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Guyana
>> Regional Overview >>Guyana Overview
Development Challenge Summary Tables
Program Summary
Previous Years' Activities
2001, 2000, 1999, 1998, 199709
Introduction
Between 1992 and 1997, Guyana's first freely and fairly elected post-Independence government made significant progress in macroeconomic and democracy building activities. However, the contentiousness surrounding the country's 1997 election, and the inter-ethnic tensions raised by the three-year legal challenge to overturn the results, slowed the pace of economic growth and democratic reform.
Guyana ranks as the third poorest country in the Latin American and Caribbean region, and has qualified for debt relief of US$329 million (in Net Present Value (NPV) terms) under the Enhanced Heavily Indebted Poor Country (HIPC) initiative. Despite such debt relief, however, the virtual absence of new investment and the continued reliance upon traditional agricultural exports (sugar and rice) have resulted in a pattern of negative growth for two of the past three years.
The recently concluded national election confirmed the 1997 results, returning the People's Progressive Party/Civic (PPP/C) to office for its third consecutive term. Unfortunately, the election campaign tended to exacerbate ethnic tension rather than seek to forge new inter-ethnic alliances, and as in 1997, votes were cast primarily along racial lines. To a large extent, the latent political uncertainties that characterized most of 2000, causing investors to adopt a cautious wait-and-see approach, have remained. While both parties have recently issued conciliatory statements that are cause for some level of optimism, there remain core elements in both groups whose orientation is steadfastly partisan and uncompromising.
In the wake of the economic downturn and enhanced ethnic tension, Guyanese continue to seek avenues of escape, to neighboring countries or to the United States. While out-migration has had obvious consequences on the ever-dwindling pool of skilled labor, the emergence of HIV/AIDS presents an even greater threat. In 1999, Guyana's HIV prevalence rate was estimated at 3-5%, the second highest in the Latin American Caribbean region after Haiti. However, in the absence of a reliable surveillance and detection system, it is believed that the actual rate is much higher.
In response to these problems, USAID's modest resources have been targeted at three critical areas of US national interest: fostering economic growth in a transitional economy, adherence to democratic principles and human rights, and arresting the HIV/AIDS epidemic. Recognizing that Guyana is part of the U.S. "third border," the country's advances in these areas will result in greater internal and regional stability, thus fostering progress toward the Free Trade Area of the Americas (FTAA) and helping to counter the growing narcotics transshipment problem.
The Development Challenge
Although Guyana is a small country with a population of only 780,000, it faces sizeable problems in terms of poverty, racial insecurity, continuing out-migration of skilled labor, border disputes and over-reliance upon exportation of primary products. Nevertheless, the country has tremendous potential. There are abundant natural resources, climatic conditions allowing for agricultural diversification, an English-speaking labor force with a competitive wage structure, and the virtual absence of natural disasters. Inasmuch as Guyana's problems are mostly man-made, there would appear to be ample opportunity to resolve these problems by means of traditional development interventions.
For example, recognizing that Guyana's two major agricultural exports, sugar and rice, depend upon preferential prices from the European Union (EU) and are expected to be severely affected by the EU's "Everything but Arms" proposal, the country needs to diversify its economy as quickly as possible. The Government will need to encourage the expansion of value added industries in agriculture, mining and forestry related products, where it has some competitive advantage. Although there can be no short-term substitute for agricultural employment, the probability of job loss in the sugar and rice industry makes it imperative that Guyana create an investment climate which attracts capital, draws upon relevant technology, creates new jobs, and opens access to new markets. While the country needs to provide an investor friendly environment by enacting the draft investment code and removing the unnecessarily bureaucratic measures that deter investors, it must, once and for all, set about resolving its political problems.
Unfortunately, the recently concluded election did not go very far in providing a basis for building upon and further solidifying the country's transition to democracy. On the contrary, the campaign's heated rhetoric often served to underscore and reinforce the fundamental conflict latent in Guyanese society. The immediate challenge, therefore, is for the newly elected Parliament to act swiftly to enact outstanding constitutional reforms aimed at resolving deep-seated inter-ethnic conflict, and then embrace these in a constructive and operational manner. Unless substantial progress can be achieved in building broad-based public confidence in governmental institutions, and engendering a climate in which political dialogue can take place without intimidation or provocation, the prospects for advancing beyond the current divisive politics of race are uncertain.
At the same time, the remorseless spread of the HIV/AIDS epidemic in Guyana poses a challenge to the limited human and financial resources of the health care system and indigenous NGO capacity. An infusion of donor funding, technical assistance, and coordination to assist in implementing prevention, care, and support strategies to arrest the disease, will be essential to ensure that Guyana's future development investments, particularly those directed toward its youth, are sustained.
Other Donors
Donor assistance to Guyana amounts to approximately $200 million annually. In FY 2000, the U.S. was once again the largest bilateral donor with combined disbursements of USAID assistance, Section 416 (b) and P.L. 480 Title I (Food for Progress program). The Inter-American Development Bank, IMF, and World Bank provide macroeconomic assistance focusing on balance of payments support and public sector investments. Local currency generated by USDA's commodity import program leverages 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 health, education, water, microenterprise, private sector, and environment, complementing multilateral programs. Bilateral donors are also increasingly funding private sector and NGO activities and jointly funding efforts such as elections and constitutional reform. While the UN system provides modest assistance for HIV/AIDS activities, USAID was the only bilateral donor with a Guyana-specific program in FY 2000. However, the European Union and Canadian International Development Agency both plan to fund Guyana-specific HIV/AIDS activities in FY 2002.
The 2002 Program
Under the Economic Growth strategic objective, USAID intends to build upon its previous activities, deepening the results previously achieved. Joint government/business participation allows for inclusiveness of all stakeholders, promotes collaboration on economic issues and increases awareness of each groups' problems and constraints. Such collaboration has already resulted in the completion of a draft investment code, Small Business Act, and investor roadmap. Building on these successes, USAID will focus on deepening organizational and advocacy capacity of private sector organizations, enhancing compliance with FTAA/WTO obligations, continuing to expand microcredit loans, and strengthening the government's ability to facilitate trade and attract investment. USAID will also be working with other donors and the government to ensure that the Poverty Reduction Strategy is a highly participatory exercise, reflecting a sound approach to poverty alleviation. USAID will continue to maintain a flexible approach allowing it to adapt to changing post-election constraints and opportunities.
In the Democracy strategic objective, USAID will concentrate its efforts upon increasing citizen participation in Guyana's public policy-making processes. The ruling party has professed its desire to increase civil society's involvement in policy-making, and USAID will assist this effort through the institutionalization of Parliamentary Committee public hearings. The program will also assist the GOG in its efforts to decentralize public decision-making by revitalizing the long dormant elements of local governance. In this regard, the Local Government Act and the Municipal and District Council Act will need to be revised to devolve authority to the grassroots level. The program will build upon its recent elections support experience by strengthening the now permanent Guyana Elections Commission (GECOM) Secretariat to plan and conduct timely, efficient elections.
While USAID's democracy activities aim to provide broad based assistance to enable Guyana to develop sound participatory democratic institutions, the achievement of some measure of success will require Guyana's political leaders to demonstrate their political will to move forward together on needed, but sometimes unpopular, reform measures. The major political parties will need to initiate constructive engagement to set up mechanisms that allow all racial groups to feel they are stakeholders in the nation's political system. They will also need to become more open and responsive to the viewpoints of their party members, upon whom they rely for support.
USAID's HIV/AIDS special objective will focus on expanding the Youth Program, initiated in FY 2000, to further develop the capacity of participating NGOs to work collaboratively in planning and implementing high profile and focused youth HIV/AIDS prevention activities. The program will continue to energize these NGOs by providing a framework for action and a means of measuring results. In response to the epidemic, the program will enlist additional NGO partners and expand geographically into high-prevalence mining and logging areas. The program will develop a cadre of peer educators to ensure that increasing numbers of young people have appropriate HIV/AIDS information and access to skilled lay counselors. USAID will also strengthen the GOG's capacity in condom forecasting, logistics, and distribution to ensure availability and access to condoms for HIV/AIDS prevention. Additionally, USAID will promote youth friendly HIV/AIDS/STI services.
Activity Data Sheets
- 504-001 Expanded Economic Opportunities for the Urban and Rural Poor
- 504-003 Improved HIV/AIDS Awareness, Knowledge and Applied Prevention Strategies
- 504-004 More Responsive and Participatory Governance and Rule of Law
Country Background Information Resources CIA Factbook
Library of CongressNational Geographic Country Maps
State Dept. Country Information
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Last Updated on: February 12, 2003 |
