The Inter-American Development Bank (IDB) has approved Guyana’s Country Strategy for the next five years to the tune of $US86.1 million. The strategy focuses on institutional strengthening and infrastructure investment to help prepare the country as an emerging oil economy.
In a statement from the IDB, it was disclosed that the concessional financing has been designed to ensure continuity with Guyana’s existing portfolio commitments, as well as to respond to developing government priorities in the new Green State Development Strategy (GSDS).
The IDB said activities to be undertaken includes the establishment of a modern national strategy and planning framework to promote Guyana’s economic diversification efforts and pursue modern industrial policies in line with the GSDS. There will also be the strengthening of fiscal policies and the framework for managing Guyana’s natural resource revenues, the facilitation of private sector development to support the delivery of better services and the delivery of critical infrastructure.
Given that Guyana will see reduced concessional financing after oil production begins in 2020, the IDB noted that continued vulnerability to commodity price shocks and the adequate creation of new government structures to manage the oil sector will need to be swiftly addressed.
The IDB in document pointed out that though Guyana is poised to emerge as a significant oil producer by mid-2020, its growth has not been inclusive. It was pointed out that per capita income remains among the lowest in the English-speaking Caribbean, at US$7,520 PPP in 2015, and the Human Development Index score stands at 0.64 compared with 0.75 for LAC.
“Guyana’s institutional framework has not been able to translate economic returns into improved outcomes in human development (well-being), or an enhanced environment for the private sector, including as it relates to delivering critical infrastructure for supporting both. Over the medium term, Guyana is expected to undergo an important structural transformation while access to concessional resources decline.”
When compared to regional counterparts, it was highlighted that the Government spends less on key public services compared with its regional peers: in health, the country spends US$222 per capita compared to a LAC average of US$694, and in education, expenditure totalled 3.6 percent of GDP, compared to a LAC average of 5.2 percent.
The 2012-2016 IDB Guyana Country Strategy was focused on specifically, natural resource management; sustainable energy; private sector development; and public-sector management. During this period, the IDB’s portfolio in Guyana consisted of 13 new loans totalling US$143.6 million; investment grant operations totalling US$51.9 million; and 30 technical cooperation in various sectors.
