World Bank Document

Report No. 2505-GUA Economic Memorandum on Guyana

Public Disclosure Authorized May 11, 1979 Latin America and the Caribbean Regional Office

FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized

Document of the World Bank Public Disclosure Authorized

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

Through December, 1972 1/1

US$1.00 - G$ 2.093 G$ 1.00 = US$0.48

December, 1973

US$1.00 = G$ 2.105 G$ 1.00 US$0.475

December, 1974

US$1.00 = G$ 2.229 G$ 1.00 = US$0.449

October, 1975

US$1.00 = G$ 2.550 G$ 1.00 = US$0.392

1/ The Guyanese dollar floated with pound sterling from July 1972 to October 1975 when the Government announced its linkage to the US dollar at G$ 2.55 = US$1.00. FOR OFFICIAL USE ONLY

to This report is based on the findings of an economic mission of Guyana during March 20 - April 5, 1979. The mission was composed (Economist). Mr. Jose Sokol (Chief of Mission) and Mr. Jose Lopez Lopez

performance| This document has a restricted distribution and may be used by recipients only in the authorization.| of their official duties. Its contents may not otherwise be disclosed without World Bank TABLE OF CONTENTS

Page No.

MAP

COUNTRY DATA

SUMMARY AND CONCLUSIONS ...... i - vi 1 I. ECONOMIC BACKGROUND ......

A. Introduction ...... 1...... B. Recent Economic Developments ...... 2 C. Economic Developments in 1978...... 4 6 II. DEVELOPMENT ISSUES ...... 10 III. PUBLIC SECTOR INVESTMENT PROGRAM ...... 14 IV. ECONOMIC PROSPECTS ......

A. Output and Expenditure ...... 14 B. Financing of Public Sector Investment ...... 15 C. Balance of Payments ...... 17

GOVERNMENT'S PROJECT LIST

STATISTICAL APPENDIX iB R D 11683R]

~. GUYAN A

-/ PORr KA)TUR..A 4umk

~' M.tihews Ridg .j -t-BARAMITA CHARITY 0

- 70,?'JD~AKAIMA V~ANNA REGINA -

ID ~ AD0rJTu'E ~ Wa6enaam hioand

P,ESSEQUIBO 0 0TLUDIc

VREEDEN STEERid

('' KARTABU POINT liE AM'I ERD A

'LIEP.ROAD

MCAOlOEiKErJ,'i? RIABWOOD \½:/ ~~~ISSANO \A ~ (RE

- LPANDING EMTME ~ *~ . MAH-DIA-- i \MT RORAIMA.V5AETU KAETURNAWARUK -II\,

C' / ORINDUIK

MONKEY MT / Alluv'ol Coast Areags Savonnah I. Main Roads ~LI X J Secondarh Roads C< ------I-- Railroads IANNAI~.AOEIK t- Airfields Rivers O j -.- InternialianalBoundaries '~ranambo ECONOMAIC ACTIVITIES - ETICrops /Postlure Bauxite Z Ei Livestock rlI! EJForeslry N ANTIJ

10 20 30 40 50 4 CA VXWL!A'' PAesi- I

201 40 60r 8)ISHfLTDEz

CWHE ZUELANTi

T; AI'AN

/ BR A Z I L B R A Z IL

iBOL.VIA Page 1 of 2 pages

COUNTRY DATA - GUYANA

POPULATION DENSITY AREA / 3 8 214,070 i0 -- 7,000 (mid-1978) . per kmi Rate of Growth: 1.8% (from 1970to 1978) . per kmbi/Df arable land

POPLILATION CHARACTERISTICS (1978) HEALTH (1975) Crude Birth Rate (per 1,000) 28.5 Population per physician 327(:.0 Crude Death Rate (per 1,000) 7.3 Population per hospital bed 190.0 Infant Mortalit.y (per 1,000 live births)

INCOME DISTRIBUTION DISTRIBUTION OF LAND OWNERSHIP % of national income, hig1est quintile .. % owned by top 10% of owners lowest quintile .. % owned by smallest 10% of owners

ACCESS TO PIPED WATER (1978) ACCESS TO ELECTRICITY J\ 4 : % of population - urban *- % of population - urban - rural - rural

NUTRITION (1975) EDUCATION (1970) Calorie intake as % of requirements 104.0 Adult literacy rate % (1970) 85.0 Per capita protein intake 58.0 Primary school enrollment %(1973) 94.0

GNP PER CAPITA in 1977 US$560

GROSS NATIONAL PRODUCT IN 1978 ANNUAL RATE OF GROWTH (%. constant prices)

US $ Mln. % 1973-77 1976-78 1978

GNP at Market liices 473.9 100.U .. -2.0 0.6 Gross Domestic Investment 95.2 2n.1 3.8 -29.4 -31.9 Gross National Saving 67.7 14.3 4.1 51.3 131.1 Current Account Balance -27.5 5.8 -58.7 -75.1 Exports of Goods, NFS 313.7 66.2 2.7 -1.6 14.1 Imports of Goods, NFS 312.1 65.9 5.8 -38.7 -22.0

Value Added US $ Mln. %

Agriculture 106.0 23.8 Industry 67.2 15.1 Services 211.4 61.1

Total/Average 100.0

GOVERNMENT FINANCE Consolidated Public Sector Central Goverrunent (GMln, % of GDP ( '3$ Mln.) % G'- GDP 1978 1978 1976-78 1978 1978 1976-78

Current Receipts 512.7 40.5 40.4 363.8 28.7 31.5 Current Expenditure 443.5 35.0 38.5 424.0 33.5 36.9 Current Surplus 69.2 5775 l9 -60.2 -T.8T :37 Capital Expenditures 251.0 19.8 29.2 109.0 8.6 16.6 External Assistance (net) 101.0 8.0 11.9 52.0 4.1 5.8

a! The Per Capita GNP estimate is at 1977 market price;, calculated by the same conversion technique as the 1977 World Atlas. All otliAr conversions to dollars in this table are at the average exchange rate prevailing during the period covered. b/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seeking their first job.

not available not applicable Page 2 of 2 pages

COUNTRY DATA - GUYANA

MONEY, CREDIT and PRICES 1972 1973 1974 1975 1976 1LQ77 1978 (G$ million outstanding end period)

Money and Quasi Money 227.5 258.1 299.8 384.7 417.3 538.1 59.1) Bank Credit to Public Sector 96.5 169.7 139.3 155.5 412.7 603.0 661.0 Bank Credit to Private Sector 97.5 117.8 125.6 117.4 120.0 113.0 121.0

(Percentages or Index Numbers)

Money and Quasi Money as % of GDP 38.4 40.0 31.6 32.3 36.8 48.2 44.6 General Price Index (1963 = 100) 106.7 117.2 140.3 148.7 161.7 179.1 Annual percentage changes in: General Price, Index 4.9 9.8 19.7 6.0 8.7 10.8 Bank credit to Public Sector 30.2 75.9 -17.9 11.6 165.4 46.1 9.6 Bank credit to Private Sector 0.8 20.8 6.6 -6.5 2.2 -5.8 7.1

BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 19 76-78) Prelim. 1976 1977 197E US $ Mln % (Millions US $) Sugar 88.9 32.0 Exports of Goods, NTFS 194.3 275.7 313.7 Bauxite and alumina 124.2 44.7 Imports of Goods, NFS 403.1 347.5 312.2 Rice 31.0 11.1 Resource Gap (deficit = ) -108.8 -71.8 1.5 All other commodities 34.0 12.2 Total 278.1 100.0 Interest Payments (net) -18.4 -14.8 -16.9 Other Factor Payments (net) -5.8 -7.1 -6.1 Net Transfers -4.2 -3.9 -6.0 EXTERNAL DEBT, DECEMBER 31, 1978 Balance on Current Account -f3772 -97.6 -27.5 US $-M1n Direct Foreign Investment Net Public Disbursements Public Debt, incl. guaranteed 420.5 Disbursements 107.5 59.2 1G0.4 Non-Guaranteed Private Debt Amortization 18.8 -23.9 -60.8 Total outstanding & Disbursed . 25 Subtotal 88.7 35.3 39.6 a/ DEBT SERVICE RATIO for 1978

Other Capital (net) -43.2 0.4 7.9 Capital Account Balance 45.5 35.7 47.5 Public Debt, incl. guaranteed 24.8 Overall Balance 91.7 61.9 -20.0 Non-Guaranteed Private Debt - Change in Reserves 91.7 22.3 - Total outstanding & Disbursed 24.8 Arrears - 32.5 -10.2 Government Funds - 7.1 2.4

RATE OF EXCHANGE IBRD/IDA LENDING, (February. 1979) (Us$ M1jlrinT IBRD IDA Since - Oct. 1975 US$1.00 - G$2.55 G$1.00 = US$0.392 Outstanding & Disbursed 29.24 15.23 Undisbursed 14.08 3.42 Outstanding incl. Undisbursed 43.32 18.65

a/ Ratio of Debt Service to Exports of Goods and Non-Factor Services.

not available

not applicable SUMMARY AND CONCLUSIONS

Background

i. Guyana, a country highly dependent upon its external sector, has in recent years been adversely affected by a number of changes in external economic conditions. Although the 1974 sugar boom more than compensated for the increase in import prices, the successive fall in sugar prices coupled with the full impact of the 1973-74 petroleum price increase required the economy to adjust to these changing conditions. The necessary adjustment became particularly difficult because the temporary flood of sugar earnings led to a greatly expanded level of public sector investment and a resulting high import bill, neither of which has it been possible to sustain. In addition, a sizeable expansion of Central Government current expenditures in 1976, coupled with the drop in sugar revenues, and continuing consumer subsidies led to a deterioration in gross public sector savings in 1976 to about 2% of GDP. This occurred at a time when the growing participation of the public sector in the economy and a shrinking private investment made a strong public sector savings performance important for financing investment at an adequate level. Investment reached the high level of 36% of GDP in 1976. One consequence of this overall situation was a current account balance-of- payments deficit of over 30% of GDP. In absolute terms, the deficit exceeded US$135 million and gross international reserves fell from US$100 million to US$27 million during the year.

ii. In 1977 only a marginal improvement in the economy took place despite the introduction of restrictive neasures which improved the balance of payments position, and a 40% reduction in public sector capital expenditures. Recovery was hampered by a 4-1/2 month long strike of sugar workers, low world sugar prices and a substantial increase in the minimum wage in the public sector. The current account deficit in the balance of payments was about 22% of GDP. Dwindling net capital inflows, resulting from a slowdown in project execution, were inadequate to fill the gap. As a result, net foreign exchange reserves became highly negative and the country accumulated about US$32 million in commercial arrears by the end of the year. As a consequence of the import cutback, investment reduction, modest growth in bauxite/alumina output, and the reduction in sugar production consequent to the strike, real GDP declined by about 5%. At the same time, the removal of some consumer subsidies and further import restrictions on consumer goods resulted in an estimated 11% rate of inflation in 1977. Despite cutbacks in nonwage Central Government current expenditures, public sector savings became negative in 1977. Accordingly,. Guyana depended entirely on gross external inflows, domestic borrowing, and money creation to finance public sector investment. Although gross external inflows declined from 1976, they were still equivalent to over half of public investment expenditures. The accumulation of balance-of-payments arrears resulted temporarily in increased liquidity in the banking system, which the public sector used to help finance its budgetary deficit. This, of course, was not a sustainable method of financing public investment. - ii -

iii. Economic developments in 1978 resulted in a partial amelioration of Guyana's external position as the country's balance-of-payments improved as a consequence of expanded exports and reduced imports. Merchandise export receipts reached US$296 million, about 14% over the poor sho.,t,ing in 1977. The Government's attempts to contain imports through foreign exchange licensing, expenditure cutbacks and trade restrictions were successful in reducing merchandise imports by about 12% below their 1977 level. This effort resulted in increasing shortages of intermediate goods, spare parts and essential consumer goods, which in tturn resulted in large amounts of machinery becoming inoperable and in a deterioration of services that led to an interruption of production and retarded economic activity. This situation was further exacerbated by a worsening in the terms of trade (mainly because of low sugar prices). Despite these problems, the Government was successful in reducing the current account deficit to US$27.5 million in 1978 or some 5.5% of GDP from 22% in 1977. A slight increase in net public capital inflows was adequate to fill the gap. The concerted effort to lower the current account deficit to a manageable level also permitted the reduction of about US$10 million in commercial arrears and allowed an increase in net international reserves of US$12 million by the end of the year. As a consequence of the import cutback, investment reductions, power shortages and industrial problems in the bauxite industry, real GDP remained almost stagnant increasing by only 0.2% in 1978. At the same time, retail prices in the urban areas increased by about 15% partly because of the imposition of a sales tax, reduction of subsidies and increased production costs. iv. The 1978 Budget covered for the first time both the Central Govern- ment and the rest of the public sector. It involved a wide-ranging program devoted to raising public sector revenues, tightening public expenditures policies through improved control procedures and achieving a higher degree of efficiency in the public sector. A Stand-by Agreement was approved by the IMF effective August 1978, which provided SDR 15 million in the form of one credit tranche and access to the Compensatory Financing Facility. As a consequence, gross public sector savings recuperated and reached 5.5% of GDP, a level above the program's target. During the year, assistance within the Caribbean Development Facility (CDF) framework of about US$21 million was pledged by several donors; however, inasmuch as the institutional arrangements for the drawdown of CDF pledges took some time to be completed, the flow of funds to projects did not materialize as fast as originally envisaged, thereby affecting the pace of project execution. The Government further reduced its capital expenditures by 16% below the 1977 level.

Development Issues v. The medium-term prospects are encouraging, although constrained by the country's as yet relatively undeveloped resource endowment. A sustained effort will be necessary to carry out the following key development objectives: (i) to expand existing and develop new export-oriented activities which can accelerate economic growth, lead to a continuous improvement in the balance of payments and provide jobs for the unemployed, including the new entrants to the labor force; (ii) to raise the level of gross national savings from almost 14% of GDP in 1978 to about 18.5% by 1980 and 21% of GDP thereafter, mainly through public sector savings efforts; (iii) to reduce the external debt service ratio through an expansion of exports, reduced reliance on foreign commercial-type credits, and greater use of more concessionary financing; (iv) to step up the implementation of the public sector investment program, including training programs to increase the pool of skilled manpower required by the expanded investment effort; (iv) to develop its hydropower resources to substitute for increasing oil imports and provide a cheap source of electrical power to meet the country's growing energy requirements; and (vi) to promote the development of the existing private sector in line with the recently enacted investment code.

Public Sector Investment Program vi. Disbursements under the public sector investment program for 1979-81 amount to G$1,111 million over the three-year period -- an average of G$370 million or 24% of GDP per year. The Central Government is expected to implement about two-thirds of the investment program, with the rest of the public sector responsible for the remaining one-third. Approximately 85% of the investment program consists of fixed-capital formation; the remainder consists of acquisition of financial assets and of capital transfers. Thus, gross public sector fixed-capital formation is projected to rise from 17% of GDP in 1978 to 20% on average during 1979-81. Of the G$945 million in fixed-capital formation expenditures in the investment program, about G$79 million consist of projects to be started in 1981, which at present are not yet fully prepared for presentation to external donors for financing. vii. The success of the development program in attaining its goals will largely depend upon the ability of the public sector to physically execute the program. Guyana, in the past three years, has experienced great difficulty in implementing development projects on a timely basis. This has been attribut- able mainly to the shortages of imported building materials, the lack of sufLi- cient local curreincy for counterpart financing and the shortage of project managers and skilled workers. External financing of local costs through the CDF should help alleviate the first two constraints. The shortage of suitable manpower remains a serious problem, although in the longer term this is being addressed by the ongoing and new technical training programs financed by various bilateral and multilateral agencies. Guyana's efforts to achieve the objectives of its development program in the medium term depends to a large extent on its ability to execute the three major irrigation projects (namely the Tapakuma, MMA and Black Bush projects), the Upper Demerara Forestry and the Second Rice Modernization projects -- all of which are export-oriented -- and some ongoing industrial projects. In order to ensure that technical expertise is available for completing these projects on a timely basis, the external agencies have provided financing for consultancy services and training of Guyanese staff both in project management and export marketing.

Economic Prospects viii. Guyana possesses the resource endowment to substantially increase output and improve the social well-being of its people over the long term. An improved economic performance is likely to take place over the medium term in the absence of adv,rse weather conditions and renewed labor problems. Provided sound economic policies are continued and export-oriented investments are implemented on a timely basis, a real GDP growth rate of 4.5% annually on - iv - average, or about 2.7% per capita, could be attained between 1979 and 1981; in 1979 real growth is projected at 4%. Beyond 1981, growth of the economy might improve further given the completion of the main ongoing projects. Neverthe- less, longer term prospects will be constrained by the time required to develop the hydro-power resources of the country and by the speed at which the private sector will invest in new export-oriented and import-substituting activities. ix. The GDP growth targets referred to above will require gross domestic investment to increase from about 17% of GDP in 1978 to an average of 25% in 1979-81, reflecting the execution of major agricultural and industrial projects and to allow for a doubling of stocks in the private sector as these fell considerably in 1978. This relatively high level of investment is likely to have a direct and almost immediate impact on raising output. This relatively high level of investment combined with the need to strengthen the balance of payments in the face of worsening terms of trade will require that the share of consumption decrease from 80% of GDP in 1978 to 75% by 1981. This under- scores the importance of achieving high growth rates to avoid a large decline in real per capita consumption. Gross national savings are projected to increase from 14% of GDP to 21% during the program period with public sector savings growing from 5.5% of GDP in 1978 to 12.5% in 1981, in accordance with the necessity of financing a higher proportion of the investment program from the Government's own savings. x. To achieve the above growth targets and to finance the public sector investment program as well as heavy external debt amortization payments, a determined effort to mobilize substantial public sector savings will be necessary. Public sector savings are expected to reach about G$123 million in 1979. Capital revenues should finance G$22 million. Net domestic borrowing by the public sector is expected to provide G$68 million. Since amortization payments would total G$182 million, G$31 million in domestic resources would be left to finance the investment program. In order to fully finance the projected G$343 million in public sector capital expenditures in 1979, gross foreign inflows of medium and long-term capital to the public sector should amount to G$312 million. Of this amount, disbursements against project specific assistance already committed is projected at G$163.2 million. After allowance for committed CDF and other nonproject assistance totaling G$102.4 million, a financing gap of G$46.4 million (about US$18.2 million) remains. Additional project financing of G$10.4 million (US$4.1 million) has been requested from external sources. This leaves G$36 million (US$14.1 million), to be raised from CDF or other similar external sources for disbursement in calendar year 1979. 1/ xi. The Government's financing plan for the balance of the program (1980-81) appears to be viable. The plan includes the prompt introduction of additional measures to increase public sector savings to a level covering over 50% of the public sector capital expenditure program by 1981. The overall financing position will continue to be aggravated by high external amortization payments which are expected to average annually US$50 million in 1980-81. The financing plan assumes continuing judicious limitation on the level of net domestic borrowing by the public sector with reduced reliance on the banking

1/ For the period from July 1, 1979 to June 30, 1980, CDF type assistance required amounts to US$25 million. system. New project financing from external donors will be required in the amount of US$53 million in 1980-81. Despite the improved performance of public savings, further non-project assistance from sources such as CDF, amounting to abcut US$16 million in 1980 and US$10 million in 1981 is expected to be required. xii. The financing of the public sector capital expenditure program during the three year period will only be feasible if substantial improvement in the fiscal situation is achieved promptly. To accomplish this goal, the Government will have to adopt both revenue and expenditure measures to raise the level of public sector savings. With regard to revenues of the consolidated public sector, they will have to grow by about 15.2% annually. This will require a virtual elimination of public sector subsidies, the full pricing of energy costs to consumers and a tax increase. With regard to current expenditures, it is essential that annual current expenditure growth in nominal terms be limited to about 8.6% for the consolidated public sector for the program period. To accomplish this goal increased restraint will be required in public sector expenditure growth, including the adoption of a public sector incomes policy which would limit nominal wages at the 1978 level and which would allow for increases in wages in accordance with productivity and production gains; and, a revision of all public sector positions with the view of implementing an effective program of redeployment of government personnel. ln addition, financial and physical monitoring of public sector enterprises should be intensified.

Balance of Payments xiii. Balance of payments management will require achievement of several objectives in addition to the basic one of maintaining imports at a level sufficient to support at least a modest rate of economic growth. These include (1) progressive reduction of the current account deficit over the longer-term in the light of reasonally expected amounts and kinds of capital inflows, (2) elimination of commercial arrears by end of 1.980, (3) rebuilding of depleted reserve levels by end of 1981, and (4) improvement in the structure of external debt. xiv. The urgent need to restore economic growth requires an increase in the current account deficit as a percentage of GDP in 1979 to 9.5% from 5.5% in 1978 by somewhat opening up imports above their 1978 level. Thus, total imports as a percent of GDP are projected to increase to 67% in 1979 from 63% in 1978. This should be sufficient to support a growth of real GDP of 4% in 1979. During 1980-81 total imports as a percent of GDP are projected to fall to 65% on average with a reduced growth in imports of non-essential consumer goods. This should be sufficient to support GDP growth rates averaging about 5%. xv. Given the likelihood of deterioration in the terms of trade in the 1979-81 period, because of expected low prices in bauxite, alumina and sugar exports, export earning are not expected to rise appreciably in real terms. In spite of this situation and the foregoing estimates of minimum import requirements, the current account deficit for 1981 is projected to drop to 4% of GDP compared to a planned .9.5% in 1979. This adjustment process, including - vi - the reduction of the current account deficit to a level sustainable over the longer-term, is likely to extend into 1983 rather than be completed by 1981. xvi. The projected current acount deficit for 1979-81 is estimated at US$120 million or about 7% of GDP as an annual average. The net inflow from medium and long-term loans to the public sector, however is projected at US$142 million or about 8% of GDP. Gross capital disbursements to the public sector are however, substantially higher because of heavy debt repayments. Scheduled debt repayments amount to US$173 million in 1979-81 (10% of GDP as an average for the period). Thus the gross disbursements of public sector medium- and long-term capital must total US$315 million (18% of GDP as an average for the period). Of this amount, US$218 million correspond to disbursements of existing loans. In addition, US$97 million correspond to project-related and local cost financing to be requested from external donors. If external resources in these amounts were mobilized in 1979-81 and a net inflow of other -- mostly SDR allocations -- capital in the amount of US$11 million takes place, then it would be possible to eliminate arrears and build up net foreign exchange reserves by about US$33 million. xvii. The above financing program would permit reasonable progress toward balance of payments viability. Essential import levels could be maintained, arrears could be eliminated by end of 1980 and existing debt service obligations would be fulfilled. While the current accouint balance-of-payments deficit would still be slightly above what seems to be a sustainable level over the longer term, and the processes of rebuilding international reserves and restructuring external debt would be far from complete, substantial progress would have been made, The need to eliminate commercial arrears delays progress in rebuilding reserves and restructuring public debt, but more rapid progress is expected to be possible in the latter respects after 1981. Sound economic and financial management will continue to be essential in 1982 and 1983 in order to complete the adjustment process. xviii. The servicing of public external debt obligations has become an increasing burden on Guyana in recent years with declining export receipts in most of these years, (because of low sugar prices) and increased amortization liabilities, in particular from nationalization loans and medium-term borrowings in commercial markets. The service on the public and publicly guaranteed debt increased from 4% of foreign exchange earnings in 1975 to 25% in 1978. In 1979 it is expected to increase further to 27%, but is projected to drop back to 19% in 1980 and 17% in 1981. Provided that the authorities take prompt action to institute the previously indicated measures to cope with the severe financial difficulties confronting them, and that a substantial part of the required external resources are provided in concessional conditions by the donor community, Guyana may be considered creditworthy for limited borrowing on conventional terms. I. ECONOMIC BACKGROUND

A. Introduction

1. Guyana's economy is mainly based on the export of sugar, rice and bauxite. The economic activity and population are concentrated along a narrow coastal strip where sugar and rice are grown. With the exception of bauxite mining, the vast hinterland remains undeveloped. The more advanced mining sector has assumed increasing importance in the economy; both the sugar and rice industries are relatively efficient. Economic development has been retarded, however, by a difficult physical environment, a limited resource base, and sharp fluctuations in output and income stemming from the vulner- ability of the economy to exogenous factors such as weather and fluctuations in international prices and demand. As a consequence, income, while fairly evenly distributed, is among the lowest (US$560 per capita in 1977) of any country in the Western Hemisphere. Real growth of the economy in recent years has been highly variable, but, on average, little more than the increase in population. Agricultural growth has been slow and export performance uneven.

2. The country's population is relatively well educated, with a literacy rate of over 85%. About two-fifths are under the age of 15. Heavy rates of male emigration in the past resulted in a population in which females are in the majority. As a consequence of the concentration of young people and women, the dependency ratio is high and the percentage of the population which is economically active is relatively small in relation to other countries. In 1978, the labor force was estimated at about 248,000, or approximately 31% of the population.

3. Because of heavy emigration and a secular decline in the crude birth rate, the average annual rate of population growth in recent years has slowed to about 1.8% annually. The preponderantly young population, however, has led to a steady stream of school leavers, who have caused the labor force to increase at a slightly faster rate, approximately 2.1% annually during 1970-78. Had it not been for the outlet which emigration afforded, the rate of growth would have been much faster. The pace of economic development has been insufficient to generate adequate employment for the expanding labor force. As a consequence, the unemployment rate appears to have increased in recent years. Unofficial estimates place unemployment rate in the region of about 17% of the labor force in 1978. This estimate does not include substantial, although hard-to-measure, levels of underemployment.

4. Since independence in 1966, the development strategy of Guyana has been to increase the participation of the public sector in the economic activity of the country and to promote producer, consumer, and marketing cooperatives. The Government has expanded state enterprises, created new state-owned financial institutions, and nationalized the country's bauxite/ alumina and sugar industries. The growing role of the public sector is reflected in the increase of its share of gross domestic capital formation from 40% in 1968 to over 80% in 1978. The Governmernt attaches high priority to an equitable distribution of income and to the provision of food, housing, health care and education to the population. -2-

B. Recent Economic Developments

5. In recent years, the country's economy has been adversely affected by a number of changes in external economic conditions. A serious balance-of- payments situation developed in 1973, when adverse weather conditions and a depressed aluminum market led to diminished export receipts. This led the Government to borrow heavily from the Eurodollar market. The same year, public sector savings deteriorated sharply as a result of a large wage increase to government employees. The quadrupling of oil prices at the end of the year delivered the final blow, leaving the economy severely weakened at the beginning of 1974 with critical balance-of-payments and budgetary management problems. However, the boom in sugar prices later that year, an improvement in weather conditions, and the strengthening of the world aluminum market unexpectedly brightened the economic picture. As a result, average annual export receipts in 1974 and 1975 were more than double the level in 1973, more than compensating for the steep rise in the import bill. Real GDP grew by an annual average of 6% in these two years. Between 1972 and 1975, payments for merchandise imports more than doubled. Fuel imports rose from 9% to about 17% of merchandise imports while consumer imports fell as a percentage by almost a half during the same period. Moreover, the introduction of a progressive tax on sugar exports, with rates which rose with increasing world prices of sugar, permitted the Government to utilize the windfall to finance a major expansion in public sector investment in 1975 and to accumulate about US$40 million in foreign exchange reserves. As a consequence, in 1976, despite the decline of sugar prices to more normal levels and despite significant production short-falls in bauxite and rice resulting from poor weather, the authorities had sufficient resources available to maintain high import levels and to continue expanding the ambitious investment program begun in 1975. By the end of 1976, however, Guyana's gross foreign exchange reserves had been almost completely depleted.

6. With the end of the sugar boom, Guyana belatedly confronted the full impact of the 1973-74 petroleum price increase. The necessary adjustment was made particularly difficult by the fact that the temporary flood of sugar earnings led to a greatly expanded level of public sector investment and a resulting high import bill, neither of which it was possible to sustain. This was accompanied by a sizeable expansion of Central Government current expenditures in 1976, which reflected Government's increasing commitment to a social welfare program which included universal free education, socialized medicine and subsidization of essential consumer goods and public services. The increased expenditures, coupled with the drop in sugar revenues and continuing consumer subsidies, led to a deterioration in gross public sector savings in 1976 to about 2% of GDP. Gross national savings, as a result, fell to 5.7% of GDP, while investment reached the high level of 36% of GDP in 1976. This jump in investment, fromn 27% of GDP in 1973, was because of a trebling of Central Government capital formation expenditures with the main increases being in agriculture and infrastructure. One consequence of this overall situation was a current account balance-of-payments deficit of over 30% of GDP. In absolute terms, the deficit exceeded US$135 million and gross international reserves fell from about US$100 million to US$27 million in 1976. -3-

7. While Guyana's balance-of-payments improved somewhat in 1977 as a result of trade restrictions introduced by the Government, the country continued to lose foreign exchange reserves and began to accrue arrears on current account. Export receipts declined from their already low world prices, a poor spring sugar crop in 1977, the loss of an important bilateral contract, and the devastating impact of a 4-1/2 month long sugar strike. Rice exports also dropped in the first part of the year as a consequence of the bad weather and the resulting low production levels in 1976; despite record production levels in 1977, exports for the year as a whole were below 1976 levels because of a late autumn harvest. As a result, notwithstanding a 15% rise in bauxite and alumina receipts, total export receipts in 1977 fell to 6% below the 1976 level. The Government's attempts to contain imports last year through expenditure cutbacks and trade restrictions were successful in reducing imports. Nevertheless, the current account deficit was still about US$98 million in 1977 or some 22% of GDP. Dwindling net capital inflows, resulting from a slowdown in project execution, were inadequate to fill the gap. Increased short-term deposits at the Central Bank from Venezuela and Brazil only partially compensated for the dwindling net capital inflows. As a result, net foreign exchange reserves became highly negative and the country had accumulated about US$32 million in commercial arrears by the end of the year. As a consequence of the import cutback, investment reductions, modest growth in bauxite/alumina output, and the reduction in sugar production consequent to the strike, real GDP declined by about 5% in 1977. At the same time, retail prices increased by about 11% because of the imposition of further import restrictions and the once and for all impact of the removal of some consumer subsidies.

8. During 1977 the Government reduced public sector capital expenditures by about 40%. Essentially, the Government continued high-priority ongoing projects to which external financing was attached and postponed the completion of other projects. Central Government financing of public corporation investment was reduced, and only those corporations which generated their own internal and external financing proceeded with capital spending. Unfortunately, the Government's cutbacks in capital expenditures were accompanied by further deterioration in public sector savings, mainly because of the reduction in sugar revenues, losses in the operations of several public enterprises, and the impact of the substantial minimum wage increase on the Central Government wage bill. This wage award, which nominally doubled the minimum wage in the public sector over a three year period, was designed to restore real wages to 1973 levels. As a consequence, and despite cutbacks in nonwage Central Government current expenditures, public sector savings turned negative in 1977 and it became apparent that the economy would be unable to generate sufficient resources to sustain a minimum wage award which was announced in 1977. Consequently, the country depended entirely on gross external inflows, domestic borrowing, and money creation to finance public sector investment. Although gross external inflows declined from 1976, they were still equivalent to about half of public investment expenditures. The accumulation of arrears in foreign payments resulted temporarily in increased liquidity in the banking system, which the public sector used to help finance its budgetary deficit. This, of course, was not a sustainable method of financing public investment. - 4 -

C. Economic Developments in 1978

9. Economic developments in 1978 resulted in a partial amelioration of Guyana's external position as the country's balance of payments improved as a consequence of expanded exports and reduced imports. Merchandise export receipts reached US$296 million, about 14% over the poor showing in 1977. Sugar exports increased to 281,000 tons benefiting from about 47,000 tons of cane left uncut in the wake of the 1977 strike, and which was harvested at the beginning of 1978. Nevertheless, this level was lower than expected as unfavorable weather conditions and the untimely availability of spare parts and inputs resulted in a lower autumn harvest. Rice exports reached 105,000 tons after the record 1977 harvest, although slightly below the Government's target as lack of spare parts and combines in addition to unfavorable weather affected output. Bauxite receipts remained almost stagnant as industrial problems affected production. The Government's attempts to contain imports through foreign exchange licensing, expenditure cutbacks and trade restrictions were successful in reducing merchandise imports by about 12% below their 1977 level. This effort resulted in increasing shortages of intermediate goods, spare parts and essential consumer goods. Such shortages resulted in large amounts of machinery becoming inoperable as well as a deterioration in services provided. Shortages of cement and other building materials constrained the construction industry and slowed the implementation of investment projects. Fertilizer and pesticides were also in short supply affecting agricultural yields. In April there was a breakdown in electricity generation which blacked out Georgetown and affected its water supply. Although power was restored, rationing was introduced and the ensuing power shortages led to an interruption of production and retarded economic activity. This situation was further exacerbated by a worsening in the terms of trade (mainly because of low sugar prices). Despite the problems, the Government was successful in reducing the current account deficit to US$27.5 million in 1978 or some 5.5% of GDP from 22% of GDP in 1977. A slight increase in net public capital inflows was adequate to fill the gap. The concerted effort to lower the current account deficit to a manageable level also permitted the reduction of about US$10 million (G$26 million) in commercial arrears in addition to increasing net international reserves by US$12 million by the end of the year.

10. As a consequence of the import cutback, investment reduction, power shortages and industrial problems in the bauxite industry, real GDP remained almost stagnant increasing by only 0.2% in 1978. At the same time, retail prices in the urban areas increased by about 15% partly because of the imposition of a sales tax reduction of subsidies and increased production costs.

11. In 1978 the Government faced its worst economic crisis since independence. In February it established the State Planning Commission to better oversee and coordinate the operations of the public sector. A cabinet subcommittee was also appointed for the monitoring of public sector enterprises under the Minister of Economic Development. In March, the Govern- ment produced a budget covering for the first time both the Central Government - 5 - and the rest of the public sector. It addressed the crisis with a wide-ranging program devoted to raising public sector revenues, tightening public expenditure policies through improved control procedures and achieving a higher degree of efficiency in the public sector. These measures included increases in excise and import duties as well as motor vehicle license fees and sizeable increases in the prices of essential consumer goods (such as rice and cooking oil) and other public services. In July, the Government entered into a one-year Stand-by Agreement with the IMF which became effective in August and made it possible for Guyana to obtain SDR 15 million over a twelve-month period in the form of one credit tranche and access to the compensatory financing facility. In August, the Government adopted a further comprehensive set of policies--mainly in the fiscal and credit fields--to restrain domestic demand and mobilize domestic resources. These included a 10% sales tax, an increase in contributions to and extension of the coverage of the National Insurance Scheme, doubling the domestic price of sugar and almost doubling interest rates to stimulate private savings. As a consequence, gross public sector savings recuperated and reached 5.5% of GDP, a level above the program's target. During the year, assistance within the Caribbean Development Facility (CDF) framework of about US$21 million was pledged by several donors; however, inasmuch as the institutional arrangements for the drawdown of CDF pledges took some time to be completed, the flow of funds to projects did not materialize as fast as originally envisaged, thereby affecting the pace of project execution. The Government further reduced its capital expenditures by 16% below the level during 1978. -6-

II. DEVELOPMENT ISSUES

13. Guyana is currently experiencing difficult economic conditions. During the past year the economy underwent a painful adjustment process necessary to improve its external stability and re-establish the basis for sustained growth. Recent developments indicate that it has slowly started to recover from the economic crisis of the last two years. Moreover, the medium-term prospects are encouraging although constrained by the country's as yet relatively undeveloped resource endowment. A sustained effort will be necessary to carry out the following key development objectives: (i) to expand existing and develop new export-oriented activities which can accelerate economic growth, lead to a continuous improvement in the balance of payments and provide jobs for the unemployed, including the new entrants to the labor force; (ii) to raise the level of gross national savings from almost 14% of GDP in 1978 to about 18.5% by 1980 and 21% of GDP thereafter, mainly through public sector savings efforts; (iii) to reduce the external debt service ratio through an expansion of exports, reduced reliance on foreign commercial type credits, and greater use of more concessionary financing; (iv) to step up the implementation of the public sector investment program, including training programs to increase the pool of skilled manpower required by the expanded investment effort; (v) to develop its hydropower resources to substitute for increasing oil imports and provide a cheap source of electrical power to meet the country's growing energy requirements; and (v) to promote the development of the existing private sector, in line with the recently enacted investment code.

14. Guayana's near term prospects depend largely upon the completion of export-oriented projects and on the ability of both the public and private sector to fully utilize existing productive capacity. In general, while the execution of most projects has been satisfactory, the pace of project implementation has been slow. Shortages of skilled technicians, institutional weaknesses, insufficient coordination and monitoring of project execution and lack of enough resources to meet local costs account for the delays. In addition, many projects have been faced with substantial cost overruns to be met by the country. The Government is particularly conscious of the role of these projects as a means of achieving sustained improvement in the country's economic position. For Guyana to continue to expand its exports, it will be necessary to improve the competitiveness, efficiency, and profitability of its export industries. In order to achieve this the timely availability of the imported inputs and raw materials needed for export activities should be ensured.

15. Unemployment will increasingly become the most critical problem facing the country. To the existing pool of unemployed estimated at about 42,000 in 1978 an additional 21,000 new entrarts to the labor force will be added by 1981. To cope with this challenge successfully, the Government will have to use all of its resources to encourage the development of the economy along an employment-oriented growth path in which exports of goods and services, efficient import substitution and the development - 7 -

of the incipient private sector figure prominently. An important policy consideration will be to emphasize training of the young in productive occupa- tions where there exist a job creation potential and to develop the skills of those already in or about to enter the labor force.

16. Gross national savings averaged 17% of GDP during 1970-75. In 1976-7 7 the savings ratio dropped to an average of 6% per year because of deteriorating public sector finances. In 1978 gross national savings rebounded to almost 14% of GDP as a consequence of the improved public sector performance arising from both revenues and expenditure measures undertaken during the year. Moreover, it will be extremely important for the Government to continue undertaking stringent measures to increase the savings generation capacity of the economy. Unless this course of action is followed, the public sector investment program and the prospects of renewed economic growth will suffer severely. Furthermore, positive interest rates will have to be instituted to encourage substantial increases in household savings.

17. The external public debt service ratio has been increasing rapidly in recent years and now presents a serious debt management problem. From 1975 to 1978 it rose from 4% to 25% as a result of declining exports in most of these years and increasing debt service commitments. In the years ahead, Guyana will be faced with sharply increased amortization payments on the external public debt resulting from the nationalization actions and the increased borrowing in the Eurodollar market of recent years for investment purposes, in addition to increased interest payments as a consequence of the rapid rise in the Eurodollar rate (LIBOR). The external debt service is expected to increase to 27% in 1979 but to drop back to 19% in 1980 and 17% in 1981. Gross external inflows would have to average about US$106 million annually through 1981 if Guyana is to meet its import requirements, service its external debt and gradually improve its liquidity. The most difficult year, however, is 1979; because of high debt repayment obligations the required gross inflow this year is US$122 million in order to generate a net inflow of US$51 million (see Table 3.4). Over the long term mobilizing the required levels of public sector capital inflows will depend upon an improved capacity to prepare and execute projects and especially upon increasing the levels of public sector savings and adopting tie necessary measures that will lead to effective domestic and external debt management. For the near term, a substantial inflow of quickly disbursing nonproject external assistance is needed.

18. Limited power generation and the ensuing shortages could severely affect output and retard economic growth unless proper measures are adopted. These would include the following: (i) the development of a sufficient maintenance program for the power facilities; (ii) the interconnection of the existing systems to undertake an optimal utilization of existing generating capacity; (iii) the undertaking of investment planning which should identify alternative investment opportunities; and (iv) developing the necessary programs to create a sufficient supply of trained manpower. Small or intermediate hydro alternatives should be explored to cover the increase of domestic consumption. If rapid and appropriate steps were taken in -8-

this direction, Guyana could face adequately the challenge of satisfying the increasing power requirements in the medium-term which will be necessary to develop export-oriented and import-substitution industries that could generate urgently needed foreign exchange and increase the number of jobs available. Imports of fuels and lubricants which in 1978 accounted for 21% of the value of total imports of goods and nonfactor services could increase to 28% by 1983 and to a higher proportion beyond 1983 as a consequence of rising prices and demand and illustrates the urgency of hydro development. Larger hydro alternatives would require a substantial increase in demand beyond what can be expected from normal economic growth; this would imply the establishment of new, large industrial users -- for instance in the aluminum sector -- and/or the sale to neighboring countries of the excess power generated by such projects.

19. Another constraint on the rate at which Guyana can develop in the future is the country's dearth of managerial and technical manpower. Thus, technical assistance is required to assist the Government in its development effort, especially in the execution of the investment program and in providing basic services required to accelerate the growth process. To the extent, however, that Guyana could tap the potential of its qualified expa- triates living abroad, this could alleviate somewhat the need for foreign technical assistance. Of equal importance is the need to retain in the country qualified civil servants required in the development effort. A system of adequate incentives to this end might be worth considering.

20. Greater private sector investment will be crucial to produce the additional revenues needed to generate public sector savings, to contribute significantly to employment creation through output growth and to improve Guyana's external financial position. Therefore, the industrial development strategy should stress provision by Government of essential services to create adequate conditions for increased private sector investment and appropriate policies required for the mobilization of private savings. The Government has recently launched some new initiatives in this direction. This is exemplified by the recent enactment of the investment code and the development of a factory to produce stoves with technical and financial collaboration from abroad including that from the International Financial Corporation (IFC). With increased promotion among local and foreign investors, new economic activity could be created to support the country's efforts to cope with its most pressing issues.

21. The three-year Extended Fund Facility (EFF) recently negotiated with the IMF mission will (assuming its approval by the IMF Board) enable the Government to draw a total of SDR 62.75 million, of which SDR 27.75 million would be from ordinary resources and SDR 35 million with supplementary financing. The comprehensive set of policies which the Government adopted last year and has decided to continue for the next three years to restrain domestic demand, mobilize public sector resources and restore economic growth, should make it possible to mobilize the external resources needed to cover the external financing gap, eliminate the commercial arrears and begin the restoration of the foreign exchange reserves. However, even with the measures likely to be taken by the Government, including increasing revenues and reducing current expenditure growth, there will still be a - 9 - financing gap for the public sector investment program, unless external assistance covers a large part of local costs. The ability of Guyana to carry out its investment program without creating unacceptable pressures upon prices will require the continuation of the Government's present policies of substantial stringency, as well as the willingness of the international community to give additional assistance to Guyana. Moreover, the courtrv's precarious external position in the immediate future and the country's low income level suggest that a substantial part of such external assistance should be offered on highly concessionary terms. - 10 -

III. PUBLIC SECTOR INVESTMENT PROGRAM

22. Since presentation in the 1978 Budget Speech of the Third Development Plan for the period 1978-81, the Government has revised the investment program for the period 1979-80 in the light of the expected availability of financing. In January of 1979 Budget preparation responsibility was shifted from the Ministry of Finance to the State Planning Commission. The Commission now has effective operational responsibility for preparing the Budget and statutory responsibility for monitoring performance and enforcing compliance. It further revised the investment program for the period 1979-81. This revised investment program has been reviewed by Bank staff and found to be appropriate in both size and composition, given the current economic situation, prospective financial resources and the development priorities of the Government. The projects in the revised program are essentially those which are ongoing and for which external financing is likely to be available in addition to a number of new projects for which financing is being requested for 1979-81. During the current year the Commission will review and assess the longer term development requirements of the country and will begin iden- tifying new projects necessary to support its long-term development strategy. For this reason, the investment program has not been projected beyond 1981.

23. The development strategy envisages exports becoming the main engine of growth with major emphasis being placed on sugar, rice, bauxite, forestry, fishing and mnanufactured products. Consequently, the projects included in the program aim at not only increasing the volume of production for export, but also at developing related infrastructure base to promote more efficient transport, processing and handling of exports. Besides this, the program places particular emphasis on improving the quality of the export products and provides for training in export marketing. The program also includes import- substitution projects in consumer goods and food items. While aiming at substantial production increases, the projects in the investment program are unlikely to significantly reduce the level of unemployment, which is estimated at about 17%.

24. Disbursements under the public sector investment program for 1979-81 amount to G$1,111 million over the three-year period -- an average of G$370 million or about 24% of GDP per year. The Central Government is expected to implement about two-thirds of the investment program, with the rest of the public sector responsible for the remaining one-third. Approximately 85% of the investment program consists of fixed capital formation; the remainder consists of acquisition of financial assets and of capital transfers. Thus, gross public sector fixed-capital formation is projected to rise from 17% of GDP in 1978 to 20% on average during 1979-81. Of the G$945 million in fixed- capital formation expenditures in the investment program, about G$79 million consist of projects to be started in 1981, which at present are not yet fully prepared for presentation to external donors for financing.

25. In reflection of Guyana's development goals of export-oriented economic growth, about 70% of total public sector capital expenditures are allocated to the export-oriented productive sectors and related infrastructure. Agriculture (including forestry and fishery) accounts for almost half of the investment program. The aim of the agricultural projects is to increase production in major expo-zt crops, to diversify away from sugar into new export crops and to increase production of other crops for domestic consumption. The major portion of this investment would be in three irrigation projects for rice production (Mahaica-Mahaicony-Abary (MMA), Black Bush and Tapakuma), financed by the IDB, IBRD and other external lenders. These projects would start yielding returns by 1981 and more than double the volume of rice output for exports by the mid-1980s. Included in the program is the Second Rice Modernization Project financed by the USAID, and which aims at minimizing post-harvest losses and improving the processing and marketing systems in order to increase rice output for exports. The volume of rice exports for 1981 is forecast at 125,000 tons, compared with 65.9 tons in 1977. By 1985 the investments in projects for rice production and processing would generate output sufficient to achieve exports of 362,000 tons. Other agricultural projects emphasize increase in dairy production and processing, oil palm, citrus and pineapple production and processing. The oil palm development project when in full production would eliminate the dependence on imported edible oil. The citrus and pineapple projects would further increase export earnings originating in the agricultural sector.

26. The program includes projects for strengthening the planning and implementation capacity of the agricultural sector. An agricultural sector planning project included would allow for more comprehensive planning evaluation of programs and projects analysis of data, monitoring and assessment of the sector. An agricultural mechanization technical assistance expected to be provided by the IDB would help to improve maintenance of agricultural machinery, to rationalize and standardize imports, to train farm mechanics and to start an agro-services program. The program also includes major projects for the extraction of tropical hardwoods (the Upper Demerara Forestry Project and the Forest Equipment Credit), a bagasse particle board factory, the development of inland fishing resources and shrimp harvesting and processing. The extraction and processing of high-value tropical hardwoods would be substantially increased by the Upper Demerara Forestry Project, which is expected to come on line in 1981. As a result, exports of timber are expected to rise from 13,400 cubic meters in 1977 to about 58,000 cubic meters in 1985. The bagasse residual from sugarcane processing would be utilized to develop particle board to be exported primarily to the North American market. Invest- ments in the fisheries sector are aimed at increasing the capacity of the fish port in Georgetown and improve fish processing facilities in addition to developing inland freshwater and blackbush-water fish. These investments are expected to Lncrease exports of shrimp besides making available the by- catch as well as the freshwater fish for sale domestically to help meet the protein needs of the population.

27. Projects in the manufacturing and mining sector account for about one-tenth of the plan outlay. These include expansion of mining and processing facilities for calcined bauxite, a feasibility study for Kaolin mining benefication and completion of a glass factory, a rum distillery, a cotton textile mill, a bicycle factory, a leather tannery and a boot and shoe factory. In addition, a project for the manufacturing of small hand tools - 12 - used in agriculture, a cement clinker grinding plant, and the financing of new industrial development projects in the private sector to develop both new nontraditional exports and import substitution industries. The new investments in the bauxite industry together with ongoing expansion programs would increase the production capacity for calcined bauxite by about 60%. Efficiency in bauxite operations would be enhanced by the installation of an electrostatic precipitator to recover bauxite dust for processing into calcined bauxite. The Kaolin feasibility study would determine the range of products which could be produced, and identify the appropriate process design in the benefication plant to develop new lines of exports. The glass factory, which would utilize Guyana's silica-concentrated sands, would initially help reduce imports of glass containers and sheet glass and, at a later stage, develop product lines for export within the CARICOM region. The rum distillery would help increased utilization of sugar molasses and add significantly to the export earnings of this industry. The cotton textile mill being built with grant assistance from the People's Republic of China would produce fabrics for the domestic and CARICOM markets. The bicycle factory, leather tannery and boot and shoe factory would substitute imports and create new jobs. The small hand tools project would help satisfy the need for a regular and continuous supply of tools needed in agriculture. The clinker grinding plant would provide for continuous availability of cement to meet domestic requirements. The new industries which would be promoted would be geared to supply the domestic and foreign markets with the purpose of increasing foreign exchange earnings and creating new jobs.

28. Infrastructure projects in communications, power and transport included in the program are essential to support the production-oriented investment program and have been allocated about 12% of the total program. The major investments in this sector would be to link the Georgetown with the Corentyne power system to make a better use of existing generating capacitv and to construct road systems to support development of forestry and agriculture. Similarly, investments have been planned to develop bulk handling facilities at shipping points for export of rice, rum, shrimp and lumber.

29. Among the projects included in the social sector which are allocated almost a tenth of the total program, education, training, health care and water supply account for the bulk of the capital expenditures. A substantial proportion of the amount allocated to education would be utilized to complete the IBRD/IDA financed Second Education Project which was approved in 1975. A project to upgrade the levels of existing managerial skills has been included. In the area of health care, two projects, one financed by IDB and the other to be financed by USAID to improve medical and public health services in rural areas have been included. The projects would develop an integrated three-tier system consisting of hospitals, health stations and health posts providing funding for supervisory, support and referral services. A project to provide potable water supply systems has also been included in the program.

30. Expenditure in the miscellaneous category account for about one- fifth of the total program. About half of this amount is allocated for new projects to be identified and to be started in 1981. The remainder includes - 13 - amounts allocated for the acquisition of financial assets and capital transfers to the nonconsolidated public sector, the private sector and international agencies.

31. The success of the development program in attaining its goals will largely depend upon the ability of the public sector to physically execute the in program. Guyana, in the past three years, has experienced great difficulty implementing development projects on a timely basis. This has been attribut- suffi- able mainly to the shortages of imported building materials, the lack of cient local currency for counterpart financing and the shortage of project the managers and skilled workers. External financing of local costs through CDF should help alleviate the first two constraints. The shortage of suitable manpower remains a serious problem, although in the longer term this is being by addressed by the ongoing and new technical training programs financed various bilateral and multilateral agencies. Guyana's efforts to achieve the large objectives of its development program in the medium term depends to a extent on its ability to execute the three major irrigation projects (namely the Tapakuma, MMA and Black Bush projects), the Upper Demerara Forestry and -- the Second Rice Modernization projects -- all of which are export-oriented and some ongoing industrial projects. In order to ensure that technical the expertise is available for completing these projects on a timely basis, external agencies have provided financing for consultancy services and training of Guyanese staff both in project management and export marketing. - 14 -

IV. ECONOMIC PROSPECTS

A. Output and Expenditure

32. Guyana possesses the resource endowment to substantially increase output and improve the social well-being of its people over the long term. An improved performance is likely to take place over the medium term in the absence of adverse weather conditions and renewed labor problems. Medium- term prospects depend on the continuing development of the country's export potential, possibly including the development of a free zone to produce manufactured exports to the North American and the EEC markets and specializ- ing in high-value, low-volume products such as jewelry, cutting of precious and semi precious stones and furniture among others, utilizing indigeneous raw materials, in addition to the timely execution of the public sector investment program. Prospects also depend on increased utilization of existing productive capacity, on increased promotion of private sector investment, including possible foreign participation in the development of the proposed industrial free zone, on increasing the savings potential of the economy, on adopting and maintaining an incomes policy, on the strengthening of the institutional structure and on the continuation of sound economic management policies introducted in 1978.

33. Provided sound economic policies are continued, and export-oriented investments are implemented on a timely basis, a real GDP growth rate of 4.5% annually on average, or about 2.7% per capita, could be attained between 1979 and 1981; in 1979 real growth is projected at 4%. Beyond 1981, growth of the economy might improve further given the completion and coming on stream of the main ongoing projects. Nevertheless, longer term prospects will be constrained by the time required to develop the hydropower resources of the country and by the speed at which the private sector will invest in new export-oriented and import-substituting activities.

34. The GDP growth targets reflected above will require gross domestic investment to increase from about 17% of GDP in 1978 to an average of 25% in 1979-81, reflecting the execution of major agricultural and industrial projects and to allow for a doubling of stocks in the private sector as these fell considerably in 1978. This relatively high level of investment is likely to have a direct and almost immediate impact on raising output. This relativelY high level of investment combined with the need to strengthen the balance of payments in the face of worsening terms of trade will require that the share of consumption decrease from 80% of GDP in 1978 to 75% by 1981. This under- scores the importance of achieving high growth rates to avoid a large decline in real per capita consumption. Gross national savings are projected to increase from 14% of GDP to 21% during the program period with public sector savings projected to grow from 5.5% of GDP in 1978 to 12.5% in 1981, in accordance with the necessity of financing a higher proportion of the investment program from the Government's own savings. - 15 -

B. Financing of Public Sector Investment

35. To achieve the above growth targets and to finance the public sector investment program as well as heavy external debt amortization payments, a determined effort to mobilize substantial public sector savings will be necessary. Public sector savings are expected to reach G$123 million in 1979. Capital revenues should finance G$22 million. Net domestic borrowing by the public sector is expected to provide G$68 million. Since amortization payments would total G$182 million, G$31 million in domestic resources would be left to finance the investment program. In order to fully finance the projected G$343 million in public sector capital expenditures in 1979, gross foreign inflows of medium and long-term capital to the public sector should amount to G$312 millUon. Of this amount, disbursements against project specific assistance already committed is projected at G$163.2 million. After allowance for committed CDF 1/ and other non-project assistance totaling G$102.4 million, a financing gap of G$46.4 million (about US$18.2 million) remains. Additional project financing of G$10.4 million (US$4.1 million) has been requested from external sources. This leaves G$36 million (US$14.1 million) to be raised from CDF or other similar external sources for disbursement in calendar year 1979. 2/

36. The Government's financing plan for the balance of the program (1980-81) appears to be viable. The plan includes the prompt introduction of additional measures to increase public sector savings to a level covering over 50% of the public sector capital expenditure program by 1981. The overall financing position will continue to be aggravated by high external amortization payments which are expected to average annually US$50 million in 1980-81. The financing plan assumes continuous judicious limitation on the level of net domestic borrowing by the public sector with reduced reliance on the banking system. New project financing from external donors will be required in the amount of US$53 million in 1980-81. Despite the improved performance of public savings, further nonproject assistance from sources such as CDF, amounting to about US$16 million in 1980 and US$10 million in 1981 will be required.

1/ The Caribbean Development Facility was established during the first meeting of the Caribbean Group for Cooperation in Economic Development, held at World Bank Headquarters, June 19-24, 1978. It is a transitional emergency financing facility to cover local costs and cost overruns of development projects in Caribbean countries, including Guyana. It is planned to be phased out over a maximum of five years. The facility is expected to provide over US$100 million duaring FY79 with the major contributors being the US, UK, Venezuela, Canada and OPEC Special Fund.

2/ For the period from July 1, 1979 to June 30, 1980, CDF-type assistance required amounts to US$25 million. - 16 -

Table 1: FINANCING OF PUBLIC SECTOR INVESTMENT, 1979-81

Current G$ Millio1x As % of GDP 1979 1980 1981 1979 1980 1981

Uses 525.0 494.0 532.0 36.9 32.0 30.8 External Amortization 182.0 129.0 129.0 12.8 8.4 7.5 Public Sector Capital Expenditures 343.0 365.0 403.0 24.1 23.7 23.3

Sources 478.6 429.4 396.1 33.7 27.9 22.9 Domestic Resources 213.0 245.0 291.0 15.0 15.9 16.9 Gross Public Savings 123.0 170.0 215.0 8.7 11.0 12.5 Capital Revenues 22.0 8.0 8.0 1.5 0.5 0.5 Net Domestic Borrowing 68.0 67.0 68.0 4.8 4.4 3.9

Disbursements from Existing Loans 265.6 184.4 105.1 18.7 12.0 6.0 Project Specific 163.2 164.0 105.1 11.5 10.4 6.0 Other Assistance (including commercial banks) 55.7 20.4 - 3.9 1.6 - Other Official Assistance (CDF) 46.7 - - 3.3 - -

Financing Gap 46.4 64.6 135.9 3.2 4.1 7.9 Project Financing Requested from External Sources 10.4 25.0 110.9 0.7 1.6 6.4 Remainder (CDF or other) 36.0 39.6 25.0 2.5 2.5 1.5

Source: Mission estimates. - 17 -

37. The financing of the public sector capital expenditure program during the throe-year period will only be feasible if substantial improvement in the fiscal situation is achieved promptly. To accomplish this goal, the Government will have to adopt both revenue and expenditure measures to raise the level of public sector savings. With regard to revenues of the consolidated public sector, they will have to grow by about 15.2% annually. This will require an almost complete elimination of public sector subsidies, the full pricing of energy costs to consumers and a tax increase. With regard to current expenditures, it is essential that annual current expenditure growth in nominal terms be limited to about 8.6% for the consolidated public sector for the program period. To accomplish this goal increased restraint will be required in public sector expenditure growth, including the adoption of a public sector incomes policy which would limit nominal wages at the 1978 level and which would allow for increases in wages in accordance with productivity and production gains. A revision of all public sector positions with the view of implementing an effective program of redeployment of government personnel will be required. In addition, financial and physical monitoring of public sector enterprises should be intensified.

C. Balance of Payments

38. Balance of payments management will require achievement of several objectives in addition to the basic one of maintaining imports at a level sufficient to support at least a modest rate of economic growth. These include (1) progressive reduction of the current account deficit over a longer-term in the light of reasonably expected amounts and kinds of capital inflows, (2) elimination of commercial arrears by end of 1980, (3) rebuilding of depleted reserve levels by end of 1981, and (4) improvement in the structure of external debt.

39. The urgent need to restore economic growth requires an increase the current account deficit as a percentage of GDP in 1979 to 9.5% from 5.5% in 1978 by somewhat opening up imports above their 1978 level. Thus, total imports as a percent of GDP are projected to increase to 67% in 1979 from 63% in 1978. This should be sufficient to support a growth of real GDP of 4% in 1979. During 1980-81 total imports as a percent of GDP are projected to as a percent of GDP are projected to fall to 65% on average with a reduced growth in imports of non-essential consumer goods. This should be sufficient to support GDP growth rates averaging about 5%. This high import coefficient reflects both the small size (GDP of US$497 million in 1978) and the high degree of specialization of the economy (sugar, bauxite/alumina and rice including processing account for 44% of total value added).

40. Merchandise export receipts in 1979 are projected to increase to US$340 million, about 15% over the improved showing in 1978, and be equal to 61% of GDP. Sugar exports are expected to increase to 302,000 tons this year, benefitting from increased acreage in sugar cultivation, Despite guaranteed exports of 167,000 tons per year and preferential prices from the EEC countries, - 18 -

price prospects are less favorable for the rest of the export crop, as the new International Sugar Agreement has had no immediate impact upon the low world sugar prices. Rice exports are expected to be 110,500 tons in 1979. The CARICOM market is expected to absorb 95,500 tons at the prevailing premium prices and the world market should be able to absorb the balance. Bauxite receipts should increase by almost 20% primarily because of increased volumes of dried bauxite, alumina and alumina hydrate.

41. The prospects for exports continue to be reasonably favorable for 1980 and 1981 despite the relatively low prices expected. In 1980 the volume of sugar exports is expected to increase slightly by about 3% above the 1979 levels, as a result of planned increases in planting area. In 1981, the volume of sugar exports is expected to remain at the same level as that in 1980. Rice export volumes are expected to increase to about 115,000 tons in 1980 and 125,000 tons in 1981 as a result of rising output from new acreage under double cropping and propagation of improved seed varieties. Bauxite export volumes should continue to expand as the ongoing investments begin to yield and production is increased to meet commitments under long-term contracts for calcined bauxite. The medium-term price prospects for all three major export commodities are fair. Beyond 1981 prospects for increased export volumes as well as improved prices are promising for Guyana's exports. Projects included in the investment program will already be contributing to increase export volumes in 1981. By 1985 sugar acreage will be increased to fully utilize the existing refining capacity of 400,000 tons while exports are expected to reach 369,000 tons. The volume of rice exports is expected to increase at an average rate of 17% per annum beyond 1981. Bauxite volumes are expected to continue to expand as previous investments come to maturity in 1981. By then, the production capacity of calcined bauxite would be 1,190,000 tons, permit- ting a substantial expansion of the volume of exports. Alumina exports are expected to increase by about 3.5% per annum. Expansion of lumber processing capacity should come on line in 1981 when these exports are expected to reach three and a half times the 1980 levels. Other nontraditional exports, while small in absolute amounts, are also expected to grow at a fast pace.

42. For achieving both the 1981 and 1985 targets referred to above, the most strategic factor will be the timely execution of the substantial number of export-oriented projects included in the public investment program (see paras 25 to 30 above). In addition, it will be necessary to maintain the type of policies recently adopted to achieve over the long run an appropriate price structure, in order to ensure the financial viability of the state enterprises operating in these fields. Furthermore, it will be necessary to provide incentives to private producers and cooperativ7es to step up production for the export trade. The Government has already instituted some trade promotion measures for increasing exports. Recently, new markets have been found for bauxite in Japan and the USSR. Export opportunities for rice in the European markets are being pursued and some quantities of rice have been shipped to these markets. In order to promote lumber exports and train personnel in export marketing, necessary arrangements are being negotiated with an established timber company in Europe. - 19 -

Table 2 BALANCE OF PAYMENTS, 1977-81 (% of GDP)

1977 1978 1979 1980 1981

64.4 63.4 65.8 Exports of Goods and Nonfactot Services 62.9 63.1 -67.4 -64.4 -65.0 Imports of Goods and Nonfactor Services -79.3 --62.8 -3.0 -1.0 0.8 Resource Balance -16.4 0.3 -5.6 -4.7 -4.1 Net Factor Services -4. -4.6 -0.9 -0.8 -0.7 Current Transfers -0.9 -1.2 -9.5 -6.5 -4.O Current Account Balance -22.3 -5.5 9.2 7.8 6.5 Net Public Disbursements 8.1 8.0 (16.2) (14.0) Gross Disbursements (13.5) (20.2) (22.0) (12.8) ( 8.4) (7.5) Amortization (-5.4) (-12.2) 0.5 0.4 Other Capital - 1.5 0.9 6.9 Capital Account Balance 8.1 9.5 10.1 8.3 -1.8 -2.9 Overall Balance 14.2 -4.0 -0.6 -1.8 -2.9 Change in Reserves (-increase) 5.2 -2.4 1.5 - - Arrears 7.4 -2.1 -2.1 - Government Funds 1.6 0.5 - -

Memorandum Items

16.2 18.4 20.6 Gross National Savings 5.9 13.6 25.0 24.6 Gross Domestic Investment 28.2 19.2 25.7 4.5 5.0 Real GDP Growth (%) -5.1 0.2 4.0

Source: Table 3.4, mission estimates. - 20 -

43. Giveq. the likelihood of deterioration in the terms of trade in the 1979-81 period because of expected low prices in bauxite, alumina and sugar exports , export earnings are not expected to rise appreciably in real tems. In spite of this situation and the foregoing estimates of minimum import requirements, the current account deficit for 1981 is projected to drop to 4% of GDP compared to a planned 9.5% in 1979. This adjustment process, including reduction of the current account deficit to a level sustainable over the longer-term is likely to extend into 1983 rather than be completed by 1981.

44. The projected current account deficit for 1979-81 is estimated at US$120 million or about 7% of GDP annually for the period. The net inflow from long-term loans to the public sector, however, is projected at US$142 million or about 8% of GDP. Gross capital disbursements to the public sector are however, substantially higher because of heavy debt repayments. Scheduled debt repayments amount to US$173 million in 1979-81 (10% of GDP as an average for the period). Thus the gross disbursements of public sector medium and long-term capital must total US$315 million (18% of GDP as an average for the period). Of this amount, US$218 million correspond to disbursements of existing loans. In addition, US$97 million correspond to projected-related and local cost financing to be requested from external donors. If external resources in these amounts were mobilized in 1979-81, a net inflow of other -- mostly SDR allocations -- capital in the amount of US$11 million takes place, then it would be possible to eliminate arrears and increase net foreign exchange reserves by about US$33 million.

45. The above financing program would permit reasonable progress toward balance of payments viability. Essential import levels could be maintained, arrears could be eliminated by end of 1980 and existing debt service obligations would be fulfilled. While the current balance-of-payments deficit would still be slightly above what seems to be a sustainable level over the longer-term, and the processes of rebuilding international reserves and restructuring external debt would be far from complete, substantial progress would have been made. The need to eliminate commercial arrears delays progress in rebuilding reserves and restructuring public debt, but more rapid progress is expected to be possible in the latter respecus after 1981. Sound economic and financial management will continue to be essential in 1982 and 1983 in order to complete the adjustment process.

46. The servicing of public external debt obligations has become an increasing burden in Guyana in recent years with declining export receipts in most of these years (because of low sugar prices) and increased amortization liabilities, in particular from nationalization loans and medium-term borrowings in commercial markets. The service on the public and publicly guaranteed debt increased from 4% of foreign exchange earnings in 1975 to 25% in 1978. In 1979 it is expected to increase further to 27%, but is projected to drop back to 19% in 1980 and 17% to 27%, but is projected to drop back to - 21 -

19% in 1980 and 17% in 1981. Provided that the authorities take prompt action to institute the previously indicated measures to cope with the severe financial difficulties confronting them, and that a substantial part of the required external resources are provided in concessional conditions by the donor community, Guayana may be considered creditworthy for limited borrowing on conventional terms. Nevertheless, the situation will at best constitute an extremely "tight fit" and, in the absence of a major unexpected improvement in the terms of trade, it is unlikely that dependence on special non-project assistance from official sources can be totally eliminated before 1982. The balance-of-payments constraint on Guyana's growth is such that, should the external capital inflow fall significantly below the projected level, import availability would be reduced and consequently, the economic activity in the dominant public sector, and more especially the existing private sector, would be further constrained and thus the growth rate would fall below the presently projected 4.5% per annum annual average. - 22 -

GOVERNMENT'S PROJECT LIST

1. This report contains a list of major ongoing projects, a list of projects for which external finance will be sought during the period 1979/81, individual project descriptions and individual technical assistance profiles. Each list contains the name of the project, the executing agency, the expected lender(s), if any, the total cost, the external financing obtained or required and the counterpart contribution required during the 1979/81 period. The individual descriptions contain additional information which would be of interest to potential donors or lenders, including technical assistance requirements and the present status of the project.

2. Data for these project lists, which will be presented at the meeting of the Caribbean Group for Cooperation in Economic Development scheduled for June 4-9, 1979, were provided by the Government of Guyana. The projects lists for 1979/81 reflect the developmental strategy of the Government of Guyana, as outlined in the Economic Memorandum dated May 11, 1979. - 23 -

GUYANA: MAJOR ONGOING PROJECTS AND SOURCES OF FINANCING (US$ million)

Total External Counterpart Financing Cost Financing Source Amount %

Agriculture Mahaica-Mahaicony-Abary 78.4 49.0 IDB 29.4 37.5 Black Bush Irrigation 45.3 37.1 IDA-CDB-CIDA 8.2 78.7 Tapakuma Irrigation 40.4 26.6 IBRD 13.8 34.2 Purchase and Installation of Pumps 4.2 - 4.2 100.0 UN Mapping 2.6 1.7 UN 0.9 34.6 Topographic Surveys 0.6 0.5 CIDA 0.1 16.7 Veterinary Diagnostic Laboratory 1.2 0.7 CIDA 0.5 41.7 Research Soils 0.1 0.1 Sweden - - Cardi 0.6 0.3 EDF 0.3 50.0 Rural Farm Household Survey 0.1 0.1 USAID - - Onnerwagt Irrigation Scheme 0.5 0.1 DPRK 0.4 80.0 Second Rice Modernization 22.0 16.5 USAID 5.5 25.0

Forestry UN Forest Industries Demonstration 2.7 2.0 UNDP 0.7 25.9 Training Projects Upper Demerara Forestry 31.4 26.7 EDF, EIB 4.7 15.0 Canadian Technical Assistance 1.1 0.9 CIDA 0.2 18.2 Guyana Timbers 1.2 0.8 CIDA 0.4 33.3

Manufacturing Textile Mill 11.8 3.2 People's Republic of China 8.6 72.9 Bicycle Factory 1.3 - 1.3 100.0 Leather Tannery 1.2 - 1.2 100.0 Boot and Shoe Factory 1.3 - 1.3 100.0

Roads and Infrastructure Georgetown Road Approaches 13.7 1.2 USAID 2.5 91.2 East Bank Berbice Road 7.8 3.9 EDF 3.9 50.0 Feeder Roads 3.8 3.0 0.8 21.1 East Coast Demerara Roads 6.2 3.0 3.2 51.6 Melanie Damishana Workshop 7.3 3.1 4.2 57.5 Upper Demerara Forestry Road 5.2 3.4 CDB 1.8 34.6 West Demerara Road 14.9 3.5 IDA, IBRD 11.4 76.5 Essequibo Sea and River Defenses 6.5 4.4 UK 2.1 32.3

Water Supply Linden Pure Water 2.6 2.6 CIDA - -

Transport and Communication Launches (2) 1.3 1.3 UK - - Dredging 1.2 1.1 0.1 8.3 Hydrographic 0.1 0.05 UK 0.05 50.0 Aircraft "Skyran" 1.4 1.4 - - Hinterland Airstrips 1.8 0.2 1.6 88.9

Education and Culture UG Library Extension 0.6 0.2 0.4 66.7 Second Education Project 19.8 9.4 IBRD 10.4 52.5

Health Rural Hospitals 1.0 0.9 USAID 0.1 10.0 Referral Hospital System 13.5 8.8 4.7 34.8

TOTAL 356.7 217-75 138.95 39.0

Source: State Planning Commission. - 24 -

GUYANA - MAJOR NEW PROJECTS AND SOURCES OF FINANCING, 1979-81

(US$ millions)

Counterpart Total External Financing Projects Cost Financing Source Amount %

Agriculture 64.8 55.1 9.7 Agriculture Sector Planning 2.2 2.0 USAID 0.2 9 Dairy Development Project 10.0 8.0 IDB 2.0 20 Technical Assistance/ Agricultural Mechanization Development 0.6 0.4 IDB 0.2 33 Bagasse Particle Board 6.5 5.2 not known 1.3 20 Citrus Processing 1.5 1.2 IDB 0.3 20 Oil Palm Development 36.4 32.0 CDC,CDB,others 4.4 12 Aquaculture 0.5 0.3 not known 0.2 40 Pineapple Processing 3.8 2.8 not known 1.0 26 Demerara Fish Port Complex 3.0 3.0 not known - -

Induistry 17.3 15.4 109 Development of Export-Oriented and Import Substitution Industries 6.7 6.0 not known 0.7 10 Guyana Cement Plant 10.0 9.0 IDB 1.0 10 Manufacture of Farm Hand Tools 0.3 0.2 not known 0.1 33 Technical Assistance/Kaolin Mining Benefication 0.3 0.2 IDB 0.1 33

Water Supply 11.1 7.6 3.5 Water Supply Improvement Project 11.0 7.5 IDB 3.5 32 Technical Assistance/ Upper Sands Aquifer 0.1 0.1 IDB - -

Electrical Power 5.9 5.3 0.6 Georgetown- Corentyne Link 5.6 5.1 CDB 0.5 10 Technical Assistance/ Generation of Electricity from Wood Wasle 0.3 0.2 not known 0.1 33

Education 0.3 0.2 0.1 Technical Assistance/ Upgrading the Levels of Managerial Skills 0.3 0.2 IDB 0.1 33

Health 5.5 4.1 1,4 Health Care Delivery System 5.5 4.1. USAID 1.4 ¢ 25

TOTAL 104.6 87.5 17.1

Source: State Planning Commission. - 25 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Agriculture Sector Planning

II. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture

III. TOTAL ESTIMATED COST: US$2.2

IV. EXTERNAL FINANCING REQUIRED: US$2.0

V. LENDING AGENCY: U.S.A.IoD.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The purpose of the project is to improve the institutional capacity of the Ministries of Agriculture and of Economic Development in agriculture sector planning.

B. Justification: Such institutional strengthening would allow for more comprehensive planning evaluation of programs and projects, analysis of data and monitoring and assessment of the sector.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 0.2 - 0.2 9 Foreign Costs - 2.0 2.0 91

Total Costs - Amount 0.2 2.0 2.2 100 % 9 91 - -

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.1 0.1 - - 0.2 - External Sources 0.8 0.6 0.4 0.2 - 2.0 Total 0.8 0.7 0.5 0.2 - 2.2 - 26

IX. STATUS OF PREPARATION: Project prepared.

X. TERMS OF FINANCING:

Interest Rate ) ) Grant Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED..

A. Project Preparation ) No ) B. Feasibility Studies ) No ) C. Project Implementation ) Yes - 27 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Dairy Development Project

II. EXECUTING GOVERNMENT AGENCY: Livestock Development Company, Ltd.

III. TOTAL ESTIMATED COST: US$10.0 (Phase I)

IV. EXTERNAL FINANCING REQUIRED: US$8.0

V. LENDING AGENCY: I.D.B.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project will involve the establishment of 10 new dairy production units with associated satellite farms and two milk processing plants.

B. Justification: Expansion of the dairy sub-sector with a view to achieving national self-sufficiency.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 2.0 - 2.0 20 Foreign Costs 8.0 8.0 80

Total Costs - Amount 2.0 8.0 10.0 -% 20 80 - 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.1 0.4 0.8 0.6 1.9 0.1 External Sources - 0.4 1.6 3.2 2.4 7.6 0.4

Total - 0.5 2.0 4.0 3.0 9.5 0.5 - 28 -

IX. STATUS OF PREPARATION: Project identified

X. TERMS OF FINANCING:

Interest Rate ) ) Concessional Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during 1979-81 Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) Yes ) B. Feasibility Studies ) Yes ) C. Projec.t Implementation ) Yes - 29 -

GUYANA

1979/81 Project List - Technical Assistance Profile

(US$ million)

I. SECTOR: Agriculture

II. PROJECT TITLE: Agricultural Mechanization Development

III. LENDING AGENCY: I.D.B.

Hydraulics - IV. EXECUTING GOVERNMENT AGENCY: Ministry of Agriculture, Division

V. DESCRIPTION AND OBJECTIVES:

1. to improve maintenance of agricultural machinery 2. to test agricultural machinery so as to rationalize and standardize imports.

VI. TECHNICAL ASSISTANCE REQUIREMENTS:

Technicians to train farm mechanics and to start an agro-services centre.

VII. ESTIMATED COST: (US$'000): $600 - 30 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Bagasse Particle Board

II. EXECUTING GOVERNMENT AGENCY: Guyana Sugar Corporation (GUYSUCO) III. TOTAL ESTIMATED COST: US$6.5

IV. EXTERNAL FINANCING REQUIRED: US$5.2

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project consists of building a factory for the production of bagasse based particle board for export.

B. Justification: To utilize the residual of sugar-cane to develop an export based industry.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount % Local Costs 1.3 - 1.3 Foreign Costs 20 - 5.2 5.2 80 Total Costs - Amount 1.3 5.2 6.5 -% 20 80 100

VIII. DISBURSEMENT PERIOD:

Post 1979 1980 1981 1982 1983 Total 1983 Local Sources - 0.1 0.4 0.6 External 0.2 1.3 - Sources - 005 1.6 2.4 0.7 5.2 - Total - 0.6 2.0 3.0 0.9 6.5 - - 31 -

Project IX. STATUS OF PREPARATION: Project has been identified. proposal prepared in 1977. Market survey required.

X. TERMS OF FINANCING:

Interest Rate ) ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) To be self-liquidating. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No ) B. Feasibility Studies ) Yes, including Market Survey ) C. Project Implementation ) Yes - 32 --

GUYANA 1979/83 Project List - Individual ProjSect Description

(US$ million)

I. NAME OF PROJECT: Citrus Processing

II. EXECUTING GOVERNMENT AGENCY: Guyana Sugar Corporation Ltd. (GUYSUCO) III. TOTAL ESTIMATED COST: US$1.5

IV. EXTERNAL FINANCING REQUIRED: US$1.2

V. LENDING AGENCY: I.D.B. to be approached

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project consists of setting up a citrus processing plant and of developing a state farm to produce citrus.

B. Justification: The project will promote citrus production in the Poimeroon and North West District by farmers as well by a state farm to produce juice and by-products for local and CARICOM markets who product a major portion of total citrus output.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %_ Local Costs 0.3 - Foreign Costs 0.3 20 _1.2 - 1.2 80 Total Costs - Amount 0.3 1.2 1.5 - % 20 80 100

VIII. DISBURSEMENT PERIOD:

1979 1980 Post 1981 1982 1983 Total 1983 Local Sources - - 0.2 0.1 - 0.3 External Sources - - 0.3 0.6 0.3 - 1.2 Total - 0.3 0.8 0.4 1.5 - 33 -

IX. STATUS OF PREPARATION: Feasibility study completed; site for state farm chosen; site for factory selected.

X. TERMS OF FINANCING:

Interest Rate ) ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during construction period. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No

B. Feasibility Studies ) No

C. Project Implementation ) Yes - 34 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Oil Palm Development (GUYSUCO) II. EXECUTING GOVERNMENT AGENCY: Guyana Sugar Corporation

III. TOTAL ESTIMATED COST: US$36.4

IV. EXTERNAL FINANCING REQUIRED: US$32.0

V. LENDING AGENCY: CDC, CDB and others to be identified

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The scheme is located in Wauna in the Northwest District, where 10,000 acres of oil palm would be planted and related processing facilities established; 1,000 acres are already under cultivation.

B. Justification: This project aims at reducing the dependence on imported edible oil.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 4.4 11.4 15.8 43 Foreign Costs - 20.6 20.6 57

Total Costs - Amount 4.4 32.0 36.4 -% 12 88 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.5 2.0 3.0 3.0 8.5 7.3 External Sources - 1.5 3.0 9.0 7.0 20.5 0.1 7.4 Total - 2.0 5.0 12.0 10.0 29.0 - 35 -

IX. STATUS OF PREPARATION: Feasibility study prepared. 1,000 acres are already under cultivation. IBRD, CDC and CDB have been approached. X. TERMS OF FINANCING:

Interest Rate ) ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) Self-liquidating. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No

B. Feasibility Studies ) No

C. Project Implementation ) Yes - 36 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Aquaculture

II. EXECUTING GOVERNMENT AGENCY: Guyana Sugar Corporation (GUYSUCO)

III. TOTAL ESTIMATED COST: US$0.5

IV. EXTERNAL FINANCING REQUIRED: US$0.3

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: To develop inland freshwater and blackbush- water fish.

B. Justification: This project will provide a cheap source of (contribute to the supply of increase) protein utilizing the land and water resources available on sugar estates.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 0.2 - 0.2 40 Foreign Costs - 0.3 0.3 60

Total Costs - Amount 0.2 0.3 0.5 -% 20 60 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.1 0.1 - - 0.2 - External Sources - 0.1 0.1 0.1 - 0.3 -

Total - 0.2 0.2 0.1 - 0.5 - 37 -

IX. STATUS OF PREPARATION: Feasibility study and technical report completed by visiting consultant.

X. TERMS OF FINANCING:

Interest Rate ) ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) Included in the corporation's Debt Obligations: ) projections.

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No ) B. Feasibility Studies ) No ) C. Project Implementation ) Technical personnel trained in hatchery development, fish, breeding and management required to train local personnel. - 38 -

GUYANA

1979/83 Pro ect List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Pineapple Processing

II. EXECUTING GOVERNMENT AGENCY: Guyana Sugar Corporation (GUYSUCO)

III. TOTAL ESTIMATED COST: US$3.8

IV. EXTERNAL FINANCING REQUIRED: US$2.8

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project, which will be sited on the Soesdybe/ Linden Highway Region, will process pineapples to obtain juice, chunks, and other by-products.

B. Justification: The project will develop new agro-industrial production to supply the domestic and CARICOM markets.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1.0 - 1.0 26 Foreign Costs - 2.8 2.8 74

Total Costs - Amount 1.0 2.8 3.8 -% 26 74 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - - 0.2 0.5 0.3 1.0 - External Sources - - 0.8 1.3 0.7 2.8 -

Total - - 1.0 1.8 1.0 3.8 - 39 -

IX. STATUS OF PREPARATION: Project identified.

X. TERMS OF FINANCING:

Interest Rate ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during 1979-81. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) Yes ) B. Feasibility Studies ) Yes ) C. Project Implementation ) Yes - 40 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Demerara Fish Port Complex (Fish Trawlers)

II. EXECUTING GOVERNMENT AGENCY: Guyana Fish Processors Limited

III. TOTAL ESTIMATED COST: US$3.0

IV. EXTERNAL FINANCING REQUIRED: US$3.0

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The purchase of 10 vessels to be utilized for shrimp and fish fishing.

B. Justification: To increase the shrimp and fish catch.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs - - Foreign Costs - 3.0 3.0 100

Total Costs - Amount - 3rO 3.0 -% 100 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources ------External Sources - 0.3 0.9 1.2 0.6 3.0

Total - 0.3 0.9 1.2 0.6 3.0 - 41 -

IX. STATUS OF PREPARATION: Project identified. EEC Consultants have recommended acquisition of 10 vessels.

X. TERMS OF FINANCING:

Interest Rate ) ) Not Known. Concessionary financing will Amortization Period: ) be required.

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during 1980-83. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) Yes.

B. Feasibilitv Studies ) No ) C. Project Implementation ) Training for ship captains and crew in modern fishing techniques. - 42 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Development of Export-Oriented and Import- Substitution Industries

II. EXECUTING GOVERNMENT AGENCY: Guyana Agricultural and Industrial Development Bank

III. TOTAL ESTIMATED COST: US$6.7

IV. EXTERNAL FINANCING REQUIRED: US$6.0

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project will consist of the financing of new industrial development projects in the private sector to develop both new non-traditional exports as well as import substitution industries.

B. Justification: To promote industrial production to supply to the domestic, CARICOM and North American markets.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 0.7 - 0.7 10 Foreign Costs - 6.0 6.0 90

Total Costs - Amount 0.7 6.0 6.7 -% 10 90 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - - 0.2 0.3 0.2 0.7 - External Sources - 0.7 1.9 2.5 0.9 6.0

Total - 0.7 2.1 2.8 1.1 6.7 - 43 -

IX. STATUS OF PREPARATION: Project in identification phase.

X. TERMS OF FINANCING:

Interest Rate ) ) Not known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Ma-intenance Costs: ) ) None during 1979-81. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) Yes. ) B. Feasibility Studies ) Yes. ) C. Project Implementation ) Yes.

,. - 44 -

GUYANA

1979/83 Prolect List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Guyana Cement Plant

II. EXECUTING GOVERNMENT AGENCY: Ministry of Economic Development

III. TOTAL ESTIMATED COST: US$10.0

IV. EXTERNAL FINANCING REQUIRED: US$9.0

V. LENDING AGENCY: I.D.B.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: To set up a cement clinker grinding plant.

B. Justification: To provide for continuous availability of cement to meet domestic requirements.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1.0 - 1.0 10 Foreign Costs - 9.0 9.0 90

Total Costs - Amount 1.0 9.0 10.0 - % 10 90 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.1 0.3 0.5 0.1 1.0 - External Sources - 0.9 2.7 4.5 0.9 9.0

Total - 1.0 3.0 5.0 1.0 10.0 - - 45 -

IX. STATUS OF PREPARATION: Feasibility study completed.

X. TERMS OF FINANCING:

Interest Rate ) ) Not Known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during construction period. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No ) B. Feasibility Studies ) No ) C. Project Implementation ) Yes - 46 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Manufacture of Farm Hand Tools

II. EXECUTING GOVERNMENT AGENCY: Guyana National Engineering Corporation

III. TOTAL ESTIMATED COST: US$0.3

IV. EXTERNAL FINANCING REQUIRED: US$0.2

V. LENDING AGENCY: Not Known

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: To produce small hand tools used in the agricultural sector.

B. Justification: To satisfy the need for a regular and continuous supply of small hand tools.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 0.1 - 0.1 33 Foreign Costs - 0.2 0.2 67

Total Costs - Amount 0.1 0.2 0.3 - % 33 67 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - - - 0.1 - 0.1 - External Sources - - 0.1 0.1 - 0.2 -

Total - 0.1 0.2 - 0.3 - - 47 -

IX. STATUS OF PREPARATION: A feasibility study of the project has been completed.

X. TERMS OF FINANCING:

Interest Rate ) ) Not Known Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) No ) B. Feasibility Studies ) No ) C. Project Implementation ) Yes - 48 -

GUYANA

1979/83 Project List - Technical Assistance Profile

(US$ million)

I. SECTOR: MINING

II. PROJECT TITLE: Kaolin: Mining/Benefication

III. LENDING AGENCY: I.D.B.

IV. EXECUTING GOVERNMENT AGENCY: Bauxite Industrial Development Co. V. DESCRIPTION AND OBJECTIVES:

1. the characterization of the Kaolin and determination of the range of products which could be produced. 2. identification of the appropriate process design in the benefication plant based on the agreed product-mix 3. calculation of pre-construction plant and infrastructural cost estimates.

VI. TECHNICAL ASSISTANCE REQUIREMENTS: Feasibility Study.

VII. ESTIMATED COST: (US$'000): $300

r - 49 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

Project I. NAME OF PROJECT: Water Supply Improvement Authority (GUYWA) II. EXECUTING GOVERNMENT AGENCY: Guyana Water

III. TOTAL ESTIMATED COST: US$11.0

IV. EXTERNAL FINANCING REQUIRED: US$7.5

V. LENDING AGENCY: I.D.B.

VI. DESCRIPTION AND JUSTIFICATION: systems in two A. Description: To provide potable water supply areas: Non-Teriel and Johns.

is to provide safe B. Justification: The purpose of the project drinking water.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount -% 32 Costs 3.5 - 3.5 Local 7.5 68 Foreign Costs - 7.5 11.0 Total Costs - Amount 3.5 7.5 -% 32 68 100

DISBURSEMENT PERIOD: VIII. Post 1979 1980 1981 1982 1983 Total 1983 0.8 3.5 - Local Sources - 0.3 0.9 1.5 1.7 7.5 - External Sources - 0.7 2.1 3.0 2.5 11.0 Total - 1.0 3.0 4.5 - 50 -

IX. STATUS OF PREPARATION: Project identified.

X. TERMS OF FINANCING:

Interest Rate ) ) Concessional. Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during 1979-81. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) Yes. ) B. Feasibility Studies ) Yes. ) C. Project Implementation ) Yes. - 51 -

GUYANA

1979/83 Project List - Technical Assistance Profile

(US$ million)

I. SECTOR: Water Supply

II. PROJECT TITLE: Upper Lands Aquifer

III. LENDING AGENCY: I.D.B.

IV. EXECUTING GOVERNMEN7-. '±GENCY: Guyana Water Authority

V. DESCRIPTION AND OBJECTIVES: The Upper Lands Aquifer which extends in the coastal region, is an economical potential source of water supply for localities established along the coastal rivers, and totalling 100,000 inhabitants, and for industrial projects presently under study.

VI. TECHNICAL ASSISTANCE REQUIREMENTS:

1- Execute a drilling program 2. Execute a program for testing pumping on 6-8 inches boreholes 3. Carry-out a water quality survey 4. Carry-out an overall hydrogeological study including an estimate of the recharge of the aquifer 5. Avoid water hydrolog survey

VII. ESTIMATED COST: (US$'000): $125 - 52 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Georgetown - Corentyne Link

II. EXECUTING GOVERNMENT AGENCY: Guyana Electricity Corporation (GEC)

III. TOTAL ESTIMATED COST: US$5.6

IV. EXTERNAL FINANCING REQUIRED: US$5.1

V. LENDING AGENCY: CDB

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: The project consists of the installation of a 69 kv transmission line to link Georgetown with Corentyne. It also includes a component for upgrading distribution facilities.

B. Justification: Better use of existing generating capacity and integration of the Georgetown-Corentyne systems.

VII. COST CO-PONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 0.5 - 0.5 10 Foreign Costs - 5.1 5.1 90

Total Costs - Amount 0.5 5.1 5.6 -% 10 90 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.1 0.2 0.1 0.1 0.5 -

External Sources _- 0.9 1.8 1.8 0.6 5.1

Total - 1.0 2.0 1.9 0.7 5.6 - 53 -

IX. STATUS OF PREPARATION: Project has been presented to CDB.

X. TERMS OF FINANCING:

Interest Rate ) ) Usual CDB Terms. Amortization Period: )

XI. PROJECT IMPLICATIONS:

Operating and Maintenance Costs: ) ) None during 1979-81; self-liquidating. Debt Obligations: )

XII. TECHNICAL ASSISTANCE REQUIRED:

A. Project Preparation ) ) None B. Feasibility Studies )

C. Project Implementation : Supervision services. - 54 -

GUYANA

1979/83 Project List - Technical Assistance Profile

(US$ million)

I. SECTOR: Electrical Power

II. PROJECT TITLE: Generation of Electricity from Wood Waste.

III. LENDING AGENCY: Not known

IV. EXECUTING GOVERNMENT AGENCY: Guyana Timbers Ltd.

V. DESCRIPTION AND OBJECTIVES: To undertake a feasibility study set up plants to generate electricity from wood waste. The establishment of such a plant would result in substantial savings in the use of imported oil and would be located in isolated communities where other alternatives are not feasible.

VI. TECHNICAL ASSISTANCE REQUIREMENTS:

Feasiblity study of project required.

VII. ESTIMATED COST: (US$'000): $300 - 55 -

GUYANA

1979/83 Project List - Technical Assistance Profile

(US$ million)

I. SECTOR: Education and Training

II. PROJECT TITLE: Upgrading the levels of Managerial Skills

III. LENDING AGENCY: I.D.B. Development IV. EXECUTING GOVERNMENT AGENCY: The Guyana Management and Training Centre.

is an executing V. DESCRIPTION AND OBJECTIVES: The Management Centre arm of the Ministry of Economic Development and was set up in 1977 by a Cabinet decision to upgrade the levels of managerial skills existing in the country.

VI. TECHNICAL ASSISTANCE REQUIREMENTS:

1. Finance Control Systems and Management (August - October) 2. New Factory Management (August - October) 3. Increasing the data processing skills/capability in the public sector

VII. ESTIMATED COST: (US$'000): $300 - 56 -

GUYANA

1979/83 Project List - Individual Project Description

(US$ million)

I. NAME OF PROJECT: Health Care Delivery Syster2

II. EXECUTING GOVERNMENT AGENCY: Ministry of Health

III. TOTAL ESTIMATED COST: US$5.5

IV. EXTERNAL FINANCING REQUIRED: US$4.1 ($3.1 Loan $1.0 Grant)

V. LBNDING AGENCY: U.S.A.I.D.

VI. DESCRIPTION AND JUSTIFICATION:

A. Description: To develop an integrated three-tier system consisting of hospitals, health stations and health posts providing funding for supervisory, support, and referral services.

B. Justification: To improve medical and public health services in rural areas.

VII. COST COMPONENTS AND FINANCING:

Financed by Total Local External Sources Sources Amount %

Local Costs 1.4 - 1.4 25 Foreign Costs - 4.1 4.1 75

Total Costs - Amount 1.4 4.1 5.5 - % 25 75 100

VIII. DISBURSEMENT PERIOD: Post 1979 1980 1981 1982 1983 Total 1983

Local Sources - 0.5 0.5 0.2 0.2 1.4 - External Sources 0.2 1.5 1.5 0.7 0.2 4.1 -

Total 0.2 2.0 2.0 0.9 0.4 5.5 - - 57 -

STATISTICAL APPENDIX

TABLE OF CONTENTS

Table No.

I. POPULATION AND LABOR FORCE

1.1 Population Trends, 1970-78 1.2 Selected Employment Data, 1971-77 1.3 Work Stoppages, 1973-78

II. NATIONAL ACCOUNTS

2.1 Sectoral Origin of Gross Domestic Product at Current Factor Cost, 1972-78 2.2 Sectoral Origin of Gross Domestic Product at Constant Factor Cost, 1972-78 2.3 Implicit Deflators, 1972-78 2.4 Expenditure on Gross Domestic Product, 1972-78 2.5 Gross National Product and National Income, 1972-78 2.6 National Income Ratios, 1972-78 2.7 Actual and Projected Resource Availability and Savings, 1973-81 2.8 Actual and Projected Resources and Uses of Resources, 1976-81

III. BALANCE OF PAYMENTS

3.1 Balance of Payments, 1972-78 3.2 Merchandise Imports (CIF) by End Use Category, 1972-78 3.3 Merchandise Exports by Major Commodities, 1973-78 3.4 Balance of Payments, 1976-81 3.5 Merchandise Exports by Major Commodities, 1976-81 3.6 Direction of Foreign Trade, 1972-78

IV. EXTERNAL PUBLIC DEBT

4.1 Summary of External Debt Operations, 1973-78

V. PUBLIC SECTOR FINANCES

5.1 Central Government Revenues, 1972-78 5.2 Central Government Expenditures by Economic Classification, 1972-78 5.3 Central Government Finances, 1976-81 5.4 Actual and Projected Public Sector Finances, 1976-81 5.5 Financing of the Public Sector Investment Program, 1976-81 5.6 Summary of Public Sector Capital Expenditure by Sector, 1979-81 5.7 Breakdown of Public Sector Capital Expenditure, 1979-81 - 58 -

Table No.

VI. MONEY AND BANKING

6.1 Summary Accounts of the Financial System, 1972-78

VII. AGRICULTURE, FORE-STRY AND OTHER SECTORS

7.1 Output of Selected Commodities, 1973-78 7.2 Electricity Generation and Consumption, 1972-77

VIII. PRICES AND WAGES

8.1 Consumer Price Indices, 1970-78 8.2 Man-hours Worked and Earnings, 1972-78 - 59 -

Table 1.1: GUYANA - POPULATION TRENDS, 1970-78

1970 1971 1972 1973 1974 1975 1976a/ 1977-a./ 1 9 7 8 d

Total end of year Population 716,000 732,000 748,000 763,000 775,000 788,000 801,000mJ 813,000 824,000

Crude Birth Rate (per '000) 33.5 32.9 33.9 31.9 30.0 30.8 30.2 29.2 28.5

Crude Death Rate (per '000) 6.8 7.3 8.1 7.4 8.0 7.6 7.7 7.5 7.3

Rate of Natural Increase (per '000) 26.7 25.6 25.8 24.5 22.0 23.2 22.5 21.7 21.2

Total Births 23,703 23,787 25,065 24,100 23,107a/ 24,068a/ 23,960a/ 23,600~-/ 23,32G0J

Total Deaths 4,808 5,248 5,962 5,599 6,161 5,924 6,107 6,020!-/ 6,000-

Natural Population Increase 18,895 18,539 19,103 18,501 16,946 18,144 17,853 17,580 17,320

Net Migration (Reported) -4,756 -2,843 -2,887 -3,909 -5,215 -4,934 -4,869 -5,000/ -7,000!

Net Population Increase 14,139 15,696 16,216 14,592 11,731 13,210 12,984 12,580 10,320

a/ Provisional

Source: Statistical Bureau. - 60 -

Table 1.2: G3UYANA- SELECTED EMPLOYMENTDATA, 1971-77

1971 1972 1973 1974 1975 1976 1977a1/ No. of Number No. of Number No. of Number No. of Number No. of Number No. of Number No. of Number firms employed firms employed firms employed firms employed firms employed firms employed firms employed

Agriculture Sugar 2 15,215 2 14,892 2 15,076 2 16,377 2 15,984 2 17,999 2 16,440

Manufacturing 93 12,518 91 12,418 92 12,920 93. 13,310 88 13,652 85 14,711 84 13,968 Sugar 2 4,937 2 4,926 2 5,042 2 4,897 2 5,243 2 5,i28 2 5,597 Other Food, Beverages &Tobacco 41 2,309 40 2,432 40 2,547 38 2,608 34 2,626 33 2,886 33 2,293 Other Manufacturing 50 5,272 49 5,060 50 5,331 53 5,805 52 5,783 50 6,297 49 6,078

Mining and Quarrying 4 6,346 4 6,316 3 6,342 3 6,530 3 6,873 3 7,522 3 7,937 Bauxite 2 5,847 2 5,981 2 6,188 2 6,312 2 6,680 2 7,346 2 7,761 Other Mining and Quarrying 2 499 2 335 1 154 1 218 1 193 1 176 1 176

Distribution 84 4,319 84 4,068 84 4,472 84 4,401 81 4,276 80 4,339 80 4,425

Other Services 34 6,196 32 5,298 30 5,262 29 5,732 29 6,287 28 5,889 24 5,954 Wharves 6 1,554 6 1,147 6 1,324 6 1,194 6 1,335 5 1,127 5 1,123 Other Transport& Communication 8 2,638 8 2,496 8 2,530 8 3,100 7 3,383 7 3,222 7 3,428 Engineering and Construction b/ 20 2,004 18 1,655 16 1,408 16 1,438 16 1,569 16 1,540 12 1,403

TOTAL 44,594 42,992 44,042 46,350 47,072 50,460 48,724

a/ Preliminary. b/ Establishments with at least 10 employees.

Source: Ministry of kconomic Development, Statistical Bureau. - 61 -

Table 1.3: GUYANA - WORK STOPPAGES, 1973-78

Preliminary 1973 1974 1975 1976 1977 1978

Number of strikes 186 138 118 284 383 300 Sugar industry 148 114 95 234 326 241 Other 38 24 23 50 57 59

Workers involved 37,889 66,953 83,509 49,422 89,687 52,060 Sugar industry 32,325 59,361 80,484 45,069 82,999 48,215 Other 5,564 7,592 3,025 4,353 6,688 3,845

Man-days lost 93,481 151,169 351,723 175,166 964,282 75,791 Sugar industry 66,693 143,820 334,218 165,931 932,402 72,875 Other 26,788 7,349 17,505 9,235 31,880 2,916

Wages lost (G$'000) 745.0 1,302.8 2,712.5 1,793.1 10,242.1 955.2 Sugar industry 512.1 1,213.2 2,712.5 1,781.2 10,081.3 952.3 Other 232.9 89.6 - 11.9 160.8 2.9

Source: Ministry of Labor; State Planning Commission. - 62 -

Table 2.1: GUYANA - SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CURRENT FACTOR COST, 1972-78 (G$ million)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Agriculture, Forestry and Fishing 103.8 106.3 264.1 341.4 236.0 210.8 270.3 Sugar 56.7 49.7 184.7 245.8 141.6 77.3 133.0 Rice 9.0 12.8 25.4 35.6 25.0 49.0 41.0 Other Crops 15.3 17.7 19.7 21.8 25.0 35.3 40.2 Livestock 11.8 13.3 18.1 19.8 24.4 26.4 31.1 Forestry 5.4 6.0 7.6 8.5 10.0 10.0 11.0 Fishing 5.6 6.8 8.6 9.9 10.0 12.8 14.0

Mining and Quarrying 96.6 80.5 114.8 141.0 145.0 164.2 171.4 Bauxite and Alumina 91.6 76.3 110.8 135.0 138.0 154.2 162.0 Other 5.0 4.2 4.0 6.0 7.0 10.0 9.4

Manufacturing and Processing 64.2 62.4 120.3 161.6 134.9 122.9 142.1 Sugar Milling 19.9 17.5 64.9 86.4 49.4 27.1 46.8 Rice Milling 2.4 2.9 5.9 6.2 4.5 9.2 9.3 Other 41.9 42.0 49.5 69.0 81.0 86.6 86.0

Services 260.2 326.8 370.6 453.6 522.4 513.6 550.0 Distribution 57.3 64.4 80.8 94.2 108.1 92.2 96.0 Transport and Communications 30.3 37.1 46.3 49.9 55.0 58.0 60.0 Construction 42.7 47.9 52.7 74.4 85.0 76.9 75.0 Rent of Dwellings 11.9 12.4 13.7 15.0 16.0 16.4 17.0 Financial Services 19.1 22.1 27.0 34.7 38,.0 42.8 44.0 Government 79.1 121.2 126.6 159.8 193.3 200.5 230.0 Other 19.8 21.7 23.5 25.6 27.0 26.8 28.0

TOTAL 524.8 576.0 869.8 1097.6 1038.3 1011.5 1133.8

Source: Ministry of Economic Development, Statistical Bureau, Bank of Guyana. - 63 -

Table 2.2: GUYANA SECTORAL ORIGIN OF GROSS DOMESTIC PRODUCT AT CONSTANT FACTOR COST, 1972-78

(G$ million - 1977 prices)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Agriculture, Forestry and Fishing 211 204 240 216 221 210 232 Sugar 133 121 151 123 134 77 101 Rice 19 24 30 34 23 44 41 Other crops 19 20 21 23 23 35 39 Livestock 20 18 17 18 23 26 28 Forestry 6 7 8 7 9 10 10 Fishing 14 14 13 11 9 13 13

Mining and Quarrying 184 175 188 188 167 164 160 Bauxite and alumina 176 168 183 180 159 155 146 Other 8 7 5 8 8 9 14

Manufacturing and Processing 103 87 107 117 133 123 122 Sugar milling 42 25 42 41 49 27 35 Rice milling 5 4 7 6 4 9 9 Other 56 58 58 70 80 87 78

Services 393 426 433 514 558 514 488 Distribution 79 86 87 105 115 92 Transport and communications 47 50 52 57 59 58 Construction 66 68 64 85 91 77 74 Rent of dwellings 12 13 15 16 17 16 Financial services 35 37 35 38 41 43 Government 127 142 152 189 206 201 210 Other 27 30 28 24 29 27

TOTAL 891 892 968 1,035 79 1,012 1,002

.. not available

Source: Statistical Bureau. - 64 -

Table 2.3: GUYANA - IMPLICIT DEFLATORS, 1972-78 (1977 = 100)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Agriculture, Forestry and Fishing 49.2 52.4 110.1 157.4 106.7 100.0 116.8

Mining and Quarrying 53.1 45.6 61.2 75.1 87.3 100.0 106.9

Manufacturing & Processing 62.7 72.6 112.6 137.4 102.0 100.0 116.4

Services 66.2 76.6 85.8 88.2 93.7 100.0 112.7

GDP at Factor Cost 58.9 64.6 89.9 106.0 96.2 100.0 113.2

Source: Statistical Bureau, mission estimates. - 65 -

Table 2.4: GUYANA - EXPENDITURE ON GROSS DOMESTIC PRODUCT, 1972-78

(G$ million)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Total Consumption 481.9 575.8 670.3 807.6 996.2 985.0 1020.4 Public 116.9 159.7 172.0 233.0 323.0 304.0 301.0 Private 365.0 416.1 498.3 574.6 673.2 681.0 718.0

Gross Domestic Investment 118.9 175.5 252.0 392.0 414.0 315.0 242.8 Fixed Capital Formation 108.3 154.8 198.0 350.0 368.0 315.0 262.8 Public (71.3) (104.7) (145.0) (288.0) (298.0) (255.0) (218.0) Private (37.0) (50.1) (53.0) (62.0) (70.0) (60.0) (44.8) Change in Inventories 10.6 20.7 54.0 42.0 46.0 - -20.0

Goods and Non-Factor Services Balance -7.7 -106.5 27.7 7.6 -277.5 -183.0 3.8 Exports of Goods and N.F.S. 344.4 333.0 659.6 963.1 750.4 703.0 799.9 Imports of Goods and N.F.S. -352.1 -439.5 -631.9 -955.5 -1027.9 -886.0 -796.1

Gross Domestic Product at Current Market Price 593.1 644.8 950.0 1192.0 1132.7 1117.0 1267.0 Plus: Subsidies 3.8 9.7 23.0 33.0 46.0 22.0 15.0 Minus: Indirect Taxes 72.1 78.5 103.0 128.0 140.4 127.0 148.2

Gross Domestic Product at Current Factor Cost 524.8 576.0 870.0 1097.0 1038.3 1012.0 1133.8

Net Factor Income Payments Abroad -24.1 -31.4 -49.7 -35.4 -62.0 -56.0 -59.0

Gross National Product at Current Factor Cost 500.7 544.6 820.3 1061.6 976.3 956.0 1074.8

Source: Statistical Bureau. - 66 -

Table 2.5: GUYANA - GROSS NATIONAL PRODUCT AND NATIONAL INCOME, 1972-78

(G$ million)

Prelimlnary 1972 1973 1974 1975 1976 1977 1978

Gross Domestic Product at Current Market Prices 593,1 644.8 950.0 1192.0 1132.7 1117.0 1267.0

Net Factor Income Payment Abroad -24.1 -31.4 -49.7 -35.4 -62.0 -56.0 -59.0

Gross National Product at Current Market Prices 569.0 613.4 900QJ 196.6 1n7n7- 1061.0 1208.0

Plus: Subsidies 3.8 9.7 23.0 33.0 46.0 22.0 15.0 Minus: Indirect Taxes 72.1 78.5 103.0 128.0 140.0 127.0 148.2

Gross National Product at Current Factor Cost 500.7 544.6 820.3 1061.6 976.7 956.0 1074.8

Provision for the Consumption of Fixed Capital -36.0 -35.9 -40.0 -45.0 -54.0 -60.0 -70.0

Net National Income at Current Factor Cost 464.7 508.7 780.3 1016.6 q22.7 896.0 1004.8

Source: Statistical Bureau. - 67 -

Table 2.6: GUYANA - NAT1ONAL INCOME RATIOS, 1972-1978

1972 1973 1974 1975 1976 1977 1978

Sectoral Outputs as a Percentage of G.D.P. at Factor Cost

Agriculture, Forestry and Fishing 19.8 18.5 30.4 31.1 22.7 20.8 23.8

Mining and Quarrying 18.4 14.0 13.2 12.9 14.0 16.2 15.1

Manufacturing and Processing 12.2 10.8 13.8 14.7 13.0 12.2 12.5

Services 49.6 56.7 42.6 41.3 50.3 50.8 48.6

Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0

National Income Categories as a Percentage of G.D.P. at Market Prices

Consumption 81.3 89.3 70.6 67.8 87.9 88.2 80.5

Gross Domestic Investment 20.0 27.2 26.5 32.9 36.5 28.2 19.2

Gross Domestic Savings 18.7 10.7 29.4 33.5 12.1 11.8 19.5

Exports (Goods and N.F.S.) 58.1 51.6 69.4 80.8 66.2 62.9 63.1

Imports (Goods and N.F.S.) 59.4 68.2 66.5 80.2 90.7 79.3 62.8

Source: Tables 2.1. and 2.4; mission estimates. - 68 -

Table 2.7: GUYANA - ACTUAL AND PROJECTED RESOURCE AVAILABILITY AND SAVINGS, 1973-81 (G$ millions at 1977 prices)

Actual Preliminary Projected 1973 1974 1975 1976 1977 1978 1979 1980 1981

G.D.P 998.1 1,056.7 1,124;5 1,177.4 1,117.0 1,119.3 1,164.1 1,216.5 1,277.2 Gains from Terms of Trade -97.7 78.5 87.8 -7.1 - -40.2 -126.7 -170.3 -159.2 Gross Domestic Income 900.4 1,135.2 1,212.3 1,170.3 1,117.0 1,079.1 1,037.4 1,046.2 1,118.0

Imports 706.6 812.2 1,065.2 1,127.1 886.0 739.0 814.0 794.6 843.5 Exports 633.1 769.3 985.9 829.9 703.0 806.4 904.1 952.2 1,013.3 Exports (as capacity to import) 535.4 847.8 1,073.7 822.8 703.0 766.2 777.4 781.9 854.1

Resource Gap 171.2 -35.6 -8.5 304.3 183.0 -27.2 36.6 12.7 -10.6

Consumption 799.9 819.3 834.0 1,044.3 985.0 837.4 774.8 756.0 793.0

Investment 271.7 280.3 369.8 430.3 315.0 214.5 299.2 302.9 314.4

Gross Domestic Savings 100.5 315.9 378.3 126.0 132.0 241.7 262.6 290.2 325.0

Net Factor Income Payment Abroad -48.6 -55.3 -13.4 -64.4 -56.0 -51.8 -64.8 -56,2 -52.8

Current Transfers -2.0 -8.9 -9.6 -10.8 -10.0 -13.5 -10.4 -10.1 -9.4

Gross National Savings 49.9 251.7 355.3 50.8 66.0 176.4 187.4 223.9 262.8

G.N.P. 949.5 1,001.4 1,111.1 1,113.0 1,061.0 1,067.5 1,099.3 1,160.3 1,224.4

Gross National Income 851.8 1,079.9 1,198.9 1,105.9 1,061.0 1,027.3 972.6 990.0 1,065.2

Source: Mission estimates. - 69 - Table 2.8: GUYANA - ACTUAL AND PROJECTED gESOURCES AND USES OF RESOURCES, 1976-811' (% of GDP in Current Market Prices)

Actual Preliminary Projected 1976 1977 1978 1979 1930 1981

Gross Domestic Product 100.0 100.0 100.0 100.0 100.0 100.0

Resource Gap -24.5 -16.4 0.3 -3.0 -1.0 0.8 Exports of Goods and NFS 66.2 62.9 63.1 64.4 63.4 65.8 Imports of Goods and NFS -90.7 -79.3 -62.8 -67.4 -64.4 -65.0

Consumption 87.9 88.2 80.5 77.4 76.0 74.6 Public Sector 28.5 27.2 23.8 23.7 22.8 22.2 Private Sector 59.4 61.0 56.7 53.7 53.2 52.4

Investment 36.5 28.2 19.2 25.7 25.0 24.6 Public Sector 26.3 22.8 17.2 20.8 20.1 19.7 Private Sector 10.2 5.4 2.0 4.9 4.9 4.9

Gross National Savings 5.7 5.9 13.6 16.2 18.4 20.6 Public Savings 2.0 -2.4 5.4 8.7 11.0 1.2.5 Private Savings 3.7 8.3 8.2 7.5 7.4 8.1

Memorandum Item

Investment Financing 36.5 28.2 19.2 25.7 25.0 24.6 Gross National Savings 5.7 5.9 13.6 16.2 18.4 20.4 Current Account Balance 30.9 22.3 5.5 9.5 6.5 4.0

Domestic Savings 12.1 11.8 19.5 22.6 24.0 25.4

l/Small differences because of rounding.

Source: Mission estimates. - 70 -

Table 3.1: GUYANA - BALANCE OF PAYMENTS, 1972-78

(US$ million)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Exports of G6ods and Nonfactor ServiGes 164.5 158.2 295.9 377.7 294.3 275.7 313.7 Imports of Goods and No;factor Services -168.2 -208.8 -283.5 -374.7 -403.1 -347.5 -312.2 Resource Balance -3.7 -50.6 12.4 3- -108u3 - 71.8 1.5

Net Factor Services -11.5 -14.9 -.22.3 -13.9 -24.2 -21.2 -23.0 Interest (-5.1) (-6.0) (-7.9) (-9@6) (-18.4) (-14.8) (-16.9) Direct Investment Income (-7.3) (-5.3) (-13.5) (-6.4) (-3.8) (-3.0) (-0.6) Other Factor Services (0.9) (-3.6) (-0.9) (2.1) (-2.0) (-4.1) (-5.5)

Current Transfers (net) -! -0.1 -0.6 -3.6 -3.9 -4.2 -3.9 -6.0

Current Account Balance -15. 3 -66.1 -13.3 -14.8 -137.2 -97.6 -27.5

Net Public Disbursements 10.9 16.3 25.7 54.3 88.7 35.3 39.6 Gross Disbursements (13.4) (20.8) (31.1) (60.4) (107.5) (59.2) (100.4) Amortization (-2.5) (-4.5) (-5.4) (-6.1) (-18.8) (-23.9) (-60.0)

Other Capital - 10.2 24.8 16.9 3.3 -43.2 0.4 7.9

Capital Account Balance 21.1 41.1 42.6 57.6 45.5 35.7 47.5

Overall Balance -5.8 25.0 -29.3 -42.8 91.7 61.9 -20.0

Change in Reserves (-increase) -5.8 25.0 -29.3 -42.8 91.7 22.3 -12.2 Arrears - - - - - 32.5 -10.2 Government Funds - - - - - 7.1 2.4 a/ Including nonmonetary gold. b/ Includes errors and omissions.

Source: Statistical Bureau, Bank of Guyana, IMF. - 71 -

Table 3.2: GUYANA - MERCHANDISE IMPORTS (CIF) BY END USE CATEGORY, 1972-78

(US$ million) Old Series New Series Preliminary 1972 1973 1974a./ 1974 1975 1976 1977 1978

Consumer Goods 51.0 54.8 63.5 47.9 55.9 64.8 56.1 51.4 Foodstuffs 15.9 20.2 22.6 19.8 20.6 22.3 26.5 25.3 Clothing and Footwear -- 3.8 4.7 4.7 6.4 7.5 6.0 4.6 Durables 23.8 9.4 11.1 6.8 7.0 10.6 5.5 6.7 Other 11.3 21.4 25.1 16.6 21.9 24.4 18.1 17.8

Intermediate Goods 48.6 63.2 123.8 139.3 175.8 176.5 161.1 165.1 Foodstuffs 4.3 8.4 18.3 18.3 22.0 26.8 20.2 19.1 Fuels and Lubricants 13.4 23.0 46.3 46.2 57.3 53.9 62.9 66.7 Chemicals 12.0 16.3 17.0 17.0 19.7 18.2 15.2 16.7 Textiles 9.9 13.4 10.3 11.8 13.5 16.8 10 8 10.8 Other 9.0 2.1 31.9 4 6.0 -/ 63 .3'- b/ 6 0 51..80-5-/

Capital Goods 41.5 58.9 67.1 65.7 110.6 118.8 88.8 60.1 Building Materials 12.3 13.8 21.1 21.1 30.6 36.0 20.6 17.7 Mining/Transport Equip.) b/2 b/) 20.8 40.3 37.4 37.7 13.6 Agricultural Machinery ) 27.2-) 34.4 , 3 7 .9V 3.4 11.1 4.0 1.0 1.1 Other 2.0 10.7 8.1 20.4 28.6 41.4 29.5 27.7

Miscellaneous ------1.4 1.8 3.5 9.4 2.0

Total Merchandise Imports 141.1 176.9 254.4 254.4 344.1 363.6 315.4 278.6 a/ Due to a reclassification of SITC categories and lack of more detailed information, the series "imports by economic classification" is discontinuous. b/ Includes parts and accessories.

Source: Statistical Burea-^, IMF, and mission estimates. - 72 -

Table 3.3: GUYANA - MERCHANDISE EXPORTS BY MAJOR COMMODITIES, 1973-78 (US$ million)

1973 1974 1975 1.976 1977 1978

Constant (1977) Prices Sugar 78.9 105.9 99.9 104.1 72.8 98.5 Rice 19.2 20.4 32.7 28.3 26.2 41.9 Calcined bauxite 79.4 91.7 92.3 87.4 82.9 69.1 Dried bauxite 30.3 24.6 25.1 15.22 16.2 18.3 Alumina 27.4 35.4 37.5 31.0 30.8 32.9 Other 28.9 34.1 84.3 42.6 30.4 38.3 Total Merchandise 264.1 312.1 371.8 308.6 259.3 299.0

Price Indices (1977 = 100) Sugar 45.6 120.5 162.2 97.5 100.0 93.4 Rice 62.0 107.8 101.8 102.1 100.0 89.7 Calcined bauxite 45.7 61.6 69.2 85.5 100.0 114.5 Dried bauxite 50.2 50.0 64.5 86.8 100.0 103.3 Alumina 51.1 59.6 70.9 81.6 100.0 97.9 Other 76.1 89.9 73.9 83.6 100.0 93.7 Total Merchandise 51.3 86.6 98.0 90.5 100.0 98.9

Current Prices Sugar 36.0 127.6 162.0 101.5 72.8 92.0 Rice 11.9 22.0 33.3 28.9 26.2 37.6 Calcined bauxite 36.3 56.5 63.9 74.7 82.9 79.1 Dried bauxite 15.2 12.3 16.2 13.2 16.2 18.9 Alumina 14.0 21.1 26.6 25.3 30.8 32.2 Other 22.0 30.7 62.3 35.6 30.4 35,9 Total Merchandise 135.4 270.2 364.4 279.2 259.3 295.7

Source: Bank of Guyana, mission estimates. - 73 -

Table 3.4: GUYANA - BALANCE OF PAYMENTS, 1976-81

(US$ million)

Actual Preliminary Projected 1976 1977 1978 1979 1980 1981

Exports of Goods and Nonfactor Services 294.3 275.7 313.7 358.8 383.3 445.8 Merchandise Exports 279.2 259.3 295.7 339.8 364.3 424.4 (Sugar) (101.5) (72.8) (92.0) (103.7) (108.0) (118.6) (Bauxite) (113.2) (129.9) (130.2) (155.7) (161.3) (191.6) (Rice) (28.9) (26.2) (37.6) (39.2) (44.7) (57.2) (Other) a/ (35.6) (30.4) (35.9) (41.2) (50,3) (57,0) Nonfactor Services 15.1 16.4 18.0 19.0 19.0 21.4

Imports Of Goods and Nonfactor Services -403.1 -347.5 -qT2.2 -375.8 -389.5 -440.3 Merchandise Imports -363.7 -315.4 -278.6 -337.2 -349.7 -400.5 (Consumer) (-64.8) (-56.1) (-51.4) (-51.7) -54.4 (-58.1) (Intermediate) (-122.6) (-98.2) (-98.4) (-117.8) (-121.1) (-149,4) (Capital) (-118.8) (-88.8) (-60.1) (-87.3) (-90.4) (-100.6) (Fuel and Lubricants) (-53.9) (-62.9) (-66.7) (-78.4) (-81.5) (-92.4) (Miscellaneous) (-3.5) (-9.4) (-2.0) (-2.0) (-2.0) (-2.0) Nonfactor Services -39.4 -32.1 -33.6 -38.6 -39.8 -40.0

Resource Balance -108.8 -71.8 15 -17.0 -6,2 5.5

Net Factor Services -24.2 -21.2 -23.0 -31.0 -28.0 -28.0 Interest -18.4 -14.8 -16.9 -25.9 -23.2 -26.9 Direct Investment Income -3.8 -3.0 -0.6 -0.6 -0.6 - Other Factor Services -2.0 -4.1 -5.5 -4.5 -4.2 -1.1

Current Transfers (net) b/ -4.2 -3.9 -6.0 -5.0 -5.0 -5.0

Current Account Balance -137.2 -97.6 -27.5 -53.0 -39.2 -27.5

Net Public Disbursements 88.7 35.3 39.6 51.0 47.1 44.0 Gross Disbursements (107.5) (59.2) (100.4) 122.4 97.7 94.6 Amortization (-18.8) (-23.9) (-60.8) -71,4 -50.6 -50.6

Other Capital c/ -43.2 0.4 7.9 5.1 3.1 3.1

Capital Account Balance 45.5 -35.7 47.5 56.1 50.2 47.1

Overall Balance 91.7 61.9 -20.0 -3.1 -11.0 -19.6

Change in Reserves (-increase) 91.7 22.3 -12.2 8.2 - -19.6 Arrears - 32.5 -10.2 -11.3 -11.0 - Government Funds - 7.1 2.4 - - -

a/ Includes re-exports. b/ Includes nonmonetary gold. c/ Includes errors and omissions.

Source: Statistical Bureau, Bank of Guyana, IMF, mission estimates. - 74 -

Table 3.5: GUYANA - MERCHIANDISE EXPORTS BY MAJOR COMMODITIES, 1976-81 (US$ million)

1976 1977 1978 1979 1980 1981

Constant (1977) Prices Sugar 104.1 72.8 98.5 105.9 109.4 109.4 Rice 28.3 26.2 41.9 44.1 45.9 49.9 Calcined bauxite 87.4 82.9 69.1 83.7 89.2 98.3 Dried bauxite 15.2 16.2 18.3 19.9 22.4 23.0 Alumina 31.0 30.8 32.9 43.3 43.4 48.9 Other 42.6 30.4 38.3 41.4 48.0 51.9 Total Merchandise 308.6 259.3 299.0 338.3 358.3 381.4

Price Indices (1977 = 100) Sugar 97.5 100.0 93.4 97.9 98.7 108.4 Rice 102.1 100.0 89.7 88.9 97.4 114.6 Calcined bauxite 85.5 100.0 114.5 114.2 109.9 119.8 Dried bauxite 86.8 100.0 103.3 100.0 102.2 110.9 Alumina 81.6 100.0 97.9 92.8 93.1 98.8 Other 83.6 100.0 93.7 99.5 104.7 109.9 Total Merchandise 90.5 100.0 98.9 100.4 101.7 111.3

Current Prices Sugar 101.5 72.8 92.0 103.7 108.0 118.6 Rice 28.9 26.2. 37.6 39.2 44.7 57.2 Calcined bauxite 74.7 82.9 79.1 95.6 98.0 117.8 Dried bauxite 13.2 16.2 18.9 19.9 22.9 25.5 Alumina 25.3 30.8 32.2 40.2 40.4 48.4 Other 35.4 30.4 35,9 41.2 50.3 57.0 Total Merchandise 279.2 259.3 295.7 339.8 364.3 424.4

Source: Bank of Guyana, mission estimates. - 75 -

Table 3.6: GUYANA - DIRECTION OF FOREIGN TRADE, 1973-78 (US$ million)

Preliminary 1973 1974 1975 1976 1977 1978

Total Exports (f.o.b.)-/ 135.4 270.2 364.4 279.2 259.3 295.7 UrLited Kingdom 40.3 55.8 95.2 84.5 86.0 85.7 CARICOM 21.5 30.5 41.5 43.1 40.3 45.5 United States 28.6 73.8 79.7 55.1 46.7 61.4 Canada 6.9 14.0 12.4 7.3 13.0 20.6 EEC (excluding UK) 11.2 15.7 26.8 33.8 22.0 32.8 EFTA 1.9 14.6 8.7 9.6 16.7 18.9 Japan 5.4 6.9 6.9 6.6 10.0 8.2 Spain 1.3 1.5 2.4 3.3 3.9 3.4 USSR 8.2 3.8 27.6 - 1.5 2.5 People's Republic of China 1.0 9.4 4.1 2.4 - - Rest of World 9.1 44.2 59.1 33.5 19.2 16.7

Total Imports (c.i.f.) 175.1 254.4 344.1 363.6 315.4 278.6 United Kingdom 45.0 52.0 68.2 83.7 64.9 61.1 CARICOM 39.1 67.3 67.9 81.0 80.9 80.6 United States 42.8 65.5 93.2 103.5 84.3 62.8 Canada 9.4 12.6 13.8 15.2 11.6 11.3 EEC (excluding UK) 18.5 26.1 27.3 24.5 29.9 23.3 EFTA 2.5 3.5 3.5 5.6 4.7 4.7 Japan 5.9 8.3 13.3 16.2 10.5 8.3 Spain 1.0 0.4 0.4 2.0 0.7 - USSR - People's Republic of China 1.0 3.4 3.5 7.3 2.2 4.1 Rest of World 9.9 15.3 53.0 24.6 25.7 22.4

a/ Includes re-exports. Source: Statistical Bureau - 76 -

Table 4.1: GUYANA - SUMMARY OF EXTERNAL PUBLIC AND PUBLIC GUARANTEED DEBT OPERATIONS, 1973-78 a!

(US$ million)

Preliminary 1973 1974 1975 1976 1977 1978

Outstanding Debt at End of Period 167.0 202.4 265.0 345.8 380.5 420.5 Outstanding Debt at Beginning of Period 150.3 167.0 202.4 265.0 345.8 380.5

Plus: Net Disbursement 16.3 25.7 54.3 88.7 35.3 40.0 Disbursements (20.8) (31.1) (60.4) (107.5) (59.2) (100.8) Amortization (-) (-4.5) (-5.4) (-6.1) (-18.8) (-23.9) (-60.8)

Valuation Adjustment b/ 0.4 9.7 8.3 -7.9 -0.6 -

Debt Service Payments 10.5 13.3 15.7 37.2 38.7 77.7 Amortization 4.5 5X4 6.1 18.8 2349 60.8 Interest 6.0 7.9 9.6 18.4 14.8 16.9 (in percent) Outstanding Balance/G.D.P. 54.5 47.5 56.7 77.8 86.9 84.6

Net Disbursements/G.D.P. 5.3 6. 11.6 20.0 8.1 8.0 Debt Service/G.D.P. 3.4 3.1 3.4 8.4 8.8 15.6 Debt Service/Exports of Goods and N.F.S. 6.6 4.5 4.2 12.6 14.0 24.8

Average interest Rate c/ 4.0 4.7 4.7 6.9 4.3 4.4

a/Excludes loans of a maturity of less than one year and liabilities of the Bank of Guyana. b/Includes adjustments due to exchange rate changes and changes in sinking fund balances arising from factors other than contributions (which are treated as amortization). C/Ratio of interest payments to debt at beginning of period.

Source: Ministry of Finance, mission estimates. - 77 -

Table 5.1: GUYANA- CENTRAL GOVERNMENTREVENUES, 1972-78

(G$ million)

Actua1 Preliminary 1972 1973 1974 1975 1976 1977 1978

Direct Taxes 72.5 63.4 1.88.2 241.8 196.1 174.5 166.0 Company Taxes a/ 48.1 39.2 48.8 73.0 67.0 108.0 __T. Personal Income Tax 20.6 20.2 27.4 30.2 38.6 39.0 56.4 Property Tax 2.6 2.9 2.8 1.8 4.1 4.3 3.7 Estate Duty 0.6 0.7 0.7 1.0 0.9 1.4 1.1 National Development Surtax 0.6 0 4 5.5 7.5 9.2 9.5 14.b Sugar Levy - - 91.0 227.3 76.2 12.0 - Other b/ - - 0.1 0.1 0.1 0.3 0.1

Indiract Taxes 67.6 71.2 102.9 128.2 140.4 126.5 148.2 Import Duty 32.1 30.2 33.2 41.4 52.0 39.1 33.9 Defense Levy 4.3 - - - - - Excise Duties 14.6 16.2 17.3 20.5 23.6 26.4 35.8 Consumption Tax 8.6 16.8 37.5 42.4 49.9 44.4 54.8 Export Duties 2.3 3.5 4.1 2.1 1.3 1.6 1.9 Entertainment Tax 0.9 0.9 1.0 1.1 0.9 1.2 1.5 License Fees 2.8 3.3 3.7 3.4 3.6 3.5 6.6 Other c/ 2.0 0.3 6.1 17.3 9.1 10.3 13.7

Other Nontax Current Revenues 17.8 25.6 24.0 28.2 53.2 51.4 49.6 Rent, Royalties & Participation in Enterprises 2.4 1.6 1.4 1.0 1.2 1.1 1.2 Interest 0.6 0.8 0.1 - - 2.7 1.0 Dividends from Non-financial and Finatwial EnterTrises 4.0 11.0 7.2 6.0 28.7 28.7 21.9 Fees, Fines, etc. 3.3 3.4 3.2 5.2 7.5 7.2 10.4 Post Office Receipts 3.0 3.0 3.7 4.4 - - Bank of Guyana Profits 2.4 3.1 5.6 8.5 13.0 9.2 9.0 Harbor Service Profits 0.5 0.3 0.4 0.4 0.2 - Other 1.6 2.4 2.4 2.7 2.6 2.5 6.1

Total Current Revenue 157.9 160.2 303.2 497.3 389.7 355.4 363.8 External Grants U.K. ------U.S. AID 1.2 1.8 - - - - Canada 0.3 0.3 - - - - Other 0.6 1.5 1.5 0.3 - 2.1 2.2 Sale of Land & Other Assets 0.4 0.4 - - - - Other 0.1 - 0.2 0.1 0.2 0.6 -

Total Capital Revenue 2.6 4.0 1.7 0.4 0.2 2.7 2.2

TOTAL REVENUE 160.5 164.2 304.9 497.7 389.9 358.1 366.0

a/ Income, corporation and withholding taxes. b/ Excess profit and development taxes. c/ Warehouse rents and charges, policy surrender tax, duty on transport and mortgages, etc.

Source: Ministry of Finance. - 78 -

Table 5.2: GUYANA - CENTRAL GOVERNMENT EXPENDITURE BY ECONOMIC CLASSIFICATION, 1972-78

(G$ million)

Preliminary 1972 1973 1974 1975 1976 1977 1978

Total Expenditure 204.6 270.7 340.2 638.8 803.0 543.6 533.0

Current Expenditure a/ 144.0 200.5 249.4 Goods and Services 327.3 457.2 415.0 424.0 - b/ 106.9 140.2 Personal Emoluments 160.0 227.1 304.2 283.3 281.9 - (65.0) (89.6) (91.4) Other goods (110.0) (128.8) (157.9) (182.0) and services - (41.9) (50.6) (68.6) (117.1) (175.4) (125.4) (99.9) Interest 16.2 32.5 Transfers 39.8 39.8 69.6 71.2 93.8 19.4 26.4 47.4 57.3 Consolidated public sector 78.6 57.6 46.6 (6.0) (0.7) (0.6) Other public sector (6.7) (10.4) (1.7) (0.5) (0.5) (7.5) (13.3) (13.6) Subsidies to private sector (16.8) (15.8) (23.1) (9.6) (9.4) (20.8) Pensions and (24.4) (34.2) (20.9) (3.2) gratuities to private sector (2.1) (6.7) International (9.4) (9.0) (12.7) (13.7) (18.5) (1.2) (2.1) (3.3) Refund of revenue (3.6) (4.5) (5.5) (1.3) 1.5 1.4 2.2 3.1 4.8 2.9 1.7 Capital Expenditure 60.6 70.2 90.8 Capital formation 311.5 345.8 128.6 109.0 44.5 59.2 69.5 187.1 Acquisition of financial assets 174.0 104.2 88.6 0.8 4.4 3.2 70.0 Transfers (grants and loans) 115.7 3.7 0.6 15.3 6.6 18.1 54.4 Consolidated public sector 55.7 20.7 19.8 (12.9) (1.8) (3.8) (6.5) Other public sector (9.1) (7.1) ( - ) ( - ) (3.0) (11.8) Private sector (35.8) (26.1) (1.0) (7.2) (1.9) (0.8) International (1.7) (10.0) (16.8) (9.6) (10.3) (0.5) (1.0) (0.8) (2.1) (3.7) (3.0) (2.3) a/ Includes defense, police, and national service expenditures. h/ Consists of wages and salaries, overtime payments, and other c/ Residual compensation.

Source: Ministry of Finance. - 79 -

Table 5.3: GUYANA - CENTRAL GOVERNMENT FINANCES, 1976-81 (G$ million)

Actual Preliminary Pro jec Le(:( 1976 1977 1978 1979 198( 1981

Current Revenues 389.7 355.4 363.8 436.0 468.() 50)SO

Tax Revenue 336.5 304.0 314.2 366.9 393.0 428.0 In,come Tax 196.1 168.8 161.2 183.9 197,8 212,2 ProDertv Tax 5.0 5.7 4.8 6.0 6.0 6.0 Produaction & Consumption 73.5 70.8 90.6 110.0 119.3 133.7 International Trade & 55.7 56.0 42.9 45.2 46.5 49.6 Transactions Other Tax Revenue 6.2 2.7 14.7 21e8 23.6 26.5

Non-Tax Revenue 53.2 51.4 49.6 69.1 75.0 80.0

Current Expenditure 457.2 415.0 424.0 504.0 514.0 548.0

Personal Emoluments 128.8 157.9 182.0 191.0 200.5 219.8

Goods and Services 346.4 257.1 242.0 313.0 313.5 328.2 Interest 69.6 71.2 93.8 136.4 137.4 139.0 Transfers 78.6 57.6 46.6 51.6 45.0 45.0 Other 198.2 128.3 101.6 125.0 131.1 144.2

Current Surplus/Deficit -67.5 -59.6 -60.2 -68.0 -46.0 -40.0

Capital Receipts 0.2 2.7 2.2 19.0 3.0 3.0

Capital Expenditures 345.8 128.6 109.0 225.0 2 t).0 273.0 overall Surplus/Deficit -413.1. -185.5 -167.0 -274.0 -323.0 -410.0

Source: Ministry of Finance, mission estimates. Table 5.4: GUYANA - ACTUAL AND PROJECTED PUBLIC SECTOR FINANCES, 1 9 7 6 -8 1 a/ b/ (Current G$ million)

Actual Preliminary Projected 1976 1977 1978 1979 1980 1981 Current Revenues 1,423 L,542 1,760 2,093 2,340 2,625 (Central Government) ( 390) ( 355) ( 364) ( 436) ( 468) ( 508) (National Insurance Scheme) ( 28) ( 32) ( 45) ( 69) ( 72) ( 77) (Public Enterprises) (1,005) (1,155) (1,351) (1,588) (1,800) (2,040) Current Expenditure 1,329 1,468 1,616 1,856 2,028 2,243 (Central Government) ( 457) 415) ( ( 424) ( 504) ( 514) ( 548) (National Insurance Scheme) ( 6) ( 9) ( 11) ( 13) ( 14) ( 15) (Public Enterprises) 866) ( (1,044) (1,181) (1,339) (1,500) (1,680) Adjustment for Intrapublic -71 -47 -75 -114 Sector Transfers (Current -142 e167 Transfers less Taxes and Dividends)

Current Account Surplus/Deficit(-) 23 -27 69 123 170 215 Capital Revenue (Net of Capital 1 9 8 22 8 Transfers plus Extraordinary 8 Revenue)

Capital Expenditure 476 299 251 343 (Central. Government Fixed 365 403 (174) (104) ( 89) (173) Investment) (225) (210) (Public Enterprises Fixed (124) (151) (129) (122) ( 85) Investment) (130) (Acquisition of Financial (116) ( 4) ( 1) ( 17) Assets) ( 12) ( 12) (Capital Transfers to Non- ( 26) ( 1) ( 7) ( 19) Consolidated Public Sector) ( 30) ( 34) (Capital Transfers to ( 17) ( 10) ( 10) 11) Private Sector) ( ( 12) ( 15) (Capital Transfers to ( 4) ( 3) ( 2) ( 1) International Agencies) ( 1) ( 2) (Other) (15) (26) (13) (-) (-) (-) Overall Surplus/Deficit(-) -452 -317 -174 -198 -187 -180 Financing 452 317 174 198 187 180 !,let External Borrowing 226 90 101 130 120 112 (Gross Disbursements) (274) (151) (256) (312) (249) (241) (Amortization) (-48) (-61) (-155) (-182) (-129) (-129) Net Banking System Borrowing 257 191 58 64 65 45 Other -31 36 13 4 2 23 a/ Because of unavailability of comparable statistics, this table does not incorporate the operations of local governments, the Sugar Industry Funds, the University of Guyana, several other decentralized agencies. and b/ Assumes the seven year refinancing of BIDCO's G$78.9 million and a rollover through lS81 of the PRoval Rank of Canada credit of (-t'25.5 million and Chase Manhattan and Lloyds Bank loans of G$12.7 million. Soiirc- 1 M1n4qtrv of i'ance, nfvsjsion estiT,ate9. - 81 -

Table 5.5: GUYANA - FINANCING OF TUE PTTRLIC SECTOR INVESTMENT PROGRAM, 1976-81 al b (Current G$ million)

Actual Preliminary Projected 1976 1977 1978 1979 1980 1981

403 Public Sector Capital Expenditure 476 299 251 343 365 403 Financing 476 299 251 343 365 215 Public Sector Savings 23 -27 69 123 170 (-40) (Central Government) (-67) (-60) (-60) (-68) (-46) ( 62) (National Insurance Scheme) ( 22) ( 23) ( 34) ( 56) ( 58) (193) (Public Enterprises ( 68) ( 11) ( 95) (135) (158) 8 Capital Revenues 1 9 8 22 8 68 Net Domestic Borrowing 226 227 73 68 67 ( (Banking System) (257) (191) ( J8) ( 64) ( 65) 45) ( 23) (Other (-31) ( 36) ( 13) ( 4) ( 2) 112 Net External Borrowing 226 90 101 130 120 (241) (Gross Disbursements) (274) (151) ( 256) (312) (249) (-129) (-129) (Amortization) (-48) (-61) (-155) (-182)

As % of GDP 23.3 Public Sector Capital Expenditure 42.0 26.8 19.8 24.1 23.7 11.0 12.5 Public Sector Savings 2.0 -2.4 5.4 8.7 0.5 0.5 Capital Revenues 0.1 0.8 0.6 1.5 3.9 Net Domestic Borrowing 20.0 20.3 5.8 4.8 4.4 6.5 Net External Borrowing 20.0 8.1 8.0 9.1 7.8

As % of Public Sector Capital Expenditure 46.6 53.3 Public Sector Savings 4.8 -9.0 27.5 35.9 2.0 Capital Revenues 0.2 3.0 3.2 6.4 2.2 16.9 Net Domestic Borrowing 47.5 75.9 29.1 26.2 20.5 27.8 Net External Borrowing 47.5 30.1 40.2 37.9 32.9

a/ Because of unavailability of comparable statistics, this table does not incorporate the operations of local governments, the Sugar Industry Funds, the University of Guyana, and several other decentralized agencies. b/ Assumes the seven year refinancing of BIDCO's G$78.9 million and a rollover through 1981 of the Royal Bank of Canada credit of G$25.5 million and of Chase Manhattan and Lloyds Bank loans of G$12.7 million in sales agent Special Advance to BIDCO and G$23.3 million in working capital loans to GUYSUCO. Source: Bank of Guyana, Ministry of Economic Development, mission estimates. - 82 -

Table 5.6: GUYANA - SUMMARY OF PUBLIC SECTOR CAPITAL EXPENDITURE BY SECTOR, 1979-81

G$ million ------Total ------% ------Total 1979 1980 1981 1979-83. 1979 1980 1981 1979-81

Agriculture, Fisheries and Forestry 109.3 233.9 191.7 534.9 31.9 64.1 47.6 48.1

Manufacturing and Mining 84.1 11.5 18.7 114.3 24.5 3.1 4.6 10.3 Transportation 64.4 38.4 11.5 114.3 18.8 10.5 2.9 10.3 Power 9.7 2.6 6.1 18.4 2.8 0.7 1.5 1.7 Water Supply 5.4 2.6 7.8 15.8 1.6 0.7 1.9 1.4 Education 11.9 15.9 20.0 47.8 3.5 4.4 5.0 4.3 Housing 3.1 - - 3.1 0.9 - - 0.3 Health 6.3 5.1 5.1 16.5 1.8 1.4 1.3 1.5 Miscellaneous 48.8 55.0 142.1 245.9 14.2 15.1 35.2 22.1 Total 343.0 365.0 403.0 1,111.0 100.0 100.0 100.0 100.0

Source: Table 5.7, State Planning Commission. - 83 -

Table 5.7: GUYANA - BREAKDOWNOF PUBLIC SECTOR CAPITAL EXPENDITURE, 1979-81

(G$ million current prices)

1979 1981 External Financing Local Total External Financ-.. , Local Total External Financing Local Total

Ongoing Pro jects Central Government

Mahaica-Mahaicony-Abary 15.4 12.6 28.0 37.7 10.7 48.4 30.7 13.3 44.0 Black Bush Irrigaion 1.0 0.5 1.5 13.4 J.:) - - I.9 21.1 9.4 36.9 Tapakuma Irrigation 16.9 6.0 22.9 16.9 11.6 28.5 7.4 12.3 19.7 U.N. Mapping 0.8 0.4 1.2 ------Topographic Surveys 0.4 0.2 0.6 ------Education & Extension of Agriculture 1.3 0.3 1.6 - - - - - Veterinary Diagnostic Laboratory 1.3 0.6 1.9 ------A.I. Service 0.1 - 0.1 ------Eradication of Acoushi Ants 0.1 - 0.1 Research Soils 0.2 - 0.2 Cardi 0.8 0.1 0.9 Food Crop Production 0.8 0.2 1.0 - - - - - Agricultural Sector Planning 2.0 - 2.0 Rgriculture Repair Workshop 1.5 1.0 2.5

U.N. Forest Industries Demonstration & 0.8 0.1 0.9 Training Project Canadian Technical Assistance Program 1.2 0.2 1.4 Upper Demerara Forestry - - - 46.0 5.0 51.0 12.2 2.1 14.3

Demerara Fish Complex 5.4 - 5.4 2.0 0.5 2.5 4.0 1.0 5.0 Miscellaneous Fisheries - - - 5.8 1.9 7.7 4.0 1.0 5.0 Textile Mill 2.5 2.5 5.0 - - - -

Georgetown Road Approaches 3.3 - 3.3 - - East Bank Berbice Road 2.6 2.4 5.0 5.0 4.0 9.0 - Feeder Roads 2.2 0.9 3.1 11.0 3.0 14.0 8.6 2.9 11.5 East Coast Demerara Roads 1.1 0.1 1.2 ------Melanie Demishana Workshop 1.6 4.4 6.0 - - - - - Upper Demerara Forestry Road 4.0 2.0 6.0 - - - - - West Demerara Road 1.8 5.0 6.8 - - - - - Essequibo Sea & River Defenses 3.5 1.7 5.2 - - - - -

Pure Water Supply Projects 1.5 1.0 2.5 ------Linden Pure Water Supply 2.1 0.8 2.9 - - - - -

Cargo Vessels 4.0 O.2 4.2 2.0 0.2 2.2 - - Launches 1.6 0.1 1.7 - - - - Dredger & Dredging Equipment 2.8 0.i 3.1 - - - - Hydrographic 0.1 - 0.1 - - - - Aircraft 'SKYVAN' 3.5 - 3.5 - - - - Hinterland Airstrips 0.2 0.7 0.9 - - - - -

Land Development & House Construction 0.4 2.4 2.8 - - - - - Urban Regional Planning Project 0.3 - 0.3 - - - - -

U.G. Library Extension 0.3 0.7 1.0 - - - - - Second Education Project 6.0 4.0 10.0 - - - - - National Library Extension 0.2 0.1 0.3 - - - - -

Rural Hospitals 0.3 0.3 0.6 - - - - - Referral Hospital Systez,s 3.3 1.1 4.4 - - - - - Georgetown Hospital Feasibility Study 0.2 - 0.2 ------Leprosy Control Unit 0.6 - 0.6 - - - - -

Community Development Project - 5 0.3 0.8

SUBTOTAL 100.5 53.2 13.7 139.8 42.4 182.2 90.4 41.0 131.4

Rest of Public Sector Guyana Sugar Corporation 5.9 14.1 20.0 6.0 14.9 20.9 1.5 15.5 17.0 Guyana Rice Board 0.4 3.3 3.7 - - - - Second Rice M-dernization 1.2 0.5 1.' 9.4 2.2 11.6 11.7 3.9 15.6 Livestock Development 1.6 0.4 2.0 - - - Guyana Forest Industries Corporation 1.3 - 1.3 - Guymine 33.0 30.2 63.2 - Guyana Liquor Corporation 0.8 7.1 7.9 4.8 2.3 7.1 1.5 2.5 4.0 Guyana Glassworks Limited 8.0 - 8.0 - Guyana Electricity Corporation 8.7 1.0 9.7 - Guyana Teleconmsnications Corporacion 1.5 3.0 4.5 - - - - -

SUBTOTAL 62.4 59.6 122.0 20.2 19.4 39.6 14.7 21.9 36.6 - 84 - Page 2

Table 5.7: GUYANA- BREAKDOWNOF PUBLIC SECTORCAPITAL EXPENDITURE, 1979-81 (G$ million current prices)

1979 1980 1981 External Financing Local Total External Financing Local Total External Financing Local Total New Project.

Agriculture Sector Planning 2.0 2.0 1. 5 0 .3 1.8 Dairy Development Project 1.0 0 .3 1. 3 - - - 1.0 0.3 1.3 4.1 Technical Assistance - Agriculture 1.0 5.1 - - - 0.7 - 0.7 & Mechanization Development - 0.7 n - Bagasse Particle Board - - - 1.3 Citrus 0.2 1.5 4.1 1.0 5.1 Processing - - - 0.8 Oil Palm Development - 0.8 1.5 0.5 2.0 Aquaculture - - - 3.8 1.3 5.1 7.6 - - - 0.2 5.1 12.7 0.2 0.4 0.2 0.2 0.4 Pineapple Processing - - - 2.1 0.5 2.6 Demerara Fish Port Complex - - - 0.8 - 0.8 2.3 - 2.3 Technical Assistance - Kaolin Mining ------0.5 - 0.5 Mards Repair Workshop 1.5 1.1 2.6

Development of Export-Oriented & - - - 1.8 - 1.8 Import Substitution Industries 4.8 0.5 5.3 Guyana Cement Plant - - - 2.3 0.3 2.6 6.9 0.7 7.6 Manufacture of Farm Handtools ------1.2 0.6 1.8 Water Supply Improvement Project - - - 1.8 0.8 2.b 5.3 2.3 7.6 Technical Assistance - Upper Lands Aquifer ------0.2 - 0.2 Georgetown - Corentyne Link - - - 2.3 0.3 2.6 iechnical Assistance - Generation of 4.6 0.5 5.1 ------Electricity from Wood Waste 0.7 0.3 1.0

Technical Asvistance - Upgrading the Levels 0.4 0.2 0.6 - - - of Managerial Skills

Health Care Delivery System 0.5 - 0.5 3.8 1.3 5.1 3.8 1.3 5.1 Mecha!iical Workshop Complex 6.0 - 6.0 2.9 - 2.9 - - SUBTOTAL 10.4 1.3 11.7 25.0 5.0 30.0 51.6 14.8 66.4 NonFr-ectized

SUBTOTAL - 7.6 7.6 - 58.2 58.2 - 26.5 26,5 New Pro jects to be Identified

SLBTOTAL - - - - 59.3 19.8 79.1 OtherA'

SUBTOTAL - 48.0 48.0 - 55.0 55.0 - 63.1 63D. Summary Ongoing Projects - Central Government 100.5 53.2 153.7 139.8 42.4 182.2 Ongoing Projects - Rest of 90.4 41.0 131.4 Public Sector 62.4 59.6 122.0 20.2 19.4 39.6 New Projects - Central 14.7 21.9 36.6 Government & 10.4 1.3 11.7 25.0 5.0 30.0 Rest of Public Sector 51.6 14.8 66.4 Nonprojectized - 7.6 7.6 - 58.2 58.2 - 26.5 26.5 New Projects to be Identified ------59.3 19.8 79.1 Other a7- 48.0 48.0 - 55.0 55.0 - 63.0 63.0 TOTAL 173.3 169.7 343.0 185.0 180.0 365.0 216.0 187.0 403.0

a/ Includes acquisition of financial assets, capital transfers to nonconsolidated public sector, to private sector and to international agencies. Source: State Planning Commission, Bank of Guyana, mission estimates. - 85 -

Table 6.1: GUYANA - SUMMARY OF MONETARY ACCOUNTS (Current G$ million)

1972 1973 1974 1975 1976 1977 1978

-80.0 Net International Reserves 58.2 5.6 70.J 180.1 -54.0 -111.0 667.0 730.0 Net Domestic Assets 198.5 281.9 258.9 239.6 483.0 661.0 Public Sector (net) 96.5 169.7 139.3 T1.5T 412.0 6T3 (603.0) Central Government ( 88.8) (167.1) (102.9) (148.0) (388.0) (531.0) 74.0) Rest of Public Sector (net) ( 7.7) ( 2.6) ( 36.4) ( 7.5) ( 24.0) ( 72.0) ( ) (-16.0) Public Sector Arrear Deposits ( -- ) ( -- ) ( -- ) ( -- ) ( -- ) ( -- 113.0 121.0 Private Sector 97.5 117.8 125.6 117.4 120.0 -52.0 Other 4.5 -5.6 -6.0 -33.3 -49.0 -49.0 556.0 650.0 Liabilities to Private Sector 256.7 287.5 329.8 4f9.7 429.0 167.0 Currency Issue 72.2 78.6 108.9 149.9 112.0 152.0 404.0 442.0 Commercial Banks 184.5 208.9 .220.9 269.8 317.0 41.0 Arrear Deposits ------

Source: Bank of Guyana, IMF. - 86 -

Table 7.1: GUYANA - OUTPUT OF SELECTED COfMMODITIES, 1973-78

Preliminary 1973 1974 1975 1976 1977 1978 Agricultural Products (volume in thousands of long tons, value in millions of Guyana dollars, and unit value in Guyana dollars per long ton, unless otherwise indicated)

Sugar Area reaped (thousand acres) 97.5 139.3 108.2 137.8 113.8 144.4 Yield per acre (long tons) 33.4 22.7 32.1 29.3 27.3 Production of cane 29.2 3,252 4,090 3,475 Company estates 4,037 3,108 4,218 (2,985) (3,452) (2,925) (3,526) Independent farmers (2,619) (3,632) (267) (648) (549) (511) (489) (586) Sugar yield per acre (long tons) 2.7 2.4 2.8 2.4 2.1 2.2 Production of sugar 265.7 340.8 300.4 332.5 Spring 241.5 324.8 (94.4) (163.1) (126.4) (149.4) Autumn (104.3) (159.7) (174.3) (177.7) (173.9) (183.1) Exports (137.2) (165.1) Voluimn 225.2 302.4 285.0 297.0 207.7 280.7 Value 75X9 284.E 413.1 Unit value 258.7 185.7 234.6 337.0 943.0 1,449.6 871.0 894,1 835.8 Local consumption Volume 31.9 30.6 29.3 Value 33.9 31.5 31.6 4.4 4.4 4.2 5.5 6.0 Unit value 7.5 138 144 143 162 190 Changes in stocks (volume) 237 8.6 7.8 -13.9 1.6 2.3 12.5 Rice Area, reaped (thousand acres) 229.3 286.0 288.0 207.5 357.4 299.3 Yield per acre (long tons) 0.48 0.54 0.61 0.53 Production 0.59 0.61 110.0 153.3 175.4 Spring 110.0 211.5 182 (31&5) (43.0) (61.0) (48.0) (80.7) Autumn 2 (62.4) (78.5! (110.3) (122.0) t(6 .0) (130.8) (119.6) Domestic seed and feed plus changes in farmers' stocks (residual)a/ 55.0 101.3 53.4 -11.0 62.4 45.0 Purchases by Rice Board Volume 75.1 77.1 122.0 116.0 Value 111.6 124.6 19.4 27.3 52.5 49.9 54.5 Unit value 56.4 259 354 430 430 488 Exports 453 Volume 48 51 82 Value 71 65.9 104.8 25.0 49.0 84.8 73.6 Unit value 66.8 96.0 521 960 1,034 1,047 1,014 916.3 Local sales by Rice Board Volume 20 25 Value 40 44 46 42 5.1 7.0 11.1 12.7 12.9 Unit value 6.9 255 280 277 277 280 402 Changes in stocks of Rice Board (volume) 7 1 -- 5 37.2 -9.8

Livestock and Related Products

Meat production (million pounds) Beef 9.6 F83 8.5 8.8 Mutton 6.9 7.3 3.1 2.5 3.5 Pork 4.9 3.1 2.5 3.5 4.9 5.1 Poultry meat b/ 3.7 12.6 12.5 17.0 20.9 16.3 22.9 Milk (million gallons) 3.6 2.4 2.5 2.7 Eggs (millions) 28.1 34.9 36.5 56.3 52.9 32.:5

Fishing (million pounds) Fish 29 36 35 35 Shrimp 41 32 13 12 10 7 7 7

Forestry (millions of cubic feet) Timber 8.2 8.8 7.9 8.9 6.2 5.9 a/ Includes stockfeed. b/ Commercial producers only. Not available - 87 -

Table 7.1 (concluded): GUYANA - OUTPUT OF SELECTED COMMODITES

Preliminary 1973 1974 1975 1976 1977 1978 Mineral Products (volume in thousands of long tons, value in millions of Guyana dollars, and unit value in Guyana dollars per long ton, unless otherwise indicated)

Dried metal grade bauxite c/ Production 1,665 1,383 1,350 969 1,001 Exports Volume 1,647 1,338 1,363 825 882 994 Value 31.9 27.5 41.5 33.7 41.2 48.2 Unit value 19.4 20.6 30.4 40.8 46.8 48.5

Calcined bauxite Production 637 726 778 729 709 Exports Volume 664 767 772 731 693 578 Value 76.1 125.8 163.0 190.6 211.5 201.3 Unit value 114.6 164.0 211.1 260.8 304.9 348.9

Alumina d/ Production 234 311 294 265 273 Exports Volume 234 302 320 265 263 281 Value 29.4 47.5 67.7 64.4 78.5 82.0 Unit value 125.6 155.6 211.6 243.0 298.5 291.8

Miscellaneous Manufacturers

Rum (million proof gallons) 4.7 6.0 5.0 4.6 3.2 3.4 Molasses (million gallons) 17.1 21.5 18.2 23.8 19.8 21.6 Copra (thousand pounds) 7.6 5.0 10.7 11.3 5.9 4.8 Copra derivatives of which: Copra meal (thousand pounds) (2.8) (0.9) (4.4) (4. ) (1.2) (1.4) Edible oil (thousand gallons) (788.0) (290.0) (701.0) (757.0) (312.4) (306.0) Soap (million pounds) (4.0) (3.9) (5.0) (4.5) (4.2) (3.6) Margarine (million pounds) (2.1) (2.8) (4.2) (4.7) (4.6) (4.3) Bacon (thousand po4nds) 129 205 310 428 580 207.3 Ham (thousand pounds) 212 158 176 206 191 199.7 Sausage (thousand pounds) 69 42 28 17 19 4.3 Beer and stout (million gallons) 1.9 2.0 2.3 3.1 3.0 2.7 Flour.(thousand long tons) 36.6 36.5 40.3 39.4 35.9 35.3 Cigarettes,(thousand pounds) 923 977 990 1,396 1,394 1,290 Stockfeed (million pounds) 61.4 58.2 80.4 93.0 80.0 100.0 Matches (thousand boxes) 239 236 243 225 266 248

Sources: Statistical Bureau; Ministry of Agriculture; GUYSUCGO; GRB; Bank of Guyana; IMF. c/ Includes reFracEory and chemical bauxite d/ Includes alumina hydrate. . ot available Table 7.2: GUYANA - ELECTRICITY GENERATION AI4D CONSUMPTION, 1972-77 (MWh)

1972 1973 1974 1975 1L976 1977

Total Generated 340.1 361.6 369.7 383.4 391.7 430.7 Of which: Public utilities 174.9 189.4 194.6 207.2 212.2 232.9 Total Consumed 305.2 329.8 330.3 327.8 353.5 386.8 Residential 62.6 69.7 70.8 77.8 82.9 86.8 Commercial and industrial 245.4 251.8 250.4 240.0 260.6 288.7 Other 7.3 8.3 9.1 10.0 10.0 11.3

Source: Ministry of Economic Development, Statistical Bureau. - 89 -

Table 8.1: CONSITMEIR PRTCE INDICES, 1970-7a

(1970 - 100)

Total Food Clothing Housing nther

Guyana

1970 100.0 100.0 100.0 100.0 100.0 1971 101.7 101.9 105.4 100.6 100.4 1972 106.7 109.5 110.3 100.8 104.4 1973 117.2 123.7 128.8 101.8 111.7 1974 140.3 157.4 154.1 110.1 122.0 1975 148.7 166.7 172.4 113.5 128.8 1976 161.7 187.2 186.7 114.9 135.1 1977 179.1 201.6 219.4 117.2 158.3 1978 .. ..

Urban

1970 100.0 100.0 100.0 100.0 100.0 1971 101.0 101.2 104.8 lofn.4 100.0 1972 106.0 110.1 107.2 100.5 105.1 1973 114.0 123.3 119.9 100.8 111.3 1974 134.0 155.9 138.8 107.3 125.1 1975 144.6 169.0 153.5 113.2 135.2 1976 157.6 192.3 162.5 113.4 147.6 1977 170.7 208.7 185.9 115.3 164.5 1978 196.5 244.7 240.7 116.6 195.5

Rural

1970 100.0 100.0 100.0 100.0 100.0 1971 102.0 102.2 105.6 100.7 100.5 1972 106.8 108.7 111.4 100.9 104.2 1973 118.0 123.1 132.2 102.1 1.11.6 1974 142.3 157.3 159.7 110.8 120.3 1975 150.2 165.7 179.8 113.6 125.5 1976 162.9 184.3 195.8 115.3 129.8 1977 181.9 204.6 231.4 117.9 154.7 1978 ......

a/ Average during period. .. not available Source : Ministry of Economic Development, Statistical Bureau. - 90 -

Table 8.2: GUYANA- RANHOURSWORKED AND EARWNINO,1972-78 (GS)

1972 1973 1974 1975 1976 1977 1W7W AveraW e Weekly Aver Weekly age Average WeeAlvreWYAe ky A,,,, WkY Average Weekly AverYe Weekly Hours £orelwno WWours Eareloge Woure Earolego Wours Earnings Weaurs EaroloWa Woors Earnings Wours Earaloge .,oekd per per worked per per worked per per worked per per worked pr per worked per per worked per par operOfor operator o neratar oWerater operator- operator operator oUtrator operator oWoraEor operator operaror ert o rar I. Aorleuleore Sugar 35.90 34.45 33.70 34.04 38.20 40.88 34.92 45.73 36.07 57.47 35.47 53.51 . 70.00 I U. Nloeanufacturf n Sugar b/ 49.20 42.50 48.6U 44.63 52.40 sUoS 51.00 58.30 53.43 7U.07 53,23 65.76 .. 88.00 Other fobt-, keerages A tobacro 43.30 39.22 42.30 39.18 42.9U 43.82 43.6U 47.78 44.85 31,47 44.37 56.86 .. 66.00 O..er a.. factorIng 45.30 34.95 46.50 38.81 46.90 45.75 48.20 50.55 47.43 33.65 46.53 57.26 .. 72.00 III, HIloig wed urye Baoti,e 39.90 84 65 40,10 86.73 43.10 99.41 43.30 102.1 48.03 113.28 42.47 115.79 .. 142.00 Okher -- tilg and quarryfng 41.3U 34.07 38W20 43.15 55.00 51.35 39.70 36.35 47.78 57.83 57.47 72.77 .. 76.00

-V. OfstribrAko- n.a. 43.04 42.14 34.77 42.40 37.67 41.40 39.52 42.45 43,79 41.67 48.83 .. 51.00 V. other S-rv-rew Wkarves 38.50 57.427 .l4 53.39 44.90 W2.10 41.90 76.52 41.60 79.93 38.17 90.27 .. 93.00 Other trrasp-rc and .o....nobafon48.50 52 37 .7.70 56.51 51.30 42.41 47.70 44.30 48.25 54.52 48.37 63,70 .. 79.00 A EnUineering eelroefioeof 50.5) 53,13 5. 58.39 46.30 61,98 47.70 70.61 46.3W 72.23 48.17 81.14 ,, 02.00

a/ Provisional.11~~ ~. . ,Il"- .d ... f f --. .. . - b/ Teelodleg cler4ool, odeAioioraiivr aed ewaWaerial. staff of sugar estares. cJ 1Establis4eknt ith ot leasI 10 e_plyaeo only.

u leefi ry of Etonoref tevrl-p.est, Ueartleal ureau