A meeting was held here on Monday between the Ministry of Finance and the Inter-American Development Bank to discuss the IDB’s new country strategy for 2008-2012 which will govern the programmes and projects to be jointly undertaken by the bank and the Guyana government.
Minister of Finance Dr. Ashni Singh and other senior finance ministry officers met with the Executive Vice President of the Inter-American Development Bank Dan Zelikow and his team at the Ministry of Finance at 9:15 am, the ministry stated in a press release.
The theme of the Country Strategy is “to accelerate economic growth through economic diversification and efficient social development”.
According to the release, the IDB’s new country strategy reflects the revised financing scenario of the bank, based on the granting of HIPC (Heavily Indebted Poor Countries) debt relief amounting to US$365 million to Guyana in the context of the Multilateral Debt Relief Initiative in March 2007.
The granting of the debt relief, the release stated, showed the IDB’s confidence in the management of Guyana’s economy and the strong and stable macro-economic environment which the government has been able to create and maintain.
The relief was retroactive to January 1, 2007 and has significantly reduced the value of Guyana’s total external debt from 122 percent of GDP at the end of 2002 to 38 percent. Guyana had also benefited from an additional $119M in savings from cancelled interest payments.
And very importantly, the release added, this new country strategy is expected to engender new, innovative and creative funding and investment methodologies.
Firstly, the new strategy is cast in the frame of three policy and investment pillars, namely: social development for growth, whereby the government and the IDB would continue to support asset accumulation while improving access to basic services for all of the people so that they may benefit from and contribute to economic development; enhanced competitiveness so that the government and the IDB would consolidate on current policies and activities on competitiveness to further enhance the country’s investment profile, locally and internationally; and strategic infrastructure investment whereby the government and the IDB would continue to focus on improving Guyana’s strategic infrastructure development agenda in support of economic diversification.
Secondly, the release said, the Country Strategy emphasizes the bank’s increased use of national systems in the execution of its projects; and
Thirdly, in terms of maximizing the efficiency in using IDB resources, the meeting discussed the use of flexible lending instruments. To this end, the new country strategy will include at least one programmatic loan and one loan using the Sector Wide Approach (SWAp)
Historically, the IDB has been an engaged and responsive partner in supporting Guyana to surmount its development challenges, the release added. Over the years the bank has supported several interventions in governance, infrastructure and social development and poverty amelioration in Guyana.
Recently, in April 2008 the Minister of Finance inked two agreements totaling US$32.9 million with the IDB for the Power Sector Support Programme and the Agriculture Export Diversification Programme.
The IDB’s Executive Vice President visit comes after one by the President of the IDB Luis Alberto Moreno in August 2007 in which he signed an agreement to finance the pre-feasibility study for the road to Brazil, which comes under the Initiative for Integration of Regional Infrastructure in South America.