Guyana ... an economic success story

Written by Gina Webmasters, Published in News, A GINA feature, May 6, 2015, Source

A proliferation of vehicles on the road

These great expectations for Guyana and its people are attainments that are being realised more and more, because government has been ensuring the right policy framework to guarantee steady and sustainable improvement in the quality of life enjoyed by citizens. From an era that could best be described as one of lost opportunities, coupled with the trampling of civil liberties and a crashed economy, the return to office of the PPP/C in 1992, heralded a new chapter in Guyana’s history.

Of course, this government understood its mandate- the monumental task of rebuilding the country’s shattered socio-economic infrastructure that had resulted in the inevitable social consequences of very high poverty levels, dissipation of virtually every type of infrastructure, and a bare treasury. Two decades later, Guyana has undergone an economic miracle, so much so that international multilateral institutions continue to commend the efforts of the Government in transforming the economy. In annual evaluations, Guyana’s economic successes have been hailed as the “shining star of the Caribbean” and the country has been described as a primary example of what other countries should do in order to achieve economic development success.

Socio-economic development

The centre piece of Guyana’s economic success has been government’s setting the stage for domestic peace and stability, thereby creating the conditions for both domestic and foreign direct investment. In fact, a raft of measures was legislated, that dealt with proper legal guidelines for doing business in Guyana, such as tax incentives, a National Competitiveness Council, and the important Guyana Office for Investment that was established for offering advice to those desirous of doing business in Guyana.

A well stocked supermarket

Debt relief

A particular area of government’s attention has been the persistent efforts in seeking debt relief for a country that at 1992 had been mired in debt to the level of US$2.2B, and which required a servicing of a reported 94 cents of every dollar. Absolutely no country with such a high debt

Traffic on the East Coast Demerara road. This road is in the process of being upgraded to four lanes

service could ever hope to advance, since such a high rate of revenue out-flows would deny opportunities for spending on critical social programmes that are pivotal to the national well-being. But thanks to the herculean efforts of Former President Bharat Jagdeo, his nationalist efforts led to very significant reductions in the national debt.

Fiscal affairs management

But, there have also been other key inputs as well, such as the prudent management of the country’s fiscal affairs, wise socio-economic policies and their proper implementation and management. This astute policy laid the platform for macroeconomic stability, while allowing for the growth and development of industries, and poverty alleviation initiatives. In fact, Guyana has not suffered in the manner as many other states have, because such competent economic oversight, shielded the economy from the debilitating effects of the international economic crises, the effects of which have had severe consequences, even for many Caribbean Community (CARICOM) states.

These socio-economic policies have sustained Guyana’s economic growth rate of an average 4.5% for nine consecutive years.

Social sector spending

This stable situation has allowed Guyana to continue to spend on the many vital socio-economic programmes, thereby ushering in the country’s transformation process. It is instructive to note, that the latter can be observed in,  for example, the highly successful housing programme that has allowed tens of thousands of Guyanese to be proud home owners. Others, such as the construction of roads and bridges, the availability of potable water in over 700 communities throughout Guyana, building of hospitals and health centres, schools and technical vocational institutes, are vivid examples of a country, whose economy has been able to sustain growth.

St. Ignatius Secondary School, Lethem, Region 9, one several secondary schools in the hinterland

IMF forecast – a vindication of Gov’t’s policies

Therefore, the recent International Monetary Fund’s (IMF) forecast of another year of sustained growth has to be understood within the above context, and comes as no surprise, as it vindicates the continuous progress of the Guyana Economy and its proper management.

A section of the Kurubuka bauxite plant. This is one of several mining enterprises underway in Guyana

The IMF, in its latest report, projected a 3.8 per cent growth rate for Guyana for 2015. In fact, the report went further to say that the country’s predicted growth is the third highest in South America, behind Bolivia’s 4.3 per cent, and Paraguay’s 4 per cent. It also said that in 2016, the local economy is expected to experience a 4.4 per cent growth, second only to Peru, whose economy, the IMF projected will grow 5 per cent.

This is indeed a fitting tribute from such an institution whose policies have been known to be quite rigid in order for states that seek its assistance, to exercise good management of their respective economies. But Guyana has not had any such issues with the institution, because of the wisdom employed with regard the local economy.

In fact, this financial institution, has instead, been consistently assessing the country’s policy initiatives and economic progress. It has been commending the government’s implementation of policy initiatives, clearly stating that these have seen the economy “maintaining macroeconomic stability, achieving real growth rates and containing inflation, in spite of the global turmoil.”  The IMF has taken note and pointed out that the fact that the economic development of country has also centred on programmes aimed at alleviating poverty conditions, while at the same time creating an enabling environment for investors’ confidence, with interventions designed for sustainable living on the part of the more vulnerable groups.

In the IMF last Article IV Executive Board Consultation on Guyana, dated December 09, 2013, it is stated:  “During the last decade, Guyana’s strong macroeconomic performance has contributed to a reduction in public debt levels and sustained poverty reduction. The economy has experienced seven years of uninterrupted growth averaging about 4 percent annually.

The key pillars of the macroeconomic resurgence have been sustained reforms, in particular the implementation of VAT, favourable commodity prices, significant inflows of Foreign Direct Investment (FDI) and debt relief under the Heavily Indebted Poor Countries Initiative (HIPC) and Multilateral Debt Relief Initiative (MDRI) initiatives.”

Proud

Guyana’s development process has removed it from its once low categorisation, placing it in the index of a middle income country.

Like the IMF, the World Bank has noted the country’s rapid emergence, saying it is one of the countries with the highest growth rates in Latin America. Here another international financial institution has praised the Guyanese economy’s accelerated growth and moreover, of Guyana weathering the effects of the recent global financial crisis very well compared to other Caribbean countries or the rest of the Latin American and Caribbean region.

Also lauding the growing success of the Guyanese Economy has been the Ca­ribbean Devel­opment Bank (CDB).  In 2014, the Bank’s President Dr William Warren Smith noted that there were some very good les­sons to be learnt, for the Caribbean states and the rest of the world, from the Guyanese experience. The institution’s Head also noted that though the country’s eco­nomic development has followed a very tough road, the economy has shown ‘resilience’, and alluded to the responsible manage­ment of its economy. 

In the President’s own words: “Guyana has followed a very tough road but the good news, is that Guyana has shown resilience and responsibility in the management of its economy and Guyana has taken advantage of the breaks that it has been fortunate to have and that is an important lessons because sometimes countries which were in were much better position that Guyana, in the past did not take advantage of those opportunity. So just from this standpoint of lesson learnt, Guyana is a study…” He also noted that, “generally there is a lot of vibrancy in the Guyanese economy… I like to say that whenever I go to Guyana you can almost see the country changing in front of your eyes and so that is just a casual indication of the extent to which economic activity is vibrant and buoyant in that country.”

Dr. Smith was of course speaking aboutthe new businesses, the changing City skyline that represents investments in manufacturing; and the many thousands of Guyanese, even young people, who are now motor vehicle and home owners, among other indicators of the country’s transformative progress.

In short, Guyana has now become a prime leader of economic development within the CARICOM constellation; and, Guyanese can now lift their heads, proud of what they have become in a country that marches on to greater economic heights. More importantly, the PPP/C Government must be proud of its achievements, because Guyana is indeed today an economic success story, given what its political-social-economic status quo had been at that epoch-making dawn of 1992.