Guyana’s competitiveness improved satisfactorily in last three years – NCS Report

Guyana has made “satisfactory progress” in improving national competitiveness over the last three years, according to the National Competitiveness Strategy (NCS) Evaluation Report, 2011.

According to the report, “The economic performance has had “an upward tick” in improvement of national competitiveness.” Guyana’s economy was noted to have continued to expand, with the gross domestic product (GDP) registering sustained growth over the period.

Inflation also showed a decline from 8.1 per cent in 2008 to 3.8 per cent in 2010.

The fiscal deficit, previously in double- digits, declined consistently from 4.7 per cent in 2008 to 3.2 in 2010, the report said.

The report added that private sector investment also benefited, though growth was described as “tepid”. Merchandise exports, particularly non-traditional exports, continued to show significant growth, underlying the push that has been placed on production of fruits and vegetables, aquaculture and other non- traditional products.

However, while growth is evident in the local economy, the global financial meltdown of 2008 registered “its full impact on the Guyanese economy in 2009, when the FDI declined from US$178 million in 2008 to US$154 million in 2010.

The report noted that, based on evidence presented, it is possible that a strong relationship exists between economic growth and poverty reduction.

Poverty levels, according to the report, have fallen.

“Indeed, if a growth rate of four per cent is sustained over the medium term, Guyana may be on its way to meeting the Millennium Development Goals of reducing moderate poverty by 50 per cent.” Speaking of the country’s macroeconomic status, the report said the maintenance of a sound monetary policy and a sustained decline in the inflation rate over the last three years have resulted in the reduction of the three-month treasury bill rate and lending rates of the commercial banks.

“It is clear that the maintenance of a sound macroeconomic framework will not only be conducive to improved competitiveness of the Guyanese economy, but it would also provide the secondary benefits of improving the welfare of the people.” As it relates to the competitiveness of local businesses, the report said, “modest progress was made in recent years”, noting that “Guyana ’ s ranking of the Ease of Doing Business moved from 136 out of 175 countries in 2007 to 101 out of 183 countries in 2008; with marginal improvement in 2010 when Guyana moved up by three points. On the Global Competitiveness Index Score, Guyana consistently showed an improvement in this composite competitiveness index with year-to-year higher scoring.” Other improvements noted in the report are: the number of days of processing business permits and licences; the number of days for incorporating a business declined, the establishment of a Commercial Court; the Tax Reform Action Plan (TRAP) that was adopted in 2010; as well as the time to process exports and imports declined significantly.

In summing up the country’s progress over the last few years, it was said that “Guyana has made strides in implementing a robust competitiveness strategy, with broad stakeholder support.” The contribution made by the government was also noted as being significant in bringing about change in the economy.

“Increased resources that have been directly provided by the government in addition to donor support markedly provided an important paradigm shift towards a more competitive economy.” Though strides have been labelled as modest, it was noted that there needs to be an ambitious work plan with the full commitment of the government, which will see the transformation of the business environment and accelerate economic growth.