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GUYANA
>> Regional Overview >> Guyana Overview 
Introduction
While Guyana has made important strides in moving to a market economy and developing sound democratic structures, it continues to face enormous development challenges and remains one of the poorest countries in the hemisphere. Although USAID's financial resources are modest, they are making a significant contribution to Guyana's development by focusing on two critical, but interconnecting, areas of U.S. national interest: fostering economic growth in a transitional economy and adherence to democratic principles and human rights. Advances in these two areas will lead to greater internal and regional stability and help counter the narcotics transshipment problem that has escalated significantly in the past year.
After several years of over 7% growth, Guyana experienced an economic downturn (-1.8%) in 1998 but moved modestly forward to grow at 2.9% in 1999. Guyana received approval for significant debt relief through the Heavily Indebted Poor Country (HIPC) Initiative and Paris Club negotiations. However, positive momentum in the economy was countered by a lengthy public service strike that led to a virtual shutdown in parts of the urban economy. The subsequent arbitration award for civil service wages, a 66% increase over two years, has caused great concern in the IMF regarding Guyana's adherence to appropriate macroeconomic policies. The World Bank and IMF have insisted that civil service reform is essential to maintain structural adjustment conditions, but such reform will be a source of racial and political tension.
The December 1997 elections continue to define the negative political engagement between the People's Progressive Party (PPP) and the People's National Congress (PNC) as the PPP victory remains contested by PNC. To help resolve this impasse, the Caribbean Community brokered an accord between the two major parties which includes a shortening of the PPP's term to three years, conducting inter-party dialogue, completing a constitutional reform process and conducting a national election in January 2001. Limited progress has been made. However, the resignation of President Janet Jagan in August and the appointment of former Finance Minister Bharrat Jagdeo as her successor has created renewed optimism among Guyanese that change is possible.
The Development Challenge
Guyana's development problems remain formidable. Its 780,000 people live on a narrow band of coastline and its natural resources lie in the sparsely populated, densely forested and difficult to reach hinterlands. Guyana is still a young democracy with fragile government, civil society and private sector institutions. Years of out-migration of some of the most talented Guyanese, including skilled teachers, have left the country with a limited trained human resource base. With the second highest HIV seroprevalence in the region, Guyana faces increased losses of its young people who are essential for the country's growth and prosperity.
Lack of political stability, a favorable investment climate and adequate infrastructure have impeded expansion of domestic businesses and foreign investment. To counter this stagnation and potential losses of preferential European markets, Guyana must aggressively pursue value-added investments and alternative markets for its agricultural and natural resources exports. Political stability is essential to attract and retain such investment. Thus advancements in democracy and economic growth are very closely linked. The most positive trend in this regard is the growing voice of the private sector and civil society, which in the past year have played an increasingly important role in brokering compromises among the political parties, and between labor and Government.
USAID's program enhances the skills and tools required to strengthen Government institutions, the private sector and NGOs. U.S. support for Guyanese women leaders willing to bridge racial and political barriers, technical assistance to the constitutional reform process, and encouragement of multi-donor support for private sector organizations are helping to increase Guyana's prospects for meeting these challenges.
Other Donors
In terms of actual disbursements, donor assistance to Guyana in 1999 totaled approximately $72 million. With combined disbursements of USAID assistance, Section 416 (b) and PL480 Title I, the U.S. remains the largest bilateral donor. Macroeconomic assistance is provided by the Inter--American Development Bank, IMF and World Bank, focusing largely on balance of payments support and public sector investments. Local currency generated by USDA's commodity import program helps leverage the funding of multilateral banks by assisting the GOG to meet counterpart funding requirements. Bilateral donors are supportive of the multilateral banks' policy agenda and provide sector assistance in areas such as health, education, water, and environment, which complement that of multilateral programs. Bilateral donors are increasingly looking for private sector and NGO funding opportunities and jointly fund major efforts such as elections and constitutional reform.
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: January 18, 2001 |
