An extract from Guyana’s 2nd WTO trade policy review
Guyana, as other developing countries, faces great challenges in the years ahead, which is further aggravated by the current global financial crisis. Despite these challenges, the Government of Guyana has outlined clear policies aimed at making Guyana a better place for business and investments. Significant improvements in key areas such as electricity and road infrastructure are expected over the next several years, and will help to make Guyana more competitive. Further export diversification and more exports of value-added products, as well as services, can be seen already.

Reforming traditional industries
A key challenge is the future of the sugar industry. The price cut of 36% by the European Union, which is the key export market for sugar, will be fully implemented by October 2009. Together with a relatively low sugar production in 2008, mainly due to extreme weather phenomena, the industry is facing difficulties.

However, the ongoing modernization of the sugar industry, including the construction of a US$181M sugar factory, the increased use of mechanization and a focus on value-added products, such as packaged and refined sugar, and molasses, is expected to bring substantial improvements to the industry.

The rice, rum and garment sectors will be affected by a substantial loss of the value of their preferences in the EU and US markets. Although these industries may be able to adapt to a changing trading environment, it is crucial that sufficient time and resources be provided to allow for the necessary transformation.

Competition policy
Another challenge is a lack of competition in some sectors. This is not unique to Guyana, but a typical problem for small countries, where usually only a few suppliers or importers compete.

To address this, Guyana has adopted a new competition law, which, once fully implemented, will help to raise the level of competition and reduce anti-competitive practices. As can be seen in other world regions, a better regional integration, as is foreseen with the completion of the CSME, can also be a major step towards more competition in the local market.

Transport infrastructure
Better transport links to neighbouring Brazil are a major opportunity for Guyana in the years ahead. The planned upgrading of the Linden-Lethem highway to an all-weather road will not only provide better access to local markets for hinterland communities, but would also allow the transshipment of goods from and to Brazil. Together with upgraded harbour infrastructure in Guyana, goods could be shipped much faster and at competitive freights from and to the Brazilian state of Roraima, rather than having to be shipped via Manaus and the Amazon River. Guyana could also profit from better and cheaper shipping connections due to better infrastructure and economies of scale. There is also a substantial potential for exports to that part of Brazil.

Energy
The supply of electricity in Guyana faces difficulties. Guyana relies on imported oil for its power supply, which makes it very vulnerable to price shocks on the oil market. However, several projects to exploit hydropower are under way, the most advanced being the Amalia Falls Hydro Project.

There are also plans to use wind power, and Government is addressing the demand side through increased efforts to reduce technical and commercial losses. It is therefore expected that power supply will see substantial improvements over the next few years, which will also have a very positive effect on the competitiveness of the manufacturing sector. In the long run, Guyana’s vast potential for the generation of hydropower could also be used to export energy to other countries in the region or for the production of aluminium.

Export diversification
A major challenge is the need to diversify exports. The bulk of Guyana’s current exports consists of only a small number of products, which are mostly agricultural commodities and products of the mining industry (sugar, rice, gold, diamonds, bauxite and timber). This makes the Guyanese economy vulnerable to price shocks, and the erosion of preferences for agricultural commodities is an additional challenge. But non-traditional exports are already on the rise. Examples are a variety of fruits and vegetables.

Aquaculture is also seen as one of the sectors with a significant potential for increased production, given Guyana’s abundance of water resources.

New technologies and ICT
New technologies also offer new opportunities for exports of services. In 2006, the Government launched its ICT strategy which, when fully implemented, will have a wide ranging impact on the economy. A number of call centres are already operating in Guyana, catering for the North American market, and proving that Guyana can successfully compete in such new sectors.

Climate change and environmental impact
Climate change could have a significant impact on Guyana’s economy. Most of Guyana’s coastland lies below sea level and a change in weather patterns could negatively affect the agriculture sector and thereby directly affect Guyana’s exports.

Guyana has already seen an increase in rainfall and floods over the last five years, which caused significant damage to livelihoods of people and agricultural production. These events have shown how vulnerable Guyana’s economy is to the effects of climate change.

Therefore, the Government has put policies to combat climate change at the core of its programme. Guyana is willing to play its part in the fight to mitigate the negative impacts of climate change and is ready to integrate its rainforest in a global carbon credit scheme within the United Nations Framework Convention on Climate Change (UNFCCC), specifically under the proposed REDD mechanism (Reducing Emissions from Deforestation and Degradation).

In 2008, the Office of the President presented a detailed paper, laying down Guyana’s position on avoided deforestation. In this regard, Guyana can become a significant provider of environmental services and such activities could help to secure revenue to allow addressing adaptation needs, such as improved sea defence and drainage, while creating other non-forestry related opportunities.

Public-private dialogue
The Government of Guyana places high priority on extensive public-private dialogue on policy matters, including trade-related policies. A good example is the institutionalised high-level inter-agency “National Advisory Committee on External Negotiations”, established since 1997, in which senior members of the public and private sectors, academia and labour, consult on trade policy developments, including national preparation for and participation in external trade negotiations. Consultations with relevant stakeholders also extend to the implementation of trade agreements.

As a matter of public policy and good governance, the Government is committed to the consultative process to enhance the understanding and appreciation of the Guyanese public of the benefits and impact of trade and trade liberalization. The Government of Guyana will continue this practice to ensure that the public is thoroughly involved and can provide inputs into crucial trade-policy matters.