IDB supports economic diversification, foreign trade in Guyana

US$9 million loan will help implement a national strategy for exports and investments promotion

Guyana will improve its public infrastructure and promote economic diversification and foreign trade with a US$9 million Inter-American Development Bank loan that will help strengthen the economy and stimulate exports and investments.

With a small domestic market, Guyana depends on exports for economic growth. Eighty-two percent of its shipments consist of fewer than 10 products, mostly from the mining and agricultural sectors. The limited size of its non-traditional exports provides an opportunity for diversification. This project is expected to help reduce market access costs for non-traditional exporters and increase their shipments.

Non-traditional exporters face major challenges concerning quality measurement and control, including difficulties with certification. There are only two accredited laboratories in the country, none of which has non-traditional exports certification capabilities. For this reason, the program proposes a series of moves to accredit labs and train their personnel.

There is also a need to design and implement quality regulations to help access international markets. Consequently, a trade and investment framework will be created and courses will be launched to train small- and mid-sized enterprises on quality and regulation issues.

Exports diversification, as well as attaining competitiveness in new markets, require the adoption of adequate quality standards. With this goal in mind, the program will strengthen quality-related infrastructure and improve the system’s capabilities.

The Business Ministry, in its capacity as executing agency, will prepare an initial report that includes an updated multi-year implementing plan, the first annual operating plan, and financial and procurement plans. The project is in line with Guyana’s need to diversify its economy as laid out in the National Competitiveness Strategy aimed at accessing new markets.

The project’s total cost is US$9 million, of which US$4.5 million come from the Bank’s ordinary capital and the remaining US$4.5 million from its Fund for Special Operations (FOE). The ordinary capital tranche is for a 30-year term, with six years of grace. The FOE’s component is for a 40-year period, with 40 years of grace and a 0.25 percent fixed interest rate.