CDB approves US$85M aid package for Guyana By Rickey Singh
Guyana Chronicle
May 15, 2002

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CAYMAN ISLANDS -- Guyana is to receive a significant aid package from the Caribbean Development Bank (CDB) to press ahead with various projects in accordance with the Government's overall economic development strategy.

The Board of the Directors of the Barbados-headquartered multinational financial institution, a pillar of the region's economic integration movement, approved the aid package for capital projects and technical assistance amounting to some US$85.50M at their 205th meeting, held under the chairmanship of President Dr Compton Bourne, who assumed that post just over a year ago.

The aid package represents the single largest approved by the Directors for Guyana's "economic strategy programme for the period 2002-2004, compared with approvals for other member states of the Caribbean Community."

The second highest loan package has been approved for Jamaica, a total of US$25M to assist the government of Prime Minister P. J. Patterson, to assist in financing emergency and rehabilitation works in the transport sector, following heavy rains and floods which occurred in October/November 2001.

According to regional technocrats who participated in the meeting, that came on the eve of today's annual Board of Governors meeting in this popular tourist resort with a major offshore financial sector, the aid package for Guyana represents an expression of confidence in the fiscal and economic strategies being pursued by the administration of President Bharrat Jagdeo.

The ceremonial opening of the CDB Board of Governors meeting begins this morning but a number of heads of government, who are also Ministers of Finance are likely to be absent because of a clash of dates with their participation in the European-Latin-American Summit which begins in Madrid, Spain, Friday and concludes on Saturday.

President Jagdeo is among CARICOM leaders attending that summit which is preceded by the Second Spain-CARICOM Summit scheduled to take place tomorrow.

According to a statement from the CDB, following the Board of Directors meeting, the aid programme will focus on reducing the incidence of poverty in Guyana in the context of sustained economic growth and development.

The capital projects include road improvement and maintenance, modernisation of the vital sugar industry, one of the major sources of foreign exchange and employment, technical and vocational education.

The technical assistance component of the aid package covers areas such as public sector reform, preparation of a tourism market demand study and the establishment of a coastal zone management system.

Another important decision taken by the Board of Directors is that for the six-month period from July 2002, there would be no change to the interest rates charged on loans made from the CDB's Ordinary Capital Resources. The rates are reviewed twice a year.

The current rate is for 5.75 per cent for loans approved after April 1, 1984, to the public sector and private sector financial intermediaries. The rate is 7.75 per cent for all loans approved directly to the private sector after March 15, 1991.

Loans approved for other CARICOM states range from US$7M for Dominica, US$3M for St. Vincent and the Grenadines; US$1.6M for St. Kitts and Nevis, as part of an original loan approval in 2001 amounting to some US$6M.

The bank's directors have also allocated about US$81,000 to assist the financing costs associated with a consultancy designed to assess the support needs of the Caribbean region in the implementation of the CARICOM Single Market and Economy.