GUYANA is expected to outpace its CARICOM partners in economic growth this year, the Economic Commission on Latin America and the Caribbean (ECLAC) says. In its 2013 Economic Survey of Latin America and the Caribbean, unveiled yesterday at a press conference in Santiago, Chile, ECLAC projected that Guyana will experience a 4.8% increase in real Gross Domestic Product (GDP), thereby recording an eighth consecutive year of positive economic growth.

This figure puts Guyana ahead of the 3.0% average growth rate forecast for the entire Latin America and Caribbean region, and is on par with the 5.5% growth predicted by the International Monetary Fund (IMF) earlier this year.

CARICOM countries are all expected to record positive economic growth as well with Suriname (4.5%), Haiti (3.5%) and The Bahamas (3.0%) being among the better performers. Jamaica (0.5%) and Barbados (0.7%), both classified as CARICOM’s More Developed Countries (MDCs), remain trapped in the headwinds from the global recession.

GUYANA PERFORMS
Observers have credited government policy, as well as buoyant prices for commodity exports for the continued growth here in Guyana.
“The growth performance of the economy is as a result of prudent macroeconomic policies,” Roger Rogers, Head of the University of Guyana’s Department of Economics told the Guyana Chronicle yesterday, adding: “Efforts to consolidate the economy fiscally have borne fruit.”
The government’s macroeconomic policy has focused on keeping inflation rates low, maintaining a stable exchange rate and managing the fiscal deficit.
The Commission, which is headquartered in Chile’s capital city, observes that sound “macroeconomic policies (and particularly fiscal, monetary and foreign exchange policies) could make a vital contribution to increased growth with equality in the future.”
A six-fold rise in gold prices over the past decade and a recovery in the bauxite sector have also fueled the country’s economic engine, even as the sugar industry continues to underperform.
However, the Commission warns that the “boom period in commodity prices” might be at an end.
“In the first six months of 2013, prices for many of the [Latin America and Caribbean] region’s exports dropped, particularly minerals, metals, oil and some foodstuffs,” it said, adding: “This trend is associated with the euro zone recession and the slowdown of growth in China.”
The impact of these declining prices will vary among countries depending on their export structure, the report says, warning: “The terms of trade are likely to worsen the most in the mineral – and metal-exporting countries [of which Guyana is one].”

DIVERSIFICATION
“The current situation highlights problems of growth sustainability in most of the region’s economies, hence the need to broaden and diversify sources of growth,” Alicia Bárcena, Executive Secretary of ECLAC, is quoted in a press release as saying. Bárcena added: “We also need a social covenant to increase investment and productivity, as well as changing production patterns to grow with equality”.
Stakeholders here share the same sentiment.
“We are too dependent on prices of commodity exports,” Ronald Webster, Chairman of the Private Sector Commission (PSC) stresses, adding that already gold prices have started to decline.

DIVERSIFICATION
Rogers, meanwhile, states: “Structural transformation – or at least, effective diversification – is required as we cannot expand our wealth-creation capacity on the narrow production base we’ve inherited [from our pre-Independence era].”
It is in this vein that he views affordable energy as “critical” to diversification. Therefore, he notes, the parliamentary gridlock on the Amaila Falls Hydroelectric Project is of “major developmental concern.”
Pointing to Hong Kong, which despite limited natural resources made tremendous economic fortunes by venturing into the financial services and technology sectors, Webster advised that Guyana could also diversify by investing in “improved communication and ICT” infrastructure.
The Government of Guyana has already embarked on a US$32M e-governance project to significantly expand the country’s fibre optic bandwidth.

PULL QUOTE: ‘Guyana is predicted to experience a 4.8% increase in real Gross Domestic Product (GDP), thereby recording an eighth consecutive year of positive economic growth’  – ECLAC