivity
facilitated by GRDB's technology transfer programme, with yield per hectare growing annually by 2.8%
over the same period. The industry employs over 150,000 persons both directly and indirectly, and
contributes heavily to rural development given that much production is made up by small farmers. The

EU remains the most important export destination, with 45% of exports destined for the EU market in

Nevertheless, despite this progress, significant competitiveness challenges confront the industry. Rice is
another major commodity that has experienced declining margins of preference in the EU market. These
changes implemented in September 2004, saw the intervention price on ACP imports into the EU fall
from 300/tonne to 150/tonne, combined with the full tariff falling proportionately more than the tariff
applied to ACP imports. This placed a burden on an industry whose yields on average are only at half the
internationally competitive level. Exports to CARICOM have also been constrained because in certain
cases the Common External Tariff (CET) on Rice is not been implemented, despite being noted by the
CARICOM Rice Monitoring Mechanism. Insufficient access to finance has also constrained the industry,
with banks offering high interest rates and only short pay back periods. The industry also suffers from an
inadequate level of Research and Development, and has not always been able to satisfy national needs for

Some progress has been made in dealing with these challenges. The Agricultural Sector Support
Programme, supported by the IDB, has provided US$25 million for work related to the sector. US$17
million of this is for the rehabilitation of Drainage and Irrigation systems in order to boost productivity.
The remainder of this money has been spent on research to improve seed paddy and other projects to
boost productivity. The EU through the Programmefor tSp 11 Ilgi the Competitiveness of the Rice Sector
has provided 11.7 million to be used for Drainage and Irrigation support, provision of sustainable credit
and the provision of technical assistance to the sector in terms of policy development, research services
and extension services.

It is imperative moving forward that the Rice industry continues to reduce its reliance on the EU market
for significant contributions to export earnings. As such Caribbean and US markets must be more fully
exploited. The industry must also seek to add value moving beyond the export of bulk "Cargo" rice, and
into branded package products as well as rice products such as rice flakes, popped rice and rice straw. The
industry must also continue with its research on increasing productivity, decreasing the variability of
yields, increasing pest resistance, enhancing quality and developing and maintaining those characteristics
demanded by export markets and domestic consumers.

Actions in Progress and Planned Activities

R.Al: Support agricultural support services through i) civil works to rehabilitate primary and
secondary D&I systems in selected areas ii) D&I institutional development including farmers'
training and extension, and establishment of Water User Associations (WUA's) in those selected
areas iii) rice seed research and production through implementation for the Agricultural Support
Services Programme.

R.A2: Support the rice sector through targeted measures to i) strengthen the Guyana Rice
Development Board and Rice Producers Association ii) support water rehabilitation through
improving drainage and irrigation systems, and iii) provide credit to rice farmers currently
restricted due to high interest rates, short payback periods and lack of collateral through
implementation of the Support for Competitiveness of Rice in the Caribbean program (funded by the EU).

R.A3: Support research to be conducted at Burma Rice Station. Burma Rice Station carries out
research in high quality seed cultivars to improve productivity of rice production.

R.A4: Construct new seed paddy sites: This is a necessary activity in order to ensure full coverage of
seed paddy provision across all the rice growing regions of Guyana.

R.A5: Conduct quality control consultations. There have been isolated incidences of low quality rice
exports, which are damaging to the reputation of Guyana as a rice producing country. These incidences
need to be eliminated through quality control consultations.


R.R1: Further diversification of international markets to reduce dependence on EU. Guyanese rice
producers should seek new export markets particularly within the region where demand is high and where
protection of the CSME is offered.

R.R2: Diversify production to include value added products. In order to access new markets,
Guyanese rice producers need to produce higher quality and higher value added types of rice for export.
This includes moving away from the sale of bulk "cargo" rice, to the sale of high value added packaged

R.R3: Increase support for Research and Development (R&D) to bring Guyana's productivity in
line with internationally competitive levels.


The forestry sector is made up of numerous enterprises involved in log production, plywood, timber,
round wood, non-timber forest products, fuelwood, manicole palm, and production of value added forest
products (e.g wooden furniture). The sector currently contributes around 4% of GDP,48 around 20,000 to
employment, and around 6% to total exports.49 Guyana's abundant supply of high quality raw forest,
including many lesser known species, provides this sector with the means to become a significant
economic driver of the national economy. However, lack of policy definition in the past, deteriorating
infrastructure, lack of business reinvestments, evolving unfavorable market conditions, and little apparent
interest in generating value added jobs in timber processing have all contributed to the diminishing
importance of traditional forestry products in the national product during the past two decades.

Nevertheless, whilst in the past, the timber industry has been largely unregulated, making it difficult for
companies to invest, things have started to change. Through the Forestry Commission's National Forestry
Plan of 1997, measures have been put in place for the conservation, protection, management, and
utilisation of Guyana's forest resources, while ensuring that the productive capacity of the forests for both
goods and services is maintained or enhanced.50 For example, it is now compulsory for all concessions in
excess of 8000ha to conduct an Environmental and Social Impact Assessment Plan (ESIA), a Forestry
Management Plan, and a Forestry Inventory (FI) prior to issuance of a concession. A Code of Practice for
Forest Operations detailing environmental and social procedures must also be complied with. A national
management level inventory has recently been completed and necessary supporting systems are in place
to guard against illegal logging. As a result of these measures, Guyana is now deemed by the International
Community to be conducting Sustainable Forest Management at the level of the Forest Concession. There
have also recently been positive investments in the sector with a number of new projects as well as
several expansions which have created additional employment and increased activity in the sector.

The Government through the GFC continues to promote strategies in partnership with all stakeholders to
enhance the development of the forestry sector. However, despite this recent progress, difficult challenges

48 Guyana Forestry Commission, 2006
49 GTIS cluster profile: Forest Products
50 Guyana Forestry Commission, 2001, National Forestry Plan, p.1.

confront the sector. The fact that Guyana's forestry resource is so much larger than the rest of the other
CARICOM countries should signify that Guyana can take advantage of the CARICOM region's
considerable forest product-related demand, especially the demand of the substantial and growing
Caribbean tourism industry. But the sector's comparative advantage is constrained by many factors such
as high energy and transportation costs and out-dated technology and equipment. Thus the forestry sector
currently suffers from poor economies (high harvesting and production costs) partly due to mediocre tree
stocks (low tree concentration per hectare; wide range of varieties), expensive infrastructure, the high-cost
of production inputs (such as energy) and unproductive labor. Whilst Guyana's log to timber recovery
rate is similar to that of some other countries, some experts maintain that with the right policies and
appropriate milling technology, the current recovery rate yield could be doubled to 65-70 percent.

A key factor determining Guyana's potential to export value-added wood products is the actual
availability and cost of timber production, followed by the cost of transformation and transportation and
the technological ability to produce to tight specifications.51 Hence, improvements at the extraction end
will be crucial to the long term viability of the value added forest products sector (see Chapter 5).

Actions in Progress and Planned Activities

See Chapter 5for an elaboration on actions to develop the value added forest products sub-sector.

F.Al: Improve forestry management by continuing ongoing projects designed to conduct surveys of
forestry resources, silviculture, pilot inventories and forest zoning.

F.A2: Improve forestry management and product promotion by holding awareness and training
courses/workshops on differing aspects of forestry management and product promotion including
timber grading and quality control, forest products marketing and promotion of lesser known
species, tree and wood identification, directional tree felling, forest harvesting operations, forest
management and planning, and reduced impact logging.


F.R1: Monitor progress of workplans set by the Forestry Commission.

Mining and Petroleum

Mining is an important sector of the economy, contributing about 13% to GDP, 35% to exports and
employing some 10-15% of the labor force.52 Despite recent hiccups, the mining sector is on the road to
recovery. For example, the bauxite industry has been on a path of recovery over the last few years
showing substantial growth. Last year bauxite production rose by 6 percent to 1,594,294 tons reflecting in
part the restructuring of, and new investments, in the industry. Significantly, the output of the very special
high grade RASC calcined bauxite, grew by 61.7 percent to 213,000 tons.

The two bauxite companies which were nationalized in the 1970's and ensured many difficulties have
now been re-privatized. CAMBIOR, the parent company of Omai Gold Mining Ltd (OGML), now has
70% equity in the refashioned bauxite operations, Omai Bauxite Mining Ltd (OBML). Similarly, the
Government recently signed an agreement with Russian Aluminum group (RUSAL) for an investment to
privatize the Berbice operations of the bauxite industry (90% RUSAL, 10% Government). A subsidiary of

51 For example, see Zweig, 2004: Profile of Wood Products Sector in Guyana
52 Guyana Transport Sector Study Working Paper 5, 2006

RUSAL, BCGI, took over the Berbice operations in March, 2006. RUSAL, looking to extract 2 million
tons of bauxite per year over the next 20 years has put US$20 million into the operations and has signed
up Oldendorf Carriers for the barging, transshipment and ocean shipment of its bauxite products for the
next 10 years. Oldendorf is investing US$60 million in a new barging fleet and in improvements of the
transshipment station which is part of the first phase deep water shipping facility at the mouth of the
Berbice River. RUSAL has also begun a study of the feasibility of establishing an alumina refinery on
known bauxite deposits in the Linden and Ituni areas for which RUSAL has taken leases.

Declarations by small gold miners have also been steadily increasing in recent years; gold declarations
reached an all time high of 162,527 ounces last year. However, overall gold production fell by 26.3
percent to 267,556 ounces reflecting the significant loss of output of Omai Gold Mines Ltd
(OGML/OMAI) which ceased operations in September 2005 having exhausted known reserves the
previous year. Diamond declarations, whilst still the second highest declaration, fell by 19.8 percent to
356,948 carats. It was these declines that caused the output of the mining and quarrying sector to contract
by 17.7 percent in 2005.53

The mining and petroleum sector in Guyana is sharing in the worldwide boom. There is great excitement
about a number of gold prospects currently being pursued. There have also been new applications for
uranium prospecting rights and the Pakaraima laterite bauxite deposits are being reappraised. A survey of
iron ore possibilities in Guyana is being undertaken as a possible feed for a new iron and steel plant to be
built in Trinidad.

Nearly all of the prospective petroleum areas in Guyana are currently under lease offshore, near on
shore, and the Takatu basin. Interest remains high in the so-called overlap off-shore Corentyne area,
awaiting boundary demarcation between Guyana and Suriname. Three wells drilled on-shore along the
Corentyne coast did not find any oil, but having reworked all data, a new programme of drilling is being
projected for 2006-2007 along a band about 10 miles further inland.

In spite of recent progress, a number of key challenges in the sector remain. These include the need to
overcome deeply ingrained habits relating to environmental practices especially among small miners; the
need for better physical infrastructure and communications; and reducing the impact of health risks
endemic to the sector including malaria, STD's/HIV-AIDS and other health related risks. It will also be
necessary to continue developing the monitoring and inspectorate capabilities of the GGMC and the EPA,
and to improve technical and professional training throughout the industry.

Actions in Progress and Planned Activities

M.Al: Implement workplan set by the Guyana Geology and Mines Commission to:

i. Promote mineral development;
ii. Provide technical assistance and advice in mining, mineral processing, mineral
utilisation and marketing of mineral resources;
iii. Facilitate mineral exploration;
iv. Provide research in exploration, mining, and utilization of minerals and mineral
v. Enforce the conditions of Mining Licenses, Mining Permits, Mining Concessions,
Prospecting Licences (for Large Scale Operations), Prospecting Permits (for Medium
and Small Scale operations) and Quarry Licenses;

53 Budget Speech 2006

vi. Collect rentals, fees, charges, levies etc. payable under the Mining Act;
vii. Continue hall marking

M.A2: Enact Mining Amendment Act and implementing regulations to improve incentives to invest
in the sector and provide adequate environmental protection.


No further recommendations proposed at this time.

Key Diversification Opportunities

Key diversification opportunities are sectors for which the development and implementation of broad-
based sector strategies should be accorded priority attention in National Competitiveness Strategy for
purposes of diversification. As the National Development Strategy points out, non-traditional agriculture,
manufacturing, tourism and other high-value services in I.T sectors remain at a nascent stage of
development yet it is envisaged that by 2010 the economy will have become much more diversified, with
in particular the manufacturing, service and information technology sectors making much more
significant contributions to GDP than they do now. This objective is reaffirmed by the Sugar Action Plan
which seeks to explore avenues for diversification within the agricultural sector.

Non-Traditional Agriculture

The non-traditional agricultural products sector (NTAP) in Guyana is a nascent sector that has shown
strong potential to become an important comer stone of the Guyanese economy; as such the sector should
be seen as a strategic growth pole with the ability to broaden the productive base and to mitigate the
potential impact of future adverse shocks to our major commodities.

While the level of exports of the sector (4,560 tonnes in 2004) is still minimal when compared with
traditional exports of rice and sugar, there is great potential for further growth in exports to CARICOM,
US and EU markets. Total exports of fruit and vegetables have grown by 93% in value since 1998, at an
average annual rate of 12%. Products with the most promising marketing opportunities include coconut
base products, pineapple, pepper, plantain, pumpkin and passion fruit. There is also strong potential for
Guyana's beef sector, due to Guyana's inherent comparative advantages in terms of land and water
resources necessary for raising cattle.

In recent years, the Guyana Marketing Corporation has taken an active role in the identification of
markets, promotion of Guyanese products and technical field visits to provide extension services to
producers of non-traditional agriculture. Exports of fruits and vegetables have begun to the Caribbean
region, with exports of Coconut Oil, Copra, Pepper, Plantain and Pineapple enjoying particular success.
Guyana has achieved foot and mouth disease free status but this must be internationally certified. Some
recent support has also been delivered through the GTIS project for advanced training in the product
development, storage, post harvest handling, processing, packaging, quality control and marketing of

A number of key competitiveness challenges confront the sector; these need to be overcome to unleash
the sector's potential. For example, in the non-traditional sector there is a lack of private sector leadership
and coordination, due to its status as a fledgling industry, which means that the private sector is unable to
direct itself in terms of identifying and securing markets and coordinating entire supply commodity

chains. While Guyana is free of Foot and Mouth there is no adequate animal or plant health systems
currently in place which are necessary conditions for the export of products to stringent markets such as
the US and the EU. The sector also suffers from severe constraints in accessing finance; non-traditional
products are often produced by small farmers who do not have collateral with which to secure loans.
There is also a lack of skilled human resources in the sector, with the knowledge necessary to drive the
sector forward.

Diversification of the agricultural sector into non-traditional agricultural products is a major strategic
priority for the Government. Implementation of this strategic priority will be spearheaded i). via
implementation of the Sugar Action Plan; ii). via implementation of the Agricultural Diversification
Program (ADP). These form the basis for the actions and recommendations outlined below and are
summarized in more detail in the NCS Action Plan. Both the Sugar Action Plan and Agricultural
Diversification Program (ADP) have largely reached completion of high-level design stage and the exact
details of programmable activities to be covered under each will be finalized in the near future.

Actions in Progress and Planned Activities

NTAP.A1: Support agricultural support services through i) civil works to rehabilitate primary and
secondary D&I systems in selected areas ii) D&I institutional development including farmers'
training and extension, and establishment of Water User Associations (WUA's) in those selected
areas iii) agricultural diversification promotion through implementation for the Agricultural Support
Services Programme.

NTAP.A2: Support the development of initial export supply chains in fruit and vegetables and beef
to produce a sustainable increase in non-traditional exports of fruit, vegetables and beef through
implementation of initial measures identified under the Agricultural Diversification Programme (see
Chapter 5 for an elaboration on strategies under the ADP to develop the fruit and vegetables and beef
supply chains)


NTAP.R1: Establish a comprehensive Plant Health System (this is a recommendation of the Sugar
Action Plan (SAP)). Phytosanitary requirements for imports to the EU and other markets are increasingly
important technical barrier to trade. The need to develop a more effective phytosanitary control system to
meet the demands of developing the fruit and vegetables export industry is critical. A Plant Health Unit
has been established within the Ministry of Agriculture, but there is an urgent need to develop a more
comprehensive phytosanitary system. Activities should focus on:

i. Improving plant inspection at points of entry.
ii. Installing a rapid response unit to control outbreaks of pests.
iii. Improved Pesticide Residue Control.
iv. Training farmers on use of pesticides.
v. Achieving international accreditation on phytosanitary standards.

NTAP.R2: Establish a comprehensive Animal Health System (this is a recommendation of the Sugar
Action Plan (SAP)). In order to begin large scale exports of beef Guyana must put in place an effective
animal health system to meet international sanitary requirements. Activities should focus on:

i. Completing a full livestock census.
ii. Improving inspection at points of entry.
iii. Establishing an animal movement control system.

iv. Installing a system of continuous sample testing of randomly selected animals.
v. Installing a drug intake control system.

NTAP.R3: Construct an Abattoir to International Standards. Another necessary requirement for the
export of beef and other livestock products. Currently there is no abattoir in Guyana that is certified for
the export of beef to markets such as the EU and the US. This is an opportunity which should be
examined by private sector investors.

NTAP.R4: Increase capacity of government institutions to provide extension services. The service
currently offered by extension officers of the Ministry of Agriculture and the Ministry of Fisheries, Crops
and Livestock is limited by human and technical capacity constraints.

NTAP.R5: Develop an Agricultural Business Development Unit (this is a recommendation of the
SAP). The objective of this unit is to develop the skills, knowledge, market information and organisation
within the private sector to scale up production of non-traditional agricultural commodities. The Unit
should focus on the following activities:

i. Provision of market intelligence to ensure that production is demand-led. The aim initially will be
to secure niche markets for Guyanese products rather than try to compete with more efficient
ii. Provision of export marketing support, which is considered essential given the lack of marketing
experience for the targeted commodities. This should include training on Sanitary and
Phytosanitary (SPS) requirements.
iii. Value chain analyses. Value chain analysis takes an integrated view of commodity systems
linking together all agents and institutions in the production and marketing chain with a view to
identifying and addressing constraints and opportunities for further development.
iv. Establishment of producer organizations to procure important inputs, such as seed, fertilizer and
pesticides, as a means to reduce costs through bulk purchasing.
v. Provision of general business development advice to producers in the non-traditional agricultural
vi. Engage in dialogue on key policy issues mcii : the development of the non-traditional
agricultural sectors.

NTAP.R6: Provide specific support to the fruits and vegetables sector through strengthening the
capacity of NARI to (this is a recommendation of the SAP):

i. Implement ongoing programmes related to fruit and vegetable propagation and production, pest
and disease control practices, soil and water management, organic agriculture and sheltered
ii. Promote the cultivation of new commercial tropical fruits and vegetables, including organically
grown products.
iii. Enhance the genetic base of high quality cultivars by supplementing local tropical fruit and
vegetables varieties with high quality foreign varieties.54
iv. Propagate selected materials in nurseries applying up-to-date tissue culture techniques and
distribute materials on a large scale.
v. Provide training activities aimed at improving the skills of NARI staff and fruit and vegetable

54 The development of high quality cultivars targeted at strategic export markets will help to increase the
attractiveness of Guyanese exports. Improvements in quality will also improve yields and thus increase profit

vi. Establish suitably equipped seed testing facilities.

NTAP.R7: Provide specific support to the beef sector to strengthen the production for export on the
intermediate savannas. Specific support should be directed at strengthening the capacity of the
Livestock Division in the Ministry of Agriculture (this is a recommendation of the SAP) to deliver the
following activities:

i. Establish three breeding programme centres in the major beef producing areas of Guyana.
Breeding programmes will be based on well established breeds. The centres will be responsible
for semen collection, processing, storage and distribution.
ii. Conduct scientific analysis of appropriate forage suited to local agroclimatic conditions and the
breeds to be introduced.
iii. Promote on a large scale improved quality forage in beef producing regions of Guyana.

NTAP.R8: Establish credit facility for non-traditional exports (this is a recommendation of the SAP).
The aim of the facility would be to extend credit to the non-traditional agriculture sector using the model
developed by IPED. The scheme would be solely targeted at exporters of nontraditional products with
lending linked to the development of business plans by prospective borrowers that will indicate how they
will expand production for export.

NTAP.R9: Address basic human capital constraints facing individuals engaged in agricultural
activities by offering training in basic literacy, numeracy, computer and book-keeping skills for
workers in non-traditional agriculture (this is a recommendation of the SAP).

NTAP.R10: Improve the supply of more highly skilled workers needed by the non-traditional
agricultural sector through the expansion of the Technical Training Programme at the Guysuco/
Port Mourant Apprentice Training College and the creation of a new college at Enmore (this is a
recommendation of the SAP).


The fisheries sector is a significant contributor to Guyana's economy, with 3% of total GDP accruing
from the sector (as much as rice in some recent years). The fishing industry employs around 6,500 people
in harvesting and a further 6,000 people in processing, with many more benefiting indirectly through
fishing related industries such as boat building and gear supply and repair.

Much progress has been made towards sustainable development of the industry in recent years. For
example, the fishing industry has achieved the requisite Fish Quality Control Standards for export of fish
to the EU market and has commenced exporting to the EU. Guyana has also implemented and enforced
regulations on Turtle Excluding Devices (TEDs); this allows for the export of fish and fishery products to
the US market. The local market has also been extensively exploited with per capital annual consumption
of fish increasing dramatically from 9kg in 1980 to 45kg in 2003. As a member of CARICOM Fisheries
Resource Assessment and Management Programme (CFRAMP), work has begun on assessing the status
of the shrimp and ground-fish stocks.

Despite this progress, a number of competitiveness constraints confront the sector. A major constraint to
the sector is the lack of sufficient regulatory support. Moreover, the Fisheries Department of the Ministry
of Fisheries, Other Crops and Livestock suffers from severe constraints in terms of human and technical
capacity to help inject further momentum into the sector. As a result Guyana's marine resources are not
being managed in a sustainable manner. An illustration of this was the collapse of the Prawn industry in

the 1990s due to over-fishing. The Government did not have the capacity to set sustainable Total
Allowable Catches because of insufficient human and technical capacity necessary to carry out an
accurate scientific survey of the resource. It is feared that another important resource, Seabob, is currently
also being over-fished due to decreasing catch sizes; a scientific survey is required to verify this (it is
noteworthy that some work has recently been done with the support for GTIS to help assess and address
issues of fisheries resource management).

Moreover, whilst Guyana has some of the most abundant marine resources in the region, many resources
remain under-exploited especially the deep water resources. This is due to the lack of ability to carry out
scientific surveys of the resource. For sustainable development of the sector there is a need to properly
survey marine resources to establish their suitability in terms of available technology and economic

Note, as part of preparing the NCS, detailed work has been undertaken in the aquaculture sector, which
M,%.,.. ,t, that aquaculture is a particularly promising sub-sector of fisheries (see Chapter 5 for more

Actions in Progress and Planned Activities

Fi.Al: Update the Fisheries Act to be more relevant to current national and international
requirements. Adjustments to the Fisheries Act are required to ensure that the industry is complying with
international standards for export of fish and fish products. With the emergence of aquaculture as a
potential strategic sector there is the need to provide extra legislative support to the sector.

Fi.A2: Facilitate seafood/fisheries cluster working group activities that focus on identifying factors
impacting the competitiveness of the sector and developing action initiatives to improve the
competitiveness of the sector/cluster.


Fi.R1: Create a semi-autonomous Fisheries Authority to address human and technical capacity
issues (this is a recommendation of the SAP). Despite the fact that fish and fish products contribute
almost as much to the economy as rice, the sector is not adequately supported. Human and technical
capacity constraints undermine the support that is given to the sector. As such a reconfiguration is

Fi.R2: Assess the Seabob resource to establish Maximum Sustainable Yield. It is generally felt that
the Maximum Sustainable Yield would allow for 30 boats to harvest this resource. Currently there are 100
boats licensed to fish Seabob in Guyana. In order to prevent further over exploitation of this resource a
survey is required to set an accurate Maximum Sustainable Yield.

Fi.R3: Demonstrate simple cost effective ways for coastal fishers to significantly increase the quality
of fish. There is concern about the quality of fish currently being produced by Guyana, with many
fishermen only able to maintain Grade A fish for 10 days, while the current market climate requires fish
to remain at Grade A for 20 day; thus cost effective methods to increase fish quality would help to
improve the competitiveness of the Guyanese product.

Fi.R4: Assess the potential for exploiting deepwater resources. Guyana is blessed with an abundance
of deepwater resources such as Atlantic Tuna. However, a survey is needed to assess the state of these
resources to evaluate the potential profitability of production.


In Guyana the manufacturing sector remains small, narrow and rudimentary, devoted primarily to the
low-value processing of our major agricultural, mineral, and forestry products. The sector currently
accounts for only 3% of GDP.55

Whilst in 2005 the manufacturing sector showed growth of 2 percent56 reflecting the expansion of existing
products and diversification into some new activities, the expansion and diversification of the
manufacturing sector is currently not proceeding at the rate it must. Currently Industry Division of the
Ministry of Tourism, Industry and Commerce, which is responsible for managing the industrial estates
and setting policy, has a staff contingent of only three people and there is not currently in place an
overarching strategy to bring together the disparate attempts of various agencies in developing the sector.
At the current time only the GTIS project (see Chapter 5) is undertaking development activities focusing
on centers of potential dynamism within the manufacturing sector (i.e. agro-processing and forest

Ensuring the future growth and development of the manufacturing sector in Guyana will now require a
commitment to develop a radical and comprehensive strategy aimed at helping the industrial sector to
build up its technological capabilities through policies designed to overcome sector-specific constraints
currently inhibiting the sectors growth and development.

To achieve this objective will require a targeted approach focusing on developing value-added activities
areas such as agro-processing and forest products (see Chapter 5). But these efforts will need to be
complemented by a strategy to quickly create competitive niche sectors in global markets through a
program aimed at targeting niche contract manufacturing/call centers.57 Guyana has a number of key
competitive advantages such as affordable labor costs, market access in sectors such as garments under
the CBI, an English speaking population, a trainable workforce and special advantages for call centers
such as accent, same time zone as US and Canada, among others. These advantages have recently been
confirmed by a few pioneer investors with expansion projects in garments and call centers in 2006.
Nevertheless, this slight competitive edge can easily be whittled away quickly unless the core
interventions highlighted in Chapter 3 are not promptly implemented to deal with factors such as high
transaction costs due to overregulation, red tape, discretionary concessions process, customs delays etc.

To position the Contract Manufacturing/ Call Centers sector as a driving element in the generation of jobs
and exports will require a bold strategy aimed at taking advantage of the current opportunities and
competitive advantages of Guyana and those to be generated. This will essentially require developing
"islands of competitiveness" for the export-oriented light manufacturing/services industry through the
creation of new industrial areas offering a more advanced infrastructure especially in buildings for long
term lease to new investors.

Actions in Progress and Planned Activities

M.Al: Organize trade fairs through Go-Invest for the manufacturing sector and facilitate the
attendance of the local private sector.

55 Guyana Transport Sector Study Working Paper 5, 2006
56 Budget Speech 2006
57 Call centers here are treated here as the same as contract manufacturing for analytical purposes as competitive
advantage is routed in roughly the same factors.

M.A2: Conduct a Strategic Investment Opportunity Assessment for agro-processing and forest
products to provide the basis for Golnvest to launch a proactive investment attraction programme
for the two sub-sectors.

M.A3: Support the Guyana Manufacturers' and Services Association to build capacity through the
funding of key positions.

M.A4: Improve factory layout and management, production processes, quality control, scheduling
and plant/employee safety by engaging services of an industrial engineer to spend 6 months working
with manufacturers in various sectors.

M.A5: Reduce the trade deficit in manufacturing products by developing a Pride in our Industry
campaign to encourage the purchase of locally produced manufactured products.


M.R1: Implement integral plan to promote and attract FDI into labor intensive manufacturing
operations (e.g. garments) and exported services. The operation of successful pioneering investments
in garment and call centers in Guyana have been expanding in recent years even in the face of a number
of competitive challenges. It makes sense to use the experience of these investors to expand the sector and
create larger economies of scale and a process of development of specialized infrastructure.

M.R2: Create a new agency or establish practical ways to combine and upgrade existing functions
present in MINTIC, Go-Invest, and/or NICIL to more effectively manage the operation of
industrial parks development in Guyana. Based on the experience of other countries, including Mexico
(state of Chihuahua), and on the operation models used by free zones in Central America, the creation of
the new governmental institution would be in charge of the development, construction, promotion, and
sale of industrial zones and parks.

M.R3: Develop a new turn-key industrial Zone with buildings for immediate lease and specialized
services, potentially including customs' on site and the hiring of specialist personnel. This will
require making use of an existing industrial areas and buildings that are not in use at the Sanata Industrial
Site to develop the kind of zone that has been so successful in many countries in Latin America and the

M.R4: Assess the potential for introducing EPZ regulations on tariffs for the new zone taking into
account i) future likely deliberations in the WTO and ii) Guyana's position as close to the $1000
GDP threshold set by the WTO for regulations governing export subsidies.

M.R5: Implement marketing plan for the new zone

M.R6: Develop and implement a specialized training for industrial estates managers and investment
attraction specialists in Go invest: The development of more advanced industrial zones offering
buildings for lease requires highly specialized knowledge. The implementation of an investment
attraction program requires basic knowledge on the methodology to detect and promote investors to the
country. Hence, the implementation of a specialized training program is recommended including site
visits to successful free trade zones in the Caribbean or Central America to learn investment attraction
basics and skills in industrial park management, operation and promotion.

M.R7: Set-up a Fast Track "Production Sharing" Action Team (see also Recommendation
FTSD.R1).The clothing and call center industry has grown in Guyana based on few participants in the
face of a number of competitive constraints and also limited private-public collaboration. To accelerate
progress, the strategy must be developed with key stakeholders including government officials, industrial
estates managers, investment advisors, manufacturing companies in operation and key service providers.

M.R8: Develop Fast-Track Action Plan to support start-up of New Tech Park (for Call Centers and
IT). A private investor is interested in developing a new IT Park in Guyana in order to attract investment
in exported services. The site of the proposed new Technology Center is adjacent to the new World Cup
Cricket Stadium. Private investors are ready to construct the new buildings on a "turn-key" basis to lease
them to call center investors. By mid-2006, private investors are planning to construct a 30,000-square-
foot, state-of-the-art, smart building that will offer quality space with "plug & play" readiness where new
call center investors can move immediately to begin operations. Fiber cable infrastructure is already
available in preparation for the Cricket World Cup media; hence it will be available for the new Tech


The Government has designated the Tourism sector as a priority sector of the economy and aims to
double international tourism by 2010. The sector currently contributes approximately 7% to GDP and
provides directly 2,000-3,000 jobs. With Guyana's wealth of world class natural tourism attractions
including vast trails of wilderness, rainforests, river systems, mountains and a variety of cultural and
historic recognition of the country's abundant natural resources, Guyana's tourism product continues to
grow and attract significant interest from investors and visitors alike.

The National Development Strategy marks tourism as a sector that can contribute to the sustainable
development of Guyana by earning foreign exchange and providing job opportunities, while conserving
the natural environment and the multi-faceted culture of the country. The strategy goes on to list a number
of elements that need to be implemented. So far the GOG has initiated a number of actions to give effect
to the strategy outlined in the NDS. In particular, the National Tourism Authority has been set-up; the
Guyana Office for Investment (GOINVEST) has mandated certain concessions for the tourism sector to
encourage its development; significant improvements have been made to Cheddi Jagan International
Airport; improvements have been made to the road between Timehri and Georgetown; and the GTA is in
the process of licensing tourism businesses.58

The GTIS project has also helped to strengthen the tourism sector by helping to ensure that improvements
in the sector meet the design and appearance standards of the international tourism industry, by carrying
out training needs assessments and nation wide consultations on the development of regulations
governing tourism standards and certification, and facilitating the attendance of GTA at the ITB German
Travel and Trade Fair. These various activities have helped contribute towards an increase in tourist
arrivals into Guyana from around 99,000 in 2001 to over 120,000 in 2004.59

Nevertheless, despite general recognition of the country's abundant natural resources, Guyana has not
been as successful as it could at translating our natural touristic resource base into a viable tourism
industry. To become a more competitive destination and to widen Guyana's appeal further field, i.e.
outside of the Guyanese Diaspora, it will be necessary to improve firstly the image of the country, to
make some focused improvements to the transport infrastructure for greater connectivity and more airlifts,

58 Guyana National Tourism Development Plan 2006 2010
59 GTA, 2005

reduce travel time/ travel cost, revise the view of Guyana's Tourism Potential (i.e. too much focus is
given to eco-tourism), extend marketing efforts to improve our market position, increase and improve
tourist facilities, increase standards within the industry (both service and product), and increase funding to
institutions that support tourism development.

To ensure that this happens, a Five-year Tourism Development Plan (FYTDP) was recently completed
aimed at defining the actions that will guide policy making investments in the sector and bring about
realization of the vision defined in the NDS.

Actions in Progress and Planned Activities

T.A1: Expand and rehabilitate the Ogle Aerodrome and improve rural airstrips and other
infrastructure to support tourism. These measures are designed to allow for increases in tourist traffic
and improve access to various tourist destinations around Guyana with the objective of improving
Guyana's image as a viable tourist destination. See also Recommendation I.All in the section on

T.A2: Improve communication, attitude and general hospitality skills and services within the sector
through implementation of CIDA funded program for the tourism sector. This program supports
training programs convened by THAG targeted at tourist operators, chefs, waiters, waitresses and other
personnel so as to improve communication, attitude and general hospitality skills and services.

T.A3: Continue ongoing marketing and support services through the Guyana Tourism Authority.
The Guyana Tourism Authority is continuously engaging in national tourism marketing, product
development, human resource development, product standards (licensing), research and information
aimed at the development of the tourism sector.

T.A4: Facilitate tourism cluster development working groups activities that focus on identifying
factors impacting the competitiveness of the sector and developing action initiatives to improve the
competitiveness of the sector.

T.A5: Develop training program in collaboration with MINTIC, GTA, THAG and private sector
firms to upgrade tourism and hospitality services in preparation of the 2007 Cricket World Cup.

T.A6: Strengthen the capacity of the Linden community to promote tourism through
implementation of a LEAP project to produce a tourist guide and develop the Linden Tourism and
Hospitality Website.

T.A7: Strengthen GTA's capacity to network, share information, and engage in website
development and management through provision of personnel, hardware and software to upgrade
GTA's IT capacity.

T.A8: Develop a birding marketing strategy. The strategy will include an assessment of Guyana's
competitive position in the global birding tourism industry, the identification of tour operators potentially
interested in conducting birding trips to Guyana, and recommendations for Guyana to further develop and
market this niche tourism industry.

T.A9: Assess Guyana's potential in the yachting market to look at the potential of developing the
yachting industry.


To complement the ongoing actions and planned activities outlined above, the Five Year Tourism
Development Plan recommends that steps are taken to:

T.R1: Improve air access transport. The strategic approach should be to improve air access
infrastructure and support services, deregulate to facilitate provision of air services, establish an air access
promotion campaign and encourage the setting up of a privately owned Guyanese airline.

T.R2: Diversify and expand the tourism product. The FYTDP recommends the following strategic
initiatives: designate and develop product destinations (Georgetown, Bartica, Kaieteur/Orinduik;
Rupununi), develop a main-stream tourism product portfolio, expand the eco-tourism product portfolio,
establish a Protected Area Management System, and establish accommodation classification system.

T.R3: Increase market demand. This would require identifying the three main customer segments (i)
Diaspora; (ii) vacation/leisure (iii) business, and formulating a promotional campaign for each segment,
producing a range of collaterals, upgrading the GTA Web-site, undertaking promotional activities,
tapping more benefits from CTO Membership, and undertaking market research.

T.R4: Upgrade service skills and standards. There is a need to provide training for persons wishing to
enter the hospitality sector and on-going on-the-job training for existing staff within the industry who
currently lack adequate skills to perform their jobs in a satisfactory manner.

T.R5: Invest in infrastructure and services. The main tourism infrastructure investments required are
(see also Recommendations outlined in section on Infrastructure):
i. upgrade Linden Annai Lethem road
ii. upgrade Linden Bartica road
iii. regional airport at Lethem
iv. improvements to Timehri airport
v. improvements to Ogle
vi. marina at Bartica

T.R6: Make tourism investment attractive. As Guyana is not currently top of the list for international
investors, the package of incentives must be made more competitive. This will involve designing an
investment package providing for:

i. Improved fiscal incentives (double capital allowance, accelerated depreciation etc)
ii. Introduction of tax concessions for staff training
iii. Improved access to investment capital

T.R7: Organize the sector for growth. The development of the Guyana tourism sector will not simply
happen. It has to be stimulated and the activities of the various tourist enterprises coordinated. This means
having the right organizational structures in place and operating effectively.

Information Technology

The ICT sector in Guyana is evolving; in 2005 six projects were financed, including two new ones,
totaling G$5.480 billion and creating 285 new direct jobs and at least 200 indirect jobs.60 A recent report
by Go Invest, shows that activity facilitated by developments in the ICT sector has led to the development
of a number of call centers and back office processing centers, creating thousands of job opportunities for
young people. Also, Golnvest was recently approached one of the largest call centre companies in the
world to establish one of their operations in Guyana.61 Nevertheless, development of the sector has been
hindered in recent years by a number of factors such as the ongoing telecommunications monopoly
described previously.

The Office of the President is now leading work across Government to develop and implement a National
ICT Strategy using inputs from various sources including a recently completed a draft policy discussion
paper produced by MINTIC entitled, "Towards an E-Commerce it,,,il -. for Guyana" designed to
provide a platform from which to translate topical issues around e-commerce into Government policy on
E-Commerce. The National ICT Strategy will be released at the end of April 2006.

Actions in Progress and Planned Activities:

ICT.Al: Review and revise draft E-Commerce legislation and support necessary public
consultations throughout the process.

ICT.A2: Develop and implement a National ICT Strategy


ICT.R1: Establish suitable mechanisms to monitor implementation of the National ICT Strategy.

60 ETG/ITG(2006), Fast Track Action Plan: Niche Light Manufacturing and Exported Services prepared for
Government of Guyana and IDB
61 Ibid




The following chapter analyses the current situation with respect to targeting strategic sub-sectors of
activity. It presents a framework and recommendations for fast-tracking the development of promising
sectors with the general objectives of diversifying Guyana's economic activities, rapidly increasing
exports and job creation, and improving general economic conditions and the welfare of Guyana's people.

Selection of Sectors: What Strategic Sectors to Target?

As before, whilst National Competitiveness Strategy, in-line with a systemic approach, should aim to
deploy an arsenal of measures to provide a broad-based support framework for competitiveness including
a strong business climate and the development of broad sector based strategies for enterprise
competitiveness, it will not be possible, however to address simultaneously all factors relevant for policy
in all sectors of the economy. Moreover, the principle of developing and strengthening complete export
chains in a context of scarce resources preclude us from attempting to foster many export chains at a time.
This leads us to the question of how to go about the difficult decision of which chains to foster through
various policy instruments that allow promising sectors to grow by alleviating bottlenecks across the
complete supply chain.

Figure 5.1: The Supply Chain Approach to Export Development

> Supply Chain >


Producing Exporting Marketing

,, 'c~4~
i -"



In Guyana, there is currently a dearth of information on the performance and capabilities of the various
productive sub-sectors, particularly in non-traditional sectors important for diversification. Nevertheless,
some work in identifying areas of strategic importance has begun and we now have a good idea of where
our priorities should lie.

However, recently as part of the NCS development process, work has taken place to determine strategic
sectors using a logical selection process grounded in sound economic analysis. A comprehensive two
stage process has been employed for the NCS whereby sectors are initially selected on the basis of a
combination of economic performance and readiness for fast-track development criteria. Then, the
selection of viable export chains within sectors is based on market signals which demonstrate signs of
some export activity and indicate the levels of high profitability needed to leverage the private sector
investment required to complement targeted public supply-chain interventions.

The initial stage involves a two-step process, first involving a rapid analysis to narrow the range of
possible strategic areas (see Table 5.1), followed by a more detailed analysis of each sector by evaluating
their potential on the basis of a wide range of criteria of economic performance and other key success

Table 5.1: Results of 1st Stage Filtering Process

Sector 1st Filter Indicators
Most Promising
Light Manufacturing ("production Competitive labor cost advantage, time to market, preferential trade agreements
sharing") under CBI
Call Centers Low labor costs, linguistic and cultural ties to major markets
Co n T m Unique convention-oriented assets including CARICOM headquarters, new
Convention Tourconvention center and 2007 Cricket World Cup
Established technical support within country, climatic suitability, high
A e productivity, hardiness, disease resistance and market accessibility, rapid growth
e in similar countries (Colombia, Brazil), strong growing US market for Tilapia,
very profitable
Well endowed product offering (pristine natural resources including forests, lakes,
Eco-Tourism rivers and beaches), and growing global eco-tourism market. But natural capacity
constraints make the sector a slow burner.
NTAP and agro-processing (fresh fruits
NTAP d agro-processing (fresh fruits Comparative expertise in agriculture, abundant arable land and water resources,
and vegetables and cattle for domestic
use and export an s well a foodc time to market advantages, proximity to major export markets, certified Foot and
use and export, as well as food Mouth Disease free status. But development process lengthy and relatively slow
processors, farmers, transportation and current growth in agricultural products and cattle.
other input suppliers)
Comparative expertise in agriculture, abundant arable land and water resources,
Organics time to market advantages, proximity to major export markets. But quality-related
challenges to comply with tight international regulations
Large natural resource base vis-a-vis rest CARICOM (signifies opportunities to
take advantage of considerable CARICOM forest product-related demand),
similarly endowed Central American countries successfully reoriented segments
t P s of sector to value-added activities, potential niche market opportunities to the
CARICOM market. But problems at extraction end including poor economies
(high harvesting and production costs), expensive infrastructure, the high-cost of
production inputs (such as energy) and unproductive labor. Low timber recovery
Less Promising:
Traditional sectors (sugar, rice, mining, Declining growth, modest diversification opportunities, and national strategic
traditional fisheries) plans already in place to drive future growth

A wide range of key indicators were used in the selection of national priorities including:

Economic Impact Indicators:
1. Current Performance: Current size and growth of sector, includes jobs, value added, exports,
market share, output and/or sales;
2. Growth Potential: Expected growth of the sector, includes jobs, value added, exports, output sales
and/or capacity to enter new markets;
3. Economic Impact: Overall potential impact on Guyanese economy, includes multiplier effect,
growth of new companies, SME's, target population growth and poverty reduction;
4. Strategic Alignment: Alignment with national economic development strategies;
5. Resource Reutilization: Labor/resource redeployment from declining traditional sectors, like
sugar and rice.

Indicators for Fast-Track Sector Development Success Indicators:
6. Comparative Advantage: Factors affecting sector competitiveness;
7. International Success: Documented comparable fast track sector success story in other similarly-
factor-endowed countries;
8. Readiness: Promptness of business leadership to take action as well as the degree to which the
process can be fast-tracked and will not be delayed by structural, procedural (and/or other)
9. Networking: Level of collaboration and networking that exists (i.e. social capital);
10. Synergy Potential: Offers synergies with other ongoing economic competitiveness activities in

Table 5.2 provides a brief guide to eight strategic sub-sectors which represent good candidates for
development as fast-track sectors to drive diversification and growth of the economy. The most promising
are aquaculture and a combination of contract manufacturing and call centers (combined because of the
related focus on investment attraction and importance of developing industrial zones to foster
development) followed closely by convention tourism, non-traditional agriculture and agro-processing
(fresh fruits and vegetables and cattle, as well as food processors), forest products, eco-tourism, and
organic food products.

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