FINANCE Minister, Dr. Ashni Singh has sounded an urgent call for Caribbean countries to develop strategies to transform their economies so as to reduce vulnerability, and transform the lives of their citizens by reducing poverty. In light of this, he has urged the Caribbean Development Bank (CDB) to work closely with its borrowing member countries in devising such strategies, and designing and implementing supportive projects aimed at achieving the proposed objectives.
Minister Singh made the call while addressing the 41st annual meeting of the Board of Governors of the CDB Thursday in Port of Spain, Trinidad, where he led Guyana’s delegation participating in the meeting.
Using the myriad transformations under way in Guyana to bolster his argument, Minister Singh said: “We have therefore committed considerable policy effort, and made significant gains, both in diversifying the range of commodities we produce and export, and in diversifying into other non-commodity productive sectors.
“Whereas ten years ago, Guyana had a virtually unknown tourism product, today we offer a destination that is highly regarded internationally, and favourably reviewed in the eco-tourism niche. Whereas 10 years ago there was no information and communication technology industry as a primary employer and creator of value, today, over 2,500 Guyanese work in call centres providing services to clients on the other side of the world, using the latest technology available.
“Whereas 10 years ago trade and traffic with our neighbours, Suriname and Brazil, were limited because of infrastructural impediments, today hundreds of persons cross our borders every day by ferry in the east, and by bridge in the south, to trade in goods and services.”
The latter physical proximity with our continental neighbours, the minister said, “provides an important opportunity not only for Guyana but also for the rest of the Caribbean, and the foundation has now been set for all of this to be widened and deepened.”
Noting that this effort on Guyana’s part to transform has generated demonstrable gains for the Guyanese economy, Minister Singh told the meeting: “…against this background, the Guyanese economy recorded a creditable performance last year, with real Gross Domestic Product (GDP) expanding by 3.6 per cent, a fifth consecutive year of positive growth. Notably, the expansion in output reflected reduced dependence on traditional sectors such as sugar and bauxite, and was broad-based with increased value added in rice, gold, construction, transportation, information and communication, and financial services.
“The external current account deficit widened by 3.6 per cent, with export earnings increasing by 16.1 per cent, principally driven by rice and gold, while imports increased by 20.2 per cent on account of a 32.8 per cent increase in the fuel import bill. That notwithstanding, a 20.7 per cent increase in foreign  direct investment mainly in the mining sector secured a capital account surplus and an overall balance-of-payment surplus, and external reserves were maintained at over five months of import cover. Credit to the private sector grew by 19 per cent, led by the mining and quarrying sector, agriculture, other manufacturing, distribution and real estate. 
“Inflation ended the year at 4.5 per cent, reflecting imported price pressure, but muted by government intervention to limit the pass through of fuel prices. The fiscal deficit was contained to 4 per cent of GDP, notwithstanding scaled-up investment in physical and social infrastructure, and the debt to GDP ratio remained at just over 60 per cent. This relatively robust macroeconomic performance reflects the sustaining of a disciplined policy stance.”
Turning his attention to the global economic meltdown and how it has affected the region, Minister Singh said:
“When we met last year, I spoke of the global economy beginning the long and arduous path to recovery. Today, one year later, even though recovery is underway, it is marked by a fragility and unevenness that are particularly unhelpful to small, vulnerable economies such as ours in the Caribbean. The dual speed of the recovery, its persistent joblessness, especially in the advanced economies, coupled with the significant adjustment effort needed in these economies to restore debt and fiscal ratios to within sustainable norms, have conspired to set a very unhelpful external context for the economies of our Region.”
Recent developments in the commodity markets, he said, “pose additional challenges in the case of net importers as a result of the recent resurgence in prices, and in the case of net exporters as a result of the uncertainty of the price outlook going forward.”
Noting that no Caribbean economy is sufficiently diversified, Minister Singh said: “The consequences for the region as a whole have included continued depressed conditions. This circumstance is exacerbated by limited fiscal space for counter-cyclicality and unresolved exposure from the CL Financial debacle in many jurisdictions. The regional outlook, therefore, remains heavily conditional on the pace of global recovery. In fact, just as the global recovery now reflects some duality in speed, so is the regional economy beset by a duality of its own.
“With increasing frequency, the distinction is being made between the service-based economies of the Caribbean and the commodity-based economies of the Caribbean, depending on the dominant sectoral contributors to national productive output. Either way, none of our Caribbean economies are sufficiently diversified, and let there be no doubt in our minds, neither of the two sets of circumstances is necessarily a safe and comfortable place in which to be in today’s world.”
In terms of the main thrusts of Guyana’s efforts at transformation, Dr Singh said: “Going forward, the backbone of Guyana’s development pathway continues to be founded on the preservation of macroeconomic stability underpinned by fiscal prudence and debt sustainability, accelerated economic growth and environmental sustainability, built around our pioneering low carbon development strategy.”
National priorities for the immediate and medium-term, he said, continue to be expanded economic diversification, increasing production and productivity, and improved competitiveness. Critical initiatives include increasing supply, and reducing the cost of energy, principally by mobilising hydropower, expanding telecommunications infrastructure to increase access and reduce the cost of bandwidth, upgrading and expanding physical infrastructure such as roads and bridges to improve ease of access and physical connectivity especially for productive activity, and upscaling social sector programmes to meet the millennium development goals and national poverty reduction objectives.
On the role the CDB is currently playing in supporting Government’s efforts in this regard, Dr Singh said the institution “…continues to play a vital role in supporting Guyana’s development agenda. Projects in our education and transport infrastructure sectors continue to be key focus areas in our programme with the Bank. The construction and outfitting of two new Technical Vocational Education Training (TVET) facilities are under way, and these centres are expected to become operational in September 2011.
“Equipping our young people with technical skills to enter the job market, while ensuring key industries and sectors are assured of a steady supply of relevantly skilled labour, is essential to improving our national competitiveness drive while providing an alternative pathway within the education system.
“In addition, the Bank is supporting rehabilitation of community roads in several coastal villages which, once completed, will significantly improve access by residents to social services and reduce the cost of living and doing business in the beneficiary areas. In addition, the utility and value of the Basic Needs Trust Fund (BNTF) cannot be overstated. The grant resources provided under this facility to address poverty reduction continue to be invaluable in the financing of critical local interventions.
“Apart from infrastructure projects to promote access to social services, the programme also has an important skills training component. For example, a number of training courses in computer literacy have been conducted under this programme. I have had the pleasure of attending several graduation ceremonies for such courses, including in places like Watooka in Linden and Albion in Berbice, and I have witnessed how the provision of this training has literally transformed the lives of participants. Successful participants emerge with a skill that empowers them to enter the job market and a skill that, increasingly, is indispensable in today’s world.”
Enthused by the Bank’s sterling performance over the past year, Dr Singh said: “Regarding overall operations at the Bank, we are particularly pleased at the historic US$1 billion general capital increase approved last year. This provides the basis for a substantially expanded lending programme.
“We are also pleased at the preservation of the Bank’s AAA credit rating. Furthermore, we welcome the 73 per cent increase in financing approvals, the 56 percent increase in disbursements, and the 166 percent increase in net transfers achieved in 2010. All of these developments point to a Bank that is seeking to be more proactive in supporting the development efforts of its BMCs.”
And, in paying tribute to the institution’s immediate past president, Guyana-born Dr. Compton Bourne “for his outstanding 10 years of service as the Bank’s fourth President,” and welcoming and congratulating his successor, Mr. Warren Smith, Dr Singh said:
“Earlier this month, Guyana had the honour and pleasure of hosting President Smith on his first official visit to a CDB Member Country since his assumption of office. We were extremely heartened by his immediate recognition of the promising developments and opportunities currently emerging in Guyana, and by his unequivocal assertion that the Bank must play a part in helping us to secure these opportunities. Mr. President, I have no doubt that, under your leadership, the CDB will play an important role in helping Guyana to consolidate gains already made and overcome challenges that still remain before us.”
While in Port of Spain, Minister Singh also engaged in a number of bilateral engagements with a number of his counterparts from around the Caribbean and with representatives of other international agencies and development partners present at the meeting. (GINA)