Overview

Guyana is a small low income country. The third smallest country in South America after Suriname and Uruguay, it has about 800,000 inhabitants.  It is the third poorest country in the Western Hemisphere, after Haiti and Nicaragua, with a per capita GNP of approximately US$3,847 (2013). 

Guyana is well endowed with natural resources, with fertile agricultural lands, bauxite, gold and extensive tropical forests which cover more than 80 percent of the country.  Guyana has one of the lowest deforestation rates in the world and 90 percent of Guyana’s forest remains intact. Most of the country’s indigenous population lives in forests on which they depend for their livelihood. About 90 percent of the population lives on the narrow coastal plain, where population density is more than 115 persons per square kilometer.

Since 1992, there have been four free general elections, but political parties are divided along ethnic lines. This has periodically resulted in civil unrest and violence, particularly around the 1997 and 2001 elections. In November 2014, the parliament was prorogued, and elections have been scheduled for May 11, 2015.

Guyana generates a large share of its economic activity from agriculture and natural resources sectors. In 1993, the traditional sectors of sugar, rice and bauxite accounted for 30.4 percent of Guyana’s GDP and 57.7 percent of the country’s export earnings. Despite progress in diversifying the economy, the mining sector accounts for 11 percent of GDP, and the agriculture sector for 20 percent of GDP (including the sugar sector contributing 4 percent to GDP). These sectors also continued to be the largest source of direct employment across the country. The contribution of the gold sector more than doubled during the last decade.

Over the last eight years, Guyana’s economic performance has significantly stabilized, expanding by an average of 4 percent per annum. This can be partly explained by the commodity boom, favoring its base of extractive industries along with significant foreign direct investment (FDI). The timely introduction of a Value Added Tax (VAT) and the implementation of debt relief agreements, under the Heavily Indebted Poor Countries Initiative (HIPC) along with the Multilateral Debt Relief Agreements Initiative (MDRI) have contributed to Guyana’s macroeconomic resurgence.

However, growth slowed down in 2014 (3.8 percent) reflecting the softening in global commodity prices – mainly gold and bauxite. The construction sector performed well in light of ongoing infrastructure projects and the manufacturing sector is estimated to have benefitted from higher value added in rice and sugar.

The economic outlook for Guyana is broadly positive. Growth is projected to remain strong, averaging about 4 percent per year over the medium-term. Economic activities will be driven by continued investments in primary industries. Potential offshore and hydro-energy projects may also attract foreign investment and boost growth. Inflation is expected to remain relatively subdued. Nonetheless, volatile commodity prices represent a significant risk.

 

Last Updated: Apr 01, 2015

The Country Assistance Strategy (2009-2012), was endorsed by the Bank’s Board of Executive Directors in May 2009. The CAS comprises a program of lending, technical assistance and analytical work to support the Government’s objective of accelerating and sustaining growth around two main areas of support:

  • Strengthening environmental resilience and sustainability.
  • Improving education quality and social safety nets.

Financing to Guyana is channeled through the International Development Association (IDA), the World Bank’s fund providing interest-free loans and grants to low-income countries, and through a series of trust funds managed by the Bank.

The World Bank Group is discussing its future engagement with the government, and a new strategy is expected to be in place shortly after the May 11th elections.

 

Last Updated: Apr 01, 2015

  • The CAS achieved significant results in strengthening environmental resilience and sustainability. The  program has contributed to minimizing environmental vulnerability and supported the development of an emerging adaptation approach to flooding in low-lying coastal areas in Guyana. Together with the government, the Bank championed the establishment and management of the Guyana REDD+ Investment Fund (GRIF), being both a Trustee and a Partner Entity with the IDB and the UN. Norway committed $250 million to the GRIF.
  • Significant progress was also made in improving access and quality of education, particularly primary education. Today Bank support reaches the hinterland and is present at all levels of education (primary, secondary, and university). The number of untrained and unqualified teachers has declined by more than 40 percent. The community-based school feeding program has benefited more than 14,000 children in 93 out of 138 hinterland schools.
  • The supervision of non-bank financial institutions was strengthened.
  • IFC invested in Guyana Goldfields, a Canadian company present in Guyana since the mid-1990s. This investment helped produce about 80 percent of Guyana's declared gold production for 2012.

 

Last Updated: Apr 01, 2015


LENDING

Guyana: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments