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GDP: $650 million.
Real annual growth rate: (2000) 0.5%., (2001) 0.5%
Per capita GDP: $760.
Agriculture: Products--sugar, rice.
Natural resources: Gold, bauxite, diamonds, timber, shrimp, fish.
Industry: Types--gold and bauxite mining, rice milling, beverage, food stuff processing, apparel, footwear assembly.
Trade (2000): Exports--$505 million: gold, sugar, bauxite, shrimp, rice, timber. Major markets--U.S. (24.5%), U.K., CARICOM countries, Canada. Imports--$585 million. Major suppliers--U.S. (37.7%), U.K., Venezuela, CARICOM, Canada.
Economy of Guyana
With a per capita gross domestic product of only $760 in 2000, Guyana is one of the poorest countries in the Western Hemisphere. The economy made dramatic progress after President Hoyte's 1989 economic recovery program (ERP). As a result of the ERP, Guyana's GDP increased 6% in 1991 following 15 years of decline. Growth was consistently above 6% until 1995 when it dipped to 5.1%. The government reported that the economy grew at a rate of 7.9% in 1996, 6.2% in 1997, and fell 1.3% in 1998. The 1999 growth rate was 3%, which declined to 0.5% in 2000 and 2001.
Developed in conjunction with the World Bank and the International Monetary Fund (IMF), the ERP significantly reduced the government's role in the economy, encouraged foreign investment, enabled the government to clear all its arrears on loan repayments to foreign governments and the multilateral banks, and brought about the sale of 15 of the 41 government-owned (parastatal) businesses. The telephone company and assets in the timber, rice, and fishing industries also were privatized. International corporations were hired to manage the huge state sugar company, GUYSUCO, and the largest state bauxite mine. An American company was allowed to open a bauxite mine, and two Canadian companies were permitted to develop the largest open-pit gold mine in Latin America.
Most price controls were removed, the laws affecting mining and oil exploration were improved, and an investment policy receptive to foreign investment was announced. Tax reforms designed to promote exports and agricultural production in the private sector were enacted.
Agriculture and mining are Guyana's most important economic activities, with sugar, bauxite, rice, and gold accounting for 70%-75% of export earnings. However, the rice sector experienced a decline in 2000, with export earnings down 27% through the third quarter 2000. Ocean shrimp exports, which were heavily impacted by a 1-month import ban to the United States in 1999, accounted for only 3.5% of total export earnings that year. Shrimp exports rebounded in 2000, representing 11% of export earnings through the third quarter 2000. Other exports include timber, diamonds, garments, rum, and pharmaceuticals. The value of these other exports is increasing.
From 1986 to 2002, Guyana received its entire wheat supply from the United States on concessional terms under a PL 480 Food for Peace program. PL 480 wheat was eliminated for FY 2003, but may be reinstituted for 2004. The Guyanese currency generated by the sale of the flour made from the wheat is used for purposes agreed upon by the U.S. and Guyana Governments. As with many developing countries, Guyana is heavily indebted. Reduction of the debt burden has been one of the present administration's top priorities. In 1999, through the Paris Club "Lyons terms" and the heavily indebted poor countries initiative (HIPC) Guyana managed to negotiate $256 million in debt forgiveness.
In qualifying for HIPC assistance, for the first time, Guyana became eligible for a reduction of its multilateral debt. About half of Guyana's debt is owed to the multilateral development banks and 20% to its neighbor Trinidad and Tobago, which until 1986 was its principal supplier of petroleum products. Almost all debt to the U.S. Government has been forgiven. In late 1999, net international reserves were at $123.2 million, down from $254 million in 1994. However, net international reserves had rebounded to $174.1 million by January 2001.
Guyana's extremely high debt burden to foreign creditors has meant limited availability of foreign exchange and reduced capacity to import necessary raw materials, spare parts, and equipment, thereby further reducing production. The increase in global fuel costs also contributed to the country’s decline in production and growing trade deficit. The decline of production has increased unemployment. Although no reliable statistics exist, combined unemployment and underemployment are estimated at about 30%.
Emigration, principally to the United States and Canada, remains substantial. Net emigration to the United States in FY 2002 was estimated to be 1.4% of the population, and is expected to hold steady at that rate for FY 2003. After years of a state-dominated economy, the mechanisms for private investment, domestic or foreign, are still evolving. The shift from a state-controlled economy to a primarily free market system began under Desmond Hoyte and continued under PPP/C governments. The current PPP/C administration recognizes the need for foreign investment to create jobs, enhance technical capabilities, and generate goods for export.
The foreign exchange market was fully liberalized in 1991, and currency is now freely traded without restriction. The rate is subject to change on a daily basis; the Guyana dollar depreciated 17.6% from 1998 to 2000, but has begin to stabilize since that time.