– Global Competitiveness Index
Almost unnoticed, Guyana turned in the best 2 year improvement of the 133 countries in the Global Competitiveness Index produced by the World Economic Forum.
From its lowly position at 126, Guyana scaled +22 spots to come in at 104 in the just released 2009/2010 report.  At the same time Switzerland displaced the USA in the top spot and Singapore moved up +4 spots to take the number three position.
In the CARICOM reference group only 4 of the other 14 countries made it on the survey.  In comparison to Guyana’s +22 place improvement, Jamaica declined -13 places and Trinidad declined -2 places while Barbados and Suriname improved +6 and +11 places respectively.

The other big gainer on the South American continent was Brazil (+16) which the report characterized as the Latin America and Caribbean regional giant. Uruguay gained +10 and Peru gained +8 while Columbia and Argentina were unchanged.  Venezuela and Bolivia each lost -15 places, Chile was down -4, Paraguay was down -3, and Ecuador was down -2.
The rankings are established on 12 pillars of competitiveness in the table below and their sub- indices.
Guyana made good progress in Institutions, Infrastructure, Health and Primary Education, and Higher Education and Training, while Financial Market Sophistication and Market Size dragged on the improvement according to the report.
The improvement in Institutions was fostered by a reduction in burdensome government regulations, more transparency in government policy making and improved efficacy of corporate boards.  But issues clustered under the security sub-index had a significant negative impact on this category as reflected in the business costs of crime and violence.
Infrastructure improvements were driven by improvements in roads and in the quality of air transport infrastructure.  The availability of seat kilometres was the weak point.

In Health and Primary Education Guyana’s standout performance in Primary Education is partially masked by the prevalence of AIDS/HIV, malaria and tuberculosis.  Quality of Primary Education ranked at 55 up +16 places.  Primary enrolment is at 26 and education expenditures at 3
(7.8% of GDP).
Higher Education and Training is another standout area.  The global survey ranked Guyana 12th in secondary enrolment.  The country also made significant strides in the Quality of the Education System (62), the Quality in Math and Science Education (79), Quality of Management Schools (88), and Extent of Staff Training (69).  The detracting factors were the lack of Local Availability of Research and Training Service and the need for internet access in schools. The cost for broadband service in Guyana is prohibitive at this time and there are reliability issues.

Other positives on the report were a rank of 39 on Agriculture Policy Cost reflected under the Goods Market Efficiency pillar, and an improvement by +26 places to an inflation rank of 63 under the Macroeconomic pillar.  The overall Macroeconomic pillar remained weak due to the remaining debt, budget deficit, low savings rate and high interest rate spreads.There were also improvements in the Pay and Productivity and Labour-Employer Relations sub-indices which fall under the Labour Market Efficiency pillar.  The report also listed advantages for Guyana in areas related to Rigidity of Employment and Hiring and Firing Practices.  But a huge negative in this category is the brain drain.  Guyana is recorded as the country most impacted by this at 133 of 133 countries.
On the countervailing side, Financial Market Sophistication was unchanged.  As is the case in developing countries, financing through local equity markets and ease of access to loans lacks in market sophistication.  However, there was improved access to venture capital, and Guyana ranked well in soundness of banks (46) restriction on capital flows (50), and strength of investor protection (55).Another countervailing factor in the rankings for Guyana was small Domestic and Foreign Market Size. However, a very strong positive for Guyana buried in this equation is that declared exports represent almost 80% of Guyana’s GDP, ranking the country 13th in the world in exports as a percentage of GDP.   The issue lies in that imports are 112% of GDP.
Regarding export markets, Guyana’s growing partnership with Brazil which has a population of 192 million, opens up huge export potential.  Brazil’s north-east does not produce enough food to meet their own requirements.  Brazil is also interested in sourcing supplies through Guyana’s ports – much more efficient and cost effective than the alternative of taking delivery through their ports in San Paulo and then trucking the goods 2,000 miles north.
Go-Invest is hosting a large SEBRAE delegation from the neighbouring Rorima province in Brazil this week.  The week long discussions, seminars and mini trade show will explore trade as well as tourism opportunities.
Go-Invest has also been actively working with foreign investors, wherever feasible to set up plants that would reduce the reliance on imports.  Go-Invest has two arms, Export Promotion and Investment Promotion and Facilitation.  Part of the mandate of the latter is to assist with obtaining factory space or land for investment purposes and to help coordinate joint venture efforts between local and overseas interests.
Recent initiatives indicate that Guyana’s attention is focused on many of the issues raised by the report.  Last September President Jagdeo and President Lula Da Silva opened the Takutu Bridge link to Brazil at Lethem.  They announced their support for infrastructure development including surfacing the road, construction of the 154 MW Amaila Falls hydro project which would significantly reduce electricity costs in Guyana, and a fibre optic cable that would address Guyana’s telephone and broadband problems.
And on the Infrastructure side the need for better availability of airline seats was taken up by the President last week when he announced that the government was considering re-entry into the airline business if reasonable fares and schedules continue to be unavailable.
The brain drain is a serious challenge for the entire CARICOM group which looses more than 85% of those with some form of tertiary education.  This is particularly a drain on Guyana which has made a strong commitment to education.  Rapidly developing emerging countries like India and China have begun to attract re-migrants with targeted programs.  Each country has its own unique dynamic but it’s an area for study.
The issue of safety and security has wide ranging impacts on all aspects of society.  It is a factor in the push/pull of migration/remigration. It’s a basic people right and in the context of the report it is necessary for a healthy business climate.  The issue has to be tackled from many directions.  In the business context the growing discipline of risk management as a business practice is a field of growing importance that is being brought to bear.  Adoption of available electronic payment technology is one business tool from the kit that has shown results in reducing violent crime.
Studies show a correlation between a reduction in payroll robberies and the increased use of electronic payrolls services that make deposits directly into employee’s bank accounts.  This is not only good risk management for business enterprises; it also reduces the vulnerability of people in the amount of cash people have to carry on them at any one time.
Speaking on the topic at the recent launch of a new electronic product by one of the commercial banks, Minister of Finance Dr. Ashni Singh said that in addition to the security aspects there is a savings in the costs of moving large sums of cash around in terms of systems, security personnel, and transportation.The Finance Ministry has also led the implementation of other financial countermeasures through the passage of the Anti-Money Laundering and Countering the Financing of Tism Act 2009, and the adoption of its protocols.
Many of these and other initiatives are yet to be reflected in the rankings. All considered, however – and notwithstanding Guyana’s still distant ranking at 104 and the challenges that the country still faces, the overall progress reflected in the report for the past two years is very encouraging.  This is especially the case given where the country is coming from and the hurdles that had to be overcome.
Moreover, Guyana has made these positive strides during a very challenging period for the world economy which contracted an estimated -2.5% in 2009 while Guyana’s economy grew by +2.3%.  These strides were made, as the 2009/2010 report puts it:  …in the midst of a major external shock on export demand and financing availability, brought about by the current global economic crisis and lower commodity prices.