Category: Media

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.

The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

A Staff team from the International Monetary Fund (IMF), led by Mr. Arnold McIntyre, visited Georgetown during June 3–14 to hold discussions for the 2019 Article IV Consultation. The team met with Prime Minister Moses Nagamootoo, Finance Minister Winston Jordan, Minister of Legal Affairs and Attorney General Basil Williams, Central Bank Governor Gobind Ganga, other senior officials, representatives from the private sector, banks, the opposition party, labor unions, and other stakeholders.

Economic growth strengthened in 2018 with broad-based expansion across all major sectors. Real GDP grew by 4.1 percent in 2018, up from 2.1 percent in 2017, led by construction and services sectors. Inflation remained steady at 1.6 percent at end-2018, on the back of stable food prices and exchange rate. For 2019, the mission projects real economic growth of 4.4 percent, driven by continued strength in the construction and services sectors ahead of oil production in 2020, and strong recovery in mining. The authorities do not foresee any significant spillovers from the crisis in Venezuela at present. However, the influx of migrants into the hinterland and rural areas could put socio-economic pressures on the local communities.

Weaker export performance and higher imports driven by high value imports related to oil production contributed to a weaker current account balance. In 2018, the current account deficit rose to 17.5 percent of GDP, from 6.8 percent in 2017. The deficit was largely financed by FDI related to the petroleum sector. Reserves stood at US$528 million in December 2018.

Public finances improved in 2018. The central government’s deficit was 3.5 percent of GDP, lower than the budgeted 5.4 percent of GDP. The better-than-expected outturn was largely supported by stronger revenues arising from the pick up in economic activity, as well as continued improvements in tax administration and the tax amnesty program which relaxed interest and penalties on payments of outstanding taxes. In addition, expenditure grew at a weaker pace due to slower capital spending as a result of capacity issues in both the public and private sector. In 2019, the fiscal stance is projected to be appropriately expansionary, at 5 percent of GDP, driven by significant need for infrastructure development and capacity building ahead of oil production.

Guyana’s medium-term prospects are very favorable. The commencement of oil production in 2020 presents an opportunity to scale-up capital and current spending at a measured pace over the medium term to address infrastructure gaps and human development needs, while attenuating debt sustainability concerns at the same time. The mission welcomes the passage of the Natural Resource Fund (NRF) legislation for managing the country’s natural resource wealth; it underscores the authorities’ commitment to fiscal responsibility. To ensure fiscal responsibility is achieved, the mission recommends complementing the NRF legislation with a fiscal framework that constrains borrowing and achieves a balanced budget in the near- to medium-term. To achieve this target, the annual non-oil deficit should not exceed the expected transfer from the NRF. This would ensure that excessive public expenditure will not lead to debt growing at the same time as the NRF accumulates. It is also necessary to preserve the spirit of the NRF framework, which appropriately aims to save part of the income from oil as net wealth for future generations. The pace of scaling-up public spending needs to be gradual to reduce bottlenecks from absorptive capacity constraints, avoid waste, and minimize macroeconomic distortions related to “Dutch” disease that has often inflicted economies experiencing sizable increases in resource-based income.

The mission supports continued efforts by the authorities to strengthen institutional, governance and management practices, which will also help reduce vulnerability to corruption. It commends the ongoing efforts in modernizing the revenue administration and strengthening the public investment management system. At the same time, the mission reiterates the importance of addressing the weaknesses identified in the 2017 Public Investment Management Assessment. Greater urgency is attached to these reforms ahead of the expected increase in public spending as oil production begins. The mission notes authorities’ intent to move to rigorous project selection and prioritization criteria within the context of the new long-term Green State Development Strategy. The authorities are committed to considering mechanisms to further improve fiscal transparency, including relating to the management of natural resources.

The mission encourages building on recent progress in strengthening transparency and governance. Guyana completed its first Extractive Industries Transparency Initiative (EITI) Report in 2019 and started implementing its recommendations to further enhance transparency in the extractive industry. In addition, the recent re-establishment of the Integrity Commission has resulted in over 50 percent of politically exposed persons (PEPs) and other required officers making declarations within the first year. Ensuring greater compliance over time with the asset declaration regime would underscore the authorities’ support and commitment to the UN convention against corruption. The mission also welcomes the progress made in strengthening public procurement, and encourages the authorities to ensure timely compliance with existing regulations and take further actions to fortify the transparency of the procurement system.

The authorities have indicated their concerns that the absence of a ring-fencing arrangement in the Stabroek Production Sharing Agreement could potentially affect the projected flow of government oil revenues. The rapid appraisal and development of multiple oil fields could affect the timing and amount of profit oil to be shared with the government from a producing oil field by allocating costs from various fields under development to the producing field. The authorities are developing strategies to mitigate such a possibility, including a national oil depletion policy to guide extraction and production and clearer ring-fencing rules for new investments.

The mission recommends that the authorities continually reassess the monetary policy stance to reflect changes in macroeconomic outlook or risks surrounding the outlook. The mission encourages exchange rate flexibility as part of the monetary policy framework, given the expected large and potentially volatile foreign inflows from oil production. It encourages the authorities to consider developing over the medium-term, supported by IMF Technical Assistance, the necessary infrastructure for a suitable monetary policy framework that facilitates economic growth and adjustment to oil price shocks while maintaining price stability.

The financial sector remains stable. The mission supports the authorities’ resolute efforts in implementing 2016 Financial Sector Assessment Program (FSAP) recommendations. Credit to the private sector grew by 4.0 percent in 2018, faster than 2.1 percent in 2017. The banking sector nonperforming loans (NPLs) to total loans ratio have fallen slightly to 11.9 percent as of end- December 2018, from 12.2 percent a year before, but remained high. Staff recommends an Asset Quality Review to examine banks’ credit risks and enhance financial sector stability. Four bills were approved by Parliament in 2018, covering deposit insurance, emergency liquidity assistance, bank resolution, and national payment system. The transition to Basel II regime (with some elements of Basel III) is on track for completion by end-2019. Staff encourages the authorities to implement the remaining FSAP recommendations, including eliminating reduced provisioning requirements for “well-secured” portions of NPLs and raising the minimum capital adequacy requirement to 12 percent.

Commendable progress has been made in strengthening the framework for anti-money laundering and counter terrorism financing, based on the 2017 national risk assessment. Guyana has been officially removed from the European Commission’s Money-Laundering Blacklist in February 2019 and is scheduled to undertake a mutual evaluation by the Caribbean Financial Action Task Force in 2022. The Financial Intelligence Unit (FIU) has been actively examining cases relating to suspicious transactions, money laundering, terrorist financing and criminal proceeds including those of PEPs, and is working towards greater collaboration with other global FIUs.

Structural reforms are needed to support economic diversification, and achieve inclusive and equitable growth. Infrastructure bottlenecks, skilled labor shortages, and weaknesses in electricity supply are major obstacles to growth. Staff supports the authorities’ proposed increase in investments to improve access to roads, electricity, and telecommunication services to enhance economic activities, including the hinterland. Simultaneous investment in upgrading the education system is critical and would enhance skills and employment prospects. To address skills gap and satisfy an expected increase in labor demand, Guyana could adopt more liberal or open immigration policies, including free movement of all categories of workers from other CARICOM countries. Promoting more flexible working arrangements could help increase female labor participation. Further regulatory and administrative reforms—including property rights and insolvency regime and reducing bureaucratic red-tape—would help strengthen competitiveness.

The IMF Executive Board is expected to discuss Guyana’s Article IV consultation in August 2019. The mission expresses its sincere thanks to the authorities and other Guyanese stakeholders for their warm hospitality, cooperation and candor.

IMF Communications Department
Media Relations
Press Officer: Maria Candia

Phone: +1 202 623-7100 Email: media@imf.org

Source: https://www.imf.org/en/News/Articles/2019/06/17/mcs061719-guyana-staff-concluding-statement-of-the-2019-article-iv-mission?cid=em-COM-123-38996

Mr. President, fellow Governors, Government representatives, Ladies and Gentlemen: I bring you cordial greetings from the dear, green and great land of Guyana. Allow me, please, to express my profound appreciation for the warm welcome and great hospitality extended by the Government and people of Trinidad and Tobago. To our gracious hostess and Chairperson of the Board of Governors, the Honourable Minister of Planning and Economic Development, Ms.Camille Robinson-Regis, I offer sincere congratulations on a well-arranged meeting.

Minister of Finance, Hon. Winston Jordan attends the First Conference of the Belt and Road Initiative Tax Administration Cooperation Forum BRITACOF2019, in Wuzhen, China which takes place from April 18-20, 2019.

Guyana/China signed an MOU on July 27,2018 for the Belt and Road Initiative. It is the first South American country to do so.

This year Guyana and China will celebrate 47 years of diplomatic relations.

Minister of Finance, Winston Jordan today (April 11, 2019) participated in a signing ceremony with Ms. Tahseen Khan, World Bank Country Director for the Caribbean, for a loan agreement which will build human resource capacity, and strengthen institutional frameworks in the Oil and Gas Sector.

Minister Jordan noted the timely nature of the loan agreement as it sought to provide much needed technical assistance to the emerging Oil and Gas Sector.

Ms. Khan said that the loan agreement will aid in building the capacity of key institutions, such as the Department of Energy, the Environmental Protection Agency and the Ministry of Finance, for prudent management of the oil revenues.

The Hon. Minister was accompanied by Dr. Gobind Ganga, Governor, Bank of Guyana, Dr. Riyad Insanally, Guyana’s Ambassador to USA and Mr. Jason Fields from the Embassy of Guyana.

1. How long is a Government pensioner’s life certificate valid?
A life certificate is valid for three (3) months. It is renewable on or before the last working day of the month in which it expires.

2. Who is authorised to endorse a life certificate?
Life Certificates for pensioners residing in Guyana must be certified by a Notary Public, Commissioner of Oaths, Head of Department, Justice of the Peace, Minister of Religion or the Manager of a Bank.
For pensioners living abroad, life certificates must be certified by a Notary Public or the Guyana Consulate of the country in which the pensioner resides.

Important: The certifying officer must affix an official stamp on the life certificate.

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Requirements for Pensions & Gratuities

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On the occasion of the 44th Annual Meeting of the Islamic Bank Group, in this historic city of Marrakesh, in the Kingdom of Morocco, it is my honour and privilege to convey, on behalf of the President and People of the Cooperative Republic Guyana, our most sincere congratulations to the leadership and staff of the IsDB Group for another successful year, and warmest greetings and thanks to my fellow governors, and the Board of Directors for their work and support to the Cooperative Republic of Guyana.

Excellencies, as you will recall, Guyana became a member of the OIC in 1998 and the IsDB in 2016.  Since then, the support Guyana has received from the IsDB has been unique for its approach to programme formulation and project approval.  In 2018, three operations were approved, enabling Guyana to benefit from a grant of ID200,000 for the upgrade and modernization of a geriatric facility; a US$20 mn installment sale operation to expand and upgrade the electricity transmission and distribution system, thereby leading to the improvement in the quality and reliability of the energy supply received by customers; and a reverse linkage programme (funded by Malaysia (US$0.3mn), the IsDB (US$0.28 mn) and Guyana (a matching amount)), to make the rice industry more resilient, productive and competitive.

Additionally, in 2018, we received a programming mission to begin preparation for several new projects.  These operations are an appropriate response to the current challenges faced by Guyana, which are rooted in insufficient national resources and a diminishing pool of multilateral and bilateral support to provide the social and economic infrastructure necessary for giving “the good life” to all Guyanese.  

Mr. President, in the period since our last Annual Meeting, some “inconvenient truths” of globalization’s free trade agreements became more evident: the developed economies have championed trade without attention to people; and trade arrangements have been extended into national borders, with the consequential reshaping of domestic regulations and the appropriation of indigenous knowledge for profit.  Now, the world begins to reap the whirlwind of a global marketplace that by-passes distributional justice with disruptions in geopolitical stability and defaults on agreements to govern the global commons. We see fragmentation, instead of collaboration and unity, and the rise of a chauvinistic brand of nationalism.

As we look towards the immediate and medium terms, Excellencies, it is clear that business as usual will not suffice.  We must applaud the vision of the President, who is steering the Islamic Bank Group on a path that recognizes the importance of the environment, and to building partnerships and south-south relations towards the realization of economies that are resilient, that champion trade with the awareness that people are central to all our policies, programmes and actions; and that address labour market failures by targeting job creation and global value chains.  These programmes and financial instruments of the IsDB will not deepen societal divisions nor undermine domestic social bargains, in the way that implementing current WTO and banking rules seem to be doing.   But, even as academic and political thought seems to target only trading arrangements for criticism, we have to recognize that technology and demands for highly skilled workers – with its attendant downside of the brain drain – are even greater disrupters.

We have to find ways for our countries to leapfrog into the 21st century and beyond with clear-sighted and even prescient recognition of the necessity of adjusting to emerging global imperatives and changes.  Media is replete with many examples of these, a few of which are: the ongoing threat to European Integration (BREXIT); financial sector and Basel II reforms and the trend towards derisking, which places international transactions, including remittances to small countries, at extreme risk while increasing the cost for correspondent banking services; and the withdrawal of large countries from the global systems and structures, such as the essential climate change pact (denying us a path to development via industrialization) and safeguarding the blue economy.

Excellencies, Guyana will be looking towards its development partners, including the IsDB, to build on our regional comparative advantage in natural resource endowment including pristine forests, abundant fresh water, large arable agricultural lands and a wide variety of flora, fauna and mineral resources.  Our strategic geo-physical and geo-political location within Latin America and the Caribbean offers a convenient gateway for public and private sector partners to collaborate and invest in Guyana, to expand their market opportunities and access scarce resources.

To realise this potential, it is imperative for us to develop: (i) climate resilient infrastructure, and food and energy security; (ii) an empowered and skilled labor force; and (iii) a capacity for entrepreneurship, innovation and creativity.

Excellences, in all of these areas I am pleased to say that the IsDB has commenced working with Guyana to develop an appropriate development agenda as well as a plan of action and implementation. To this end, Guyana has placed for consideration the following investment initiatives with the IsDB:

• The development and construction of three (3) mini- hydropower systems and road links in our vast hinterland communities.
• The construction of several potable water and sanitation systems.
• A reverse linkage programme in halal ecosystems. and
• A reverse linkage programme in technical and vocational training with emphasis on addressing the critical needs of our emerging oil and gas sector.

In the pipeline are opportunities for a waqf investment programme to support our elder care initiatives; highway construction to open thousands of hectares of agricultural land while linking communities and markets; and marine port development to improve shipping and competitiveness.

Guyana looks to the esteemed President of this august institution and his skilled and hard-working staff to support our ambitious programmes, and we look to your respected Excellencies to formulate the policies to support the work of the IsDB among its member countries.  There are thousands of years of experience and tested technologies that exist in this region, from which we hope to benefit.

Your Excellencies, Guyana is open for business and we invite you and the IsDB to partner with us in making our exciting development prospects a reality.