-cites persistent pockets of poverty
Finance Minister Dr Ashni Singh says that the involvement and support of the Caribbean Development Bank (CDB) is critical to Guyana’s success in its key priorities, while observing that Guyana had registered a balance of payment surplus of US$234M in the face of difficult regional and international conditions.
This enabled Guyana to increase its external reserves position to US$628M or five months of import cover at the end of last year, the finance minister said in addressing the 40th Annual Meeting of the Board of Governors of the Caribbean Development Bank (CDB) which was held recently in Nassau, Bahamas.
Dr Singh, who is the Alternate Governor for Guyana, said Guyana’s key priorities for the immediate term included removing critical impediments to growth and competitiveness by ensuring the introduction of more reliable and affordable energy through hydropower, expanding information and telecommunications infrastructure to reduce the cost of bandwidth, and extending and upgrading the roads and bridges network to improve access and reduce cost.
He also identified further acceleration in real sector diversification and expansion particularly in areas where there are obvious comparative advantages such as agriculture and food production; and rapidly scaling up social programmes to help in meeting immediate poverty reduction needs and attaining the millennium development goals.
And noting developments in the Guyanese economy against global and regional conditions, he disclosed that real growth moderated to 2.3% in 2009, somewhat slower than in the previous three years but nevertheless, a sustaining of positive growth since the devastating floods of 2005.
“Output expanded in some sectors, such as sugar, rice, other agricultural crops, and gold mining, thereby offsetting contraction in others, such as forestry and bauxite mining,” Dr Singh told the fellow governors, the CDB president, vice-presidents, directors, and other delegates and observers.
He noted also a balance of payments surplus of US$234M despite a significant decline in bauxite exports and a more modest reduction in migrant remittances.
“This enabled us to increase our external reserves position to USD628mn or five months of import cover at the end of last year,” Dr Singh said.
In addition, the Guyana dollar appreciated against the US dollar by almost 1% in 2009.
And during the year, he added, credit to the private sector grew by 5.7%, led by lending to agriculture and real estate mortgages, the latter primarily the result of the government’s policy actions to promote low-income housing development.
At the same time, inflation was contained to 3.6% at the end of 2009, reflecting reduced imported pressures, along with government’s interventions that included continued adjustment to the excise rate on fuel products, the finance minister said.
Despite the cost of such interventions, the fiscal deficit was contained to 5.3% of Gross Domestic Product, with investment in infrastructure for growth and social programmes for poverty reduction remaining the core objectives of government expenditure, Dr Singh explained.
According to the finance minister, the relative resilience displayed by the Guyanese economy so far, represents early signs of gains made from underlying structural reforms and diversification of Guyana’s productive base.
It also represents important vindication, Dr Singh declared, of the support provided to Guyana by its development partners including the CDB.
But he acknowledged that much work still needs to be done if Guyana’s contributions to aggregate regional output, intra-regional trade, and the regional trade balance with the rest of the world, are to get to the levels where they should be.
In addition, he said it was recognized that there remained persistent pockets of poverty in Guyana which require intensified and sustained efforts if they are to be resolved.
Meanwhile, he underscored that in going forward, Guyana’s agenda will be guided by the new Low Carbon Development Strategy, which was launched in 2009 and now has gained considerable international support.
Dr Singh also pointed out that Guyana continues to place the highest premium on grant resources such as the Basic Needs Trust Fund (BNTF), and on concessional resources such as those provided by the Special Development Fund (SDF), to finance poverty reduction and economic development plans in a sustainable manner.
And against this background, Guyana welcomed the agreements reached on the General Capital Increase and on contributions to the Seventh Cycle of the SDF.
He expressed Guyana’s appreciation to the CDB’s members and contributors for participating in these negotiations, and congratulated the President of the Bank for his leadership in securing the successful outcome.
Appreciation was also expressed for the special contributions made by Canada to the BNTF and by the United Kingdom to the CARTFund, from both of which Guyana was a beneficiary, Dr Singh added.
