Economy registers growth of 2.86%
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Economy registers growth of 2.86%
--Finance Minister tells GUYEXPO 2000 seminarby Stacey Davidson
Guyana Chronicle
August 26, 2000
GUYANA experienced continued economic growth during the middle of this year, registering a real growth of 2,86 per cent with the recovery of the mining and the supporting service sectors, Finance Minister Saisnarine Kowlessar, revealed.
This was stated by Finance Minister Saisnarine Kowlessar, while he was delivering the main address at the GUYEXPO 2000 seminar on Investment Opportunities in Guyana at Le Meridien, Pegasus, yesterday. Theme of the workshop was "Guyana's Ten-year Perspective".
"These developments were quite heartening as they pointed to the evolution of resilience in the economy, which was hitherto unknown," the Minister declared.
He referred to years gone by, when there was a decline in the agricultural sector, particularly in the sugar and rice industries, "which could readily be translated as a drop in general economic performance...this was not the case this year," he reiterated.
The Finance Minister stated that the reason for this year's improved performance was a result of higher labour productivity following investment spending in the bauxite and gold industries.
Minister Kowlessar indicated that particular note was taken during the six months of some "sluggish growth" in consumption expenditure, which was affected in part by the increase in imported fuel costs and domestic food prices. The latter were receptive to the vagaries of local weather conditions.
According to him, non-food prices, excluding fuel, contributed to the inflation which was as a result of an annual target of 4.5 per cent.
Inflation reached 1.7 per cent for the first six months this year, compared to 5.8 per cent for the same period in 1999.
"These factors combined to act as a mixed blessing, since it resulted in our overall surplus on the balance of payments and our reserve position maintaining a comfortable level of approximately four months of imports," Minister Kowlessar indicated.
Despite a deceleration of export growth, the exchange rate was kept close to the level retained at the beginning of the year, the Minister pointed out.
"So, it would appear that all is well at this time. We are still concerned with our inability to rapidly restructure our economy, and to be able to reduce our vulnerabilities to internal and external shocks.
"Moreover, we do not yet have in place all of the systems to allow for orderly removal of the old restraining economic structure."
"In addition, we have moved from a state-controlled economy to one that is open and democratic, and a private sector that was victimised to one that is developing rapidly, creating more jobs and wealth for our people," he noted.
The Minister boasted that good governance was responsible for the overall performance of the economy, compared to one decade ago, when the economy was firmly dependent on the trends of sugar, bauxite, rice, gold and forestry, which were hampered by disruptive elements that dislocated the economy.
Average growth of real GDP during the second half of the decade was 4.2 per cent per annum, and in the second half it slipped to 4.2 per cent.
Taking into consideration the average inflation which was 15.5 per cent for the decade, that decreased to 6.0 per cent during the second half of this period.
"These indicators during the second half of the period, notwithstanding the adverse shocks, were not achieved by accident, but rather by our adhering to the necessary imperatives for economic expansion (such as) good governance and economic management, which contributed to lowering some risks."
"What we are experiencing in Guyana today, are the fruits of sound investment policies which have sought to support and forge strong partnerships with the private sector," he stressed.
Minister Kowlessar further noted that these policies are geared to promote export, ensure more competition, and maintain appropriate incentives for private sector development, which is very essential for job and wealth creation.
A decade from now, the Minister said, the society will be characterised by faster growth which is widely dispersed across economic regions and groups in order that the optimal combination of consumption and investment expenditure levels could be attained.
"Our Government had foreseen the challenges and imperatives which would present themselves in the future and included everyone at various stages in our National Development Strategy (NDS) which lays out a vision and strategy for the future and which benefited from broad- based inputs of our society," he added.
The Minister explained that this strategy is truly a national plan, one that is very comprehensive and analytical.
Taking into consideration the given changes in the rate of population growth and migration patterns, Government's target "would not be adequate to erase the sizable gap that exists between us and richer countries", he explained.
Mr Saisnarine, however, assured that there will be some reduction in the size of this gap, with the inclusion of the private sector and non-governmental organisations (NGOs) in strategy formulation and implementation that sectoral growth trends would reflect in the big push approach to development.
So far, he said, the Government has conceptualised and begun implementation of policies to reduce uncertainty in the financial sector with the enactment of banking legislation to make the banking sector safer and a cheaper source of acquiring funds.
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