I. The Nature of the Strategy
II. The Social and Historical Context of the Strategy
III. The Structure of the Document
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This National Development Strategy sets out priorities for Guyana's economic and social development policies for the next decade. It is based on a careful technical analysis of the problems and prospects in all the sectors of the economy, in major areas of social concern and at the level of the macroeconomy. Specific policies are formulated in all areas with the aim of fulfilling the fundamental national objectives, which are described in the succeeding Chapter, and the supporting objectives in each sector and area.
The technical reviews carried out have revealed considerable potential for economic growth and for improving the living standards of all groups in the population. Attaining this potential, however, will require a dedicated effort to implement the new policies. The Strategy's detailed formulations of policies in all fields can serve as guiding frameworks for the implementation effort. To further support implementation, it contains recommendations for legislative changes in many areas and a programme of public investments.
The Strategy was formulated in draft through an unusually participatory effort involving experts from both the public and private sectors, and in its very conception provision was made for subsequent reviews of the draft by the wider public, as part of the process of producing the definitive version. While the Ministry of Finance provided overall guidance in the development of the Strategy, an effort of this magnitude could not have been assayed by one Ministry or a small group of individuals. Nor would it have been appropriate to do so. A Strategy for a more participatory economy -which is one of the pervasive leitmotifs of the document- should be developed in a participatory fashion. The bulk of the work was carried out by 23 technical working groups, embracing more than two hundred individuals from Government, NGOs, the business community, and the University of Guyana. In all they met approximately three hundred times and put their vast technical expertise at the disposal of this Strategy. A handful of resident experts from international and bilateral donor agencies were asked to contribute to the effort as well, and The Carter Center provided overall advisory assistance and helped coordinate the undertaking, jointly with personnel of the Ministry of Finance.
The result of their combined labours provides a unique and invaluable blueprint for policies and actions to carry our economic momentum forward and spread the benefits as widely as possible among our citizenry. However, this effort will have been of little value if it is not implemented thoroughly. Converting the National Development Strategy into concrete economic gains for all will heart, make it their own, add more specificity to it where necessary, and unite in the great challenge of lifting our economy and society boldly forward.
For Guyanese, we believe this Strategy will come to signify faith in future, and in our ability to work together as a multi-ethnic society to achieve betterment for all. It marks the first time that Guyanese of all races, religions and political persuasions have come together to draft a blueprint for our future.
For the international community, we believe this Strategy initiates a fruitful dialogue and marks the beginning of a new era of cooperation. The Strategy should be the point of departure for programming international assistance. It establishes a Guyanese policy framework for Guyana that should be supported by international actions and it delineates the priority areas to which international cooperation can be directed.
It is not realistic to expect agreement on every aspect. But it is proper to expect that the document be taken into serious consideration in the planning of the international technical and financial support. International collaboration also can and should extend to the drawing up of the detailed implementation plans.
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Guyana's first decades of independence have been its crucible of nationhood in political, social and economic respects. They have been intense and difficult years in many respects, yet out of the struggles and self-examination a sense of self-identity and a modern nation are emerging, in measured steps but assuredly.
The nation's polity had to be defined against the backdrop of a population brought to these shores in disenfranchised conditions and cleavages wrought in the society by colonial rule. Global geopolitical tensions also left their imprint on the nascent body politic. Throughout these lacerating historical experiences the spirit of nationhood has deepened; although at times it has appeared to fray under the pressures, it has shown resilience and inevitably has rebounded to a fuller expression.
The elections of the year 1992 marked a political watershed in consolidating that spirit and confirming the country's commitment to the path of democracy. We are still a very young nation but our fundamental political and social values have been forged and now we can look to the future with more confidence than at any time in our brief history.
The trends in the economy largely mirrored that of the polity, until recently characterised as much by difficulties as by progress. From 1966 until 1988 real per capita incomes declined, and total real GDP actually dropped during the 1980s. Poverty increased, health and educational standards fell, and infrastructure crumbled. Many of Guyana's brightest talents chose to emigrate rather than continue to suffer the straitened circumstances of the domestic economy.
Falling external terms of trade contributed to the decline but in retrospect it must be acknowledged that inappropriate domestic economic policies played their role in the tragedy, including a willingness to incur a crushing burden of external debt that has reached unserviceable levels. Those policies were well motivated, by a desire to provide social and economic justice, but sadly they turned out to be counterproductive even for those noble aims. Guyana wasn't alone on the world stage in experimenting with its mix of economic policies, and the lessons of that period have been well learned. As early as 1988 the initial steps in a fundamental re-orientation of economic policy were taken, and the reforms have been extended further in each succeeding year.
The benefits of the new policies have begun to become apparent. In the last four years Guyana has experienced a turn-around in its economic performance that is remarkable by any standard. After a decade in which real growth rates were on average negative, the economy has registered real growth averaging in excess of seven percent per year for the past four years. This outburst of growth has been led by agriculture, forestry, mining, and construction but all other sectors also have recorded significant growth. These positive developments have led to a diminution of unemployment rates and a lessening of poverty, although both those issues remain matters of considerable national concern.
At the same time that the real economy was taking off, the government budget deficit and the balance of payments deficit were reduced, and inflation was brought down sharply. Domestic savings improved from a negative level in 1991 to 36 percent of GDP(1) in 1995. The share of total investment that was financed through dependence on net external inflows dropped from 46 percent in 1991 to 3 percent in 1995.
Although many daunting problems still confront Guyana, these economic changes have begun to lay the basis for sustained growth. They also have generated a more optimistic spirit, and the beginnings of a renewal of faith in the country's future can be perceived.
As encouraging as recent developments have been, the obstacles that remain in the path of development are large, and redoubled efforts are required to overcome them. The difference from a decade ago is that now we know they can be surmounted with wise policies and sufficient persistence.
Those obstacles include not only hindrances to the expansion of production but also deteriorated social services and a governmental structure that is weakened in its ability to set and enforce the basic rules of the economy. They include both decayed physical infrastructure and institutions that function poorly, and in addition there is the prospect of external market conditions for our basic agricultural products may change for the worse, providing lower returns to our farmers by the beginning of the new century. The challenges are many and diverse.
The manifold nature of the problems that lie ahead, and the increasing complexity of our economy, have dictated that we undertake to formulate a multi-faceted strategy for overcoming the problems. A few basic guidelines, helpful as they may be, are not sufficient. And macroeconomic policy alone, though it is fundamental, cannot deal with the multitude of sectoral issues that cry out for resolution. Macroeconomic policy sets the overall framework, but policy also has sectoral content, and it must not be forgotten that the economy responds at the micro level. For these reasons, the content of the is very specific content, including, as mentioned, detailed recommendations for reforms in the existing legislative framework that would be needed to facilitate the implementation of the policies.
The aim in writing this National Development Strategy has been to weave together macroeconomic and sectoral analyses and proposals into a consistent policy fabric that will bring substantial benefits to all groups in society. The orientation is fundamentally pragmatic. It is one of solving problems, everywhere identifying concerns and developing solidly-based remedial courses of action that are sustainable. While no document achieves all its aims, we believe this Strategy is unique in its scope and depth, and its policies are strong and sure enough to carry forward our rapid economic expansion for another ten years, if not more, and make our citizens measurably better off whilst assuring that our priceless heritage of natural resources has proper stewardship.
Guyana has the potential to achieve sustained rapid growth, and the goal of this Strategy is to unlock that potential. Drawing upon the lessons from countries that have successfully surmounted the barriers to underdevelopment, we can say that with another decade of strong economic performance, poverty will be very considerably reduced, and that with two decades of rapid growth we will break out of the category of underdeveloped nations. Progress of that kind would be fitting for Guyana with its traditions of hard work and literacy and its abundant endowment of natural resources.
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The National Development Strategy covers four broad areas of policy: macroeconomic policy, the social sectors, the productive sectors and the infrastructure sectors. The first topic embraces monetary policy, the external sector, fiscal policy, public sector reform, debt management, and banking policy. Each of these topics is dealt with in considerable depth.
The social sectors include forward-looking policies for poverty alleviation, health, education, the environment, the role of women in development, the role of Amerindians, housing and urban development, and the strengthening of regional and local government.
The chapters on the productive sectors include extensive treatments of the following areas:
rice development, other agricultural products, the institutional framework for agriculture, agricultural land policy, forest management, fisheries policy, mining policy, the sugar industry, the manufacturing sector, labour and employment policy, the policy framework for the private sector, and tourism policies.
The chapters on the infrastructure sectors examine at length issues and policies in transport development, the energy sector, and water management and flood control.
The Strategy has been organised into six volumes, as follows:
Volume I establishes overall objectives and guidelines for the Strategy and includes summaries of all the technical chapters in the remaining sections. The objectives and guidelines are contained in Chapters 1 through 5, and the summaries are found in Chapters 6 through 9.
Volume II contains the technical material concerning macroeconomic policies, in Chapters 10 through 16.
Volume III presents policies for the social sectors, in Chapters 17 through 24.
Volume IV contains the Chapters, nos. 25 through 37, that deal with the productive sectors.
Volume V contains the material on the infrastructure sectors, Chapters 38 through 40.
Volume VI contains the summary of the investment programme and the programme of legislative reforms that are required to put the Strategy into practice.
The chapters in Volumes II through V are structured in a similar way, with emphasis on identifying principal issues and constraints in each area, establishing the sector-specific objectives to resolve those issues, and then developing a comprehensive set of new policies along with their technical foundations. Considerable efforts have been made to ensure consistency across the chapters and with the overall national objectives of the Strategy. Nevertheless, the chapters are written so that they can be read as stand-alone pieces, or by volume.
Putting the National Development Strategy into practice will be achieved through four broad channels: Administrative changes as regards the ways Government defines and carries out its diverse policies and programmes; modifications in the legislative framework; making the necessary investments to support the new policies; and increased citizen participation in the implementation of many of the poliicies and programmes. In this regard, the stage of public consultations on the draft of the Strategy is integral to the entire effort, for citizens must be fully cognisant of the contents of the document, and have made their inputs into it, in order to be effective participants in its implementation.
While every Guyanese will continue to hold his or her own viewpoints on many of the topics touched on in the Strategy, we are confident that the public will find this Strategy to be a solid, thoughtful and imaginative document, a true landmark in our strivings for national betterment. We urge all citizens to join together in the great national effort of implementing this bold vision.
1. GDP at factor cost (calculations made in current prices).