Part I
This series of articles on the GCSP is intended to build awareness of it. Contact details will be provided at the end of each week’s article.
Introduction
The formation of the GCSP grew out of an initiative of the Ministry of Foreign Trade and International Cooperation (MoFTIC) in 2003, following discussions at CARICOM level to develop institutional arrangements in the services sector to facilitate trade negotiations at the regional and national levels. This gave rise to the National Advisory Committee on External Negotiations (NACEN). The WTO, and the soon to be enjoined EPA negotiations, gave urgency to this initiative. A Task Force was established in 2003 to aid and advise the Ministry in these negotiations. The University of Guyana as provider of tertiary education, research and other professional services, nominated the Director of the Institute of Development Studies (IDS) Prof. Clive Thomas, as their representative on the Task Force. Other services providers in the Task Force included insurance, banking, postal services, tourism, telecommunications, legal, accounting and auditing, engineering and construction and related services.
At its Inaugural Meeting (March, 2003) Prof. Thomas was elected Convenor of the Group. During the course of its various activities the Task Force came to recognise the need to create an independent organization of services providers. In pursuit of this, an Interim Board was created on January 13, 2005. Shortly after, on June 1, 2005 the GCSP was formally launched with the full support of MoFTIC and the CARICOM Secretariat.
The work of the GCSP, however, was abruptly affected in 2006 following the sudden and prolonged illness of its Chairperson. After deliberations, 2010 was designated as the year of resuscitation of the GCSP.
Establishment and Objectives
The GCSP was legally established last August (2010) under the Company Act of Guyana as: “A Not For Profit Company”. Its by-laws identify ten objectives, as follows:
1. To help create a supportive environment for the development of the services sector
2. To perform advisory functions within its capability, to the government and regional trade negotiating agencies
3. To review laws, procedures and policies affecting services in order to recommend/aid reforms for the sector
4. To provide research and development (R&D) for enterprises operating in the sector
5. To pursue education and training for operators in the sector
6. To build awareness of the sector, its needs and opportunities
7. To monitor national/enterprise compliance with Guyana’s evolving trade agreements
8. To build capacity through the collection, organization and dissemination of relevant information
9. To network ― regionally and internationally ― with other services sector agencies and developmental bodies in the private and public sector
10. To undertake SWOT-type appraisals of the sector in order to establish needs, opportunities and potential clusters, so as to prioritize their expansion
The GCSP clearly recognises that in Guyana it has to interface with three principal groups of services sector enterprises. Those that are based on: 1) the private supply of for-profit commercial services 2) the public supply of for-profit commercial services and 3) non-governmental, not-for-profit supply of those services needed to facilitate and improve the environment for economic growth and development. All three groupings are essential to the expansion of domestic and export sales of services. This structure poses unique challenges and distinguishes the GCSP from a purely private sector profit driven organization.
To facilitate its transitional development, the GCSP embraces four broad categories of members; namely: Founding Members, Full Members, Associate Members and Provisional Members. Its Board of Directors consists of seven (7) members comprised of a chairman, vice-chairman, secretary, treasurer and three other directors. (Membership and the directorship will form one of the major areas of focus in the next article outlining the structure and function of the GCSP).
Background to the Services Sector in Guyana
Utilizing the 2006 re-based National Accounts, Table 1 shows the services sector comprises about 58 per cent of Guyana’s GDP at basic prices. In terms of importance and rank, the recognised sub-sectors are constituted as presented in the Table 2.
Table 1: Sectoral GDP at Current Basic Prices (2009):
Value ($ billion) and (per cent)
Total GDP 360 (100)
Agriculture/fishing/forestry 74 (21)
Mining and Quarrying 51 (14)
Manufacturing; of which 28 (8)
sugar 4 (1.1)
rice 8 (2.2)
Services (adjusted for FISIM) 207 (58)
Table 2: Services sub-Sectors GDP at Current Basic Prices: Value
($ billion) and (per cent) 2009
Total Services (adjusted for FISIM), of which 207 (58)
Wholesale/retail 51 (14)
Construction 36 (10)
Public Administration 33 (9)
Transport 21 (6)
Information/Communication 19 (5)
Education 15 (4)
Financial/Insurance 15 (4)
“Other” Services 12 (3)
Electricity/Water 8 (2)
Health/Social Services 6 (2)
Real estate 4 (1)
A USAID/MoFTIC/IDS-UG study has estimated that there were approximately 1,094 companies in the services sector, which employed about 23,711 persons in 2006. More recent data are not available.
WTO Services Sectoral Classification
The WTO recognises four different types of commercial services transactions between countries. These types of international transactions are:
Mode 1: cross-border transfers Mode 3: establishment of a commercial presence
Mode 2: consumption of the service abroad Mode 4: supply of the service by a
natural person
Based on these Modes, negotiating countries make their commitments in terms of “market access” and “national treatment”. The latter affords treatment to trading partners similar to that offered to its nationals. The twelve broad areas of services provision are listed in Table 3. Guyana has made commitments in respect of five of the 12 broad areas; that is, business, communication, financial, tourism and transport.
Table 3: WTO Services Sectoral Classification
1* Business
2* Communication
3 Construction
4 Distribution
5 Education
6 Environment
7* Financial
8 Social and health
9* Tourism
10 Recreational/cultural/sports
11* Transport
12 “Other”
* = Guyana commitment
In more detail the specific commitments Guyana has made under the GATS cover only 18 of the 160 subsectors attached to the 12 broad sectors. For example, in regard to “business services”, the specific sub-sectors committed are legal, accounting, auditing, book-keeping, engineering, architectural, medical and dental. In regard to “communication services”, on-line information and database retrieval are committed; while for “financial services”, banking and insurance are committed. For “tourism services”, the commitments include hotels and restaurants, travel agencies and tour operators. Finally, in the “transport services” sector the commitments are to air transport, aircraft repair and maintenance, computer reservations systems, passenger and freight transportation by road.
Following on the above, many issues remain to be resolved. One of these is that the coverage of items so far is still far from complete. Further, in terms of Mode 4 (the movement of natural persons in the supplyof services) the processes and procedures involved in this type of movement are not yet clear and transparent. Thus for example there are no widely-known, clear standard transparent procedures/rules governing the entry of CARICOM or European Union (EU) nationals under the CARIFORUM-EC, Economic Partnership Agreement (EPA).
As indicated in the objectives above, one of the key functions of the GCSP is to monitor, as best it can, how commitments in the area of services undertaken at the CARICOM, EPA and WTO levels are being applied. As matters stand the WTO undertakes its own Trade Policy Review of Guyana, with the last one being undertaken in August 2009.
In the next article on the GCSP the focus will be on 1) membership, the Board of Directors and related issues 2) networking with other services suppliers across CARICOM under the aegis of the EPA and 3) the generation of resources to aid in the fulfilment of the GCSP’s objectives. Subsequent articles will deal with other important matters including the monitoring of Guyana’s external trade commitments in services, particularly in CARICOM, EPA, WTO and the forthcoming negotiations with Canada.
Contact Details:
[email protected]
