Poverty reduction strategy adopted
National cohesion seen as crucial to success
Stabroek News
October 30, 2001

Restoring real economic growth rates to pre-1997 levels, expanding and strengthening social safety nets and improving social services are seen as the requisites of an interlocking approach to reduce poverty in Guyana by half by the year 2015.

This will mean sustained economic expansion in the context of deepening participatory democracy; access to improved social services and the strengthening and expansion of safety nets, according to the draft poverty reduction strategy paper (PRSP) adopted at national consultation forum yesterday. Minor changes will be made to the document before it is forwarded to the World Bank/International Monetary Fund (IMF) by mid-November for clearance to allow Guyana to draw down on enhanced debt relief.

President Bharrat Jagdeo made himself available for the all-day forum at Le Meridien yesterday and cautioned on the risks involved in meeting all the targets set in the strategy; the lack of financing to pursue all the options raised by the 200-odd consultation sessions and asked for the continued support of the donor community to achieve the task of reducing poverty in Guyana.

* broad-based, job-generating economic growth;

* environmental protection;

* stronger institutions and better governance;

* investment in human capital with emphasis on better education and primary health;

* investments in physical capital, with emphasis on better health and broader provision of safe water and sanitation services, farm to market roads, drainage and irrigation systems and housing;

* improved safety nets;

* special intervention programmes to address regional pockets of poverty.

But given the varied demands of the various communities and the lack of financial resources and the institutional and capacity constraints facing Guyana, the document set out priorities for the poverty reduction programme to be embarked upon from next year.

To achieve sustained economic growth, priority is to be placed on removing bureaucratic inertia through institutional and regulatory reforms and reorienting the public sector to support private sector investments as well as improving the infrastructure to complement economic growth.

"These reforms are crucial in removing the bottlenecks to production," the strategy, which comes after the National Development Strategy and the Presidential Business Summit, said.

The strategy sees broad-based labour intensive economic growth as a way out and calls for the requisite government policies to stimulate such growth.

The government has committed itself to undertaking a comprehensive review of the tax system with the objective of broadening the base and reducing rates as a fiscal policy measure. It is to also pursue a review of non-tax revenues and fees to bring these up to date. Further measures are to be put in place to improve tax collection and administration and fully staff the Guyana Revenue Authority.

Prudent expenditure side policies are also to be adopted including a strengthening of the audit office. The government is to also seek to implement a wages policy with the unions for multi-year agreements to avoid annual conflicts.

Systemic support is to be provided for export promotion, investment promotion and the development and expansion of small business and cottage industries. The objective will be to create the conditions to allow the export sector to be the instrument for sustained and rapid growth. This will mean more effective export promotion services as well as providing information and matching services for exports whilst supporting local companies in their effort to participate in overseas trade fairs and domestic exhibition. It will also mean coordinating industrial cooperation.

The strategy is predicated on a reliance on foreign private capital to transform the economic and social landscape and to this end, the government is expected to work to improve political stability, improve infrastructure, accelerate judicial reforms, sign trade treaties with its major bilateral trading partners and expand trade and investment promotion abroad.

To expand small businesses and cottage industries, the Companies Act will be revised to allow for a simple process of business creation. Other reforms are also to be adopted, including laying of the small business and cottage industries bill before parliament.

Modernising sugar and rice and exploiting potential in natural resource and human resource development were cited as other areas for development and diversification.

Good governance is another priority of the strategy, which cites participatory democracy at the community level, strengthening and deepening the political dialogue between the two main parties and strengthening parliament to conduct oversight.

In the social sector, the emphasis is on access and equity with the priority in education on improving the quality of education and the conditions of service of teachers whilst reducing overcrowding and providing targeted subsidies to the poor.

In health care, increasing access to quality services, improving the conditions of service of health care personnel and taking measures to reduce the prevalence and incidence of sexually transmitted infections including HIV are priority.

For housing, the strategy leans towards provision of basic infrastructure for new schemes, accelerating land titles and setting up of a revolving low income-housing fund.

And to address the pockets of poverty, importance is placed on regions with extreme poverty levels.

Implementing the poverty programme will cost the government US$3.9 billion over a ten-year period or US$329 million per year. But this will require a doubling of revenues to see a 75% level funding from domestic resources, and, as such, mobilising domestic resources will be necessary to finance the project.

The donor community is expected to continue its support for the implementation, evaluation and monitoring of the programme, while local government elections, due next year, are expected to empower communities with similar tasks.

President Jagdeo, who felt that the strategy achieved by Guyana, was far superior to any other prepared for the World Bank/IMF, cautioned that internal cohesion was absolutely necessary to allow for the success of the strategy. He also noted that Guyana was not immune to the trends of the international economy and urged the donor communities to ensure that their policies did not work against those of developing countries like Guyana, which were pursuing policies to succeed. The President also noted that another risk was the dwindling of resources now available.

However, he felt that Guyana could realise her potential if every Guyanese put his/her energy to constructive use.

United Nations Resident Coordinator, Richard Olver, gave brief remarks at the forum, extending the continued support of the donor community to Guyana's efforts at poverty reduction.