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I. Introduction

II. National Objectives

III. Fundamental Policy Conditions for the Development Process

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I. Introduction

Guyana is now at a crucial stage in our renewed march to development, a stage in which foresight, clarity of vision and firm decisions are required if we are to ensure that true and sustained development takes place. We are an economy rich in natural resources, and those sectors can be expected to continue to expand, but a narrowly based growth path is risky, and the desired level of social and economic development cannot be attained on the basis of a very few primary products alone. We need to enhance the value added that is generated in Guyana as a consequence of exploiting our resources and to develop our own new specialisations that will be internationally competitive and enduring. It is essential that we continuously improve productivity in all sectors. International experience has demonstrated that over the longer run increases in productivity are the only way to assure that real earnings continue to grow.

Concomitantly with that process, and as part of it, we need to strengthen our base of human resources and reduce the poverty that still is too prevalent in town and countryside. We need to rehabilitate, modernise and widen our network of both physical and social infrastructure, for without it our possibilities of advancement will encounter forbidding obstacles.

Above all, we should ensure that Guyana's development is sustainable and is widely shared among the populace and not confined to a few enclaves or social strata, and that each citizen has ample opportunity to participate in the basic economic and political decisions that affect the daily lives of everyone.

This National Development Strategy has been articulated to meet these challenges and to guide our economy along the path of true, broadly based development, not only for the next few years but in the medium and longer term as well.

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II. National Objectives

The development process must be visualised in its broadest context if it is to meet the expectations of the citizenry for a more elevated standard of living. Accordingly, the most all-encompassing goal of development is the progressive realisation of the abilities and talents of each individual for his/her own satisfaction and enhancement of the good of the community and the nation. This is what is meant by the concept of human development, or people-centered development.

This overall concept and goal is adopted as the principal guiding orientation of the National Development Strategy. Fulfillment of the following broad national objectives has been established as a precondition for the achievement of that broad goal:

a) Rapid growth of incomes of the population in general.

b) Poverty alleviation/reduction (rapid growth of the incomes of the poor).

c) Satisfaction of basic social and economic needs.

d) Sustainment of a democratic and fully participatory society.

Given the still-lagging state of our economy, substantial increases in incomes, in the sense of purchasing power, will be essential to permit our citizens to realise their talents and aspirations. For that reason, promotion of economic growth has to play a central role in the Strategy. As many countries' experiences have shown, from the East Asian "Tigers" to Mauritius, Ghana, Cyprus and Jordan, and from Chile to Costa Rica, rapid growth above all leads to creation of employment and increases in real wage earnings.

However, growth alone is not a sufficient objective, particularly if it does not involve all segments of the population. For that reason, the objective of poverty alleviation/reduction has equal standing, for special emphasis will be placed on raising the incomes of the poor more rapidly than for the population as a whole. This is the distributional aspect of the growth process. It is a commitment to attaining growth in a highly equitable manner.

There are two approaches to poverty alleviation/reduction: a) temporary subsidies to enable the lower income groups to have access to sufficient amounts of food and other basic necessities; and b) creation of an economic environment that will enable them to secure those necessities through exertion of their own abilities. The latter is the preferred course, although the former approach is a necessary complement in the interim, until the income-earning capacities of the poor are expanded sufficiently. The long-run aim is clear: the strengthening of self-reliance, the eradication of poverty at its roots rather than policies with force a continuation of handouts to relieve poverty.

The distributional question has a spatial dimension as well. It is fully recognised that the populations in interior regions of the country, especially the Amerindian groups, have tended to become marginal players in the country's development process. This Strategy intends to remedy that situation while putting in place guarantees that the Amerindians may follow their own choices of lifestyles.

The third fundamental objective, that of satisfaction of basic social and economic needs, is an essential component of the Strategy because higher incomes alone do not guarantee sufficient access to pure water, health services, education and other forms of social infrastructure, including opportunities for cultural enrichment. A recent survey by IICA and IFAD(1) has shown that in the coastal areas of the country 51 percent of the poor do not have their basic needs met, and an additional 19 percent of the non-poor also suffer that kind of deprivation, so the problem is rather widespread and its occurrence is not always linked to poverty per se. It is undoubtedly more serious yet in interior regions, but it also is increasingly evident in the capital, where the piped water supply leaves much to be desired from a viewpoint of public health and where disposal of sewage and solid wastes does not meet environmental health standards.

The fourth fundamental objective, of sustaining a democratic and fully participatory society, can be achieved in part through continuing to uphold the national commitment to an open political process, but the economic strategy also can be designed in a way that favours widespread participation in economic decision making and a more active role by local organisations, both governmental and non-governmental, in all the policies, plans and projects that affect their communities. This approach can be contrasted with one that encourages monopolies, public and private, and relies solely on centralised decision-making. To illustrate how this objective is put into practice, one of the policies utilised in this Strategy to achieve this participatory goal is broadening the basis of ownership of the country's economic capital, and another one is strengthening the financial basis of municipalities and local governments.

On the basis of the fundamental orientation provided by these four basic objectives, more detailed objectives have been specified for each sector, and their fulfillment effectively constitutes the means of achieving the four principal objectives.

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III. Fundamental Policy Conditions for the Development Process

While the four basic objectives have guided the formulation of the National Development Strategy, directly and also via the definition of corresponding sector-level objectives, there are additional considerations of an overarching nature that are incorporated into the Strategy and should guide its implementation. To state the point in its most concise form, Guyana will not pursue objectives at any cost; the Strategy incorporates policy conditions on the development process itself, and its sectoral and topical Chapters specify concrete policy orientations and measures that will help ensure that these conditions are continuously observed as development takes place. These conditions may also be thought of as basic principles governing development policies.

Basically, these policy conditions, or principles, refer to the sustainability of the development process, in various dimensions, so that in later years we will not see a reversal of the gains made in the early years of implementation of the Strategy. The principles require of the development process that it be:

Environmentally sustainable;

Fiscally sustainable; and

Institutionally sustainable.

a) Environmental Sustainability

The environment not only is critical to our health and well-being but, more than in most countries, it is our source of livelihood. Short-sighted approaches to managing the environment will undercut the basis for the prosperity of future generations and also will damage the health and earnings capacity of the present one. Our water and soil resources, so vital to life itself, are fragile and can easily be affected by economic activity. The positive side of the picture is that in many countries and contexts conceptual approaches and technologies have been developed that can permit a continuation of economic growth while at the same time providing the necessary protection to the natural environment. The challenge for this Strategy has been to adapt those lessons, and to create Guyana's own complementary approaches as necessary. The Chapters on fisheries and forestry and the environment, among others, propose forward-looking policies to guarantee this kind of sustainability. Environmental protection is not simply avoiding contamination, or cleaning up its after effects, but it also embraces efforts to manage renewable natural resources in a sustainable way, and that is why it is important that the Strategy incorporate new guidelines for management of fisheries and forests. They are basic to our future prosperity, and their unwise management could threaten to impoverish significant segments in our population within another generation, if not sooner.

The early steps toward implementation of the Strategy in this area will include the full establishment of an Environmental Protection Agency. They will also include dissemination of new procedures for granting and managing forestry concessions and for regulating the fisheries industry. In their totality, environmental plans and policies cover the areas of liquid and solid waste management, coastal zone management, forest management, fisheries management, mining policies, Amerindian concerns, urban water supply, pesticide management, and protection of biodiversity, among others, as well as the institutional and legal aspects of those issues.

b) Fiscal Sustainability

Fiscal and monetary stability is one of the prerequisites for a prosperous economy, and control of the fiscal deficit is in turn a requirement for that stability. Great strides have been made in reducing the deficit, but further efforts in that direction are required. In addition to simply reducing the deficit, it is important that Government programmes be placed on a self-sustaining basis whenever possible, through user fees for example, so that it is the main beneficiaries of the programmes who acquire a vested interest in adequately funding them and monitoring their performance. It is also essential that the economic base for generation of fiscal revenues be made as equitable as possible, because the public's perception of fairness in taxation is essential to its full collection and continuation in the long run.

Equally, subsidies should be oriented in the directions in which they can be effective and are justified, and vigilance must be maintained not to introduce generalised subsidies or those which are aimed only at special interest groups. The discipline of economics and also development experience throughout the world teach us that subsidies are justified in the following circumstances, and in no others:

Assistance to poor households in meeting their essential needs until they acquire the means to do so themselves.

Assistance in supplying basic social services that the economy would not provide on its own, although in this case it is important to reduce the magnitude of the subsidy as much as possible through the creation of user fees.

Transitional subsidies for the purpose of eliminating long-run subsidies, as in cases in which the Government subsidises the purchase of shares in State enterprises by workers or by the public as a whole, as part of the process of divestment which reduces the recurring drain on the public finances.

Subsidies to compensate for environmental externalities, as in the case of underwriting part of the costs of environmental management programmes or environmental improvements that benefit the general public.

Used judiciously, these four classes of subsidies can be powerful instruments for promoting the attainment of the goals of the National Development Strategy, and there is no need to have recourse to other forms of subsidy. Extended transfers to financial institutions, for example, end up subsidising their inefficiencies and postponing the day when they are placed on a sustainable basis. Subsidies of an unjustified nature also undermine the nation's fiscal aims, thereby jeopardising the stability of the economy and consequently discouraging productive investments and eroding the purchasing power of pensioners and low-income groups in general.

c) Institutional Sustainability

Institutional sustainability, or viability, is one of the keys to ensuring that the Strategy can continue to produce benefits over the medium and long run. Quick fixes in an institutional sense do more harm than good. Clearly one of the pillars of institutional viability is assuring sustainable sources of financing. We have at hand a painful example in the area of health, in which "low salaries and . . . deteriorated infrastructure . . . make it very difficult to attract and retain staff to work in the public health system" with the consequence that "over 90 percent of the specialist medical staff in the public sector are expatriates."(2) Similar issues of being unable to recruit and retain capable staff have to be confronted in several sectors, and they are intimately related to questions of financing and also to staff training, procedures for performance evaluation, and other aspects of the work environment.

Another aspect of the question of institutional viability concerns the structure of the institutions themselves. For example, Government has made a commitment to involve local entities more deeply in the management of the drainage and irrigation systems, in recognition that it is the users who have the greatest interest in maintaining the systems and the greatest awareness of priority actions toward that end. Another example occurs (in many countries) in the field of financing for agriculture, general development and home mortgages, where State banks have been found to be non-viable over the long run if they do not have a true capacity for resource mobilisation (attracting deposits) and adequate procedures for administering their portfolios of loans. If they are viewed only as channels for credit, then their ability to function is dependent on the generosity of the national treasury, and in times of fiscal stringency the banks' operations inevitably suffer. Other examples may be cited to reinforce the need for structuring institutions with a view to guaranteeing their long-run viability. The Strategy is designed to promote sustainability in this institutional respect as well as in the others mentioned above.

Adoption of and adherence to these principles will help ensure the complete and lasting filfillment of the objectives of this Strategy, leading to a more prosperous, healthier and cohering society in which we all find a rewarding and prideful role.

1. IICA and IFAD, Results of Socio-Economic Survey in Coastal Areas of Guyana, Georgetown, 1994.

2. Ministry of Health, in collaboration with Public and Private Health Sectors, Draft National Health Plan of Guyana, 1995 - 2000, Georgetown, Guyana, January, 1995, pp. 63-64.

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