Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
GUYANA
FY 1997 FY 1998 FY 1999 Actuals Estimate Request Development Assistance.............. $2,786,000 $2,800,000 $2,300,000
Introduction
Despite impressive achievements since its return to democracy and a free market economy, Guyana is the third poorest country in the Western Hemisphere and its democratic institutions are weak. Assisting Guyana's economic and political transition promotes internal and regional stability. The USAID program plays an important role in improving the business climate, and U.S. investment is expected to grow as Guyana further liberalizes its investment policies and more fully utilizes its enormous natural resources. Guyana also cooperates in stemming the flow of narcotics and illegal immigrants to the United States.
The Development Challenge
Guyana's transition from a state controlled to an open, free market economy began in 1989; transition from authoritarian rule to democracy began in 1992. Although there has been significant progress, many obstacles remain. Poverty is still manifest, structural distortions persist, and income distribution is highly skewed. Indeed, some indicators are only now reaching the levels enjoyed in the 1970s and 1980s. A fragile democracy has taken root in Guyana: political discourse is open; public participation is encouraged; the media are far freer; and a more active civil society is emerging. However, ineffective institutions, a dearth of skilled human resources, low public confidence and strained ethnic relations continue to plague the democratic process. Guyana's debt is approximately $1.6 billion, of which about $30 million is owed to the United States. Since 1991, $127 million in U.S. debt has been forgiven. Guyana is not a candidate for graduation from U.S. development assistance in the near term.
Guyana's progress in democracy and more effective governance has been remarkable, particularly in view of its socialist/authoritarian past and its current development constraints. USAID's assistance has improved the efficiency of the justice system, enhanced the effectiveness of local government, and strengthened Parliament. A Parliamentary library, for example, has been established, enabling lawmakers to enter the modern information age, engage in more informed debate, and prepare better legislation. Select committees on constitutional reform and the electoral process have also received technical guidance and reference materials. USAID has also played a key role in improving the capacity of the Guyana Elections Commission to plan and manage elections. The otherwise excellent performance of the Commission leading up to the December 1997 election was, however, marred at the last moment by a deficient tabulation process and subsequent allegations of fraud. The resulting legal action and demonstrations reflect deep ethnic and political polarity, suspicion, and distrust more than malfeasance. Despite these problems, the electoral process is clearly moving toward greater openness and transparency.
Other Donors
Donor assistance to Guyana in CY 1997 totalled approximately $102 million. In terms of actual disbursements and including the PL480 Title I Program, the United States was the largest bilateral donor. The World Bank, International Monetary Fund (IMF) and Inter-American Development Bank (IDB) provide significant macroeconomic policy reform, stabilization, and structural adjustment assistance. Their sectoral programs in health, agriculture, environment, and education complement the bilateral programs of the other major donors: Canada, the United Kingdom and the European Union (EU).
FY 1999 Program
Guyana's reform program has resulted in the highest rate of economic growth in the hemisphere, sharply reduced inflation, increased exports, greater foreign investment, and more product diversification. USAID has played a major role in this process by filling important niches within the IMF/World Bank macro framework, reinforcing multilateral conditionality, and providing assistance which complements other donor programs. Strategic planning and policy analysis assistance in key ministries, for example, have helped the Government of Guyana (GOG) to meet conditionalities and satisfy requirements for significant debt relief. Guyana's trade regime is also moving toward openness and compatibility with regional and global trade practices. Also as a result of USAID assistance, increased dialogue between the public and private sectors has led to a better business environment, improved economic analysis and budgeting has resulted in significantly higher funding levels for programs benefitting the disadvantaged, and the Ministry of Finance is being restructured to more efficiently fulfill its responsibilities.
The current USAID development strategy for Guyana covers the period FY 1994-FY 1998, and a new strategy for FY 1999-FY 2003 is now being prepared for USAID/Washington review in early CY 1998. In developing the new strategy, it was determined that the current strategy is on track and should build on past investments, but with sharper focus. The new strategy proposes two mutually reinforcing, cross-cutting strategic objectives: improved climate for private investment; and more responsive and participatory governance and rule of law.
In the area of private investment, the Mission will initiate programs to: assist the government to develop trade policies conforming to international norms; ensure marketing and investment information is widely available to producers and investors; enable more effective application of laws and regulations relating to commerce and investment; and enhance the capacity of the private sector to influence public policy.
Governance and rule of law programs to be initiated in FY 1999 will focus on five priority results: (1) improved lawmaking and regulatory governance and rule of law processes; (2) increased capacity to adjudicate court cases; (3) sustained capacity to conduct free and fair elections; (4) greater civil society influence in public policy; and (5) strengthened local government.
GUYANA FY 1999 PROGRAM SUMMARY
($000s)
USAID
Strategic and Special
ObjectivesEconomic Growth and Agriculture Population and Health Environ-ment Democracy Human Capacity Develop-ment Human-itarian Assistance
TotalS.O. 1
Improved climate for private investment
- DA
1,200
1,200
S.O. 2
More Respon-sive and Parti-cipatory Gov-ernance and Rule of Law
- DA
1,100
1,100
Totals
- DA
1,200
1,100
2,300
USAID Representative: Patrick McDuffie
ACTIVITY DATA SHEET
PROGRAM: GUYANA
TITLE AND NUMBER: Improved Climate for Private Investment, 504-SO1
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,200,000 DA
INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2003
Purpose: To encourage broad-based economic growth by improving the climate for private investment.
USAID Role and Achievements to Date: USAID uses a strategic model which ,with limited resources, will leverage substantial impact on the economic reform process. The USAID program supports the policy agenda of international financial institutions such as the International Monetary Fund, World Bank, and the Inter-American Development Bank (IDB), and also fills critical niches in the programs of other bilateral donors. USAID has assisted the GOG, for example, to satisfy macro reform conditionalities, to qualify for debt relief, and to develop a plan which should reduce debt to a manageable level. USAID assistance has also improved economic analytical capacity, resulting in far better national budgeting processes and more funding for programs benefitting the disadvantaged. Other achievements include computerization of key offices in the Ministries of Finance and Trade, the establishment of a strategic planning process, improved dialogue between the public and private sectors on economic policy, and accelerated implementation of the public sector investment program. The completed PL480 Title III Program and ongoing Title I Program have resulted in tremendous achievements in rehabilitating economic infrastructure such as drainage and irrigation systems, farm to market roads, and sea defenses to protect the agriculturally rich coastal zone. To better ensure the future integrity of agricultural economic infrastructure, USAID conducted technical analyses and developed options for increasing cost recovery. The resulting recommendations will be implemented by the Government of Guyana in partnership with the IDB.
Description: Several critical activities are underway which support both the current strategic objective (expanded economic opportunities for the urban and rural poor) and the proposed, new strategic objective of increasing private investment. An investor's guide is being finalized, a trade policy unit is being established, and an investment strategy describing options to stimulate private investment is under review. Once approved, the investment strategy will be used to develop an investment code clearly articulating policies and incentives. USAID will also provide assistance to finalize the national development strategy and to formulate a plan of action for its implementation. The strategy, which provides options for addressing structural distortions, promoting trade and investment, and rationalizing regulatory bodies, will provide an excellent development road map for the GOG and donors. USAID's program to improve the business environment will terminate in FY 1998 and a new activity to improve the investment climate will be initiated in FY 1999. Guyana is a resource rich country, but it lacks the technical skills and financial capital to exploit its natural resources successfully. Guyana's sustained economic growth and more equitable distribution of income is directly linked to its attractiveness to domestic and foreign investors. A new activity having the purpose of increasing investment will be designed in mid-1998, with implementation beginning in early FY 1999. It is anticipated that assistance in FY 1999 will focus on several priority areas: development of a detailed plan of action to facilitate Guyana's participation in the Free Trade Area of the Americas; identification and reforming of laws that constrain private investment; enhancing GOG capacity to carry out macroeconomic reforms; and improving the capacity of private sector institutions to analyze and advocate for key policy changes.
Host Country and Other Donors: The USAID program will be implemented in coordination with the programs of the World Bank, International Monetary Fund, and the IDB, which provide the macro framework for economic and policy reform. Other key donors providing assistance in economic growth and reform include the European Union, Canada and the United Kingdom.
Beneficiaries: The activities benefit all Guyanese but the greatest proportional benefit should accrue to the disadvantaged because of Mission and GOG emphasis on equity. Household incomes of the poorest 40% of the population will be monitored to measure progress in achieving objectives.
Principal Contractors, Grantees, or Agencies: The current primary contractor is IGI International but competetive procedures will be used to select the contractor(s) for the new main activity to be designed in CY 1998.
Major Results Indicators: Preliminary indicators for the new strategic objective have been established but baselines and targets have not been determined as activity design will not be completed until mid-CY 1998.
Proposed Indicators
1. amount of private investment
2. investment/GDP ratio
3. number of new firms investing
4. non-traditional sector investment
ACTIVITY DATA SHEET
PROGRAM: GUYANA
TITLE AND NUMBER: More Responsive and Participatory Governance and Rule of Law, 504-SO2
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,100,000 DA
INITIAL OBLIGATION: FY 1998; ESTIMATED COMPLETION DATE: FY 2003
Purpose: To promote the establishment of a sustainable democracy by strengthening governance and the rule of law.
USAID Role and Achievements to Date: USAID plays a unique leadership role in democracy and governance. While many donors have provided electoral assistance to support free and fair elections, USAID is the only donor with a broader approach to democracy which includes the legislative process, civil society, local governance, and the legal system.
USAID has two activities which support this strategic objective; a program to increase the effectiveness and efficiency of the justice system, and a program to strengthen democracy. Continued, strong progress has been made in improving the justice system; the backlog of criminal cases has been reduced from over 3,500 to approximately 2,000; the consolidation of Guyana's legislation is well underway; comprehensive recommendations to improve court management are being systematically implemented; a court reporting program has been initiated; a renovated legal library with expanded resources has opened; and a strengthened local bar is becoming more active. The GOG's infrastructure rehabilitation program proceeded smoothly, with fourteen courts rather than the planned seven being renovated. Significant achievements have also been made in strengthening democratic processes. Assistance to strengthen the Elections Commission for the December 1997 election received priority attention. The Commission's otherwise exceptional performance was unfortunately marred by allegations of fraud. The new government has been recognized by the United States, Canada and the United Kingdom. The performance of an indigenous electoral monitoring organization funded by USAID was excellent. Training of locally elected officials continued, although the target number was not achieved due to electoral priorities. Parliament was further strengthened by the continued establishment of a parliamentary library and provision of reference materials, study tours regarding constitutional reform, and assisting the committee on constitutional reform to conduct hearings.
Description: Completed activities and those underway support both the current strategic objective (strengthened democratic institutions and processes) and the proposed strategic objective of more responsive and participatory governance and rule of law. FY 1998 will witness the full consolidation of Guyana's legislation, implementation of at least 80% of all court management recommendations, completion of the infrastructure program, institutionalization of court reporting training, and reduction of the criminal case backlog from 2,000 to 1,000. The electoral process will be further strengthened by conducting a post mortem of the 1997 election and responding to lessons learned. Guidance in constitutional reform, completing the establishment of the Parliamentary library, and continued training of locally elected officials will receive priority attention in FY 1998. The justice improvement activity will terminate in FY 1998 and the strengthening democracy activity in early FY 1999. Other activities will be designed to support the new strategic objective in mid-CY 1998. It is anticipated that assistance in FY 1999 will focus on: increasing GOG technical capacity for and public participation in lawmaking; establishing alternative dispute mechanisms; further institutionalizing the electoral process; assisting the GOG to define and rationalize the role of local government; and training programs to improve media reporting on public policy concerns.
Host Country and Other Donors: USAID is the only donor assisting the judicial system or providing long-term comprehensive assistance to strengthen democracy. Other donor assistance is likely to remain limited. However, both the IDB and the United Nations Development Program will be key partners in institutionalizing the electoral process.
Beneficiaries: The people of Guyana as a whole are beneficiaries but primary benefit will accrue to the disadvantaged--women, the poor, and minority groups, such as Amerindians--as they do not have access to equal justice or actively participate in the democratic process.
Principal Contractors, Grantees, or Agencies: The University of the West Indies, in conjunction with the University of Guyana, assist in the implementation of the justice improvement activity. The National Democratic Institute is the grantee for the strengthening democracy activity. Competitive procedures will be used to select contractors/grantees for new activities to be designed in CY 1998.
Major Results Indicators: Preliminary indicators for the new strategic objective have been established but baselines and targets have not been determined as activity design will not be completed until mid-1998.
Proposed indicators:
1. frequency of laws, regulations, and public policy being influenced by public participation
2. continuation of constitutional reform.
3. number of productive partnerships established between NGOs, advocacy groups and government
4. level of public confidence in the judiciary is increased.
Despite impressive achievements since its return to democracy and a free market economy, Guyana is the third poorest country in the Western Hemisphere and its democratic institutions are weak. Assisting Guyana's economic and political transition promotes internal and regional stability. The USAID program plays an important role in improving the business climate, and U.S. investment is expected to grow as Guyana further liberalizes its investment policies and more fully utilizes its enormous natural resources. Guyana also cooperates in stemming the flow of narcotics and illegal illegal immigrants to the United States.
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