Financial stability, real economic growth for Guyana
– despite prevailing global slump
THE Ministry of Finance is perhaps the most important component of the state’s executive, since this office is responsible for the management and monitoring of its fiscal affairs. Notwithstanding global economic turmoil that led to many large, vibrant economies into a state of bankruptcy, forcing them to cut jobs and close down industries, Guyana, though not totally unscathed, has managed to maintain positive growth, largely as a result of fiscal prudency and sound macro-economic policies.
According to Finance Minister, Dr. Ashni Singh, “This strong and sustained macroeconomic performance has encouraged, and is simultaneously demonstrative of, increasing vitality from a private sector that is so responsive to the favourable policy environment established by PPP/C Government.”
The year began with the presentation of the 2011 National Budget, of $161.4B, the highest ever in the country’s history, which saw the PPP/C administration moving its vision for a better Guyana for all citizens, closer to reality.
Presented under the theme, “Together building tomorrow’s Guyana today”, the 2011 budget was based on sustainable use of the country’s land, natural resources, building closer ties with its neighbours, affordable and clean energy, a well educated work force equipped, and the availability and productive use of cutting edge technology. It superseded the 2010 budget by a significant 13.1 percent.

MID-YEAR REPORT
The local economy witnessed real economic growth of 5.9% in the first half of 2011, which is a continuation of the robust performance of recent years, and in particular, building on its previous achievement of five consecutive years of positive growth since 2006.
As a result of this performance, and given updated outlooks for the various productive sectors, the economy was projected to grow by 5.1 percent in 2011, with non-sugar growth projected at 3.4 percent.
For the first half of the year, Central Government revenue saw a significant 12.8 percent increase, internal revenue, 10.2 percent, and tax revenue 11.4 percent.
By the end of June, private sector credit amounted to $119.8B, which is attributed to 20.3 percent in agriculture, 10.3 percent increase in real estate mortgages, 9.4 percent increase in the distribution sector, 7 percent increase in other services, 4.7 percent increase in mining and quarrying, and a 2.2 percent and a 1 percent increase in credit to other manufacturing and rice milling, respectively.  
The commercial banks’ weighted average lending rate declined from 11.95 percent to 11.65 percent, while the small savings rate declined by 16 basis points to 2.51 percent.

ECLAC Preliminary Overview
Guyana’s consistent economic growth was recognized by the Economic Commission for Latin America and the Caribbean (ECLAC), which highlighted that the country’s economy continued to post robust growth in 2011, despite the continuing difficulties in the major export markets of the United States and Europe.
It also mentioned that the monetary policy pursued by the Bank of Guyana in 2011 continued to focus on stabilizing prices and ensuring sufficient liquidity in the banking system, and the first half of 2011 saw the private sector’s continued expansion, but at a slower rate relative to the corresponding period in 2010.

INVESTORS’ CONFIDENCE
Investors’ interest in Guyana has been growing at an unprecedented rate, owing to the stable economic environment that government has managed to create. This has led to the emergence of a rapidly evolving and lucrative private sector.
Low fiscal deficit and debt, strong external reserves, stability in the exchange rate, and lowering of interest rates and containment of inflation to single digits are some of the measures that led to the creation of an attractive environment for investment.
Government is working relentlessly to ensure that traditional sectors of the economy, such as rice, bauxite and sugar, remain competitive; while at the same time, put in place the necessary measures to allow non-traditional sectors to take off.
In this regard, some of the largest investments in the history Guyana’s mining sector were initiated during the year, with reputable North American companies signing mineral agreements with the Guyana Government.
A historic mineral agreement with Guyana Goldfields and the Guyana Government was inked for the development of the Aurora mines in Region 7, and another with First Bauxite Corporation for bauxite mining in Bonasika, along the Essequibo River.
In November, the sod was turned for the Marriott Guyana Georgetown, a world class hotel that will boast all the requisite amenities.
Additionally, Trinidad and Tobago investors will be investing US$20M to bring MovieTowne to Guyana with the hope of revitalizing the once vibrant movie theatre environment here.
The local banking sector has also been rapidly expanding; this year Citizens Bank opened its fifth branch in the mining town of Linden, an investment of more than $225M.

MDG PROGRESS REPORT
In September, Guyana’s 3rd Millennium Development Goals progress report was launched. The eight goals have formed the core basis for the national development agenda, as the country has been able to achieve substantial progress.
The report highlights the progress that has been made thus far in achieving the eight goals which include eradicating extreme hunger and poverty; achieving universal primary education; promoting gender equality and empowering women; reducing child mortality; improving maternal health; combating HIV/AIDS, malaria and other diseases; ensuring environmental sustainability; and developing a global partnership for development.
Guyana has seen significant decline in incidence of poverty from 28.7 percent in 1992, to 18.6 percent in 2006. Unemployment has fallen as significant gains have been made in female employment and participation by young people in the labour force.
Malnutrition also saw a decline, with a figure of 11.8 percent in 1997 to 6 percent in 2008 in children, due to the comprehensive Agriculture Diversification Strategy implemented by the Ministry of Agriculture and the ‘Grow More Food Campaign’.
Primary school enrolment has consistently been above 95 percent and while Universal Primary Education has thus far been achieved, efforts are moving apace towards attaining Universal Secondary Education.
Significant gains have been recorded in the reduction of child mortality, which has seen a decline in less than five mortality rates from 120 for 1000 live births in 1991, to 17 per 1000 live births in 2008.
Goal Five, which seeks to improve maternal health, has also seen improvements recorded, including a reduction from 320 deaths for 1000 live births in 1991, to 86 deaths per 1000 in 2008. Over 96 percent of births are now attended by skilled health personnel.
Meanwhile, the country has made tremendous strides in achieving gender equality and empowerment; the Finance Minister said that female participation in decision making has also increased considerably.

PRSP CONSULTATIONS
In July, another round of consultation on the Poverty Reduction Strategy Paper (PRSP) 2011-2015, which points to low carbon growth as one of its key pillars, was held.
Minister Singh said that that Guyana’s Low Carbon Development Strategy (LCDS) combines the promotion of sound environmental and investment policies to catalyze economic progress.
The strategy, which has endured a productive period of countrywide consultations, has allowed the Government to identify priority projects which, it is optimistic, will translate into reality this year, with the $70M forest based carbon incentive already secured through a partnership deal with the Government of Norway.
The promotion of cleaner and cheaper energy from the impending hydropower project and the numerous hinterland communities that will be connected to the national grid as a result, will add significantly to the country’s development.

HUMAN DEVELOPMENT REPORT
The 2011 Human Development Report released in November by the United Nations Development Programme ranked Guyana as a medium human development country, moving up two points from the 2010 report on the Human Development Index scale. 
The country is now ranked at 117 of 187 countries, with a Human Development Index (HDI) of 0.633 from 0.489 in 1990.
The HDR recognises explicitly in its texts, Guyana’s performance and strong stance as it relates to the environmental indicators and to environmental rights of its Indigenous peoples.

ECONOMIC PARTNERSHIP AGREEMENTS
During the year, several MoUs and funding agreements were signed between government and international partners for the execution of national development programmes. Most notable was a US$12.3M agreement between Guyana and the Inter-American Development Bank for the modernisation and expansion of the Linden water supply. 
This project is testimony to yet another commitment by the PPP/C Government to improve social services across the country, and it does not only mean better quality water coming from the taps, but will also have significant trickle down economic impact in the region, including the purchasing of goods and services and job creation. It will enhance the level and quality of service for more than 30,000 residents.
Government partnered with the United Nations for the new country cycle 2012-2016 of the United Nations Development Assistance Framework (UNDAF).
This next cycle will see Guyana focusing on four broad, thematic areas, including inclusive governance, inclusive growth, poverty reduction, human and social development and environmental sustainability and disaster preparation and reduction, all of which are extensions of the current cycle.
This framework continues what has become government’s developmental thrust in terms of a pro-poor and pro-growth approach in ensuring economic growth, diversification of the economy and a human-oriented approach in terms of reducing poverty and improving the quality of life of all Guyanese.