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A W OR L D B AN K CO UN TRY STUDY
Guyana
From Economic Recovery
to Sustained Growth
The World Bank
Washington, D.C.



Copyright © 1993
The International Bank for Reconstruction
and Development/THE WORLD BANK
1818 H Street, N.W.
Washington, D.C. 20433, U.S.A.
All rights reserved
Manufactured in the United States of America
First printing March 1993
World Bank Country Studies are among the many reports originally prepared for internal use
as part of the continuing analysis by the Bank of the economic and related conditions of its
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The complete backlist of publications from the World Bank is shown in the annual Index of
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ISSN: 0253-2123
Library of Congress Cataloging-in-Publication Data
Guyana: from economic recovery to sustained growth.
p. cm. - (A World Bank country study, ISSN 0253-2123)
Includes bibliographical references.
ISBN 0-8213-2346-6
1. Guyana-Economic policy. 2. Guyana-Economic conditions-1966-
I. International Bank for Reconstruction and Development.
II. Series.
HC207.G882 1993
338.9881-dc20                                             93-14780
CIP



iii
GOWSSARY OF ABBREVIATIONS
BB          -       Bank of Baroda
BIDCO       -       Bauxite Industry Development Company
BNS         -       Bank of Nova Scotia
BOG         -       Bank of Guyana
CARDI       -       Caribbean Agricultural Research and Development Institute
CARICOM     -       Caribbean Community
CDB         -       Caribbean Development Bank
CEMLA       -       Centro De Estudios Montarios De Latin America
CET         -       Common External Tariff
COFA        -       Cooperative Financial Institutions Association
cxc         -       Caribbean Examination Council
DWL         -       Demerara Woods Ltd.
EC          -       European Community
ERP         -       Economic Recovery Program
GAIBANK     -       Guyana Cooperative Agricultural and Industrial Bank
GBTI        -       Guyana Bank for Trade and Industry
GCE         -       General Certificate of Education
GCIS        -       Guyana Cooperative Insurance Service
GCMFB       -       Guyana Cooperative Mortgage Finance Bank
GDP         -       Gross Domestic Product
GEC         -       Guyana Electricity Corporation
GFC         -       Guyana Forestry Commission
GNCB        -       Guyana National Cooperative Bank
GNP         -       Gross National Product
GNRA        -       Guyana Natural Resources Agency
GREB        -       Guyana Rice Export Board
GRO         -       General Registration Office
GTT         -       Guyana Telephone and Telegraphs
GUYMIDA     -       Guyana Manufacturing and Industrial Development Agency
GUYMINE     -       Guyana Mining Enterprise Ltd.
GUYSUCO     -       Guyana Sugar Cane Corporation
IDB         -       Inter-American Development Bank
IICA        -       Inter-American Institute for Cooperation on Agriculture
IMF         -       International Monetary Fund
IRP         -       Intra Regional Payment Arrangements
LBC         -       Linden Bauxite Corporation
LIDCO       -       Livestock Development Country
MFI         -       Mortgage Finance Institutions
MMA         -       Mahaica-Mahaicony-Abary Project
MOA         -       Ministry of Agriculture
MOE         -       Ministry of Education
MOF         -       Ministry of Finance
MOH         -       Ministry of Health
MW          -       Megawatt
NBIC        -       National Bank of Industry and Commerce
NIS         -       National Insurance Scheme
0 & M       -       Operation and Maintenance
PCS         -       Public Corporations Secretariat
PSIP        -       Public Sector Investment Program
RG          -       Resource Gap
ROA         -       Return on Assets
SAPIL       -       Seals and Packaging Industries
SIMAP       -       Social Impact Amelioration Program
SPS         -       State Planning Secretariat
UNDP        -       United Nations Development Program
VAT         -       Value Added Tax



iv
CURRENCY EOUIVALENTS
Average exchange rates prevailing during recent
years, Guyanese dollars (G$) per US $1.00,
period average:
1988         10.00
1989         27.16
1990         39.53
1991        111.80
December, 1991         122.00
Fiscal Year:
January 1 - December 31, 1992



v
GUYANA - COUNTRY DATA SHEET
Area:  215,000 sq.km                Population: 0.8 million (1991)               Density: 4 per sq km
.....                               ............... ..----...----......
Rate of growth: 0.7 X (1991)
Population characteristics                                  Health
Crude birth rate (per 1,000):  25.6                         Infant mortality (per 1,000 live births): 53
Crude death rate (per 1,000):   7.6                         Population per physician:      6220
Population per hospital bed: 300
Income distribution                                         Distribution of land ownership
X of national income, highest quintite:                     X owned by top 10X of owners:
Lowest quintile:                     X owned by smallest 10X
Access to safe water                                        Access to electricity
X of population - urban:  100                               Energy consumption per capita:  585
- rural:  65
Nutrition                                                   Education
CalorIe intake as X of requirements: 86.6                   Adult literacy rate tX)       93.9
Per capita protein intake (g/day):    59.0                  Primary school enrollment
(X) of relevant age group: 90
GNP per capita tUSS, 1990 1/ : 290
GROSS NATIONAL PRODUCT, 1990                                ANNUAL  RATE  OF  GROWTH ( X , 1977 prices)
USS Mn   X            1975-80 1980-85 1986-87   1988    1989      1990
.---   ..          -- - -    -- - -   -- - -  - -     - -     - -
GNP at Market Prices                  292.6   100.0            -1.0    -6.2    -5.6    4.7    13.9      -4.8
Gross Domestic Investment             167.6   57.3             -9.1    -6.2    -9.8  -32.1    51.3      18.9
Gross National Saving                  37.2   12.7             -4.4   -52.4      4.6  -3.2    -5.4    -3.3
Current Account Balance              -163.1   -55.7
Export of Goods, NFS                  235.8   80.6             -2.9    -4.4    -6.2   -9.6    -2.8      -4.0
Import of Goods, NFS                 293.3  100.2              -5.9    -5.9   -2.6  -23.8    -1.2        7.6
OUTPUT, EMPLOYMEWT AND
PRODUCTIVITY IN   1990
Value   Added            Labor Force         V.A. per Worker
USSM n    X              Mn      X                 USS
Agriculture                           133.1   39.9
Industry                               71.3   21.3
Services                              129.4   38.8
Total / Average                    333.8  100.0
GOVERNMENT FINANCE
General Goverrwent
G Mn  Percent of  GDP
1990     1986    1990
Current  Receipts                                    5357.6    43.6    34.2
Current  Expenditure                                 7605.3    81.0    48.5
Current  Surplus                                    -2247.7   -37.4   -14.3
Capital  Expenditure                                 3320.4    15.0    21.2
…--    -  - - - -   --    -   _ -  .  - . - . .  - -  -  . .  . .  - .   -- - .  -  - _ - .  -  . -
1/ World Bank Atlas methodology.



vi
GUYANA - COUNTRY DATA SHEET
MONEY, CREDIT & PRICES                         1985    1986    1987    1988    1989    1990
..- - -- - - -- - - -                         ....    ....  .    ....  .... .    ....  ..... ............ .
(Nn GS outstndidrg at end of perlod)
Broad Money SippLy                           1977.8  2366.4  3170.2  4353.8  6580.1 10211.2
Bank Credit to Public Sector                 4690.5  5066.9  7252.1  8883.8 11466.5 11911.2
Bank Credit to Private Sector                 520.2  673.5   986.7  1590.9  2566.1  4159.6
(percentage or Index rnubers)
Broad Money as % of GOP                       101.4   109.1    94.4   105.2   63.7   65.2
GeneraL Price Index (FY85 s 100)              100.0   107.8   138.6   193.3   312.7  521.2
Annual percentage changes In:
General Price Index                            13.2     7.8    28.6    39.4    61.8   66.7
Bank Credit to Public Sector                   21.9     8.0    43.1    22.5    29.1      3.9
Bank Credit to Private Sector                  12.3    29.5    46.5   61.2    61.3    62.1
BALANCE OF PAYMENTS                                          MERCHANDISE EXPORTS (AVERAGE 1985-90)
1987    1988    1989    1990                           USS Mn      X
(USS million)          SuaxIte                  76.3    35.6
Exports of Goods, HFS        269.2  245.6  233.7  235.8    Sugar                        80.5    37.6
liports of Goods, NFS        273.9  263.0   259.3  293.3    Rice                        13.3     6.2
-----   .....   .....  -----    Gold                       0.0     0.0
Resource Gap (deficit  -)  -4.7   -17.4   -25.7  -57.5    Spirits                        0.0     0.0
Other Goods             44.2    20.6
Interest Payments (net)       80.8   85.0    54.9    55.6                                  .   .
Other Factor Payments (net)  44.9    10.4    54.0   63.0          Total                214.3   100.0
Net Current Transfers         10.9    12.8    14.0   13.0                              .....  -----
Balance on Current Account  -119.5  -100.0  -120.6  -163.1
Direct Pvt. For. Investment    5.0      5.0     7.0    14.0  EXTERNAL DEBT, DECEMBER 31, 1990
Net MLT Borrowing            -94.6  -100.9  -107.2   103.8  ---------------------------------
Disbursements              39.3    28.7    67.7   225.1
Amortization              133.9  129.6   174.9  121.3                                      USS Mn
...-   .. ...   -----   -----                                   -- --
Subtotal (Dir.Inv.+Net MLT)  -89.6   -95.9  -100.2   117.8    Public Debt, NLT                1663.0
IMF nd Short-term              297.0
Rescheduling                  72.0   73.1  343.9   418.5    Total Outstanding & Disbursed 1960.0
Other CapitaL (net)            -0.2    17.1    -6.3    11.2
-----   .....  -----   .....  DEBT SERVICE RATIO FOR 1990 2_
Capital Account Balance      -17.8    -5.7   237.5   547.5                                        X
Change in commercial                                           Pubilc Debt, 1ncl. Guaranteed   53.9
arrears (increase a +)         3.9      3.5     9.6  -101.3    Non- Guaranteed Private Debt
Changes In net reserves      133.4   102.2  -126.5  -283.1    Total Outstanding L Disbursed   53.9
(increase a -)
Gross Reserves l/(end-year)    9.1      4.1    15.0    26.6
RATE OF EXCHANGE                                             IBRD/IDA LENDING (Dec.31, 1990)
Annual  Averages
(end of period)                                          IBRD     IDA
1987    1988    1989    1990                                         (USS Mn)
----    ----    ....    ....            Outstanding & Disbursed   59       94
USS1.00 - GS          0.10    0.10    0.04    0.03             Undisbursed                 0.      0
GS1.00 a USS         9.76   10.00   27.16   39.53             Outstanding Incl.Undisbursed       94
1/ Includes gold holdings.
2/ Debt service, as a percentage of exports of goods and non-factor services.



vii
PREFACE
This report is the first economic report to be written on Guyana
since 1986. Because of the long absence of substantial economic work by the
World Bank prior to this report, it attempts a fairly wide review of both the
current macroeconomic condition of the country, as well as recent developments
and issues in important sectors. The report's overall objective is to
identify the critical areas on which the Government must focus in order to
continue and extend the nascent economic recovery now taking place, and the
level of external assistance necessary to support this recovery.
Part I of the report deals with the broader issues of macroeconomic
management and resource allocation. Chapter I discusses recent economic
events, policies and economic management. Chapter II looks at the public
sector in more depth, including both revenue and expenditure issues, while
Chapter III examines the allocation questions of the public sector investment
program. Chapter IV looks at long-term prospects, and the need for further
external assistance and debt relief. In Part II, the report examines in more
depth issues in certain key sectors, and the role of public policy in
sustaining the recovery effort. This includes private sector and industrial
development (Chapter V), and the role of the state in setting incentives for
private investment. Chapter VI examines issues in the financial sector,
including bank regulation and supervision, and monetary policy. Chapter VII
discusses the agriculture sector while Chapter VIII looks at poverty and the
social sectors, specifically health and education.
This report is based on a World Bank economic mission which visited
Guyana in October-November, 1991. The mission included Norman Hicks (chief,
macroeconomics), Hilarian Codippily (public sector, bauxite), Coby Frimpong
(public investment, statistics), Luis Guasch (financial sector), William Shaw
(private sector) and Carolyn Winter (poverty, social sectors). The chapter on
agriculture was written by John Panzer, and is based on the results of an
agricultural sector mission which visited Guyana in October, 1991. Additional
updating was undertaken after discussions with the Government in March, 1992.
The report has also drawn on other work undertaken by Bank staff, including
Peter Gyamfi (transportation), Vincente Ferrer (sugar), and Xavier Coll
(SIMAP). The report was produced under the general direction of Jose Sokol.






ix
TABLE OF CONTENTS
EXECUTIVE SUMMARY   . . . . . . . . . . . . . . . . . . . . . . . . . xi
PART I: MACROECONOMIC ISSUES, PROSPECTS, AND AID REQUIREMENTS . . .  1
CHAPTER I:    MACROECONOMIC MANAGEMENT AND RECOVERY . . . . . . . .  3
Background . . . . . . . . . . . . . . . . . . . .  3
The Economic Recovery Program  . . . . . . . . . . 4
Economic Performance under the ERP, 1989-91  . . .  5
Demand Management and Adjustment . . . . . . . . .  6
External Accounts  . . . . . . . . . . . . . . . . 9
Balance of Payments  . . . . . . . . . . . . . . . 10
CHAPTER II:   PUBLIC SECTOR FINANCES  . . . . . . . . . . . . . . . 13
Introduction . . . . . . . . . . . . . . . . . . . 13
Recent Trends in Central Government Revenues
and Expenditures . . . . . . . . . . . . . . . . 13
Public Sector Management . . . . . . . . . . . . . 16
The Tax Structure.                           . . . . 18
Non-Financial Public Enterprises and Divestment  . 21
CHAPTER III:  THE PUBLIC SECTOR INVESTMENT PROGRAM  . . . . . . . . 24
Introduction . . . . . . . . . . . . . . . . . . . 24
Size of the Investment Program . . . . . . . . . . 24
Composition of the Program . . . . . . . . . . . . 25
Sector Priorities  . . . . . . . . . . . . . . . . 26
Issues of Implementation . . . . . . . . . . . . . 28
Institutional Framework  . . . . . . . . . . . . . 29
Discrepancies between Program and
Actual PSIP Expenditure  . . . . . . . . . . . . 29
Identifying Core Projects  . . . . . . . . . . . . 30
CHAPTER IV:   LONG-TERM OUTLOOK, AID REQUIREMENTS, AND DEBT RELIEF  31
Growth Prospects . . . . . . . . . . . . . . . . . 31
External Capital Requirements  . . . . . . . . . . 32
PART II: ISSUES IN CRITICAL SECTORS . . . . . . . . . . . . . . . . 35
CHAPTER V:    PRIVATE SECTOR DEVELOPMENT  . . . . . . . . . . . . . 37
Introduction . . . . . . . . . . . . . . . . . . . 37
The Industrial Sector  . . . . . . . . . . . . . . 37
Labor Markets  . . . . . . . . . . . . . . . . . . 39
Infrastructure . . . . . . . . . . . . . . . . . . 39
Policies Towards Competition . . . . . . . . . . . 40
The Tax System . . . . . . . . . . . . . . . . . . 42
The Trade Regime . . . . . . . . . . . . . . . . . 45



x
CHAPTER VI:   THE FINANCIAL SECTOR  . . . . . . . . . . . . . . . . 50
Structure of the Financial Sector  . . . . . . . . 50
Regulation . . . . . . . . . . . . . . . . . . . . 53
Supervision  . . . . . . . . . . . . . . . . . . . 54
Taxation   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  55
Reserve Requirements . . . . . . . . . . . . . . . 55
Interest Rate and Credit Policy  . . . . . . . . . 56
Financial Intermediation . . . . . . . . . . . . . 59
Recommendations  .....  .  .  .  .  ..  .  .  .  .  .   . 60
CHAPTER VII:  AGRICULTURE AND DEVELOPMENT . . . . . . . . . . . . . 62
Output Structure and Trends  . . . . . . . . . . . 62
Economic Policies and Economic Performance . . . . 63
The Potential for Agricultural Development . . . . 64
Constraints to Agricultural Development  . . . . . 67
Main Issues .................. . 71
CHAPTER VIII: POVERTY AND THE SOCIAL SECTORS  . . . . . . . . . . . 73
Introduction .....  ..  ..  .  ..  .  ..  .  ..   . 73
The Social Sectors ....  .  .  .  .  ..  ..  .  .  .   . 74
Health and Nutrition . . . . . . . . . . . . . . . 75
Organization of the Health Care System . . . . . . 79
The Education Sector . . . . . . . . . . . . . . . 82
Improving Social Sector Services . . . . . . . . . 88
ANNEX A:  MEASURING GDP IN GUYANA ................ . 90
ANNEX B:  THE BAUXITE SECTOR  . . . . . . . . . . . . . . . . . . . 91
ANNEX C: THE INSTITUTIONS OF THE FINANCIAL SECTOR . . . . . . . . . 94
ANNEX D:  THE PUBLIC SECTOR INVESTMENT PROGRAM  . . . . . . . . . 105
STATISTICAL APPENDIX .                    . .114
MAP



xi
EXECUTIVE SUMMARY
Proaress in Adjustment
Prior to 1988, Guyana followed a set of economic policies
characterized as "cooperative socialism." These policies led to the
domination of the public sector in the economy, and severely distorted
incentives for the private sector. Existing private investments were
nationalized, particularly the critical sugar and bauxite sectors, and
government control extended to most financial institutions and consumer
marketing. Government controls on prices, and the rationing of foreign
exchange, also limited private sector activity and discouraged domestic
agricultural production. While economic performance showed positive growth
during the early 1970s, the collapse of sugar and bauxite prices after the
boom years of 1974-75 led to a secular decline in output, large government
deficits, accelerating inflation and increased reliance on external
borrowings. While new investments were being made by the public sector in
industry, traditional infrastructure was being neglected and gradually
deteriorated. By 1988, output was only 68% of the 1976 level. After the
devaluation of 1989, total debt was over 600% of GDP.   The severe decline in
real wages and living standards led to a major migration of talented Guyanese
to jobs abroad. While the Government made some attempts to deal with these
problems in the mid-1980s, these reforms were insufficient given the magnitude
of the problem. In the early 1980S, the Government began to suspend payments
on external debts, bcth to official and private lenders, and these arrears
continued to accumulate during the decade.
The Economic Recovery Program, launched in 1988, was a major and
fundamental reversal in these policies. It aimed to eliminate distortions in
commodity and factor markets, reduce the size of the public sector, and
restore international economic relations. Few countries have moved so far, so
fast. Specifically, during the last three years, the Government has:
-    eliminated almost all price controls;
-    established a floating exchange rate for the Guyanese dollar;
-    eliminated import licensing and reduced tariffs;
-    launched a major program of privatization of public assets;
-    introduced private sector management into the sugar industry;
-    reduced the numbers working for the Government, raised taxes,
and reduced its reliance on domestic credit financing of the
public deficit; and
-    eliminated its arrears to international agencies, and agreed
to a major program of rescheduling for its bilateral debts.
In addition, the Government launched a program to offset the social
impact of the adjustment program by providing funds for employment generating
social projects at the local level.
The years since 1988 have not been easy ones for Guyana, and the
positive impact of the ERP is only now becoming evident. In 1990, a
combination of adverse weather, strikes and power shortages produced decline
in GDP of 3.2%, and a rate inflation of 65%. Large stocks of deposits in the
banking system, the removal of price controls, and an overall lack of
confidence in the economy, led to an increase in the velocity of money and
high rates of inflation, despite tight controls on credit to the public
sector. In 1991, with much more of the ERP reforms in place, the economy is
estimated to have grown by about 6% in real terms. Inflation, which remained
high during the first half of the year, was brought under control and reduced
to average of about 1-2% per month. For 1992, inflation is expected to fall
to about 15%, and growth continue in the range of 6-7%. Major sources of
growth in the past year include the sugar sector, where output is estimated to



xii
be up 23%, the result of better weather, better availability of inputs, and
introduction of private sector management in the state-owned sugar company.
Likewise, better prices and weather resulted in an estimated 60% increase in
rice production. Gold exports increased by about 50%, largely as a result of
a decline in smuggling now that the Government's purchase price is in line
with world prices.
Constraints on Development
The longer term outlook for Guyana, however, continues to be
constrainied.  While the incentive system now provides an appropriate set of
signals to the private sector, the response of the private sector to these
signals will take some time. The country still suffers from the accumulated
costs of past policies, including an external debt whose interest payments
alone are over 40% of GDP. Per capita income is only US$290 (1991), the
lowest in the Western Hemisphere.
The Public Sector. Most public sector infrastructure necessary to
support the private sector has deteriorated to the point of non-existence.
Power and water supplies are so erratic that many large private sector firms
have invested in their own generators and water sources. The road system has
deteriorated, particularly critical farm-to-market feeder roads. The sea wall
system which protects the most productive agricultural land has been breached
in several places, and patched temporarily, but needs major reconstruction.
'ven in urban areas, most of the population lack access to safe water
supplies. Social services are also in terrible shape. Schools lack basic
repatre, books, equipment and supplies. Employers complain that.secondary
school graduates lack basic skills. Hospitals operate with most equipment not
working, with no drugs to dispense, insufficient budgets for food, and the
Ii.abillty to carry out simple diagnostic tests, such as X-rays or blood tests.
The decline of the public sector is also a result of the decline in
real wages. It is estimated that real wages in the public sector are 18%
below what they were in 1986, which itself was low, and are about one-third to
one-fourth of that being paid in the Guyanese private sector. As a
consequence, talented people at all levels have left for the private sector,
or for jobs abroad, making it difficult, if not impossible, for the public
sector to function effectively.
The rebuilding of the public infrastructure, as well as the
capacity of the sugar and bauxite industries, is a high priority for the
public sector. However, such a program should only be undertaken provided
that there is a clear commitment of resources to provide adequate maintenance.
Otherwise, new investments will deteriorate and not provide the level of
benefits expected. High priority areas for the public sector investment
program are the reconstruction of the sea wall, the power sector, water
supply, and the road system.
In 1991, tax revenue from the private sector amounted to 21% of
GDP, but interest expenditures by the Government equalled 35%. Clearly there
is a need for more concessionary debt rescheduling in order to free up
resources for the public investment program (PSIP). At present, its
implementation is constrained, not by the lack of foreign funds, but by the
inability of the Government to provide local counterpart resources, even
though these constitute only 21% of total project costs.
However, the Government itself can do more. The tax system is
badly administered, and the level of collection is far below the potential in
the system. Evasion, avoidance and corruption are everyday occurrences. Many
firms enjoy overly generous tax and tariff holidays as part of the
Government's attempt to encourage new investment through fiscal incentives.
The consumption tax is too high for some products (up to 150%), while ignoring
others, such as services, entirely. Fees charged for public services are
either very low, not having been adjusted for inflation, or uncollected, or
non-existent. The Government attempts to provide free education from nursery



xiii
school through university level without collecting any fees, as well as free
health care. Irrigation water has a price, but collections average only 6% of
total billed. The power company collected only 35% of billed power in t;he
first half of 1991, and was a major factor in the public sector deficit.
The Private Sector. Despite its many problems, Guyana remains a
country with much potential, including a productive agricultural sector, vast
timber resources, and mineral resources that include bauxite, gold and
diamonds. With recent massive devaluations, the relative cost of labor in
Guyana is one of the lowest in the world. With some improvement in public
infrastructure, the country could be attractive to substantial foreign
investment. However, the present tariff structure is still too protective.
While it follows the CARICOM structure, the top rate of 45% is high by present
standards in Latin America, where many countries have reduced tariffs to a
maximum of 20%.   On October 29, 1992, CARICOM Member States approved a 5-20%
tariff band to be introduced over a period of 4-5 years. Rapid implementation
of the new CET will enhance Guyana's international competitiveness and extra-
regional export performance. As noted above, many firms enjoy tax excemptions
as part of the Government's investment incentive laws. This further raises
the level of effective protection, since firms can be exempted from import
duties for periods ranging up to ten years. It has been estimated that the
system of tariff protection and fiscal incentives costs the country $150,000
for every job created, or $360 for every dollar of foreign exchange saved.
Serious attention needs to be directed toward reforming the system
of fiscal incentives, which grant firms holidays from the payment of company
tax, import duties and the consumption tax. The system of granting incentives
includes a wide rang of discretion and while it is based on the level of
employment and value added by the investment, the application of these
criteria is not transparent. While the system is in line with that of other
CARICOM countries, there is no evidence that it has materially increased
private investment in Guyana. It also gives new firms in the same industry an
unfair edge over existing firms. The fiscal impact is considerable, estimated
to be about 15% of total tax revenues in 1991. On the other hand, a duty
drawback system for exporters should be put in place to reimburse them for
tariffs paid on imports.
The Financial Sector. The financial sector in Guyana is relatively
underdeveloped, and continues to be dominated by public sector institutions.
A stronger, more developed financial system can be an important component in
promoting private sector development. Of the five commercial banks in the
country, the three largest are either partly or wholly government owned. The
country's only development bank, GAIBANK, has 35% of its loans in arrears.
Most banks do relatively little lending, but simply collect deposits and
funnel them into the treasury bill market. Lending and savings rates tend to
follow treasury bill rates closely, since treasury bills represent the major
alternative use for funds. At times, lending rates of some public sector
institutions have been below the cost of funds to the Treasury. The
supervision and regulation of the financial system is divided between the Bank
of Guyana and the Ministry of Finance, with some overlapping and conflicting
jurisdictions. The level of supervision has deteriorated in recent years
owing to insufficient technical staff in the Bank of Guyana, and few public
sector banks have recent supervision reports or public audits.
Agriculture. Guyana has a rich and potentially very productive
agriculture sector, which can make a major contribution to the recovery of the
economy. The Government has made significant progress in recent years in
restoring output levels in sugar and rice. The introduction of private
management in the Government's sugar company (GUYSUCO), has resulted in a
resumption of replantings, higher wages for labor, and increased output. It
is likely that Guyana will very shortly be able to meet its sugar quotas in
the EC and U.S. markets. Rice production has directly benefitted from a
decontrol of output prices, greater availability of inputs and spares, and the
privatization of the public sector rice mills. Rice production is limited,
however, by an absence of improved seeds and by infrastructure problems.



xiv
Most of present agricultural output is derived from a thin belt of
land close to the sea, most of which is below sea level. The sea wall system,
which prevents inundation at high tide, is in danger of collapse due to lack
of maintenance and wave damage during storms. Repairs to the sea wall are a
critical priority, and the immediate action program will cost about
$36 million, a large sum relative to the Guyanese economy. Beyond this
fundamental investment, a strategy for agriculture should be linked to:
Water Resources. The rehabilitation of the country's drainage and
irrigation systems is a necessary condition to raising yields. The
participation of water user associations in the operation of these systems
should be pursued.
Land Tenure. Most farmers lack clear title to their land, or lease
it from the Government, and therefore cannot offer land as collateral for
credit. The divestment of State-owned land and provision of adequate titling
services to privately-owned farms is an essential first step in raising
agricultural productivity.
Research and Extension. Research and extension should continue to
focus on rice production, for which there is an ample untapped market. In
research, the Government should focus on primary stages, and private sector
participation should be promoted in the areas of seed production and
extension.
Poverty and the Social Sectors
It is difficult to know exactly the nature and extent of poverty in
Guyana. Since 1980, however, out-migration has kept the total population
roughly constant at about 750,000 people. At the same time real GDP has
fallen 24% and consumption spending has fallen 22%. An estimate made by the
IDB in 1989 indicated that 67% of the population were poor. Official
estimates put the figure closer to 86%.
The Government has made a major effort to organize a social program
(SIMAP) to address the problems of the social cost of adjustment. It will
particularly provide targeted nutrition and health interventions to the most
at-risk group; pregnant women and young children.  After a slow start-up,
SIMAP is now beginning to identify and fund a wide variety of projects.
However, to adequately deal with poverty will also require a major revamping
of current government programs in health and education, beyond the
improvements that SIMAP can contribute.
The percentage of public spending allocated to the social sectors
has declined significantly since the beginning of the 1980s. Recurrent
spending on the health sector, for example, accounted for 9.2% of public
spending in 1984 and only 4.7% in the 1991 budget estimates. Similarly,
recurrent spending on education has declined from 17.6% to 5.6% of public
spending in 1991, all at a time when per capita GNP has been declining. These
are well below levels reported for other Caribbean countries and are also low
relative to the GNP.
Education. Historically, Guyana has had a high quality education
system with broad coverage of the population. Education has been universally
free at all levels since 1976. Literacy rates have traditionally been high
(currently estimated to be around 84%) and coverage from pre-school to
secondary level has been broad.
Reduced investments and inefficiencies in the use of resources
within the sector has meant that both human and physical infrastructure has
deteriorated significantly at all levels. Many of the qualified and
experienced teachers have been lost to emigration and other sectors and have
been replaced by unqualified staff. School buildings have not been maintained
and teaching resources are extremely limited. Daily school attendance rates



xv
are low in many regions. Employers complain about the poor quality of
secondary school graduates.
Health. The quality of health care has declined markedly over the
past decade and shortages of staffing and equipment has effectively resulted
in a contraction of the health services offered. The principal reasons for
these declines include the severe shortage of resources, fragmented
organization of the sector, lack of coordination between relevant agencies,
the breakdown of the central auditing system and lack of accountability of
agencies to client populations.
The deterioration of health facilities and services at the regional
level affects the entire population, but is most severe in smaller urban areas
and rural areas where health facilities lack even the most basic drugs and
diagnostic equipment. The regional hospitals are ill-equipped in terms of
staff, basic diagnostic equipment and drugs and they are generally bypassed by
patients who seek care directly from the somewhat better funded national
hospital in Georgetown. Simple diagnosis of hypertension, diabetes (an
important health risk in Guyana) and even anemia is not always possible in the
regional hospitals because of broken diagnostic equipment, and they generally
lack standard antibiotics, common painkillers, or anesthetics. The extremely
low quality of care offered in regional facilities is reflected in severe
underutilization of the facilities; occupancy rates in some are as low as 11%.
The Future Agenda
Guyana is a country blessed with tremendous resources, but also
burdened with tremendous problems. Sustaining the recovery effort, and
transforming it into continuous long-term growth and development will require
a major effort on the part of the Government. It will be essential that the
Government continue to maintain a balanced and supporting macro-economic
environment, free from the inflationary pressures of the last few years. In
addition, it is important that the past changes in the incentive structure be
maintained, and where possible, extended. But the major challenges for the
Government are not in the area of the incentive framework. Rather, the
biggest problems now lie in other areas, particularly in improving the
functioning of the public sector, and the provision of adequate infrastructure
for development. Over the medium term, it is important that the second phase
of the Economic Recovery Program focus on the following, high-priority reforms
in the public sector:
-    a major adjustment of public sector wages to levels more
competitive with the private sector;
-    a significant increase in the real level of maintenance and
operating expenditures, particularly for the health and
education sectors;
-    a major overhaul of the tax system, including better
enforcement of the existing system, and modifications in the
structure to both eliminate disparities in incentives and to
generate more revenues (as required to finance the first two
items). The most important changes in the revenue system
should include:
- a reduction in the number of consumption tax rates and its
extension to services;
- the elimination of special exemptions and fiscal incentives
that reduce revenue;
- the simplification of the common external tariff (CET) and
a rapid reduction in its highest rates from 45% to a
maximum of 20%; and
- the introduction of user charges in the social sectors, and
upward adjustment and better collection of existing charges
in transport, drainage and irrigation.
Other measures urgently needed include:



xvi
-    the development of a revised public investment program that is
more tightly focused on the key areas of sea wall defense,
power, transportation and water supply;
-    the privatization of the sugar and bauxite industries; and
-    privatization of public sector financial institutions,
particularly in commercial banking;
Other important, but somewhat less urgent, reforms that should be undertaken
include:
-    improve the regulation and supervision powers of the Central
Bank of Guyana, including the placing all deposit taking
institutions under its supervision;
-    establish the Bank as an institution more independent of the
Ministry of Finance;
-    eliminate of the favorable tax treatment for bank deposits;
-    adjust interest rates in public institutions upward to reflect
cost of funds to the Treasury, and put long-term lending on a
variable rate basis;
-    bring the auditing of all government departments, agencies and
financial institutions up to date;
-    undertake a major program to rehabilitate the health and
education facilities, particularly in the rural areas;
-    privatize state-owned land to farmers and improve titling
services for privately owned farms;
-    develop water-user associations to take over the role of water
charge collection and maintenance from the government;
-    improve extension, credit and other services for agriculture;
and
-    improve the controls over forestry activities, so as to ensure
that they operate on an environmental sound and sustainable
basis.
Debt Relief and Aid Reauirements
Implementation of this reform agenda, and the maintenance of a
stable macroeconomic environment, is an essential prerequisite for a sustained
development effort. However, Guyana's continued development also depends
heavily on continued access to concessionary external finance, as well as
concessionary debt relief. Overall requirements for official inflows are
estimated to be about $550 million during the period 1992-95. Of this amount,
about $150 million could be drawn from existing loans, leaving $400 million
which would have to come from new loans and grants, or from additional debt
relief. Of the total of $550 million, about $185 million (34%) is required to
finance projects in the public investment program; the balance would have to
be made available in the form of balance of payments assistance.   The large
size of these requirements, given the relatively small size of the economy,
suggests that additional concessionary debt rescheduling would be the most
efficient means of effecting the necessary resource transfer. Donors should
consider extending additional debt rescheduling on terms even more
concessionary than the present Toronto terms, in light of Guyana's
considerable achievements in structural adjustment and its heavy debt service
burden. A rescheduling of all outstanding bilateral debts, including those
recently rescheduled, on the more favorable Trinidad terms, for example, would
reduce the required level of inflows by about $180 million, from $400 to about
$220 million.



PART I
MACROECONOMIC ISSUES, PROSPECTS, AND AID REQUIREMENTS






3
I. MACROECONOMIC MANAGEMENT AND RECOVERY
Backaround
Guyana is one of the poorest countries in the Southern Hemisphere,
having a per capita income of only US$290 in 1991. After its independence
from Great Britain in 1966, Guyana followed a socialistic model of
development. The Constitution called for a type of socialism based on
"cooperative efforts" and "the extension of socialist ownership and the
economic laws of socialism".1' Major productive sectors were controlled
either through government investment, or through price controls and foreign
exchange rationing. Major foreign-owned investments in the sugar and bauxite
sectors were nationalized. The government also controlled the major financial
institutions, and most consumer and marketing agencies. By 1988, the
Government controlled over 80% of recorded import and export trade and 85% of
total investment. The rapid expansion of the public sector was accompanied by
a concomitant decline in the private sector, and a emergence of a parallel
economy, particularly as commodity, factor and foreign exchange prices began
to diverge from their market equivalents.
Economic performance during the 1970B was mixed. During the first half
of the decade, GDP grew by about 4% per annum in real terms as a result of
favorable prices for Guyana's major export commodities, and the rapid growth
of government expenditures. The increase in oil prices in 1973-74 was offset
by a boom in the price of sugar during 1974-75. The windfall associated with
the sugar boom was used by the Central Government to expand both consumption
and investment expenditures. With a fall in the price of sugar after 1975,
and weakening demand for bauxite, the public sector came under increasing
pressure, deficits and foreign borrowings increased, and the resource gap
widened to 12% of GDP (1975-80 average).
During the 1980s, real gross domestic product continually declined,
averaging a -2.8% per annum during the 1980-88 period. The level of recorded
output in 1988 was only 68% of the level of 1976.   Because of the continued
decline in the terms of trade, and the rising share of foreign interest
payments, gross national income decline even faster, at a rate of -4.9% (see
Table 1.1 below). Technical, organizational and financial problems in
Guyana's key sectors (sugar, rice, bauxite), combined with falling world
demand, led to a stagnation in output in these sectors and declining
government revenues. At the same time, inflation averaged 20% per annum, as
public sector deficits widened, and the government increasingly relied on
foreign borrowings to finance resource imbalances. Interest on foreign debts,
and losses of public enterprises, particularly in bauxite and sugar, added to
the pressure on government finances. Foreign debt outstanding increased from
187% of total exports in 1980, to 668% in 1989, and with the devaluation in
that year, total debt exceeded 600% of GDP. The public sector deficit
increased from 21% in 1980 to 32% in 1988 and current account deficit in the
balance of payments widened from 7% of GDP to 20% in the same period. By the
mid-1980s, the Government was unable to meet its debt service obligations, and
ceased making payments to most of the bilateral and multilateral lenders.
Some attempts were made to make adjustments during the 1984-87 period, by
restructuring some public enterprises, reducing public sector employment, and
establishing a de facto multiple exchange rate system. However, these reforms
were generally insufficient given the magnitude of the problem. For example,
attempts at devaluation of the fixed exchange rate in 1984 and 1987 yielded
little real effect, as these nominal devaluations were offset by continued
1/   Constitution of Guyana, Articles 14-16.



4
high rates of inflation fueled by continued large fiscal deficits. While
total public sector employment fell after 1980, there was a large increase in
public sector employment between 1984 and 1986. The worsening economic
situation lowered real wages and consumption, and many talented Guyanese
migrated abroad to more lucrative opportunities, further limiting the
Government's ability to deal with its problems.
The Economic Recovery Program
In mid-1988 the Government announced its Economic Recovery Program
(ERP), which called for a major redirection in Government policy.
Specifically, it called for a much reduced role in the economy for the public
sector, the removal of controls that distorted commodity and factor prices,
and a greater role for the private sector. Following this program, the
Government has during the last three years, undertaken the following steps:
-    price controls were almost completely eliminated starting with
food and consumer items (1988), and eventually including
petroleum products and transportation (l991)y;
-    import prohibitions were eliminated for all items except food
(1988), and these too were subsequently eliminated except for
two items;
-    the structure of tariffs was reduced, in line with the CARICOM
common external tariff introduced in 1991 with a maximum rate
of 45%; - foreign exchange licensing for imports were
essentially eliminated by making them non-binding;
-    a free market for the sale of foreign exchange (cambio market)
was established among banks and registered dealers(1990) and
the official rate and the cambio rate unified (1991);
-    a privatization program was initiated for a large group of
public sector enterprises, with a number of them sold, closed,
or leased;
-    new tax measures were put in place, and exemptions eliminated,
in order to increase revenues;
-    rationalization of the operations of the bauxite and sugar
sectors has begun, and work initiated toward the eventual goal
of full privatization;
-    power rates were increased substantially (over 400% in real
terms between 1989 and 1991, and management changes were made
in the power utility;
-    the government structure was rationalized to reduce the number
of ministries from 18 to 11, and non-critical positions were
eliminated;
-    fiscal deficits and money supply growth have been reduced,
with a consequent drop in the rate of inflation; and
-    a free auction of government treasury bills has been
introduced, and interest rates now reflect market conditions.
2/   The only product still under price control is sugar.



5
Few countries have undertaken such a dramatic turnaround in economic policies,
and few have implemented such a program with such speed and determination.
Because of its efforts, a support group of donors was organized, and the
Government was able to secure financing to clear arrears to the multilateral
lenders. It also was able to agree with the IMF, World Bank and CDB on major
programs of support, and to agree with the Paris Club on a major program of
debt relief.
Economic Performance under the ERP. 1989-91
The Government has continued to implement the ERP despite disruptions in
1989 and 1990 which severely impacted on the economy. Strikes and work
stoppages in the sugar and bauxite sectors, and continued power shortages,
limited production in 1989 and 1990.3' While the reform of the exchange rate
system benefitted non-traditional exports, Guyana's main products suffered
from the effects of a dual exchange rate system which applied an overvalued
official rate to traditional products. In addition, unusually heavy rains in
1990 had a devastating effect on bauxite, sugar and rice production. The
resulting flooding of the bauxite mining areas led to closure of the mines for
protracted periods, while flooding of agricultural lands severely impeded
sugar and rice production. Agriculture production was further constrained by
the intrusion of saline water into prime agricultural lands, following
extensive breaches in the protective coastal sea wall. Guyana was also
adversely affected by the sharp increase in oil prices during the Gulf crisis.
As a result, real GDP declined by 4.8% in 1989 and 3.2% in 1990 (see Table
1.1).
Table 1.1: MACROECONOMIC INDICATORS
(percent)
- - - - -  Actual - - - - -           Estimated
1980-88      1989          1990          1991
--- growth rates ---
GDP (Factor Cost)                   -2.8        -4.4         -3.2          6.1
Investment                         -10.5       63.2          18.9         10.9
Exports                             -5.7        -6.3         -2.1         12.5
Consumer Prices
annual average               21.5        89.3          64.9        102.0
end year--end year                      104.7          75.9         71.0
GDP Deflator                        17.0       155.0         55.3        130.4
--- shares of GDP (current prices) ---
Investment                          29.5       34.2          42.3         43.7
Current Acct. Balance              -28.7      -29.8         -37.3        -39.7
Net Factor Income                  -15.6        22.7         26.2         34.6
Source: Government of Guyana, IMF, World Bank staff estimates.
In 1991, the reform program began to show an impact, and weather and
other conditions were favorable. The decontrol of producer prices and the
3/   Total mandays lost in public sector work stoppages in 1989 was 686,000
mandays, which was five times the level of 1987 (see Statistical
Appendix, Table 1.3).



6
establishment of a substantially depreciated exchange rate have had a
significant impact on increasing production, and returning to the legal
economy production of some items, such as gold and diamonds, which were
previously smuggled out of the country. In the sugar sector, the installation
of better management in GUYSUCO, the resumption of a replanting program, and a
resolution of much of the labor problem, has resulted in output increase of
23% to 162,000 tons. Rice output has responded to better prices and improved
weather, and is likely to increase production by 60% (to 150,000 tons).
Production of calcined bauxite is estimated at 360,000 tons in 1991, up 14%
over the previous year. Only the output of chemical and metal grade bauxite
is down, because of depressed world market conditions. Gold production, as
based on sales to the Gold Board, will be about 60,000 oz. in 1991, up from
41,000 in the previous year. Altogether, a real GDP increase of about 6% is
estimated in 1991 on a preliminary basis. However, some of this increase may
be merely the rerouting of activities previously taking place in the
underground economy (see Annex A).
Demand Manacement and Adiustment
Despite a significant supply-side response in 1991, the Government
continues to have major difficulties in limiting demand and controlling
inflation. Consumer prices went up 89% in 1989, 65% in 1990, and 60% during
the first half of 1991. Since July, inflation has been averaging
approximately 1-2% per month.y The continuation of inflation has been the
result of several factors, including the removal of price controls, declining
output in 1989-90, and consequent shortfalls in government revenues. As a
result, domestic deficit financing requirements of the public sector remained
large, about 13% of GDP in 1990 and 17% in 1991 (includes the impact of the
Bank of Guyana). The higher domestic financing in 1991 was a result of
shortfalls in foreign loan disbursements. However, the overall deficit was
reduced in 1991, to 24% of GDP, from 44% the year before.
Table 1.2: SUMMARY OF PUBLIC SECTOR OPERATIONS
(percent of GDP)
---------------Actual--------------- Estimated
1986    1987    1988    1989    1990    1991
Primary Current Account         17.8    27.1    15.5    13.3    18.9    19.3
Current account surplus        -13.6    -8.8   -15.8   -18.8   -21.6   -15.6
Capital expenditure             24.9    29.1    18.4    18.8    27.5    16.5
Overall surplus/deficit(-)   -37.2   -34.8   -32.7   -35.2   -43.6   -23.9
Net external financing          26.4    37.0    17.6    26.2    30.8        6.9
Net domestic financing          10.8    -2.2    15.2       9.0    12.8    17.0
memo: GDP (G$ millions)         2170    3359    4138   10330   15665   38283
Source: IMF; includes non-financial public sector and Bank of Guyana.
Despite a contraction in credit to the public sector (see Table 1.3
below), money supply has expanded significantly during the period, increasing
by 52% in 1990 and 59% in 1991 (broad money). This is in despite of the
Central Bank's program to absorb 75-80% of the excess reserves of the banking
4/   There are no official consumer price indices; these numbers are based on
staff estimates. The estimated inflation on an end-year to end-year
basis is 71% (see Table 1.1).



7
system through the forced sale of long-term debentures. Control over the
money supply has been made difficult by the series of rapid devaluations,
which has moved the exchange rate from 4.4/US$ in 1986 to 45/US$ in 1990 and
120/US$ in 1991, and the impact of the oil price shock of 1990-91. At the
same time, the attempt by the Central Bank to build foreign exchange reserves
has also added to the growth of the domestic money supply, and added to this
has been an inflow of transfers and repatriated capital from abroad, and the
problems of dealing with very large external debt service payments. Another
important factor is the large size of the government deficit in relation to
the monetary base. The domestic deficit in 1990 was G$2.0 billion, over one-
fifth of the money supply of G$9.4 billion (M3).
Up until June, 1991, effective monetary policy was difficult to implement
because the Government set the treasury bill rate without reference to market
conditions, and could not sell unlimited amounts of treasury bills as a
deflationary device. Large amounts of money held in the banking system, and
uncertainties in estimating the demand for money further compounded the
situation. Credit to the public sector increased by only 3% in 1990, and fell
by 39% in 1991. Credit to the private sector, however, increased by over 60%
in each year. In addition, the velocity of money has increased significantly
since 1986 (see Table 1.3) as inflation and negative real interest rates have
discouraged people from holding significant amounts of money and near-money
instruments.
Table 1.3: MONEY AND CREDIT
(growth rates)
-----------------Actual-----------------  Estimated
1986     1987      1988     1989      1990     1991
Domestic Credit           -5.6      30.2     31.0    -34.8      22.2      -8.2
to Public Sector        -5.2      25.3     20.9      20.9      2.7    -39.1
to Private Sector       29.5      46.5     61.3      61.2     62.1      60.4
Broad Money(BM)            4.4      34.3     37.3      50.3      52.0     52.0
Velocity (GDP/BM)          1.0       1.2       1.0      1.7       1.7      2.7
Inflation (CPI)            7.9      28.5     40.1      89.3     64.9    102.0
Source: IMF, International Financial Statistics, and staff estimates.
The Exchange Rate. Guyana's foreign exchange system has been profoundly
reformed, and both the nominal and real rates subject to substantial
depreciation. The parallel market for foreign exchange was legalized in March
of 1990, with the introduction of the "cambio" system, which allowed banks and
non-bank dealers to trade foreign currency at freely determined rates. In
fact, the rates tend to be set by the larger commercial banks. During most of
1990 a dual exchange rate system existed with an official rate for official
transactions which was substantially more appreciated than the cambio rate.
Initially, the cambio market only applied to nontraditional exports and
nonessential imports and services, which essentially resulted in a duel
exchange rate system. After June, 1990, the cambio rate applied to most
trade, except for sugar exports and imports of fuel, sugar and official debt
service. Full unification of the exchange rate occurred only in February,
1991, when the official rate was adjusted to match the cambio rate, and was
moved from G$45 to G$102. The official rate was abolished completely in
October, 1991. Only sugar and a small amount of bauxite exports now must go
through the Central Bank, and these are transacted at the official rate which



8
remains equal to the cambio rate. The exchange rate in the open market
depreciated in the early weeks after unification, reaching a peak of about
G$135 in March of 1991, but subsequently appreciated to a rate of about G$122
by the end of the year.
Table 1.4: EXCHANGE RATES AND RELATIVE PRICES
(period averages)
----------------Actual---------------  Estimated
1986    1987    1988    1989    1990       1991
Nominal Exchange Rate (GS/USS) 4.27    9.76    10.0    27.2    39.5    111.8
CPI (1985=100)                 107.9   138.9   194.4   368.0   606.8   1225.7
MUV (1985=100)a/               117.9   129.5   138.9   138.0   146.2    153.5
Relative Price Index           109.3    93.2    71.5    37.5    24.1        12.5
Real Effective Exchg. Rate b/ 100.0    51.3    65.3    45.8    49.1        33.3
a/  World Bank export price index for manufactures, LDC weights.
b/ 1986 =100, decrease indicates depreciation.
Source: IMF & Bank Staff estimates.
In real terms, the exchange rate movements represent a substantial
depreciation, despite rapid domestic inflation. As shown in Table 1.4, the
index of the real effective exchange rate, with 1986 equal to 100, is
estimated to be 33.3 in 1991, a real depreciation of 67%. The adjustment
process has not been smooth, however, with a sharp real depreciation in 1987
(49%) followed by an appreciation in 1988 (27%), depreciation in 1989,
appreciation again in 1990, and finally a major depreciation (32%) in 1991.
Interest Rates. The Bank of Guyana sets a Bank rate for rediscounting
loans, and while this facility is rarely used, the Bank rate is an important
signalling device to the financial system. The Bank rate at the end of 1991
was 32.5%, and the prime lending rate was 33.5% for loans from commercial
banks. However, most borrowers are charged substantial spreads above the
prime rate, so that most loans have average rates of about 37-38% (see Table
1.5 below). Until recently, interest rates on treasury bills were fixed by
the Government, and were generally negative in real terms. In 1989, the
treasury bill rate was increased substantially from 11.3% to 33.75%, and
between 1989 and 1991, the rates were held at about this level. In June,
1991, the Government introduced a system for the competitive bidding of
treasury bills at monthly auctions. The rate prevailing in the treasury bill
auctions is used to adjust the Bank rate and other administered rates, such as
the lending rates for development banks and the rates paid on excess
commercial bank reserves held in the Bank of Guyana. Since these funds
represent the opportunity cost to the banks of alternative investments, the
Bank's policy on setting interest rates on excess reserves helps determine the
overall structure of rates.



9
Table 1.5: - SELECT'ED INTEREST RATES
(percent per annum)
1986   1987    1988    1989    1990    1991    1991     1992
Dec    Dec     Dec     Dec     Dec     Jan     Dec     March
Primn Lending Rate   15.00   15.00    14.80    37.50    31.00    33.50    33.50  32.25
Bank Rate            14.00   14.00    14.00   35.00    30.00    32.50    32.50  31.25
Treasury Bills       12.75  10.36   10.80   33.75    28.75   31.25   30.90      -
Sources: Bank of Guyana, and IMF; International Financial Statistics.
Since the introduction of the auction, treasury bill rates have averaged
close to 31%, with only minor fluctuations month to month. With a estimated
rate of inflation of 102% in 1991, these interest rates would appear to be
quite negative. With current inflation running about 1-2% per month, present
rates would appear to be positive in a real sense. The needs of the
Government to finance its deficits continues to dominate the financial market,
both because of a low demand for private credit, and the large size of the
government's deficits. Most commercial banks hold only about 20-30% of their
portfolios in loans; the balance is in liquid assets, chiefly treasury bills.
The continuation of high real interest rates is partly a function of the high
interest rates paid by the Bank of Guyana on the excess reserves of the
commercial banks, which discourages downward pressure on the treasury bill
rate, to which the entire structure of interest rates is tied (see Chapter VI
for a more detailed discussion of the financial system).
External Accounts
The large external debt of Guyana, presently about $2.0 billion (end
1990), presents a continued burden on the recovery program. At current
exchange rates, this represents a debt equal to about 6 times the total GDP
(as of the end of 1991). Scheduled debt service in 1990 equalled 99% of the
exports of goods and non-factor services. About one-quarter of the debt is
owed to multilateral agencies, and therefore not subject to rescheduling.
About half of the debt is owed to bilateral lenders, and only a relatively
small portion is owed to private creditors, banks and suppliers (see Table 1.6
below).
Dealing with the problem of the debt has occupied a major segment of the
Government's attention. Under the chairmanship of the Government of Canada, a
support group formed in late 1988 to help Guyana deal with the problem of the
arrears to multilateral institutions, including the Bank and the Fund. These
were successfully cleared in June of 1990, and government received a Fund
stand-by arrangement as well as a drawing from the Enhanced Structural
Adjustment Facility, and a Structural Adjustment Credit from IDA was also
made. Guyana has received two reschedulings from the Paris Club, the latest
in September 1990 on Toronto terms. However, the Paris Club reschedulings
affected only about US$350 million of the total external debt, and have
included some capitalized interest into the debt owed. The effect has been
mostly to postpone payments, rather than to reduce substantially debt service.
Some bilateral lenders debts have been canceled unilaterally. These include
US$112 million owed to the United States under various development loans,
US$32 million owed to Canada, and US$9 million owed to the United Kingdom.
One commercial bank has canceled its debt of US$13 million. While Guyana's
debt of US$437 million to Trinidad and Tobago has been rescheduled, payments
are not being made, and this issue needs to be resolved. At present, no
payments are being made on the US$73 million owed to the commercial banks.
While the impact of past debt relief and cancellation agreements has been to
reduce debt service somewhat, the projected debt payments for 1992 will amount
to approximately 41% of exports of goods and non-factor services. The



10
Government has made a proposal for a comprehensive debt restructuring
arrangement centered on a debt buyback operation at a significant discount.
Debt owed to commercial banks, however, is less than 10% of Guyana's total
debt outstanding.
Table 1.6: TOTAL DEBT OUTSTANDING, 1990
(US$ million, end year)
Creditors                                 US$ million            Percent
Bilateral Donors                             1042                 53.2
Trinidad & Tobago                           414                 21.1
United States                               126                  6.4
United Kingdom                              138                  7.0
Others                                      364                 18.6
Multilateral Agencies                         471                 24.0
CDB                                          58                  3.0
IDA                                         93                   4.7
IBRD                                         59                  3.0
IDB                                        193                   9.8
Others                                       68                  3.5
Financial Institutions/Bonds                   88                  4.4
Supplier's Credits & Other                     62                  3.2
Total, MLT                                   1663                 84.8
IMF                                           113                  5.8
Short Term                                    184                  9.4
Total, Public Debt                           1960                100.0
Source: IBRD, World Debt Tables, and Debtor Reporting System.
Balance of Payments
Guyana's economic situation remains constrained by its external payments
difficulties, despite the fact that official arrears have been cleared, and
exports are beginning to respond to recent adjustments in the exchange rate.
The current account deficit in 1991 still amounted to 52% of GDP, and interest
owed on external debt amounts to 34%.
In 1991, total exports increased by 17%, largely on the basis of better
results in bauxite, sugar and rice sectors. Imports, however, increased by
about the same amount, reflecting increases in the level of investment,
particularly in the public sector, and the general recovery of the economy.
Most imports consist of capital goods (about 45% of total in 1990) and
intermediate goods (42%), of which fuels and lubricants is the biggest
component (see Box). Net investment income, which totaled $109 million,
largely for debt interest payments, was over 50% of commodity export earnings
(see Table 1.7).



11
Table 1.7: SUMMARY BALANCE OF PAYMENTS
(USS mitlions)
-----------------           Actual------------------------   Estimated
1986          1987          1988          1989           1990        1991
Current Account (including transfers)          -141           -109          -94           -113           -148        -134
Merchandise trade (net)                          -49           -21            -1             -7           -46         -37
Exports, f.o.b.                               210           241            215           205           204          238
Bauxite                                      82            86            80             73            75          87
Sugar                                        83            90             75            83            75          86
Rice                                         11            16             15            12            14           i7
Other                                        34            48             45            37            40          48
Imnports, c.i.f.                               -260           -262          -216          -212          -250         -275
FueL                                        -74           -77           -74            -70           -87         -79
Other                                      -186          -185          -142           -142          -163        -196
Service (net)                                  -108           -109          -112          -127           -130        -125
Of which: investment income !/                -85            -90           -94          -103          -109        -109
Transfers (net)                                   16            21            19            21             28          28
of which: private transfers                    10             11            13            14             13          16
CaDital Account                                    1           -24           -23           231           531          210
Nonfinancial public sector
Medium-and long-term debt                         7           -23           -28           226           522          102
Disbursements                               68            39            29             67           225          99
Amortization                              -126          -134          -130           -175          -121         -52
Rescheduling/Debt Relief                    66            72            73           344            418          55
Short-term debt(net)                            --             --            --            -3             --          --
Official development banks (net)                   2             6             1             --
Private sector/Commercial Banks                   -8            -7             4            -5              9         100
Errors and Onissions                              _             -4            11              1             1           8
Overall Balance                                 -140          -137          -106           117            384          76
Financed by:
BoG net foreign assets (incl. IMF)            62            77             32            29           -18         -76
Nonfinancial public sector arrears            68            56             70          -156          -265          24
Private sector commerciat arrears             10             4              4            10          -101          --
Total                                      140           137           106          -117           -384         -76
a.   On an accrual basis, including interest on principal in arrears.
Source:    IMF staff estimates.  Note:  earlier years might differ with the statistical appendix Table 3.1 due to
adjustments made by the Fund.
Note: Current account includes official grants.
Guyana received substantial foreign assistance in 1990, both in terms of
debt relief and new loans, some of which were used to clear arrears. Total
disbursements of official loans amounted to $225 million, in addition to $418
million of debt relief. In 1991, disbursements are estimated to have been



12
about only $99 million. The success
of the stabilization program can be            Trade in Petroleum:Products...
seen in the ability of the Bank of
Guyana to increase its reserve            :    I                 and lubricant8
holdings of foreign exchange well          alone make up about 23% of total
beyond the goals set under the             imports(l1990).  Guyana has no
program.  From a low of $4 million         domeatic petroleum resources.: All
dollars at the end of 1988, the            petroleum products, other than
authorities have managed to increase       those required by-the bauxite
indusitry, are,imported by the.
gross reserves by about $90 million        Guyana National Energy Authority
during the year.  Gross reserves at        (GNEA)j, largely through a
the end of 1991 equaled $123 million,    Venezuelan line of credit.  The .
which is equivalent to over four          G¢NEA sells imported products toi
months of merchandise exports.            rprivatedistributors at prices
ireflecting import costs, and
retailers are free to set prices
as they wish.  Since March 1991,5
the Government has decontrolled
all prices of petroleum prOducts. i
at the retail level, including  
kerosene.  B8us and taxi: fares have;
also been totally decontrolled.
At present, some exploration
}?tactivity is going on both offshore:;
and in southern Guyana, but no
! conmmercially :viable resources have 
been located.



13
II. PUBLIC SECTOR FINANCES
Introduction
Public sector finances deteriorated markedly during the second half of
the 1980s. Central government revenues eroded as a consequence of both the
decline in real economic activity and the growth of a parallel economy
dropping from 42% of GDP in 1986 to 19% in 1989 (see Table 2.1). At the same
time, growing expenditures, especially interest payments and rising capital
expenditures, led to an overall public sector deficits which averaged about
35% of GDP during 1986-1989. Much of this deficit can be traced to very high
payments of domestic and foreign interest, over 30% of GDP in this period.
Table 2.1: CONSOLIDATED PUBLIC SECTOR FINANCES
(percent of GDP)
Prel.
1985      1986      1987       1988         1989        1990        1991
Central Goverrnent _/                     -5.8        4.8      -3.2        -4.0        -2.3         2.1         7.6
Revenue /(                              33.5       42.1      30.5        30.0        18.7        21.6        21.0
Expenditure                            -39.3      -37.3     -33.7       -34.1       -21.1       -19.5       -13.4
Rest of Public Sector c/                  10.7       14.3      31.2        19.7        15.5        10.4        11.6
Primary Current Balance                    4.9       19.1      28.0        15.7        13.2        12.6        19.3
Interest ObLigations                     -29.0      -32.7     -36.8       -31.6       -32.0       -34.1       -35.0
Domestic                               -16.0      -17.9     -12.6       -11.7        -8.9        -9.0        -6.1
External _I                            -13.0      -14.8     -24.2       -19.8       -23.1       -25.0       -28.8
Current Balance                          -24.1      -13.6      -8.8       -15.9       -18.8       -21.5       -15.7
Capital Revenue                            0.2        0.1       0.0         0.0         0.4         1.9         5.7
Grants                                     1.5        1.2       3.1         1.7         2.1         3.6         2.8
Capital Exoenditure                      -24.7      -24.8     -29.4       -18.4       -18.9       -27.5       -16.5
Overall Balance                          -47.1      -37.2     -35.1       -32.6       -35.2       -43.5       -23.8
Financing                                 47.1       37.2      35.1        32.6        35.2        43.5        23.8
External (Met)                          29.6       26.5      37.1        17.5        26.2        30.8         6.9
Domestic                                17.5       10.6      -2.0        15.1         9.0        12.7        16.9
a.     Excludes transactions with the Public Enterprises and the WIS.
b.     Excludes the sugar levy and all other taxes from public enterprises.
c.     Excludes transactions with the Central Government.
d.     Starting from October 1990, interest obLigations on rescheduled debt were estimated at 2X of the
stock of such debt.  These obligations were subsequently rescheduled by the Paris Club.
Sources:  Goverrment of Guyana, IMF and Bank staff estimates.
Recent  Trends  in Central Government Revenues and  ExDenditures
Since the mid-1980s, the Government intensified its revenue-collecting
efforts in the wake of rising expenditures. Current revenues increased
significantly in 1986, reflecting improved collections of corporate taxes, an
increase in the number of taxpayers, and increases in consumption tax rates.



14
Ho:.ever, a setback was witnessed in 1987, as devaluation losses incurred by
companies depressed the tax base, and the government eliminated consumption
taxes on fuel and energy products. With the launching of the ERP in 1988, the
Government began to intensify revenue collection efforts and in 1989 it
converted some specific consumption taxes to an ad valorem basis and
eliminated exemptions on consumption taxes and import duties previously
provided to some public enterprises. Further steps were taken in 1990 to
eliminate exemptions relating to fuel and imports of agricultural, forestry
and mining equipment. In addition the coverage of these taxes was extended to
previously prohibited imports. The introduction of the sugar levy in 1988
raised direct taxes, but subsequent adjustments in income tax rates have
reduced direct taxes. At present, personal income taxes amount to less than
2% of GDP, and taxes on companies less than 8%.
Table 2.2: CENTRAL GOVERNMENT CURRENT REVENUES
(percent of GDP)
1985   1986   1987   1988      1989    1990    1991
Direct Taxes                 15.6   19.1   12.8    21.8    14.1    17.5    15.2
o/w Company Tax             8.7   10.8    7.3    10.0       8.2      8.8     7.7
Personal Income Tax         4.8    6.1    4.7       4.3     1.8      2.4     1.3
Indirect Taxes               19.1   23.2   17.8    15.9    13.3    14.6    13.8
o/w Consumption Taxes    10.8   13.1    9.7        8.5     7.4      8.4     8.7
Non-tax Revenues               4.8    4.9    4.6      3.3      3.3     2.0      2.1
Current Revenue              39.4   47.2   35.1    40.9    30.7    34.2    31.1
Total Revenue                41.2   48.5   38.1    42.4    33.2    39.6    36.5
Note:    The table includes all taxes from public enterprises (including the
sugar levy) and are not comparable with those of Table 2.1 which
excludes transactions with the public enterprises.
Source:  Statistical Appendix Table 5.1.
Measures introduced in the February 1991 Budget included: (a) a
modification of personal income taxes by replacing allowances and deductions
by an income threshold, adjusting the tax bands and reducing the number of tax
rates; (b) taxation of all allowances and prerequisites unless expressly
excluded; (c) the introduction of a 15% withholding tax on interest on
resident savings in lieu of taxation of personal income; (d) introduction of a
15% rice export levy to capture a part of the differential between the EEC
preferential price and the world market price; and (e) a modification of the
consumption tax structure with a reduction of the rate to 40% for most
commodities previously taxed at 50%. In the 1992 Budget, the Government
eliminated consumption taxes on medicines, essential foods and educational
materials, and reduced consumption taxes on cigarettes and tobacco, certain
textile products and on electronic goodB.



15
The Central Government's expenditures have been heavily dominated by
debt service obligations stemming from Guyana's massive debt overhang. As
Table 2.3 shows that interest obligations alone have exceeded 30% of GDP in
most years when payments of external interest were being made. Faced with
revenue limitations and increasing budget deficits, the Government had cut
back on other items of current expenditure. Consequently, personal emoluments
have decreased steadily from 18% of GDP in 1985 to 6% of GDP in 1991. This
reflects conscious efforts by the Government to apply wage restraint as one of
the measures in keeping down the fiscal deficit and a drastic reduction of
central government employees from nearly 29,000 employees in 1985 to less than
18,000 in 1991. With the objective of eliminating overlapping functions and
improving overall efficiency, the structure of the civil service also
underwent a radical change in 1991, involving a reduction of the number of
ministries from 18 to 11. The reduction of the number of ministries, however,
did not lead to a significant saving of expenditures, as salaries were
increased in an effort to retain staff.
Table 2.3: CENTRAL GOVERNMENT CURRENT EXPENDITURES
(percent of GDP)
1985   1986   1987   1988      1989    1990    1991
Personal Emoluments          18.1   17.8   16.9   13.8        7.2     6.8      5.9
Other Goods and Services    19.0   13.7   18.1   17.8         9.7     6.7      6.5
Interest Obligations         41.9   45.8   36.0   31.7       11.2    26.8    29.5
Transfers                     4.8    9.7    6.5    7.3        7.6     8.2      9.7
Current Expenditure/GDP      84.3   87.3   78.0   70.8       35.9    48.5    51.6
Source: Statistical Appendix Table 5.2.
Since 1986 concerted efforts were also made by the Government to limit
or cut back in real terms, expenditure on other goods and services, i.e., on
materials, fuel, equipment supplies, travel, postage and other services.
Consequently, expenditure on these items declined steadily from 19% of GDP in
1985 to 7% of GDP in 1991. As discussed below, the reduction of expenditures
on other goods and services have been so severe that it has begun to impair
the efficient functioning of government ministries and departments. On the
other hand, current transfers rose significantly in 1989 and 1991, mainly
owing to a sharp increase in transfers to the Guyana Electricity Corporation
(GEC), which above reached the equivalent of 2% of GDP in 1991. The increase
was also caused in part by higher transfers in G$ terms to international
organizations following the devaluation of the Guyana dollar.



16
Public Sector Management
Wages and Manpower. Probably the most fundamental constraint facing the
Government is the deterioration in the quality of the public service. The
shortage of professional and technical manpower continues to impede the
operational as well as the development activities of the public sector. Even
basic information needed for macroeconomic management such as the national
accounting data, remains extremely weak, in large part, owing to the lack of
personnel to collect, compile and analyze key economic data. The lack of
professional manpower has also adversely affected the formulation of effective
sectoral policies and the development and monitoring of the PSIP. Shortages
are most acute in the fields of economics, engineering, accountancy and
industrial management, as reflected by the large number of unfilled vacancies
in the public service. Guyana's economic recovery program would crucially
depend upon developing a 'critical mass" of higher level manpower through
increased incentives, training and technical assistance, and attracting
Guyanese professionals abroad for short periods.
Table 2.4: CENTRAL GOVERNMENT REAL WAGES
-------------------.Actual--------------------  Est.
1986    1987    1988     1989     1990     1991
Number of Emrployees                  28,650   27,411  24,391    22,034   18,656  17,800
Sataries and Wages (GS millions)1'    385.4    535.2  602.5    754.8  1,191.1  2,248.3
Average Nominal Wage (GS per month)  1,121.0  1,627.1 2,058.5  2,854.7  5,320.5 10,525.7
Consunmer Price Index                  100.0    128.7  180.1    341.1    563.2  1,137.7
Average Real Wage (GS per month)     1,121.0  1,264.3 1,143.0    836.9    944.7   925.2
Real Wage Index (1986=100)             100.0    112.8  102.0     74.7     84.3    82.5
a. Represents total employment costs which consist of salaries and wages, allowances and contributions.
Source: State Planning Secretariat and IMF.
While it is understandable that wages would fall in the early stages of
an adjustment program, the adjustments in the public sector have been
excessive. As Table 2.4 shows, the average real wage in the central
government has declined by 18% between 1986 and 1991. Consequently, wage
levels remain about one-third or one-quarter of those in the private sector.
As a result, vacancies remain at about 20% of total positions, despite the
abolition of a large number of redundant posts. Before recent increases, many
lower level staff were not receiving sufficient remuneration to cover
commutation and food costs of going to work.
Rapid rates of inflation have undercut what appear to be large nominal
wage increases. Government wages were increased by 50% in January 1991, and
additional 20% plus G$ 800 per month in July. The result was that lowest
ranked staff (GS-l) received a total increase of about 137%, while upper level



17
staff (GS-16) received only 79% (calculated at grade mid-points). Inflation,
however, was 65% in 1990 and 102% in 1991. Even after these increases, the
salary of permanent secretaries, the highest paid civil servant, is the
equivalent of US$370 per month, including allowances. For 1992, the
Government has announced a general salary increase of 10%, with 27% for
teachers and medical personnel. For most staff, this will be less than the
rate of inflation.
The effect of the past increases has been to compress the overall salary
structure between top and bottom levels. In order to retain qualified staff,
the Government introduce market supplements for upper echelon staff, but these
were paid only to a relatively small number of technical people. It is almost
impossible for the public sector to recruit and hold technically qualified
people at middle and upper ranges, and those that remain with the Government
do so only with tremendous sacrifice. The Government's room for maneuver is
constrained by the fiscal situation, and the need to keep the budget deficit
in check. A team financed by the U.K.'s Overseas Development Administration
is presently implementing a public service reform project, which includes
reviewing job classifications and pay scales, including such issues as merit
pay increases and allowances. Based on this work, the Government needs to
adopt an immediate plan of action, which should include steps to:
-    establish a goal for real wage increases so as to gradually reduce
the wage gap over the next five years to some agreed level in
relation to the private sector;
-    further eliminate both redundant unfilled positions as well as
staff, particularly those at the lower levels;
-    regrade positions to put them in line with market competition; and
-    use foreign funds to supplement salaries in critical areas.
Operations and Maintenance. Inadequate funds for the operation and
maintenance of public capital is apparent in all sectors, and results from
insufficient allocations for materials, supplies, fuel, equipment and spare
parts. Since 1988, key operations and (O & M) maintenance expenditures in the
Central Government Budget have fallen by 24% in real terms (see Table 2.5).
It is extremely inefficient to undertake new investments if investments
already made are allowed to deteriorate rapidly from inadequate maintenance.
New investments often reflect capitalized maintenance expenditures, in that
donors are funding projects to rebuild infrastructure that has deteriorated
not just because of age, but because of inadequate or improper maintenance.
Part of the deterioration in maintenance is also due to the shortage of
properly qualified and trained staff. A comprehensive assessment should be
undertaken to establish realistic levels for each sub-sector, and a plan
developed to reach this level within the next two or three years. As a
beginning, however, the Government should restore expenditures to the 1988
level in real terms.



18
TabLe 2.5: CENTRAL GOVERNMENT EXPENDITURES ON OPERATIONS AND MAINTENANCE
1986    1987   1988    1989    1990    1991
Operations & Maintenance          140.8   248.1  313.5   601.9   644.9  1513.0
(GS miLlion)
Consumer Price Index (Base Year 1986)  100.0   128.7  180.1   341.6   563.2  1137.7
ReaL Exp. & Operations and Maintenance  140.8   192.8  174.1   176.2   114.5  133.0
(GS miLlion)
Index of ReaL Expenditure         100.0   136.9  123.7   125.1    81.3   94.5
Source: Government of Guyana Estimates of the Public Sector.
The need to increase the public service, by raising wages and further
streamlining its organization, plus the launching of an expanded program of
O&M is the highest priority facing the Government. To do this, however, will
necessarily raise current expenditures, and will have to be offset by
increased revenues to prevent an additional increase in budget deficits. Any
significant change will entail a substantial increase in resource mobilization
efforts. For instance, a doubling of central government salaries would add
expenditures equivalent to roughly 10% of GDP. A 50% increase in O&M would
add another 3%. However, an additional cut of 10-20% in government employment
would save about 1-2% of GDP. The overall impact would be a required
additional effort of about 11-12% of GDP. However, given the tax enforcement
of the current tax system, plus the widespread use of exemptions, it is
possible that such a revenue increase could be accomplished without changes in
tax rates.
The Tax Structure'
Although significant progress has been made by the Government in
increasing tax revenues (para. 2.2), the tax burden continues to fall on a
narrow base with relatively high rates while an extensive parallel economy
remains largely untaxed.  Thus, a major challenge before the Government is to
widen the tax base to improve revenue performance, while also lowering some of
the highest rates which discourage compliance in certain areas.
In an effort to simplify versonal income taxes, the February 1991 budget
reduced the number of rates from 6 to 3, widened the tax bands and lowered the
highest marginal rate from 50 percent to 40 percent.  In terms of these
proposals, taxable income is determined after the deduction of G$48,000 per
I/  This section discusses the tax system from a resource mobilization
standpoint. Chapter 5 examines the Lncentive effects of the tax system
on production and investment.



19
year or one-third of an individual's income from all sources, whichever is
higher. The rates applicable for taxable income are as follows:
Income Band              Rate
First G$50,000           20%
Next  G$50,000           30%
Balance                  40%
Thus, for someone with a gross income of $G100,000, the tax would be GS10,600
or about 11%. With an income of $200,000, the tax would be G$38,200, or
19%.a
Although the above structure represents an improvement over the previous
one, personal income taxes still contribute only the equivalent of less than
2% of GDP, reflecting its narrow base consisting of public sector employees
and employees of relatively large companies. The tax base needs to be widened
to cover a large number of small companies - a task which would involve
surveys of small establishments and improved data processing capacity. This
calls for a major strengthening of the Inland Revenue Department in terms of
manpower and equipment to process an increased volume of tax returns.
Companv taxes presently constitute the equivalent of 8% of GDP, and are
set at a rate of 35% of gross profits, and a 15% withholding tax on dividends.
The highest priority, given limited staff resources, is to increase
supervision and auditing of compliance by larger corporations. In addition,
as in the case of personal income taxes, the coverage needs to be widened to
include small companies. Revenue losses are also incurred by the Government's
granting of overly generous tax holidays to new companies. Consideration
needs to be given to abolishing or limiting such concessions (see Chapter VI).
The other large source of tax revenues in Guyana is the consumDttion tax
which contributes the equivalent of 9% of GDP. But as in the case of other
taxes, consumption taxes are also derived from a narrow base consisting of
imports and domestic sales of a relatively small number of manufacturers, but
excluding exports. There are currently seven rates of consumption taxes
ranging from 0% to 150%, but 90% of all schedule positions are covered by
rates 10% and 30%. These rates, which are relatively high and levied on top
of import duties, combined with the lack of manpower at the Customs Department
to enforce regulations have encouraged the smuggling of imports into Guyana
(estimated to be as high as US$50 million), and the evasion of taxes. High
tax rates have also encouraged individual manufacturers and importers to seek
and obtain tax exemptions under the Customs Act. Thus, one approach to
improve compliance is to reduce the benefits of non-compliance by reducing the
consumption tax rates. Consideration should be given to the adoption of a
uniform rate of tax of 10% for most products as recommended by a recent
study.3 The study estimates an increase of about 4% in revenues from
consumption taxes based on a reduction in the tax rate to 10%. Consideration
also needs to be given to the extension of consumption taxes to services such
2/   These are the rates prevailing in 1991.  In March, 1992 the Government
adjusted upward the minimum income level for paying taxes, and the basic
deduction.
3/   See Crittle F.J., "A Review of the Application and Administration of
Consumption Taxes in Guyana" (Mimeo), Georgetown, Guyana, 1991. Also
see A. Gersovitz, 'A Report on the Consumption Tax in Guyana" (Mimeo),
Georgetown, Guyana, 1991.



20
as the use of telephone and transport services. It should be noted, however,
that an essential part of tax reform is a strengthening the tax administration
to detect evasion and enforce compliance.
Another area of taxation which could benefit from reforms concerns
import duties which contribute the equivalent of 5% of GDP to government
revenue.  In early 1991, the Government adopted the CARICOM Common External
Tariff (CET) which, as originally designed, had 5 rates, i.e. 5%, 10%, 20%,
30% and 45%. But the CET as modified and adopted by Guyana has 15 rates
within which the original rates apply only to some 55% of customs positions.
However, 80% of all imports in 1990 came into Guyana on a duty-free basis.
Thus, on the one hand Guyana has too many import duty rates which hinders
efficient assessment and distorts consumption patterns, most imports pay no
tariff at all. On October 29, 1992, the CARICOM Member States adopted a new
5-20% CET to be introduced over a 4-5 year period. The new CET has 4 rates,
i.e., 5%, 10%, 15%, and 20%. A recent study has estimated that the pattern of
exemptions provides a net implicit subsidy of some G$1200 million to
manufacturers, which iB G$270 million in excess of their estimated revenue
contribution.< The exemption policy unnecessarily constrains revenue growth
and prevents the Government from recapturing the costs of providing
infrastructure services to the private sector.
Finally, two other important sources of central government revenue are
the sugar levy and the rice levy. Both levies are designed to capture a part
of the differential between the EEC price and the world market price for these
commodities when exported to the EEC at the preferential price. The amounts
transferred to the Government represent budgetary support as envisaged by the
Lome Convention. There is scope to increase the sugar levy even after taking
into account the investment needs of the industry. In any event, both levies
need to be continued as important sources of government revenue.
In sum, the main areas of reform suggested are as follows:
(a) the adoption of a simplified tax system with a consumption tax
rate of 10% applied to most products subject to a few
exceptions, instead of the 7-rate structure operating at
present. In addition, excise duties of 15%, 30% and 50% should
be levied before consumption taxes on three groups of items:
all petroleum products except kerosene; beer and alcohol, and
tobacco;
(b) the extension of consumption taxes to services (e.g. telephone
services, transport facilities);
(c) adoption of the 4 level CET of 1992, i.e., 5%, 10%, 15% and
20%, rather than the modified 15 rate structure used at
present;
(d) a drastic reduction of the remissions (special exemptions) of
consumption taxes and tariffs granted at present;
(e) limiting fiscal incentives for new ventures only for "pioneer"
industries; and
4/   See Crittle. op. cit.



21
(f) strengthening the customs and consumption tax administration
through increased and better staff, consultancy services, staff
training, computerization and tighter control over corruption.
Non-Financial Public Enterprises and Divestment
Nonfinancial public enterprises in Guyana consist of some 23 public
enterprises supervised by the Public Corporations Secretariat (PCS) and a few
independent corporations such as GUYMINE and GUYSUCO. The PCS group includes
the Guyana Electricity Corporation (GEC). Trends in public enterprise
finances are largely determined by the behavior patterns of GUYMINE, GUYSUCO
and GEC, which together account for about 60% of total operating revenue of
public enterprises.
Table 2.6: PUBLIC ENTERPRISE FINANCES
(as percent of GDP)
1986   1987   1988      1989    1990
Operating cash balance                3.8   19.9    10.4    18.8       6.6
Current account balance               1.0   18.2      4.4    12.2      1.4
Capital expenditure                   9.6   10.5      5.5      9.4    12.3
Overall Balance                      -8.4   11.4      1.1      2.7    -7.8
Sources: IMF and Bank staff estimates.
The operating cash balances of public enterprises markedly improved in
1987 and 1989 following the major devaluations in each of the years, i.e.,
from G$4.40 to G$10 per US dollar in January 1987 and to G$33 per US dollar in
April 1989. The overall balances also improved significantly in these two
years. However, a setback was witnessed in 1990, mainly owing to unusually
heavy rains which caused production losses in the bauxite, sugar and rice
sectors. The resulting flooding of the bauxite mining areas led to closure of
the mines for protracted periods, while the inundation of agricultural lands
severely impeded sugar and rice production. Agricultural production was
further constrained by the intrusion of saline water into prime agricultural
lands, following extensive breaches in the protective coastal sea wall.
With the elimination of current transfers from the Central Government to
public enterprises, except for those to GEC, the priority effort of the
Government in respect of these enterprises is now to improve the efficiency of
their operations. The financial position of the public enterprises was
strengthened considerably in 1991 on the basis of the favorable effects from
the adjustments of the exchange rate and cost-cutting measures implemented by
GUYMINE associated with the closing of a mine and the reduction of its labor
force by about one quarter. The finances of the public sector will change as
the divestment program proceeds, as ownership changes and as investment plans
undergo consequential changes. On the assumption of existing ownership and
associated projected levels of operations, the primary current account surplus



22
of the public enterprises (excluding GTC which was divested in early 1991) is
projected to increase from 10% of GDP in 1990 to 22% in 1993. Transfers of
these surpluses to the Central Government will be ensured by a continuation of
the arrangements already in place with the Accountant General for transfer or
deposit of surplus funds of these enterprises, as well as by the enforcement
of the payment of taxes and dividends. Of considerable importance in these
arrangements is the requirement that GUYSUCO will begin to pay the sugar levy
partly on a current year basis in 1991 and fully in 1992.
The Government continues to actively pursue its divestment program. In
this connection, overseas private investment has been complemented by
increasing investment by local businessmen who have been responding vigorously
to the new opportunities the Government has made available. During 1991, the
Government completed the sale of assets of three companies and partially
divested two others. In addition, it is considering offers for a further four
companies. The Government also has sold the bulk of its shares in Seals and
Packaging Industries Limited (SAPIL) to the private sector to finance the
company's capital expansion program. Excluding the rice mills, the Government
has divested eleven major non-financial enterprises, including those in
telecommunications, retail distribution, timber, paint, road transport and
fisheries. Total divestment proceeds in 1991 are estimated at US$33 million,
of which about two-thirds were used to finance the 1991 public sector
investment program. Table 2.7 shows cumulative proceeds received from
divestment by the Public Corporation Secretariat. Excluded from this table
are the divestment of the Guyana Telecommunications Corporation (which yielded
US$16.5 million), the public sector rice mills, SAPIL and GBTI.
In the short term Guyana's economic prospects are closely associated
with the rehabilitation of the bauxite and sugar industries which continue to
face severe technical, managerial and financial shortcomings. Booker Tate is
preparing a blueprint for the divestment of GUYSUCO which could take place by
end-1992. Also, the Government has selected a firm that will take over the
management of GUYMINE and carry out a restructuring of its operations (see
Annex B for a discussion of the bauxite sector). Other firms slated for
future privatization include a pharmaceutical plant, an edible oil factory, a
glasswork, a feed supplier, the national airline, a textile firm, and others.



23
Table 2.7: SUIARY OF DIVESTMENT PROCEEDS
('000 of US dollars)
Amounts
Contract             Amounts               to be
Price                Received              Received
Guyana Fisheries Ltd.Y                              1,825                  1,529                  296
Guyana Timbers Ltd.                                 2,700                 2,700                     0
Guyana National Trade Corp.                         5,810                 5,359                   452
Guyana Nichimo Ltd.                                   175                    175                    0
Guyana Transport Services Ltd.                        858                    795                   63
Ouality Foods (CG) Ltd.                               329                    142                  187
Demerara Woods Limitedc'                           16,678                  3,928               12,750
National Paint Company Ltd.                         1,150                    200                  950
Sijan Palace                                            6                      6                    0
Leathercraft Ltd.                                   3,000                 2,000                 1,000
Total                                         32,531                16,834                15,698
Source: Pubtlic Corporations Secretariat.
a.     Of GS27,515 million received, GS21,432 million relates to leasing fees from 1990 to October 1991.
b.     Contract price for Demerara Woods Ltd. (DWL) includes USS167,850 and USS10,000 received from DTL re
DWL receivables, and leasing fees for Christiarburg property respectively.
NOTE:  The above table excLudes divestment proceeds of the Guyana Telecommunications Corporation, GBTI,
SAPIL, and the rice mills owned by the Guyana Rice Milling and Marketing Authority. Divestment
proceeds in GS are converted to USS at a rate of GS120:USS1.0.



24
III.   THE PUBLIC SECTOR INVESTMENT PROGRAM
Introduction
Over the past decade the country's capital stock has severely
deteriorated. The lack of resources in the past, both domestic and external,
prevented adequate maintenance, limited new investment, and contributed to the
downturn in economic growth. The economic recovery program initiated in 1988
attempts to reverse this decline through the Public Sector Investment Program
(PSIP) whose objectives are to rehabilitate and strengthen the country's
economic and social infrastructure. However, the continuation of a severe
resource constraint imposes the need to focus resources on those areas that
are the most critical to the recovery process. More importantly, the level of
maintenance expenditures will have to be accelerated markedly before new
investments can be undertaken. Otherwise, there is a danger that the funds
invested in new capital projects will not produce their intended benefits, and
will begin to deteriorate prematurely.
Size of the Investment Proaram
The Government's proposed PSIP for 1991-93 is projected to total G$27
billion(about US$225 million) or 23% of GDP. This is high when compared to
other countries, but as noted in Annex A, GDP is probably understated. Even
so, about half of total expected investment in the economy during the next two
years will be in the public sector. However, about 22% of the total program
is for the sugar and bauxite sectors, which eventually will be privatized.
There are two major components of the investment program; public enterprises
and the Central Government. Public enterprises account for close to 50% of
the investment program with investments in sugar, mining, and power
representing more than 90% the public enterprises share. The Government share
of the investment program is dominated by few large projects in the
agriculture, transportation and the social sectors.
Table 3.1 presents two alternative estimates of the overall size of the
PSIP. The original Government estimate gives an average PSIP equal to 23% of
GDP, while the World Bank estimate averages about 20%. The Bank estimate is
based on the assumption that implementation ratio would be 70% of the
investment program in 1992 and 1993.1'
Financing for the investment program over the period is covered by donor
assistance, counterpart funds, corporations' funds and budgetary resources.
Of the total of G$23.7 billion of capital expenditures over the 1991-93
period, domestic financing is expected to be G$5.0 or 21% of which G$3.4
billion will come from public corporation resources. Foreign funding is
estimated to average about US$43 million per year in loans and grants for
direct project funding, and US$10 million per year in foreign grants which
will generate counterpart funding. The ability of the Government to generate
G$5.0 billion per year in support for the program iB problematic and is the
most important resource constraint on the program. In addition, new
investments will require increase maintenance expenditures, which does not
appear to have been taken into consideration. Although this PSIP has been
already considerably reduced by the State Planning Secretariat (SPS) from
investment program proposed by the public enterprises and the line ministries,
it does not include some important projects for which financing is being
sought. These include expanded rehabilitation for the sea defense, bridge
replacement and feeder roads. Since the present program includes only
proiects for which financing has already been secured, it reflects both donor
priorities as well as Government priorities. The Government program for 1992
and 1993 is still under revision, and the final program for 1992 is likely to
be lower than that shown in Table 3.1 and Annex D.
l/   1993 also includes 70% of the slippage from 1992.



25
Table 3.1: THE PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
(GS miLLions)
Est.                Projected
1991      1992       1993      Total
Planned Expenditures
Government Estimate          6,598     12,343      8,443     27,384
X of GDP                  --        30.7       20.3       22.8
World Bank Estimate          6,598      8,640      8,502    23,740
X of GDP                  --        21.5       20.4       19.8
Financing                    6.598      8.640      8.502    23.740
Goverrvnent Budget           562        452       581       1,595     (6.7X)
Counterpart Funds W          865      1,334      1,233      3,432    (14.5X)
ExternaL Loans & Grants     3,733     5,688      5,884     15,305     (64.5)
Enterprises Resources       1,438     1,166       805       3,409     (14.4)
Memorandun Item
GDP (GS 1991 bin)          38,283    40,044     41,686
a. Represents funds generated from sale of commodities from foreign grant assistance.
Source: State Planning Secretariat and World Bank staff estimates (see Arnex D).
Figures for 1991 represent preLiminary.
Comt>osit ion of the Proara
There has been no significant maintenance over the past decade of the
Guyana's infrastructure and productive capacity. As a result, the need for
urgent reconstruction and rehabilitation far exceeds the country's financial,
absorptive and implementation capacity. This necessarily implies that some
urgent needs would go unsatisfied in the short term. The highest priority is
clearly to rehabilitate the public enterprises slated for privatization, sea
defenses, and other infrastructure necessary to induce a quick supply response
such as power, water supply and feeder roads.
A sectoral breakdown of the PSIP reveals that for the period 1991-93,
economic sectors are scheduled to account for 39% of capital expenditure,
infrastructure 30%, social services 21%, and general public services 10% (see
Table 3.2 and Annex D). Among the investments programmed for the economic
sectors, agriculture accounts for 68% of the total.  The main focus of the
investments in the agriculture sector is factory and equipment rehabilitation
of GUYSUCO and the rehabilitation of drainage and irrigation projects.
In infrastructure, the Government's emphasis is to rehabilitate roads,
sea defenses, river transportation and power supplies. Energy accounts for
more than a third of the sector investments and 12% of the total investment
program and represents about 50% of the foreign exchange cost of the sector's
projects. While the transportation sector accounts for 15% of the PSIP, the
Mabura-Lethem Road is responsible for 23% of investment in the infrastructure
sector or 7% of the PSIP.
In the social sectors priority is given to improving the primary
education system, developing human resources and rehabilitating the health
system. Of the sectoral allocation, the primary education, Georgetown
Hospital and Human Resource Development projects account for more than 85% of
planned sectoral expenditures. Water projects amount to G$1029 million or 4%



26
of PSIP expenditure during 1991-93. They include the rehabilitation of
equipment and rural water supply systems, institutional strengthening of
Guyana Water Authority and improvement of the Georgetown water supply,
sewerage disposal and storm drainage systems.
Table 3.2: COMPOSITION OF THE PSIP, 1991-93
(percent)
Average
SECTORS                                   1991      1992       1993     1991-93
Economic                                  69.7      34.2       13.7       39.2
AgricuLture                          45.5       25.3       8.6        26.5
o/w GUYSUCO                         26.7       8.2       0.0        11.6
Drainage & Irrigation               5.0        3.4       3.5         4.0
Mining                               19.7       12.2       0.1        10.7
Infrastructure                            11.1      38.3       40.6       30.0
Transport and Communications             6.4       16.5      21.0        14.7
o/w Mabura-Lethem Road                 2.0        7.0       11.8        6.9
Power (GEC)                              2.4       18.0      14.7        11.7
SociaL Sectors                            7.5       20.1       34.1       20.6
Health                                   2.2        7.1      22.2       10.5
o/w Georgetown HospitaL                 1.9       6.8       21.8       10.2
Education                                4.8        9.7       7.8        7.4
o/w Primary Education                   1.0       4.2       7.4         4.2
Human Resource DeveLopment            3.4       5.3        0.0        2.9
Other Public Investment                   11.7       7.4       11.6       10.2
TotaL PubLic Sector Investment           100.0     100.0      100.0      100.0
Source: State Planning Secretariat
Sector Priorities
At present, almost every investment in Guyana appears to be a high
priority because of the tremendous deterioration over the past decade.
However, the Government lacks the administrative and financial resources to
implement a large program, and the current program itself may well be too
large given these constraints. Four areas have been identified as being of
particularly urgent priority, and should be the focus of donor assistance.
These are sea defenses, power, transportation and water supply.
Sea Defenses. The most productive agricultural land in Guyana lies
along the coast, in an area that is below sea level, and protected from sea
water incursions at high tide by a series of dikes and tidal gates that permit
drainage at low tide. The maintenance of this system is a high priority since
it protects most of the prime sugar and rice growing areas. In addition, the
Government has already made significant investments in irrigation and drainage
improvements in areas which are now threatened with sea water flooding (namely
the East Bank Essequibo Development Project, the Mahaica-Mahaicony-Abary
Project (MMA) and the Black Bush Polder Rehabilitation Project).
At present, about 36 km. (of a total of 315 km.) of sea defense walls
are in critical condition, both because of inadequate maintenance and
monitoring of wave action, and shifts in wave pressures over time. An
additional 71 km. of sea wall will require rebuilding in the next decade. In
1990 alone, there were at least 49 breaches occurring on a monthly basis
throughout the coastline. It is estimated that it would cost about US$36
million to rebuild the 36 km. of sea walls to a standard that would absorb the
pressure of wave action without deterioration (see Chapter 7). The present
program allocates G$l.l billion (US$9.2 million) or 4.6% of total capital



27
expenditure to sea defenses between 1991-93, an allocation that is adequate
only to undertake "patchwork" repairs in the most threatened areas. The
urgency of protecting these investment and the cost of seawall reconstruction
would require a concerted action by all the donor agencies. The IDB has
prepared a project to assist with rehabilitation of sea defenses and roads and
the CDB has recently appraised an agricultural project with a sea deferse
component. Additional assistance is likely to come from the EC and other
donors.
Power. Energy investment is one of the largest components of the
investment program, and because of its long-term implications and the
importance of its sectoral linkages, is probably the part that needs the most
careful scrutiny at this time. Large power projects have progressed slowly
and have become increasingly costly. Although the system has an installed
capacity of 87 MW, only about 35 MW are currently being generated because of
poor operating procedures and inadequate maintenance. Current peak demand is
between 35-40 MW, with the result that power supplies are erratic, and power
outages are a daily occurrence.
An Integrated Investment Plan (IIP) has been prepared for the Guyana
Electricity Corporation for the period through 1999. It is designed to cope
with an anticipated growth in electricity sales of 10% per year, based on the
fulfillment of repressed demand (see Table 3.3). This plan has a cost of $48
million over the period 1991-93. The present PSIP allocates 12% of the total
for power development, or about $23 million, which is less than the IIP.
Beyond 1993 the projected cost varies depending on the feasibility of
using bagasse as a fuel for power generation. Even with bagasse, the plan
would cost an additional $100 million between 1994 and 1997. The plan,
however, depends entirely on adding new capacity using oil-based power
generation. Potential also exists for hydro-power development, although this
will entail greater transmission costs since it would not be located as close
to the major population centers. Oil based power development, however, makes
the country very vulnerable to fluctuations in world oil prices. Thus, some
careful appraisal needs to be made of these alternatives, including their
respective environmental impacts.
Table 3.3: GEC INTEGRATED INVESTMENT PROGRAM
(constant USS millions)
1991   1992   1993   1994   1995   1996   1997
Energy Sales (GWh)          168    197    230    230    250    274    298
investment (with bagasse)   13.8   11.6   23.0   38.4   30.4   24.7    7.2
Investments (without bagasse)  13.8   11.6   23.0   34.7   20.3   32.3   15.7
Source: Guyana Electricity Corporation.
The GEC continues to be affected by serious institutional, technical,
commercial and financial problems. Institutionally, the GEC is poorly
organized and inadequately staffed. The number of vacancies is high because
salaries, particularly at the managerial and technical levels, are low.
Technically, the power system has been unable to ensure a satisfactory
electricity supply because of the deterioration of major generating plants,
unreliable transmission and distribution grids, high technical losses and
deficient operation and maintenance. The pricing, metering, billing and
fraud-control practices have been extremely inadequate with the collection
ratio falling to 35% of accrued revenue in the first half of 1991. Partly as
a result, sales income has not been sufficient to cover the company's



28
operational, maintenance and debt-service costs and therefore budgetary
transfers from the Government have been necessary. The GEC is the only
government enterprise operating at a loss. Private consultants are being
hired, however, to improve its management and discussions for the divestment
of GEC are continuing. A study has completed to define long-run marginal
costs and plans are being made to revise the tariff structure on that basis.
These issues of organizational effectiveness and cost recovery need to be
addressed before any major investment program is initiated.
Transportation. Although transportation plays a critical role in the
agriculture and mining sectors, the present investment program does not give
adequate attention to the transport requirements of these sectors. Capital
expenditure in feeder roads rehabilitation represents less than 1% of the
agriculture sector investment and less than 4% of investment in the transport
sector. At the same time, the Mabura-Lethem road, which entails the
completion of the Brazil/Guyana Road, accounts for half of transport sector
investment. The projects benefits of providing a communication link between
Brazil and Guyana and reducing transport costs between the two countries are
not directly linked to the economic recovery program, and do not constitute a
high priority. While the road is 100% externally financed, no allowance has
been made for its maintenance. On the other hand, internal transport with
Guyana is heavily dependent on river crossings. Investments are needed to
rehabilitate the aging fleet of ferries, and to improve the Demerara River
bridge.
Water supplv and sewerage. In spite of substantial donor support in the
past, the quality of water and sewerage services remains unsatisfactory. In
Georgetown, water losses are estimated at 55 percent and breaks in the main
pipes are allowing impure water to contaminate the remaining supply. The
situation of the rural areas is no better; although many households have pipe
connections, it is estimated that 70 percent of the population is not
receiving regular water supply. As a result of a lack of maintenance, and
scarcity of spare parts, many well pumps have stopped functioning. In other
instances, wells have been drilled but pumps never installed. People have to
walk several miles to obtain water. Drainage in urban areas is poor as the
canals are silted, polluted with sewerage run-off, and in some cases, blocked
by debris.
In addition to deficient revenue collection practices and insufficient
resources to acquire the necessary equipment and spare parts, the crisis
facing the water and sanitation sector stems from its cumbersome organization
and a dearth of qualified personnel. With regard to the large urban centers,
it would be desirable for the municipal authorities to run their own systems
but with technical support from the water authority.
A master plan study financed by the IDB to improve Georgetown's water
supply, sewerage and storm drainage is planned, but is not expected to be
completed before 1994. In the meantime, emergency works to contain water
losses and improve the water supply need to be undertaken. The present PSIP
allocates only 4% of total resources to the sector. The authorities are
deeply concerned at the existing situation in the sector and are seeking to
identify additional projects and financing to address sector shortcomings.
Issues of Implementation
During 1991, G$6.6 billion were disbursed out of a total of G$12.2
billion initially budgeted for the program, i.e, an implementation ratio of
54%F. This low rate of implementation is a combination of the institutional
weakness, inadequate implementation capacity, insufficient local resources,
and understaffing of executing agencies. Given the shortage of technical
manpower in Government ministries, consideration should be given to
2/   This is a preliminary estimate; the actual could be substantially lower.



29
contracting out project management to private sector firms. In the longer
term, given the weaknesses throughout the public sector, more efforts should
be made to vrivatize as much of the public infrastructure services as
possible. Leading candidates include the power sector, water supply and
certain transport services, such as the ferries.
Institutional Framework
The PSIP process is not well developed in Guyana. Under the present
practice, all public sector projects are basically identified and prepared by
the line agency, the line ministry or the region. Projects involving foreign
funding are approved by the Ministry of Finance and the Cabinet, with little
or no involvement by SPS. SPS does apply a series of ranking criteria to all
projects, but exercises effective control only over those which are funded by
domestic resources. Since the bulk of the PSIP is foreign funded, this means
that SPS is generally excluded from the identification, appraisal and project
selection process. The criteria used by SPS and the weights attached to them
are those referred to in the 1985 budget statement of the Minister of Finance.
However, in the light of current changes taking place in the Guyanese economy,
these weights should be reviewed.
Project implementation is primarily the responsibility of the executing
agency, but it is the SPS which is charged with monitoring progress. Of
necessity, SFS project officers need to be in close and frequent contact with
their ministry counterparts. Two interconnected issues arise in this regard:
human resource constraints compounded by low wage rates and the two way flow
of information. Executing agencies include not only the various ministries,
but also public sector entities. Although the formal procedures for
information gathering are in place, the shortage of technical personnel
endemic throughout the public sector means that often times there is no
knowledgeable counterpart from whom SPS officers can glean information on
matters such as cost overruns, delays and alterations in implementations
schedules. Specific training in project management may alleviate some of the
difficulties but would need to be carefully targeted both in terms of
beneficiaries and content. For projects where the donor disburses funds
directly to suppliers, contractors or consultants, the SPS has no accurate
record of project status and has to rely on donors providing the data in a
timely fashion. Part of the reticence by executing agencies in providing
implementation information may be attributable to the lack of feedback
received. To address this issue, status report of all projects under
implementation, major project related issues and responses would have to
introduced, perhaps on a quarterly basis. This would allow implementing
agencies to see their projects in the context of the overall capital
expenditure program and would allow the discussion of key implementation
bottlenecks as they emerge.
Discrepancies between Program and Actual PSIP Expenditure
The revised estimates for the 1991 budget indicate that there have been
substantial discrepancies between programmed and actual PSIP expenditure.
Over expenditure is a problem in some sectors, and under expenditure in others
with the problem more pronounced at the project level. There are several
factors contributing to this budget performance.
In the social sectors, substantial increase in programmed investment was
not matched with sufficient project preparation and development of
implementation capacity. For example, the major constraint preventing the
completion of the Human Resource Development Project is the delay in
completing designs and drawings for the sewerage disposal system, completion
of designs and drawings with respect to the backup water supply system and
completion of the new buildings on which construction has actually stopped;
and this has delayed disbursements from the IDB. Similarly, the Health Care
II project is now behind schedule because of delays in completing drawings and
other tender documents. In addition, the Georgetown Hospital suffers from



30
serious shortage of suitable staff at all levels. Unless this situation is
corrected, the country will not benefit fully from the institutional
strengthening measures now underway, and much of the investment in equipment
and physical facilities will be wasted.
Another serious implementation problem relates to the availability of
counterpart funds. For example, in the case of the Primary Education
Improvement Project, the lack of counterpart funds has resulted in the
curtailment of the 1991 training program and the inability of the executing
unit to provide satisfactory accommodation for the PEU staff. In GUYMINE, the
lack of local funds is making it difficult to install already imported
equipment. The shortage of counterpart funds has also slowed down GUYSUCO and
GUYMINE drawings from the Inter-American Development Bank. The slow
implementation of the East Bank Essequibo Development Project is also the
result of the lack of local funds. The consequence of these delays is the
escalation of project costs for these corporations and agencies.
Identifying Core Proiects
Institutional problems, the capacity to implement projects, the shortage
of adequate technical staff and related facilities, the size, scale, technical
complexity and intersectoral relationships of many projects, make it difficult
to determine what is a reasonable approach, in the medium-term, for the course
of the investment program. One possibility would be to identify a list of
"core projects". These projects would represent a subset of the PSIP that is
critical for the country's economic recovery program, help mobilize foreign
resources, and generate employment for the local economy. They would have
first priority claims on budgetary resources. Projects that are important,
but are fully funded by donor aid, with no reliance on budget resources, would
not need to be included in the core project list. The core projects would be
financed from a special account which will be credited with sufficient funds
at the beginning of each quarter to fully meet the planned investment program
of the included projects.



31
IV. LONG-TERM OUTLOOK. AID REOUIREMENTS. AND DEBT RELIEF
Growth Prospects
There is already considerable evidence that an economic recovery is
underway, and that this recovery will continue into 1992 (see Chapter I). The
longer-term prospects, however, are somewhat more difficult to predict. A key
factor will be the ability of the Government to continue the reform vroaram.
maintain a system of undistorted factor and commodity markets and a stable
macro-economic environment, raise the efficiency of the public sector, and
provide an improved level of supporting public infrastructure.
The Guyanese economy remains heavily based on agriculture and basic
minerals; agricultural output constitutes 39% of GDP, and mining 15%.
Manufacturing, excluding rice and sugar milling, is only 7% of GDP. Exports
are basic on primary commodities, and external markets and prices for these
products remain uncertain. Sugar exports are constrained by U.S. and EEC
quotas, and the continuation even of these preferential access arrangements is
in doubt. Guyana remains highly dependent on foreign markets for crucial raw
materials, particularly petroleum, and is therefore vulnerable to fluctuations
in the prices of these products.
Table 4.1: EXPORT PROJECTIONS
(growth rates of volume)
Actual                  Proiected
1991             1992             1993-98
Sugar                               11.6             25.0              4.5
Rice                                 9.7             15.0             10.0
Bauxite
Calcined                        16.0               0.0              7.4
Dried                          -10.7               0.0              6.7
Gold                                63.5            100.0              10.0
Others                              15.0              5.0               7.4
Total Goods                         17.5             13.7               6.8
Total merchandise exports are projected to increase by 14% in 1992,
although part of this increase represents the redirection of goods which were
formerly sold on the black market to official channels. Growth during the
period 1993-98 is projected at an average rate of 6.8% per year, based on the
continuation of a market determined exchange rate and a favorable environment
for foreign trade, including continued access to preferential export markets.
Sugar exports are expected to increase rapidly to reach the EC quota (160,000
MT) and the U.S. quota (15,000 MT) by 1993. After 1993, more limited growth
based on sales to the free market is expected. Recovery of bauxite exports
depends on Guyana's ability to restore its market share, and the recovery of
the international economy and the demand for calcined bauxite, which is used
largely in steel production. A further large increase in gold exports is
expected in 1992 based on the completion of a large new gold mining
investment. On this basis, merchandise exports are projected to total US$474
million in 1998, compared to US$210 million in 1990.
Conservative projections made in this report are designed to achieve a
balance between Guyana's potential, which is great, and the likely
reoccurrence of unforeseen external and internal shocks which will slow the
growth process. The projection assumes that the reforms of the present
Economic Recovery Program continue in place, and are extended along the lines
described in this report. On this basis, it is feasible to project a growth



32
in real GDP of 4.6% in 1992, an average of 4.4% per year during 1992-95 and
4.5% per year during 1995-97 (see Table 4.2). This would permit an
improvement in private per capita consumption of about 4% per year during
1993-98, (compared to a decline of 4.1% per year during 1986-89). The
economic growth would require maintaining investment at around 42% of GDP
during 1992-95 (these estimates are based on 1989 prices and exchange rates).
This high level of investment reflects the amounts needed for the
rehabilitation of the productive sectors, especially sugar and bauxite, and a
rebuilding of related infrastructure in the public sector. It also reflects
the fact that it has a foreign component of about 70%, which is exaggerated in
size by the present exchange rate. The projected rate of investment depends
on raising the domestic savings rate from a level in 1991 of about 26% to an
average of 37-41% of GDP during 1993-98, which should be feasible given the
projected rate of GDP growth.
The sources of GDP growth during the 1990s are assumed to be an increase
in volume in agriculture (rice, sugar, fresh fruit, livestock and vegetables),
mining (bauxite and gold), manufacturing (textiles), lumber and the informal
sector. Guyana has considerable potential in agriculture (see Chapter VII).
A more efficient management, supported by additional investments should enable
production of rice and sugar to increase substantially. Sugar production is
expected to stabilize at levels compatible with the combined export quota to
the EC and United States of around 175,000 mt. and domestic consumption of
about 35,000 mt. The price incentives to rice producers are expected to yield
positive results for rice production and exports. The provision of sufficient
term finance and the gradual removal of power and transport constraints should
engender further increases in output in the productive sectors in general.
Privatization efforts and foreign investments, particularly in gold mining,
should stimulate greater output in the mining sector. Calcined bauxite is
projected to recover to the mid-1980s level, while that of dried bauxite is
projected to increase to about 90% above the mid-1980s level. Given Guyana's
vast timber resources, the lumber industry offers considerable potential,
provided that adequate actions are taken to exploit such resources on a
sustainable basis.
Table 4.2: SELECTED MACROECONOMIC AGGREGATES
(percent)
1992      1993-95        1996-98
---growth rates---
GDP                             4.6           4.4           4.5
Agriculture                     5.0           3.9           3.5
Industry                        4.1           4.8           5.5
Private Consumption            -4.1           0.5           5.6
Investment                      5.9           3.9           3.7
Exports                        12.6           8.8           5.4
Imports                         5.3           4.7          4.7
---shares of GDP (constant 1989 prices)---
I/GDP                          42.7          41.5         40.8
GDS/GDP                        31.3          36.7          40.8
RG/GDP(- = surplus)             5.3           0.2          -2.8
Source: World Bank Staff estimates
External Capital Recruirements
Guyana will continue to need substantial levels of foreign capital
inflows in order to finance the rebuilding of public infrastructure, and to
provide sufficient resources to sustain economic growth. While exports are
projected to rise to $474 million by 1998, imports are estimated to be $513
million. In addition, interest on long-term debt amounts to $84 million,



33
resulting in a current account deficit of $218 million (see Table 4.4 below).
In absolute terms, however, this is slightly lower than the current account
deficit in 1990 of $230 million. The estimates in Table 4.4 are based on a
number of assumptions, including no new debt relief beyond the 1990 agreement,
a continuation of foreign loan and grant assistance roughly at 1991 levels, a
limited accumulation of reserves, and direct foreign investment of $25-40
million per year. Inf lows of foreign investment are assumed to be based on a
continuation of the privatization program, as well as a return of Guyanese
capital held abroad. Based on these assumptions, there is a need for
additional assistance, or a financing gap, which is relatively small during
the period 1992-93, but increases significantly after the expiration of the
current Paris Club debt relief agreement, to $72 million in 1994, and
remaining at a level of about $50 million annually through 1998.
Table 4.3: PROJECTED BALANCE OF PAYMENTS AND EXTERNAL CAPITAL REQUIREMENTS
(USS millions)
1991      1992      1993      1994       1995      1998
Current Account
Exports (fob)           238       275        308       340        371       474
Imports (cif)          275        297        321       354       389        513
Non-Factor Services (net)    -16  -16        -18       -20       -22        -30
Net Factor Income      -109      -100       -101      -112       -109      -105
Interest, total        89        90         93       102         99        92
Net Current Transfers    16        18         20        20        22         26
Current Account Balance    -145  -122       -113      -126       -127      -149
Financing
Direct Investment        25        27         28        30        32         39
Officiat Grants          12        13         13        14         15        17
Net Lending, Long term   47        39         23        35        49         61
Disbursements          99         92        71        77         89        100
Repayments             52         52        48        42         39        40
Other Capital           137        10         5          0         0          0
Changes in Reserves     -76        24         9        -25        -17       -20
IMF                    34        24          9        -22       -22        -24
New Financing Required, net    0    9         35        71        49         52
Repayments              0         0          0         0          0         3
Interest                0         0          0         1          2         4
New Financing Required, gross   0   9         35        72        51         59
Memo Items:
Debt Service Ratio (X)   49        41         38        40        35         30
Debt/GDP (M)            784       763        734       706        675       601
Source: World Bank staff estimates.
The total capital inflow required during the 1992-95 period, excluding
direct foreign inveBtment, is US$551 million (See Table 4.5 below). Of this
amount, US$149 million is expected to be met from existing loans with the
balance of US$402 million to be met from new loans (US$347 million) and grants
(US$55 million). New "loans" could also include debt relief. Identified
loans and grants equal US$180 million, leaving a "gap" of US$167 million. The
total inflow of US$551 million can be further disaggregated into US$178
million (or 32%) required for project financing in the PSIP. Thus the bulk of
the new aid requirements must come in the form of quick-disbursing balance of
payments assistance or debt relief.



34
TabLe 4.4: AID REQUIREMENTS
TUSS mitLion)
1992     1993     1994     1995       1992-95    percent
MLT Loans
existing (pipeline)     62       41        26       20          149        27.0X
new MLT                 39       65       123      120          347        63.0X
identified            30        30       51       69          180        32.7X
unidentified           9        35       72       51          167        30.3X
grants                    13       13        14       15           55        10.0X
Total, new                52        78      137       135         402        73.0X
Total Aid Requirements   114       119      166       155         551       100.0O
Of which: PSIP Finance   47        49       45        45         186        33.8
Source: WorLd Bank staff estimates.
Extraordinary Debt Relief. Because of its tight fiscal and external
debt situation, Guyana needs more favorable debt relief than that available
under the "Toronto terms". One option being considered by the Paris Club for
low-income countries is to increase the average grant element from 20% under
the "Toronto terms" to a range of 50% to 80%, roughly in line with the
proposal for "Trinidad terms,. The proposal would to grant a 50% debt or debt
service reduction for moderately indebted countries and 80% for severely
indebted countries. If the latter option is applied to Guyana's bilateral
debt to Paris Club Members and Trinidad and Tobago (about US$600 million),
total debt outstanding would be reduced by about US$720 million, and the
interest obligations would immediately decline by US$29 million per year. The
total debt service saving would be $182 million during the 1992-1995 period
(compared to an unidentified financing gap of $167 million), and $338 million
during 1992-98. Thus, Trinidad terms, or some equally concessional
rescheduling could help eliminate much of the unidentified financing gap shown
in Table 4.5. The total debt service ratio, which is projected to be 41% of
exports in 1992, would fall to 29% in 1992 with Trinidad terms, and would fall
further to 21% by 1998 (compared to 30% in the original projection).
Table 4.5 IMPACT OF TRINIDAD TERMS ON DEBT AND DEBT SERVICE
Without Further Debt Relief      With Further Debt Relief
1992     1998                1992        1998
Debt Outstanding (US$M)         1959     2471                 1246        1748
Debt Service/Exports (%)        41.4     30.0                 29.4        20.7
Current Account Deficit (US$M)  122       149                   93         108
Interest/GDP (%)                26.0     15.6                 18.5        10.8
Source: World Bank staff estimates.



PART 11
ISSUES IN CRITICAL SECTORS






37
V. PRIVATE SECTOR DEVELOPMENT"
Introduction
The Economic Recovery Program has removed many of the policy-induced
constraints on private sector activities in Guyana. The elimination of most
price, input and foreign exchange controls has increased the role of the
market in allocating resources and eased firms' access to essential inputs.
In addition, the Government has established a more positive environment for
business through initiation of a privatization program and a more cooperative
posture towards foreign investment in Guyana's natural resources.
Uncertainty over the permanence of reforms after two decades of
inappropriate policies towards private sector development has slowed reaction
to the Government's program. Perhaps more importantly, after years of
economic crisis the public sector is too weak to provide the services
essential for growth. Remaining constraints on private sector growth include:
(i) the shortage of skilled labor, owing to the deterioration in the
educational system and large-scale emigration as a result of the declining
economy; (ii) the terrible state of infrastructure, marked by intermittent
power supply, a deteriorated transportation network, poor water quality and
unreliable telecommunications services; and (iii) some remaining distortions
in the incentives framework that have not been addressed, particularly the tax
system marked by high rates, slack enforcement and numerous exemptions.
The Industrial Sector
Manufacturina. Manufacturing plays a limited role in Guyana's economy.
According to available data, manufacturing accounts for less than 5% of value
added and about 4% of export receipts. Nevertheless, Guyana's wealth of
natural resources, low wages, and open economy, suggest the potential for
considerable growth in manufacturing production. There is some evidence of
recent growth in the sector, as the Guyana Manufacturers Association added 32
new companies over the past year, an increase of over 20%. However, this
expansion has yet to be reflected in production data. Available information
on production is fragmentary, but point to a significant decrease in levels of
production during the first half of 1991, particularly in rum,
pharmaceuticals, garments, matches, refrigerators, textiles, footwear and
bottled water. Processing of sugar increased, however, owing to improved
management of the GUYSUCO.
Guyana's domestic market is limited. Thus, expansion of manufacturing
would have to be directed primarily to export in order to be efficient. The
potential for the efficient production of high-quality, standardized products
necessary to compete in export markets exists in only a small group of
Guyanese industries. In addition to the considerable success achieved in
exporting rum and other alcoholic beverages (over US$7 million in 1990, 3% of
merchandise exports), examples of promising areas for future export expansion
include furniture, garments and metalworking. An examination of these
industries provides some insight into the general problems facing
manufacturing.
1/   This chapter is based on a number of sources: (i) information on tax
policy was taken from two consultant reports, "A Review of the
Application and Administration of Consumption Tax in Guyana" by F. J.
Crittle and "A Report on the Consumption Tax in Guyana" by Mark
Gersovitz; (ii) the discussion of potential export industries was based
on conversations with the UNDP consultants assisting those industries;
and (iii) some of the observations on tourism were based on a draft
report submitted by Edward M. Coe to the UNDP. In some cases, however,
the recommendations differ from those presented by the authors of the
reports.



38
The abundance of timber has facilitated the production of furniture. The
local market is served by numerous small operations producing low-quality
goods. While domestic firms export to CARICOM markets and to Cuba, they have
made only limited inroads in the North American market. Two hurdles need to
be overcome before production can reach the level of quality essential to
penetrate developed country markets. First, the high-moisture content of
Guyanese wood requires more effective drying processes than available to most
firms. Second, production relies heavily on experienced carpenters for
finished work. While Guyana boasts many skilled carpenters, consistent
production of standardized, high-quality products requires more extensive use
of machinery. Incorporation of more sophisticated production processes is
hampered by the high tax rates on machinery and the lack of reliable power
(see below).
Past shortages of foreign exchange and import controls have encouraged
the growth of metalworkina to maintain an aging capital stock. The presence
of 30-40 year old cars on the streets of Georgetown attests to the skills
learned. So far, this experience has been more helpful in servicing local
industry than in production for export. A few firms are adopting more
sophisticated processes, including computer-aided design, and there has been
some limited production of steel frames for buildings and export of spare
parts. The skills learned in production for the local economy could be
extended to exports, if more information were available on potential markets.
Garment exports are produced by traditional sewing operations that use
materials supplied by foreign country wholesalers. The very low wage rates
make assembly operations an attractive industry for Guyana; unskilled factory
workers earn between US$l-2 a day, and even experienced mechanics earned less
than US$10 a day. Before the exchange rate became distorted, Guyana had a
thriving garment export business. So far, linkages with the domestic economy
have been limited, as Guyana has only one textile mill based on imported
cotton. There may be some potential for expanding production of the fittings
used in the assembly operations. Also, the presence of considerable textile
imports raises the question of whether producers can increase their share of
the domestic market. However, one suspects that many of imported textile
products sold in Georgetown have entered the country free of taxes, making it
difficult for domestic producers to compete.
Guyana also exports a limited amount of other manufactured goods,
including pharmaceuticals, footwear, perfumes and refrigerators. While data
by product and destination are not available, many of these goods probably are
directed towards the protected CARICOM area. Producers may experience greater
difficulty in penetrating developed country markets.
Mining. Private sector mining in Guyana mostly consists of small
operators exploiting limited tracts for gold and diamonds. Despite its
considerable potential, gold and diamonds exports amounted to only US$15
million in 1990, or 6% of official exports. Reported gold production during
the mid-1980s was about 10,000 ounces a year. Establishment of a more
realistic price for gold purchased by the Gold Board (see below) has resulted
in an estimated increase to 60-70,000 ounces in 1991, and a projected 100,000
ounces in 1992 due to some local production expected to come on stream. An
improved policy regime for foreign investors has resulted in the signing of
six agreements with large firms covering 15 mining properties. The first of
these should begin production in 1993. Companies also have expressed interest
in mining silicon sand for glass and clay for ceramics.
Some potential may exist for exploitation of petroleum deposits, although
no wells are producing as of yet. The Government has licensed three offshore
concession areas. In one area the firm soon will complete seismic
reconnaissance work and should decide shortly whether it wishes to proceed
with development. In the best of circumstances, however, no production can be
expected for at least 5 years. Potential sites for petroleum development also
exist onshore. One of these is an area near where Suriname is already
producing heavy oil in small quantities.



39
Labor Markets
Labor markets in Guyana are relatively free of policy-induced
distortions. However, the prolonged economic crisis has had a disastrous
impact on the labor force. The lack of skilled labor probably is the most
important constraint on private sector development. Extremely low wages have
improved the competitiveness of some activities, but have contributed to the
massive emigration of high-skilled workers. The deterioration in Guyana's
educational system and technical institutes also has impaired the quality of
the labor force. Employers claim that recent school graduates lack even the
basic skills necessary to benefit from specialized training. Skilled managers
are in particularly short supply. Some of the larger firms are making large
investments in training, but both domestic competition and the attractiveness
of opportunities overseas make it difficult for individual firms to capture
the full return from such investments.
Infrastructure
Infrastructure is a disaster. The deterioration of the public sector's
stock of capital has reached the point where basic services are provided by
individual businesses. Firms thus fail to benefit from the enormous economies
of scale available in the centralized provision of infrastructure services.
While the Government is taking steps to address this problem, inadequate
infrastructure will remain a major limitation on industrial growth for a long
time to come.
Power. The unreliability of electrical power is perhaps the most serious
problem. Power outages are so common that most businesses and even many
private homes have their own generators. It is estimated that the combined
electrical generation capacity of the private sector is approximately 80
megawatts, or about the same as the capacity of the public sector. While data
are not available on the costs of private electrical generation in Guyana,
some conclusions can be reached based on experiences in other developing
countries. The largest firms that run machinery continuously (i.e. the
brewery and rice mills) rely almost entirely on their own generation capacity,
which may exceed one megawatt. It is estimated that, for each kilowatt/hour
produced, the capital cost of a one megawatt unit is twice that of the larger
units used by public utilities. In addition, smaller generators involve
higher current costs than larger ones, due to the higher per unit staff costs
of operations and maintenance and lower efficiency in fuel consumption. The
larger firms also complained of the need to devote scarce managerial time to
managing their power plants. Smaller firms are even more disadvantaged by the
lack of reliable power, as the cost per kilowatt/hour of electrical generation
increases rapidly as capacity declines below one megawatt. This structure of
electricity generation greatly increases costs, biases production away from
energy-intensive activities (and thus slows the adoption of more sophisticated
production processes necessary to compete in export markets), reduces the
efficiency of firms that must switch between GEC and generators and impairs
the competitive position of smaller firms which face greater unit costs in
generating electricity.
Water. Reliable access to clean water also is lacking. Water service is
erratic in Georgetown and absent in many parts of the country, and the quality
of water provided can be very low. The larger firms that use water as a part
of the production process have their own wells or have made arrangements with
the Government to manage public sector wells. Other firms have large standby
tanks supplied by trucks. Again, the major costs are borne by smaller firms
that need water but do not have the resources to dig their own wells.
Internal transport. The transportation network suffers from serious
deficiencies. Most goods are transported within the coastal strip where most
of the population lives. While the main road going east from Georgetown to
the Suriname border is in relatively good shape, the road west towards
Venezuela is not. More seriously, it is necessary to cross wide rivers on
both sides of Georgetown, and the ferry services across these rivers are not



40
reliable. For example, a significant proportion of Georgetown's food is
supplied from the area east of the Berbice river, and thus must cross on the
ferry at New Amsterdam. Only one ferry is presently operating, which has
limited capacity and is badly in need of repair. The tenuous communications
along the coastal strip, not to mention the isolated areas in the south,
reduce the potential size of the market for manufactures and raise the cost of
living. Lack of adequate road transport has an even larger impact on mining
operations. Much of Guyana's mineral resources are located far from the major
population centers. Roads to one of the major gold mines are not always
passable, and frequently it iB necessary to use two trucks just to pull
another truck through bad spots in the road. Other companies have had to
build roads of 10-30 miles to reach the mines.
Shippina. Greater mechanization is needed to handle goods at the ports,
including conveyer belt systems and availability of basic machinery, such as
fork lifts. The most serious problem is the shallowness of the Georgetown
harbor, which means that only small or lightly loaded vessels can enter.
Large cargos often must be shipped in parts from Georgetown to a deeper port,
such as in Suriname, and from there to the final destination. The port at
Essequibo faces similar problems, so that rice shipped from Essequibo must
first go to Georgetown, which takes 1-2 days and adds about 5% to the price
per ton. Unfortunately, the options for providing a deeper harbor are all
very expensive, including moving the wharves, dredging the harbor on a
continuous basis, or building a floating jetty.
Telecommunications. Telephone service is beginning to improve with the
privatization of Guyana Telephone and Telegraph (GTT) the telecommunications
company. Reportedly, calls to the United States can be made with less effort
than before, although calls to Canada and Europe can still be difficult.
Still, firms reported that lack of adequate communications continues to hamper
operations. Delays in placing international calls and difficulties in calling
Guyana from abroad particularly constrain firms involved in international
trade. Domestic telephone service also is poor, with lengthy periods during
which it is impossible to call within Georgetown. The modernization program
now underway may improve matters.
Policies Towards Competition
Guyana is relatively free of the unnecessary bureaucratic requirements
that hamper the private sector in many other countries. With some exceptions,
administrative requirements are limited to those necessary for tax compliance,
for enforcement of normal regulations at the municipal level (i.e. zoning,
building codes) and for environmental and health reasons. There are no legal
provisions which favor domestic over foreign investors, who can invest in any
sector of the economy and can repatriate profits freely. Administrative
requirements related to the tax system and the trade regime are discussed
below. This section will cover other policies which affect competition in the
economy, including support services provided by Government, the legal regime
for tourism, restrictive legislation and the privatization program.
Government Support Services. Public services to the industrial sector
suffer from the same problems facing other public sector activities: the
inability to pay adequate wages to attract highly-qualified people. The
Guyana Manufacturing and Industrial Development Agency (GUYMIDA) is the major
source of assistance to the manufacturing sector. Some uncertainty exists
concerning GUYMIDA's role due to the recent reorganization of public sector
activities. GUYMIDA is now carrying out the following activities: (i) it
serves as a one-stop shop to assist investors with bureaucratic requirements;
(ii) it promotes investments through providing literature, evaluation of
investment projects, and promotional tours overseas; and (iii) it provides
technical support to investors in the form of training and provision of
information on technology. UNDP is now carrying out an evaluation of GUYMIDA
to see how it meets these responsibilities.



41
A preliminary view of GUYMIDA's activities points out a number of
problems. GUYMIDA does not have the resources to act as a true one-stop shop,
that is to serve as the single location where investors can apply for all of
the regulatory approvals necessary to conduct business. Instead, GUYMIDA
simply responds to enquiries on Government policies and procedures and refers
investors to the appropriate office. Only in special cases will GUYMIDA
provide direct assistance to the investor in meeting regulatory requirements.
GUYMIDA's technical assistance activities also appear questionable. It is not
clear that GUYMIDA has the expertise to evaluate investment projects or to
provide technical assistance to entrepreneurs. The private sector was quite
negative concerning the value of GUYMIDA's assistance, claiming that the
organization reacted very slowly to requests, did not provide relevant
assistance and did not undertake effective promotional activities. The
Government should consider reducing GUYMIDA's responsibilities to serving as a
one-stop shop and provision of information, for example on export markets.
The Geology and Mines Commission provides information and services to the
mining sector. Much of the Commission's resources appears to be devoted to
the negotiation of agreements with mining companies (see below). However, the
Commission does provide information on mining deposits and is involved in
geological mapping.   The Commission is receiving some technical assistance in
this area from donors, and officials were able to cite examples of how their
information assisted companies in selecting promising areas for exploration.
Given Guyana's potential and the lack of information on mineral deposits, it
may be useful to devote more resources to this area.
Tourism. Guyana has some potential for tourism due to the attractiveness
of its tropical forests, birdlife, fishing resources and water resources.
These kinds of activities need to be packaged for small groups and require
relatively complex arrangements, such as guides services and transport to
remote areas. While Guyana lacks attractiveness for large tourism facilities
of the Caribbean islands, it is likely that the country has not fully
exploited the available tourism opportunities. Impediments to a more
developed tourist industry include strict visa requirements, lack of transport
infrastructure and the poor security situation in Georgetown. In addition,
the Government is now in the process of establishing review procedures for new
tourism projects. At present, all tourism projects must be reviewed by the
Ministry of Trade, Tourism and Industry for environmental soundness. The
Ministry will seek assistance from the Tourism Association of Guyana, an
umbrella association with private sector representation, to evaluate
proposals, including hotel projects. The danger in this plan is that the
Ministry will rely on existing businesses to vet potential competitors. The
rationale is to make use of private sector expertise in evaluating the
environmental consequences of new tourism projects. Given the weakness of
public sector administration, this concern is understandable. However, the
Government can ill afford to establish a system which would stifle competition
in the sector, and may therefore need to establish some public sector
capability in evaluating tourism proposals.
Restrictive legislation. One of the impediments to the recovery of the
economy is the history of inappropriate economic policies, including the
forced sale of businesses to the public sector and various interferences in
private sector activities. While these practices are no longer followed, the
legislative authority for some measures remains on the books. For example,
the Compulsory Acquisition Act passed in the 1970s enabled the Government to
take over property at its 1939 value and the Capital Issue Control Act
required approval of the Ministry of Finance to transfer shares of private
sector businesses. The Government reports that the latter measure has been
abolished, although the law abrogating the Act has not been formally published
in the official gazette. The Government has stated that as a matter of
policy, the "era of nationalizations is therefore to be considered at an



42
end.A' However, a formal abrogation of the authority to nationalize private
property (with the exception of the right of eminent domain with procedures to
determine fair market value) would increase confidence in the permanence of
present policies.
Privatization. Public sector enterprises dominated the economy through
the mid-1980s. The present Government has launched an ambitious privatization
program, which ultimately may include all public sector enterprises, to
encourage a greater private sector role in the economy. The program began
with 10 companies, in areas such as fisheries, timber development,
distribution, transportation, foods, paint and rice milling. This stage is
nearly completed, with contracted sales at close to US$30 million, of which
about US$15 million had yet to be paid to the Treasury (as of October 1991).
Many of the companies were broken up and the assets sold separately, although
a few were sold as going concerns. Dismissed workers were paid their pension
rights due and severance payments based on time in service. In some cases,
workers received substantial raises in salary from the new owners. The
Government is now proceeding with the divestment of an additional 16
companies, which tend to be the more profitable ones. There is are also plans
to eventually privatize GUYMINE, GUYSUCO, and possibly GEC, the electric power
company.
The privatization program is important for increasing efficiency,
competition and attracting a greater volume of investment. The program
already has generated some benefits to the economy. Telephone service has
improved since the privatization, and the new owners are embarking on a
modernization program. The privatization of the rice mills has proceeded
smoothly, and has increased the potential for investments in rice milling.
The program also has drawn some criticisms. Some observers believe that the
Government could have received higher prices, enabling private speculators to
make substantial profits by the resale of companies purchased from the
Government. Confidence in the process may have been reduced by the practice
of managing a few of the larger privatizations by private negotiations outside
of the normal public bidding procedures the Public Corporations Secretariat
(the main agency responsible for implementation of the program). The
Government should proceed carefully with plans for privatization of some of
the larger companies. While an infusion of private capital would be useful
for the electricity company, the Government should ensure that it has the
authority and administrative ability to regulate GEC before selling it to the
private sector. Also, the large size of GUYSUCO and its importance to the
economy emphasize the need to ensure adequate tax revenues and service of
Government-contracted debt after privatization.
The Tax SVstem-'
The tax system is characterized by high rates of nominal taxes imposed on
a relatively small base due to numerous exemptions. These exemptions are
granted in the interest of encouraging economic activities deemed desirable by
the Government and compensating for various anomalies generated by the tax
system. However, the administration of the exemptions is not transparent,
appears to favor larger firms over smaller ones and results in a very complex
set of taxes and subsidies which appear to have little economic rationale.
The Government needs to work towards a system that would reduce tax rates,
reduce cascading and eliminate exemptions granted to particular firms in order
to have a tax system that is more neutral and encourages greater efficiency in
production and investment decisions.
2/   Government of Guyana, The Guyana Investment Policy (State Paper, July,
1988).
3/   This section deals only with the impact of the tax system on resource
allocation; Chapter II has already discussed the tax system from the
standpoint of revenue generation.



43
Consumption tax. The consumption tax unnecessarily distorts production
decisions due to a dispersed structure of rates, narrow base, numerous
exemptions and uneven taxation of inputs. Half of domestic consumption tax
collections in 1990 were from alcohol and cigarettes, the latter of which is
taxed at 100% rate. While it makes sense to levy higher taxes on these goods,
very high rates may be ineffective when it is impossible to control smuggling
(see below). On the other hand, many luxuries such as hard liquor, beauty
products and tableware are taxed at relatively low rates. The large number
and high dispersion of tax bands results in very different rates applyiilg to
close substitutes. For example, the tax on plywood is 40%, but the tax on
solid timber is only 19%, thus discouraging domestic processing of lumber.
The companv tax structure has also been improved through the adoption of
a single corporate tax of 35%. Previously, non-commercial firms paid a 25%
corporation tax on total profits, and a 20% income tax on retained earnings
(commercial firms paid 35% and 20%, respectively). Consequently, the company
tax is lower for a company that pays no dividends (35% as compared to 45%
previously), but higher for a company that paid all its profits as dividends
(35% as compared to 25% previously). Thus, relative to the earlier tax
regime, there iB an incentive to retain profits for reinvestment. floweNer,
firms also deduct and remit a withholding tax of 15% on all dividends.
Dividends are then tax-free to recipients, regardless of their income WveI.
The tax base is limited to approximately 550 registered manufacturern,
which simplifies administration of the tax. To avoid cascading, registeiLed
manufactures are exempt from the consumption tax on their material inputs.
However, this provision does not completely eliminate cascading, for a number
of reasons. First, taxation at the level of the manufacturer may tax inputs
at subsequent stages (i.e. repair shops). Second, inputs to production
imported by traders are taxed, and there is no procedure for crediting the tax
if a registered manufacturer purchases from a trader. This anomaly
discriminates against smaller manufacturers who cannot import directly and
encourages nonregistration by manufacturers. Finally, capital inputs are
taxed, which further discourages the use of the more sophisticated production
processes necessary for producing competitive exports.
Many of these problems could be avoided and the tax base substantially
increased by replacing the consumption tax with a value added tax. fHowevev,
administration of a VAT would place excessive demands on the Governzment'n
limited resources, and could actually result in lower tax collectionsf by
raising the potential for tax evasion. Instead, the Government should
consider marginal improvements to the present system to reduce cascading and
broaden the tax base, including allowing traders to obtain a rebate of the tax
when they sell inputs to registered manufacturers, exempting capital equipment
and other inputs that presently are taxed.
Fiscal incentives. The fiscal incentives program is designed to
encourage investment in Guyana through granting of holidays from payment of
company tax, exemptions from duties and exemptions from the consumptioln tax.
Incentives are granted based on a number of criteria, the most important of
which is the amount of value added to be produced in Guyana by the project.
However, other criteria also are considered, including the location of the
firm, the amount of investment, expected employment generation, the type of
technology and the expected contribution to nontraditional export earnings.
The Government states that it would like to encourage investment in light
manufacturing, forestry and agricultural processing.y However, there are no
fixed rules on how these several criteria are combined to determine the extent
of fiscal incentives granted, and each application seems to be treated on a
case-by-case basis.
The amount of fiscal incentives granted is quite large in comparison with
revenues. The Government granted US$10 million in fiscal incentives in 1990,
4/   Ibid.



44
and US$61 million in 1991 (through September). These figures are estimates
based on expected tax liability at the time of application, and refer to total
revenue foregone over a period of years. The actual revenue loss is
impossible to estimate, because data are not available on how much companies
receiving fiscal incentives actually would have paid in taxes and the
Government does not release information on the extent of incentives granted.
However, if the average tax exemption granted equalled the median allowable
exemption under the CARICOM harmonization rules (7 years), the estimated
revenue loss in 1992 from incentives granted in 1990-91 would be US$12
million, about 15% of expected tax revenues in 1992. It is noteworthy that
the number of incentives granted and the amount of investment covered by
exemptions has risen (see Table 5.1), so one should expect an increase in lost
revenues in coming years. Given limited staff resources and lack of access to
income tax returns, it is difficult for GUYMIDA to confirm whether the
incentives are claimed for the approved project. This gives some opportunity
for firms to include other transactions within their tax exempt operations,
further increasing the revenue loss to the Treasury.
Table 5.1: FISCAL INCENTIVES
1985    1986    1987    1988    1989   1990    1991
Number Incentives        11.0     8.0    9.0      13.0    11.0   12.0    23.0
Planned Investment        3.4     0.9    8.0       6.0    15.7   10.1    61.3
(US$ million)
Source: Guyana Manufacturing and Industrial Development Agency.
There is no evidence that the combination of high tax rates with
widespread exemptions is effective in increasing overall investment in the
economy or has any beneficial impact on the allocation of resources.
Incentives granted recently appear to favor larger firms. Of the 12 incentive
packages granted in 1991, 7 were for investments in excess of US$1 million and
only one was for an investment less than US$100 thousand. The system lacks
transparency, due to the multiplicity of criteria and the policy of the
Government not to make available information on incentives granted. This lack
of transparency raises doubts on the part of investors concerning the fairness
of the system and may reduce investment if entrepreneurs have to worry about
potential competition by firms receiving more generous incentives.
Eliminating fiscal incentives along with a sharp reduction in rates
would improve the transparency of the system and reduce the importance of
noneconomic factors in investment decisions. The common objection to
eliminating the incentives system is that Guyana needs to grant incentives to
compete with other CARICOM countries. However, the lowering of general income
and consumption tax rates along with elimination of incentives would increase
the ability of the typical Guyanese firm to compete, both in export markets
and domestically against smuggled goods.
Mining. The tax regime for minerals and petroleum requires separate
treatment. The general philosophy underlying Government intervention in this
area has been that Guyana's mineral resources are the property of the State,
which should share directly in profits from development. Prior to the mid-
1980s, the Government required a majority equity share to grant large
concessions. Further, all gold production had to be sold to the Gold Board at
a below-market price. As a result, there were no large concessions granted,
all mining activity was carried out by small operations with limited
technology and reported gold production was estimated to be less than one-
third of actual production.



45
Subsequently, the Government eliminated the requirement of an equity
interest in mining, except where previous exploration had been done, in which
case the requirement was reduced to 15%. The new regime for large companies
led to the signing of a series of agreements for minerals and petroleum
exploration (see above). The agreements generally granted exclusive right to
develop a specified area, required payment of royalty (5% ad valorem for gold)
and income tax, granted tariff and consumption tax exemptions on inputs and
required the hiring and training of local staff. There is some concern that
the extension of lengthy tariff exemptions for the larger mining companies was
too generous and created a dangerous precedent for future negotiations. The
less restrictive policy towards mining agreements was essential to provide for
efficient private sector development of the mining sector. However, the
Government continues to negotiate individual agreements on a case by case
basis, which take an average of 2-3 months to complete. The lack of clear
criteria for concessions granted is not likely to lead to an efficient tax
rate on mining operations. An alternative approach would be to fix a profit-
sharing schedule which would apply to all mining operations. Firms would
receive a much clearer signal on their own and their competitors' expected tax
liability. Individual agreements would still be necessary, but would focus on
the companies financial and technical ability to exploit the concession,
rather than the rate of tariff exemptions to be granted.
More recently, the Government established a market exchange rate for
purchases by the Gold Board, which led to a sharp expansion in declared gold
production in 1991. Some miners still are reluctant to declare their gold,
both to evade taxes and to avoid announcing the value of their claims. The
Government should consider the possibility of removing restrictions on the
free sale of gold. The continued power of the Gold Board to fix the price at
which all gold is exported creates some uncertainty regarding future gold
policies. The only present benefit of the system is that it ensures that all
officially-declared gold pays the royalty. If controls are deemed necessary
for tax enforcement, the Government could require an export license, granted
on evidence that the royalty was paid, as is now done with diamonds. This
system would be no less effective than required purchases by the Gold Board,
would simplify administration, would allow the market to differentiate prices
on the basis of quality and would increase confidence in the Government's
decision to cease manipulating the price of gold.
The Trade Regime
The Government has opened the economy through the unification of the
exchange rate, liberalization of capital flows and elimination of almost all
import prohibitions. Most of the distortionary trade policies that impaired
the efficiency of the economy have been removed. The remaining problems with
the trade regime are of a much smaller order of magnitude than those already
resolved. Nevertheless, it is useful to focus on further improvements in
trade policies that would enhance the credibility of the new regime and
increase competition.
Tariffs. Guyana adopted the CARICOM Common External Tariff (CET) and
rules of origin in the first quarter of 1991, resulting in a slight reduction
in tariff rates compared to the previous schedule. The CET is a highly-
differentiated tariff schedule ranging from 0% to 45%, with the following
broad categories: (a) tariff rates from 5-10% on imported inputs and basic
commodities (certain foodstuffs and other critical supplies) that do not
compete with CARICOM production; (b) tariff rates from 20-30% on inputs and
basic commodities that do compete with CARICOM production; (c) a 30% rate on
final goods (excluding basic commodities) that do not compete with CARICOM
production; and (d) a 45% tariff rate on final goods (excluding basic
commodities) that compete with CARICOM production.
Guyana has a complex system of tariff exemptions, granted either as part
of a package of fiscal incentives (see above) or through separate approval by
the Ministry of Finance. Section 12 of the Customs Act gives the authority to
the Minister of Finance to remit any customs duty when deemed appropriate. In



46
1990, 80% of imports in value terms were exempt from duty, resulting in an
average collection rate of 5%, compared to an average nominal protection rate
of 20%. About half of all duty-free imports, however, result from
international agreements (including CARICOM), or from imports under
multilateral and bilateral aid programs. In addition, oil imports paid only
minimal duties in 1990.
Crittle-' estimates that the nominal structure of protection combined
with exemptions, some subsidies and tax holidays, yields an effective rate of
protection for manufactures of 55%. He estimates that the net implicit
subsidy of the system is about G$150,000 per employee, or G$360 for each US
dollar of foreign exchange saved. Despite this heavy protection, domestic
manufacturers provide only about 15% of total taxable domestic demand. The
relatively moderate average level of effective protection may be an
understatement. Some firms are protected by a 45% tariffs on their final
goods and in addition were granted exemptions for most duties on inputs. A
recent survey of the 19 largest manufactures found that all but one were
exempted from most import duty obligations on material inputs and capital
goods. If it is assumed that value added iB one-third of total output and if
there are no duties on inputs, a 45% protective tariff on final goods implies
an effective protection rate of 135%. Given that some firms enjoyed such high
rates of effective protection, the average effective protection rate of 55%
implies that other firms received much lower, or negative, rates of
protection.
Thus, the combination of the CET and an arbitrary of system of duty
exemptions results in a highly-differentiated structure of protection across
products and firms. This structure is not consistent with any standard of
economic efficiency, nor does it represent a conscious subsidization policy
based on economic or other criteria. Furthermore, given recent reductions in
tariff barriers in other Latin American countries, the CET iS Bubstantially
out of line with regional averages. Most Central American countries, for
example, have moved to a tariff system with a range of 5-20%. Countries such
as Bolivia, Chile, Peru and Venezuela all have maximum tariffs of 20% or less
(see Table 5.2). The Government should consider the following steps in
achieving a more rational system of protection: (i) the Customs Act should be
amended to provide that any exemptions can be granted only by legislative
approval; (ii) tariffs should be lowered to a range of 5-20%; and (iii) a
lowering of tariff rates should be accompanied with elimination of all duty
exemptions and partial remissions.
Trade Regulations. The Government has removed all import prohibitions
(with the exception of meats and jellies), and there are no prohibitions on
exports. However, the system of licensing requirements remains in effect.
Export licenses are required for a variety of foods, fertilizers, hides and
skins, gold and precious stones, metal products, machinery, vehicles, and
various instruments. Licenses are required to ensure that products meet
health and quality standards, to ensure that exporters have paid taxes on the
product (particularly for minerals) and to guard against the export of stolen
goods (the rationale provided for licenses on export of scrap metals). The
Ministry of Trade, Tourism and Industry administers the licensing system, and
claims to process most licenses with 48 hours. However, licenses that require
review by other ministries, for example licenses that must be approved for
health reasons and licenses for agricultural products, may take longer.
Established exporters did not feel that the licensing system obstructed their
operations, but the process is nevertheless lengthy, and smaller firms may
have a more difficult dealing with the paperwork. The Government should
consider reducing licensing requirements to the minimum necessary to ensure
that Guyanese goods meet health standards and to assist in tax collection. In
the latter case, export licenses could be granted on the spot on presentation
of proof of payment of taxes.
5/   Crittle, F.J., "A Review of the application and Administration of
Consumption Taxes, In Guyana" (Processed), Georgetown, Guyana, 1991.



47
Table 5.2: TRADE REGIMES IN LATIN AMERICA AND THE CARIBBEAN
Range of
Imports Subject to  Unweighted Mean   Tariffs
Quantitative      Tariff Including  Including
Country         Year            Restrictions        Surcharges      Surcharges
(percent)      (percent)
CARICOM MEMBERS  1991-92    QRs vary across countries  20 a/         0-45
CENTRAL AMERICA
Mexico          1991         20% of local production    4            0 - 20
Costa Rica      1992            QRs removed            16            5 - 20
El Salvador     1992            QRs removed            16            5 - 20
Guatemala       1992                                   16            5 - 20
Honduras        1992            QRs removed            16            5 - 20
Nicaragua       1992                                   16            5 - 20
SOUTH AMERICA
Argentina       1991         8% of local production    15            0 - 22
Bolivia         1991            QRs removed            8             5 - 10
Brazil          1990          10% of tariff items      41            0 - 85
1994                                 14.2            0-40
Chile           1991            QRs removed           11              11
Colombia        1991            1 % of imports        6.7            0 - 15
Ecuador         1991                                   18            2 - 40
Paraguay b/     1991            QRs removed            16            3 - 86
Peru            1992            QRs removed           15              15
Uruguay         1991            QRs removed            12            10 - 30
Venezuela       1993         5% of local production    15            10 - 20
a. Excluding surcharges/stamp duties
b. Special import regimes enable actual tariffs to be below 15%
Source: IBRD staff estimates.
Most imports remain subject to licenses, with the exception of certain
imports intended for personal use and goods from CARICOM states that conform
to the CARICOM rules of origin. In many cases, licenses are automatic and
granted within 24 hours. The exceptions largely concern goods screened for
health reasons, including review of pharmaceuticals, cosmetics, foods and some
chemicals. It also appears that licenses are granted for imports of poultry
on the basis of domestic market conditions, to provide some protection for
domestic industry. Again, the Government should consider eliminating all
licensing requirements that are not necessary for reasons of health or safety.
There also was some concern voiced by private sector organizations that health
screening needs to be strengthened, particularly to guard against the
importation of cattle infected with hoof and mouth disease.
Export incentives. As a result of the elimination of most quantitative
restrictions coupled with adoption of the Common External Tariff, Guyana is an
open economy with a substantial degree of tariff protection provided domestic
producers. Such a regime makes it difficult for exporters to compete in
international markets, as the protective regime raises their costs compared to
exporters in other countries. Many of the larger manufactures exporters are
able to avoid the impact of protection on their costs by gaining tariff
exemptions, by evading payment of duties or by various non-legal methods.
However, this is not an efficient means of compensating exporters for the
costs of domestic protection, as this subsidy is granted regardless of the
share of exports in production.



48
A more desirable approach would be to compensate exporters directly for
the tariff on their imported inputs, through programs such as bonded
warehouses or a duty drawback scheme. The difficulty in Guyana is that such
programs require staff resources to administer effectively. The Government
must ensure that goods imported through warehouses duty free are actually used
in production for export, or that export declarations used to calculate
compensation for import tariffs are accurate. The administrative burden in
implementing a duty drawback program can be reduced by compensating exporters
at a fixed rate for the estimated import duty paid, without requiring
documentation concerning the value of imported inputs actually used. This
rate would be varied by the type of product, although the Government should
avoid an overly complicated scheme. The payment should be in the form of a
tax credit to be applied to future corporate income taxes. Even with this
simplified system, it is an open question whether establishment of appropriate
export incentives is the highest priority for using the Government's scare
administrative resources. Perhaps the economies in staff resulting from the
reduction of export and import licensing requirements could be used for this
purpose. A similar approach should be used towards proposals to set up export
processing zones or industrial parks with access to improved infrastructure
facilities. While these ideas have considerable merit, it is necessary to
ensure that they can be administered effectively.
Customs administration. The private sector generally gave customs
administration mixed reviews. Established traders who were familiar with
customs requirements felt that the system worked in an acceptable fashion,
although some complaints were voiced concerning slowness of processing of
goods. The head of customs receives a daily report on the progress of goods
through the system, and is therefore in a position to resolve unwarranted
delays. Customs officials stated that if proper invoices are presented, goods
usually can be cleared within 1-2 days. However, goods may be delayed beyond
that if it is necessary to obtain clearances from other agencies, for example
health certificates. In general, though, the level and intensity of
complaints about customs administration did appear less than in many other
developing countries, perhaps because evasion is very common.
Considerable evidence exists of evasion of import tariffs, either through
underinvoicing or smuggling. Underinvoicing takes various forms. About 25%
of imports consists of "barrel trade", or household goods imported in barrels.
Anecdotal evidence suggests that the majority of barrels are only cursorily
inspected. An inordinate amount of barrels are declared as containing "food
preparation not elsewhere specified", a category that accounted for 29,000 out
of an estimated 100,000 imports cleared into Guyana in 1990. These items were
valued at an average G$S100 per import (about US$130), while it is likely that
many barrels contained high-value items for resale domestically. Another
problem concerns undervaluation of container imports by the established
traders. Examples have been reported of a container clearing customs with a
declared value less than the cost of freight and insurance. Finally, there
also are reports of goods imported duty free as inputs by registered
manufactures being diverted to retail markets.
Smuggling appears commonplace, encouraged by the high consumption tax and
tariff rates coupled with poor enforcement. Transport of dry goods (such as
cigarettes and groceries) from Suriname across the Courantyne River is perhaps
the dominant source of illegal imports, but they also enter from Venezuela and
through the ports in Georgetown. Many of these products are exported legally
from Suriname, although price controls in that country also encourage the
illegal export of goods to be sold in the freer markets in Guyana.
Discussions with retailers at the large markets east of the Berbice river
confirmed that most of the goods came from Suriname. The size of the market
in smuggled goods is of course difficult to judge. Based on reasonable
estimates of the physical capacity to ship goods through Guyana's borders, an
upper limit on illegal imports is US$50 million, or about 25% of official
imports.
Prevention of smuggling is a difficult task, given the length of Guyana's
borders and lack of resources. The Suriname border is particularly difficult



49
to police, as it is defined as the high water mark of the river on the Guyana
side. Thus, goods can leave Suriname legally and cannot be interdicted on the
river itself. Some success was achieved in raiding the markets in eastern
Guyana and confiscating smuggled goods. However, these measures engendered
considerable opposition, as people are accustomed to the availability of goods
at prices that do not reflect consumption tax or tariffs. Since then, the
customs administration has adopted the view that control of smuggling should
be accomplished at the point of entry rather than in the marketplace.
Enforcement of the tax system is essential to domestic industry.
Smuggled goods enjoy a large competitive advantage on many domestically-
produced products; it is not reasonable to expect that domestic production can
compete. The example of matches is particularly dramatic. The 100%
consumption tax on matches makes it impossible for the local producer to
compete with smuggled products, but the industry has been able to export
matches to other CARICOM countries. This problem would be reduced, although
by no means eliminated, if the recommended reductions in consumption tax rates
were adopted.



50
VI. THE FINANCIAL SECTOR
During the last few years, the financial sector has been going through a
severe contraction. Between 1988 and 1991, the level of real assets in the
banking sector has decreased by 33%. Net credit in real terms has declined
significantly, and the government share remains very high. This has been the
result of macro-economic management policies designed to reduce high public
sector fiscal deficits and high rates of inflation, and to realign the
exchange rate. Aside from a shrinkage of real assets, the commercial bank
subsector has not been particularly affected, with one exception, since their
loan exposure was low. In fact, a number of them have significantly
benefitted as a result of the revaluation of their foreign currency holdings.
The impact on the non-bank financial institutions has been more severe,
particularly for the development bank GAIBANK, since it had a high exposure to
exchange rate risk. Overall the performance and solvency of the financial
sector has been mixed. While most of the commercial banks appear solvent and
profitable, two of the larger public financial institutions are in financial
difficulty. Capital adequacy ratios are below prudential levels and the
supervision structure is fragmented and inadequate. While interest rates in
Guyana are fully liberalized, the unwarranted dominant presence of the state
in the financial sector, casts doubts about the degree of "market"
determination of interest rates. The economy is still highly monetarized and
the financial sector remains fairly underdeveloped with a limited degree of
financial intermediation and with a limited number of financial instruments.
In the following section we present a summary of the sector. A detailed
analysis of each institution is provided in Annex A.
Structure of the Financial Sector
Banks. The banking sector consists of five banks: the Guyana National
Co-operative Bank (GNCB, 40% of total assets) and the National Bank of
Industry and Commerce (NBIC, 34%), are the largest. The remaining three are
the medium-sized Guyana Bank for Trade and Industry (GBTI), with market share
of 17% and the smaller Bank of Nova Scotia (BNS) and Bank of Baroda (BB), with
market shares of 5.6% and 2.9%. Total assets in the banking sector as of
September 1991, were G$ 19,178 millions (see Table 6.1). The state owns 97%
of GNCB, 53% of NBIC, and 30% of GBTIP. Bank of Baroda is owned by the
state-owned Bank of India, and Bank of Nova Scotia is owned by a private
Canadian bank. Overall the state owns about 62% of the assets of the banking
sector. However, it has majority control in banks that have 73% of total
banking sector assets.
The profile of all the banks is very similar, with the exception of
GNCB. Their source of funds is mostly from deposits, which constitute between
80% and 90% of their liabilities. Their portfolio is highly liquid. They lend
only a small proportion of collected funds, from 16% to 30%, with the rest
invested in Treasury bills. As a result their risk exposure is minimal and
can be considered quite safe. All of their operational and financial
indicators appear to be quite adequate. Their operating costs to assets ratio
have been in the 3% to 4% range. Their percentage of bad and doubtful loans
does not exceed 5% of loan value. Their rates of return on assets have been
quite healthy, in the 4% to 8% range annually. Their rates of return on
equity have been in the 70% to 90% range, outpacing the inflation rates.
Nearly one-third of these profits in 1990 and 1991, however, can be attributed
to gains from the devaluation of the currency. The banks are urban oriented,
operating almost exclusively in Georgetown. Their lending and borrowing rates
are very similar, in the 26% to 27% and 36% to 38%, ranges respectively.
j/   Prior to August 1991, the share had been 100%.



51
While near 50% of their loans are technically over a year, that figure is
misleading since most of the loans are on call. This means that the bank can
terminate the loan at any time and request immediate full payment. As a
result there is little term premium assessed on loans. Finally all banks
appear highly leveraged with capital assets ratios well below the prudential
required level of 10%.
Table 6.1: GUYANA - Banking Sector
Total Nominal Assets Banking Sector and Real Growth Rates
(G $1,000,000)
1991              1990              1989               1988
-  -- - - -- - - -- - -   -  -   -  --- --   -- --   -  -- - - - - - - - - - - -   -- -- --   -  - ------- - - - -   - - -     - - - - - -    
Assets Share  Equity  Assets Share Equity Assets Share Equity  Assets Share Equity
(percent)         (percent)         (percent)          (percent)
GNCB    7,748  40.40 1,012   5,518  38.59 465  3,560  38.21  158  2,341  39.30  114
NBIC    6,467  33.72  318   5,086  35.57  245  3.508  37.65  133  2,005  33.66  68
GBTI    3.333  17.38  284   2,780  19.44  149  1.580  16.96  97  1,278  21.42  42
SCOTIA  1.073  5.59    6    490  3.43          383   4.11        176   2.95
BARODA   557  2.90   18    426  2.98   9    286   3.07           159   2.67
19,178  100.0 1,638  14,300  100.0 868   9 317  100.0 388  5, 957  100.0  224
Memorandum Item
1991   1990  1989
Annual Real Growth Rate of Assets:    -20  -8   -18
(percent)
Source: Bank of Guyana (1991).
In contrast to the other banks in the sector, GNCB, lends a substantial
part of its funds, 60%, and is the only one to have branches outside
Georgetown. As a consequence it provides for 75% of the loans of the banking
sector, most of them on call, with an average maturity of over 5 years. In
the process it has overextended itself, reaching unsafe capital adequacy
ratios of 3 to 4%. While it has been fulfilling the role of financial
intermediary and providing long term credit, its quality control and financial
performance has been quite disappointing. It has over 25% of its loan
portfolio in arrears, and is in the process of writing off G$ 1,400 million, a
far larger amount than its equity.
Non-Bank Financial Institutions. Beyond the main stream banking sector,
there are trust companies, and mortgage finance institutions (MFI). Their
main source of funds is deposits, other than demand, from the public. Because
of that restriction they are not considered banks, and thus not subject to the
Banking Act regulations or to the supervision of the Bank of Guyana, (BOG).
Nevertheless, trust companies can be considered as the closest competitors to
banks for savings and term deposits. There are four trust companies, GNCB
Trust, Trust Company Guyana LTD, Secure Trust International LTD, and Globe
Trust and Investment Company LTD. GNCB Trust is the largest with 90% of the
Trust market share, and is fully state owned. GNCB Trust engages in two types
of activities. First, for a fee manages 12 pension funds of public
institutions. And second it serves as a financial intermediary for mortgage
and other loans. It lends at market rates and appears to be profitable.
However, it is a highly leveraged financial institution, and its solvency is
questionable, given its capital-asset ratio of 1.2%. There is little
regulation to guide the operations of this institution, and literally no
supervision. Although the nominal growth of its assets, through the last five



52
years, has been significant, it has by no means outpaced the inflation rate.
In fact, in real terms, from 1987 to 1991 assets have decreased by 30%.
Mortgage finance institutions are special institutions offering mortgage
finance services to their depositors and special customers at privileged
rates. There are two of them, the Guyana Cooperative Mortgage Finance Bank
(GCMFB) and the New Building Society LTD (although technically GNCB Trust
should be considered part of that subsector, since it engages in mortgage
finance). The former is fully state-owned with a market share in the subgroup
of 4%, while the latter is privately owned, with a market share of 60%. The
GCMFB was designed as a government institution to channel government funds, at
subsidized rates, for housing development at present, interest rates charged
range from 13.5% to 24%. Its source of funds has been government transfers,
loans from domestic insurance companies, and housing debentures. It has not
been very active during the last couple of years, since no new funds have been
transferred to it from the Government and it cannot afford to borrow from the
private sector and make loans at below market rates. As a result of its
lending practices, lax enforcement, and inflation, it does not have the
potential to become financially viable. On the other hand, The New Building
Society is highly capitalized and operates like a credit union. Its funds are
deposits from its members, to whom it lends long term for housing mortgage
operations at a below market rate. It is financially viable because it
mobilizes its own deposits (offering below-market rates), invests 40% of its
assets in Treasury bills, and is exempt from paying any taxes.
There is one development bank, the Guyana Co-operative Agriculture and
Industrial Development Bank, (GAIBANK), the third largest financial
institution in the country, specializing in lending to the agricultural and
industrial sector. It is the only financial institution in Guyana that covers
the non-urban sector, where the only alternative is the informal market where
the current rate for loans is about 20% per month. It is not allowed to
accept deposits from the public, and its source of funds is mostly (90%) from
development credits from donors and international agencies. Because of
restrictions on the use of these funds, GAIBANK's lending has been primarily
to the industrial sector. It lends medium to long term, to both public and
private sector, in the part, its rates have often been below the Government's
cost of funds; at present, it charges 32.5% for domestic currency loans, and
15% for loans denominated in foreign exchange. All of its financial
indicators are quite unsatisfactory. It is perceived to be a grant-help
institution, with an arbitrary assignment policy of loans, and with a lax
policy of enforcement and collection and as a result it has accumulated high
levels of arrears (35%). Aside from its numerous bad loans, in the past two
years it has incurred significant losses, as a result of the currency
devaluation, since most of its liabilities were in foreign currency, while
most of its assets were in loans denominated in domestic currency. In the
very near future it is going to have to write off those losses as well as the
arrears accounts. Those losses are ten times the level of its equity.
Although the government has agreed to cover the losses, its record through the
last ten years would tend to indicate that its financial viability and
capacity to administer credit according to bonafide economic practices is, at
best, questionable. During the past year, however, it has attempted to reduce
staff and improve its operating procedures.
Completing the description of the financial system, are credit unions
(5), insurance companies (15 of them with assets of G$ 4,800 million) and
pension schemes (23 of them with assets of G$ 1,000 million). There are two
apparent problems in this subsector. First, it has been heavily
decapitalized. Its assets have decrease in real terms by near 50% over the
last four years. And second, most of its funds, which are long term, are
invested in short term paper, like Treasury bills. The only exception are
their limited investments in new equity, since these institutions are not
allowed to invest in outstanding equity. The argument is that the absence of
a secondary market for equity makes price determination difficult. Although
the credit unions take deposits from the public, they are small and declining
in importance.  They accept non-interest bearing deposits, lend small amounts



53
to their members (for small ticket durables and consumption) at a 1% interest
rate.
With one exception, The New Building Society, of all of the important
non-bank financial institutions are state owned and part an umbrella
organization, the Co-operative Finance Administration (COFA). This
organization is an administrative body established to exercise supervision and
control over the financial institutions under its purview, with the exception
of GNCB, since by being a bank is supervised by the BOG. The rest of the non-
bank financial institutions are minuscule by comparison, with little financial
impact. Including non-bank financial institutions, the state share of assets
in the broad financial sector is around 75%.
Credit for small enterprises is also available from the Institute of
Small Enterprise Development, a private, non-profit and tax-exempt
organization founded in 1986 to serve small and medium scale enterprises.
Funding for the ISED comes largely from foreign concessionary official
sources, including IDB, USAID, and the British and Canadian aid programs. In
1991 it lent G$ 103 million in 540 projects, or an average loan of G$ 191,000.
Interest charges are set to be slightly below the Bank rate, and were 29% in
March, 1992. Although about five percent of its portfolio is in arrears, the
ISED makes a profit since its funding is derived from grants or loans on very
concessionary terms. It has three branches outside of Georgetown.
Reoulation
The regulatory environment for the financial sector is embodied
essentially in two acts, the Banking Act and the Co-operative Financial
Institutions Act. The following issues are a concern:
-    There are no standards set for provisions for losses in the
regulatory environment. As a result the provisions set by a number
of financial institutions are below the prudential levels (see
Table A.4, Annex B). The Centro de Estudios Monetarios de Latin
America (CEMLA) criteria on provisions should be adopted. These
are described in Annex B.
-    The capital required to start a new commercial bank (G$1.0 million)
is excessively low. The amount was set in the Banking Act, enacted
in the late seventies, and has never been adjusted for inflation.
A figure in the range of GS30 million would be more appropriate.
Since an application for the establishment of a new bank to serve
the needs of the timber sector is in the process of being
submitted, there is some urgency for the revision of this capital
requirement.
-    Minimum capital adequacy ratio (capital-asset ratio) is set at 10%
for banks. There are no capital adequacy requirements ratios set
for non-bank financial institutions. As of now almost all banks
and all of the trust companies are below the 10% level. In
particular, the levels for the trust companies are excessively and
dangerously low (see Annex B).
-    Existing guidelines on the use of funds by commercial banks are
deficient. For example, there are no clear guidelines about equity
investment. Likewise there are no rules about the issuing of debt
or equity.
-    As of now, loans to non-residents need to be approved by BOG.  This
requirement appears to be an attempt to maximize the inflow of
foreign direct investment. However, it is too rigid, increases
transaction costs, and burdens excessively the BOG. A maximum
should be set, underneath which loans to non-residents need not be
cleared by the BOG.



54
There are no guidelines for lending to related parties, like
shareholders and relatives of directors and employees. The Banking
Act only addresses restrictions on lending to directors and
employees. Maximum loan to a director is 2% of paid-up capital and
reserves, while to an employee is two years emoluments.
Any loans or deposits in foreign currency need to be approved by
BOG.
Maximum loan to an entity is 25% of paid-up capital and reserves.
The liquidity ratios requirements are 25% of demand liabilities and
20% of time liabilities.
The requirements and guidelines for entry and exit in the sector
are ambiguous.
Although the Bank of Guyana (BOG) is described to be an autonomous
institution, in practice and in law it is not. Many of the clauses
of the Banking Act, state that the actions to be taken by the BOG
require the consent or approval of the Ministry of Finance (MOF).
The Governor of the BOG reports to the Minister of Finance. The
establishment of new banks as well as the creation of new branches
by established banks needs to be approved by the MOF. Likewise,
any changes of directives needs to be approved by the MOF, and
there are no restrictions on the lending to the Government by the
BOG. In just about any activity, as by the Banking Act the
Minister of Finance has the authority to overrule the dispositions
of the BOG.
Supervision
There are two basic problems with the supervisory system in the Guyana
financial sector. The first one refers to the structure of supervision and
the second one to the degree. The structure is fragmented and the degree
ranges from insufficient to non-existent. The commercial banks are supervised
by the Bank of Guyana (BOG), through the Inspector of Banks. The Co-operative
Financial Institutions, which are non-bank state-owned financial institutions,
are supposed to be supervised by the Co-operative Finance Administration
(COFA)-. The New Building Society and private insurance companies are
supposed to be supervised by the Ministry of Finance through its Commissioner
of Insurance. The credit unions are supposed to be supervised by the Guyana
Co-operative Credit Union League, through its Chief Co-operative Officer.
And, finally it is unclear who is supposed to supervise the private trust
companies and pension schemes, if anybody.
Part of the reason for this peculiar supervisory structure, is the
Guyana Banking Act which defines banks as, "institutions that accept demand
deposits from the public". That definition excludes any institution, like
GNCB Trust and the New Building Society, that accepts savings and time
deposits. The Act proceeds to give jurisdiction over the supervision of banks
to the BOG.
An evaluation of the degree of supervision is underscored by noting that
no inspection or examination of any of the commercial banks has taken place
at all in the last three years. Moreover, out of eight positions in the
Supervisory Department of the BOG, the four top positions have been vacant for
at least three years, with the top position vacant for seven years and has not
had a Supervisor since 1989. The dates of the last inspection of the
commercial banks are as follows:
2/   while GNCB comes under COFA, it is supervised by the BOG as a commercial
bank.



55
-    GNCB  Feb 1988, a loan inspection
-    GBTI, Jan 1987, a loan inspection
-    NBIC, Dec 1988, a loan inspection
-    Bank of Baroda, Feb 1984, a general inspection
-    Bank of Nova Scotia, Aug 1988, a general inspection
The non-bank financial institutions.fare no better. COFA has never
conducted any formal examination of the institutions under its jurisdiction;
nor has it issued any guidelines governing the conduct of operations of these
institutions. It remains a weak, understaffed organization that functions
largely in an advisory role to the Ministry of Finance.
Some evidence of the undesirable consequences of the lax supervision in
the Guyana financial sector is as follows:
-    GNCB is planning to write off G$1.4 billion of its portfolio, an
amount much larger than its equity.
-    GAIBANK has a 65% non-productive assets to assets ratio, and
sooner or later will have to write them off.
-    Despite the requirement that leverage ratios do not exceed a 10:1
ratio, capital adequacy ratios exceedingly and dangerously low.
Examples are, GNCB Trust has a 2% capital to assets ratio; with
over 60% of their portfolio in mortgage loans, it is extremely
vulnerable to fluctuations in the economic environment. Trust Co.
Guyana LTD, has likewise a 2% capital asset ratio, and GNCB capital
asset ratio is 5%.
-    The provision levels are exceedingly low, with differences between
required and actual provision ratios of up to 8 percentages points.
-    Some of the banks, particularly GNCB, are routinely excessively
late in submitting their consolidated statements to the BOG.
In addition, the information routinely provided by the banks to the BOG
is inadequate for supervisory purposes, particularly for the rating of
portfolio loans, since there is no past due and maturity data on loans. The
common practice for banks in Guyana of allowing for loans to be on overdraft
(an additional 2% premium is charged) makes the rating of the portfolio more
difficult. Lastly, the current staff at the Supervisory Department of the
BOG, do not have the capability or skills to analyze and supervise the banks,
mostly as a consequence of being severely understaffed.
The Bank of Guyana recognizes these problems and is receiving some
technical assistance from the IMF to strengthen bank supervision. In
addition, COFA is receiving technical assistance from the CDB.
Taxation
Direct taxes on financial institutions consist of a flat tax on profits
of 35% (5F% prior to January 1992). Interest from bank deposits is taxed only
at a flat 15% rate, which is a final tax (although it is described as a
withholding tax, since it is withheld by the banks prior to payment). There
is no double taxation.
Reserve Recuirements
Reserve requirements are 11% of demand deposits and 9% of savings and
time deposits. There are no forced investments in the system. Perhaps the
only exception was in mid 1991, where commercial banks were compelled to
purchase G$ 4,089 million in three year debentures issued by the Treasury, to
soak up their excess liquidity. They were issued at a variable rate linked to



56
the average of the last three months Treasury bills. That rate was 34.3%,
much higher than the existing Treasury bill rate.
Interest Rate and Credit Policy
In June 1991, the Government introduced a system for the competitive
bidding of 90 days Treasury bills at monthly auctions. The importance of the
Treasury bill auction is underscored by noting that it is "market" determined
and it is supposed to be the anchor rate of the system, with the Government
using it to set and adjust the Bank rate. And the latter is the reference
rate for all the others rates in the system. The structure of the auction is
as follows. Prior to the auction, information is provided to the public on
past quantity and amount awarded, as well as the amount to be auctioned (the
latter piece of information started to be provided at the September auction).
Bids are submitted in sealed envelopes prior to the announced deadline.
Multiple bids are allowed and each awarded bidder pays his bid value
(discriminatory price auction). The minimum bid is G$ 500. After all the bids
have been submitted, the average price is computed. The cutoff level to
determine awards has been 3% points above the average. Those bids above the
cutoff level are rejected. If there is excess supply, Treasury bills can be
purchased by anyone at the average price of the auction. There is no private
secondary market for Treasury bills. However, the BOG stands ready to
repurchase bills before maturity, if requested. Data on average rates,
amounts auctioned and issued at the auctions is presented on Table 6.2.
The average quantity auctioned monthly has been around G$ 2 billion.
That means that at any time Treasury bills are absorbing nearly 33% of the
assets of the banking sector, and over 50% of the productive assets of the
sector. The average number of players has been moderate, about 20, mostly
because single individuals can participate and the minimum acceptable quantity
is quite low.  However, 90% of the bid value has been concentrated in a few
institutions.  In that sense, the Treasury bill market is thin. There are
basically five major players (and a number of small players) in the bidding
and almost all of the most important are state-owned institutions.  In the
Treasury bill auction, in a sense, the government, is both the buyer and the
seller, which is a point of concern.
Table 6.2: TREASURY BILL AUCTION DATA, 1991
Date    Amount Auctioned   Aver. Rate        Amount Issued
(G$ billions)    (percent)         (G$ billions)
June            2.4            30.83         2.20    (1.63)
July            1.5            30.93         1.40    (0.95)
August          1.5            31.25          1.47    (1.20)
September       2.3           31.12          2.30    (1.86)
October         2.5            31.14          1.84    (1.96)
November        1.5            31.01          1.45    (0.63)
December        2.6            30.89         2.65    (2.02)
January 1992   1.9             30.68         1.85    (1.21)
Note: Numbers in parenthesis are the amounts awarded at the
auction date. The other number includes additional
purchases after the auction at the average price.
Source: Bank of Guyana (1991).
The BOG, with the blessing of the MOF, sets the bank rate. The BOG
policy is for the Bank rate to be slightly above the Treasury bill rate.
Interest rates for commercial banking are, in principle, fully liberalized.
However, the BOG sets a suggested prime rate one percentage point higher than



57
the Bank rate, although the banks are legally free to set lending rates as
they please. Nevertheless, the evidence indicate that the quoted rates hover
around the suggested ones with very small variance.   While in the past the
real rates were negative, from July 1991 on real interest rates appear to be
positive. Table 6.3 presents a summary of interest rates in the financial
sector and inflation numbers for 1991. While the estimated inflation for 1991
runs as high as 70%, most of it took place up till June (it was 60% from
January to June), and was largely induced by currency devaluation. From July
on, it has been running at a rate between 1% and 2% per month. Savings and
term deposit rates have remained roughly constant through the year in the 26%
to 30% range, while lending rates have been in the 35% to 40% range, and
Treasury bills in the 31% to 32% range.
The stickiness of the interest rates in the face of significant changes
in the inflation rate can be explained, in large part, by the BoG's policy of
paying high interest rates on excess reserve deposits held by banks with the
BOG. These accounts, called Special Deposit Accounts (SDA), were drawing
interest of 30% during 1991. At this rate, there was little incentive for the
commercial banks to bid rates for Treasury bills down below this rate, since
SDA's are as safe and liquid as Treasury bills. In March of 1992, the BOG
changed its policy slightly, and rate on SDA's is set at 2.50 points lower
than the Bank rate, which is only slightly lower than the Treasury bill rate.
Because of this narrow spread between Treasury bills and the SDA rate, and the
circularity in the setting of the rates, there is still very little
flexibility in the system. While interest rates are nominally free, they are
very much influenced by the policies of the central bank, and as long as the
Treasury bill market is dominated by the commercial banks, there is little
likelihood that rates will move.
Interest rate policy for non-bank financial institutions is set by the
MOF.  While interest rates for GAIBANK, at 32.5% for domestic loans, seems
appropriate, in the past these rates have often been set substantially below
the cost of funds to the Treasury. It is not entirely clear what rate is
appropriate for long term loans from GAIBANK, and how they should be set in
relation to the Government's cost of funds, which is essentially a short term
Treasury bill rate. The best alternative, to insure automatic adjustment, is
for GAIBANK to shift to a variable rate lending instrument, using a spread
above the T-bill rate. Likewise, lending policies for the Mortgage Finance
Bank need to be brought in line with market conditions. Rather than broad
interest subsidies to all borrowers, the Government should shift to programs
funded out of the budget that are clearly directed at the poor. Raising
GCMFB's lending rates to market levels would also enable it to tap the private
market.   Again, given inflation and interest rate uncertainties, a variable
rate instrument would seem to be the most prudent. However, some
consideration needs to be first given to the future of GCMFB. This is a small
institution with a weak portfolio, and mortgage finance is already provided at
market rates by GNCB Trust and the New Building Society. It could be merged
with or sold to one of these institutions, or simply closed.
The effective margins and spreads of the commercial banks also appear
high. Their effective cost of funds is around 21%, while their effective
lending rate is around 29% (accounting for reserve requirements). Given the
low risk of their portfolio, over 60% in Treasury bills, for most of them, an
8 percentage points margin seems a bit high. Similar margins persists if we
account for all assets (including fixed assets). That applies for all of the
commercial banks, since as we described earlier, all follow the similar
operational strategies. The only exception is GNCB that operates with smaller
margins, and as a consequence of a higher percentage of loans in its portfolio
and perhaps poorer screening, has a much higher percentage of bad loans. That
uniformity in the system adds to the perception of a lack of effective
competition in the system.
With one exception, all banks appear to be offering similar rates for
savings and term deposits. As of 1991, while GNCB has been offering 30% for
savings deposits, the rest of the banks have been offering rates in the 25.5%
to 27% range.  For term deposits the rates have been in the 28.5% to 31.5%



58
range, with again GNCB offering the highest ones. The discrepancy with GNCB
arises more from a lack of information on its part than from the pursuing of a
deliberately different interest rate strategy.- On the lending side, the
rates are in the 34% to 40% range, with GNCB rates being in the lowest part of
the range.
Table 6.3: INTEREST RATES OF GUYANA BANKING SECTOR, 1991
(percent)
Savings Deposits              Time Deposits                 Loans
3 mos.    6 mos.
GNCB             30.0                   30.5       31.0                35-37
GBTI             27.0                   28.0       30.5                35-39
NBIC             26.0                   29.5       n.a.                34-38
Scotia           25.5                   28.5       29.5               34-38
Baroda           26.0                   28.5       29.5                34-38
GNCB Trust                              27.0       29.0                36-40
GAIBANK                                                                 30
Treasury Bill 31.25
Prime Rate       33.5
Bank Rate        32.5
Inflation Rate  70.0
Source: Bank of Guyana (1991).
Access to credit appears to be adequate, at least in the urban areas,
particularly for those who can provide collateral. All the commercial banks
(except GNCB and GAIBANK) appear to be quite strict on the collateralization
of their loans (GNCB is improving in this regard). This is a good business
practice that minimizes costs and risk. However, it screens out a number of
small merchants and agricultural producers from the formal credit market, that
otherwise could be reasonable credit risk (they are the ones that borrow and
repay in the informal market). It appears to be costly to identify them.
Improving on the titling of property should be undertaken to ameliorate the
access problem. Aside from collateral problems, the apparent low demand for
credit from low risk borrowers, seems to be driven more from the "high"
interest rates. The situation seems to be different in the rural sector,
where access to credit is a problem. Most banks do not have branches outside
Georgetown. GNCB has only 8 branches outside of the capital, and NBIC has
one. This contributes to the exorbitant interest rates quoted in the curb or
informal market, 20% interest per month. A policy to integrate the informal
credit market operators into the formal credit market, by lending through
them, should be worth considering, particularly given the record of GAIBANK.
3/   Even though GNCB has been offering a significantly higher rate for
savings accounts than the other banks, its share of those deposits is
not higher in relative and absolute terms than the other banks. In fact
NBIC, offering a much lower rate on savings deposits at 26%, collected a
larger amount of funds than GNCB.



59
Financial Intermediation
The financial system is relatively underdeveloped. Guyana has a cash
economy and no institution induced innovation has taken place during the last
decade. The level of financial intermediation is very low. Checks are
sparingly used, and payment by credit card is non-existent. The reason for
the monetarized economy is twofold. First as a result of a weak legal
enforcement of contracts (as the failure to cover a check), checks are
undesirable. Second, this is a culture of tax avoidance, and cash
transactions facilitate that activity.
Fig. 6.1:  NET  DOMESTIC  CREDIT
Septerrb.r 1989 - SePtember 1991
17
16-
15            
14
13
_      '~~12
o
10
9
0
0      ~~~7
a
o         6
-      ~~~5
4
3
2
10  12  2  4  6  9  10  12  2  4  6  9
Source: Bank of Guyana (fIle: ndcguyl)
0 TOTAL   +   PUBLIC (NET)  O   PRIVATE
6.1.      If one of the desired roles of commercial banking is to channel
deposits and savings to the productive sector, then the financial sector is
failing in that regard. Particularly as a result of the crowding out effect
on the credit market by the public sector. On average little more than 30% of
the deposits and savings reach the productive sector. Moreover, there is
little long term intermediation. Although most banks grant long term loans,
most of them are on an "on call" basis, rendering moot the benefits of the
long term of the loan. With one exception, the profile of the commercial
banks portfolio is 20% loans, and the rest in heavily liquid instruments like
Treasury bills. Even of more concern is the portfolio profile of institutions
with long term liabilities as insurance companies, pension funds and trust
companies. Most of the portfolio of those institutions is in short term
Treasury bills, so that long-term deposits are funding short term credit
needs, largely of the public sector. Figure 6.1 displays the distribution of
total net credit in the system, in nominal terms, and its distribution between
the government and the productive sector, for the period 1989 to 1991. The



60
proportion of domestic credit reaching the private sector is increasing, but
remains rather small, in the 20% to 30% range. In part, this reflects the
depressed level of demand in the private sector. In real terms between, Dec
1989 to Sept 1991, private sector credit, decreased by 15%, and total net
credit to the system decreased by 60%.
Recommendations
To improve the performance of the sector in terms of efficiency and
safety, the following would be required.
On Regulation and Supervision
-    Establish the Bank of Guyana as the regulator and supervisor of the
entire financial system, including any institution, public or
private that collects funds from the public, not just demand
deposits. This would include, GAIBANK, the Trust Companies, and
Credit Unions.
-    Abolish COFA or merge it with the Ministry of Finance.
-    Rewrite the Banking Law Act so as to grant greater independence to
the Bank of Guyana.
-    Update the capital requirements needed for starting a banking
institution; Minimum capital requirement should be at least 10% of
demand and time liabilities.
-    Adopt the CEMLA criteria for the banks setting of provisions for
losses, (see Annex B).
-    Impose a maximum loan level below which, loans to non-residents
need not be cleared by the BOG.
On Interest Rates
-    Widen the spread between the rate on excess reserves (SDA's) and
Treasury bills.
-    Modify the interest rate policies of the GAIBANK and GCMFB so that
they lend at variable rates linked to the Treasury bill rate.
On Institutional Changes
-    Consider further divesting the share of the state in the financial
institutions. In particular the state should divest GNCB and GNCB
Trust, and reduce its stake in NBIC, and GBTI. Another alternative
would be to issue convertible bonds.
-    Restructure GAIBANK including a redefinition of its lending
strategy and strengthening of its enforcement and collection
practices. Since GAIBANK is basically the only financial
institution covering the rural areas or lending significantly to
the rural sector.
-    Close the Guyana Co-operative Mortgage Finance Bank, or merge it
with GNCB Trust Company, which operates in the same market and is
financially more viable. With GNCB Trust and the New Building
Society covering the housing mortgage market, there is no
justification for maintaining a separate, small and financially
non-viable institution.



61
On New Financial Instruments
-    To save on transaction costs, provide for more accurate planning
and potentially develop a market for long term credit, introduce
longer term Treasury notes or debentures, either at a fixed, market
determined, prices or at a variable interest rate linked to the
Treasury bill rate.
To facilitate the development of bonafide longer term credit,
consider the issuing of bonds by public financial institutions at
variable rates linked to Treasury bill rates. Another possibility
is for state owned institutions to issue bonds convertible into
shares over time as a way for the government to divest ownership.



62
VII. AGRICULTURE AND DEVELOPMENT
Output Structure and Trends
Guyana is endowed with ample natural resources. Of the country's 21.5
million ha., about 500,000 ha. are suitable for cultivation, 1.2 million ha.
are in permanent pastures and 16.4 million ha. comprise forests and woodlands
most of which are currently inaccessible. Of the 500,000 ha. suited for
cultivation only 140,000 ha. are currently being used. The vast majority of
agricultural activities take place in the coastal plains. Coastal soils are
generally fertile yet extremely low-lying. For more than five miles inland
the land is below sea level at high tide. Drainage and water control are
therefore major problems, and agricultural development in Guyana is closely
tied to the struggle of defence against water from the sea and the major
rivers.
Table 7.1: COMPOSITION OF AGRICULTURAL GDP, 1983-91
(percent)
1983      1985        1987        1989       1990       1991
Sugarcane            26         37         60          33          31        48
Rice                 14         10          6          11           6        14
Other Crops          26         21         14          18          18        11
Livestock            14         10          7           8           7          4
Fishing              10         10          8          25          34        21
Forestry             10         10          6           5           5         3
Total             100       100         100         100         100       100
Agr./GDP Share:      24         27         30          40          38        39
Source: Bank of Guyana.
Agriculture has traditionally been one of Guyana's key economic
activities. In 1990, the sector's value added of roughly US$133 million
accounted for almost 38% of GDP, 45% of registered merchandise exports, and
35-40% of total employment. Agricultural production is heavily based in sugar
and rice; in 1990, these two crops accounted for roughly 31% and 6% of
agriculture's GDP respectively (Table 7.1). Other relatively important crops
produced (mainly for the domestic market) include: plantains, pineapples,
coconuts, cassava, coffee, and citrus. Livestock production contributes to
about 7% of agricultural GDP; fishing activities contribute another 34% of
agricultural GDP. Although forest areas are extensive, forest activities
account for only about 5% of agricultural GDP. Since most of the sugar, rice,
fishing and forest activities are geared to the international markets, the
sector has traditionally been a very important participant in the country's
international trade (Table 7.2).
Livestock and crop production (with the exception of sugarcane), is
characterized by the predominance of small farms. According to the last Farm
Household Survey (1978), farms of less than 6 ha accounted for about 80% of
the country's 24,000 farms. It is estimated that about 70%-80% of these small
farms are geared to rice production, with the remainder producing food crops.
Many of these small farms combine their crop production with some milk
production. There are, however, several larger agricultural operations that
include private rice growers, some medium- and large-sized forest and fishing



63
operations, and large public-sector enterprises such as the Guyana Sugar
Corporation (GUYSUCO) and the Livestock Development Company (LIDCO)--both in
the process of being divested from the public sector.
Table 7.2: AGRICULTURAL EXPORTS, 1975-90 a/
(USS million)
1975-80    1981-85   1986-89    1990
Sugar                                   114.1        79.2       84.4    81.4
Rice                                     31.4        22.1       14.0    13.0
Timber                                    4.5         4.5        3.5     4.6
Agriculture                             154.7       107.7      124.0   121.9
--as percentage of all exports           52%         47%        53%     48%
a.   Corresponds to the annual average value of exports of rice, sugar, timber
and shrimp.
Source: Bank of Guyana.
Economic Policies and Economic Performance
Since the early 1970s increased Government intervention into all aspects
of economic activities was the prevailing trend of Guyana's economy.
Agriculture, being the country's most important productive sector, was no
exception to that trend. The sugar industry was nationalized in 1976,
Government monopolies were established for the importation and distribution of
agricultural inputs, and restrictive trade and pricing practices were
established for most of the sector's key commodities, i.e., sugar, rice, milk,
coconuts (through price and trade restrictions on edible oils), and poultry
products.
Direct interventions on the sector, however, were not the only venue
through which the Government affected the sector's incentive structure and Its
performance. During the 1980B, Government financing of the increasingly large
public sector deficit led to inflation. In its efforts to control inflation
the Government introduced domestic price controls and did not undertake the
necessary devaluations of the exchange rate. This led to a significant
deficit in the current account which the Government tried to control by
imposing stringent controls on international trade. The above-mentioned
difficult economic environment impacted the agricultural sector mainly
through:
(a)  the absence of a devaluation led to an appreciation of the official
real exchange rate altering the country's relative price structure
to the detriment of exportables. This was magnified by the
existence of a dual exchange rate regime; most private imports for
the sector (e.g., inputs) had to be financed at the parallel
exchange rate while export revenues had to be converted into
domestic currency at the official exchange rate;
(b)  firms/farmers that were constrained to rely exclusively on
officially imported inputs (e.g., public sector firms) faced severe
shortages as official imports were greatly reduced because of lack
of foreign exchange;



64
(c)  increased controls on domestic prices had a particularly negative
effect on the rice sector. Price controls (at all levels of the
rice production chain) kept the evolution of prices below both the
rates of inflation and depreciation of the domestic currency in the
parallel market, thus reducing the competitiveness and
profitability of this crop; and
(d)  efforts to control the public deficit resulted in a steady decline
of the public sector's real wages. As a consequence there was
considerable loss of the most capable personnel. In the sugar
industry, this policy gave rise to frequent and prolonged strikes.
The continued management and budgetary problems also resulted in a
steady deterioration of the country's infrastructure. This had a
strong impact on agricultural activities in the coastal lands since
maintaining their productivity requires adequate drainage and
protection from the sea. It has also made the transportation of
products more difficult.
As a consequence of the above-mentioned policies, the performance of the
agricultural sector during the past ten years has been very poor (Table 7.3),
and has been a major contributor to the decline in total GDP. The decline of
the sugar industry itself (including sugarcane and sugar-milling activities)
accounted for almost 60% of the decline in total GDP during the 1983-90
period.
Table 7.3: GROWTH RATES, 1981-90 a/
(percent)
1981-90        1983-88         1988-90
Total GDP                  -3.0            +0.2            -5.2
Agriculture GDP            -2.6            -3.5            -5.8
Sugarcane                                  -5.2            -7.3
Rice (paddy)                               -0.5            -9.3
Other crops                                +3.6            +2.0
Livestock                                   0.0            -6.1
Fishing                                    +7.9           -10.0
Forestry                                   -2.4           -13.4
a. Average annual growth rates
Source: Bank of Guyana.
The Potential for Agricultural DeveloDment
The agricultural sector could play an important role in the reactivation
of the economy. Past economic policy mistakes were particularly harsh on the
sector, and accordingly, the new policy environment should provide a boost to
its activities. In addition, a significant--untapped--share of the country's
resources are located in the sector. Growth could be achieved through
enhanced productivity of currently used resources and by an environmentally
sound expansion of forest activities.
The Sugar Industry. The decline of the sugar industry (Table 7.4) was
mostly a reflection of management and labor problems and the lack of foreign
exchange that prevented needed re-investments to maintain the industry's
assets. A serious effort to address the management problems was initiated in
1989 when the Government turned over the administration of the company to
Booker Tate--a subsidiary of the industry's previous owner. Furthermore, the



65
company is currently in the process of being divested and the prospects of
restoring past levels of efficiency and production are good.
The industry future lies in adequately supplying roughly 225,000 ton per
year to its three main markets: (i) the European Community (EC) market where
Guyana has preferential access to export 163,500 ton per year at a price of
roughly US$0.25/lb; (ii) the US market where Guyana has an export quota of
23,000 ton per year at the preferential price of US$0.21/lb; and (iii) the
domestic market with an estimated annual consumption of about 38,500 ton.'
Some additional exports could be channeled to CARICOM's protected market
(where imports from non-member countries are subjected to a 45% tariff). The
potential CARICOM market has been estimated at 16,000 ton per year. Exports
to non-preferential export markets are likely to be unprofitable given that
Guyana's marginal cost of producing sugar beyond 235,000 ton is about
US$0.18/lb and the world market price for sugar is unlikely to surpass
US$0.16/lb during this decade.
It has been estimated that the goal of supplying Guyana's main markets
could be achieved by 1997. Based on the value added that was generated by the
industry in the past when annual production was roughly 240,000 ton, restoring
production to that level would increase total GDP by 15% to 20%. Over a
period of six years, sugar would then contribute to an annual average rate of
growth of GDP between 2.5% and 3%.
Table 7.4: SUGAR AND RICE PRODUCTION AND YIELDS, 1980-91
1980-85      1986-89          1990          1991
Sugar ('000 ton)           265.8         199.7         130.0        162.5
Yield (ton/ha)                5.5          5.0           3.6          4.3
Rice ('000 ton)            163.7         147.5          93.4        150.0
Yield (ton/ha)a/             3.3           3.3           3.1          3.4
a.   Yields of paddy rice.
Sources:   GUYSUCO, MOA.
The Rice Subsector. Many Government interventions throughout the past
decade were detrimental to the subsector. The implicit taxation of paddy rice
production imposed by the controlled prices varied throughout the 1980s from a
high of 43% (1980-82) to a low of 4% (1986), averaging about 24% from 1980 to
1988. v The real price of paddy rice also decreased by about 25% during the
decade. The main impact of these policies were to reduce the income of the
majority of Guyana's small farmers. Despite the decline in rice's
profitableness the decline in rice production has been moderate (Table 7.4)
1/   The current domestic price policy should be revised.  The 45% tariff to
sugar imports is exceedingly high and should be changed to a pricing
policy that would adequately reflect true border Prices. Based on
current projections for future world prices and of the domestic industry
marginal costs of production, the domestic sugar could adequately
compete with imported sugar within that policy framework.
2/   Implicit taxation is based on nominal protection coefficients estimated
in Reca, L. and Maffucci, E. "Guyana: a proposal to Reactivate
Agriculture in the Context of macroeconomic Policies", IDB, 1989.



66
and aggregate rice production has proven to be quite inelastic to prices.
This is a result of the lack of viable alternatives since the production
possibilities of alternative crops or livestock have been constrained by the
poor quality of land (a result of poor drainage), marketing problems and the
size of the domestic market.
The Government has taken the required steps to correct its negative
interventions on the sector. The State is in the process of divesting its
mills, prices have been freed and the Government monopoly (and its
participation) on rice exports has been eliminated. While there are still
some remaining interventions, none of them has any significant negative impact
on the industry.}' Even though there has yet to be a significant supply
response to the policy changes,4 there are already some indications of
positive changes taking place as several large domestic and foreign investors
are engaged in the acquisition of large (formerly State-owned) mills and plan
to increase the planted acreage of rice.
The rice sector could experience substantial growth provided that some
critical issues on the production side (e.g., low yields in production because
of stagnating technology and the deterioration of the drainage and irrigation
systems) are successfully addressed. Rice, as sugar, has the distinct
advantage of having preferential access to the European Community (currently
the quota Guyana shares with Suriname is 142,000 ton per year), and also to
the CARICOM market which imports roughly US$40 million (100,000 ton) of rice
per year (Table 7.5). Other non-CARICOM Caribbean countries import about
150,000 ton per year and constitute an additional potential market. By
contrast, 1990 total registered exports of rice were roughly 50,000 ton, of
which less than 10,000 ton were sold at the CARICOM market.
Other Crops. In the case of fruits and vecetables, the prospects of
these crops are very limited and are unlikely to provide--at least in the
short and medium term--a viable alternative to the production of major crops
(i.e., rice and sugar). First, the production of non-traded commodities is
severely limited by the size of the domestic market; secondly, the
difficulties in developing a significant non-traditional export market are
great. They encompass many aspects in both production and marketing, neither
of which are likely to be solved in the near future. The most significant
difficulty from the production viewpoint is lack of technology that extends
all the way back to the absence of seedlings.
Marketing problems are primarily related to constraints imposed by
difficulties in domestic transportation, deficient post-harvest practices, and
the small size of its most readily accessible market (CARICOM). In 1990
registered non-traditional exports of fruits and vegetables reached only about
3/   These interventions are:  (i) the Government captures part of the
subsidy that is granted by the European Community to Guyana rice through
a 15% tax on the preferential tariff; (ii) the Government requires that
the domestic market be supplied before rice export licenses are granted.
In practice this measure is non-distorting since the rice sold in the
domestic market is of inferior quality and cannot be exported; and (iii)
rice exports are still regulated by the Guyana Rice Export Board (GREB)
who monitors that rice exports meet its contracted specifications. GREB
charges 3% of the value of exports. This levy is excessive and
constitutes an implicit export tax and the Government has agreed to
revise this charge.
4/   The acreage of the 1991 post-liberalization crop is similar to the
average that prevailed during the 1980s (Table 4). The increase in
production from 1990 to 1991 is a reflection of the inordinately low
1990 production that was a consequence of extraordinary weather
conditions.



67
US$375,000, of which pineapple exports to Barbados accounted for roughly 50%.
Even taking into account that the official export data could have
underestimated exports by as much as 70%, the limited size of the CARICOM
market (Table 7.5) would indicate that market opportunities within CARICOM are
extremely limited.
Table 7.5: CARICOM SELECTED AGRICULTURAL IMPORTS, 19891A/
(US$ thousand)
Net Imports         Imports b/
Pineapples                              328.1            + 319.4
Plantains and bananas                   524.7          - 1,937.1
Dasheen and Eddoes                      948.7          - 4,122.0
Coconuts                                591.4             + 261.3
Cassava                                 283.3          - 8,000.4
Peppers and Pimento                   2,004.3          - 2,954.0
Citrus (excluding oranges)              152.9             + 427.2
oranges                               1,223.9           - 1,432.9
Rice                                 41,405.3         + 38,859.0
a.  Corresponds to aggregate imports of all member countries excluding Guyana.
b. The difference between the region's aggregate imports and exports.
Source: CARICOM Secretariat.
Forestry. The tropical rainforest of Guyana covers about 161,000 square
kilometers (approximately 75 percent of the land area) and is composed of
hundreds of hardwood species. Guyana is one of the few countries in the world
that still has the majority of its forest intact and is implementing policies
to manage in a sustainable manner and protect the forest areas. Only about 40
percent of the forest areas is presently accessible and only 10 percent is
being exploited; a total of 3.7 million hectares have been allocated for
commercial use by ten large companies and 250 medium and small operators,
which are supplying the domestic market and some CARICOM countries.
Development of the wood processing industry has been hindered by financial
constraints, the lack of basic infrastructure (principally the inadequate
electricity supply but also a lack of kiln drying facilities), staff shortages
at all levels, a lack of equipment and spares as well as high freight costs
for exports outside CARICOM.
The liberalization and divestment process has triggered a rapid growth
of foreign investment in forest and timber activities. The Government has
welcomed the economic initiatives in this area and has been granting forest
concessions based on the premise that forests will be harvested in a
sustainable manner. The concept of sustainability has been defined as one
that will not alter the tropical forests ecosystems and will provide a
sustained yield of wood products. However, a sound scientific basis to
determine what is required for such management does not exist. At present,
the Government allows the harvesting of 20 m3 per ha. based on experiences of
similar forests elsewhere in the world, but additional research is needed to
determine the appropriate standard in Guyana.
Constraints to Aaricultural Development
While the sector's development potential has been enhanced by the
removal of distortions and pervasive Government intervention in almost all
aspects of the economic activities, there are still many important issues that



68
need to be addressed. These issues are closely tied to the deterioration of
all services which included private sector participation, the most important
being: (i) land tenure; (ii) financial markets; (iii) research and extension;
(iv) water management; (v) regulation of forest activities; and (vi) roads
infrastructure.
Land Tenure. According to the most recent farm survey (1978) about 45%
of the Guyana's farmland is the property of the State and is leased to
farmers. Current leasing arrangements have promoted inefficiency and
inequity. Inefficiency has been promoted by the nature of the lease
contracts, most of which have a duration of 20 to 25 years, and cannot be
renewed automatically at the end of such periods. Moreover, because of the
Governments' administrative difficulties, many of the lease-contracts have
been granted on a provisional basis, contributing to increased tenure
insecurity. This insecurity discourages the demand for land-specific
investments and has impeded access to credit because land cannot be used as
collateral. The same problems tend to apply for privately-owned land because
of the lack of adequate titling services.5/ In addition, many of the leasing
arrangements contain provisions that limit farm size, therefore constraining
land consolidation into optimal-sized units. Inequities are the result of
lease contracts between the State and farmers at fees that are well below
market values. The current average annual fee is less than US$0.05 per ha.
The State does not collect the fees and obtains practically no revenue from
these arrangements (roughly USS17,000 in 1990) which are an important source
of rents for some lessees.
The Government is planning to depart from current practices by granting
titles to all lessees with landholdings of less than 15 acres. According to
Government estimates this would cover at least 80% of all current leases. The
divestment of larger farms would be done at a later stage pending the results
of the initial land distribution. Unlike many other countries, the Government
plans to grant full property rights, meaning that the distributed land could
be transferred, used as collateral, rented, etc. This proposed Government
policy could provide a significant boost to the sector and is a very necessary
complementary measure to the achieved improvements in economic policy.
Agricultural Credit. Commercial banks and the State-owned GAIBANK are
the two major sources of formal credit for agricultural activities in Guyana.
Credit to large- and medium-sized farmers has been an important business
activity for private commercial banks. By contrast, small farmers (as is
common in many countries) have basically no access to services from commercial
banks and have relied almost exclusively on the informal market or GAIBANK--
the only financial institution servicing most areas outside of Georgetown--as
a source of formal finance. However, access to GAIBANK's credit has been
progressively reduced because of the institution's financial difficulties (see
Chapter 6).
Because of its difficulties, GAIBANK has lost most of its capital which
has severely constrained its ability to serve small farmers. In December
1990, the value of GAIBANK's active portfolio for agriculture was roughly
US$1.2 million, and total disbursements for agriculture in 1990 reached only
about US$1 million. A case in point is that throughout the last decade, the
number of rice farmers receiving loans from GAIBANK has never exceeded 1,500
in a given year (likely less than 10% of all rice farmers) and in 1990 the
average size of approved loans was about US$500.
However, the limited formal credit availability does not appear to have
been binding since the demand for investment has also been low. This will
5/   According to the MOA there are currently more than 5,000 ownership
titles waiting to be regularized. This represents an exceedingly high
number since according to the 1982 farm household survey, there were
roughly 12,000 privately owned farms in Guyana.



69
hopefully change as the economy responds to the new economic framework and the
proposed land reform takes place (as a result of the latter, land transactions
should increase and so would land-specific investments). While informal
lendina activities are already extensively taking place (working capital loans
provided by the private rice mills and large farmers in the form of inputs),
it is unlikely that these sources will provide financial services for longer-
term investments. Moreover, access to alternative--to the informal financial
services provided by the mills--formal financial services, could be an
important factor in reducing the potential monopsony power that the mills
could exercise on paddy rice farmers. GAIBANK could therefore play an
important role provided that the institution can be satisfactorily
restructured and/or privatized. In fact, based on the characteristics of
Guyana's agricultural sector, the adequate management of such a bank should be
an easier task than in most other countries since: (i) farms are very
concentrated geographically; (ii) most farmers use a very homogeneous
technology; (iii) the farmers' educational level is relatively high; (iv) it
is expected that land can be used as collateral; and (v) production risks can
be greatly reduced if a satisfactory solution is found for the drainage and
irrigation problems. If GAIBANK is to remain in the public sector, it might
be better for it to evolve to a second-tier institution, providing funds to
banks and non-bank lenders in the agricultural sector.
Research and Extension. With the exception of sugar, technology
generation is the responsibility of the National Agriculture Research
Institute (NARI), a semi-autonomous public sector institution. However, as
NARI has focused the vast majority of its efforts in rice, responsibility for
livestock research has been assumed by the Caribbean Agricultural Research and
Development Institute (CARDI) with some assistance from the Inter-American
Institute for Cooperation on Agriculture (IICA). IICA is also the only agency
active in fruit tree research.
Although NARI is well managed, its effectiveness has been limited by
lack of funds and difficulties in recruiting and maintaining qualified
personnel and research efforts in Guyana were stagnant for most of the 1980s.
Nevertheless, the agency has recently succeeded in identifying a new rice-seed
variety that will be released for commercial production shortly. This is a
major advancement since varietal problems have been imposing serious
production constraints in past years. Currently, more than 70% of the rice
area is cultivated with an old variety that is subjected to rice blast
disease. Current efforts are also focusing on seed multiplication. The MOA
viewpoint is that, at this stage, private sector participation is critical and
that the Government should limit its involvement until the research stage.
The challenge is to find a strategy that will incorporate the private sector
into seed production. This should not be difficult as several of the newly
established milling companies have already expressed their interest in seed
production activities.
Unlike research, in which a foundation exists for improvement, extension
is in total disarray. Efforts have been initiated to re-activate the
extension service. The proposed plan (sponsored by the Inter-American
Development Bank) calls for the reunification of the entire system in the
Ministry of Agriculture. However, the key question of how to attract quality
staff within the public sector's salary scale has yet to be addressed. As in
the case of research, private sector participation should be enhanced. Many
large rice growers already have their own technical staff and have expressed
interest in establishing a technical service to growers.
Water Resources Issues. Adequate water management and control is a key
factor for Guyana's agriculture given that most land is below sea level. For
the most part, all the water infrastructure (i.e., sea defenses and drainage
and irrigation (D&I) sYstems) is in great need of repair because of the
deterioration suffered in past years as a result of the public sector's
budgetary difficulties and management problems. The result has been a decline
in the productivity of land.



70
The coastal areas are protected by several types of sea defenses: earth
embankments (165 km); earth embankments with slope protection (5 km); sea wall
with reinforced concrete and/or sheet piling (69 km); and natural sand banks
(75 km). While the. sea defenses have always suffered from sea erosion, the
shortage of financial resources have seriously effected the maintenance of
these defenses which are now in precarious conditions. According to a study
commissioned by the EC, about 35 km of the sea defense are considered a
priority area for rebuilding. The protection of the entire coastline--
critical for the development of agriculture--to adequate design standards may
cost up to US$300 million.
Irrigated lands are confined to the coastal areas and are used for
growing primarily sugar and rice. The total area with full development of
drainage and irrigation facilities (including the sugar estates) is about
150,000 ha. All these areas are administered by the Regions with the
exception of the Mahaica-Mahaicony-Abary and Tapakuma projects that are
operated under an independent "authority" and GUYSUCO who manages the sugar
estates. The administration of the D&I systems have been beset with severe
budgetary difficulties and personnel problems that have precluded an adequate
maintenance. As a result, overall water use efficiency has been estimated at
about only 25%.
At the core of the maintenance problems is the administration's
inability to set and collect water-user charges that would allow for the
adequate maintenance of the systems. Water charges are assessed each year by
the regional authorities who prepare a yearly budget to cover operation and
maintenance costs. A water fee is then calculated by dividing 90% of the
total estimated costs by the acreage within the irrigated area. The remaining
10% is a central government subsidy. Water fees across regions vary largely,
depending basically on the targeted quality of the proposed maintenance and
the inherent cost associated to different types of D & I schemes. In 1990,
less than 6% of the projected water charges were collected, and collections
were equivalent to about US$50/ha/crop. The adequate maintenance of the
systems--on average--would require an annual fee of about US$20/ha.
The Regional Governments' inability in collecting water charges is in
part the result of its lack of administrative capabilities to provide adequate
services. Farmers currently do not participate in the management of the
schemes which are administered by Government personnel who, with rare
exceptions, lack experience and technical expertise. The result has been a
disassociation between the providers of the services and the users which has
promoted inefficiency in water managements and difficulties in the collection
of fees.
The rehabilitation of existing infrastructure is a necessary condition
for increasing productivity (yields). The experience of some large private
landowners in Guyana is indicative of the economic feasibility of the
rehabilitation. Many of them lease lands to smallholders for an annual rental
price that varies between US$30 and US$40 per ha. This high price (when
compared to the ample available public land that is leased at a very small
fraction of the above-mentioned prices) can be commanded because the
landowners provide adequate infrastructure by undertaking their own
maintenance of the irrigation systems and roads. This rental "premium"
therefore represents the value farmers assign to the infrastructure, and its
value indicates that the maintenance of rehabilitated schemes could be
sustained in the long run by the farmers. However, the inadequate maintenance
of the systems is only one of the main problems affecting the D&I schemes.
Their rehabilitation should only take Dlace if apDropriate chanaes in the
6/   This is the result of conflicting need of farmers who have different
cropping calendars (i.e., along secondary canals, while some farmers
want to drain their fields for harvesting, others demand water for land
preparation).



71
systems' administration are undertaken. Taking into consideration the
budgetary difficulties of the public sector and in accordance with the overall
direction of the economy, the best alternative is to enhance farmer
participation in the administration of the D&I systems through the promotion
of water user associations. Such approach would also contribute to solve the
existing water-management problems arising from conflicting water-demand-
drainage schedules among farmers.
Forestry. Forest resources in Guyana are vast and could be a long-term
source of growth for Guyana--provided their exploitation is done in a
sustainable manner. While the Government has expressed its commitment to
monitor the sustainable management of the forests (para. 7.16) it has vet to
put in place mechanisms to accomplish that. The responsible agency for the
forest industry is the Guyana Natural Resources Agency (GNRA). The GNRA in
turn supervises and delegates the regulation of the industry to the Guyana
Forestry Commission (GFC).
The GFC is responsible for granting cutting rights, collecting
royalties, enforcing environmental safeguards, controlling exports and
collecting export fees, and conducting industry development activities. The
agency is clearly unable to perform its functions, having--among its 170
employees--only one professional forester (other than the expatriate
commissioner whose tenure lasts two years). In fact, the GFC seems to be a
perfect example of the "capture" theory of regulation (i.e., a regulatory
agency controlled by the industry that it is supposed to regulate). The GFC
is largely unable to collect the fees it is due and is unable to enforce
planning requirements and environmental safeguards. Moreover, there seems to
be a large amount of discretion on the treatment regarding taxes and royalties
granted to different firms, and the most pertinent information on how GNRA and
GFC deal with individual timber operators is regarded as confidential and is
not publicly available.
The Government has initiated steps to redress this situation. In
February 1992 a donor's meeting was held in Georgetown at which the Government
presented a project list that could be the basis for a comprehensive forestry
policy. The main areas of involvement would be land-use planning and
taxation. If forest activities are going to be a source of long-term growth
for Guyana, a different institutional approach to regulate and monitor the
industry is much needed.
Road Infrastructure. The improvement of the road infrastructure could
provide an important boost to agricultural activities. The growth potential
of agriculture is strongly linked to developments in this area since: (i) in
terms of transportation, the potential development of non-traditional exports
is more severely constrained by domestic transportation than by international
transport availability. Perhaps the most significant indicator is that the
domestic price of most non-traded commodities (tomatoes, bananas, cucumbers
etc.) at the Georgetown marketplace is very similar to the retail price of at
a supermarket in the Washington area. This reflects high marketing costs
which are related to transportation difficulties; and (ii) to a large extent
the success of the divestment process of rice mills will depend on the
competitive evolution of the industry. The possibility that the large mills
will form a monopsonistic cartel has to be taken seriously. One of the most
effective ways to decrease the mill's monopsony power in a given area is to
improve transportation facilities.
Main Issues
The trade and price-liberalization policies that have taken place,
coupled with the divestment of the Government's rice milling operations and
other public sector enterprises have created a new economic environment that
is a necessary condition for the development of the sector. However, having
lifted that "first layer" of constraints, there are still numerous areas that



72
need to change to foster agricultural development and growth--particularly of
small farmers.
Although the potential growth of the rice subsector is enhanced by its
access to international markets, increased rice production is limited by
technical problems--associated with the absence of improved seeds--and
infrastructure problems. It is doubtful that any significant increases in
production and/or productivity will be forthcoming without major improvements
in water management. The growth of alternative--to sugar and rice--crops are
limited by the size of the domestic market and exports are limited not only by
technical factors in production but also absence of adequate processing,
storage and transportation facilities.
The Government needs to focus in four highly linked priority areas that
would stress further private sector participation in the development of the
sector:
(a) land tenure. The divestment of state-owned land and provision of
adequate titling services to privately-owned farms should be the
cornerstone to the promotion of investment in agriculture;
(b) water resources. The rehabilitation of the sea defenses and the
D&I systems is a necessary condition to achieve increased yields in
agriculture. Given the limitations faced by the country's public
sector, the participation of the private sector in the management
of these systems through water-users associations should be
pursued. The land tenure reforms proposed in (a) would be a
necessary condition for the implementation of such management
scheme;
(c) research and extension. Research and extension should continue to
focus in rice production, for which there is an ample untapped
market. In research, Government involvement should be limited to
its primary stages. Private sector participation should be
promoted in the areas of seed production and extension; and
(d)  comprehensive forestry policv.  The exploitation of forest
resources could contribute significantly to Guyana's growth and
development. However, that can only be achieved if a forestry
policy that encourages sustainable management practices, prevents
deforestation and captures the rents associated to the exploitation
of national natural resources is put in place.



73
VIII. POVERTY AND THE SOCIAL SECTORS
Introduction
There is no reliable way to estimate the extent of poverty in Guyana or
assess the effects of the adjustment measures on the poor since recent data
are not available on household income levels, employment and unemployment
rates, or on other social conditions. The absence of even the most basic
socio-economic data also makes it difficult to design social programs which
effectively target the poor. Consequently, efforts to address poverty have
focused on providing assistance to groups generally recognized as vulnerable,
specifically women and young children and the unemployed. However, there
remains a critical need for more adequate information.
Despite the lack of data, various attempts have been made to determine
the extent of poverty in Guyana. Inter-American Development Bank estimates
for 1989, based on an approximate minimum basket of needs, indicated that 67%
of the population were poor at that time, although official calculations put
the figure closer to 86%. However, the large increases in basic food prices
occurring in 1990 have widened the gap between the earnings of the poor and
the cost of a minimum food basket and very probably increased the number in
poverty.
Data on undernutrition is sketchy and unavailable for some of the poorer
regions of the country, but what data is available indicates that the
incidence of moderate malnutrition among children is high in certain
communities. Surprisingly, the data does not indicate that the incidence of
severe malnutrition has increased over the past few years. The limited data
on infant mortality shows the rate to be substantially higher than in other
Caribbean countries. The Government plans to undertake a comprehensive survey
of Income and Expenditures during 1992, covering 7,000 households in four
survey rounds conducted in both rural and urban areas. The survey will also
include a Living Standards Measurement Survey, which will link expenditure
data to health and nutrition measures and provide information on consumption
patterns.
SIMAP. The Government has acted to reduce the social costs of the
ongoing adjustment measures by supporting the establishment of the Social
Impact Amelioration Program (SIMAP), a short-term program designed to promote
nutrition and health programs and labor intensive employment schemes in
infrastructure rehabilitation. While SIMAP acknowledges the need to target
benefits to the most vulnerable and needy groups, their target groups are
necessarily very broad given the absence of socio-economic data. For
instance, SIMAP plans to place special emphasis on nutrition programs targeted
at pregnant women and children under five years.
SIMAP is undoubtedly the agency best equipped to respond quickly to
address the most immediate needs of the poor. The line Ministries are
severely understaffed, generally lacking qualified and experienced personnel,
and are confronting the need to improve and rehabilitate the services they
presently offer. They do not have the institutional capability at this time
to take on new fast-response programs. SIMAP has a comparative advantage in
financing small, short-term, technically simple projects that can reach the
intended beneficiaries in a more direct manner. It has the potential to reach
a wider and more diverse group of beneficiaries as a result of its ability to
channel funds through a wide network of sponsoring agencies, including local
government, community groups, NGOs, churches, grass roots organizations and
the private sector. SIMAP has suffered, however, from its own institutional
difficulties, and its slow start-up time (two years) has delayed project
implementation. SIMAP has been able to tap a diverse group of official and
private donors for funding, including the IDB, the World Bank, the EEC, the
UNDP, the French Government, and the FUTURES Fund. As of March, 1992, it had
project funds available amounting to G$636 million, and had committed G$237
million in 128 projects. SIMAP projects typically focus on rehabilitation of



74
schools and local infrastructure, vocational training projects, and infant and
child nutrition projects.
Women's Issues. In 1990, a UNDP-financed survey identified the needs of
women in twelve communities located outside the major cities. Potable water
supply was considered to be a priority in two-thirds of the communities
surveyed. The need for day-care centers was cited in 40 percent, and nursery
schools in 30 percent. Women also expressed serious concerns about income
generating activities which reflects a deteriorating economic situation where
women feel unable to provide basic necessities, such as food, for their
families.   There are an estimated 173,000 women of child-bearing age (15-44)
which comprises the key target group for SIMAP sub-projects in health and
nutrition. These sub-projects would provide nutritional supplements, improved
primary health care services, and educational programs (e.g. breast feeding
and weaning programs). Sub-projects in water supply and basic sanitation,
while not targeted to women per se, would provide important benefits in
improved access and quality, responding to one of their major perceived needs.
SIMAP would also provide financing to expand the coverage of day-care centers,
delivering nutritional benefits to children while supporting the activities of
working women.
The Social Sectors
The provision of extensive and free social services has historically
been a major commitment of the Government of Guyana. Consequently, a large
amount of resources have gone into the development of an extensive system of
public social services. These include a public health system with a
widespread network of rural health clinics, rural health centers and regional
hospitals. Free education is provided from nursery school through university
and estimated enrollment rates are high: 90 percent at the primary level and
55 percent at the secondary level.
The commitment of the Government to provide services, however, is not
matched by its ability to meet these commitments. Years of economic decline
and scarce public resources have meant declining allocations for the social
sectors, inadequate investment and maintenance of the capital stock, and
insufficient allocations for basic materials and supplies. Consequently, the
quality of the services has dropped significantly. As shown in Table 8.1, the
share of recurrent spending allocated to health dropped from 3.8% to 1.9% of
GDP between 1984 and 1991. In the education sector the drop was even more
severe, with recurrent expenditures falling from 6.0% to 2.4% of GDP, or from
17.6% to 9.1% of the total recurrent budget.
The problems now confronting the social sectors are both of a short- and
longer-term nature. In the short-term, efforts must be made to cushion the
most vulnerable groups as the adjustment process proceeds and to maintain the
provision of health and education services at a satisfactory level. Longer-
term efforts must focus on defining sustainable sectoral policies, improving
the quality of services which have declined substantially over the past
decade, and rehabilitating the infrastructure which is severely dilapidated.



75
Table 8,1: GOVERNMENT HEALTH AND EDUCATION EXPENDITURE AS A SHARE OF TOTAL EXPENDITURE AND GDP, 1984-91
(GSOOOS)W
1984     1986      1988      1989      1990     1991W
Total Current Expenditures  56,9999   747,183  130,6205  255,5135  343,3084  7,123,729
Total Current Health
Expenditures               64,551    84,961   197,158   288,736   335,431   524,750
Health as a percent of TCE    11.3      12.9      15.1      11.3       9.7       7.3
Health as a percent of GDP     3.8       3.1       3.8       3.3       2.6       1.9
Total Current Education
Expenditures              100,487   111,389   333,480   308,253   231,340   645,802
Education as a percent of TCE  17.6     14.9      12.1      12.1       6.7       9.1
Education as a percent of GDP  6.0       4.1       6.4       3.5       1.8       2.4
a.   Total recurrent expenditures (TCE) incLude totaL statutory expenses (minus public debt) plus total
appropriations voted.
b.   1991 figures are estimates, not actual expenditures.
Source:    Estimates of the Public Sector Current and Capital Revenue and Expenditure. Goverrnent of
Guyana, 1986 to 1991.
Health and Nutrition
Mortality. Life expectancy in Guyana is fairly high, being around 65
years. However, the limited data available suggests that mortality rates are
high and increasing, especially among young children. The best estimate of
infant mortality available for 1990 yields an infant mortality rate of 37 per
1,000 for 1990, well above rates reported by Suriname (30), Trinidad and
Tobago (20) and Jamaica (18).l' Although the data are incomplete, it is clear
that there are striking Regional differences in infant mortality rates. The
rates are particularly high in Regions 10 and 8 (see Table 8.2).
The principal causes of death among infants and young children are
nutritional deficiencies and intestinal infections, conditions which can be
averted through effective preventive care. Nutritional deficiencies and
intestinal infections accounted for over 44% of infant deaths and just over
30% of deaths among children aged 1-5 years. The prevalence of deaths from
these disorders indicates that water and sanitation conditions are poor and
that the coverage and effectiveness of pre- and post-natal services is
limited.
01/  The Infant Mortality Rate is estimated as the number of infant deaths per
1,000 live births. In 1990, the GRO recorded 14,484 live births and 534
infant deaths, yielding a mortality rate of 37 per 1,000.



76
Table 8.2: INFANT MORTALITY RATES PER 1,000 LIVE BIRTHS, 1990a/
Region                                           Estimated Mortality Rate
1.  Barima - Waini                                          40.0
2.  Pomeroon - Supernaam                                    53.3
3.  W. Demerara - Essequibo Is.                             17.6
4.  Demerara - Mahaica                                      48.3
5.  Mahaica - Rosignol/Berbice                              52.5
6.  E. Berbice - Corentyne                                  21.4
7.  Cuyuni - Mazaruni                                       13.3
8.  Potaro - Siparuni                                       57.1
9.  Upper Takatu - Upper Essequibo                           n.a
10. Upper Demerara                                          65.0
Country Average                                        37.0
a.  Mortality rates are estimated from birth and death registration records
for 1990. Unregistered births and deaths are thus not included.
Source: Statistical Bureau, Government of Guyana.
No national data on maternal mortality rates are available after 1984
when it was estimated to be 0.6 per 1,000 births. However, data collected at
Georgetown Hospital in 1987 suggests that the rate is significantly higher,
possibly around 1.8 per 1,000 births. Toxaemia in pregnancy and hemorrhage
and sepsis during childbirth were reported to be the principal causes of
maternal mortality.
The main causes of adult death are similar to those in most middle-income
economies, with cerebrovascular and heart disease accounting for over 37% of
deaths. As is common in many Caribbean countries, diabetes is also a major
cause of death.
Morbidity. Several tropical diseases have not been fully controlled in
Guyana and continue to pose serious health risks. The most prevalent of these
is Malaria (Plasmodium falciparum) which has spread rapidly in the hinterland
and western areas of the country over the past five years. Although the
disease was previously controlled in the coastal areas, increasing population
movement between the goldmining areas of the hinterland and the coast has led
to a resurgence of the disease in these areas. Reported cases of Malaria rose
from 3,600 in 1984 to 20,822 in 1989, equivalent to an estimated morbidity
rate of 4,510 per 100,000. The problem has been exacerbated by indiscriminate
use of antimalarial drugs in the endemic areas, leading to drug-resistance.
Vector control in the hinterland does not appear to be feasible and the
Government will, therefore, have to rely on improved education of the
population to limit the spread of the disease and widespread, regulated use of
drugs.
Filaria' a8so continues to be a serious public health problem,
especially in Georgetown, where the main vector responsible for its
transmission is present in high densities. Although the Ministry of Health
attempted to reactivate the filaria control program in 1989/90, no real
progress was made because of funding shortages. The extent of infection is
not known, but in 1990 over 16% of filaria smears done in Georgetown tested
positive, an alarmingly high rate.
2/   Filaria is a mosquito-borne disease with chronic symptomatology like
elephantiasis and hydrocele.



77
Sporadic outbreaks of immuno-preventable diseases such as measles and
whooping cough gave impetus to the Government's Expanded Program on
Immunization which aims to provide full immunization coverage to 80% of young
children in Guyana by 1992. Although it is clear that this target will not be
met, coverage of BCG and measles vaccines has improved in 1991, if somewhat
unevenly across Regions. Regions 1, 7, 8 and 10 have particularly low
coverage rates, with less than 50% of the target population being reached.
Coverage of oral polio vaccine remains low across all Regions and well below
levels in other Caribbean countries. Efforts to expand coverage continue to
be frustrated by an inability to maintain cold chain facilities, the
inaccessibility of some communities, and by a lack of adequate supervision and
coordination at the Regional level.
Patterns of morbidity are also being affected by the breakdown in basic
services such as the water supply, sanitation services and waste collection.
Water services have been drastically reduced or completely cut in some areas
and the sewerage syBtem is severely overloaded. As a result, residents in
poorly served areas draw water from roadside canals which are also used to
remove household waste. The incidence of diseases such as typhoid, hepatitis
and gastroenteritis has consequently increased substantially, as Table 8.3
shows.
Table 8.3: INCIDENCE OF DISEASES ASSOCIATED WITH
POOR ENVIRONMENTAL HEALTH, 1983-88
Disease                    1983      1984      1985     1986      1987     1988
Infectious Hepatitis        181       168      126       310       151      241
Typhoid Fever                 51      193       118      119        66      154
Gastroenteritis           2,142    3,907    3,598    3,895    4,770    4,396
Malaria                    n.a.      n.a.    7,680   16,388   34,136   35,451
Source: Ministry of Health.
Nutritional deficiencies contribute significantly to morbidity and anemia
(a good indicator of undernutrition) is very prevalent among pregnant women
and children. Data from health centers for 1990 showed that over 76% of
pregnant women attending suffered from mild/moderate anemia. Cases of severe
anemia increased from around 5% of health center attenders in 1986 to over 9%
in 1990. Approximately 61% of all school children suffered from anemia in
1986.
The principal causes of morbidity among the adult population are heart
diseases and diabetes. No preventive education on diabetes is offered through
the public health system despite the high costs of treating illnesses arising
from this disorder. Cervical, stomach and breast cancers appear to be another
principal cause of mortality although data on these disorders are incomplete.
The health sector has very limited capacity to provide specialized services
for the treatment of these disorders and provides no services for their early
detection.
Nutritional Status. Currency devaluations and the removal of generous
subsidies on many basic foodstuffs (which caused the price of some products to
increase by more than 200%) have greatly reduced individual purchasing power.
No reliable Consumer Price Index exists, but informal estimates of the price
of a basic foodbasket show increases of 96% in 1989, 49% in 1990, and 84% in
1991 (to October). Although many households have reportedly met income
shortfalls through receipts from family members abroad, there is widespread
concern that nutritional deficiencies are increasing among the poor.



78
Data on nutritional status are extremely limited and are available only
from attendance records at health clinics. These data show that over 30% of
children under six attending the clinics suffered from mild/moderate
malnutrition in 1988, a percentage substantially above those recorded in other
Caribbean countries.> Table 8.4 shows that there has been little change in
the incidence of malnutrition between 1983 and 1988 and it remains uniformly
high. Reliable data for 1990 is not available, but data from the Georgetown
Hospital pediatric clinic show a significant increase in the number of
malnutrition cases treated between 1989 (931 cases) and 1990 (3,506 cases).
Table 8.4: CLINIC ATTENDERS UNDER 5 YEARS WITH MALNUTRITION
(percent)
1983         1985          1986          1988
Nutritional Status
Normal                       56.1          57.0          59.5         60.4
Mild                         33.6          32.5          30.1         30.1
Moderate                      9.2           9.1           9.1          8.4
Severe                        1.1           1.4           1.3          1.1
Source: F. Vio, Guyana's Nutritional Status, 1991.
Data on birth weight, a good indicator of the mother and infant's
nutritional status, are poor and available only from a 1987 Caribbean Food and
Nutrition Institute survey. This survey estimated that 16.3% of births were
low weight but reports significant regional variations with the incidence
being substantially higher in the hinterland Regions. In Region 10, for
example, 21% of recorded births were low weight.
The Government currently maintains two programs aimed at improving the
nutritional status of pregnant and lactating women and young children:
(a) The Ministry of Health, with support from various international
donors, administers a program to provide women with iron and vitamin
supplements and improved ante-natal care through the Regional Health
Centers. It is not known what percentage of pregnant women benefit
from this program.
(b) A school feeding program began in May, 1990, as a follow-up to an
earlier nursery school feeding program. The project aims to provide
20,000 nursery school and 80,000 primary school children with a
supplementary snack of biscuits and a glass of powdered milk during
195 school days. Basic foodstuffs, donated by the World Food
Program, are made into biscuits and distributed by a private
contractor. Despite some distributional problems, the program
appears to be operating well.
Family Plannino.  The total fertility rate in Guyana was estimated at 2.9
in 1989, a level similar to Jamaica and Chile. Recent estimates from UNFPA
and IPPF put the prevalence of contraceptive use at 45%, which is similar to
3/   Malnutrition is measured using the Gomez classification, a scale which
distinguishes three degrees of malnutrition -- mild (90 - 76% of expected
weight for age, moderate (75 - 61% of expected weight for age), and
severe (under 60% of expected weight for age).   The reported percentage
of malnourished children was 6.8 in Trinidad and Tobago (1987), 14.6 in
Jamaica (1985), and 9.7 in St. Vincent and the Grenadines (1986).



79
other countries In the region at the same income level. Contraceptives are
distributed free of charge in a majority of health centers in the country.
Education about the importance of breastfeeding and about family planning
education are systematically carried out in health centers. WFPA and IPPF
have been funding family planning through the Guyana Responsible Parenthood
Association for the last five years at a rate of US$120,000 per year.
Organization of the Health Care System
In 1985 the Government decentralized the health system, passing
responsibility for most health functions directly to the ten Regional
Administrations. The Ministry of Health (MOH) has remained principally as a
central quality control unit whose function is to monitor health conditions
across the country and ensure that equal standards of care are provided in the
different Regions. The MOH has also retained responsibility for a few key
activities such as dental and preventive health. The Regional Administrative
Councils operate independently of the Ministry, preparing and submitting their
own budget proposals, deciding on staffing requirements, and receiving their
funds directly from the Treasury. The Regional Administrations are thus
central in ensuring the effective operation of the health delivery system. In
each of the Regions a Regional Health Officer is responsible for the day to
day management of the health sector. The Officer is supported by a staff of
District Health Officers who monitor and supervise the various health
facilities.
Several structural deficiencies in the decentralization system, however,
have led to a deterioration in the quality of health care provided. First, as
the Regional Administrations levy no taxes and receive their funding directly
from the central Government, they are not held directly accountable by the
population for the quality of services provided and no incentives exist to
encourage Administrations to respond to citizen concerns. Second, efforts by
the MOH to act as a central quality control body are thwarted by the absence
of any accountability of the Regional Administrations to the Ministry; the
Ministry is quite unable to effectively influence the operations or quality of
services offered in the different Regions. The fact that the MOH has been
unable to obtain even the most basic data on health conditions from several
Regions illustrates this very clearly. And, third, the breakdown of the
public auditing system means that the Regional Administrations are not
accountable to the central Government.y
There is some evidence that funds transferred from the central government
are considered fungible by the Regional Administrations and are thus
transferred from the recurrent budget in one sector (be it health, education
or agriculture sector) to cover urgent expenditures in other sectors. Actual
spending on health in a Region thus largely reflects the Regional Health
Officer's negotiating ability with the Regional Administration. This makes it
extremely difficult for health facilities to plan or budget and, more
seriously, it means that resources allocated to health by the central
government are not necessarily spent in that sector.
The Health Care Delivery System. The system has 115 health posts staffed
by community health workers which operate at the community grassroots level.
There are 47 health centers which should be staffed by a health visitor, a
medex (who has received 18 months of specialized health training) and nurses,
and 16 district hospitals in 8 of the 10 Regions -- 4 larger Regional
Hospitals with resident doctors (in Regions 2, 3, 6, and 10) who should be
providing medicine, surgery, obstetric and pediatric services, and 12 cottage
hospitals with no resident doctors. There is a national hospital in
Georgetown and three specialized institutions (geriatrics, psychiatry and
leprosy centers) which are funded and administered directly by the MOH.
4/   Audits of the Regional Administration are currently five years behind
schedule.



80
The quality of health care offered has declined markedly over the past
decade. Although government allocations to the health sector have dropped
during this time, high levels of inefficiency, the fragmented organization of
the sector and a lack of coordination between the relevant agencies are
largely responsible for this. The deterioration in care is most severe in
smaller urban and rural areas where health facilities lack even the most basic
drugs and diagnostic equipment. The extremely low quality of care offered in
Regional facilities has caused patients to bypass these services and seek care
from either Georgetown Hospital which has better resources, equipment and
staff, or from the six private hospitals. The latter hospitals are the
preferred source of treatment for those who can afford it. Occupancy rates in
some of the Regional hospitals are consequently extremely low, being only 11%
in some cases. Field visits to these hospitals revealed that they lacked even
the most basic equipment; x-ray machines had been out of service for almost a
year, the complete absence of anesthetics made even simple surgical procedures
impossible, sterilization equipment was frequently out of service, constant
electricity outages and the lack of backup generators meant that the small
bloodbank spoiled and that running water was intermittent, and even the most
basic painkillers were not available.
These conditions have profound consequences in terms of equity since it
is the poor who are unable to afford the costs of travel to Georgetown or the
cost of private care. But they are also directly responsible for an increased
reliance on more costly curative care since most people will not incur the
costs of a trip to Georgetown until they are seriously ill. Preventive health
care is limited almost exclusively to the provision of basic immunizations and
maternal and child health care (MCH) which continues to have considerable
support from international donors.
The quality of services and care provided in health institutions and
services under the direct administration of the MOH is also very low.
Preventive health care services and nutrition education are no longer offered
at the national hospitals and preventive dental care does not seem to be
practiced anywhere in the country. Dentists in the Regional hospitals (who
are funded and equipped by the MOH rather than the Regional Administrations)
lack basic equipment and even the materials necessary to fill dental cavities.
Their work is therefore limited to tooth extractions.
Health Manpower. Manpower shortages are acute throughout the sector, and
the MOH report for 1990 shows that close to 40% of the staff positions are
vacant. Clearly, these shortages profoundly affect the quality of health care
offered. The Government has taken some steps to try to meet the manpower
shortfall, but extremely low salaries and poor working conditions continue to
encourage large-scale emigration of trained and qualified health manpower.
Table 8.5 shows the estimated ratio of health personnel per 10,000 population
for 1987 and 1990.
Table 8.5: NUMBERS OF HEALTH PERSONNEL AND RATIO PER 10,000 POPULATION,
1987 AND 1990
1987                         1990
Per 10,000                   Per 10,000
Total     Population         Total      Population
Physicians                     164          2.0             286           3.7
Dentists                        16           0.2            n.a.          n.a.
Nurses (all categories)    2,073           27.5           1,905          25.2
Source: Statistical Department, Ministry of Health.
The ratio of physicians per 10,000 population has increased slightly in
1990 due to the recruitment of Cuban medical interns on short-term contracts.



81
However, the ratio of nurses per 10,000 population has declined. Like all
health sector personnel, physicians' salaries are fixed according to central
government pay scales and most currently earn between G$9,991 (US$85) and
G$11,437 (US$97) per month. Declines in the real value of salaries between
1985 and 1991 have been greater for more highly qualified staff, as Table 8.6
shows.
Table 8.6: AVERAGE MONTHLY SALARIES (IN CONSTANT 1991 PRICES) OF
HEALTH PERSONNEL, 1985 AND 1991
1985 Salary'          1991 Salary
Category                               G$                    G$
Medical Consultant                  25,452                1,5014
Medical Registrar                   19,695                12,069
Medical Office                      13,731                11,437
Medical Intern                      11,574                 9,991
Medex                                6,435                 5,243
Ward Sister                          6,375                 5,538
Staff Nurse/Midwife                  4,963                 5,170
Nurse                                4,787                 5,019
Midwife                              3,660                 3,119
Assistant Nurse                      3,393                 2,943
Nurse Aide                           2,799                 2,552
a. Adjusted using Guyana CPI.
Source: Ministry of Health, 1991.
The Government has, in accordance with its policy of providing universal
and free health care, discouraged physicians from setting up private practices
and foreign physicians are prohibited from working outside the public sector.
Consequently, the majority of physicians continue to work for the public
sector where, however, they are severely underutilized because of low
occupancy rates and the lack of basic equipment and supplies. The lack of
diagnostic equipment and basic drugs is so severe that the sick do not even
attend the outpatient clinics, preferring instead to travel to Georgetown
hospital or to purchase drugs directly from a pharmacist or black-market drug
dealer.
Nurses are trained in four publicly funded nursing schools which graduate
approximately 120 nurses per year. Students do not pay fees to attend these
schools. The number of entrants to nursing schools has remained fairly steady
over the past five years, despite declines in the real value of nurses wages.
Wages are currently $G5,019.30 (US$42) for professional nurses and $G2,943.22
(US$25) for assistant nurses. It appears that a nursing career continues to
be attractive largely because of the opportunities it presents for emigration
to other Caribbean countries.
Provision of Drugs and Pharmaceuticals. Responsibility for the provision
and distribution of drugs has remained centralized with the MOH. Although the
MOH's budget allocation for drug purchases has remained relatively steady in
real terms since the mid-1980s (see Table 8.7), hospital staff report that
drugs have become extremely scarce over the past few years. The regional
allocation of drugs is determined by quarterly Drug Consumption Reports which
the Regions submit to the MOH as well as by the Regions' consumption patterns
over the past quarter. This slow and unnecessarily bureaucratic system is
complicated further by the MOH's inability to distribute and maintain drug
supplies. Field visits to Regional Hospitals showed that they lacked even the
most basic drugs and painkillers. Patients routinely purchase the drugs they
need from private pharmacists or individual traders selling expired drugs
smuggled from Venezuela.



82
Table 8.7: MINISTRY OF HEALTH ALLOCATIONS FOR DRUG PURCHASES, 1985-90
Year                    Actual Allocations             Allocations in
G$                  real 1990 pricesf
1985                         9,000,000                   54,540,000
1986                        11,252,000                   63,236,000
1987                        14,607,000                   63,832,000
1988                        43,475,000                  135,642,000
1989                        84,060,000                  137,858,000
1990                        65,129,000                   65,129,000
a. converted to 1990 prices using the Guyana CPI.
Health Monitorina Systems. The MOH retains responsibility for monitoring
health conditions in the country and relies on the Regional Administrations to
submit data annually. However, no incentives exist to ensure compliance by
the Regional Administrations and, consequently, several Regions fail to
provide data. The problems of working with incomplete and unreliable data are
compounded by the limited institutional capacity of the MOH's central
statistical department to process the data they receive. Without detailed and
accurate data on health conditions it is impossible to accurately assess
health conditions in the country or respond effectively to health needs.
Improved monitoring of health conditions throughout the country and
strengthening of the MOH's capacity to process this data should be given
priority.
The Education Sector
Structure and Process of Sector Management. Since 1985, responsibility
for education has been split between two government levels, the Ministry of
Education (MOE) and the ten Regional Administrative Councils.y  Under this
decentralization program the MOE retained responsibility for curriculum
development, coordination of national examinations and distribution of
textbooks. The separate Regional Administrations took over all other
responsibilities, including maintenance of physical facilities. Although
teachers are appointed by a statutory central government body, the Teacher's
Service Commission, and are paid according to central government pay scales,
the separate Regions are responsible for determining staffing needs and for
payment of teachers.
In each of the ten Regions a Regional Education Officer is responsible
for day to day management of the education sector and is supported by a staff
of District Education Officers and District Education Supervisors who monitor
and supervise the schools. A detailed annual budget is formulated at the
Regional level after discussions between the Regional Education Officer and
the Chief Executive Officer of the Regional Council. This budget is submitted
to the Ministry of Finance through the MOE, although the MOE has no direct
input into the process. Education funds are allocated directly from the
Ministry of Finance to the Regions.
Decentralization should have the advantage of making the system more
responsive to the population it serves. In Guyana, however, no system of
5/   Municipal Georgetown continues to be a separate school district and
operates independently from the remainder of Region 4 in which it is
situated.



83
public accountability has been established between local residents and the
Regional Administrations, in part because the Administrations have no power to
raise funds and rely almost totally on central government transfers, but also
because local residents do not elect the Regional Administration officials who
continue to be appointed by the central government.F Regional
Administrations thus have little incentive to respond to local education
concerns or demands. The populace continues to view central government as
being responsible for the quality of education offered, but has no recourse to
an accountable agency.
The management capabilities of the various Regional Administrations
differ significantly, and efficiency in the allocation and use of education
funds largely reflects the capabilities of the Regional Education Officers.
Central government transfers to the Regional Administrations have increasingly
been treated as fungible as economic conditions have worsened, a practice that
has been encouraged in the absence of effective auditing.7' Funds may be
transferred from the recurrent budget in one sector (health, education,
agriculture, etc.) to cover urgent expenditures in another sector. The
negotiating power of the Regional Education Officer has thus become crucial in
determining the level of educational expenditures in a particular Region and
central government transfers for education do not necessarily reflect real
education spending. Improved efficiency in the allocation of education
resources will clearly depend on the introduction of improved planning,
budgeting and auditing procedures at the Regional level.
Structure of the Education System. Guyana is fairly well served by 320
nursery schools, 427 primary Schools, 62 academic secondary schools, 400
schools offering a combined secondary academic and vocational curriculum-,
several post-secondary institutions and a university. There is also an adult
education program. The education system closely resembles those in other
English speaking Caribbean countries. Schools follow a centrally planned
curriculum designed to guide students through a series of national
examinations which determine their future educational opportunities. Primary
school children are coached to write the Secondary School entrance examination
in the sixth year of primary school which determines whether they gain access
to an academic secondary school or a community/vocational school. Higher
scoring students (usually those scoring in the top 33 percent) gain entrance
to the academic schools where they then aspire to write the Caribbean
Examination Council (CXC) examinations and/or the General Certificate of
Education (GCE), a British-based examination, in their fifth year. Lower
scoring students gain entrance to the less prestigious community/vocational
schools, where the curriculum is vocationally based, and they write the
Secondary School Proficiency Examination. Community/vocational students may
transfer to an academic school if they do sufficiently well on a locally
administered examination, but this is very uncommon. Students with CXC passes
may enter a variety of post-secondary institutions for further teacher or
vocational training, and those with CXC or GCE passes in five subjects may
gain entrance to the university. Higher achieving students from
community/vocational schools may pursue a post-secondary education at a
Technical Institute or Technical Training Center.
Streaming of students within grades begins in the first year of primary
school. Field visits to schools revealed that students in higher streams
6/   A report "The Participation of Local Communities in the Financing of
Education in Guyana", prepared in 1986, specifies that local communities
should be encouraged to mobilize regional resources for education and
that they should have more influence over the management and delivery of
education in their Region. No steps have been taken to implement the
recommendations of this report.
7/   Auditing of the Regional Administrations is currently five years behind
schedule.
8/   Some of these classes are located in the secondary departments of primary
schools.



84
generally benefit from more highly trained teachers, better educational
resources and slightly better access to textbooks. There is reportedly little
movement of students between streams after their initial placement. Students
in the lower streams are thus labelled as under-achievers from a very young
age.
Education is compulsory for all children between 6 and 14 and a half
years of age and enrollment rates are estimated to be over 97%. If a child
progresses normally through the school cycle, this should mean that they
receive six years of primary school and at least three years of secondary
education. Pre-school education is not compulsory but, as is common in most
Caribbean countries, it is well developed and attended by over 70% of children
in this age group.
Cost and Financing of Education. Since 1976, when private schools were
absorbed by the public sector, the costs of education have been borne almost
entirely by the central government. Ninety-five percent of the total volume
of expenditure on education is currently from the central government. As no
fees are charged at any level of education, primary through university, the
central government supports all recurrent expenditures. Of capital
expenditures, 68% is currently funded by the central government and the
remaining 32% comes principally from foreign sources. Some limited direct
financial assistance for school maintenance is obtained from public
corporations who have been encouraged to "sponsor" a school.
Worsening economic conditions over the past decade have made it
increasingly difficult for the country to maintain the high levels of
educational investment recorded in the 1970s and, as a result, real government
spending has declined. In addition, recurrent spending on education, as a
proportion of total recurrent public spending, shows sharp declines since 1988
despite growing public concern over education quality. In 1984, 17.6% of
public recurrent spending went to education. The percentage declined to 14.5
in 1987 and 6.7 in 1990, rising again to 9.1 in the 1991 budget (See Table
8.1). The 1991 allocation is about half the proportions allocated in Jamaica,
Belize or Grenada. Education spending in Guyana, as a percent of GDP, has
declined from 6.0% in 1984 to 2.4% in 1990.
The most recent estimates of unit recurrent government expenditures by
education level are shown in Table 8.8. Expenditures are exceedingly low
relative to other Caribbean countries; at the primary level, Guyana's unit
recurrent government expenditures were US$26 compared to US$101 in Jamaica and
US$596 in Trinidad and Tobago. At the secondary level expenditures were US$54
in Guyana, US$257 in Jamaica and US$811 in Trinidad and Tobago.
Despite the Government's stated policy of emphasizing primary education,
unit costs are significantly higher at higher levels of education. The unit
cost ratio of secondary to primary education was 2.1:1 in 1988, higher than in
almost any other Caribbean country. The ratio of tertiary to primary unit
costs is higher still; thirty-three primary school students could be educated
for the cost of one university student.9' However, absolute expenditures per
university student are not especially high at US$858 in 1988, indicating that
the problem is low spending at the primary level rather than overspending at
university level. Given the high emigration rate among university graduates,
though, higher social returns are more likely to be gained from investments in
primary and secondary education.
9/   Higher tertiary education costs are partly explained by the exceedingly
low student/teacher ratio in some university courses. In the Agriculture
faculty, for example, the staff/student ratio is 1:3. The highest
staff/student ratio of 1:7 is in the Social Science faculty.



85
Table 8.8: CARIBBEAN COUNTRIES: UNIT RECURRENT GOVERNMENT EXPENDITURES
BY EDUCATION LEVEL, 1988 (US$)
Country                  Primary        Secondary       Tertiary       University
Bahamas                    640           1,010           1,200
Belize                   8,157             362             699
Barbados                   672             913           1,200
Guyana                      26              54             146             858
Jamaica                    101             257             639           5,138
Trinidad                   596             811             ...          10,510
Source:   "Access, Quality and Efficiency in Caribbean Education, A Regional
Study." World Bank. October, 1991.
From the perspective of resource mobilization, efficiency and equity, the
case for introducing cost recovery measures at the higher secondary school
level and in tertiary institutions is strong. The high level of student
subsidies at tertiary level relative to the primary level works against the
Government's stated commitment to provide high quality primary education to
all children. Some consideration is currently being given to introducing fees
at the university. If this were done across all tertiary institutions it
would facilitate efforts to increase funding at the primary level and bring
expenditures at this level closer to those in neighboring Caribbean
countries.LW
Educational Inputs. The availability of textbooks has been consistently
associated with higher student achievement in developing countries. Under
Guyana's decentralized education system the MOE retains responsibility for
textbook provision. Budget allocations for textbooks and education materials
have been greatly reduced over the past decade and are totally inadequate
given that almost all textbooks must be imported from European publishers.
Field visits to primary schools showed that in many cases the teacher used the
only textbook. At secondary schools there were generally 5 or 6 students to
each book meaning that teachers were unable to assign homework. Other
educational materials are almost completely absent from classrooms and
learning occurs through repetition and rote learning.
Although teacher/student ratios have risen in recent years they remain at
acceptable levels, averaging about 40 students per teacher in primary schools
and 35 students per teacher in secondary schools. However, low pay scales and
poor working conditions have encouraged better qualified teachers to move out
of the sector leading to a heavy reliance on untrained and unqualified
teachers. Thus, while student/teacher ratios continue to be relatively low,
the quality of the teaching force is declining. There are significant
differences between Regions in terms of the quality of their teaching force at
the primary level; only 19 percent of teachers in the municipal Georgetown
area are untrained compared to 69 percent in Regions 1 and 9 and 74 percent in
Region 8 (See Table 8.9).
10/ It should be noted, however, that the move to introduce fees at the
university has been initiated by this institution, not by the Government.
In fact, the Government has expressed some reservations to this plan.



86
Table 8.9: UNTRAINED AND UNQUALIFIED TEACHERS, BY REGION, 1989
(percent of total)
Region                       Primary School              Secondary School
1                                 69                           44
2                                 36                           39
3                                 22                           36
4                                 21                           11
4 G/T                             19                           25
5                                 41                           30
6                                 25                           30
7                                 67
8                                 74
9                                 69
10                                 31                           34
Total                               30                           29
.. Data not available.
Source: Ministry of Education.
Investment in the rehabilitation and expansion of school facilities has
been extremely limited over the past two decades with the result that school
facilities are dilapidated and very crowded. Many students do not have access
to a desk or writing space and in most schools three or more different classes
will share one room, meaning that noise levels are high and teachers must
compete with each other to be heard by their students.   Few schools have
libraries and where these exist the books are old and in poor condition.
Sanitation facilities are generally completely inadequate.
Efforts to improve the quantity and quality of school inputs should focus
on in-service teacher training and increased student access to textbooks and
other educational materials. Local publishers could be encouraged to produce
some texts, especially primary level texts, which would greatly reduce their
cost. Increased investments in the education sector, especially in
infrastructure and equipment, will be essential just to keep existing
structures in a usable condition.
Efficiency of the Education System.   The internal efficiency of an
education system is assessed by comparing inputs into the school system with
desired outputs, measured in terms of the quantity and quality of student
learning. Improvements in internal efficiency can be achieved by altering the
mix of educational inputs to improve student learning and achievement, by
taking steps to improve school attendance and reduce dropout and repetition
rates, and by improving the physical organization of schools and classes.
Although the data available in Guyana for measuring education outputs are
scanty, it is clear that efficiency is low and that significant improvements
need to be undertaken.
Dropout and repetition rates at the Primary level are not particularly
high in Guyana; approximately 11% of the first grade enrollments are repeaters
and dropout rates range from 3.2% in the first grade to 7.8% in the final
grade. The primary cohort survival rate is around 80%. However, student
learning, as measured by the secondary school entrance examination (taken in
the final year of primary school) is low. Almost half of the students are
unable to answer one third of the questions successfully. If the test scores
are adjusted to correct for possible guessing, 50% of students score less than
one sixth of the marks available. Pass rates in science and social science
subjects have dropped during the past decade (See Table 8.10).



87
Table 8.10: PERCENTAGE OF STUDENT PASSES ON THE SECONDARY SCHOOL
ENTRANCE EXAMINATION, 1980-90
Subject                      1980       1984       1987      1989       1990
Mathematics                   19.3      13.2       18.0      17.0       17.6
English                      20.1       17.4       18.0      21.0       19.3
Science                      26.5       17.8       20.0      17.0       20.5
Social Science               23.3       18.1       20.0      19.5       19.0
Source:   "Access Quality and Efficiency in Caribbean Education." World Bank.
October, 1991.
8.1.      Daily attendance rates at primary schools are extremely low in
Guyana, averaging 68% nationally. There are, however, wide variations across
regions; attendance rates are close to 80% in the Georgetown municipal area
but drop to around 50% in Region 1. Attendance rates generally reflect the
quality of education offered; poorly trained teachers, limited textbooks and
teaching materials, overcrowded classes and a poorly developed curriculum are
all factors commonly associated with low attendance rates and are clearly
issues needing to be addressed in Guyana.
8.2.      The secondary school enrollment ratio is low relative to other
English speaking Caribbean countries, and shows some signs of having declined
in recent years.- The estimated enrollment ratio of 59% in 1980 dropped to
56% in 1989, the most recent year for which estimates are available. Daily
attendance rates are low but vary widely across Regions, averaging 30% in
Region 1 and 78% in Georgetown in academic secondary schools. Attendance data
for community/vocational secondary schools show that attendance rates are
lower in these schools than in academic schools.
8.3.      Secondary school examination results show very clearly that student
learning has declined sharply in recent years. Students in the secondary
academic track aim to write the Caribbean Examination Council (CXC) or General
Certificate of Education (GCE) examinations in their fifth year, but only
write the examinations if their teachers think they have a chance of passing.
In Guyana, the proportion of the 15 - 19 year old age cohort entering the
examination has dropped from 16.5% in 1965 to 4.9% in 1984. This is the
reverse of trends in other English speaking Caribbean countries where the
proportion of students entering the examination has more than doubled.
Moreover, as Table 8.11 shows, the percentage of Guyanese CXC examination
candidates achieving passes in the core subjects has fallen sharply in recent
years. The 1984 pass rate in English of 23% dropped to 13% in 1990. In
mathematics, student pass rates dropped from 20% to 15% over the same period.
Guyana, which ranked third out of seven Caribbean countries in terms of its
student pass rate in 1965, now ranks last.
11/ Secondary school enrollments include students in secondary schools,
community high schools and students enrolled in Forms I to IV in all-age
primary schools.



88
Table 8.11: PERCENTAGE OF CXC EXAMINATION CANDIDATES ACHIEVING PASSES IN
SELECTED SUBJECTS, 1985-90
Subject                        1984        1985       1988        1989       1990
English                          23          20         11          12         13
Mathematics                      20          16         16          13         15
Social Sc.                     n.a.         25          18          10         12
Business                       n.a.        n.a.         20          15         22
Source:   National Examinations Board, Guyana.
Students enrolled in the community/vocational schools write the Secondary
Schools Proficiency Examination and these scores are even more discouraging.
Results for 1986, for example, show that in mathematics students, on average,
scored 12.7 of a possible 40 points, only 2.7 points above the chance score
(the score possible from random guessing). In Reasoning and Science, the
average student scored 15 out of 40 possible points, 4.9 and 6.3 points above
the chance scores, respectively.
Steps to increase educational efficiency should include efforts to
improve student attendance, particularly at the primary level. Efforts to
inform parents of the long-term benefits of schooling for children should be
intensified but attention should also be given to eliminating the practice of
streaming. Parents whose children are in lower streams are aware that teacher
quality is lower and that their children have almost no chance of gaining
access to the more highly regarded academic secondary stream. Consequently,
they have little incentive to ensure that their children attend school
regularly and may consider the value of a child's work in the home to be
higher than their possible future returns from this form of schooling.
Eliminating streaming and equalizing access to educational resources may work
to improve attendance.
Ecuity Issues.   The woeful state of education enrollment, expenditure,
and performance data in Guyana precludes a rigorous analysis of equity issues.
These data are unreliable at the Regional level and no household income data
exist to permit an assessment of equality of educational opportunity.
However, the partial data which exist permit two conclusions: (i) that there
is a relatively high level of participation at the primary level and, (ii)
that there are serious inequities in education inputs between the Regions.
The quality of the teaching force differs significantly across Regions with
the proportion of untrained teachers ranging from 19 to 74 percent in
different Regions (See Table 8.9). In addition, field visits confirmed that
schools in smaller urban and rural areas are less likely to have textbooks and
other educational materials.
The lack of data also precludes any estimate of the extent of social
selectivity in the education system. However, since a primary school entrant
only has an estimated 26% probability of entering an academic secondary school
and a 4% probability of gaining entrance to the university, educational
opportunities are clearly rationed, and this is most probably by socio-
economic status. This is an issue deserving further investigation given the
high level of public subsidies at tertiary education levels.
Improvino Social Sector Services
Investment in human resources development is a key element in the
development process. Limited resources, however, mean that great care must be
taken in choosing appropriate investment strategies and in ensuring that
sufficiently high returns on investments are achieved. Equity concerns must



89
also be given priority when deciding between investment alternatives. In
Guyana, it is clear that some important policy shifts must be made in the
social sectors; the existing system of financing health and education
services, and the problems arising from the decentralization of service
provision, have led to significant declines in the quality of services offered
and have also served to increase inequities in access. The situation in these
sectors is now critical and a major effort is needed to initiate improvements.
The more important issues at the present time include:
-    The need to improve the collection and processing of basic education
and health statistics and other socio-economic data. These data are
vital in obtaining a reliable picture of health and education
conditions in the country and in assessing differences in quality
and access between the Regions. The data are also critical in
improving understanding of the extent and regional distribution of
poverty and in designing programs to effectively target poor groups.
-    The need for a major program to rehabilitate existing infrastructure
and facilities in the health and education sectors. Severely
dilapidated structures in both sectors need urgent repairs if they
are to remain in use and, in the health sector, basic diagnostic
equipment must be replaced.
-    The need for the introduction of user fees and charges to generate
additional funds which could be used to finance recurrent
expenditures on educational materials in the schools and diagnostic
equipment and pharmaceuticals in the health sector. In the
education sector, consideration should be given to introducing fees
at post-school institutions and in the higher levels of secondary
school so as to reduce the high level of public subsidies presently
enjoyed by these students. Scholarships should be made available
for students from lower-income families. In the health sector, some
charges for outpatient services and diagnostic tests should be
introduced. If responsibility for purchasing drugs was given to the
hospitals this could provide another area where fees could be
introduced. The introduction of user fees and charges should be
undertaken in conjunction with a parallel effort to improve the
quality of services. Users will only be willing to pay if
substantial improvements are undertaken.
-    The need to reinstate the frequent and regular auditing of
expenditures at the regional level to ensure that funds are being
properly used and to ensure accountability of the Regional
Administration to the Central Government.



9o
ANNEX A
MEASURING GDP IN GUYANA
Guyana has some remarkable statistics in comparison to other developing
countries. Investment in 1991 was about 50% of total GDP, the current account
deficit was 52%, and the public sector deficit was 24%. The extremely high
values for these ratios derives, in part, from the fact that gross domestic
product (GDP) appears understated.
This understatement derives from two phenomena: first, it is generally
believed that at least 25% of GDP, and perhaps a great deal more, is not
included in the GDP estimates, largely because of illegal activities not
reported, and undercounting of the informal sector. With the restoration of a
more appropriate set of incentives, it is likely that there will be
substantial apparent growth in GDP as many of these previously illegal
smuggling activities now go through standard market channels. Secondly,
because the rapid pace of exchange rate changes, GDP itself becomes an
uncertain base to make comparisons. Since 1986, domestic prices have
increased 912%, but the exchange rate has depreciated by 2,289%. Thus, the
domestic, or non-tradeable, component of GDP, when valued at international
prices using a straight exchange rate conversion, becomes extremely small.
Tradeables or items that have a high component of foreign exchange, such as
investment or the current account balance, remain relative large. Thus, the
investment rate in current prices has increased from 31% to 42% of GDP (1986
to 1990), even though investment in constant prices has decreased by 32%.
While the exchange rate in 1986 was over-valued with respect to its
equilibrium level, the extent of depreciation reflects more generally the
collapse of the export production, and the move toward a new equilibrium
exchange rate which undervalues the non-tradeable sector.



91                          ANNEX B
THE BAUXITE SECTOR
The bauxite sector encompasses Guyana's major mining industry and main
industrial activity, contributing about 8% of GDP and 38% of merchandise
exports. The industry was developed by foreign investors in the 1920s and
consists of two main operations, namely: (i) the Linden operation that
produces high quality and high value calcined bauxitelY representing only
about 27% in 1988-90 of the tonnage but 68% of total industry sales and some
metallurgic bauxite mainly as a by-product of the mining and processing of
higher grade ores, and (ii) the Berbice operation that produces lower value
metallurgic bauxite.
Both operations were nationalized with compensation in the mid-seventies
and have since been wholly government owned. There are two public enterprises
operating in the bauxite industry in Guyana, the Bauxite Industry Development
Company (BIDCO) which is in charge of marketing bauxite products, and its
subsidiary, Guyana Mining Enterprises (GUYMINE), which is in charge of bauxite
mining and processing of the two operations referred above. Recently, the
Government entered into a joint venture with Reynolds for the development and
exploitation of new bauxite deposits in Aroima (76 miles southeast of Linden)
under separate ownership and private management arrangements. This
development represents a shift in government policy toward a market-oriented
economy with a much greater role for the private sector.
During the early years of the industry and up to the late seventies,
Guyana enjoyed a quasi-monopoly position for its high quality calcined
bauxite. After the nationalization, Guyana continued to benefit from being
able to command very high prices in the market. This allowed the industry to
cover cost inefficiencies, while continuing to provide for generous
maintenance, investment and marketing budgets. In the late 1970s, Guyana lost
its market dominance when China entered the high value refractory bauxite
market and gained a significant share through a substantial reduction in
prices (a 35% reduction in nominal terms from 1980 to 1984). As a result,
BIDCO/GUYMINE's share of the market dropped from 75% in 1975 to about 45% by
1984.
Despite the changing market conditions, BIDCO/GUYMINE did not take
adequate steps towards adjustment. The loss in market share led to a
substantial reduction in revenues that was not matched by an effort to
rationalize costs, especially a very high fixed cost structure stemming from
the capital intensive nature of the mining operation. By the early 1980s the
BIDCO/GUYMINE started facing serious financial problems that were dealt with
through increasing indebtedness and drastically cutting investment and long-
term maintenance.
By the mid-1980s the financial problems were compounded by serious
difficulties in the production side. Deteriorating mining and processing
plant machinery and equipment, gradual depletion of existing mining deposits,
industrial relation conflicts derived from overmanning and deteriorating
compensation and a steady erosion of managerial and technical manpower
capabilities has led to a steady reduction and increasing unreliability in the
quality, of GUYMINE's output. By 1989 Guyana had further lost market share to
about 30%, resulting mainly from inability to generate a reliable output.
1/   Includes refractory grade (RASC), abrasive grade (AAC) and high silica
calcined bauxite. The average selling price of calcined bauxite is
roughly six times that of metal-grade bauxite.



92                          ANNEX B
Table B.1: BAUXITE PRODUCTION
('000 of metric tons)
Est.
1986    1987     1988      1989     1990    1991
Calcined bauxite"              444.3   457.4    435.0    344.7    316.1   325.0
Metal-grade, chemical
and bauxite                 981.3   884.1    904.0    976.4   1113.6   938.0
Total                   1,425.6 1,341.5  1,339.0  1,321.1  1,429.7 1,263.0
a.   Includes refractory grade (RASC), abrasive grade (AAC) and high silica
calcined bauxite.
Calcined bauxite declined further in 1990 (see Table B.1), mainly owing
to unusually heavy rains that filled up the bauxite mines and led to the
closure of the mines for protracted periods. With the improvement of weather
conditions in 1991, and greater availability of spares, the production of
calcined bauxite increased slightly to 325,000 metric tons but was far below
the target of some 425,000 tons mainly owing to softer market conditions in
Europe and USA and high levels of stocks in Japan. Marketing problems have
been compounded by the entry of Brazil into the calcined bauxite market.
Although Guyanese calcined bauxite still maintains some advantage over
Brazilian bauxite which is finer in particle size (and hence prone to
processing losses) and Chinese bauxite which has a higher variability in
aluminum oxide content, it is continuing to face high competition in terms of
price. In the case of dried bauxite, production in 1991 has also suffered a
setback owing to softer world market conditions.
Within the framework of the ERP, the Government is committed to the
privatization of the bauxite sector as the main instrument to tackle the
issues of poor managerial and technical capacity, lack of access to
technological improvements and as a means of mobilizing the external financing
required to bring about the industry's rehabilitation. The Government invited
the two US companies that had their operations nationalized in the seventies
to consider their return to Guyana by acquiring the Linden and Berbice
operations.   However, the Government has not been able to interest private
investors in either of these operation because of the high degree of
uncertainty and high risks associated with establishing commercially viable
operations.
A study carried out in 1990 concluded that the Linden operation would
constitute a viable and attractive economic and financial proposition if
operated in accordance with appropriate industry standards. It emphasized
that the infrastructure, managerial, operational and financial capacity and
the industrial relations at the Linden facility were seriously deteriorated
and that a substantial effort would need to be initiated in all these fronts
to restore Linden to an acceptable operational, thus, to a commercially viable
position.
In light of this, the Government has designed a two-phase strategy to
carry out the privatization process:  an initial industry restructuring phase
(IRP) that will set the stage for a rehabilitation/privatization phase. This
phase is aimed at carrying out of basic restructuring tasks designed to put
the Linden operation on a viable commercial position that would make it
attractive for privatization.



93                            ANNEX B
The main tasks identified for achieving this objective are:
* production, defined in terms of achieving a reliable and
sustainable production level of 400,000 tons of calcined
bauxite per year within some specified production cost;
* basic equipment rehabilitation program, consisting in the
carrying out of a program for the rehabilitation of stripping,
mining, railways, bauxite plant and miscellaneous equipment;
* financial restructuring, consisting in the renegotiation of
existing debt with suppliers and establishing the asset and
liability base that would be transferred to the new corporate
entity to be created at the end of the management contract
period;
* labor rationalization, consisting in the reduction of
personnel by about one-third, Implementation of appropriate
compensation policies and reallocation of personnel to ensure
improved efficiency in operations;
* establishment of new corporation that will operate the Linden
facilities, Linden Bauxite Corporation (LBC) and the
preparation of LBC's, five-year business plan.
As a first step in the process, GovernLment has selected a firm that will
take over the management of GUYMINE and carry out a restructuring of its
operations.



94                                ANNEX C
THE INSTITUTIONS OF THE FINARCIAL SECTOR
The Banking Sector
This annex provides a more detailed analysis of Guyana's bank and non-
bank financial institutions. The analysis of the five banks forming the
banking sector is divided in three parts: (a) NBIC and GBTI, (b) Baroda and
Nova Scotia and (c) GNCB. The criteria of the partition is the similarity of
operations, mode of ownership and sizes.
NBIC and GBTI. Those are two very similar banks in their operating
procedures and financial strategy. The share of the government in NBIC is
52.9%, and 30% in GBTI (although it was 100% up until August 1991, when it
divested 70% of its share, mostly to the bank employees). NBIC is twice as
large as GBTI with assets as of 1991 of G$ 6,467 million and 3,383
respectively. Both of them are urban oriented, operating almost exclusively
in Georgetown, NBIC with three offices and GBTI with two.
Their source of funds is mostly from deposits, which constitute 85% of
their liabilities. The breakdown has for both of them been around 20% demand
deposits, 60% savings accounts and the rest time deposits. Their portfolio is
highly liquid, they have been lending only a small proportion of collected
funds (16% for NBIC and 32% for GBTI), with the rest invested in Treasury
bills. As a result their risk exposure is minimal and should be considered
quite solvent. All of their operational and financial indicators appear to be
quite adequate. Their operating costs to assets ratio has been in the 3% to
4% range. Their percentage of bad and doubtful loans does not exceed 5% of
loan value. Their rates of return on assets, ROA, have been quite healthy, on
the 4% to 5% range annually for NBIC and on the 6% to 8% range annually for
GBTI range for the last two years (it was a bit lower in previous years).
Their rates of return on equity, ROE, have outpaced the inflation rates, with
both banks obtaining annual ROEs in the 75% to 90% range. Nearly one third of
their profits in 1990 and 1991 can be attributed to gains from the devaluation
of the currency.
Their lending and borrowing rates are very similar, 26% to 27% and 36%
to 37%, respectively. While 50% of their loans are technically over a year,
that figure is a bit misleading since most of the loans are on call. This
means that the bank can terminate the loan at any time and request immediate
full payment. As a result there is little term premium assessed on loans.
Finally both of them appear highly leveraged with capital assets ratios
below the prudential regulated level of 10%. GBTI and NBIC capital asset
ratios are 9% and 4.8%, as is indicated in Table C.l.
Bank of Baroda and Nova Scotia. Those are the two smallest and private
banks of the sector. Although Baroda is a subsidiary of a state bank of
India, while Nova Scotia is the subsidiary of a private Canadian bank. Both
of them operate only in Georgetown, with just one office. Nova Scotia has
assets of G$ 1,000 million and a 5.6% market share the numbers for Baroda are
G$ 557 and 2.7% as of 1991.



95                                ANNEX C
71b.e C.1: GUYANA - SELECTED DATA/RATIOS
CG"4ERCIAL BANKS - CAPITAL REOUIREMENTS
(SEPTEMBER 1991  GS1,000,000)
GBTI     NBIC     GNCB      BNS      BB
A. Total Liabilities:              3,705.0   7,272.0   7,046.6   1,106.5    598.8
B. Required Capital - 10X        370.5    727.2    704.7
- 7X                                        77.5      41.9
C. CapitaL Accounts:
1. Share Capital/Assigned Cap.  60.0     20.0     14.7     35.9        -
2. Statutory Reserves           21.5     30.0    392.0      6.2        -
3. Subtotal                     81.5     50.0    406.7     42.1        -
4. Retained Earnings           166.1    296.3    144.6     69.2     18.2
S. Undistributed Profit         87.1
6. Total                       334.7    346.3    551.3    111.3      18.2
D. Reserve Account - BOG:        351.5     579    768.7    111.1       42
E. Ratios:
C.3/A                         2.2     0.7X      5.8X     3.8X       -
'C.3 + D)/A                   11.7X     8.6X    16.7X    13.8X       -
C.6/A                         9.0X      4.8X     7.8B    10.11     3.0X
Source: Bank of Guyana (September 1991).
Their operational and financial profile is very similar to that of NBIC
and GBTI. Their source of funds is mostly from deposits, where they offer
similar rates as those two banks. Their portfolio is highly liquid. They
lend also a small percentage of their funds, 30% to 35%, and the rest is
invested in Treasury bills. Their non-performing loans and operating costs
ratios are both slightly lower than those of NBIC and GBTI, while their ROA
and ROE rates are similar to those two banks. Again they can be considered
quite solvent and in good standing. Although their capital-asset ratio
appears below the required levels (see Table C.1), it is not very significant
since they are backed up by their parent institutions.
GNCB: Guyana National Co-oRerative Bank. Almost fully state owned
(97%), GNCB is the largest of the commercial banks, with 12 branches and over
603 employees, and with assets of G$ 7,748 million and a market share, in term
of assets, of 40%. In contrast to the other banks in the sector, it lends a
substantial part of its funds, 60%, and is the only one to have branches
outside Georgetown. As a consequence it provides for 75% of the loans of the
financial sector, with an average maturity of over 5 years. In the process it
has overextended itself, reaching unsafe capital levels of 3% to 4%. While it
has been successful fulfilling the role of financial intermediary and
providing long term credit, its quality control and financial performance has
been quite disappointing. It has over 25% of its loan portfolio in arrears,
and is in the process of writing off G$ 1,400 million, a far larger amount
than its equity. New initiatives are being taken to improve lending policies
and financial controls.
Non-Bank Financial Institutions
With one exception, The New Building Society, all of the important (in
terms of asset size) non-bank financial institutions, are state owned and are
part an umbrella organization, the Co-operative Finance Administration (COFA).
This organization is entrusted with control and supervisory powers over those
institutions, including GNBC. However, since GNCB is a commercial bank, it is



96                                ANNEX C
also supervised by the BOG. In fact, COFA has been a very weak institution.
Part of the reasons is that its is understaffed. The staff of the institution
consists of only four higher-level including the Executive Secretary. COFA's
participation in those institutions is a non-voting seat for its Executive
Secretary on the respective Board of Directors, with very limited influence in
the operations of those institutions.
COFA will be receiving short-term technical assistance from the CDB to
improve its performance. The institutions under COFA jurisdiction are:
-    Guyana National Co-operative Bank (GNCB)
-    Guyana Co-operative Agricultural and Industrial Development
Bank (GAIBANK)
-    National Insurance Scheme (NIS)
-    Guyana Co-operative Insurance Service (GCIS)
-    Guyana Co-operative Mortgage Finance Bank (GCMFB)
-    GNCB Trust Corporation
The analysis of each one of COFA's institutions and the New Building
Society is presented below.
GAIBANK. This is a development bank, specializing in lending to the
agricultural and industrial sector, although the share of the latter is the
largest, mostly as a consequence of sectoral restrictions on the source of
funds. As of 1991, all the agricultural lending is from recovery loans from
the sector. It is not allowed to accept deposits from the public, and its
source of funds is mostly (90%) from development credits from donors and
international agencies. A smaller percentage, (10%), of its funds comes from
government transfers and sectoral credit programs, most of them as counterpart
funds needed to match the foreign source funds. It is the third largest
financial institution in Guyana with 16 branches, 280 employees (down from 375
as a result of migration or attrition, but still overstaffed), and assets of
G$ 3,755 million as of June 1991. It is the only financial institution that
has a significant presence in rural areas, where the major alternative is the
informal market where the current rates are 20% per month.
Its lending terms, are mostly medium to long term with a maximum of ten
years. It provides for a grace period of 1 to 2 years, a practice not matched
by the commercial banks. Moreover, it lends below the commercial rate and
below the prime rate. For example, as of October 1991, GAIBANK rates were
around 30% (for domestic currency loans), while commercial banks were lending
at 36% (the lowest rate), the prime rate was at 33.5%, the bank rate was
32.5%, and the Treasury bill auction elicited rate was 31.4%. Therefore it is
lending at subsidized rates below the government cost of borrowing. When the
loan is in foreign currency, US$, the interest rate is 15% and is to be repaid
in foreign currency. The interest rate policy of GAIBANK is set by the
Ministry of Finance.
Of its assets, 40% are Treasury bills and deposits, while the rest are
loans. Over 40% of these loans are to the public sector.1' The rest of its
loans are to the private sector and private borrower profile is a medium to
large entity, borrowing at least G$ 12,000. Most of its loans are unsecured,
although as of late its has been requiring co-financing by the borrower
(around 40%). All of its performance indicators are quite unsatisfactory.
That should not be surprising when noting that, its non-productive assets to
assets ratio is 60%, including arrears, which account for 35% of its
portfolio. Those numbers are most likely best estimates since GAIBANK tends
to have a fairly liberal policy towards granting the rollover of part due
loans.
Aside from its numerous bad loans and serious arrears collection
problems, in the past two years it has incurred significant losses, as a
1/   The sugar consortium GUYSUCO is its largest public customer.



97                                ANNEX C
result of the currency devaluation, since most of its liabilities were in
foreign currency, while most of its assets were in loans denominated in
domestic currency.V These losses are ten times the level of its equity.
Although the government has agreed to cover the losses, its record through the
last ten years would tend to indicate that its financial viability and
capacity to administer credit according to bonafide economic practices is, at
best, questionable.
Mortaage Finance Institutions
There are three financial institutions that specialize in mortgage
financing, GNCB Trust, GNCFB, and The New Building Society. The first two are
fully state owned and are part of COFA. The New Building Society is fully
privately owned, and is the largest of them. Although it is not part of COFA,
we will analyze it here given its line of operations.
GNCB Trust. GNCB Trust engages in two types of activities. First, for
a fee manages 12 pension funds of public institutions.y And second it serves
as a financial intermediary for mortgage and other loans.   As the manager of
pension funds, it has full discretion in the investment of those funds. The
standard pension plan portfolio is almost fully liquid, 95% Treasury bills and
bank deposits and 5% on equity. They are only allowed to invest in new
equity. The argument is that the absence of a secondary market for equity
difficult price determination. As a result long term funds are converted in
very short loans, mostly to the government.
In its second role, as a financial intermediary, GNCB Trust is, by far,
the largest of the trust Companies, with assets near G$ 600 million, and a
market share of over 90% within the trust Companies sector. Its main source
of funds is savings deposits from the public, which constitute 90% of its
liabilities. Nevertheless it is not considered a bank since it is not allowed
to offer demand deposits, and as a result not subject to the supervision of
the BOG or to the regulatory structure provided by the Banking Act. However,
It competes head to head with banks for savings deposits by offering similar
rates.
Near 70% of its portfolio consists of mortgage loans. The rest are
other loans and Treasury bills. In contrast to its sister institution, Guyana
Co-operative Mortgage Finance Bank, it lends at market rates, 36% for domestic
mortgages and 40% for commercial housing as of October 1991. However, it is a
highly leverage financial institution operating with a capital asset ratio of
1.2%. There is little regulation to guide the operations of this institution,
and literally no supervision from COFA, its supervisory body. It has been
consistently profitable in nominal terms, obtaining net return on assets, ROA,
around 2%. Given its leverage ratio its net return on equity,ROE, has been
quite significant, outpacing the inflation rate. Although the nominal growth
of its assets, through the last five years, has been significant, it has by no
2/   It has had little success expropriating assets or foreclosing on
delinquent loans.
3/   Those pension plans are the following, Bauxite Industrial Development
Company Limited Pension Plan, Co-operative Financial Institution Pension
Plan, Guyana School of Agriculture Pension Plan, Guyana Geology and
Mines Commission Pension Plan, Guyana National Engineering Co-operation
Pension Plan, Guyana Manufacturer Industrial Development Association
Pension Plan, National Agriculture Research Development Association
Pension Plan, Guyana Electricity Corporation Pension Plan, Mahaica
Mahaicony Abery Pension Plan, Guyana National Trading Corporation
Limited Pension Plan, Sugar and Trading Enterprises Pension Plan, and
Shipping Association Pension Plan.



98                                ANNEX C
means outpaced the inflation rate. In fact, in real terms, from 1987 to 1991
assets have decreased by 30%.
GCMFB.   The Guyana Co-operative Mortgage Finance Bank was originally
designed as a government institution to channel government funds for housing
development for low-income people at subsidized rates. Its source f funds has
been government transfers and loans from the private sector. Its current
asset portfolio is around G$ 60 million, but it has been relatively inactive
during the last couple of years, since no new funds are being transferred from
the government, and it cannot afford to borrow in the private market. It
lends at subsidized market rates (13-24%, depending on the size of the loan,
with lower rates for smaller loans). GCMFB is perceived to be a grant-help
institution, with an arbitrary assignment policy of loans, and with a lax
policy of enforcement and collection. About 20% of its portfolio is in
arrears, or has been rescheduled. Its future is questionable, and the
Government should consider dismantling the institution.
The New Buildina Society. The New Building Society, with assets of G$
1,340 million as of 1991, is a private financial institution, that operates
like a credit union. Its funds are deposits from its members, to whom it
lends long term for housing mortgage operations at an 18% rate, which is 20
percentage points below the market rate. It is financially viable because its
deposit rates are also below market rates at less than 10%, it invests 40% of
its assets in Treasury bills, enjoying a margin of over 20%. Its
profitability is further enhanced and finally because it is exempt from paying
any taxes.
NIS and GCIS. The two insurance companies NIS and GCIS, cover two
distinct areas, health and retirement benefits vs casualty. NIS is a
compulsory insurance plan or social security system for private and public
sector employees. GCIS sells causlty and other forms of insurance. Both of
them are being rapidly decapitalized, in part because they were forced, in the
past, to invest in government debt instruments at below market interest rates,
and have been adversely affected by high inflation. Their assets as of 1991
are G$ 1,647 million and 98 million for NIS and GCIS respectively, which are a
net decrease in real terms of 50% for both from their 1989 levels. Similar
changes apply for their equity.
Capital Adecuacy
Table C.2, presents selected financial ratios on capital adequacy of the
most important non-bank financial institutions. From that Table, it can be
seen that both GNCB Trust and Trust Co. Guyana Limited are highly leverage
with unwarranted and unsafe capital asset ratios of 1.2% and 1.8%,
respectively. GAIBANK displays also an inappropriately low capital assets
ratio of 7.5%. The rest of those institutions appear highly capitalized, much
beyond the safe limit. However, the liquidity and arrears problems of GCMB,
not visible in those statistics, described above would question its financial
viability.



99                                             ANNZX C
Toble C2: GUYANA - SELECTED DATA/RATIOS
NON-BANK FINANCIAL INSTITUTIONS
(051,000,000)
Guy. Coop   Guy. Coop          GNCB    New BIdg          Trust       Secure
Agr & Ind    Nortgage         Trust      Society           Co.        Trust
Dev.IBnk    Fin.Bank           Co.         Ltd.      Guy. Ltd   Int'l Ltd
(Sep. 91)   (Jun. 91)    (Jun. 91)   (Sep. 91)    (Jun. 91)   (Sep. 91)
Total Assets               4,597.2         61.7        564.2      1,461.0           17.0        39.5
Liabilities                4,134.0         31.7        557.7         95.6          16.7         29.5
Deposits                          -            -       496.5         91.7              -         11.6
Accts Payable/Other Limb  1,279.6          10.7         27.3           3.9          2.2           5.1
Loans Received             2,854.3         21.0          3.9             -             -         12.8
Trust Funds                       -            -        30.0             -          14.5
Capital Accounts             346.9         30.0          6.6      1,365.4            0.3         10.0
Share Capital
Govt                       301.3         30.0          6.6      1,272.9
Others                                                                            0.3          10.0
Surplus                       32.4
Reserves & Provisions         13.2                                   92.5
Ratios:
Capital Accts/Total Assets   7.5X         48.6X          1.21       93.5X           1.82        25.3X
Capital Acct./Liab.           8.4X        94.6X          1.2X      1428.22          1.8X       33.92
Source:  Bank of Guyana (September 1991).
Table C,3: GUYANA - SELECTED DATA/RATIO
CONSOLIDATED PORTFOLIO RATING SHEET tCPRS)
(GSC ,000,000)
GSBTI       NBIC        GHCB      SCOTIA          Bs
(3/31/91)   (6/30/91)               (3/31/91)   (3/31/91)
Required Provision for Losses   57.071        17.959       n.s.        2.607      0.249
per CEMLA Criteria
Less: Actual/Booked Provision   11.474        13.529       na.           -           -
for Losses
Excess (Deficiency)              (45.597)    (2.430)       n.s.       (2.607)    (0.249)
Total Credits:                   668.839    697.369                   87.314      21.061
(ncl. Accrual Interest)
Commercial                    641 .797    654.340                  55.930      20.387
Consuer                        18.883      22.256                  25.269      0.668
Housing                        8.159       20. M                    6.115      0.006
Required Prov./Total Credits:      8.52        2.62                    3.0X        1.22
Actual Prov./Total Credits:        1.72        1.92
Source:  Bank of Guyna:  Suetted reports (CPRS) of commercial Banks.



Appendix 1: CEMLA PROPOSAL FOR EVALUATION OF CREDITS IN FINANCIAL INSTITUTIONS
A. RATING OF CREDITS
Commencai Credits                        Consumer Credits                 Housina Credits
riming:                  At least twice a year, during the last           Permanent evaluation by          Permanent evaluation by
of each half year. closing at and of the         verifying delay period.          verifying delay period.
and tNrd quarter. Results should be reflected
in the financial statements for June and December.
Cover:                   At least 400 largest debtors or 75% of           Total Consumer credits.          Total housing credits.
commercial portfolio, whichever is greater.
All comnrnercial credits should be rated at
least once a year.
Cateaories;
A. Normal Risk           No doubt about recovering loan, interest         Credits with up-to-date          Credits with up-to-date
Credit.                end associated debts.                            payments and/or up to 1           payments and/or up to 1
month overdue.                                   month overdue.
B. Potential             Credits with certain degree of failure           Baiances with payments           Balances with payments
Risk Credits.          causes for which may be temporary and/or         between 1 - 2 months overdue      between 1 - 6 months overdue.                    °
not materially affect recovery of debt.
C. Deficient             Debtors show deficient payment capacity          Balances with payments            Balances with payments
Credit.                but recovery not seriously affected.             between 2 - 3 months overdue.     between 6 - 12 months overdue.
D. Credit of             Debtors show marked deficiencies in              Balances with payments           Balances with payments
Doubtful               payment capacity that recovery is                between 3 - 6 months              between 1 - 4 years
Collect-               doubtful. Credits 6 months or more               overdue.                          overdue.
ibility                overdue included in this category
E. Non-                  Credit or portion of credit judged               Balances with payments            Balances with payments
Recoverable            Credits 12 months or more overdue and            more than 6 months                more than 4 years
Credit.                backed by personal guarantee as well as          overdue.                          overdue.
those rnore then 3 years overdue with                                                                                            Z
collateral, included in this category.



B. REGULATIONS FOR PROVISIONS
Commerical                      Consumer                        Housina
Category:                A      None                             None                            None
B      None                             None                            None
C      20% of total value of credits    20% of total value of credits   50% of total value of credits
not backed by collateral.       not backed by collateral.       not backed by collateral.
D      50% of total value of credits    50% of total value of credits   100% of credit and accruing
interest not covered by
by guarantee.
If backed by collateral.        If backed by collateral.
50% of capital and accruing     50% of capital and accruing
interest not covered by         interest not covered by
guarantee.                      guarantee.
E.     100% of value covering the       100% of value covering the      100% of value covering the
whole amount of the interest    whole amount of the interest    whole amount of the interest
they would have accrued.        they would have accrued.
ADJUSTMENT PERIOD FOR COMPLIANCE - Not to exceed three 13 years). Supervisory body to agree on adjustment plan with each supervised bank.
N



Appendix II: Matix of Rules and Rernlatiom
Pertinent to Banks and Other Financial Institutions
Banking Act Cap. 85:01              Co-operative Financial Institutions  The New Bldg Society
Act Cap. 75:01                 Act Cap. 36:21
1. W
(a) Definition:                        Company licened to caffy on Banking        An administrative body established to   The society shall be a
business which includes acceptace of deposits  exercise supervision and control over the    Housing Association for
of money from tho public, repayable on     financial institutions under its preview.  the purposes of the
deond, for the purpose of lenling or                                              Housing Act and has
imvestm t.                                                                        power to raise funds by
issue of sham.
(b) - Accept do_ad & time deposit:                        Yes                         Yes: (Other than demnd deposits)             No
- BorOw  funds:                                        Yes                                      Yes                             No
- Grat buM:                                            Yes                                      Yes                            Yes
- Invest in seurities:                                 Yes                                      Yes                            Yes
- Purchau fixed asu:                                   Yes                                      Yes                            Yes              o
- Engag in foreig
exchan  tranction:                                   Yes                                      Yes                             No
(a) Minismm Capitalization             Loal: k  10% of Demad and Time
liailitie or GSI MM whihever is ger.
Foreign: s  Gslo MM. To retain in Guyn
out of funds originating from outside 7% of
demand d Time liabilities or $1 MM
whicver is geatr.
(b) Goverment Office Granting          Bank of Guyana (with Minitr of Finance           Ministry of Finance & COFA                  -
Licenses/Supervisory Body          approval)



|I11. Rest rkcfo,tz on OneratlOnS
I11. Restricdons on Onradons            Transfer to fund a sum  k  15% of net       Transfer to fund a sum k 2 5% of net
(a) Reserve Fund                       profits before dividends whenever amount in    profits before dividends whenever amount
fund is <  the paid-up capital of the bank.  in fund is <  the paid-up capital of the
institution.
With effect from 16/05191 - 22/05/91:
(b) Reserve Requirements                  11 % of Demand Liabilities                          Pertains to GNCB
9 % of Time Liabilities
For bank incorporated outside Guyana, 25%
of the minimum balance for deposit with Bank
of Guyana shall be in the prescribed foreign
currency (Sec. 40 A, Bank of Guyana Act).
With effect from 15/05/91:
25 % of Demand Liabilities
(c) Liquid Assets                         20% of Time Liabilities.                            Pertains to GNCB
Liquid Assets comprise: Cash, current
balances with Central Bank and other banks;
items in the course of collection; treasury
bills, local and foreign; balance at any
banking institution outside Guyana.
(1) l 25% of paid-up capital and
published reserves;
(d) Loan Limits                        (2) No granting of credit facility                     Pertains to GNCB
against the security of its own                                                       G$1 MM
shores.
(3) Directors: E 2% of paid-up
capital and published reserves.
(4) Employees: E 2 years emoluments.
Cannot be paid until reserve fund
requirements have been met [see (a) above]
(e) Dividends                                                                                      Sarne
(1) Where director has been directly or
indirectly concemed in the manage-
(f) Management (Disqualification as        ment of a bank whose license has been    (1) Officers and employees owe their
Director/Officer)                       revoked.                                   duty entirely to the financial
(2) Where a director has been convicted by     institution and shall not engage in
a court for an offence involving          any other paid employment without
dishonesty and has not received a free    approval of the Minister.
pardon for that offence.               (2) Where director or officer or other
employee does not confirm to the                              z
preservation of secrecy.
(3) Where director fails to reveal his
interest whether directly or
indirectly in an application for a
loan.
(g) Foreign Exchange                                                                          Pertains to GNCB
(h) Others          .                                                                    ..



IV. Afiscellaneous
(a) Report Submission                 Balance Sheet; P&L in Gazette and
newspapers and to B.O.G. (no later than 4           Pertains to GNCB                    BOG
months after and of each financial year) BOG
could exempt a bank incorporated outside
Guyana from submission of reports.
Annually by an approved auditor appointed by  Annually by an auditor appointed by the    Annually by auditor(s)
(b) Audit                            the bank. If the latter fails to appoint an  minister of Finance                 appointed at annual
approved auditor then BOG would appoint.                                        general meeting. If no
auditor is approved on
this occasion then the
Board may appoint an
auditor.
Pertains to GNCB            Minister of Finance
(c) Inspection                        Periodically or at the discretion of the BOG                                    could order an
by one or more of its officers.                                                 inspection.
0



105                      ANNEX D
PUBLIC SECTOR INVESTMENT PROGRAM
SUMMARY TABLES
Table 1      Summary of Public Sector Investment Program, 1991-93
Table 2      Public Sector Investment Program and Total Transfers, 1991-93
Table 3      Public Sector Investment Program, 1991-93



Table    1: GUYANA - SU9IARY OF PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93a/
----------               (1991 GS million)
1991 Estimated Actual        1992 Prel. Proposal           1993 Prel. Proposal
Total   External   Local    Total   External   LocaL        Total   External   Locat
TOTAL PROJECTS                        6598.1   3732.8   2865.3   12342.5   8126.1   4216.5        8442.5   5843.2   2599.3
Economic Sectors                    4603.1   3016.3   1586.8    4216.7   2732.1   1484.6         1157.7    777.8    379.9
Agriculture                       3002.6   1743.5   1259.1    2327.4   1656.2    671.1         723.5    601.8    121.7
Hanufacturing                      300.6    126.9    173.7       382.9    100.0    282.9       427.8    176.1    251.7
Mining                            1299.9   1145.9    154.0    1506.4    975.9    530.5            6.4      0.0       6.4
Infrastructure                       730.4    257.3    473.0    4728.4   3376.4   1352.0        3425.7   2556.0    869.6
Power                              157.1     78.4      78.7    2215.9   1896.4    319.5        1242.4   1151.2      91.2
Transport and Communication        424.7    132.9    291.8    2041.5   1077.0    964.5        1774.3   1133.4    640.9
Water                              148.6     46.1    102.5       471.0    403.0      68.0      409.0    271.5    137.5
Social Sectors                       492.4    334.0    158.3    2480.0   1967.9    512.1        2881.8   2434.6    447.2
____._______ _____---               ......   ......    ------     ---.- ----  ------  ------     ... .    ------    ------ F
Education                          314.0    244.9      69.1    1203.0    963.0    240.0        659.0    472.0    187.0
Housing and CoTm.nity Service       33.3      1.0      32.3      255.6     61.7    193.9        181.7    111.0      70.7
Health                             143.1     88.2      54.8     878.1    800.0       78.1      1876.5   1714.0    162.5
SIMAP                                2.0      0.0       2.0      143.3    143.3       0.0       164.6    137.6      27.0
Other
-----                                772.3    125.2    647.1       917.4     49.6    867.8       977.3      74.7    902.6
Source: State Planning Secretariat.
a/ As of March, 1992. This program is in the process of revision.



Table       2: GUYANA  - PUBLIC SECTOR  INVESTMENT PROGRAM AND TOTAL TRANSFERS, 1991-93
---------                                  (1991 GS million)
.............. ............................. ............................................... .............. .......................... ..... ........ ................ ................................ ..
1991 Estlimted Actual                 1992 Prel. Proposal                   1993 Prel. Proposal
Projects                                                    Status   Fin.             Source                Total    External    Local             Total    External    Local              Total    External    Local
.. .......................... ..................................................... ...... .......... ..... ........ ... ... .. .... .... ..... .. ... ... .......
GROSS PSIP                                                                                                 7283.8    4122.0    3161.8    13767.8    9545.9    4221.9                     9073.5    6467.8    2605.7                _
TOTAL TRANSFERS                                                                                             685.7        389.2       296.5       1425.3    1419.8             5.4         631.0        624.6          6.4
Transfers  to Corporatiors                                                                               26.0         25.0          1.0          0.0          0.0         0.0            0.0         0.0          0.0
GAIBANL                                           Ongoing Loan                          IDB            25.0        25.0          0.0          0.0          0.0         0.0            0.0          0.0         0.0
GUYNINE                                           Nei         Local                  Local              0.0          0.0         0.0          0.0          0.0         0.0            0.0         0.0          0.0
MEOCOL                                            New         Local                  Local              0.0         0.0          0.0          0.0          0.0         0.0            0.0         0.0          0.0
GCOFB                                             New         Local                  Local              1.0          0.0         1.0          0.0          0.0         0.0            0.0         0.0          0.0
Transfer to private Sector                                                                              659.7       364.2        295.5       1425.3    1419.8             5.4         631.0       624.6          6.4
GAIBANK                                           Ongoing Loan                          IDE          620.3        327.2       293.1           5.4          0.0         5.4            6.4         0.0          6.4
Quarries  - Private Sector                        Ongoing Grant                         EEC             0.5         0.3          0.3          0.0          0.0         0.0            0.0         0.0          0.0
Agri-Rehab  I                                     New         Loan                      IDB             1.1          0.0         1.1       1319.8    1319.8            0.0         524.6        524.6          0.0
Fisheries Eqjip. Facitity                         Ongoing Grant                       CIDA            37.7         36.7          1.1        100.0       100.0          0.0         100.0        100.0          0.0
TOTAL PSIP (net)                                                                                           659O  1    3732.8    2865.3    12342.5    8126.1    4216.5                    8442.5    5843.2    2599.3
.......... .................. ....................... ................................................ ..... ........ .... ...... ............... ........................... ........ ........................................ .................
Source: State Plaming Sweretariat as of N ch9  1992.
to.



Table    3: GUYANA - PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
--------                      (1991 GS million)
1991 Estimated Actual        1992 Prel. Proposal           1993 Prel. Proposal
Projects                                      Status  Fin.        Source           Totat   External   Local    Total   External   Local        Total   External   Local
ONGOING PROJECTS                                                                    6250.9   3364.8   2886.1   10330.4   7269.4   3061.1        7215.3   5245.2   1970.0
..- -- - -- - -                                                                  -- --    ------    ------   . ....  ..    .....  I- - - -    - - -    - - -    - - -
Economic Services                                                                   5064.7   2936.1   2128.6    7427.6   5506.4   1921.3        3767.3   2997.6    769.7
Agricutture Forestry & Fishing                                                      2911.3   1406.0   1505.3    1909.4   1455.7    453.7         822.9    701.8    121.2
National Agri Research Institute (NARI)       Ongoing Grant          UNDP/FAO         75.1      69.7      5.4        1.9      1.7       0.2        1.7       1.4      0.3
GAIBANK                                       Ongoing Loan            EIB/IDB        646.1    352.2    293.8       742.0    712.0      30.0      416.0    396.0      20.0
Forestry Studies                              Ongoing Local             Local          4.0       0.0      4.0      80.0       0.0      80.0        0.0      0.0       0.0
Misc. Drainage & Irrigation Works             Ongoing Local             Local          2.1       0.0      2.1        1.4      0.0       1.4        2.0       0.0      2.0
National Land Registration                    Ongoing Local             Local          0.4       0.0      0.4       0.6       0.0       0.6        0.6      0.0       0.6
Drainage and Irrigation (Regions)             Ongoing Local             Local          3.1       0.0      3.1        5.0      0.0       5.0        8.0       0.0      8.0
Agric. Dev./Equipment (Regions)               Ongoing Local             Local          5.6       0.0      5.6       24.9      0.0      24.9        4.4       0.0      4.4
East Bank Essequibo Dev. Project              Ongoing Loan                IFAD        58.3      23.9     34.4      165.0    115.0      50.0      111.0     82.0      29.0
GUYSUCO - Factory Rehab.                      Ongoing Loan         IDOB/Credit      1760.0    799.5    960.5      529.9    455.0       74.9        0.0       0.0      0.0
Mahaica-Mahaicony-Abary Project (MHA)         Ongoing Loan                 IDB        77.7      12.3     65.4      60.0       0.0      60.0       25.0       0.0     25.0
Black Bush Polder Rehabilitation              Ongoing Loan                IDOB       119.1      61.4     57.7        5.0      0.0       5.0        0.0      0.0       0.0  .-
Rehab. of Drainage & Irrigation Areas         Ongoing Loan                 IDB        72.0      32.9     39.1      152.0     72.0      80.0      153.0    122.4      30.6  O
Artisanal fishery (Coastal)                   Ongoing Grant              CIDA         43.7      17.3     26.4       40.0      0.0      40.0        0.0       0.0      0.0  o
Geodetic Survey                               Ongoing Locat             Local          0.7       0.0      0.7        0.0      0.0       0.0        0.0       0.0      0.0
Fishery Equipment Facility                    Ongoing Grant              CIDA         37.7      36.7      1.1      100.7    100.0       0.7      100.7    100.0       0.7
Artificial Insemination Program               Ongoing Local             Local          0.6       0.0      0.6        0.0      0.0       0.0        0.0       0.0      0.0
National Padi & Rice Grading Center (NPRGC) Ongoing Local               Local          5.0       0.0      5.0        0.9      0.0       0.9        0.6       0.0      0.6



Table 3: GUYANA - PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
---------                     (1991 GS million)
1991 Estimetd Actual         1992 Prel. Proposal           1993 Prot. Proposal
Projects                                      Status  Fin.        Source           Total   Externat   Local    Totat   Externat   Local         Total   External   Local
Manufacturing                                                                        214.2    126.9      87.3      249.9    100.0    149.9        132.7    124.8    7.960
Guy. Manuf. l Indus. Dev. Agency (GUYMIDA)  Ongoing Grant                 (MOP        106.4    103.1       3.3       3.0       0.0      3.0         3.0      0.0    2.960
Guyana National Engineering Corp. (GNEC)    Ongoing Local                Local        21.5       0.0     21.5        0.0      0.0       0.0         0.0      0.0    0.000
GNEC Works I                                  Ongoing Grant              China        29.8      23.8      6.0       16.9      0.0      16.9         0.0      0.0    0.000
seals & Package Industries Ltd. (SAPIL)       Ongoing Loan              Credit        39.0       0.0     39.0      230.0    100.0    130.0        129.8    124.8    5.000
SAPIL - Other Capital Works                   Ongoing Local              Local        17.6       0.0     17.6        0.0      0.0       0.0         0.0      0.0    0.000
Mining                                                                              1296.5   1145.9    150.6    1474.5    975.9    498.6            6.4      0.0    6.412
OUYNINE - Capital Works                       Ongoing Loan              SYSNIN      1285.2   1143.1    142.1    1122.2    975.9    146.3            0.0      0.0    0.000
GUYNINE - Capital Works                       Ongoing Local              Local          7.8      2.5       5.3     193.5       0.0    193.5         0.0      0.0    0.000
GUYMINE - Barges                              Ongoing Local              Local         0.0       0.0      0.0      153.4       0.0    153.4         0.0      0.0    0.000
Quarries - Guyana National Service (GhS)    Ongoing Grant                  EEC         3.0       0.0      3.0        5.4       0.0      5.4         6.4      0.0    6.412
Quarries   Private Sector (IRP)               Ongoing Grant                EEC         0.5       0.3       0.3       0.0      0.0       0.0         0.0      0.0    0.000
Power                                                                                150.4      78.4     72.1    2215.9   1896.4    319.5        1242.4   1151.2   91.242
. .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-
Power Extension (Regions)                     Ongoing Local              Local         3.0       0.0      3.0        0.0      0.0       0.0         0.0      0.0    0.000       0
Petroteum Expto Promotion Project             Ongoing Local              Locat         0.0       0.0      0.0       18.0      16.0      2.0         0.0      0.0    0.000
Hydropower Division                           Ongoing Grant             OLADE          0.1       0.0      0.1       25.4     18.5       6.9      427.4    424.3    3.144
GEC - Power Station                           Ongoing Loan                 IDOB      140.4      78.4     62.0    2172.5   1861.9    310.6        815.0    726.9   88.098
GEC - 5.7 MW                                  Ongoing Loan               Japan          1.6      0.0       1.6       0.0      0.0       0.0         0.0      0.0    0.000
GEC - Other Capitat Works                     Ongoing Local              Local         5.3       0.0      5.3        0.0      0.0       0.0         0.0      0.0    0.000
Transportation & Communication                                                       355.1    132.9    222.2    1259.9    813.4    446.6         1391.7    913.4  478.380
Guyana Post Office Corp. (GPOC)               Ongoing Local              Local         6.7       0.0      6.7       15.7      0.0      15.7        15.8      0.0   15.790
Timehri Airport                               Ongoing Grant              Local        42.0       0.0     42.0       16.0      0.0      16.0       45.0       0.0   45.000
Stellings & Wharves                           Ongoing Local              Local         2.7       0.0      2.7        3.0      0.0       3.0         3.0      0.0    3.000
Demerara Harbour Bridge                       Ongoing Grant                EEC        58.4       9.0     49.4       38.0      0.0      38.0       126.0      0.0  126.000
Equipment - Civil Aviation                    Ongoing Local              Local         10.4      0.0      10.4      30.8      0.0      30.8        19.8      0.0   19.800
Guyana/Suriname Ferry Project                 Ongoing Local              Local         0.6       0.0      0.6        2.6      0.0       2.6         3.3      0.0    3.324
Hinterland Airstrips                          Ongoing Local              Local          1.9      0.0       1.9       3.5      0.0       3.5        15.0      0.0   15.000
Land and Water Transport                      Ongoing Local              Local        12.7       0.0     12.7       10.0      0.0      10.0        10.0      0.0    9.990
Reconditioning of Ships                       OngoIrg Local              Local         4.0       0.0       4.0      20.0       0.0     20.0         8.8      0.0    8.800
Navigational Aids                             Ongoing Local              Local          1.3      0.0       1.3       2.3       0.0      2.3         2.8      0.0    2.824
Roads (Regions)                               Ongoing Local              Local        25.5       0.0      25.5      46.0      0.0      46.0        37.0      0.0   36.990
Ferry Services                                Ongoing Grant                EEC         2.7       2.1      0.6        1.1      0.0       1.1         1.3      0.0    1.320
Reconditioning of Ferry Vessels               Ongoing Local              Local          0.4      0.0       0.4      15.1       0.0     15.1         6.4      0.0    6.402
Bridges                                       Ongoing Local              Local        23.3       0.0     23.3       33.8       0.0     33.8        20.0      0.0   20.000
Mabura/Lethem Road                            Ongoing Loan              Brazil        132.8    121.8      11.0     863.4    813.4      50.0       994.4    913.4   81.000      t
Cargo Vessel Spares                           Ongoing Local              Local          2.1      0.0       2.1       5.5       0.0      5.S         3.1      0.0    3.140
Georgetown - Georgetown Timehri Road          Ongoing Local              Local         27.7      0.0      27.7     153.3       0.0    153.3        80.0      0.0   80.000



Tamle    Is UWM  -  WUtC SECTOR ZUWSIMT POIin. I99-93
..... *                   (191    million)
1991 Esttimated Acmtu        ?99  Prot. Propoal            1995 Pret. pi oet
Projgcts                                     Status  fin.         source          Total   External   Local    Totat  Exterral   Local          Total   Eitervma    Lcal
Water                                                                                 137.1     46.1      91.1     318.0    265.0      S3.0       171.0    106.5   M4.483
;Water, I4rove.ent                            Ongoing Grant                log          1.8      0.0       1.8     159.8    142.0       17.7      111.0    106.5    4.440
Guyana Sewerage & Water Cam. Ph~.11           Ongooing Local             Local        47.1       9.5      37.5     133.0    123.0      10.0        15.0       0.0   15.043
Plure Water SuppLy - Guy. Defence Force       Ongoing Locat              Local          3.0      0.0       3.0       0.0       0.0      0.0         0.0       0.0    0.000
Water Supply (Regions)                        Ongoing Local              Locat          4.7      0.0       4.7       0.2       0.0      0.2         5.0       0.0    5.000
Rural Water Supply                            Ongoing Grant                EEC         80.5     36.5      44.0      25.0       0.0     25.0        40.0       0.0   40.000
Touris                                                                                  0.0      0.0       0.0       5.1       0.0      5.1         6.0       0.0    6.042
General Public Service                                                               699.8      94.7    605.1      791.7       0.0    791.7       873.5      61.7  811.865
Admainistration & Planning                                                            136.7     46.8      89.9      80.4       0.0     80.4        65.6       0.0   65.636
Guyana National Service (GNS)                 Ongoing Local              Local          5.5      0.0       5.5       6.0       0.0      6.0         6.0       0.0    6.042
Goverrvment BuiLdings (Rehab.)                Ongoing Local              Local        35.3       8.8      26.6      20.0       0.0     20.0        11.2       0.0   11.220-
Minor Works                                   Ongoing Local              LocaL         10.5      0.0      10.5       7.0       0.0      7.0         7.0       0.0    7.030-
Hydrometeorological Services                  Ongoing Local              Local         0.9       0.0       0.9       2.0       0.0      2.0         0.2       0.0    0.200
Off ice & Residence of the President          Ongoing Local              Local          2.0      0.0       2.0       5.0       0.0      5.0         4.0       0.0    4.000
Buildings-Admninistration (Regions)           Ongoing Local              LocaL         11.6      0.0      11.6       9.1       0.0      9.1         9.0       0.0    9.001
Equipment & Furniture                         Ongoing Local              Local         14.3      0.0      14.3      11.1       0.0     11.1        11.0       0.0   11.000
Technical Assistanice                         Ongoing Locat              Local         0.6       0.0       0.6       2.0       0.0      2.0         2.0       0.0    1.973
Project Development & Assistance              Ongoing Local              Local         15.5      0.0      15.5      15.2       0.0      15.2       15.2       0.0   15.170
PubLic Corporation Secretariat                Ongoing Local               USiDP        40.5     38.0       2.5       3.0       0.0       3.0        0.0       0.0    0.000
Contributions to International Agencies                                               106.0      0.0    106.0      284.8       0.0    284.8       307.9       0.0  307.893
Multi-Lateral Investment Guarantee Agency   Ongoing Local                Local          0.0      0.0       0.0       9.3       0.0       9.3       12.0       0.0   12.000
Caribbean Development Bank                    Ongoing LocaL              Local         78.0      0.0      78.0     144.0       0.0    144.0       165.0       0.0  165.000
I.D.A                                         Ongoing Local              Local         0.0       0.0       0.0       8.3       0.0      8.3         8.3       0.0    8.261
I .D.B                                        Onigoing LocaL             Local,       28.0       0.0      28.0      76.0       0.0     76.0        85.0       0.0   85.000
I.F.C                                         Ongoing Local              Local         0.0       0.0       0.0      29.7       0.0     29.7        20.0       0.0   20.000
1.1 .C                                        Onigoing Local             Local         0.0       0.0       0.0      17.6       0.0     17.6        17.6      0.0   17.632
Public Safety                                                                          5o.o       0.0     50.0      31..3      0.0     34.3        67.0       0.0   67.036
Office Equipment & Furniture                  Ongoing LocaL              LocaL          0.4      0.0       0.4        0.5      0.0       0.5         1.5      0.0    1.500 
Buildings (Home Affairs)                      Onigo ing Local            Local          0.7      0.0       0.7       0.5       0.0       0.5        0.0       0.0    0.000
Buildings - Prisons                           Ongoing Local              Local          1.4      0.0       1.4       10.0      0.0      10.0       15.0       0.0   15.043
Fire & Ambuuaence Stations                    Ongoing Local              Local          0.3      0.0       0.3       0.5       0.0       0.5        0.5       0.0    0.493
Police Stations & Buildings                   Ongoing Local              Local         32.7      0.0      32.7       12.0      0.0      12.0       20.0       0.0   20.000 
Tools & Equ.ipment -Fire                      Onigoinig Locat            Locat          3.0      0.0       3.0       0.8       0.0       0.8       15.0       0.0   15.000
Equipment - PoLice                            Ongoing Local              Local         11.6      0.0      11.6       10.0      0.0      10.0       15.0       0.0   15.000



Table 3:   GJYANA - PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
..----.-                     (1991 GS miltion)
1991 Estimated Actual       1992 Prel. Proposal         1993 Prel. Proposal
Projects                                    Status  Fin.       Source          Total   External   Local    Total   External  Local       Total   External  Local
.. ...................... ............................................... ................. ................................... ... ... .... ...... .......... ......................................... ..... 
Other fixed Invwtemnt                                                            407.2     47.9   359.2    392.3         0.0    392.3      433.0    61.7 371.300
,... . . . . . .. . .
Bureau of Standards                         Ongoing Local            Local         0.2      0.0      0.2        0.2      0.0      0.2        0.3      0.0   0.250
GAIBANK - PL480                             Ongoing Loan             USAID        13.0      0.0      13.0      15.0      0.0     15.0        0.0      0.0   0.000
Infrastructure Rehab. Project               Ongoing Grant              EEC       316.6     16.7   299.9    350.0        0.0    350.0       350.1      0.0 350.050
SPS/National Platning Project               Ongoing Grant    IDB/IBRD/UNDP        42.0     31.3      10.8      12.0      0.0     12.0       69.7    61.7   8.000
Statistical Bureau                          Ongoing Grant             UHDP        14.9      0.0      14.9       3.0      0.0      3.0        3.0      0.0   3.000
Inst. of ApWlied Science & Tech. (IAST)     Ongoing Grant             UNDP        20.4      0.0     20.4       12.0     0.0      12.0       10.0      0.0   10.000
Scial Services                                                                   486.4   334.0    152.4   2111.1   1763.0   348.1    2574.5  2186.0 385.520
Educatlon                                                                        312.4    244.9     67.6    1202.0   963.0   239.0         658.0   472.0  186.000
Carnegie School of Horn Economics           Ongoing Local            Local         0.2      0.0       0.2       3.0     0.0       3.0        3.0      0.0   3.000
Nursery, Primary & Secondary Schools        Ongoing Local            Local         6.2      0.0      6.2       10.0      0.0     10.0       15.0      0.0   15.000
School Furniture (Education)                Ongoing Local            Local         1.2      0.0       1.2      17.0      7.0     10.0        5.0      0.0   5.000
Primary Education Project                   Ongoing Loan               IDB        68.7     39.4     29.3    515.0   392.0    123.0         625.0   472.0  153.000
Huaan Resource Development                  Ongoing Loan               IDOB      223.8    205.5      18.3    652.1    564.0     88.1         0.0      0.0   0.000    '7'
School Buildings (Regions)                  Ongoing Local            Local        10.9      0.0      10.9      5.1      0.0       5.1       10.0      0.0   10.000
President's College                         Ongoing Local            Local         1.5      0.0       1.5      0.0      0.0       0.0        0.0      0.0   0.000
Housing & Community Services                                                      30.9      1.0    29.9       30.9      0.0     30.9        40.0      0.0  40.000
Infrastructure Development & Blding         Ongoing Grant             UNDP        16.8      1.0     15.8      28.0      0.0     28.0        35.0      0.0  35.000
Youth & Sports                              Ongoing Local            Local        14.0      0.0      14.0       3.0      0.0     3.0         5.0      0.0   5.000
Cultural Centre                             ongoing Local            Local         0.1      0.0      0.1       0.0      0.0       0.0        0.0      0.0   0.000
Health                                                                           143.1     88.2     54.8    878.1    800.0    78.1        1876.5   1714.0  162.520
Palms                                       Ongoing Local            Local         1.0      0.0       1.0      4.0      0.0       4.0        5.0      0.0   5.000
Building                                    Ongoing Local            Local         5.4      0.0      5.4        8.0     0.0       8.0       11.0      0.0   11.000
Ceorgetown Hospital (Health Care 11)        Ongoing Loan               IDB       125.9    88.2      37.7      842.7   800.0      42.7     1837.0   1714.0  123.000
Buildings - HeaLth (Region)                 ongoing Local            Local         5.9      0.0       5.9      20.0      0.0     20.0       20.0      0.0  20.000
Equipment - Health (Region)                 Ongoing Local            Local         4.8      0.0       4.8       3.5      0.0      3.5        3.5      0.0   3.520



Table    3: GUtYANA - PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
---------                 (1991 GS million)
1991 Estimated Actual       1992 Prel. Proposal          1993 Prel. Proposal
Projects                                     Status  Fin.        Source           Total   External   Local    Total   External   Local       Total   External   Local
NEW PROJECTS                                                                       1032.9    757.2    275.7    3437.4   2276.5   1160.8       1858.3   1222.6    635.7
.. .. .. .. ... .                                                                ---  --   -- - -   -- - -     - -  -    - - -    - - -      - -  -    - - -    - - -
Economic Services                                                                   952.9    726.4    226.5    2942.8   2022.0    920.8       1447.2    960.9    486.3
Agriculture                                                                         775.5    726.4     49.1    1843.3   1620.4    222.9        531.6    524.6       7.0
Guyana Rice Export Board (GREB)              New      Local            Local          0.0      0.0      0.0        0.8      0.0       0.8        1.0      0.0       1.0
Agriculture Rehabilitation I                 New      Loan                IDB         9.9      0.0      9.9    1323.8   1319.8        4.0      530.6    524.6       6.0
East Bank Berbice Drainage Scheme            New      Grant              EEC          0.6      0.0      0.6       33.0     33.0       0.0        0.0      0.0       0.0
Guyana Rice Hilting 4 Hkt. Auth (GRMMA)      New      Grant            China        765.0    726.4     38.6        0.0      0.0       0.0        0.0      0.0       0.0
Guysuco - Administration                     New      Local            Local          0.0      0.0      0.0      485.5    267.5    218.0         0.0      0.0       0.0
manufacturing                                                                        86.3      0.0      86.3     133.0       0.0    133.0      295.1      51.3    243.8
GNEC                                         New      Local            Local         82.4      0.0      82.4       0.0      0.0       0.0      192.4     51.3    141.1
GPC                                          New      Local             Locat         2.2      0.0       2.2       6.4       0.0      6.4       14.6       0.0     14.6
Seals & Package Industries Ltd. (SAPIL)      New      Local            Local          1.5      0.0       1.5      39.0      0.0      39.0        5.0      0.0       5.0
NEOCOL                                       New      Local            Local          0.1      0.0       0.1      27.5      0.0      27.5       77.4       0.0     77.4
Guyana Soap & Detergent Co. Ltd.             New      Local            LocaL          0.2      0.0       0.2       0.3      0.0       0.3        2.3       0.0      2.3
Guyana stockfeeds                            New      Local            Local          0.0      0.0       0.0       0.0      0.0       0.0        0.0       0.0      0.0
Sanata Textile                               New      Local                           0.0      0.0      0.0       59.9      0.0      59.9        3.4      0.0       3.4
Mining                                                                                3.4      0.0       3.4      31.9       0.0     31.9        0.0       0.0      0.0
GUYNINE - Vehicles                           New      Local            Local          3.4      0.0      3.4       31.9      0.0      31.9        0.0      0.0       0.0
GUYNINE - Others                             New      Local            Local          0.0      0.0      0.0        0.0      0.0       0.0        0.0      0.0       0.0
Power                                                                                 6.6      0.0      6.6        0.0      0.0       0.0        0.0      0.0       0.0
GEC - other Capital                          New      Local            Local          6.6      0.0      6.6        0.0      0.0       0.0        0.0      0.0       0.0
Transport & Communication                                                            69.6      0.0     69.6      781.6    263.6    518.0       382.5    220.0    162.5
Bridges                                      New      Local            Local          1.2      0.0       1.2     375.0      0.0    375.0        20.0      0.0      20.0
Guyana NationaL Shipping                     New      Local            Local          9.7      0.0      9.7       21.3      0.0      21.3       18.0      0.0      18.0
Guyana Airways Corp. (GAC)                   New      Local            Local         36.6      0.0     36.6       45.9      0.0      45.9       47.1      0.0      47.1
Guyana National Newspapers Limited           New      Local            Local          9.4      0.0      9.4       15.0      0.0      15.0       22.5      0.0      22.5
Land & Water Transport                       New      Grant               IDB         0.6      0.0       0.6      25.0      0.0      25.0        0.0      0.0       0.0
Hiscellaneous Roads                          New      Local             Local        12.2      0.0      12.2     299.5    263.6      35.8      275.0    220.0      55.0
GPOC                                         New      Local                           0.0      0.0       0.0       0.0       0.0      0.0        0.4      0.0       0.4



Table    3: GUYANA - PUBLIC SECTOR INVESTMENT PROGRAM, 1991-93
(1991 GS millfon)
1991 Estimated Actual        1992 Prel. Proposal          1993 Pret. Proposal
Projects                                     Status  Fin.        Source           Total   External   Local    Total   External   Loca;       Total   External   Local
Water                                                                                11.4       0.0     11.4     153.0    138.0      15.0      238.0   165.0  73.000
Environmental Sanitation                     New      Local             Local        11.4      0.0      11.4      15.0      0.0      15.0       18.0      0.0   18.000
Guyana Sewarage & Water Conm.                New      Local                           0.0       0.0      0.0     138.0    138.0       0.0      220.0    165.0   55.000
General Pubtlic Service                                                              75.0     30.8      44.3     125.6     49.6      76.0      103.8      13.1  90.720
Administration & Plaming                                                             35.2      30.8      4.4      28.0     25.0       3.0        0.0       0.0    0.000
Institutional Strengthening                  New      Grant               IDB        25.6     24.0       1.7      27.0     25.0       2.0        0.0      0.0    0.000
Equipment & Furniture                        New      Grant               IDB         9.1       6.8      2.3       0.0      0.0       0.0        0.0       0.0    0.000
Acquisition of Property                      New      Local             Local         0.5       0.0      0.5       1.0      0.0       1.0        0.0       0.0    0.000
Public Safety                                                                         6.6       0.0      6.6      10.0      0.0      10.0        0.0      0.0    0.000
GeneraL Register Office                      New      Local             Local         0.1       0.0      0.1       0.0      0.0       0.0        0.0       0.0    0.000
BuiLdings - GDF                              New      Local             Local         0.3      0.0       0.3       0.0      0.0       0.0        0.0       0.0    0.000
Pistols & Ammunition                         New      Local             Local         0.0       0.0      0.0       0.0      0.0       0.0        0.0       0.0    0.000
Timehri Fire Hall                            New      Local             Local         4.8      0.0       4.8      10.0      0.0      10.0        0.0      0.0    0.000          L
Land & Water Transport - Prison              New      Local            Locat          1.4      0.0       1.4       0.0      0.0       0.0        0.0      0.0    0.000
Other Fixed Investment                                                               33.2       0.0     33.2      87.6      24.6     63.0      103.8      13.1  90.720
Guyana Mational Printers Ltd. (GNPL)         New      Local             Local         6.7      0.0       6.7      15.9      0.0      15.9       31.5       0.0  31.490
GtYOIL                                       New      LocaL             Local        11.3       0.0     11.3      17.4      0.0      17.4       52.0      13.1   38.870
Guyana Stores Ltd. (GSL)                     New      Locat             Local        15.3       0.0     15.3      23.8      0.0      23.8       20.4      0.0   20.360
Study Expert Fund (STEP)                     New      Grant               CDB         0.0       0.0      0.0      30.6     24.6       6.0        0.0       0.0    0.000
SociaL Services                                                                       5.0       0.0      5.0     368.9    204.9    164.0       307.3   248.6  58.700
.......... .......
SIMAP                                        New      Grant   IDB/EEC/France          2.0       0.0      2.0     143.3    143.3       0.0      164.6    137.6  27.000
Education                                                                             1.6       0.0      1.6       1.0      0.0       1.0        1.0      0.0    1.000
Critchlow Labour College                     New      Local             Local         1.0       0.0      1.0       1.0      0.0       1.0        1.0      0.0    1.000
David Rose School                            New      Local             Local         0.4       0.0      0.4       0.0      0.0       0.0        0.0       0.0    0.000
Other Equipment                              New      Local             Local         0.2       0.0      0.2       0.0      0.0       0.0        0.0       0.0    0.000
Housing & Conmity Services                                                            2.4       0.0      2.4     224.7     61.7    163.0       141.7    111.0  30.700
......------------.............-X
Recreation Facilities                        New      Local             Local         1.4       0.0      1.4       3.0       0.0      3.0        3.0       0.0    3.000
GCMFB                                         New     Local             Local         1.0       0.0      1.0      10.0       0.0     10.0         0.0      0.0    0.000
Urban Renewal Project                         New     Local                           0.0       0.0      0.0     211.7      61.7    150.0       138.7    111.0   27.700
…---.---.-.....------.------.---.-..-----.......--.-.--   --------...---.-..........-.....-..--------------.............------.-..---.....-.........-..-----...-..-.
Source: State Plaming Secretariat as of March 1992.



114
STATISTICAL APPENDIX
TABLE
1.1         Population Trends, 1976-90 . . . . . . . . . . . . . . . . . 115
1.2         Employment in the Public Sector, 1980-90 . . . . . . . . . . 116
1.3         Work Stoppages in the Public Sector, 1976-90 . . . . . . . . 117
2.1         Sectoral Origin of Gross Domestic Product
at Current Factor Cost, 1976-90 . . . . . . . . . . . . . 118
2.2         Sectoral Origin of Gross Domestic Product
at Constant Factor Cost . . . . . . . . . . . . . . . . . 119
2.3         Implicit Deflators, 1976-90  . . . . . . . . . . . . . . . . 120
2.4         Expenditures on Gross Domestic Product at
Current Prices, 1976-90 . . . . . . . . . . . . . . . . . 121
2.5         Estimate of Expenditures on Gross Domestic
Product, 1976-90  . . . . . . . . . . . . . . . . .      122
2.6         National Income Ratios, 1976-90  . . . . . . . . . . .      123
3.1         Balance of Payments, 1976-90 . . . . . . . . . . . . . . . . 124
3.2         Merchandise Exports (FOB), 1976-90 . . . . . . . . . . . . . 125
3.3         Merchandise Imports (CIF) by End-use Category, 1976-90 . . . 126
3.4         Value, Volume, and Unit Value of Principal
Fuel Imports, 1977-90 . . . . . . . . . . . . . . . . . . 127
3.5         Exports, 1976-90 . . . . . . . . . . . . . . . . . . . . . . 128
3.6         Imports by Main Categories, 1976-90  . . . . . . . . . . . . 129
3.7         Trade Volume, Unit Values, and Terms of Trade, 1976-90 . . . 130
4.1         External Medium and Long-Term Public Debt
by Type of Creditor, 1976-90  . . . . . . . . . . . . . . 131
4.2         Selected Medium-term External Debt Indicators, 1976-90 . . . 132
5.1         Central Government Revenues, 1976-90 . . . . . . . . . . . . 133
5.2         Central Government Expenditures by
Economic Classification, 1976-90  . . . . . . . . . . . . 134
5.3         Summary Accounts of Central Government, 1976-90  . . . . . . 135
5.4         Central Government Financing, 1976-90  . . . . . . . . . . . 136
5.5         Summary Accounts of Public Sector Corporations, 1976-90  . . 137
5.6         Summary Accounts of the Public Sector, 1976-90 . . . . . . . 138
6.1         Summary Accounts of the Monetary Authorities, 1977-90  . . . 139
6.2         Summary Accounts of Commercial Banks, 1977-90  . . . . . . . 140
6.3         Summary Accounts of the Consolidated Monetary
System,   1977-90  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .   141
6.4         Summary Accounts of the Consolidated Financial
System,   1980-90   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .   142
6.5         Net International Reserves of the Banking System, 1980-90  . 143
6.6         External Payment Arrears, 1980-90  . . . . . . . . . . . . . 144
6.7         Selected Interest Rates, 1977-90 . . . . . . . . . . . . . . 145
6.8         Commercial Bank Credit to Private Sector and
Public Enterprises, 1977-90 . . . . . . . . . . . . . . . 146
6.9         Central Government Bonded Debt By Holder, 1977-90  . . . . . 147
6.10        Private Sector Holdings of Domestic Selected
Financial Assets, 1977-90 . . . . . . . . . . . . . . . . 148
7.1         Output of Selected Commodities, 1976-90  . . . . . . . . . . 149
8.1         Consumer Price Indices, 1976-90  . . . . . . . . . . . . . . 152



Table 1.1: GWYANA - POPULATION TRENDS, 1976-90
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986           1987      1988    1989      1990
Total Population             732924  738858  744840  750870  756960  757173  757386  757600  757300  756900  756500   756100   755700  755300   754900
(beginning of year)a/
Total births b/               23154   23300   22700   23120   23000   23000   23000   22500   23000   20900   18600    18300    19568   20521    17522
Totat deaths c/                 6251    5895    5592    5560    5575    6000    6500    6500    9000   11500    5400           5800      5967    5605      6134
Natural population increase  16903   17405   17108   17560   17425   17000   16500   16000   14000    9400   13200    12500    13601   14916    11388
Apparent net migration d/   -10969  -11423  -11078  -11470  -17212  -16787  -16286  -10772  -14400   -9800  -13600   -12900   -14001  -15316   -11788
(Reported net migration)    (-4869  (-5000  (-7000  (-8000 (-11000 (-10000 (-11010 (-10000  (-8113  (-8000             ..      .
Net population increase         5934    5982    6030    6090       213      213     214    -300    -400    -400    -400        -400      -400    -400      -400
Crude birth rate (per 1000)   31.6    31.5    30.5    30.8    30.4    30.4    30.4    29.7    30.4    27.6    24.6             24.2      25.9    27.2      23.2
Crude death rate (per 1000)    8.5       8.0      7.5     7.4      7.4      7.9     8.6      8.6    11.9    15.2       7.1      7.7       7.9     7.4       8.1
Rate of natural increase(X)    2.3       2.4      2.3     2.3      2.3      2.2     2.2      2.1     1.8      1.2      1.7      1.7       1.8     2.0       1.5
note:
a/ April 7, 1970 census showed population of 669,848 excluding persons in institutions, and Nay 12, 1990 population census showed 756690.
b/ Estimated from 1977 onwards.
c/ Estimated from 1979 oruards.
d/ Equals net population increase less natural population increase
Source: Statistical Bureau.



Table 1.2: GUYANA - EMPLOYMENT IN THE PUBLIC SECTOR, 1980-90
1980    1981    1982    1983    1984    1985    1986    1987    1988    1989          1990
(nOumer of empLoyees)
Total employment                       98848   86226   83754   81226   78106   75947   74048   74578   70394   66928    67461
Central goverrment                     42000   29981   27502   28096   28686   28686   28650   27411   24493   22034    18656
Rest of the public sector              56848   56245   56252   53130   49420   47261   45398   47167   45901   44894    48805
Guyana State Corporations
(GUYSTAC group)                      18100   17132   15059   14554   13407   12635   14165   13046   12628   10947           9993
Guyana Rice Board (GR1)                3427    2854    2486    1942    1697    1436    1677    1720    2000    1299           1050
Guyana Nat'l. Eng'g Corp. (GWEC)       1576    1744    1508    1603    1406    1527    1410    1108    1134          976       997
Guyana Stores Ltd. (GLT)               1796    1912    1621    1444    1387    1387    1396    1422    1440    1291           1306
Guyana Electricity Corp. (GEC)         1506    1544    1371    1292    1318    1380    1137    1499    1524    1582           2324
Guyana Pharmaceutical Corp. (GPC)    1119    1292    1031    1037    1050    1028           600     506      575     468       446
Guyana Transport Corp. (GTC)           1302    1321      745      749      718     693      695     742      255     236        75
Other corporations                     7374    6465    6297    6487    5831    5184    7250    6049    5700    5095           3795
Guyana Sugar Corp. (GUYSUCO)           31128   31374   30540   30756   28104   26700   24158   25260   24198   25502    30963
Guyana Mining Enterprises Ltd.
(GUYMINE)                             7620    7739    7676    5272    4887    4887    4016    5710    5692    5051           4507
Other independent Corporation               0       0    1920    1460    1293    1335    1253    1220    1381    1287          1232
Financial Institutions                     0        0    1057    1088    1729    1704    1806    1931    2002    2107          2110
(as percent of total enpLoynent)
Central government                      42.5    34.8    32.8    34.6    36.7    37.8    38.7    36.8    34.8    32.9           27.7
Rest of public sector                   57.5    65.2    67.2    65.4    63.3    62.2    61.3    63.2    65.2    67.1           72.3
GUYSTAC group                           18.3    19.9    18.0    17.9    17.2    16.6    19.1    17.5    17.9    16.4           14.8
GUIYSUOCo                               31.5    36.4    36.5    37.9    36.0    35.2    32.6    33.9    34.4    38.1           45.9
GUYNINE                                  7.7      9.0    12.7      9.6    10.1    10.4       9.6    11.9    12.9    12.6       11.6
So_ce_Stt..__.____e--c-rea--------a----t.
Source: State Plonning Secretariat.



Table 1.3: GUYANA - WORK STOPPAGES IN THE PUBLIC SECTOR, 1976-90
1976    1977    1978    1979    1980   1981    1982    1983    1984   1985    1986      1987    1988   1989       1990
Number of Strikes              284    383     300      219    333    621       653    731    493    718    453         497      349    138       329
Sugar Industry                 234    326    241       158    276    585       639     704    480    712    447        489      345    134       315
Other                           50      57      59     61       57      36      14      27      13      6       6        8        4       4       14
Uorkers Involved             49422   89687   52060  106366  40652   87697   81564  103519  60300  93718  47550    57757   39358  113320   61474
…---------------             ------  ------  ...     -- --  .                               ......…  .              ......…------     -       ------
Sugar Industry              45069   82999   48215   91463   35475   84100   80373  94818  58779  93304   46957    57052    38856  107875    60905
Other                         4353   6688   3845   14903    5177   3597    1191    8701    1521    414    593          705      502   5445       569
Man-days Lost               175166 964282   75791  324473   67620  125582  140744 290296  152000  208888  138364   131449  232595  686356   244498
...- - -- -                -- --   ------  ------.  . -----   ........  -----   ..  ....  -- --   -----  -- --   -- --   -- --   -- --   -- --   . ----...-..-..
Sugar Industry              165931  932402   72875  139091   60593  110118  127987  164309  144157  208443  135109   128986  231089  594339  229291
Other                         9235   31880    2916  185382    7027   15464   12757  125987   7843    445   3255       2463     1506  92017    15207
Wages Lost (GS million)       1.89   10.20    0.96    6.40    1.20    2.60    3.30    5.10   3.40    4.36   3.40      4.50    8.50  35.90    16.90
… ....… ..... .                                                     .          - .       .  ..       -      .       ....   ..        .        .--
Sugar Industry                1.78   10.00    0.96    2.80    1.10   2.30    3.10    3.00   3.30   4.35       2.9      3.8      8.1   29.3      16.9
Other                         0.11    0.20    0.00    3.60    0.10   0.30    0.20    2.10    0.10   0.01      0.5      0.7      0.4    6.6         0
Souces: Ministry of Labor; State Planning Secretariat; and GUYSUCO.



TabLe 2.1: GUYANA - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST, 1976-90
--- -----                           (GS million)
Prel.
1976   1977   1978   1979    1980   1981    1982   1983   1984    1985   1986    1987    1988   1989    1990
Agric., Forestry & Fishing  236.0  210.8  256.6  263.5   312.0  300.0  292.0  291.0  347.0  439.0  490.0   884.0   936.0 3622.0  5261.0
Sugar                      141.6   77.3  122.0   123.0   149.0  120.0   84.0   76.0  104.0  162.0  183.0   529.0   397.0  1205.0  1618.0
Rice                        25.0   49.0   41.0   34.0    41.0   43.0   46.0   40.0   48.0    42.0   58.0    50.0    58.0  400.0   304.0
Other crops                 25.0   35.3   38.6   42.0   48.0   54.0   65.0   75.0   80.0   92.0  103.0   120.0   186.0  646.0   960.0
Livestock                   24.4   26.4   30.5   37.0   41.5   44.0   50.0   40.0   45.0   43.0   48.0    59.0    94.0  275.0   358.0
Forestry                    10.0   10.0   11.0   12.0   15.5   19.0   25.0   30.0   35.0   45.0   43.0    58.0    80.0  923.0  1768.0
Fishing                     10.0   12.8   13.5   15.5   17.0   20.0   22.0   30.0   35.0   55.0   55.0    68.0   121.0  173.0   253.0
Mining and Quarrying         145.0  164.2  178.5  169.5  221.0  101.0   88.0   17.0   59.0   56.0  103.0   339.0   360.0  1027.0  1392.0
Bauxite * Altuina          138.0   154.2  165.0  159.0   210.0   85.0   70.0    1.0   39.0   28.0   53.0   288.0   300.0   777.0   697.0
Other                        7.0   10.0   13.5   10.5   11.0   16.0   18.0   16.0   20.0   28.0   50.0    51.0    60.0  250.0   695.0
Manufacturing & Processing   134.9  122.9  137.5   146.0   162.0  201.0   179.0  158.0  183.0  227.0   271.0   411.0   460.0  1211.0  1425.0
-- - - - - - - - - - - - - - - -  .....   -- -     - --   - - -   .....   -- -    -- -  .  - -     - -     - --    - - -   - - -  - - -    .. ....
Sugar mifling               49.4   27.1   43.0   43.0   49.0   40.0   28.0   23.0   36.0   53.0   67.0    185.0   126.0  489.0   651.0
Rice milLing                 4.5    9.2    8.5    6.0    10.0   11.0   16.0   10.0   17.0   14.0   16.0    16.0    23.0   167.0    61.0
Other a/                    81.0   86.6   86.0   97.0   103.0  150.0  135.0   125.0  130.0   160.0  188.0   210.0   311.0  555.0   713.0
Construction                 85.0   76.9   75.0   85.0    95.0  110.0   95.0   98.0   100.0   120.0  124.0   141.0   246.0  434.0   620.0
... . .. ..               .. .    ----    -- -    -- -*-     -     ---    - - -   - - -    - -     - -    - - -   - - -    - --     - -      - -
0o
Services                    437.5  444.5  488.0  515.0   546.0  638.0  596.0  636.0   715.0  794.0  849.0   1143.0   1598.0 2780.0  5117.0
..-- -                   -- -     .--.    . .     - -     . .     . .    - - -   - - -   - - -   - - -   - - -  . . .     ... .   . . .   - - -
Distribution               108.1   100.0  104.0   117.0   115.0  145.0  123.0  120.0  125.0  133.0  134.0   166.0   290.0   500.0   915.0
Transport & communications   55.0   58.0   65.0   72.0   75.0   90.0   85.0   98.0  100.0  128.0  139.0   188.0   299.0  546.0  1056.0
Rent of dielLings           16.0   16.4   17.0   17.0   18.0   23.0   25.0   27.0   30.0   32.0   34.0    39.0    65.0  392.0   700.0
Financial services          38.0   42.8   44.0   45.0   54.0   64.0   80.0   88.0   95.0  100.0  100.0   134.0   185.0  295.0   961.0
Govern-int                 193.4  200.5  230.0  234.0  250.0  276.0  238.0  255.0  315.0  346.0  387.0   535.0   634.0  822.0  1175.0
Other bl                    27.0   26.8   28.0   30.0   34.0   40.0   45.0   48.0   50.0   55.0   55.0    81.0   125.0  225.0   310.0
Total GOP at Factor Cost    1038.4  1019.3  1135.6  1179.0  1336.0  1350.0  1250.0  1200.0  1404.0  1636.0  1837.0  2918.0  3600.0 9074.0  13815.0
Indirect taxes              143.7  127.0   146.0  164.0  190.0  265.0  208.0  278.0  326.0  381.0  485.0   567.0   538.0  1256.0  1850.0
Subsidies (-)                45.9   21.7   14.0   17.0   18.0   18.0   12.0   10.0   67.0   67.0  152.0   126.0                0.0    0.0       0.0
Total COP at Market Prices  1136.2  1124.6  1267.6  1326.0  1508.0  1597.0  1446.0  1468.0  1663.0  1950.0  2170.0  3359.0  4138.0 10330.0  15665.0
*/ Includks electricity, gas and water.
b/ For 1987, includes aLl services except Goverrant
Source: State Planning Secretariat; and Statistical Bureau.



TabLe 2.2: GUYANA - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CONSTANT FACTOR COST
---------                (1977 G$ miLLion) a/
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986      1987     1988    1989     1990
Agric., Forestry & Fishing     218     211     229      213     214     219     216     208     215     215      223      218      198     198      165
. . .                                                                                           .
Sugar                         100      77      105      96      89      99      95      93      89      89      89        82       63      62       49
Rice                           26      49      42       33      39      38      42      37      46      39      46        45       44      49       32
Other crops                    37      35      35       34      36      36      37      41      43      47       48       49       50      50       52
Livestock                      31      26      25       27      28      26      22      16      16      14      15        16       16      16       11
Forestry                       12      10      10        9       8       7       8       8       7       8       7         8        7       6        6
Fishing                        12      13      12       14      14      13      12      13      14      18      18        18       18      15       15
Mining and Quarrying           162     164      145     132     140     124      85      51      62       74      68       70       69      51       61
…-------------------          .....   -----    -----   -----   -----           -----   -----            -----   -----   -----    -----
Bauxite & Alumina             154     154      134     124     133     114      76      44      49       58      50       49       47      35       35
other                           8      10       11       8       7      10       9       7       13      16      18       20       22      16       21
Manufacturing & Processing     122     123      126     131     132     140     122     102      96      93       93       90       87      78       72
…. 
Sugar milLing                  37      27      36       33      30      33      32      31      29      29       29       26       21      21       16
Rice miLling                    5       9       8        6       7       7      10       9      11      10       12       13       13      11       10
other b/                       80      87      82       92      95     100      80      62      56      54       52       51       53      46       46
Construction                    93      77      66       68      70      71      64      61      61      61      60        63       64      62       64
-----------                           -----   -----   .....   -----   .....   -----   -----      ---        -----   -----   -----    -----   -----   -----
Services                       455     445     424     432      436     435     399     382     387     386     387       363      367    361       365
.….                                                                             …
Distribution                  107     100      83       87      89      85      68      55      58      58       58       62       65      62       64
Transport & commnications      56      58      56       63      64      64      63      63      65      62      63        71       73      70       71
Rent of dwellings              16      16       16      16      16      16      16      16      17       17      17       18       18      18       18
Financial services             41      43      41      40       41      42      40      40      40      42      42         5        5       5        5
Goverrwnent                   207     201     203      204     205     207     191     187     187      187     187      187      184     184      184
Other                          28      27      25       22      21      21      21      21      20      20       20       21       22      22       22
TotaL GDP at Factor Cost      1050    1019     990      976     992     989     886     804     821     829     831       805      785     751      726
a/ OfficiaL data on GDP at 1977 prices do not cover the years prior to 1977. Data for 1970-76 have been on the basis of sectoral and subsectoraL
growth rates derived from tabLe 2.2.
b/ IncLudes eLectricity, gas and water.
Source: State Planning Secretariat; StatisticaL Bureau; and mission estimates.



Table 2.3: GUYANA - IHPLICIT DEFLATORS, 1976-90
-------'-     (1977 = 100)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986       1987     1988    1989     1990
Agric., Forestry L Fishing   108.3   100.0   112.1   123.7   145.8   137.0   135.2   139.9   161.4   204.2   219.7    404.8    472.7  1830.3   3180.3
0
Mining and Quarrying          89.5   100.0  123.1   128.4   157.9    81.5   103.5   33.3   95.2    75.7   151.5    486.9   518.9  2003.5   2300.4
Manufacturing & Processing   110.6   100.0   109.1   111.5   122.7   143.6   146.7   154.9   190.6   244.1   291.4    455.2    526.3  1555.7   2007.0
Construction                  91.4   100.0   113.6   125.0   135.7   154.9   148.4   160.7  163.9   196.7  206.7   222.5    386.7  696.3    974.6
Services                      96.2   100.0   115.1   119.2   125.2   146.7   149.4   166.5   184.8  205.7   219.4    314.8   435.9  769.5   1401.9
Total GDP at Factor Cost      98.9   100.0   114.7   120.8   134.7   136.5   141.1   149.3  171.0   197.3  221.1    362.6   458.6  1208.9   1902.3
SourceTables.1and2.3,  -tt a   A                      ......-....... .    .                    -     
Source: Tabtes 2.1 and 2.3, Statistical Appendix.



Table 2.4: GUYANA - EXPENDITURES ON GROSS DOMESTIC PRODUCT AT CURRENT PRICES, 1976-90
---------                           (GS miltion)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985        1986      1987    1988     1989     1990
TotaL Consumption                     949.6   935.9   989.9   954.0  1200.3  1469.5  1335.2  1428.5  1326.7  1521.0   1448.9   2796.4  3440.9   7688.0  11670.0
Piblic                                320.1   290.0   296.0   348.0   365.0   464.0   373.0   398.0   301.0   352.0    683.0    952.0  1162.0   1701.0   2133.0
Private (residual)                    629.5   645.9   693.9   606.0   835.3  1005.5   962.2  1030.5  1025.7  1169.0    765.9   1044.0  1330.0   2557.7   4225.3
Gross Domestic Investment             469.4   363.6   278.0   497.0   494.0   501.0   361.0   314.0   456.0   698.0    871.0   1025.0   890.1   3536.0   6624.0
---     -- ---  -- --             ......   -----   ...... .    -- --   - -- - -- -- -  -- -  ......  -----    -----   -- --    -- --     -----   -- --    -- --
Fixed Capital Formation               425.2   326.8   260.0   411.0   449.0   471.0   361.0   314.0   456.0   582.0    733.0   1025.0   890.1   3536.0   6624.0
Public                               311.0   230.0   195.0   260.0   334.0   361.0   301.0   254.0   376.0   411.0    535.0    910.0   761.0   1697.0   3487.0
Private                               70.0    60.0    47.0    65.0    70.0    80.0    60.0    60.0    80.0    55.0         60.0    115.0   129.1   1839.0   3137.0
Change in inventories                  44.2    36.8    18.0    86.0    45.0    30.0        0.0     0.0     0.0   116.0    138.0       0.0      0.0      0.0       0.0
Resource BaLance                     -282.8  -174.9    -0.3  -124.9  -186.3  -373.5  -250.2  -274.5  -119.7  -269.0   -149.9   -462.4  -193.0   -894.0  -2629.0
Exports of goods & NFS                750.7   710.9   799.7   793.1  1225.8  1100.7   763.2   673.5  .734.4   937.7   1004.8   2635.5  2633.0  7945.0  12269.0
Imports of goods & NFS               1033.5   885.9   799.9   918.0  1412.1  1474.2  1013.4   948.0   854.1  1206.7   1154.7   3097.9  2826.0   8839.0  14898.0
GDP at current m.p.                   1136.2  1124.6  1267.6  1326.0  1508.0  1597.0  1446.0  1468.0  1663.0  1950.0   2170.0   3359.0  4138.0  10330.0  15665.0
Net factor income from abroad          -60.9   -67.1   -64.5   -77.0  -123.6  -174.9  -178.8  -218.1  -246.3  -272.5   -446.9   -725.0  -869.0  -2343.0  -4098.0
GNP at current m.p.                   1075.3  1057.5  1203.1  1249.0  1384.4  1422.1  1267.2  1249.9  1416.7  1677.5   1723.1   2634.0  3269.0   7987.0  11567.0
------------------~~ ~   ~    ~    ~    ~ -- - -   -- - ---- -   - - -   - - -   - - -   - - -   - - -   - - -   - - -   - - -  - - -  - - -   --- - -    -- - - ---
Gross Domestic Savings                 186.6   188.7   277.7   372.1   307.7   127.5   110.8    39.5   336.3   429.0    721.1    562.6   697.1   2642.0   3995.0
Net transfers from abroad              -15.6    -9.9   -16.6      0.8   -18.0     0.6   -24.6      3.0    18.6    42.2      41.9      46.6   195.0    700.0   1575.0
Gross National Savings a/              110.1   111.7   196.7   295.8  166.1   -46.8   -92.6  -175.6   108.6   198.7    316.1   -115.8    23.1    999.0   1472.0
emeo Item:
Depreciation                            54.0    60.0    70.0    85.0    95.0   103.0   118.0   120.0   125.0   126.0    134.0    140.0   144.0    325.0    140.0
National Income at current m.p.       1021.3   997.5  1133.1  1164.0  1289.4  1319.1  1149.2  1129.9  1291.7  1551.5   1589.1   2494.0  3125.0   7662.0  11427.0
Indirect Taxes less subsidies          97.8   105.8   132.0   147.0   172.0   247.0   196.0   268.0   275.0   290.0    399.0    464.0   538.0   1250.0   2140.0
GNP at current f.c.                   977.5   951.7  1071.1  1102.0  1212.4  1175.1  1071.2   981.9  1141.7  1387.5   1324.1   2170.0  2731.0   6737.0   9427.0
Public Savings                          23.0    -9.8    74.0    54.6    32.5  -288.1  -309.3  -543.4  -499.9  -879.3   -787.5   -386.6  -386.6   -386.6   -386.6
a/ Domestic savings plus net factor income plus net current transfers.
Sources: State PLanning Secretariat and Statistical Bureau.



Table 2.5: GUYANA - ESTIMATE OF EXPENDITURES ON GROSS DOMESTIC PRODUCT, 1976-90
---------                      (1977 GS million)
1976   1977   1978    1979   1980   1981    1982   1983   1984   1985   1986    1987    1988   1989    1990
Total Consumption              969.7  936.4  814.1  709.8  847.9  933.1  821.7  787.8  641.4  651.5  670.3   579.6   682.4  583.0   569.2
....--  -- -  -                ------  -- --   ------  ......  ------  -- --   -- --  -- --   -- --   -- --   -- --   .........  -- --   -- --  -- --
Pubtlic a/                     346.8  290.0  257.2  256.6  235.9  245.5  163.6  151.5   91.5   93.0  167.3   181.2   158.1  122.0    93.9
Private (residual)             622.9  646.4  556.9  453.1   612.0  687.6  658.1   636.3  549.9  558.5   503.0   398.4   524.3  461.1    475.3
Gross Domestic Investment      511.8  363.6  241.6  372.6  307.4  279.1   183.0  147.8  186.8  230.2  249.4   252.2   124.5  203.2   241.6
..- - -- - - - -- -   -        -----   -----   ...  ...  -----   -- --   -- --   -----   ------  -----   ------ . -- --   -- --   -- --   -- --   ..  ..... ... .....
Fixed capital formation b/     463.9  326.8  226.0  309.1   278.3  263.3   183.0  147.8  186.8  199.5  215.6   252.2   124.5  203.2   241.6
Change in inventories a/        47.9   36.8   15.6   63.4   29.1   15.9    0.0    0.0    0.0   30.7   33.8              0.0      0.0    0.0       0.0
Resource Balance              -325.5  -174.9   49.0    2.1  -52.1  -92.5  -32.7  -29.6   76.4   24.0    9.0    61.3    51.2   54.0                9.6
...-  - -- - -                 -- --   -----   -----   .  .....  -----   ------ -----   .....  .  -- --   -- --   -- --   -----   ------  -- --   -- --
Exports of goods £ NFS c/      821.8  710.9  773.5  694.8  714.7  672.4  499.1  482.8  527.3  540.8  485.3   506.3   446.2  417.9   401.1
Imports of goods & NFS c/     1147.3  885.9  724.5   692.8  766.8  765.0  531.8  512.4  450.9  516.8  476.3   445.1   395.0  363.9   391.5
GDP at constant m.p. d/       1156.0  1125.1  1104.7  1084.4  1103.2  1119.7  972.0  906.0  904.6  905.6  928.7   893.1   858.1   840.2   820.4
FSY from abroad e/             -67.0  -67.1  -56.1   -59.1   -73.6  -103.6  -107.3  -134.5  -154.5  -132.9  -164.5   -252.2  -125.1  -112.3   -127.6
GNP at m.p.                   1089.0  1058.0  1048.6  1025.3  1029.6  1016.1  864.6  771.5  750.1  772.7  764.3   640.8   733.0  727.9   692.8
Gross Domestic Savings         186.3  188.7  290.6  374.7  255.2  186.6  150.3  118.3  263.2  254.2  258.4   313.5   175.7  257.2   251.2
.... -------------------       ------  ------  ------  ------  ------  ----   ......  ------  ------  ------  ------  ------ . ------  ------  ......    
Net transfers from abroad e/   -17.1   -9.9  -14.4    0.6  -10.7    0.4  -14.8    1.9   11.7   20.6   15.4    16.2    28.1   33.6    49.1
Gross National Savings f/      102.2   111.7  220.1   316.1   170.9   83.3   28.2  -14.4   120.4  141.8   109.4    77.4    78.7  178.4   172.7
------- ------ -....   -- --   -- --   -- --   ...... ... -- - - - - - . - - - - - -   ......  -- --   -- --   -- - - - - - . - - -  - - -
Deflators
GDP at m.p.                     98.3  100.0  114.7  122.3  136.7  142.6  148.8  162.0  183.8  215.3  233.7   376.1   482.2  1229.4  1909.4
Consumption                     97.9   99.9  121.6  134.4  141.6  157.5  162.5  181.3  206.8  233.5  216.2   482.5   504.2  1318.6  2050.3
Investment                      91.7  100.0  115.1   133.0   161.4   178.9  197.3  212.4  244.2  291.7  340.0   406.5   714.8  1740.4  2741.2
Exports of GNFS                 91.3   100.0  103.4   114.1   171.5   163.7  152.9  139.5   139.3  173.4  207.0   227.1    537.0  1518.3   2322.3
Imports of GNFS                 90.1   100.0  110.4   132.5   184.2   192.7  190.6  185.0   189.4  233.5   242.4   262.9   649.6  1935.1   2959.4
MUV                             91.0   100.0  115.0   130.3   142.8  143.5   141.6  137.8  135.5   136.4   162.2   171.6   181.5   192.1    203.2
MUV Index (adjusted)            91.0   100.0  115.0   130.3   168.0   168.8  166.6  162.1   159.4  205.0  271.7   287.5   694.5  2086.3  3210.7
Guyana CPI                      92.3  100.0  115.1  135.6  154.7  189.0  228.0  262.7  328.9  378.4  408.3   525.5   735.1  1394.6  2271.7
Exchange Rate(GS/USS)            2.6    2.6    2.6    2.6    3.0    3.0    3.0    3.0    3.0    3.8    4.3               4.3     9.8   27.2    39.5
a/ Current prices defLated by CPI
b/ Current price data deflated by composite index of MUV (weight 0.75) and Guyana CPI (0.25).
c/ Merchandise exports/imports in GS (TabLe 3.1) defLated by GS price indices (TabLe 3.7) pLus NFS in GS (TabLe 3.1) defLated by MUV (adjusted).
d/ EquaLs GDP at factor cost at constant 1977 prices (TabLe 2.3) pLus Indirect taxes less subsidies, both deflated by Guyana CPI.
e/ Deflated by NWV index (adjusted for currency valuation).
f/ Domestic savings plus net factor income pLus net transfers.
Source: Mission estimates.



Table 2.6: GUYANA - NATIONAL INCOME RATIOS, 1976-90
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985         1986      1987    1988      1989     1990
Percentage of GDP at Current M.P.
Consumption                            83.6    83.2    78.1    71.9    79.6    92.0    92.3    97.3    79.8    78.0          66.8     83.2    83.2      74.4      74.5
PubliC                             28.2    25.8    23.4    26.2    24.2    29.1    25.8    27.1    18.1    18.1          31.5     28.3    28.1      16.5      13.6
Private                            55.4    57.4    54.7    45.7    55.4    63.0    66.5    70.2    61.7    59.9          35.3     31.1    32.1      24.8      27.0
Gross Domestic Investment              41.3    32.3    21.9    37.5    32.8    31.4    25.0    21.4    27.4    35.8          40.1     30.5    21.5      34.2      42.3
Public                             27.4    20.5    15.4    19.6    22.1    22.6    20.8    17.3    22.6    21.1          24.7     27.1    18.4      16.4      22.3
Private                            10.1     8.6      5.1    11.4      7.6     6.9      4.1     4.1      4.8     8.8       9.1      3.4      3.1     17.8      20.0
Ratio of Public/Private Investment  272.3   237.6   300.0   172.2   290.4   328.2   501.7   423.3   470.0   240.4    270.2    791.2   589.7             92.3    111.2
Gross Domestic Savings                 16.4    16.8    21.9    28.1    20.4       8.0      7.7     2.7    20.2    22.0       33.2      16.8    16.8     25.6      25.5
Public                              2.0    -0.9      5.8     4.1      2.2   -18.0   -21.4   -37.0   -30.1   -45.1    -36.3    -11.5    -9.3         -3.7      -2.5
Private                            14.4    17.6    16.1    23.9    18.2    26.0    29.1    39.7    50.3    67.1          69.5     28.3    26.2      29.3      28.0
Gross National Savings                  9.7     9.9    15.5    22.3    11.0    -2.9    -6.4   -12.0         6.5    10.2      14.6      -3.4     0.6      9.7       9.4
PubLic                              2.0    -0.9      5.8     4.1      2.2   -18.0   -21.4   -37.0   -30.1   -45.1    -36.3    -11.5    -9.3         -3.7      -2.5
Private                             7.7    10.8      9.7    18.2      8.9    15.1    15.0    25.1    36.6    55.3        50.9      8.1      9.9     13.4      11.9
Exports of Goods & NFS                 66.1    63.2    63.1    59.8    81.3    68.9    52.8    45.9    44.2    48.1          46.3      78.5    63.6      76.9     78.3
Iqorts of Goods & NFS                  91.0    78.8    63.1    69.2    93.6    92.3    70.1    64.6    51.4    61.9          53.2     92.2    68.3      85.6      95.1
BOP Current Account                   -31.6   -22.4    -6.4   -15.2   -21.7   -34.3   -31.4   -33.4   -20.9   -25.6    -25.6    -15.2   -23.6    -31.7    -46.9
Growth Rates
GDP f.c                                 1.7    -2.9    -2.9    -1.4       1.6    -0.3   -10.4    -9.3       2.1      1.0      0.2      -3.2    -2.5      -4.4     -3.2
GDP m.p.                                2.3    -2.7    -1.8    -1.8       1.7      1.5   -13.2    -6.8    -0.2       0.1      2.5      -3.8    -3.9      -2.1     -2.4      K)
GNP m.p.                                1.1    -2.8    -0.9    -2.2       0.4    -1.3   -14.9   -10.8    -2.8        3.0     -1.1    -16.1    14.4       -0.7     -2.7       J
GDPfc/capita                            0.9    -3.7    -3.7    -2.2       1.2    -0.3   -10.4    -9.2       2.2      1.0      0.3      -3.1    -2.4      -4.3     -3.2
GNP/capita                              0.2    -3.6    -1.7    -3.0       0.0    -1.3   -14.9   -10.8    -2.7       3.1      -1.0    -16.1    14.4       -0.6     -3.7
Consumption/capita                     11.7    -4.0   -13.8   -13.9    20.3        8.4   -12.9    -4.7   -21.5       2.5      4.9    -17.0    27.0    -11.6        2.0
Exports of Goods & NFS                 -4.1   -13.5      8.8   -10.2      2.9    -5.9   -25.8    -3.3       9.2      2.5    -10.3      4.3   -11.9       -6.3     -4.0
Exports of Goods                         ..   -15.1    10.9   -10.2       3.2    -6.9   -27.5    -7.6    11.4        1.9     -7.4       3.9   -13.0      -5.8     -4.8
Imports of Goods & NFS                  3.4   -22.8   -18.2    -4.4    10.7    -0.2   -30.5    -3.7   -12.0    14.6          -7.8     -6.6   -11.2       -7.9      7.6
Imports of Goods                              -22.0   -19.5    -5.8       3.9     6.3   -36.4    -9.6   -17.7    27.4         1.9      -8.0   -14.7      -8.8     11.5
Others
ICOR                                   -8.1   -26.2      1.5     7.1      2.2     4.5    -1.6      8.8      1.7     2.0       3.4      0.7      1.0      0.5       1.2
Terms of Trade Index                  103.3   100.0    93.6    86.1    93.1    84.9    80.2    75.4    73.5    74.3          85.4      86.4    82.7      78.5     78.5
Marginal National Savings Rate        550.3   -13.4    59.4   169.8   -71.3  -239.2    30.3  -377.3   145.7    31.4          53.4    -36.3    17.8       15.8      8.9
... .. .   . ........................................................................................................................................................
Source: Tables 2.1 *nd 2.5. Statistical AppWrnix.



)                                                               Table 3.1: GUYANA - BALANCE OF PAYMENTS, 1976-90
---------            (US$ million)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1966      1987     1988    1989    1990
Exports of Goods & NFS       294.4  278.8  313.6   311.0  408.6  366.9  254.4  224.5  244.8  244.7  235.2   269.2   245.6  233.7   235.8
-- -- -- -- - -- -- -- .. . .. .. .. . .. .. .   .. . .   .. ..   . . ..   . .. .   . .. .. .. . .. .. .. .   . .. .   .. . . . -- --  . . ... . .. .
Merchandise Exports          278.9  259.3  295.5   292.5  389.0  344.4  231.8   192.6  215.5  212.8    210    240.0   214.6  204.7   203.9
Sugar                      101.5    72.8   92.0    90.4  121.0  108.9   87.7   71.5    70.9   66.4    83.4    90.4    74.8   68.1    74.9
Bauxite                    113.2   129.9  130.3   128.4  188.0  152.8   94.2   72.9   91.6   99.1    82.4    86.2    79.5   60.8    74.9
Rice                        28.9   26.2    37.6    31.7   34.0   39.1    20.2    21.6    21.3   13.3    10.5    16.1            15.4   11.1    13.6
other                       35.3    30.4    35.6    42.0   46.0   43.6    29.7   26.6   31.7   34.0   33.7    47.3    44.9   64.7    40.5
Nonfactor Services            15.5    19.5    18.1    18.5    19.6   22.5   22.6   31.9   29.3    31.9   25.2            29.2    31.0   29.0    31.9
Imports of Goods & NFS       405.3  347.4   313.7  360.0  470.7  491.4  337.8  316.0  284.7  314.9  270.3   273.9   263.0  259.3   293.3
Merchandise imports          363.6  315.4   278.9   317.7  396.1  440.0  280.4  248.3   214.3  255.5  230.3   231.6   215.6  212.2   249.5
Consumer                    64.8   56.1    51.3    57.8    51.0   57.2   36.0    25.0    21.7   23.4   27.2    26.2    21.6   21.3    29.8
Intermediate               122.6   98.1    98.4   110.4  125.6  153.4   85.9   76.7   51.4   61.5    76.7              71.5    74.9   51.6    47.4
Capital                    118.8   88.8   60.2    57.2   75.5   77.2   46.9   48.0   30.6   66.1    51.1               55.0    43.1    75.7   112.1
Fuel £ Lubricants           53.9    62.9   66.7    90.3   141.2  149.2  109.0   96.6  108.3.  102.9   73.5             76.9    73.8   61.3    56.6
MiscelLaneous                3.5     9.5      2.3     2.0     2.8     3.0     2.6     2.0     2.3      1.6     1.8      2.0      2.2     2.3      3.6
Nonfactor Services            41.7   32.0   34.8    42.3    74.6   51.4    57.4    67.7   70.4    59.4    40.0    42.3            47.4   47.1    43.8
Resource BaLance            -110.9  -68.6   -0.1   -49.0  -62.1  -124.5  -83.4  -91.5  -39.9  -70.2  -35.1               -4.7   -17.4  -25.7   -57.5
Factor Services (net)        -23.9  -26.3  -25.3  -30.2  -41.2  -58.3  -59.6  -72.7  -82.1  -71.1  -104.6   -125.7   -95.4  -108.9  -118.6
Interest on HILT Debt a/  -19.8  -15.2  -17.3  -25.2  -26.7  -36.3  -31.6  -36.0  -32.5  -60.0  -76.9   -80.8   -85.0  -54.9   -55.6                             -
Other (net)                 -4.1   -11.1   -8.0    -5.0  -14.5  -22.0  -28.0  -36.7  -49.6  -11.1   -27.7   -44.9   -10.4  -54.0   -63.0
Current Transfers (net)       -6.1    -3.9   -6.5       0.3   -6.0      0.2   -8.2       1.0     6.2   11.0      9.8     10.9       .8   14.0    13.0
Current Account BaLance    -140.9  -98.8  -31.9  -78.9  -109.3  -182.6  -151.2  -163.2  -115.8  -130.3. -129.9  -119.5  -100.0  -120.6  -163.1
Public Capital (net)          56.9   30.5    27.3    31.6   52.2   115.9   40.8          2.3  -13.8   -0.9       7.5   -22.6   -27.8  236.7   522.3
Gross Disbursements a/      70.0   47.2    59.6    97.7   95.0   169.3   76.0   48.8   24.4   56.8   67.9    39.3               28.7   67.7   225.1
Amortization                13.1    16.7   32.3    66.1    42.8   53.4   45.4   78.1    81.7   113.2  126.2    133.9   129.6  174.9   121.3
Rescheduling                 0.0     0.0      0.0     0.0     0.0    0.0    10.2   31.6   43.5    55.5   65.8    72.0    73.1  343.9   418.5
Other Capital (net) b/        -6.7    38.6   -7.8   -6.5  -40.9  -43.8  -13.8            5.7  -13.8  -73.9   -0.8         4.8    22.1       0.7    25.2
Capital Account Balance       50.2    69.1    19.5    25.1    11.3   72.1    27.0       8.0   -27.6  -74.8       6.7    -17.8    -5.7  237.5   547.5
Overall BaLance              -90.7  -29.7  -12.4  -53.8  -98.0  -110.5  -124.2  -155.2  -143.4  -205.1  -123.2  -137.3  -105.7   116.9   384.4
change in Commercial
Arrears  (increase   *)       0.0     0.0    22.2      5.2    17.0   36.3    47.7   37.9    -2.7   16.1         9.8      3.9      3.5      9.6  -101.3
Changes in Net Reserves       90.7   29.7   -9.8    48.6    81.0   74.2   76.5   117.3  146.1   189.0   113.4    133.4    102.2  -126.5  -283.1
…------- -------- -----       .. ..   ....     ......                                                                              ...     .       .
(increase * -) -
a/ Based on Table 4.2; excludes short-term public debt.
b/ Residual: Includes direct investment, private capital, short-term capital, errors & omissions, SDR allocation, debt refinancing/daferuent and other.
Source: Statistical Bureau; Bank of Guyana; IMF; and mission estimates.



Table 3.2: GUYANA -MERCHANDISE EXPORTS (FOG), 1976-90
---------         ~(GS miLlion)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986          1987      1988    1989      1990
Totat Exports                 711.3   661.2   753.5   745.9   992.3   968.5   754.5   580.0   831.3   910.3   947.1   2400.0   2146.0  6753.5   9441.0
Re-Exports                      16.1     9.3    14.0      9.3    15.9    20.7    26.3    20.0    19.9    27.2    23.1         83.0      57.0   151.8    202.5
Domestic Exports              695.2   651.9   739.5   736.6   976.4   947.8   728.2   560.0   811.4   883.1   924.0   2317.0   2089.0  6601.7   9238.5
AgricuLture                   376.2   291.9   376.9   374.3   456.9   474.9   362.1   315.9   400.5   407.8   503.0   1276.7   1080.4  3854.9   4859.8
Sugar                         259.0   185.7   234.6   230.6   307.6   305.9   263.6   214.5   271.5   282.3   356.2    904.0    745.0  2752.2   3370.0
Rice                           73.6    66.8    96.0    80.8    87.5   110.0    60.7    64.9    81.6    56.6    57.2    161.0    154.0   396.0    612.0
Other                          43.6    39.4    46.3    62.9    61.8    59.0    37.8    36.5    47.4    68.9    89.6    211.7    181.4   706.7    877.8
Motasses                       6.0      6.0      8.9    13.1    12.3    12.9       6.3     2.3      3.5     2.0      5.0      8.0       2.2     1.4       4.5
Rum & other aLcoholic
beverages                     14.0     9.1    11.6    15.1    20.5    20.6    11.7    10.8    18.3    26.1    32.4          94.5      82.5   209.7    286.0
shrimp                        12.9    12.3    12.4    17.6        7.8     2.7      2.3     4.2      4.7    18.3    23.9      47.0      41.0   171.0    225.0
Natural spirits-                          -            -        -           -      2.3     5.4      5.1     3.4      7.1     15.0      24.0   224.0    229.5
Timber                         9.7      9.1    10.9    14.3    16.2    15.3    14.0    13.3    14.7    17.9    17.7          43.7      28.2    89.1    117.0
other                           1.0     2.9      2.5     2.8      5.0     7.5      1.2     0.5      1.1     1.2      3.5      3.5       3.5    11.5      15.8
Minerals                      289.7   332.4   333.5   328.1   480.7   430.1   317.5   224.2   367.6   438.8   378.0    955.0    875.0  2580.4   3969.0
CaL cired bauxite              190.6   211.5   201.6   218.3   305.5   259.5   205.8   142.3   270.9   311.4   261.4    667.0    579.0  1620.3   2142.0
Dried bauxite & aLumina
cement                        33.7    41.2    48.5    54.8    62.4    78.1    71.4    69.5    80.0   110.2    92.5    194.0    216.0   772.0   1233.0
Alumina I. atluina hydrate     64.4    78.5    82.0    53.7   111.4    91.9    35.9         7.0      0.0     0.0      0.0      0.0       0.0     0.0       0.0
GoLd                             0.2     0.9      0.2     0.1       ...      ...    4.0     5.0    16.6    17.2    24.1       94.0      80.0   188.1    594.0
Diamonds                         0.8     0.3      1.2     1.2      1.4     0.6      0.4     0.4      0.1       ...     ...      ..       ..        ..      ..
Other Manufactured              29.3    27.6    29.1    34.2    38.8    42.8    48.6    19.9    43.3    36.5    43.0          85.3    133.6   166.4    409.8
clothing                         8.9     7.1      5.6     5.4      6.0     4.2      3.4     2.5      2.0     3.6      1.7       1.7
Footwear                         2.0     2.2      1.5     1.3      1.5     1.5      1.5     1.5       ...      .       ..
Drugs                            4.3     3.9      5.3     6.6      7.4     4.4      5.4     5.0      5.1    10.9'    5.7'      5.7
Perfumery                        1.8     2.3      2.2     4.5      5.4     4.8      4.3     2.0      5.2    10.9      3.4      3.4
Refrigerators & stoves           1.7     3.4      7.2     7.8      7.8    12.7    16.9      8.0      9.9     8.0      6.0      6.0
Other (manufacturIng)           10.6     8.7      7.3     8.6    10.7    15.2    17.1       0.9    21.1      3.1    26.2      68.5
..Not AvailabLe.
Source: Statistical Bureau.



Table 3.3: GUYANA - NERCHANDISE IMPORTS (CIF) BY END-USE CATEGORY 1976-90
----- ---                                       (USS million)
~~~~~.... ..... .......... .................. .... ...... .... ....... _......... ..... ......... ...... ......... ...... ............ . .....................
1976    1977    1978    1979    190    1961    1982    1983    1964    1985    1986                                                   1987          1988    1989              1990
. ._. . ... ......... .. ..... ...... _. ........ .................. .... ...... .. ........ ....... .... .... ......... ...... ... ..
Consumer Goods                               64.8         56.1        51.3        57.8        51.0         57.2        36.0        25.0        21.7        23.4         27.2         26.2          21.6        21.3          32.6
... .. _ .---... ..                                       -----.    ----    .......           ----         -----    .......        -----       ---          -----.. ----            -----.. ......             .....  ..-.-.-
Foodstuffs                                  22.3        26.5        24.5        24.4         24.4        23.0          9.5         6.3         7.5         6.8          7.9          7.6           6.3         6.2           9.5
Clothing  &  Footwear                        7.5         6.0          4.6         4.8         4.5          5.8         5.4         2.8         2.8         3.1          3.6          3.5           2.9         2.8           4.3
Durables                                    10.6          5.5         3.7         5.0         6.3          8.5         8.1         4.7         4.1         5.0          5.8          5.6           4.6         4.6           7.0
Other                                       24.4        18.1        18.5         23.6        15.8        19.9         13.0        11.2         7.3         8.5          9.9          9.5           7.8         7.7          11.8
Intermediate  Goods                         176.5       161.0       165.1       200.7       266.8        302.6       194.9       173.3        159.7       164.4       150.2         148.4        148.7        112.9        113.9
... -------                                ........    -----. ........ -----    -----.    ---            ----- . -----           ---         -----       -----        ----.       -----.      . ----         -----    .. ... .. ....... .... ..
Foodstuffs                                  26.8        20.0        19.1        25.1         23.1        23.4        10.9          4.3         4.4         5.4         5.5           5.4           4.5         3.4           4.2
Fuels 8  Lubricants                        53.9         62.9        66.7        90.3       141.2        149.2          109       96.6       108.3       102.9         73.5          76.9         73.8        61.3          62.0
Chemicals                                   18.2        15.2        16.7         15.3        14.3        22.0        18.0         16.7        13.4        14.0        14.4          13.9          11.6         8.9          10.9
Textiles                                    16.8        10.7        10.8         11.5        11.7        13.3          4.7         4.5         3.9         3.4          3.5          3.4           2.8         2.2           2.6
Other                                       60.8    52.2    51.8    58.5    76.5    94.7    52.3    51.2    29.7    38.7    53.4                                                    48.8          55.9    37.2             34.2
Capital  Goods                              118.8        88.8        60.2         57.2        75.5         77.2        46.9        48.0        30.6        66.1         51.1         55.0          43.1        75.7         122.7
Building  Haterials                         36.0        20.6        17.7        20.3         12.7        20.7        12.0         12.8         9.2         9.7          7.5          8.1           6.3         6.3           6.7
Mining/Transport Equipment    37.4                      37.7        13.6         16.1        21.9        24.3          9.2        10.4         4.8        15.5        12.0          12.9          10.1        17.8         21.2
AgricuLtural  Machinery                      4.0          1.0         1.1         2.2         7.8          7.3         3.6         0.8         5.0        10.6          8.2          8.8           6.9        12.1          19.7
Other                                       41.4        29.5        27.8         18.6        33.1        24.9        22.1        24.0         11.6        30.3        23.4          25.2          19.8        39.5         75.1
Miscellaneous                                  3.5         9.5         2.3          2.0         2.8         3.0         2.6          2.0         2.3         1.6          1.8          2.0           2.2         2.3           4.0
..-- - -    -                            --  -       -----.                   -----       .....     .--- ..       --   -       ----        -----       .....       ----         -----        .......       --   -      ----- ... .........  .
Total  Merchandise  lmports                 363.6       315.4       278.9       317.7        396.1       440.0       280.4       248.3        214.3       255.5       230.3         231.6         215.6       212.2         273.2
...   .  .  .  .  .  .  .  ......           --   -   _    -  -        -  -        -  -         -  -        -  -        -  -      .....         -   -        -  -      ....               --          -  -     -  -  --         -  -
....Not Available.
Source: Statistical Bureau.



Table 3.4: GUYANA - VALUE, VOLUME, AND UNrr VALUE OF PRINCIPAL FUEL IMPORTS. 1997-90
(Value In millions of Guyana dollars; volume in millions of Inperial
gallons and unit value in Guyana dollars per imperial gallon) a/
.......................................................................................................................................
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986    1987        1988     1989    1990
.............................................................................................................................................
Total value of fuel
.... .... ... ... .....
Imports (cif)               160.4   170.0   230.0   345.4   416.9   327.0   290.0   415.0   436.8   302.8   754.5   2435.4   2022.9  2790.0
......--..........-...      ......  -----   ......   ------  -- --   -- --    -----   ......  ......   -----.  ..   .......  ------  ...... . . ...-----.. 
G;;otine
.
Value                          13.6    13.3    25.5    36.4       44    46.4    44.9    53.4    62.5    40.7   94.2    340.0    509.7   478.4
Volume                         11.8    11.0    12.1    12.6    13.3    13.5    14.3    13.9    14.4    14.5    14.1        14.2      16.3    14.8
Unit value                      1.2     1.2     2.1      2.9     3.3     3.4      3.1     3.8     4.3      2.8     6.7     23.9      31.3    32.3
Kerosene
Value                           6.7     7.3    13.5    18.4    22.9   28.1    23.3    31.4    29.9    18.0    52.0    174.9    191.4   342.0
Volume                          5.7     6.1     6.5      5.7     6.8     7.8      7.2     7.9     6.9'    6.6      7.2      7.7       7.4     7.5
Unit value                      1.2     1.2     2.1      3.2     3.4     3.6      3.2     4.0     4.3      2.7     7.2     22.7      25.9    45.6
Gas oll/diesel oil
Value                          43.8    41.8    64.8   114.4   127.9    97.0    85.6   103.8   121.5    77.3   186.0    620.1    507.5   875.9
Volume                         35.8    35.0    35.7    40.3    39.0    28.4    27.9    26.3    28.5    31.0    26.2        30.3      25.4    30.1
Unit value                      1.2     1.2     1.8      2.8     3.3     3.4      3.1     3.9     4.3      2.5     7.1     20.5      20.0    29.1
Butane and propane
.... .. .........
Value                             .     1.6     4.1      7.7     9.1     9.5      9.2    10.7    11.9      7.6    18.8     72.6      55.0    82.0
Volume b/                         -     6.3    10.5    13.2    15.2    14.5    14.2    13.1    12.3       9.8    10.9
Unit value                        -     O.3     0.4      0.6     0.6     0.7      0.6     0.8     1.0      0.8     1.7
Aviation fuel
Value                             -     0.9     1.9      2.1     3.3     2.6      2.6     2.8     2.8      2.8     6.0     18.6      15.4    17.1
Volu                                    o.5     0.5      0.5     0.6     0.4      0.5     0.5     0.4      0.4     0.5      0.6       0.5     0.3
Unit value                        -     1.8     3.8      4.2     5.5     6.5      5.2     5.6     7.0      7.0    12.0     31.0     30.8    57.1
Bunker "Cm
Value                          80.3    87.6    84.9   134.9   169.4   117.8    99.1   186.7   184.1   126.1   333.5    780.2    689.1   951.2
Volume                         88.0  104.2    72.1    75.9    73.1   54.5    42.7    57.6    57.2    62.1    51.6          54.0      37.3    71.7
Unit value                      0.9     0.8      1.2     1.8     2.3     2.2      2.3     3.2     3.2      2.0     6.5     14.4      18.5    13.3
Cetne 47
Value                             -             11.6    17.2    12.1      7.0     6.7      ...      ...     ...     ...      ...      ...      ...
Volume                                    -     6.0      5.8     3.6      2.0     2.2               ...     ...     ...      ...      ...      ...
Unit value                                -      1.9     3.0     3.4     3.5      3.0      ...      ...     ...     ...      ...      ...      ...
Other
Value ci                       16.0    17.5   23.7    14.3    28.2    18.6    18.6    26.2    24.1    30.3    64.0    429.0          54.8    43.3
aI/ Oe barrel of petroleum Is equivalent to 34.973 InperIal gallon.
b/ In oillions of pouIdI.
c/ Includes ltubricating grease  nd oIls, and hite spirit.
Source: StatisticaL Bureau.



Table 3.5: GUYANA - EXPORTS, 1976-90
-----        CUsS million)
1976    1977      1978    1979    1980       1961    1982    1983    1984    1985    1986            1987      1988    1989        1990
Bauxite Sector                   113.2   129.9   130.3   128.4   188.0   152.8    94.2    72.9    91.6    99.1    82.4                 86.2      79.5    60.8        68.2
Dried metat                      13.2    16.2    19.1    21.6    24.5    27.8    23.8    23.2    20.9    25.9    21.6                 19.5      19.5    19.5        19.5
Catclned                         74.7    82.9    79.3    85.7   119.8    92.3    68.6    47.4    70.7    73.2    60.8                 66.7      66.7    66.7        66.7
Atutins                          25.3    30.8    31.9    21.1    43.7    32.7            1.8      2.3      0.0      0.0      0.0       0.0      -6.7   -25.4      -18.0
Other                            165.7   129.4   165.2   164.1   201.0   191.6   137.6   119.7   123.9   113.7   127.6    153.8    135.1   143.9    141.6
Sugar                           101.5    72.8    92.0    90.4   121.0   108.9    87.7    71.5    70.9    66.4    83.4                 90.4      74.8    68.1       68.6
lice                             28.9    26.2    37.6    31.7    34.0    39.1    20.2    21.6    21.3              13.3    10.5       16.1      15.4    11.1        11.8
Other                            35.3    30.4    35.6    42.0    46.0    43.6    29.7    26.6    31.7    34.0    33.7                 47.3      44.9    64.7        61.2
Merchandise exports              278.9   259.3   295.5   292.5   389.0   344.4   231.8   192.6   215.5   212.8   210.0    240.0.    214.6   204.7    209.8
Non-factor cervices               15.5    19.5    18.1    18.5        19.6    22.5    22.6    31.9    29.3    31.9    25.2             29.2      31.0    29.0        31.9
Exports, GIIFS                   294.4   278.8   313.6   311.0   408.6   366.9   254.4   224.5   244.8   244.7   235.2    269.2    245.6   233.7    241.7
PRICE INDEX (1977   100)
Bauxite Sector                    84.5   100.0   111.9   127.9   162.4   162.2   163.9   131.5   127.3   126.5   126.7    131.4                  125.2    98.6      113.5
Dried metaL                      87.4   100.0   104.4   116.8   134.1   152.4   188.0   159.5   148.5   135.3   123.3                116.7    110.5   104.6         99.0
Calcilned                        85.1   100.0   114.6   132.0   168.7   157.9   157.0   126.0   122.1   123.6   128.0    136.4    145.4   155.0    165.1
Atwilna                          81.3   100.0   110.0   124.1   164.9   18~.6.  159.7    69.7              0.0      0.0      0.0       0.0        0.0      0.0       0.0
other                             96.8   100.0    96.6   103.9   133.3   124.6   112.5   108.1   109.4   103.1   116.2    132.6    143.1   165.2    167.4
Sugar                            97.4   100.0    93.4    97.9   138.7   117.2   100.0    95.2    99.8    89.8   112.8    148.7    195.9   258.2    340.2
lice                            102.3   100.0    90.3    95.2   108.6   128.2   148.4   132.4   113.5   116.0    69.6                 58.3       48.9    41.0       34.4
other a/                         91.0   100.0   115.0   130.3   142.8   143.5   141.6   137.8   135.5   136.4   162.2    171.6    181.6   192.1    203.2                                                              c
Merchandise exports               91.4   100.0   102.8   113.2   145.9   138.9   128.9   115.9   116.4   112.8   120.1                132.2      135.9   137.5    145.0
Non-factor services a/            91.0   100.0   115.0   130.3   142.8   143.5   141.6   137.81  135.5   136.4   162.2    171.6    181.6   192.1    203.2
Exports. GNFS                     91.3   100.0   103.4   114.1   145.8   139.1   130.0   118.6   118.4   115.4    123.6    135.6    140.4   142.6    150.7
Bauxite Sector                   134.0   129.9   116.5   100.4   115.8    94.2    57.5    55.4    72.0    78.4    65.0                 65.6       63.5    61.7       60.1
Dried metal,                     15.1    16.2    18.3    18.5         18.3    18.2    12.7    14.5    14.1         19.1    17.5        16.7      17.6    18.6       19.7
Catcined                         81.8    82.9    69.2    64.9    71.0    58.5    43.7    37.6    57.9    59.2    47.5                 48.9       45.9    43.0       40.4
AtLains                          31.1    30.8    29.0    17.0    26.5    17.5            1.1      3.3      0.0      0.0      0.0        0.0       0.0      0.0       0.0
Other                            171.3   129.4   171.1   157.9   150.8   153.8   122.3   110.7   113.2   110.3   109.8    116.0                   94.4    87.1       84.6
Sugar                           104.2    72.8    98.5    92.3    87.2    92.9    87.7    75.1    11.0    73.9    73.9                 60.8       38.2    26.4       20.2
Rico                             28.3    26.2    41.6    33.3    31.3    30.5    13.6    16.3    18.8    11.5    15.1                 27.6       31.5    27.1       34.3
Other                            38.8    30.4    31.0    32.2    32.2    30.4    21.0    19.3    23.4    24.9    20.8                 27.6       24.?    33.7       30.1
Merchandise exports              305.3   259.3   287.6   258.3   266.5   248.0   179.8   166.2   185.2   1818.7   174,8    181.5    157.9   148.8    144.7
Non-factor services               17.0    19.5      15.7    14.2    13.7    15.7    16.0    23.1    21.6    23.4    15.5                17.0      17.1    15.1       15.7
Exports, GIWS                    322.3   278.8   303.3   212.5   280.3   263.7   195.7   189.3   206.8   212.1   190.3    1981.6                 175.0   163.9    160.4
a/ Deflated by the SlN index.
Source: Based on Tables 3.1 and 7.1 of StatisticaL AppesiIx; and mission estimates.



Table 3.6: GUYANA - IMPORTS BY MAIN CATEGORIES, 1976-90
.........              (USS million)
1976    1977   1978    1979   1980   1981    1982    1983   1984   1985    1986    1987    1988   1989    1990
CURRENT PRICES
Fuel and lubricants          53.9   62.9   66.7   90.3   141.2  149.2  109.0   96.6  108.3  102.9   73.5             76.9    73.8   61.3    62.0
Capital goods               118.8   88.8   60.2   57.2   75.5   77.2   46.9   48.0   30.6   66.1   51.1    55.0    43.1   75.7   122.7
Other                       190.9  163.7  152.0  170.2  179.4  213.6  124.5  103.7   75.4   86.5  105.7    99.7    98.7   75.2    88.5
Total goods                 363.6  315.4  278.9  317.7  396.1  440.0  280.4  248.3  214.3  255.5  230.3   231.6   215.6  212.2   273.2
Non-factor services          41.7   32.0   34.8   42.3    74.6   51.4   57.4    67.7   70.4   59.4   40.0    42.3    47.4   47.1               43.8
Total goods & NFS           405.3   347.4   313.7  360.0   470.7  491.4   337.8  316.0  284.7  314.9   270.3   273.9   263.0  259.3   317.0
.. ...............          - - -    - - -  ... ..  .... .  ... .    - - -  - - -   .... .  -  - -  - - --   - - -  - - --   - - -   - - --   - - -
PRICE INDEX (1977=100)
Fuel and lubricants a/       84.5   100.0   96.2   139.6  201.8  242.5  232.1   231.6  232.2  217.8   112.3   136.1    165.0  199.9   242.3
other (incl.
Capital goods) b/           91.0   100.0   115.0  130.3  142.8  143.5   141.6   137.8  135.5  136.4   162.2   166.9   171.7  176.7   181.8
Total goods                  90.0   100.0   109.9  132.8   159.4   166.6  166.9   163.6  171.6  160.6  142.1    155.2   169.4  182.9   192.8
................            .....   ----    -- -    -- -    -- -    -- -    -- -  .  - -     - -     - -     - -     - -    .. ... . - - -    - -
Non-factor services b/       91.0   100.0   115.0   130.3  142.8  143.5   141.6   137.8  135.5  136.4   162.2   166.9   171.7  176.7   181.8
Total goods & NFS            90.1   100.0  110.4   132.5   156.5   163.8  162.0   157.3  161.0  155.4  144.7   156.9   169.8  181.7   191.2
CONSTANT 1977 PRICES
Fuel and lubricants          63.8   62.9   69.3   64.7   70.0   61.5   47.0   41.7   46.6   47.2   65.4    56.5    44.7   30.7    25.6
Caltal goods                130.5   88.8   52.3    43.9   52.9   53.8   33.1    34.8   22.6   48.5    31.5    33.0    25.1   42.8    67.5
Other                       209.8   163.7  132.2   130.6   125.6   148.9   87.9    75.3   55.6   63.4    65.2    59.7    57.5   42.6           48.7
Total goods                 404.1   315.4   253.9   239.2   248.5   264.2   168.0   151.8  124.9  159.1   162.1    149.2   127.3  116.0   141.7
-- - - - -                  .. .. ..  ......  - - -  - - -  - - -    - - -  - - -  ......  -  - -  - - --  .......  -- --   -- - -   - -- -  - - -
Non-factor services          45.8   32.0    30.3   32.5    52.2   35.8   40.5   49.1   52.0   43.5    24.7    25.3    27.6   26.7    24.1
Total goods & NFS           449.9  347.4   284.1   271.7  300.7  300.0  208.5   200.9  176.8  202.7  186.8   174.5   154.9  142.7   165.8
~~~~~~. . ........ ...........  -- - - -- - - - -- - - -- - - - -- - - -  ......  -- --  -- --  -- --  -- - - ......  ------.  ......  - - -
a/ Curacao fuel price Index (1976-81), International oil price index (1982), and unit price for local imports for 1983-86 (see Table 3.4).
b/ World Bank Index of International USS inflation (HNW).
Source: Based on Tables 3.1,3.3 and 3.4 of Statistical Appendix; mission estimates.



Table 3.7: GUYANA - TRADE VOLUME, UNIT VALUES, AND TERMS OF TRADE, 1976-90
(USS million)
1976   1977   1978   1979   1980   1981    1982   1983   1984   1985   1986    1987    1988   1989    1990
In USS
Export Price Index          91.37  100.00  102.75  113.24  145.94  138.86  128.94  115.90  116.38  112.78  120.15   132.20   135.90  137.54   145.00
lmport Price Index          89.97  100.00  109.87  132.81  159.41  166.56  166.90  163.57  171.62  160.57  142.05   155.24   169.36  182.86   192.77
Commodity Terms of Trade    101.55  100.00   93.52   85.26   91.55   83.37   77.26  70.85   67.81   70.24   84.58   85.16    80.24   75.22   75.22
w
Export Earnings Index      107.56  100.00  113.96  112.80  150.02  132.52  89.39  74.28  83.11   82.07  80.99   92.56   82.76   78.92    80.91
Income Terms of Trade      119.54  100.00  103.73   84.93   94.11   79.74  53.56  45.41   48.43   51.11   57.01   59.62   48.87  43.16    41.97
In GS
Export Price Index          91.37 100.00  102.75  113.24  145.94  153.18  151.70  136.35  174.61  189.07 201.28   221.47  519.93 1464.77  2558.87
Import Price Index          89.97  100.00  109.87  132.81  159.41  153.74  196.35  192.44  257.50  269.19  237.98  260.07  647.95 1947.32  3401.76
Commodity Term  of Trade    101.55  100.00  93.52   85.26  91.55   83.37  77.26  70.85   67.81   70.24  84.58   85.16   80.24   75.22   75.22
107.56  100.00  113.96  112.80  150.02  146.52  105.17   87.38  124.70  137.58  135.68   155.06  316.63  840.49  1427.83
Income Terms of Trade      119.54  100.00  103.73   84.93   94.11   79.74  53.56  45.41   48.43  51.11   57.01   59.62   48.87  43.16   4.1.97
…
.......... .... ............................................................................ .  ...............................
Source: Tcbles 3.5 and 3.6, Statistical Appendix.



Table 4.1: GUYANA - EXTERNAL, MEDtUM. AND LONG-TERM PUBLC DEBr BY TYPE OF CREDr, 1976490
...... ......... ........ ................ ........ ...............___....  _...    .................._..................
1976    1977    1978    1979    1980    1961    1982    1983    1964    196          1986     1967      19M     1969      1990
Total Debt                    460.8   484.0   656.9   737.2   769.6   869.1   858.7   631.0   639.7   897.4   951.6   1039.9   1047.9  1559.3  163.6
.. .._ ..........             ......    .........  ......... ......    ......... ......    ......... ------  ------.. ......    ........---...  -----  .  ,__. .._....  ------.. ..
(lncl. udisbursed)
Comercial                    203.6   205.4   194.6   221.9   230.4   206.5   194.7   179.1   178.3   157.6   189.9    214.0    206.5   194.3    154.4
… ........                   ......    ......    ......    ------    ......    ......… ......    ------….....  ......    ......    ......  ......  ......    ......
Suppliers Credits            28.8    29.2    27.9    25.9    30.9    23.6    19.6    16.9    19.1    21.6    58.3           77.1     63.9    58.2       36.5
Financial Institutlons       82.9    85.3    79.2   113.7   121.2   119.9   115.8   113.4   112.9    88.6    68.7           94.4    101.1    96.3      80.1
Bonds                        10.3    11.6    12.3    13.5    14.5        7.6      6.4     5.8     4.6      5.7     5.9       7.4       7.2     6.4       7.7
mationalization              81.6    79.3    75.2    68.8    63.8    55.4    52.9    43.0    41.7    41.7    37.0           35.1     34.3    33.4      30.1
Non-Commercial               257.2   278.6   462.3   515.3   539.2   662.6   664.0   651.9   661.4   739.8   761.9    825.9    841.4  1365.0   1709.2
...............  ..                   -                         ...... ...... ............ .   .   .   ......
MuLtilateral                 53.1    57.9   166.4   201.3   220.6   306.2   305.0   298.7   332.0   401.3   415.5    456.2    440.1   431.1    667.7
Silateral                   204.1   220.7   295.9   314.0   318.6   356.4   359.0   353.2   329.4   370.9   376.1    411.8    432.7   980.0   1068.4
X of Total
Commercial                    44.2    42.4    29.6    30.1    29.9    23.8    22.7    21.6    21.2    17.6    20.0           20.6      19.7    12.5      8.3
Non-Commercial                55.8    57.6    70.4    69.9    70.1    76.2    77.3    78.4    78.8    82.4    80.0           79.4     80.3    87.5      91.7
Disbursed Debt                363.8   404.4   438.7   507.1   559.3   638.4   662.5   699.1   693.4   769.8   841.1    937.2    960.8  1483.7   1662.8
...                                                                                    . _._ ...... ...... ..... ...... - ....   ......
Comrcial                     180.6   196.4   190.9   215.2   218.2   188.2   187.7   177.1   171.9   157.9   185.5    207.2    202.3   177.6    150.1
.                                              .       -
Suppliers Credits            17.4    25.8    27.8    25.3    26.3    20.8    18.2    16.8    14.0    21.9    53.9           70.3     59.6    41.5      32.2
Financial Institutions       71.3    79.7    75.6   107.6   113.6   104.4   110.2   111.5   111.6    88.6    88.7           94.4    101.2    96.3      80.1
8ands                        10.3    11.6    12.3    13.5    14.5        7.6     6.4      S.8     4.6      5.7     5.9.      7.4      7.2      6.4      7.7
NationalIzation              81.6    79.3    75.2    68.8    63.8    55.4    52.9    43.0    41.7    41.7    37.0           35.1     34.3    33.4      30.1
lon-Cowmerclal               183.2   208.0   247.8   291.9   341.1   450.2   494.8   522.0   521.5   611.9   655.6    730.0    758.5  1306.1   1512.7
..............               ...... ...... ...... ...... .    .   .    .    .    .     ...... ...........                                             ......
Multilateral                 23.7    28.9    41.7    70.6   107.2   172.2   203.9   233.1   246.2   273.4   309.2    360.3    357.2   372.2    471.2
Bilateral                   159.5   179.1   206.1   221.3   233.9   278.0   290.9   288.9   275.3   338.5   346.4    369.7    401.3   933.9   1041.5
x of total
... .... ..
Co_mercial                     49.6    48.6    43.5    42.4    39.0    29.5    27.5    25.3    24.8    20.5    22.1          22.1     21.1    12.0        9.0
Uon-C_merclat                 50.4    51.4    56.5    57.6    61.0    70.5    72.5    74.7    75.2    79.5    77.9           77.9      78.9    6.0      91.0
............................................................................................................................................  .........
Source. NInistry of Finac; llorl4 lak.



Table 4.2: GUYANA - SELECTED MEDIUM-TERM EXTERNAL DEBT INDICATORS, 1976-90
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986    1987         1988     1989    1990
In Percentage
DOD/XGS               123.6   145.1   139.9   163.1   136.9   174.0   268.3   311.4   283.3   314.6   357.6   348.1    391.2    635.0   688.0
DOD/GDP               81.6    91.7    88.3    97.5    94.6   112.4   141.6   142.9   159.5   168.8   165.6   119.2    226.5    579.1   738.6
Actual
TDS/XGS                11.2    11.4    15.8    29.4    17.0    21.7    18.7    23.2    15.7        9.5    12.5     9.6       8.6     11.5    56.7
TDS/GDP                 7.4     7.2    10.0    17.6    11.8    14.0       9.9    10.6     8.9      5.1     5.8     3.3       5.0     10.5    60.9
INT/XGS                6.7      5.5     5.5     8.1      6.5     9.8     9.6    12.7      8.5      4.7     6.1     4.5      4.6       4.8    30.2
INT/GDP                4.4      3.4     3.5     4.8      4.5     6.4     5.1      5.8     4.8      2.5     2.8     1.5       2.7      4.4    32.4
Scheduled
TDS/XGS                11.2    11.4    15.8    29.4    17.0    24.4    30.3    50.8    46.7    70.8    86.4    79.8         87.4     98.4    73.2
TDS/GDP                 7.4     7.2    10.0    17.6    11.8    15.8    16.0    23.3    26.3    38.0    40.0    27.3         50.6     89.7    78.6
INT/XGS                6.7      5.5     5.5     8.1      6.5     9.9    12.4    16.0    13.3    24.5    32.7    30.0       34.6      23.5    23.0
INT/GDP                4.4      3.4     3.5     4.8      4.5     6.4      6.6     7.4     7.5    13.2    15.1    10.3       20.0     21.4    24.7
In USS million
DOD                   363.8   404.4   438.7   507.1   559.3   638.4   682.5   699.1   693.4   769.8   841.1   937.2    960.8   1483.7  1662.8
GDP                   445.6   441.0   497.1   520.0   591.4   567.7   482.0   489.3   434.7   456.1   508.0   786.3    424.1    256.2   225.1
XGS                   294.4   278.8   313.6   311.0   408.6   366.9   254.4   224.5   244.8   244.7   235.2   269.2    245.6    233.7   241.7
MGS                   405.3   347.4   313.7   360.0   470.7   491.4   337.8   316.0   284.7   314.9   270.3   273.9    263.0    259.3   317.0
TDS(scheduted)         32.9    31.9    49.6    91.3    69.5    89.7    77.0   114.1   114.2   173.2   203.1   214.7    214.6    229.8   176.9
INT(scheduled)         19.8    15.2    17.3    25.2    26.7    36.3    31.6    36.0    32.5    60.0    76.9    80.8         85.0     54.9    55.6
PRI(scheduLed)         13.1    16.7    32.3    66.1    42.8    53.4    45.4    78.1    81.7   113.2   126.2   133.9    129.6    174.9   121.3
TDS(actual)           32.9    31.9    49.6    91.3    69.5    79.7    47.6    52.0    38.5    23.2    29.4    25.9          21.0     26.8   137.0
INT(actual)           19.8    15.2    17.3    25.2    26.7    36.1    24.4    28.4    20.8    11.5    16.3    14.4          12.1     11.3    72.9
PRI(actual)            13.1    16.7    32.3    66.1    42.8    43.6    23.2    23.6    17.7    11.7    13.1    11.5          8.9     15.5    64.1
Memo item:
Average Exchange Rate
(GS/US$)                2.6     2.6     2.6      2.6     2.6     2.8      3.0     3.0     3.8      4.3     4.3     4.3       9.8     27.2    45.0
Note:
DOD = Disbursed and Outstanding Debt (end-year).
TDS = Public Debt Service Payments (interest and mortization).
INT - PubLic Debt Interest Payments.
GOP = Gross Donestic Product.
XGS = Exports of Goods end Non-factor Services.
MGS = imports of Good, and Non-factor Services.
Source: Mission estimetes.



Table 5.1: GUYANA - CENTRAL GOVERNKENT REVENUES, 1976-90
(CS MilLion)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986       1987      1988    1989     1990
Direct taxes                  196.0   174.2   166.0   171.4   195.4   216.0  237.1   208.7   249.8  303.7   414.9    428.4    900.8  1458.8  2746.2
...  .......... ....  ......           .....   .. . ..  -----   .....   . ....          .....    -  --    - --    - --   .......   -- -     -- --   -- -
Company taxes                67.0   108.0    90.1    96.8   118.2   130.1   132.8   113.3   142.2   170.4   234.1    246.0    412.8   851.1   1375.4
Personal income tax          38.6    39.0    56.4    55.1    58.7    62.6    79.7    67.0    74.6    94.2   132.2    157.8    178.4   185.0    374.2
Property tax                   4.1     4.3     3.7     4.0      2.4     3.6     3.8     7.5    10.5    10.4    12.9       10.6      9.4    14.0     39.7
Estate duty                    0.9     1.4     1.1     1.4      1.6     2.3     2.4     2.8      4.0     5.8     5.7      6.0       8.0    11.9     12.9
National Dev. surtax          9.2      9.5    14.7    14.1    14.5    17.4    18.4    18.1    18.5    22.9    30.0        8.0       2.2     2.1      2.0
Sugar levy                    76.2    12.0       .        -               -                                                       Z .  290.0   225.3    478.7
Rice Levy                                                                                                                           7.3   169.5    463.4
Indirect taxes               140.4   126.5   144.0   161.8   188.6  263.5   216.7  268.5   322.7   371.5   503.7    597.4    658.4  1376.6   2294.5
-- - - -    -                 -- --   -- --   -- --   --  --    . -.-.-.  ......  -- --  -----  -- - -  - - -   ... ...  .... ..  -- - -   - -- -  - - -
Import duty                  52.0    39.1    33.9    36.4    37.4    46.9    26.8    29.0    28.9    31.7    51.3        81.3     91.9   305.9    544.3
Excise duties                23.6    26.4    35.8    39.6    41.1    39.3    43.0    37.2    40.8    49.7    56.9        53.2      70.2    84.6     83.8
Consumption tax              49.9    44.4    54.8    62.5    84.8   139.3   111.0   141.8   181.2   211.2   284.9    324.8    351.0   763.0   1315.0
Export duties                  1.3     1.6     1.8     2.2      1.3     1.6     0.9      1.2     2.2'   6.8      8.3     20.3      17.8    50.2     94.2
Entertainment tax              0.9     1.2     1.5     1.5      2.2     2.9     4.1     3.6      4.0     4.4     3.9      4.4       5.6    11.6     12.3
License fees                  3.6      3.5     6.5     6.2      6.5     7.8     9.8     9.1      8.4    12.8    13.4     17.0      18.9   23.1      38.2
Travel tax a/                    -       -     7.1     7.9      8.8    17.8    16.8    41.9    50.5    46.3    58.2      51.2      48.7    57.0     79.7
Other                         9.1    10.3      2.6     5.5      6.5     7.9     4.3     4.7      6.7     8.6    26.8     45.2      54.3    81.2    127.0
Non-tax revenues              53.3    51.7   53.6    61.7    67.3    80.4    85.6    70.8    87.0    93.2   105.6    153.0    135.0  338.7    316.9
Rent, royalties, etc.          1.2     1.1     1.5     1.1      0.7     0.8    10.1    11.1    12.8    13.2    16.0       1.3       2.0    10.9      7.4
other Investment Income        0.1     3.0     1.4     1.2      3.5     3.4     3.7     4.1      4.1    16.0     6.0      11.7     12.0    12.0      5.4
Dividends from Public
enterprises                 28.7    28.7    22.2    28.4    12.5    13.3       8.8     9.7    12.7   10.0       7.9     10.3      27.2    62.3     62.7
Fees, fines, etc.             7.5      7.2    10.4    11.5    13.3    14.9    12.4      9.4     9.5      6.8    18.1     50.7    37.8    25.3       58.3
Bank of Guyana profits        13.0     9.2     9.0    13.1    28.3    39.8    38.4    22.1    31.5    30.0    30.0       30.8      32.0     5.7      0.0
Special tranfers, corpora      ..      ..      ..      ..       ..      ..      ..      ..       ..      ..      ..       ..       ..   155.5       0.0
other                          2.8     2.5     9.1     6.4      9.0     8.2    12.2    14.4    16.4    17.2    27.6      48.2      24.0    67.0    183.1
Total current revenue        389.7   352.4   363.6   394.9   451.3   559.9   539.4   548.0   659.5   768.4  1024.2   1178.8   1694.2  3174.1   5357.6
. ... ...............   ,,  ,  ......  .. ....  .....  -- --  -- --  .. ....  ... .    - - -  - - -   .... .   .... .  - - -    ...  .   - - --    - - -
Total capital revenue           0.2     2.7     2.2    17.3      3.8    20.7     3.3     2.0    51.2    34.6    27.1    102.2       60.9   252.1    849.8
---------------------~~~~~~ ~~~ -----  ..  ....  .....  .....  . -  . .  .....  - - - ..... .   -- -  . ....  - -- - --  - --     .. ...  ..... .
External grants                  -     2.1     0.7    15.8      3.0     9.9     2.5      1.2   50.8    30.7   25.5    101.4        59.2   215.8   551.3
Other                          0.2     0.6     1.5      1.5     0.8    10.8     0.8     0.8      0.4     3.9     1.6      0.8       1.7   36.3    298.5
Total revenue                 389.9  355.1   365.8   412.2   455.1   580.6  542.7   550.0   710.7  803.0  1051.3   1281.0   1755.1  3426.2   6207.4
-------------~~. -- --       -- --    ......  -- - -  ......  .... ..  ......  -- --   -- --   ......   -- - -  ......   ......    -----   ..........
a/ For 1973 thru 1977, Included under Other".
Source: Ministry of Finance; and mission estimates.



Table 5.2: GUYAiA - CENTRAL GOVERNMENT EXPENDITURES BY ECONOMIC CLASSIFICATION, 1976-90
........                                t(CS million)
,.................. ....... ............ ..... ........ ............................. ............................................................. . ..................--------
1976   1977   1978   1979   1980   1981    1982   1983   1984   1985    1986    1987   1908    1909    1990
,...... .......... ............................ ........................................................... ..... ........ ........ .............. ................
Total expenditures                  782.5  530.9  529.6  674.2  914.1  1165.2  1545.8  1239.8  1880.1  2061.0  3117.0  3278.4 3582.9  4959.9  10925.7
…. ........ ....... ....... ....... ....... …....... .......…....... ....... ............... .......…-----.   .                                  ..
Current expenditures                457.2  415.0  423.8  497.3  613.9  805.7  787.7  1000.6  1241.5  1644.2  1895.0  2618.4 2930.9  3710.2  7605.3
. ... ... ...... ... .               ..... ...... ...... ...... ...... ...... .            ......  ------ ......  ------ .         ...... ......  ......
Goods and services                  304.2  284.0  281.6  310.1  364.7  463.5  39Z.0  457.9  566.0  723.1   682.6  1176.0  1306.0  1754.7  2118.8
Personal emoluments                128.8  154.0  176.2  183.7  196.0  228.3  225.8  238.8  293.1  353.1   385.4   567.0  571.0   748.0  1071.3
Other goods ard services c/        175.4  130.0  105.4  126.4  168.7  235.2  166.2  219.1  272.9  370.2   297.2   609.0  735.0  1006.7  1047.5
Interest                             69.6   70.7   93.8  133.9  164.6  241.7  312.0  470.8  602.9  817.9   993.4  1207.8  1313.5  1155.3  4191.5
External                               -       -      -       -       -   53.1   70.3   89.7  105.7  154.7   120.6   244.2  293.8   205.9   500.7
Domestic                               -       -       -              .  188.6  241.7  381.1  497.2  663.2   872.8   963.6  1019.7   949.4  3690.8
Transfers                            78.6   57.4   46.4   49.7   80.0   96.0   77.9   66.7   64.5   94.5   211.0   219.1  300.1   784.3  1288.5
Consolidated Public Sector a7       10.4    1.7    0.5    0.5    0.5    0.5    0.0    0.0    0.0    0.0    96.5    57.4   58.0   124.3   170.5
Other Public Sector (Uncons.) b/    16.8   15.6   22.9   25.1   30.0   26.7   21.2   19.4   19.6   23.6             7.7      9.7   12.0    16.8    14.1
Pensions  gratuities to
private sector                     12.7   13.7   18.5   16.8   20.3   27.6   14.6   23.5  . 15.1   17.6    20.2    21.3   25.8    31.3    39.9
Other private sector                34.2   20.9    3.2      2.9   22.7   20.9   16.7    9.8   15.2   20.7    28.7    41.9   86.5             0.0      0.0
Local 4 International                4.5    5.5    1.3    4.4    6.5   20.3   25.4   14.0   14.6   32.6    57.9    88.8  117.8   611.9  1064.0
Refund of revenue                     4.8    2.9    2.0    3.6    4.6    4.5    5.8    5.2    8.1    8.7             8.0    15.5   11.3    15.9        6.5
Capital expenditure                 325.3  115.9  105.8  176.9  300.2  359.5  758.1  239.2  638.6  416.8  1222.0   660.0  952.0  1249.7  3320.4
-- - - - - - - - -                   -----. . -- -   -- -   .....   -----.   ..  .....  -----  ----  -----  .... .  -- -    -----    . ....  ----.   -----. 
Capital formation                   174.0  101.4   68.3  125.2  182.1  244.7  200.8  162.2  181.9  218.2   282.0   576.0  727.0   860.5  1842.2
Acquisition of financial assets     116.1    3.7    0.6    7.3    2.3   13.3   20.8   17.1   24.8    7.1   731.0              0.0    0.0    46.3    58.6       >
Transfers (grants 4 loans)           35.2   10.8   36.9   44.4  115.8  101.5  536.5   59.9  431.9  191.5   209.0    84.0  225.0   342.9  1419.7
Consolidated Public Sector           9.1    9.9   20.3   11.9   61.0   53.2  523.9   51.0  413.8  180.9   209.0    63.2  222.0   191.8  1264.6
(of which special financing)        0.0    0.0    0.0    0.0    0.0    0.0  475.0    0.0  378.0    0.0             0.0      0.0    0.0      0.0      0.0
Other Public Sector (Unconsolidate  26.1    0.9   16.6   32.5   54.8   48.3   12.6    8.9   18.1   10.6             0.0    20.8    3.0   151.1   155.0
aJ From 1983, included in capital trwnsfers (grants A loans).
b7 From 1983, includes National Service expenditures, previously designated as capital expenditure.
c/ Includes NIS contribution.
Source: Ninistry of Finance; nd mIssion estimtes.



Table 5.3; GUYANA - SUMMARY ACCOUNTS OF CENTRAL GOVERNMENT, 1976-90
---- ---- ...                (GS million)
ActuaL
…---------- --------- . ----.....- --..........-..---- . --.---..-....  .-.-.............-.--...-...-...----- . -----..-.
1976   1977   1978   1979   1980   1981   1982   1983   1984   1985   1986    1987    1988   1989    1990
Current Revenue             389.7  352.4  363.6  394.9  451.3  559.9  539.4  548.0  659.5  768.4  1024.2  1178.8  1694.2 3174.1  5357.6
-- -- -- -- -           -- - -   -- - -   -- - -   ------   -------   -- - -   -- - -   -- - -   -- -- - -- - -- -- - -- - -- -  .......  ------ .   ..--- ...
Tax revenue                 336.4  300.7  310.0  333.2  384.0  479.5  453.8  477.2  572.5  675.2  918.6  1025.8  1559.2  2835.4  5040.7
Direct taxes               196.0  174.2  166.0  171.4  195.4  216.0  237.1   208.7  249.8  303.7  414.9   428.4   900.8  1458.8  2746.2
Indirect taxes             140.4  126.5  144.0  161.8  188.6  263.5  216.7  268.5  322.7  371.5  503.7   597.4   658.4  1376.6  2294.5
Non-tax revenue              53.3   51.7   53.6   61.7   67.3   80.4   85.6   70.8   87.0   93.2  105.6   153.0   135.0  338.7   316.9
Current Expenditure         457.2  415.0  423.8  497.3  613.9  805.7  787.7  1000.6  1241.5  1644.2  1895.0  2618.4  2930.9 3710.2  7605.3
. . -------                                       .             .   . -
Personal emoluments         128.8  154.0  176.2  183.7  196.0  228.3  225.8  238.8  293.1  353.1  385.4   567.0   571.0  748.0  1071.3
Other                       328.4  261.0  247.6  313.6  417.9  577.4  561.9  761.8  948.4  1291.1  1509.6  2051.4  2359.9 2962.2  6534.0
Interest                    69.6   70.7   93.8   133.9   164.6  241.7  312.0  470.8  602.9 , 817.9  993.4  1207.8  1313.5  1155.3  4191.5
Transfers                   78.6   57.4   46.4   49.7   80.0   96.0   77.9   66.7   64.5   94.5  211.0   219.1   300.1   784.3  1288.5
Other goods & services     180.2  132.9  107.4  130.0  173.3  239.7  172.0  224.3  281.0  378.7  305.2   624.5   746.3  1022.6  1054.0
Current Surplus/Deficit     -67.5  -62.6  -60.2  -102.4  -162.6  -245.8  -248.3  -452.6  -582.0  -875.8  -870.8  -1439.6  -1236.7  -536.1  -2247.7
,----------------------  ------  ------  ------  ------  ......  ------  ......  ......  ------  ......  ------  ......  ------ .------  ------
Capital Revenue               0.2    2.7    2.2   17.3    3.8   20.7    3.3    2.0   51.2   34.6   27.1    102.2    60.9  252.1   849.8                       Li
Capital Expenditure         325.3   115.9  105.8  176.9  300.2  359.5  758.1   239.2  638.6  416.8  1222.0   660.0   952.0  1249.7  3320.4
Overalt Surplus/Deficit    -392.6  -175.8  -163.8  -262.0  -459.0  -584.6 -1003.1  -689.8 -1169.4 -1258.0 -2065.7  -1997.4  -2127.8 -1533.7 -4718.3
Financing                   392.6  175.8  163.8  262.0  459.0  584.6  1003.1   689.8  1169.4  1258.0 2065.7  1997.4  2127.8  1533.7  4718.3
…-- -- ----                    --   . ...   - -- -  -- --  --- --  -- --   - -- -  - -- -  -- --  .. ...  -- --   - -- -   --- -    -- --  -- --
Net External Borrowing      130.3   22.2   53.7   68.6   93.4  402.3  131.6   68.2   78.4  298.7  141.0   234.2   322.0  308.8  4131.0
Disbursement               162.7   57.1  106.5  135.2  154.3  435.9  180.8  140.0   99.0  264.8  131.2   217.6   172.0  1485.0  7664.0
Amortization               -32.4  -34.9  -52.8  -66.6  -60.9  -49.4  -111.6  -207.1  -226.4  -334.3  -411.9  -1034.1  -967.0 -4164.2  -4874.0
Rescheduling                 0.0    0.0    0.0    0.0    0.0    0.0   30.6   69.3  134.1   199.8  244.8   536.6   646.0  1751.1  4434.9
Change in Arrears            0.0    0.0    0.0    0.0    0.0   15.8   31.8   66.0   71.7  168.4  176.9   514.1   471.0  1236.9  -3093.9
Net Dom. Bank Borrowing     240.3  143.1   71.8  137.3  288.6  139.1  726.5  346.4  1291.0  681.7  1179.5  2305.2  1261.6 2070.5  1317.0
Other Domestic Borrowing     22.0   10.5   38.3   56.1   77.0   43.2  145.0  275.2  -200.0  277.6  745.2  -542.0   544.2  -845.6  -729.7
.-..---.-----.-.-.-....-.--..---....-..-.-...-..    .-....    -------..----..  .    .....---.-----..----.---.--..-.-..-    ---    ------.-.--.---.----.-.----.........
Source: Tables 5.1 and 5.2 of Statistical Appendix.



Table 5.4: GUYANA - CENTRAL GOVERNMENT FINANCING. 1976-90
-------               (CS miLLion)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985             1986      1987    1988       1989      1990
Total Financing                         392.6   175.8   163.8   262.0   459.0   584.6  1003.1   689.8  1169.4  1258.0   2065.7   1997.4  2127.8   1533.7   4718.3
.. . . .  . ....                        ....  .   -  - -  ...  .     - - -  -  - -   ...  .    - - -   - - -     - - -   - - -   ...  .     -  - -   - -  -   ....  .   - -  -
External Borrowing (net)                 130.3    22.2    53.7    68.6    93.4   396.5   136.9   135.7   120.1   272.3    257.9    586.9   523.4   3619.1   4575.0
. . . . .... ... .. .. ....              -- - -  - - -     .....   - - -    .. ....  -- - -   ......   - - --    - - -  ... ...  -- --     .... .    -- --    ... .     -- --
Multilateral                               8.9    12.2    30.0    67.2    84.3   170.5    99.6    91.5    47.7   103.7              85.1     80.7   108.8    518.7   3546.0
Disbursement                              9.9    13.6    31.1    69.2    86.8   173.2   101.8    97.8    73.8   116.0    102.3              85.4   128.8    638.2   5490.0
Aaortization                              1.0      1.4      1.1     2.0      2.5      2.7      2.2      6.3    26.1    12.3        17.2      4.7    20.0    119.5   1944.0
BIlateral                                 49.4    24.5    35.9    26.2    10.7   228.7    54.8    35.7            5.0      0.1       4.3      18.4    42.0    218.9   1190.3
Disbursement                             58.8    33.4    48.7    50.8    39.4   244.4    63.7    35.7            5.0      2.7      11.2     34.6    62.4    247.1   1246.5
Aortization                               9.4      8.9    12.8    24.6    28.7    15.7         8.9      0.0      0.0      2.6       6.9      16.2    20.5       28.2      56.3
Financial Markets                         25.2      3.5     8.3   -10.0    22.3    -4.5    -0.6          0.0      0.0      0.0       0.0      -4-3     0.0        0.0       0.0
Dlsburse ent                             29.9      9.2    26.7       9.5    26.6      0.0      0.0      0.0      0.0      0.0       0.0      18.8      0.0       0.0       0.0
Aortization                               4.7      5.7    18.4    19.5       4.3      4.5      0.6      0.0      0.0      0.0       0.0      23.1      0.0       0.0       0.0
Trade Credits                             -2.5    -4.0    -4.4        1.7    -5.7      2.3      0.8      0.0      0.0      0.0       0.0       0.0      0.0       0.0       0.0
Disbursement                              1.4      0.0      0.0      5.7      1.5     8.0      3.7      0.0   .0.0        0.0       0.0       0.0      0.0       0.0       0.0
Amortization                              3.9      4.0      4.4      4.0      7.2     5.7      2.9      0.0      0.0      0.0       0.0       0.0      0.0       0.0       0.0
Nationalization                           49.3   -14.0   -16.1   -16.5   -18.2    -8.3   -25.0    -7.2   -14.4   -14.5    -14.5    -17.9   -27.3    -81.5   -161.2
Disbursemnt                              62.7      0.9      0.0      0.0     0.0      0.0      0.0      0.0      0.0      0.0       0.0       0.0      0.0       0.0       0.0
Aertization                              13.4    14.9    16.1    16.5    18.2         8.3    25.0       7.2    14.4    14.5        14.5      17.9    27.3       81.5    161.2
Change In arrears                          0.0      0.0      0.0      D.0      0.0      7.8     7.3    15.7    81.8   183.0    183.0    510.0           400      2963
Domestic Bank Borrowing (net)            240.3   143.1    71.8   137.3   288.6   139.1   706.7   312.0   855.5   916.8   1438.4   1505.5  1260.9   2070.5    172.9
....... ......... . ........ ...        ......   -  - -   - - --   .... .   -  - -   .... .  ..   ..  -   - -  - - --    - - -   ..   ..   -  - -    ... ..   ..   ..   -   - -
Bank of Guyan                            252.2    91.7    46.8   158.0   217.5   111.0   535.7   149.5   804.4   916.8   1179.5   2305.2   906.2    211.7  -1111.3
C erciat  Banks                          -11.9    51.4    25.0   -20.7        Tl.1    28.1   171.0   162.5    51.1         0.0    258.9   -799.7   354.7   1858.8   1284.2
Domestic Borrowing from
.................
Other Financial Intermediaries            5.6      3.6     4.3      0.0    -3.5       3.2    21.2    37.1    59.2    85.8    123.5           63.0    -0.2       39.0    196.2
..~~~~~~~~~~-                     -    --  --   .....    ---  -   - ---    .....    -----.   -----.  . . ...  . .  -- -  -- -   ----      --  -    --  -     ----- 
Mew Building Society                       2.9      1.5    -2.2       1.4    -0.1      3.4    15.9    17.6    40.3    75.5          68.7      90.5    15.4    138.7    383.6
Locat Life Insurance Coopnles              2.7      2.0      0.5      1.3      1.0     0.9    13.0       6.0    23.3    10.2        21.2    -31.2       5.6      27.2      19.8
rrust Coapanies                              -     0.1       0.4        -    -0.6      0.1    -0.1       0.7    -0.2    -0.5         5.0      -5.7
Goverrnent development banks                 -        -      5.6    -2.7    -2.3    -0.9    -0.2         1.7      0.7      0.0       0.5      -2.9             -197.i   -200.7
Pension ftuaa                                                                -1.5    -0.3    -7.4    11.1    -4.9          0.6      28.1      12.3   -21.2         71      -6.5
Dowstic Borrowing from
Consolidated Public sector               31.3      9.2    38.3    64.0    61.5    67.8   107.9   150.1   102.2   176.7             80.2      87.0   122.7       13.5    -49.6
.; ... . . . . . . . . . .            .....    .....    ... .    ... .    ... .    .....     - - -   - - -    ... .     - - -  .  . .      - - -   - - -      . . .   . . .
Natlonat Insurance Scheme                 21.1    23.0    34.5    61.3    75.2    57.4    94.8   125.2   123.8   174.0              64.6      91.8   110.7       77.5    -55.0
Goverruant-owied corporations             10.2   -13.8       3.8      2.7   -13.7    10.4    13.1    24.9   -21.6          2.7      15.6      -4.8    12.0    -64.0         5.4
Domestic Borrowing from
.......... ....... ........... .
ULnconsolidated Pubtic sector            -9.4    13.1    19.0   -22.3   -46.1   -43.8   -63.5   -71.6   -18.6   -59.7    -32.6               75.2    74.1    224.2    128.1
.......- - -- -- -- -- -               ......   . .......  ......... ........ ------... . ------  ......  -- --  . .. ...  -- --  .. .. ..  -- - -  ......    -- --     -----
Special funds                             -1.0        -     5.0         -      1.4     9.5    -2.7       0.1      0.0      1.8      -1.5      -4.3      0.2    -19.2
Sinking funds                              Z.3    25.1    28.a    -4.1   -25.2          1.9    26.7    18.3    40.4   -32.2         -1.8    108.8    73.9    243.4    128.1
Goverrnent contributions to
Sinking Funds                           -10.7   -12.0   -14.8   -18.2   -22.3   -55.2   -87.5   -90.0   -59.0   -29.3    -29.3    -29.3
Other Domestic Borrowing                  -5.5   -15.4   -23.3    14.4    65.1    21.8    93.9   126.5    51.0  -133.9    198.3   -320.2   146.9  -4432.6   -304.3
-- - - - - - - - - - - -- - -                      - - -  .......  ......    - - --    - - -  - - --   ..... .  ......... - - --   - - -    ... ... . . - -    - - -     ... .... 
Insurance conies, n.e.l.                   1.8      3.4    10.8       7.7     6.7    10.4    10.1    11.6         8.2    26.5       24.0    -20.5    23.6        91.8      15.0
Other a/                                  -7.3   -18.8   -34.1        6.7    58.4    11.4    83.8   114.9    42.8  -160.4    174.3   -299.7   123.3  -4524.4   -319.3
. .. . ..... ..... .... .......... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      . . . . . . . . . . . . . . . . . . . . . . . .
a/ Includes holdings certificates and defense bonds.
Source: Ministry of Finance.



Table 5.5  GUYANA - SUKINARY ACCOUNTS OF PUBLIC SECTOR CORPORATIONS, 1976-90
-----                               (OS million)
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986    1987            1988      1989    1990
Operating Revenue             1186.7  140.3  1610.0  2012.7  2122.3  1803.3  1609.   1992.3  2273.9  2416.4  4492.1   4438.0   9610.1 14436.0
Guymiine/Bidco                354.9   364.0   366.0   542.0   493.0   327.0   244.0   398.2   475.6   397.3   930.0    904.7   2233.5  3468.4
Guysuco                       186.0   261.4   259.3   328.8   316.7   276.0   231.1   307.4   333.4   429.5  1078.8    691.9   2534.6  3738.9
ORB                            91.9   130.4   113.1   122.6   156.6   137.7   113.7   132.5   110.0   114.3   185.0    194.3    439.3   523.5
N.I.S.                         31.8    44.9    78.8    84.8   100.0   112.5   123.4   137.9   156.8   193.4   195.0                          i60:
other a/                      522.1   609.6   792.8   934.5  1056.0   950.1   897.3  1016.3  1198.1  1281.9  2103.3   2647.1   4402.760.
Operating Expenditure bI    1030.1  1198.4  1372.9  1743.7  2192.9  1907.6  1746.8  2011.5  2303.5  2293.9  4475.3  4094.8   9800.0 11325.2
Guymine/Bidco                 264.0   285.0   310.0   459.0   588.5   458.0   398.0   507.3   613.6   511.6  1030.2    935.1   2817.7  3422.2
Guysuco                       197.9   266.0   246.9   311.2   399.4   368.7   349.8   399.6   409.5   414.2  1058.2    681.7   1751.4  3179.8
ORB                            80.7   100.0   109.7   122.0   161.8   156.8   129.2   132.3   134.7   143.4   197.8    206.0    379.6   492.4
N.I.S.                          8.8    10.9    13.8    14.3    20.4    24.3    23.6    25.2    29.7    61.3    54.1
Other 8/                      47.       3.      9.       3.    028 898 862 947.1  1116.0  1163.4  2135.0   2272.0   4851.   4230.8
Operating Balance              156.6   211.9   237.1   269.0   -70.6  -104.3  -137.3   -19.2   -29.6   122.5    16&8    343.2   -189.9  3110.8
Guymine/Bidco                  90.9    79.0    56.0    83.0   -95.5  -131.0  -154.0  -109.1  -138.0  -114.3  -100.2    -30.4   -584.2    46.2
Guysuco                       -11.9    -4.6    12.4    17.6   -82.7   -92.7  -118.7   -92.2   -76.1    15.3    20.6             10.2    783.2   559.1
ORB                            11.2    30.4       3.4     0.6    -52   -19.1   -15.5         0.2   -24.7   -29.1   -12.8    -11.7         59.7    31.1
N.I.S.                         23.0    34.0    65.0    70.5    79.6    88.2    99.8   112.7   127.1   132.1   140.9              0.0       0.0     0.0
Other a/                       43.4    73.1   100.3    97.3    33.2    50.3    51.1    25.0    82.1   118.5   -31.7    375.1   -448.6  2474.4
Net Transfers                 -103.8   -77.7   -80.1   -73.9   -67.3   -54.8   -50.3   -49.4   -64.3   -71.0   -64.9   -138.5   *351.0  -732.0
Transfers from CO cl            0.0      0.0      0.5     0.5      0.5      0.5     0.0      0.0      0.0     0.0      0.0       0.0    334.0      0.0
Transfers to CO               103.8    77.6    76.6    69.9    63.9    51.8    44.2    44.4    58.6    72.0    59.9    126.0    664.0   725.0
Local government taxes          0.0      0.1     4.0      4.5      3.9      3.5     6.1      5.0      5.7     5.0    12.5       21.0       7.0    23.0
Non-cash Expenditures            0.0      0.0      0.0     0.0    95.6    98.1    96.8   150.7   104.0   124.0   597.7    235.9   1596.0   382.0
Current Account BaLance         52.8   134.2   157.0   195.1   -42.3   -61.0   -90.8    82.1    10.1   169.5   549.6    440.6   1055.1  2760.8
GuyminelBidco                  49.1    47.0    33.0    74.0   -63.5   -95.0  -120.0   -32.1  -124.9  -167.7  -100.2    -30.4   -584.2    46.2
Guysuco                       -31.7    -4.6    12.4    16.4   -67.9   -15.8  -100.7   -71.2   -63.5    37.0    20.6             10.2    783.2   559.1
ORB                            11.2    30.4       3.4     0.4      1.1   -13.3   -10.3       3.2   -22.1   -24.0    15.2        14.3     66.1    31.4
N.I.S.                         23.0    34.0    65.0    70.5    79.6    88.2    99.8   112.2   126.3   130.7   137.2
Other a/                        1.2    27.4    43.2    33.8        8.4    34.9    40.4    70.0    94.3   193.5   476.8    446.5    790.0  2124.1
CapitaL Receipts                 9.9    20.3    11.9    61.0    53.2   523.9    51.0   413.8   180.9   209.0    63.2    222.0    191.8  126-4.6
Capital Expeniditure           151.6   102.2   114.0   117.6   115.8    89.1    86.6   176.0   141.0   259.0   461.0    458.0    978.0  2318.0
Overall Balance                -88.9    52.3    54.9   138.5  -104.9   513.8  -126.4   319.9    50.0   119.5   151.8    204.6    268.9  1707.4
Exclude Capital Receipt)  -98.8    32.0    43.0    77.5  -158.1  -150.1  -177.4   -93.9  -130.9   -89.5    88.6    -17.4               77.1   442.8
a/ The Guystac Group (excLuding GRB) and Guryana Liquor Coepan.
hi Includes depreciation allowances.
c/ CG  Central Goverrinet. From 1913, incLuded in capital, receipts.
Source: State Plarming Secretariat.



Table 5.6: GUYANA - SUIKARY ACCOUNTS OF THE PUBLIC SECTOR, 1976-90
,. --                         (GS million)
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986         1987      1988    1989      1990
Current Account Surplus/Deficit         -9.8    74.0    54.6    32.5  -288.1  -309.3  -543.4  -499.9  -865.7  -701.3   -890.0   -796.1   519.0    513.1
Central Goverrwent                    -62.6   -60.2  -102.4  -162.6  -245.8  -248.3  -452.6  -582.0  -875.8  -870.8  -1439.6  -1236.7  -536.1  -2247.7
Other Public Sector                    52.8   134.2   157.0   195.1   -42.3   -61.0   -90.8    82.1    10.1   169.5    549.6    440.6  1055.1   2760.8
Central Goverrvnent Capital Revenues    2.7      2.2    17.3      3.8    20.7      3.3      2.0    51.2    34.6    27.1    102.2       60.9   252.1    849.8
-- - - -- - -.   - - - .  -- - - -     .....    .......  -- -    ----    -----    -----   -----   . -- -   . ..  ...  -- -  . ...  ..  .......  -- -    . ....
Capital Expenditures                   257.6   187.7   279.0   356.8   422.1   323.3   274.8   400.8   376.9  1272.0   1057.8   1188.0  2035.9   4373.8
-- - - - - - -  - - --                    - -   -  - -   .. .. .  -- -    -- -    ----      -   -- . - -              - -     - -      - --        -    ... ...
Central Goverrunent                   115.9   105.8   176.9   300.2   359.5   758.1   239.2   638.6   416.8  1222.0    660.0    952.0  1249.7   3320.4                    w
Other Public Sector                   151.6   102.2   114.0   117.6   115.8    89.1    86.6   176.0   141.0   259.0    461.0    458.0   978.0   2318.0
Transfers to Corporations              -9.9   -20.3   -11.9   -61.0   -53.2  -523.9   -51.0  -413.8  -180.9  -209.0    -63.2   -222.0  -191.8  -1264.6
Overall Surplus/Deficit               -264.7  -111.5  -207.1  -320.5  -689.5  -629.3  -816.2  -849.5 -1208.0 -1946.2  -1845.6  -1923.2 -1264.8  -3010.9
.. .. . .. .. .-----.....                       ........  ----    -----                    .....   -----   . ----   -----    -- -     ----      -----   .. ........... 
Financing (net)                        264.7   111.5   207.1   320.5   689.5   629.3   816.2   849.5  1208.0  1946.2   1845.6   1923.2  1264.8   3010.9
Net External Borrowing                  89.0   121.0   106.0   130.0   383.0   258.9   168.0   102.7   370.0   298.7    141.0    234.2   322.0    308.8
Disbursements                             -        -       -        -   476.1   228.2   168.9   104.6   272.3   264.8    131.2    217.6   172.0   1485.0
Amortization                              -        -       -        -  -150.2  -136.2  -236.4  -256.7  -392.5  -334.3   -411.9  -1034.1  -967.0  -4164.2
Change In Arreas                          -        -       -        -    57.1   136.3   166.2   120.7   290.4   199.a    244.8    536.6   646.0   1751.1
Rescheduling                            0.0     0.0      0.0     0.0      0.0    30.6    69.3   134.1   199.8   168.4    176.9    514.1   471.0   1236.9
Domestic Borrowing (net)               175.7    -9.5   101.1   190.5   306.5   370.4   648.2   746.8   838.0  1647.5   1704.6   1689.0   942.8   2702.1
Banking System                        190.0    74.0   196.0   346.0   283.0   633.9   633.8  1201.6  1438.4  1505.5   1261.6   2070.5   172.9   1284.8
Other (net)                           -14.3   -83.5   -94.9  -155.5    Z3.5  -263.5    14.4  -454.8  -600.4   142.0    443.0  -381.5   769.9   1417.3
.. .. . ............. .............................................................................................................................. ......
Source: Ministry of Finance; ond ulasslon estimates.



Table 6.1: GUYANA - SIM4ARY ACCOUNTS OF THE MONETARY AUTHORITIES, 1977-90
........                              (GS *illion)
December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985            1986     1987    1988       1989      1990
Net International Reserves                      -105.1   -64.3  -187.5  -407.8  -494.1  -662.3  -923.4 -1694.0 -2107.9  -2367.2  -6124.0 -6334.2 -21764.1 -29403.5
Assets                                            59.6   148.6    44.7    32.8    25.7    25.6    19.3    20.7    26.8            37.8      89.0    40.4    501.6   1195.3
Liabilities                                      164.7   212.9   232.2   440.6   519.8   687.9   942.7  1714.7  2134.7   2405.0   6213.0  6374.6  22265.7  30598.8
Net Domestic Credit                              302.7   339.6   459.5   709.7   792.3  1285.4  1371.4  2016.8  2233.3   3221.5   5491.2  6304.0   6097.3   6349.5
.. - -- -  - -- - -                              -- --    - -- -   .... .. .  . .....        -- - -   ....    ..  ..   .... .   ......    .....    --  - -  - --  -   - - -
Public Sector (net)                              337.5   386.0   541.4   829.2   926.0  1461.1  1615.5  2796.0  3178.0   3926.9   6288.5  7241.2   7326.9   6137.4    w
Central Goverrnent                              346.0   392.9   550.9   837.9   939.4  1475.1  1624.6  2804.0  3228.4   3957.6   6262.9  7169.9   7381.5   6270.2               o.
Treasury Bills                                 335.3   390.2   587.0   818.5   853.1  1403.8  2037.4  1870.6  2199.0   2171.5   3806.9  3591.6   3047.3   1662.4
Debentures a/                                    5.9      5.9      2.2     2.2      0.9      0.4      0.4   955.0   930.5    783.1    750.9   714.2    672.1    458.5
Advances                                         4.8      0.0      0.0    17.2    85.4    70.9        0.0     0.0    98.9   1003.0   1705.1  2864.1   3662.1   4149.3
Deposits                                         0.0    -3.2   -38.3       0.0      0.0      0.0  -413.2   -21.6       0.0         .         ..
Special Funds                                    -6.1    -6.2    -6.4    -6.4    -6.5    -6.5    -6.5    -6.5    -6.5            -6.5      -6.5    -6.5      -6.5      -6.5
social Security & Pension Funds                  -2.4    -0.7    -3.1    -2.3    -6.9    -7.5    -2.6    -1.5   -43.9    -24.2             32.1    77.8    -48.1   -126.3
Official Capital & Surplus                       -11.7   -12.7   -14.2   -48.6   -56.6   -94.5  -188.1  -544.1  -708.9    -43.1    -46.6   -46.6    -46.6    -46.6
Unclassified (net)                               -23.1   -33.7   -67.7   -70.9   - 77. 1   -81.2   -56.0  -235.1  -235.8   -662.3   -750.7  -890.6  -1183.0    258.7
SOR AllocatIon Accouat                            20.1    22.5    31.5    44.4    39.1    50.1    43.9  -391.0                    78.2    206.1   188.9   623.39        30.2
.......    ............... ..... ........ .....  .......   ----    .... .   .......  -----   ...... ........            ----    ---       ---  .   .........   ----   .......
LIabiLitIes to Cornerclal Banks                   34.6    96.3    92.2    98.0    80.2   352.6   142.2   405.9   171.8    782.3   2369.8  2627.9   1861.1   1764.0
... .. . . .....................------. .                 ....   ......   . .. ...  . ..... .   ------. . . -- --  -- --  -- --  -- --  -----     -- --   --  --  . ---.---.  ...........
Currency                                           9.6    10.8    11.0    11.9    12.2    14.5    15.5    21.4    17.7            20.7      27.4    37.4      79.2       196
Deposits (net of advances)                        25.0    32.4    12.7    15.8   -65.5    57.6  -267.5   -80.2  -316.4    178.3   1681.6  1811.9    825.5                652
External payents Arrears DeposIts                  0.0    53.1    68.5    70.3   133.5   280.5   394.2   464.7   470.5    583.3    660.8   778.6    956.4                916
Currency in CirculatIon                          142.8   156.4   148.3   167.0   186.1   230.9   268.9   335.8   421.6    508.8    726.3  1057.8   1505.9   2211.5
....................... ------   ........................ -----             -- --   - -- -   - - -    ......  ....... .. ..... . ..... . - --       - - -   ...... ... ...----.....--.............. ....
Currency Issue                                   152.4   167.2   159.3   178.9   198.3   245.4   284.4   357.2   439.3    529.5    753.7  1095.2   1585.1   2407.5
Less: Holdings of Conercial Banks                  9.6    10.8    11.0    11.9    12.2    14.5    15.5    21.4    17.7            20.7      27.4    37.4      79.2       196
.................. ..................................... ......................................................................... ...................... ....... ...... .......................
a/ Since 1984, includes a special interest free debenture contrIbution from the
Treasury to Bank of Guyana to cover exchange rate losses Incurred during 1984.
Source: Pank of Guyana.



Table 6.2: GUYANA - SUMMARY ACCOUNTS OF COMMERCIAL BANKS, 19T7-90
.....-...                         (GS million)
December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985          1986      1987    1988      1989     1990
Net International Reserves                       -5.8   -15.9   -16.7   -11.1   -30.9   -45.7   -39.1   -35.9   -28.4    -46.7            16.8    22.8    571.0   1512.5
Assets                                           21.2    33.8    55.9    59.0    36.5    30.7    27.4    28.8    34.7           40.3    160.5   164.2    760.9       2402
Liabilities                                      27.0    49.7    72.6    70.1    67.4    76.4    66.5    64.7    63.1           87.0    143.7   141.4    189.9    889.5
Claims on Bank of Guyana                         34.2   101.5    91.8   104.0    82.3   362.2   149.9   405.5   214.9    791.2   2414.7  2712.0   2115.2   1764.2
Currency                                          9.6    10.8    11.0    11.9    12.2    14.5    15.5    21.4    17.7           20.7     27.4    37.4      79.2       196
Deposits (net of advances)                       24.6    37.6    12.3    21.8   -63.4    67.2  -259.8   -81.3  -313.8    187.1   1708.5  1895.6   1079.6              653
External Payments Deposits                        0.0    53.1    68.5    70.3   133.5   280.5   394.2   465.4   511.0    583.4    678.8            779    956.4    915.2
Net Domestic Credit                             393.9   439.0   534.6   644.7   870.3   960.7  1509.0  1516.4  2034.7   1819.0   1942.0  3224.1   6618.1   9951.7
Public Sector (net)                             265.8   291.0   331.6   399.6   573.0   648.7  1093.4  1051.6  1512.5   1140.0    963.6  1642.6   4139.6   5773.8
Central Goverruent                             185.3   210.3   189.6   200.7   228.9   399.8   562.3   613.3   793.4   1052.2    252.4   607.1   2466.0   3750.2
Treasury Bills                                170.8   198.2   190.1   210.9   238.0   402.1   563.0   615.0   791.6   1045.3            214   428.8   2382.6   3806.1
Debentures                                     16.4    14.5      8.5      5.5     9.6    13.0    11.8    10.4    24.8         32.4     88.8   277.7    276.8    269.6
Advances                                                 0.7     0.1      0.0      1.7     2.4      2.9     4.3      6.8       8.5     48.7    24.2       26.2     35.6
Deposits                                       -1.9    -3.1    -9.1   -15.7   -20.4   -17.7   -15.4   -16.4   -29.8    -34.0    -99.1  -123.6   -219.6   -361.1
Social Security Fund (net)                      -7.2    -7.7    -8.3    -9.1   -13.3   -14.8   -16.8   -19.0   -29.9   -119.5    -94.6  -118.9   -136.1   -153.5
State & Local Governments (net)                  3.7      4.3     3.3      3.7     5.8      4.7      1.5     0.4      1.9      -0.7      -0.1     0.9       5.5    -16.3
Public Enterprises (net)                        84.0    84.1   147.0   204.3   351.6   259.0   546.4   456.9   747.1    208.0    805.9  1153.5   1804.2   2193.4               O
Credit                                        118.8   121.9   172.6   229.3   375.7   306.3   613.5   551.4   837.7    322.7    355.2   551.9    651.7    754.9
Deposits                                       34.8    37.8    25.6    25.0    24.1    47.3    67.1    94.5    90.6    114.7   -450.7  -601.6  -1152.5  -1438.5
Credit to Private Sector                        113.0   121.1   162.7   195.8   262.1   313.3   376.7   463.2   520.2    673.5    986.7  1590.9   2566.1   4159.6
Interbank Float (net)                             4.4      4.2     5.3      4.4      2.9     3.9      9.9     0.7    18.6       49.3     27.2    50.4         35     44.1
Unclassified (net)                               10.7    22.7    35.0    44.9    32.3    -5.2    29.0          0.9   -16.6    -43.8    -35.5   -59.8   -122.6    -25.8
Liabilities to Rest of Financial System          18.7    26.0    22.2    57.0    58.1    92.7   119.6   164.6   152.0    122.7    362.3   680.7    981.3   1437.9
Deposits                                        19.4    27.9    24.1    59.2    62.5    95.2   124.6   166.3   155.4    129.3    356.3   675.8    974.5   1436.6
Less: Advarces                                   0.7      1.9     1.9      2.2      4.4     2.5      5.0     1.7      3.4       6.6        -6    -4.9      -6.8     -1.3
Deposits on External Payments Arrears             0.0    56.3    69.4    75.0   137.1   271.6   396.2   464.9   513.0    583.4    678.8   788.9    957.5    916.2
Liabilities to Private Sector                   403.6   442.3   518.1   605.5   726.6   912.0  1103.8  1256.8  1556.2   1857.6   2443.9  3296.0   5074.2   7999.7
Monetary Liabilities                            395.3   433.6   504.2   587.1   702.2   872.8  1048.1  1187.5  1463.1   1725.2   2274.3  3062.1   4686.0   7202.9
Demand Deposits                                 79.2    66.1    79.2    91.4   100.8   105.4   131.2   160.1   195.3    200.4    352.5   468.1    652.1   1059.8
Cashier's Checks & Bank Acceptances             32.0    31.0    23.0    24.4    27.3    41.6    43.1    51.7    52.4           71.2      61.9   131.4    224.6    160.2
Time & Savings Deposits                        284.1   336.5   402.0   471.3   574.1   725.8   873.8   975.7  1215.4   1453.6   1859.9  2462.6   3809.3   5982.9
Private Capital and Surplus                       8.3      8.7    13.9    18.4    24.4    39.2    55.7    69.3    93.1    132.4    169.6   233.9    388.2    796.8
Source: Bank of Guyana.



Table 6.3: GUYANA - SUMHARY ACCOUNTS OF THE CONSOLIDATED MONETARY SYSTEM, 1977-90
---------                                (GS miltion)
December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985       1986      1987    1988     1989      1990
Net International Reserves                    -110.9   -80.2  -204.2  -418.9  -525.0  -708.0  -962.5 -1729.9 -2136.3  -2413.9  -6107.2 -6311.4 -21193.1 -27891.0
Assets                                          80.8   182.4   100.6    91.8    62.2    56.3    46.7    49.5    61.5        78.1    249.5   204.6   1262.5   3597.3
Liabilities                                    191.7   262.6   304.8   510.7   587.2   764.3  1009.2  1779.4  2197.8   2492.0   6356.7  6516.0  22455.6  31488.3
Net Domestic Credit                           696.1   783.7   993.7  1367.8  1672.0  2265.3  2894.9  3561.0  4857.3   5692.5  10507.4 12758.2  29742.2  40456.3
Public Sector (net)                           603.3   677.0   873.0  1228.8  1499.0  2109.8  2708.9  3847.6 4690.5   5066.9   7252.1  8883.8  11466.5  11911.2
Central Goverrument                          531.3   603.2   740.5  1038.6  1168.3  1874.9  2186.9  3417.3  4021.8   5009.8   6515.3  7777.0   9847.5  10020.4
Treasury Bills                              506.1   588.4   777.1  1029.4  1091.1  1805.9  2600.4  2485.6  2990.6   3216.8   4020.9  4020.4   5429.9   5468.5
Debentures a/                                22.3    20.4    10.7       7.7    10.5    13.4    12.2   965.4   955.3    815.5    839.7   991.9    948.9    728.1
Advances                                      4.8      0.7     0.1    17.2    87.1    73.3       2.9     4.3   105.7   1011.5   1753.8  2888.3   3688.3   4184.9
Deposits                                      -1.9    -6.3   -47.4   -15.7   -20.4   -17.7  -428.6   -38.0   -29.8    -34.0    -99.1  -123.6   -219.6   -361.1
Special Funds                                  -6.1    -6.2    -6.4    -6.4    -6.5    -6.5    -6.5    -6.5    -6.5        -6.5     -6.5    -6.5      -6.5     -6.5
Social Security Fund (net)                     -9.6    -8.4   -11.4   -11.4   -20.2   -22.3   -19.4   -20.5   -73.8   -143.7    -62.5   -41.1   -184.2  -279.8
State & Local Goverr,ments (net)                3.7     4.3     3.3      3.7     5.8     4.7      1.5     0.4     1.9      -0.7     -0.1     0.9       5.5    -16.3
Public Enterprises (net)                      84.0    84.1   147.0  204.3   351.6   259.0   546.4   456.9   747.1    208.0    805.9  1153.5   1804.2   2193.4
Official Capital anf Surplus                   -11.7   -12.7   -14.2   -48.6   -56.6   -94.5  -188.1  -544.1  -708.9    -43.1    -46.6   -46.6    -46.6    -46.6
Credit to Private Sector                       113.0   121.1   162.7   195.8   262.1   313.3   376.7   463.2   520.2    673.5    986.7  1590.9   2566.1   4159.6
Interbank Float (net)                           3.9      9.3     4.9    17.8    12.3    23.1    24.4    28.5   607.9    701.3   3101.4  3280.5  17061.8  24199.2
Unclassified (net)                             -12.4   -11.0   -32.7  -26.0   -44.8   -86.4   -27.0  -234.2  -252.4   -706.1   -786.2  -950.4  -1305.6    232.9
SDR Atlocation Account                          20.1    22.5    31.5    44.4    39.1    50.1    43.9  -391.0    78.2    206.1    188.9   623.4        30.2       0.0
Liabilities to Rest of Financial
System                                         18.7    26.0    22.2    57.0    58.1    92.7   119.6   164.6   152.0    122.7    362.3   680.7    981.3   1437.9
......-                                         - -  ......   ....   ....  .. .... .  ..... .  -- --  -----   -----  -- --  -- --  -- --   -- --   -- --  .  -- -
Deposits                                       19.4    27.9    24.1    59.2    62.5    95.2   124.6   166.3   155.4    129.3    356.3   675.8    974.5   1436.6
Less: Advances                                 0.7      1.9     1.9     2.2      4.4     2.5     5.0      1.7     3.4      6.6      -6.0    -4.9     -6.8      -1.3
Deposits on External Payments
Arrears                                        0.0    56.3    69.4    75.0   137.1   271.6   396.2   464.9   513.0    583.4    678.8   788.9    957.5    916.2
Liabilities to Private Sector                 546.4   598.7   666.4   m  .5  912.7  1142.9  1372.7  1592.6  1977.8   2366.4   3170.2  4353.8   6580.1  10211.2
-- - - - - - - - - - - - - -              - - -  - - -     - - -  - - -    - - -  -  - -    - - -  - - -    - -  -  - - -     - - -   ...  ... -  - -   ...  .
Monetary LiabiLities                           254.0   253.5   250.5   282.8   314.2   3T7.9   443.2   547.6   669.3    780.4   1140.7  1657.3   2382.6   3431.5
Currency in circulation                       142.8   156.4   148.3   167.0   186.1   230.9   268.9   335.8   421.6    508.8    726.3  1057.8   1505.9   2211.5
Demand Deposits                                79.2    66.1    79.2    91.4   100.8   105.4   131.2   160.1   195.3   200.4    352.5   468.1    652.1   1059.8
Cashier's Checks & Bank Acceptances           32.0    31.0    23.0    24.4    27.3    41.6    43.1    51.7    52.4        71.2      61.9   131.4    224.6    160.2
Time & Savings Deposits                       284.1   336.5   402.0   471.3   574.1   725.8   873.8   975.7  1215.4   1453.6   1859.9  2462.6   3809.3   5982.9
Private Capital and SurpLus                      8.3     8.7    13.9    18.4    24.4    39.2    55.7    69.3    93.1    132.4    169.6   233.9    388.2    796.8
---------. ..-.--.---.--.-..............-.-..........
a/ Since 1984,1nctudes a special interest free debenture contribution from the Treasury to the Bank of Guyana to cover the exchaaue rate losses incurred during
1984.
Source: Bankr of Guyana.



Table 6.4: GUYANA - SLI4ARY ACCOUNTS OF THE CONSOLIDATED FINANCIAL SYSTEM, 1980-90
(GS million)
December 31
1980    1981    1982    1983    1984    1985    1986    1987    1988        1989     1990
Met Foreign Assets                            -405.3  -517.8  -678.1  -911.8 -1697.2 -2137.2 -2413.8 -6107.2 -6312.5 -21193.1 -27891.1
.. . .... ..... . -.                         ------    ......  ......... .......  -----  .... ..  .                  ........  -- --  ------    ......  -----
Monetary System                              -419.0  -524.9  -707.7  -962.5 -1730.0 -2136.3 -2492.0 -6356.7 -6517.1 -22455.6 -31488.3
Other Net Foreign Assets                       13.7     7.1    29.6    50.7    32.8    -0.9    78.2   249.5   204.6   1262.5   3597.2
Net Domestic Credit                           1698.5  2073.1  2694.9  3379.7  4133.7  5059.0  4975.1  6576.7  8612.5  11609.3  14191.4
--- - . -   .  . -  -                         .....   -- --   -- --   ------   -----.  ------  ......   -- --   -----    -----   . ...-----. ... ... ...
Public Sector (net)                           1336.1  1612.4  2243.3  2875.5  4076.1  4995.7  5074.2  6357.3  7681.4   9162.5  9057.1
Central Goverrnment (net)                    1142.4  1278.1  2004.7  2350.1  3642.2  4323.9  5009.9  6515.3  7772.2  9847.6  10020.5
Treasury Biils                             1046.9  1114.4  1843.1  2665.9  2612.9  3158.2  3216.9  4020.9  4020.6        5430   5468.5
Debentures a/                                94.0    96.9   106.0   109.9  1063.0  1089.8  815.5   839.7   991.9    948.9    728.2
Advances                                     17.2    87.2    73.3      2.9     4.3   105.7  1011.5  1753.8  2883.3  3688.3  4184.9
Deposits and Ulndistributed Profits         -15.7   -20.4   -17.7  -428.6   -38.0   -29.8   -34.0   -99.1  -123.6   -219.6   -361.1
Public Enterprises (net)                      204.3   351.6   259.0   546.4   457.0   747.1   208.0   -95.5   -49.7   -500.8   -683.6
Unconsolidated Public Sector                  -10.6   -17.3   -20.4   -21.0   -23.1   -75.3  -143.7   -62.5   -41.1   -184.3   -279.8
Official Capital and Surplus                   -83.2  -105.1  -154.6  -266.3  -631.7  -802.6  -819.9   -4303   -4541 -17586.6 -25972.6
Credit to Private Sector                       434.0   543.6   630.1   713.5   826.3   949.5   673.5   986.7  1590.9   2566.1   4159.6
Unconsolidated Financial institution (net)  -15.3        7.8      1.2     6.2    -7.2   -39.2      6.8   158.3   206.8    635.2    464.5
Unclassified (net)                              26.9    14.4  -25.1    50.8  -129.8   -44.4    40.5  3377.4  3674.4  16832.1  26482.8
Counterpart Unrequited Foreign Exchange         44.4    39.1    50.1    43.9  -391.0  -398.1  -466.7 -3822.2 -3715.9  -19034 -27029.5
.... ----- ----- ..... .. - . ----- .. . -----
Long-term Foreign Liability                     22.5    23.3    30.8    38.9    31.7    80.5    30.1        93   203.4    944.8   767.1
…. ….....   .....   -----   -----   ----- ...                                                     ----- ...        ----- ....       ......
Deposits on External Payment Arrears            75.0   137.1   271.6   396.2   464.9   513.0  583.4   678.8   788.9    957.5    916.2
-                                               ..... ...  .....    ..... ..... ----- ..... .... ..... -----
Liabilities to Private Sector                 1151.3  1355.7  1664.1  1989.0  2330.8  2726.5  2488.8  3520.5  5024.7   7547.9  11646.4
… … .......  ......  ......  ------ ..                                                           -       ..       -       ------   ......
Currency in Circulation                       167.0   186.0   231.0   268.9   335.8   421.6   508.8   726.3  1057.8        1506   2211.4
Demand Deposits and Cashiers'Checks           115.9   128.1   147.0   174.3   211.8   247.7   271.5   414.4   599.5    876.7         1220
Time and Savings Deposits                     496.8  609.8   782.2   944.5  1049.4  1307.9  1453.6  1859.9  2462.6   3809.3  5982.9
Private Capitat and Surplus                    39.6    35.1    50.0    70.5    86.2   114.6  132.1   169.6   233.9    388.2    796.8
Other Liabilities                             332.0  396.7   453.9   530.8   647.6   634.7   122.8   350.3   670.9    967.7   1435.3
.... -.--.-....--...---.-.--...........-.----..---...- .-...... ...-...... . .........-... . . . ..-.-.-....-.--.-- .-.
a/ Since 1984,Includes a special interest free debenture contribution from the Treasury to the Bank of Guyana to cover the exchane rate
losses incurred duwing the year 1984.
Source: Bank of Guyan



Table 6.5: GUYANA - MET INTERNATIONAL RESERVES OF THE BANKING SYSTEM, 1980-90
........ .... (USS million)
December 31
1980    1981    1982    1983    1984    1985    1986    1987    1988    1989            1990
................. .................................. ........ ............... ............. ........................ ... .... ......................... ....................... .
Met International Reserves             -159.9  -164.7  -220.6  -307.6  -401.6  -507.2  -406.9  -612.5  -633.5  -661.9   -653.8
Foreign Assets                           12.9      8.6      8.5     6.4      5.0      6.5     8.8    20.2       4.1    14.7      27.3
..... .........   .....  ........ ............... ........... .  -- --  .........  -- --  -- --  -----  -----  -----  ------  -- --  ......  ...........
Gold                                    0.0      0.0      0.0     0.0      0.0      0.0     0.0      0.0      0.0      0.0       0.0
Balances with foreign banks            12.6      5.7      5.5     6.2      4.7      6.5     8.7    19.7       3.8    14.2      26.4
Foreign notes                           0.1      0.1     0.0      0.0      0.1      0.0     0.1      0.5      0.3      0.5      0.9
Cash in process of collection           0.0      0.0      0.0     0.0      0.0      0.0     0.0      0.0      0.0      0.0       0.0
Gold tranche in IMF                     0.0      0.0      0.0     0.0      0.0      0.0     0.0      0.0      0.0      0.0       0.0
SDR holding IMF record                  0.0      1.2     2.9      0.0      0.0      0.0     0.0      0.0      0.0      0.0      0.0
Honey market securities                 0.2      1.6      0.2     0.2      0.2      0.0     0.0      0.0      0.0      0.0       0.0
Foreign Liabilities                     172.8   173.3   229.1   314.0   406.5   513.7   415.7   632.7   637.6   676.6    681.1
---..--   .-   -------.                  .....    . ......    .... ..  -----    ......  .....  -- -   -- -     -- -    -- -     -- -
Principal                             169.4   163.7   212.7   276.9   359.1   430.7   313.5   333.5   462.1   598.0    610.0
Deposits of T&T Govt                 20.0    20.0    20.0    20.0    20.0    20.0    20.0    20.0    20.0    41.4            41.4
Deposits of Kuwait Govt              11.1    10.7    10.4    10.3    10.1    10.4         0.0      0.0    11.1    10.0       10.4
Deposits of Libya Govt               10.0    10.0    10.0    10.0    10.0    10.0         0.0      0.0    10.0    10.0       10.0
TLY bilateral account                 0.0     0.0      0.0    56.0   141.5   205.0   205.0   221.0   221.3   283.1    283.1
Carribean Clearing Facility          32.4    33.8    83.5    96.5    %.5    96.5    96.5    96.5    96.5   151.3    151.3
BIS-Samuel Montague                   7.0     0.0      0.0      0.0      0.0     0.0      0.0      0.0      0.0     0.0       0.0
Loan from Central Bank of Brazi    3.0        3.0      2.5      2.5      2.5     2.5    -2.5    -2.5        2.5     2.5       2.5
Royal Bank of Canada                  0.0     0.0      0.0      0.0      7.0     6.8      6.6      6.6      7.5     7.5       0.0
Use of Fund credit                   86.0    86.2    85.8    77.2    71.3    78.8   -12.6    -8.1    93.2    92.2    111.3
GOR USS deposit                       0.0      0.0     0.0      0.0      0.0      0.0     0.0      0.0      0.0      0.0      0.0
Export Dev Fund deposit 2             0.0     0.0      0.5      0.0      0.3     0.0      0.0      0.0      0.0     0.0       0.0
Outstanding foreign trade             0.0      0.0     0.0      0.0      0.0      0.0     0.0      0.0      0.0      0.0      0.0
Liquidation account GDR/Guyana        0.0     0.0      0.0      4.4      0.0     0.6      0.5      0.0      0.0     0.0       0.0
Interest in Arrears                     3.4     9.6    16.4    37.1    47.4    83.0   102.2   299.2   175.5    78.6            71.1
..........     ..................................................................................................................
Source: Barnk of Gqjyna.



TabLe 6.6: GUYANA - EXTERNAL PAYMENT ARREARS, 1980-90
--------           (USS million)
December 31
1980    1981    1982    1983    1984    1985    1986    1987    1988    1989        1990
Total Arrears                          45.4   136.4   217.0   392.0   544.2   731.1   880.5  1005.2  1133.9   530.4
Commercial & other current payments   29.3    45.7    93.5   131.4   128.7   140.7   153.4   145.2   151.9   122.3
Bank of Guyana Arrears                 16.1    80.7    94.3   191.8   320.7   438.9   498.9   564.3   600.9   156.3
BilateraL Deposits                      3.4    29.6    34.1    37.7    44.3    49.6    74.7    73.1    76.2    38.1
Principal                              0.0    20.0    20.0    20.0    20.0    20.0    40.2    41.1    40.6    20.7
Trinidad & Tobago                     0.0    20.0    20.0    20.0    20.0    20.0    20.0    20.0         20
Bank of Libya                         0.0      0.0     0.0     0.0      0.0     0.0    10.0    10.0       10       10
Bank of Kuwait                        0.0      0.0     0.0     0.0      0.0     0.0    10.2    11.1    10.6    10.7
Bank of Brazil                        0.0      0.0     0.0     0.0      0.0     0.0     0.0      0.0     0.0      0.0
Interest                               3.4     9.6    14.1    17.7    24.3    29.6    34.5    32.0    35.6    17.4
Trinidad & Tobago                     3.4     9.1    10.8    13.5    16.6    19.8    23.4    18.3    20.4
Bank of Libya                         0.0      0.5     2.2     3.0      4.5     5.7     6.4      7.2     7.8      8.7
Bank of Kuwait                        0.0      0.0     1.1      1.9     2.8     4.1     4.7      6.5     7.4      8.7
Bank of Brazil                        0.0      0.0     0.0     0.1      0.4     0.0     0.0      0.0       0        0
CARICOM Clearing Facility              12.7    51.1    60.2    84.7   113.2   122.8   130.2   138.2   146.6          ..       ..
Principal                             12.7    51.1    57.4    76.6    96.5    96.5    96.5    96.5    96.5          ..       ..
Interest                               0.0     0.0      2.8     8.1    16.7    26.3    33.7    41.7    50.1         ..
Trinidad & Tobago BiLateral Account    0.0       0.0     0.0    57.6   148.7   234.9   233.6   255.7   271.2
Principal                              0.0      0.0     0.0    56.0   138.2  205.0   215.7   222.7   222.6
Interest                               0.0     0.0      0.0      1.6    10.5    29.9    17.9    33.0    48.6
IHF                                     0.0     0.0      0.0    11.8    14.5    31.6    60.4    97.3   106.9   118.2
Principal                               0.0     0.0     0.0      7.6    14.5    27.3    48.4    75.6    78.6    84.1
Interest                               0.0     0.0      0.0     4.2      0.0     4.3    12.0    21.7    28.3    34.1
Public Sector Debt                      0.0    10.0    29.2    68.8    94.8   151.5   228.2   295.7   381.1   251.8
Principal                               0.0      9.8    21.8    53.9    68.2   101.9   156.9   200.6   240.8   151.2
Interest                                0.0     0.2      7.4    14.9    26.6    49.6    71.3    95.1   140.3   100.6
Note: Arrears on account of merchandise and other current payments without local currency deposits are estimated at about
USS30 million in 1982, about US$40 million in 1983 and USS44.6 illion in 1984.
Source: Bank of Guyana, State PLaming Secretariat, and IMF staff estimates.



Table 6.7: GUYANA - SELECTED INTEREST RATES, 1977-90
Deceffber 31
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986          1987      1988    1989      1990
(percent per ennum)
Local Rates
Prime Lending Rate                      7.50    9.50   11.50   13.50   13.50   15.00   15.00   15.00   15.00   15.00    15.00    14.80   37.50    31.00
Bank Rate                               6.50    8.50   10.50   12.50   12.50   14.00   14.00   14.00   14.00   14.00    14.00    14.00   35.00    30.00
Maximum Charge on Commercial Bank
Deficiencies                          12.20   12.20   12.20   12.20   12.20   14.00   14.00   14.00   14.00   14.00
Treasury Bills                          5.88    7.80    9.72   11.62   11.62   12.75   12.70   12.75   12.75   12.75    10.36    10.80   33.75    28.75              s
Government Bond Rate                    7.00    8.00    9.00    9.00    9.00   14.50   14.50   14.50   14.50   14.50             ..        ..      ..        ..
Small Savings Rate                      5.50    8.50    8.50   10.50   10.50   11.50   11.50   11.50   11.50   11.50    11.50    10.90   31.00             27.5
Time Deposits
3 months                              4.00    7.00    9.00   11.00   11.00   12.00   12.00   12.00   12.00   12.00    12.00    12.00   32.30             28.1
6 months                              4.50    7.50    9.50   11.50   11.50   12.50   12.50   12.50   12.50   12.50    12.50    12.50   33.00             28.5
12 months                              5.50    8.50   10.50   12.50   12.50   13.00   13.00   13.00   13.00   13.00    13.00    13.00   34.30             29.5
Interest Paid on Deposits Against
Payments Arrears with Commercial
Banks                                    -      7.00    9.00    9.00    9.00   12.50   12.50   12.50   12.50   12.50    12.50    13.00   34.00    29.00
International Rates a/
EurodoLLar Rate (London)                7.19   11.58   14.50   17.75   13.75    9.52   10.14    9.56           ..       ..
Treasury BIll Rate In:
United Kingdom                         6.37   11.57   15.90   13.07   13.03    9.90    8.87    9.23           ..       ..
United States                          6.06    9.12   12.07   15.66   14.08    8.01    8.93    8.79           ..       ..
Canada                                    ...  10.46   13.66   14.41   16.33    9.80    9.71   10.50          ..      ..
Jamaica                                7.29    8.42    9.56    9.91    9.97    9.26   12.11          ..       ..      ..
Trinidad & Tobago                      3.93    3.25    3.10    3.06    3.05    3.05    3.19    3.72           ..      ..
Note: Bank of Guyana pays 13X on deposits on payments arrears held by the commercial banks with the Central bank.
a/ Daily average for the month on Instruments of three-month maturity. Rates for 1984 refer to average up to November.
Source: Bank of Guyana; and INF - International Financial Statistics.



Table 6.8: GUYANA - CONERCIAL BANK CREDIT TO PRIVATE SECTOR AND PUBLIC ENTERPRISES, 1977-90
---------                                   (GS million)
December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986       1987     1988    1989     1990
Total Gross Credit Extended a/       231.8   243.0   335.3  425.2   637.8   619.8   990.3  1014.6  1357.9   996.1   1301.5   2143.3  3206.5   4900.9
Credit to Private Sector              113.0   121.1   162.7   195.9   262.1   313.4   376.8   463.0   520.2   673.5    953.2   1579.3  2518.7   4108.6
AgricuLture                            11.0    11.1    14.1    14.4    17.7    18.7   20.7   31.8    46.0    55.3         85.1    144.7  266.1    335.4
Sugarcane                              0.3     0.4     0.2     0.6      1.0     1.4     1.4     0.9     1.1      1.4      1.4      1.9     2.7      6.4
Rice Paddy                            5.9      5.5     7.2     7.2     7.7      7.7     8.2     8.0    16.8    19.5      20.6     24.5    73.6     98.2
other                                  4.8     5.2     6.7     6.6     9.0      9.6    11.1   22.9    28.1    34.4       63.1    118.3   189.8   230.8
Mining                                  0.6     0.6     0.6     0.4     0.6      0.6     1.4    4.1      6.5     9.3      15.9     62.2   117.0    178.3
Timber and SawmiLtLing                 3.6      5.2     5.3     7.3     8.7    11.3    13.8   19.2    16.4    20.9        22.2     58.0    85.1    157.4
Construction                           8.1      7.1    13.0    17.3    25.9    33.6   37.1    58.9    44.7    59.2        94.6    183.9  315.3    412.4
Manufacturing                          11.1    13.7   22.5    24.2    36.2    32.5    36.6   45.1    64.4    76.2    107.7    188.4  307.0    492.5
Sugar                                    -       -       -     0.2        -       -     0.5     0.4     0.4      1.0      1.2
Other                                 11.1    13.7    22.5    24.0    36.2    32.5    36.1    44.7    64.0    75.2    106.5    188.4   307.0    492.5
Transport & Communications             2.4      1.7     2.6     1.3     1.5      2.8     5.0    13.4    10.8    15.5      28.4     76.2    98.9    150.0
Distribution                           18.3    19.0   22.6   30.4    32.6    :2.0    61.6   68.4    62.9    73.8    105.5   248.8  302.5    574.3
Housirg and Real Estate                16.9    18.2   20.5    19.8    21.9    24.0    28.0   47.1    40.8    54.2         60.7     60.7    67.7    125.9
Personal (excLuding housing)           18.7    24.0    32.7    45.9    58.0    74.3    84.9    72.3    90.3   109.4    192.5    188.5   269.4    543.6
Cooperatives                           3.8      2.5     5.8     5.2     6.9      9.1    13.3    11.8    16.0    18.8      28.1       ..
Services and Other                     18.5    18.0    23.0    29.7    52.1    64.5    74.4    90.9   121.4   180.9    212.5    367.9   689.7   1138.8
Credit to Public Enterprises          118.8   121.9   172.6  229.3   375.7   306.4   613.5   551.6   837.7   322.6    348.3    564.0   687.8    792.3
Sugar                                 24.0    23.8    19.9    35.3    81.9    51.5   186.9   138.7   230.4    43.3         0.4       ..      ..     13.6
Bauxite                                3.1      6.2    34.4    39.9   116.9   95.7   275.4   259.0   448.7   109.5        87.1    165.1   219.2    247.1
Timber and Sawmilling                   1.7     0.8     4.0     5.0     5.8      7.0     8.7     0.0     0.0    13.4      16.1     19.2
Electricity                            13.6    15.4   22.9    26.4    26.1    27.9    28.9   28.1    21.9        0.0        ..
Transport & Comuunications             7.7      0.7     0.5     8.6     6.7      1.3     0.8    11.6     0.9     0.4       1.9      0.1     1.7      2.7
Telecommications                          -    8.0      8.9       -        -       -    6.0      3.0     1.7     0.5        ..
Distribution (including rice)          65.3   63.4    67.6    87.8    97.5    94.0    84.4    87.5    92.6   129.0    182.8    225.4    28.1        13.3
Other b/                                3.4     3.6    14.4    26.3    40.8   29.0    22.4   23.7    41.5    26.5         60.0    154.2  438.8    515.6
a/ In August 1982 the Central Goverrment made equity contributions to some corporations amounting to GS475 million; in March 1984 the Central Government
mede transfers to some corporations (mostly Guymine and Guysuco) amounting to GS378 mitlion, and in February & ApriL 1986 the Central Bank made
transfers to BIDCO & Guysuco respectively of GS175 million & GS225 million to pay their overdraft with the Cooperative Bank.
b/ Includes electricity.
Source: Bank of Guyana.



Table 6.9: GUYANA - CENTRAL GOVERNMENT BONDED DEBT BY HOLDER, 1977-90
*....                        (GS miltion)
Outstanidng as of December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986         1987     198     1989      1990
Total Bonde  Debt                     853.9  1035.2  132.5  1650.6  1809.1  2775.7  3820.8  4544.0  5272.4  6233.6   7006.2   7374.9  9294.5   9772.8
Treasury Bills                        587.8   708.0   916.5  1191.0  1245.7  2069.3  2966.7  2980.2  3627.8  3978.8   4740.8   4804.0  7012.5   7556.1
…..  . . . . .-                          - -    . . .  . .  .    . . .  - - -     - - -   . . .  -  - -    - - -  . . .    .  . .   - - -     .  . .  . . .
Banking system                        506.1   588.4   777.1  1019.9  1080.5  1801.0  2589.0  2511.4  3026.7  3242.4   4111.4   4109.7  5811.4  5849.4
Bank of Guyana                       335.3   390.2   587.0  809.0   842.5  1398.8  M06.0  1887.7  2222.4  2185.6   3878.3   3654.7' 3230.0   1767.1
Cormercial banks                      170.8   198.2   190.1   210.9   238.0   402.2   56.0   623.7  804.3  1056.8    233.1    455.0  2581.4  4082.3
other FinanmiaL intermediaries          10.1    12.9     8.3      8.7    17.7    31.9    65.8   106.6   142.6   142.6    142.6    142.6   142.6    142.6
New Bultding Society                   4.2      2.0     3.4  .3.3        8.7    17.5    24.0    64.7        ..    90.2    162.9    148.4   287.3    676.5
Local insurance companies               5.7     4.7      1.4     1.8     4.8      8.3    17.5    38.1       ..    44.0      20.7      9.2    39.8      61.9
Trust companies                         0.2     0.6     0.6        -     0.1        -     0.      0.2       ..     5.7       0.0      0.0     0.0       0.0
Pension funds                             -       -              3.6     4.1      6.1    21.9      1.2      ..     1.4       1.8      3.7    64.7      62.1
Government deveLopment baits              .     5.6     2.9                .              1.7     2.4       ..     2.9       0.0      0.0      0.0     18.2
PubLIic Sector                          37.8    60.5    78.1    57.8    63.6    87.4'  131.1   154.0   115.4   142.7    275.7    371.7   472.6   651.1
National Insuranme Scheime              4.4     6.9     5.0    10.7      7.4      2.3       .                -     1.0      10.0     18.5    24.5      29.0
special furds (Labor WeLfare fund)    3.7       3.7     3.7      5.1     4.6      4.0     4.1     4.1              4.3       0.0      0.0      0.0      0.0
Debenture sinking Fund (Bank of
Guyana Trustee)                       15.1    31.5    48.3    34.6    29.5    45.9    66.9   11.4    84.2    90.6    213.7    294.2   448.1    616.7
Government-owned corporations          14.6    18.4    21.1      7.4    22.1    35.2    60.1    38.5    31.2    46.8        52.0     59.0      0.0      5.4
Private Sector                          33.8    46.2    53.0   104.6    83.9   149.0   180.8   208.2   343.1   451.1    211.1    180.0   585.9    913.0
Insurance companies n.e.i.             8.4    16.2    19.0    20.4    34.6    37.5    25.7    25.2          ..    51.6      29.5     41.2   147.0   168.7
Trust compaies on behatf of
customers                             6.3      6.3     7.8      9.1     9.7    13.5    19.3    41.8        ..    29.3       0.0     37.8    82.0    116.9
Non-consolidated financial
institutiors ./                       5.3    10.3      7.4     6.7      7.1      1.1     1.0     0.        .       .       0.0       0.0     1.1       2.5
Commercial baits on behalf of
customers                             6.0                 .       .     0.5      8.6    52.9    18.6       ..    39.1       0.0      0.0     0.0       0.0
other (residuial)                       7.8    13.4    18.8    68.4    32.0    88.3    81.9   122.5         .. 330.0    161.6    101.0   355.8   624.9
Debentures                             263.3   324.3   393.0   456.6   560.4   693.4   842.8  1550.3  1630.9  2238.6   2247.7   2549.9  2263.4   2200.4
.--  - - --                              - -    . . .  -  - -    - - -  . . .     . . .  -- - -  .  . .    - - -  - - -     - - -   . . .      . . .  . . .
Banking system                          22.3    20.4    10.7      7.7    11.2    13.4    12.2   590.1   579.6   815.4    839.7    992.2   672.1    726.9
Bank of Guyana                          5.9     5.9     2.2      2.2     1.6      0.4     0.4   580.0  555.5   783.0    750.9    714.2   396.2    457.9
Commercial, banks                      16.4    14.5     8.5      5.5     9.6    13.      11.8    10.1    24.1    32.4      88.8    278.0   275.9    269.0
other Financial Intermediaries          13.1    14.6    16.7    81.9    82.4    85.9    90.3    91.5        0.0   245.3    267.0    290.8   297.2    285.5
New BuiLding Society                    5.1     5.1     5.1      5.1     5.1    13.0    22.1    23.0        i. 41.7    159.5    189.4   189.1    183.6
Local Insurance companies               7.9     9.4    11.4    12.0    13.3    15.2    17.5    21.1         ..    42.1     34.1      51.2    47.8      45.5
Pension funds                             -                - 64.6    63.8    57.7    50.7    47.4           ..    61.5      73.4     50.2    60.3      56.4
Govermewnt development banks            0.1     0.1     0.2      0.2     0.2                -        -      ..     0.0       0.0      0.0     0.0       0.0
PubLic Sector                          152.6   202.0   261.1   319.1   392.5   500.6   625.4   745.1   905.2   974.4    914.4   1015.2  1152.0   1052.0
National Insurance Scheme             115.2   147.2   210.4   279.9   340.6   440.5   568.0   691.8   865.8   924.2    888.8    991.0  1062.5   1003.0
Goverrment-owrmed corporations         4.3      4.3     4.3      4.3       .        .       .        .    10.0    10.0       0.0      5.0     0.0       0.0
Special funmds                         6.0    11.0    11.0    11.0    21.        18.9    18.9    18.9       ..    19.0      19.0     19.2     0.0       0.0
Sinking Fund                          27.1    39.5    35.4    23.9    30.9    41.2    38.5    34.4    29.4    21.2           6.6      0.0    89.5      49.0
Private Sector                          75.3    87.3   104.5    47.9    74.3    93.5   114.9   123.6   146.1   203.5    226.6    251.7   142.1    136.0
insurmrice caoanies                   12.1    15.1    20.0    25.3    18.6    25.8    49.2    57.9          ..    82.2     83.8      95.7    81.7      75.0
Other                                 63.2    72.2    84.5    22.6    55.7    67.7    65.7    65.7          .. 121.3    142.8    156.0    60.4         61.0
Defeme Bonds                             2.8     2.9     3.0      3.0     3.0    13.0    11.3    13.5    13.7    16.2        17.7     21.0    18.6      16.3
... . . . .                    . .     . .      . .     . .     . .      . .     . .      - -     - -     - -      . .      - -       - -
.--  - - - - - -  - - - - - - - - -  - - - - - - - - - -  - - - - - - - - - - --  - - - - - - - -  - - - - - - - - - - - -  - - - - - - - -  - - - - - - - -
a/ IncLudes the Guyana Housing and Deveopment Company and sevral small credit unions.
Source: Bank of Guyana.



Table 6.10: GUYANA - PRIVATE SECTOR HOLDINGS OF DOMESTIC SELECITED FINANCIAL ASSETS, 1977-90
(GS million)
Outstanding as of December 31
1977    1978    1979    1980    1981    1982    1983    1984    1985    1986          1987      1988    1989      1990
Total                                  772.6   909.5  1033.0  1272.2  1511.1  1896.3  2282.6  2676.8  3217.4  3908.6   4507.8   5976.6  8893.8  13674.1
By type of asset
Claims on financial System            660.7   m  .1   872.5  1124.1  1355.4  1663.7  1984.8  2330.1  2725.6  3237.8   4052.4   5523.9  8147.2  12608.8
Currency in circulation              142.8   156.4   148.3   167.0   186.0   231.0   268.9   335.8   421.7   508.8    726.3   1057.8  1506.0   2211.4
Demand deposits & cashier's check  111.2    97.1   102.2   115.9   128.1   147.0   174.3   211.8   247.7   271.5    414.4    599.5   876.7   1220.0
Time and savings deposits            298.2   352.7   424.3   469.8   609.8   782.2   944.5  1049.3  1307.5  1453.6   1859.9   2462.6  3809.3   5982.9
Other claims                          99.9   157.9   183.4   331.8   396.4   453.5   526.6   647.0   634.1   844.0   1051.8   1404.0  1955.2   3194.5
Private capital and surplus            8.6      9.0    14.3    39.6    35.1    50.0    70.5    86.2   114.6   159.9            ..
Claims on Central Government          111.9   136.4   160.5   148.1   155.7   232.6   297.8   346.7   491.8   670.8    455.4    452.7   746.6   1065.3
Treasury bills                        33.8    46.2    53.0   104.6    88.1   124.7   170.7   207.8   337.2   451.1    211.1    180.0   585.9    913.0
Government debentures                 75.3    87.3   104.5    40.5    64.6    94.9   115.8   125.4   140.9   203.5    226.6    251.7   142.1    136.0
Defense bonds                          2.8      2.9     3.0      3.0      3.0    13.0    11.3    13.5    13.7    16.2        17.7     21.0    18.6       16.3
By institution
Financial intermediaries              660.7   773.1   872.5  1124.1  1355.4  1663.7  1984.8  2330.1  2725.6  3237.8   4052.4   5523.9  8147.2  12608.8
Bank of Guyana                       142.8   156.4   148.3   167.0   186.0   231.0   268.9   335.8   421.7   508.8    726.3   1057.8  1506.0   2211.4
Commercial banks                     403.6   483.1   569.8   605.5   726.6   912.1  1103.8  1256.6  1556.0  1857.6   1857.6   1857.6  1857.6   1857.6
Other intermediaries                 114.3   133.6   154.4   351.6   442.8   520.6   612.1   737.7   747.9   871.4   1468.5   2608.5  4783.6   8539.8
Central Government                    111.9   136.4   160.5   148.1   155.7   232.6   297.8   346.7   491.8   670.8    455.4    452.7   746.6   1065.3
(as percent of total)
By type of asset
Claims on financial intermediaries   85.5    85.0    84.5    88.4    89.7    87.7    87.0    87.0    84.7    82.8             89.9     92.4    91.6      92.2
Currency in circulation               18.5    17.2    14.4    13.1    12.3    12.2    11.8    12.5    13.1    13.0           16.1     17.7    16.9       16.2
Demand deposits & cashier's check   14.4    10.7        9.9      9.1     8.5      7.8      7.6     7.9      7.7     6.9       9.2     10.0      9.9       8.9
Time and savings deposits             38.6    38.8    41.1    36.9    40.4    41.2    41.4    39.2    40.6    37.2           41.3     41.2    42.8      43.8
other claims                          12.9    17.4    17.8    26.1    26.2    23.9    23.1    24.2    19.7    21.6           23.3     23.5    22.0       23.4
Private capital and surplus            1.1      1.0     1.4      3.1     2.3      2.6      3.1     3.2      3.6     4.1       0.0      0.0      0.0       0.0
Claims on Central Government           14.5    15.0    15.5    11.6    10.3    12.3    13.0    13.0    15.3    17.2           10.1      7.6      8.4       7.8
Treasury bills                         4.4      5.1     5.1      8.2     5.8      6.6      7.5     7.8    10.5    11.5        4.7      3.0      6.6      6.7
Government debentures                  9.7      9.6    10.1      3.2     4.3      5.0      5.1     4.7      4.4     5.2       5.0      4.2      1.6       1.0
Defense bonds                          0.4      0.3     0.3      0.2      0.2     0.7      0.5     0.5      0.4     0.4       0.4      0.4      0.2       0.1
By institution
Financial intermediaries               85.5    85.0    84.5    88.4    89.7    87.7    87.0    87.0    84.7    82.8           89.9     92.4    91.6      92.2
Bank of Guyana                        18.5    17.2    14.4    13.1    12.3    12.2    11.8    12.5    13.1    13.0           16.1      17.7    16.9      16.2
Commercial banks                      52.2    53.1    55.2    47.6    48.1    48.1    48.4    46.9    48.4    47.5           41.2     31.1    20.9       13.6
Other intermediaries                  14.8    14.7    14.9    27.6    29.3    27.5    26.8    27.6    23.2    22.3           32.6     43.6    53.8       62.5
Central Goverrnment                    14.5    15.0    15.5    11.6    10.3    12.3    13.0    13.0    15.3    17.2           10.1       7.6     8.4       7.8
Source: Bank of Guyana.



Table 7.1: GUYANA - OUTPUT OF SELECTED COMMOITIES, 1976-90
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986        1987      1988    1989      1990
Sugar
Area reaped ('000 acres) a/  137.8   113.8   144.4   137.8   122.0   166.1   160.0   119.4   125.9   107.8   110.2    102.9           82.8    84.0     89.9
Cane yield/acre (LT) a/        25.6    23.0    25.2    25.1    27.8    21.6    20.8    25.9    25.6    26.1    28.0         28.0      27.9    28.6     21.3
Cane production ('000 LT)      4037    3108    4218    3872    3770    4126    3845    3571    3472    3153    3379   3119.8   2501.7  2565.5   2039.3
Company estates               3526    2619    3632    3463    3390    3581    3327    3092    3224    2815  3090.6   2877.8   2312.5  2403.1   1914.7
Independent farmers            511     489      586     409      380     545     518      479     248     338   288.7    242.1    189.1   162.4    124.5
Sugar production ('000 LT)   332.5   241.5   324.8   298.3   269.6   300.8   287.7   251.8   241.9   242.1   249.4    164.5    170.2   167.4    132.0
Spring                       149.4   104.3   159.7   110.3   104.3   109.7    86.8    86.1   105.2   113.8   126.5         36.8      78.0    64.3     58.8
Autumn                       183.1   137.2   165.1   188.0   165.3   191.1   200.9   165.7   136.7   128.3   122.9    127.7          92.2   103.1      73.2
Exports
Volume ('000 LT)             297.0   207.7   280.7   264.2   248.1   264.6   250.2   212.2   205.9   213.5   214.3    179.3    146.9   170.0    134.5
Value (GS min.)              258.7   185.7   234.6   230.6   307.6   305.9  263.1   214.6   271.5   286.6   356.3    882.3    748.5  2265.0   3434.9
Unit value (GS/LT)           871.0   894.1   835.8   872.8  1239.8  1156.1  1051.6  1011.3  1318.6  1342.4  1662.6   4920.8   5095.3 13323.5  25538.3
Local consumption
Votume ('000 LT) b/           33.9    31.5    31.6    31.5    36.2    36.5    35.3    36.3    34.7    28.5    31.7         42.3      35.8    38.5      27.6
Value (GS min.)                5.5     6.0      7.5     9.8    11.3    11.4    11.0    10.7    26.7    41.6    50.3        68.0      58.3   173.1    395.5
Unit value (GS/LT)           162.2   190.5   237.3   311.1   312.2   312.3   311.6   294.8   769.5  1459.6  1586.8   1607.6   1628.5  4496.1  14329.7
Changes in stock ('000 LT)      1.6     2.3    12.5      2.6   -14.7    -0.3      2.2      3.3     1.3      0.1     3.4    -57.1    -12.5   -41.1    -30.1
Rice
Area reaped ('000 acres)      207.5   357.4   299.5   218.5   237.0   220.0   239.5   187.1   229.7   194.0   207.3    185.0    190.2   169.3    126.9                   F-
Yield/acre (LIT)               0.53    0.59    0.61    0.65    0.70    0.74    0.75    0.79    0.78    0.79    0.87         1.31      1.21    1.40      1.23
Production ('000 LT)          110.0   211.5   182.0   142.8   166.4   163.0   179.0   147.6   179.6   153.0   179.5    242.7    230.4   237.2    155.7
Spring                        48.0    80.7    62.4    66.0    78.2    78.7    85.0    60.1    80.1    55.9    79.1    109.5    107.4   119.5          86.4
Autumn                        62.0   130.8   119.6    76.8    88.2    84.3    94.0    87.5    99.5    97.1   100.4    133.2    123.0   117.7          69.3
Purchases by Rice Board
Volume ('000 LT)             122.0   148.0   125.0   122.0   127.0   126.0   110.4    80.3    81.0    78.6    74.0         81.5      85.8    50.3     42.9
Value (GS min.)               52.4    66.5    63.4    59.3    69.0    80.0    88.6    62.6    79.5    87.8    95.1    166.2    199.4   342.2    429.7
Unit value (G$/LT)           429.5   449.3   507.2   486.1   543.3   634.9   802.5   779.6   981.5  1117.0  1285.1   2039.3   2324.0  6803.2  10016.3
Exports
Volume ('000 LT)              71.0    65.9   104.8    83.7    79.7    76.8   34.4    41.7    47.9    28.9    38.6          69.0      62.2    40.6     49.7
Value (GS mtn.)               73.6   66.8    96.0    80.8    87.5   110.0   60.7    64.9    80.9    56.6    44.9            157    154.3   287.4    513.2
Unit value (GS/LT)          1036.6  1013.7   916.0   965.4  1097.9  1432.3  1764.5  1556.4  1688.9  1958.5  1163.2   2275.4   2480.7  7078.8  10326.0
LocaL sales by GRB
Votume ('000 LT)              46.0   46.0    39.0    36.4    37.0    30.0    42.0    29.9    36.8    46.2    50.4          41.7     49.6    29.9      22.3
Vatue (GS min.)               12.7    12.9    16.9    19.0    20.6    21.3    41.7    30.3    40.5    57.3   109.2    113.6    145.4   458.4    470.0
Unit value (G$/LT)           276.1   280.4   433.3   522.0   556.8   710.0   992.9  1013.4  1100.5  1240.3  2166.7   2724.2   2931.5 15331.1  21076.2
Changes in stocks of GRB
('000 LT)                      5.0   36.1   -18.8       1.9    10.0    19.2    34.1       8.7     3.7      3.5     0.1       ..       1.7             -4.6
Other ('000 LT) c/            -12.0    63.9    57.0    20.8    39.4    37.0    68.6    67.3    98.6    75.1    65.5         61.8      29.3    42.2     37.2
-------. . . ..---......-..--------- ............ -----.-----.-----.---.---..---...... .------.---..........



Table 71: GUYANA - (Continued)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986             1987     1988    1989       1990
........... ..................... ........ ............... .. ........ .... ...... .................. ...................................... ............................................ ...................................................
Livestock & Related Products
....... ............ ..... .............
Neat production (min. lbs.)
Beef                            8.8      6.9      6.1      3.9      3.6     4.6      4.7      4.9     3.5      3.9      3.5       3.8      4.6      5.3      4.85
Pork                             4.9     5.1      3.7      4.0      3.1     3.0      2.4      1.8      2.2     2.4      2.4       2.4       2.6     2.2      1.98
Poultry meat d/                20.9    16.3    22.9    23.3    23.0    23.0    16.3           8.6      9.3     6.2      7.1       7.9       8.8     5.5      4.62
MiLk (gin. gaLlons)               2.7       ...     ...      ...      ...      ...     ...    0.8       0.8     0.7      2.5       2.6       0.9      0.5      0.4
Eggs (milLion)                   56.3    52.9    32.5    52.0    55.9    51.0    48.5    36.7    49.0    49.3    50.0             35.1      14.0    30.4      13.5
Fishing (min. pounds)
Fish                            35.0    41.0    32.0    43.2    39.5    41.1    45.7    50.9    61.9    99.2    92.6              90.2     90.8    71.4       72.8
Shrimp                            7.0     7.0      7.0      8.0      8.1     6.7      6.8      6.2      4.4     7.5      7.7       7.5       7.1      7.7      7.7
Forestry (u(n. cubic feet)
Timber                            8.9     6.2      5.9      5.5      5.0     4.9      7.0      6.7      5.7     4.8      4.7       5.3       4.6      4.1      4.1
Dried m_tal grads bauxite eI
...........................
Production ('000 LT)            969.0   879.0  1021.9  1058.5  1005.0   982.0   958.0   761.0   797.0  1028.3   981.3    884.1    904.0   976.4   1113.6
Exports
VoLme ('000 LIT)              825.0   882.0   999.0  1010.8   998.0   995.1   691.9   793.1   769.7  1029.4   957.3    912.9    851.0  1008.5   1083.8
Value (GS min.)                 33.7    41.2    48.5    54.8    62.4    78.1    71.4    69.5    80.0   110.3    96.0    207.8    253.8   630.1   1184.6                          o
Unit value (GS/LT)              40.8    46.7    48.5    54.2    62.5    78.5   103.2    87.6   103.9   107.1   100.3    227.6    298.2   624.8   1093.0
Calcined bauxite
................
Production ('000 LT)            729.0   709.0   570.0   568.0   591.6   505.4   385.0   310.0   506.0   567.9   444.3    457.4    435.0   344.7    316.1
Exports
Volume ('000 LT)              731.0   693.0   578.0   542.3   593.5   488.2   364.7   346.2   501.3   542.7   444.3    457.4    417.4   346.7    304.5
Value (GS mln.)               190.6   211.5   201.8   218.3   305.7   259.5   205.8   142.3   270.9   311.4   259.9    651.0    579.0  1336.5   1888.1
Unit value (GS/LT)            260.7   305.2   349.1   402.5   515.1   531.5   564.3   411.0   540.4   573.8   585.0   1423.3   1387.2  3854.9   6200.7
Alumina
Production ('000 LT)            265.0   273.0   236.0   159.7   211.5   167.1    93.0          0.0       ..       ..      ..        ..
Exports
VoLutm  ('000 LT)             265.0   263.0   248.0   145.0   226.2   149.6    64.0    29.0             ..       ..      ..        ..
Value (GS min.)                64.4    78.5    81.2    53.7   111.4    91.9    36.0           7.0           ..       ..       ..        ..
Unit value (GS/LT)             243.0   298.5   327.4   370.3   492.5   614.3   562.5   241.4                ..       ..       ..        ..
Cold ('000 ounces)
,..... ... . . .
Voluee ('000 ounces)              ...      ...     ...      ...   11.0    19.3       8.6      5.4    11.1    11.4    15.4        23.5      17.8    19.0      42.5
Value (USS)                                                                          1.3      1.7      4.3     3.4      5.6       9.4       8.0      5.7     13.2
Diamonds ('000 carat)              ...      ...      ...     ...   10.0       9.3    11.2    12.0       7.3    11.6      9.1       7.3       4.4      7.8      15.3
......--.---...--.-..--...-..-..-..-.---....--..-.....----  .------.... --...--.-......-    .....---.....-..---..-.--.....-----    .      ..   ......--.....-..   .---..-  .-..---.-.......................... 



Table 7.1: GUYANA - (Continued)
1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986       1987     1988    1989     1990
Miscellaneous Manufactures
Rum (min. proof gatlons)       4.6      3.3     3.4     3.5     4.0     3.9      2.7     2.9     3.4     3.9     3.7       3.9      3.9     3.8      4.0
MoLasses (mil. gallons)       23.8    19.8    25.8    21.4    20.8    23.3       7.3      ...     ...     ...      ...     ...      ...      ...     ...
Copra (min. pourds)           11.3      5.9     4.8     6.6     8.9     4.5       ...     ...     ...     ...      ...     ...      ...      ...
Copra derivatives of which:
Copra meal ('000 pounds)      4.6      1.2     1.4     1.7      ...      ...     ...     ...     ...  211.2       ...     ...      ...      ...
EdibLe oil ('000 gallons)   757.0   312.4   336.0   365.0   437.0   317.0   386.0   305.9        ...     ...      ...     ...
Soap (min. pounds)            4.5     4.2      3.6     3.5     4.4     5.1     5.1      2.7     0.6      ...      ...     ...      ...      ...
Margerine (mil. pourds)       4.7      4.6     4.3     4.4     6.4     5.3      0.9     0.1     6.5      ...      ...     ...      ...      ...
Bacon ('000 pounds)          428.0   580.0   207.3   195.2  214.0         ...     ...     ...     ...     ...      ...
Ham ('000 pounds)            206.0   191.0   199.7   149.8   138.4        ...     ...     ...     ...     ...      ...     ...      ...      ...
Sausage ('000 pounds)         17.0    19.0      4.3    11.1    23.7       ...     ...     ...     ...     ...      ...
Beer and Stout (mIl.gallons    3.1      3.6     3.6     3.1     3.9     3.5      3.5     2.0     2.0     2.1       ...
Flour ('000 LT)               39.4    35.9    35.3    28.1    36.2    30.7      8.0       ...     ...     ...     ...
Cigarettes (mitlions)        558.6   557.8   519.0   548.7   567.0   602.0   429.6   408.2   373.2   466.9         ...
Stock feed (mil. pounads)     93.0    80.7   110.3   126.5   118.3   105.4    71.3    55.0    57.3    56.2         ...     ...      ...      ...
Matches ('000 boxes)         225.0   266.0   248.0   219.0   182.0   177.5   181.7   155.9   114.5   160.8         ...     ...      ...      ...
Garments ('000 dozens)           ...  671.0  462.0  540.0   332.0  267.0   240.1   273.4   189.0          ...      ...              ...      ...
Refrigerators ('000 units)       ...     ...     ...   20.0    20.0    16.0    16.7      8.7     9.6    6.1        ......
Textiles ('000 meters)           ...     ...     ...     ...  457.0  1739.7   844.4  1109.0  1500.0  1700.0        ...
.--------------------------------------------------------------------------------------------------------------------------------------------
a/ Company estates (GUYSUCO).                                                                                                                                       un
b/ Includes packaged and dark crystal sugar.
c/ Includes seed, feed, on-farm consumption, change in farmers' and millers' stocks, private saLes and
unaccounted for; 1984 excludes on-farm consumption.
d/ Commercial producers only.
e/ Includes metal grade, chemical grade and alunina cement.
Source: Ministry of Economic Development; Statistical Bureau; Ministry of Agriculture; GUYSUCO; GRB; and Bank of Guyana.



Table 8.1; GUYANA - COSSU1EI PRICE INDICES. 1976-90 a/
-                   (1977 - 100)
Yeights(X)         1976    1977    1978    1979    1980    1981    1982    1983    1984    1985    1986            1987      1988    1989      1990
URUUI 
Food         42.54             192.3   208.7   244.7   290.9   326.2   416.3   338.1   650.9   867.4  1043.2  1134.0   1474.1   2167.0  3562.2   7033.2
Clothing      8.64             162.5   185.9   235.7       313   365.6   497.5   570.6   619.0   678.7   740.0   792.5   1157.1   1617.6  2647.8   3690.0
Housing      29.46             113.4   115.3   116.6   125.4   140.7   151.2   158.5   168.3   178.0   192.8   200.5    230.2    240.3   351.5    406.3
Other        19.36             147.6   164.5   195.5   228.6   273.5   308.5   343.8   357.7   402.1   430.9   467.5    475.0    627.0   965.0   1414.6
Total       100.00             154.0   168.6   198.1   239.5   276.5   343.4   352.8   449.0   531.6   601.7   648.6    834.1   1163.0  1881.6   3136.0
-  -        -- --              - - -    -- - -    - - -  - - --   .. ..  -  --- -   -----   .  . .  -  - --   --- -   --- -    - -  -   . . .      - - -  - - -
Chan.e(Z)                  8     7.9      9.5    17.5    20.9    15.5    24.2        2.7    27.3    18.4    13.2    7.80        28.6      39.4    61.8      66.7
RURAL
Food         54.00             184.3   204.6   255.3   290.0   324.3   402.2   460.2   525.1   621.8            ..       ..        ..
Clothing      9.72             195.8   231.4   280.6   324.2   344.7   439.7   491.7   532.7   584.5  . .                ..        ..
Housirg      19.06             115.3   117.9   121.0   140.2   163.9   177.4   185.5   194.8   200.7            ..       ..        ..
Other        17.22             129.8   154.7   185.0   216.3   258.0   299.1   321.9   336.3   362.3            ..       ..        ..
Total       100.00             162.9   181.9   219.9   252.1   284.7   345.4   387.3   431.2   512.0            ..       ..        ..
~~~~~~~~~~~~~--  -  --- -  --- -  . .....  -- - - - - - - - - - - -   ... ...  ......  -  - --    - --  ......   -- --
Change(%)                        8.5    11.7    20.9    14.6    12.9    21.3    12.1    11.3    18.7
GUYANA
Food         50.73             186.6   205.8   252.3   290.3   324.8   406.2   425.3   561.0   692.0            ..       ..       ..
Clothing      9.41             186.3   218.4   267.8   321.0   350.7   456.2   514.2   557.4   611.4  . .                ..        ..
Housing      22.03             114.8   117.2   119.7   136.0   157.3   169.9   177.8   187.2   194.2            ..       ..       ..
Other        17.83             134.9   157.5   188.0   219.8   262.4   301.8   328.2   342.4   373.7            ..       ..        ..
Total       100.00             160.3   178.1   213.7   248.5   282.4   344.8   377.4   436.3   517.6            ..       ..       ..
-- -        ------             -- --    -- --    ..... .  ---- -  ------  ......   -----    -- --   ......   ------
Chbnge(Z)                        8.3    11.1    20.0    16.3    13.6    22.1         9.5    15.6    18.6        ..       ..        ..
....................... ............................................... .. .. ...........................      ........................
*/ Averge duirig period.
bl UWighted average of urban and rural irdices with weight of 28.57X and 71.4X.
Source: Statistical kreau.



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