Demerara Waves Online News- Guyana Riding on the Crest of Truth
Last Updated on Saturday, 3 December 2016, 15:16 by Denis Chabrol
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, the hemispheric financial institution said.
“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 IDB said.
The bank said 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 comes 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.
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 IDB added that the limited size of Guyana’s 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.
The bank said studies show that 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,” said the bank.
The IDB is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.