The International Monetary Fund (IMF) has warned that Guyana’s economy remains exposed to the effects of volatile commodity prices, economic slowdowns in the international market, and protectionist measures against Guyana’s exports.
This was explained by the Fund in a recent report on Guyana’s economy, and it comes even as Guyana has already had to contend with protectionist measures from various countries which have blocked and even returned certain shipments of goods from local shores.
“Guyana remains subject to commodity price shocks, heightened protectionist trends, and slowdown in international trade,” the report says. However, the IMF noted that based on the Government’s utterances, work is being done to build a more diversified economy.
It also noted the importance of expanding opportunities and competitiveness for businesses to grow in the local economy, as well as supporting measures for an economy that has ‘green’ initiatives at its core.
The report acknowledges that export figures can be distorted by the large proportion of commodity exports Guyana ships, and the effects of shocks in certain economic sectors, like rice and sugar. Here, it used the example of the suspension of the PetroCaribe deal with Venezuela and the woes of the Guyana Sugar Corporation (GUYSUCO).
Protectionism
Of recent, Guyana has had to contend with protectionist measures from the United States, United Kingdom and Trinidad. In the case of the US, that country imposed a ban on the exportation of catfish from Guyana. In explaining why the ban was imposed, Veterinary Public Health Unit Director Dr Ozaye Dodson had said that Guyana fell short of the US standards in three areas. In the first place, there were issues regarding the presence of inspectors.
There were also issues with insufficient documentation to verify the steps being taken in the sanitation and Hazard Analysis and Critical Control Points (HACCP) process.
There was also insufficient documentation specifying how the industry manages adulterated catfish products.
When it comes to the UK, their Environment Agency imposed restrictions on greenheart importation since 2015. At the time, it was claimed that proof of sustainable sourcing of the forest product was inadequate, and this has since resulted in a drastic decrease in export of the product to the UK.
In December 2016, the EA relaxed the restrictions on greenheart, but only began to accept Category A FSC 100 per cent greenheart from Iwokrama. Guyana has, however, been involved in talks under the Guyana-European Voluntary Partnership Agreement to lessen the restrictions.
In 2019, Jamaican authorities also rejected some 70 metric tonnes of white rice. It was reported that after samples of the rice shipment were sent to the division’s microbiology lab for testing, the results from the tests demonstrated that the rice contained microbial levels which are beyond the accepted limits, thus making it unfit for human consumption.
This seizure was the first for the year, but an epidemic of poor quality rice exiting Guyana was seen in the recent months when Panama rejected some 20 containers of rice from Guyana back in September 2018.
Rice is a major contributor to the Agriculture Gross Domestic Product (GDP) of Guyana. Guyana is presently a major paddy producer and one of the leading exporters of rice in the region.
Climate change
The IMF had also warned in its report that Guyana was at risk of the effects of climate change, something that has become obvious over the past few weeks with overtopping along the coast bringing with it flooding of communities.
“With its coast being below sea level, Guyana remains highly vulnerable to climate change and the consequent trend in sea level rise,” the IMF said in its report.
Flooding in Mahaica this month saw more than 300 acres of rice being destroyed and hundreds of acres more being put under threat of destruction by saltwater. In addition, livestock was destroyed and properties sustained damages.
Apart from the destruction of the rice, it has been reported that the flooded land is no longer suitable for rice production, since the soil composition has become too salty.
Junior Minister of Public Infrastructure, Jaipaul Sharma, has himself ascribed the overtopping to the effects of global warming.
