Private sector has to work on diversifying economic base -Yadav
By Gitanjali Singh
The IMF's Caribbean Division Chief, Gopal Yadav says the ball is in the private sector's court to work on diversifying the economic base but he acknowledged that there was resistance on the part of investors to putting money in Guyana under the current circumstances. The government had projected a growth rate of three percent this year, but with elections due in less than eight months and the uncertainties that come with it, it was possible that that target would not be met. Yadav said Guyana was facing difficult circumstances given the uncertainties as well as the declining export prices and the investment environment. The country, he stressed, had to look for new production lines and to get into the areas of non-traditional goods and services because the market for traditional goods was not bright. He said the government was trying to encourage private investment through structural reform and by reducing the role of the public sector in the economy. "We hope that once the elections are behind us, there will be a renewed effort on the part of the private sector to invest in this country," Yadav told his first media briefing in Guyana on Thursday. Yadav said that the government currently had to spend heavily on infrastructure because the investment was beyond the current private sector capacity. However, in the case of diversification, he said it was left to the private sector to act and diversify within the existing environment. He said any constraints in the public sector to such diversification could be looked at, noting that the government was moving to create the stable financial environment and create a transparent regulatory system to facilitate this. Meanwhile, interest rates, which affect the level of investment were high in Guyana and reported to be climbing because the level of savings was low, Yadav noted. The demand for loans on the other hand, was high, causing the price for them to go up. Yadav, who is here to negotiate the second year of the new structural adjustment facility with the government as well as review last year's performance, said he was not in a position to say when Guyana's case for enhanced debt relief would go to the International Monetary Fund (IMF)/World Bank board. Guyana has to prepare a poverty reduction strategy to take to the IMF/World Bank board for enhanced debt relief under the Cologne terms.
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