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  • Guyana 2013 PSAR

    January 2014 This Guyana Private Sector Assessment Report (GY-PSAR) presents an

    overall assessment of private sector development (PSD) and recommendations for facilitating and accelerating private investment and growth. This report includes a summary of the main characteristics and

    issues as it relates to private sector development, selection of priorities, a section on monitoring and evaluation of PSD initiatives, and finally a

    section with recommendations for interventions and also for filling in data gaps. The report includes one annex with the Guyana Donor Matrix (GY- DMX).

    I want to thank the support, comments and suggestions of Mark Wenner,

    Tara Lisa Persaud, Sylvia Dohnert, Musheer Kamau and Sophie Makonnen. I want to thank all the people that were interviewed in Georgetown that

    provided data, analysis and anecdotes and experiences that have been incorporated into this report.

    2013

    Carlos Elias Ph.D.

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    Guyana Private Sector Assessment Report

    Table of Contents

    1) Introduction.............................................................................................................................. 3

    2) Chapter I: Identifying market failures ..................................................................................... 4

    a) Goal of PSD in the country and current programs............................................................... 4

    b) Overview of the economy .................................................................................................... 6 i. The domestic economy..................................................................................................... 6

    ii. The international economy ............................................................................................. 10

    iii. The productive structure ............................................................................................. 13

    iv. The institutions ........................................................................................................... 16

    c) State of the private sector................................................................................................... 17

    d) Large and fast growing sectors in the economy................................................................. 20 e) Issues for private sector development ................................................................................ 22

    i. Business supportive institutions structure ...................................................................... 22

    ii. Donors and other international entities .......................................................................... 33

    iii. Access to finance ........................................................................................................ 38

    iv. Corporate taxation ...................................................................................................... 42

    v. Business environment .................................................................................................... 44

    vi. Technology and innovation ........................................................................................ 48

    vii. Trade and FDI policies ............................................................................................... 48

    viii. Labor regulation.......................................................................................................... 50

    ix. Infrastructure, communications and energy ............................................................... 51

    x. Environment ................................................................................................................... 53

    xi. Gender......................................................................................................................... 53

    3) Chapter II: Selecting and prioritizing issues.......................................................................... 54

    a) Opportunities for selective interventions to improve the business climate in Guyana ...... 55

    b) Additional recommendations to accelerate private sector growth and development in Guyana....................................................................................................................................... 60

    c) Action plan ......................................................................................................................... 62 4) Follow-up, monitoring and evaluation .................................................................................. 62

    5) Chapter III: Conclusions and recommendations.................................................................... 63

    Annex 1: Sources of information used in this report .................................................................... 65

    Annex 2: Guyana Donor Matrix Report (GY-DMX) ................................................................... 66

    Annex 3: Brief description of the National Competitiveness Strategy and the Low Carbon

    Development Strategy................................................................................................................... 81

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    1) Introduction

    According to the PSAR guidelines the PSAR is: “a report meant to provide a comprehensive framework to identify market failures concerning the development of the private sector and

    prioritize them in terms of their need for an urgent solution. These outcomes are the result of a process that involves the use of descriptive and analytical tools to assess the state of the private sector and the economy as a whole, as well as consulting with firms in strategic sectors of the

    economy to prioritize issues. The PSAR can be decomposed in two big parts: first, it compiles and analyzes information from different sources in order to provide a snapshot of the state of the

    private sector in the country, and second, it brings the information to relevant stakeholders – such as firms in the economy – to establish priorities on all the identified issues affecting further growth in the private sector.”1

    According to the DMX guidelines the DMX is: “is a dynamic tool designed to improve

    coordination among government, stakeholders and the donor community of PSD programs and projects in CARIFORUM countries. The DMX will identify PSD programs and projects,

    including, among other, business climate reforms, macroeconomic support to governments, direct support to the private sector, and women in business initiatives and related gender mainstreaming efforts. As such it is a tool that will be used to identify, assess, and monitor PSD

    programs and projects in individual CARIFORUM countries as well as sub regional programs and projects. The DMX is also meant to be used for the development of strategic partnerships,

    to identify gaps and omissions, and to maximize the impact of projects through improved donor coordination.”2

    The DMX guidelines note that: “The DMX and PSAR complement each other, with the DMX

    providing information about past and present programs and projects in each country; and the PSAR identifying priority areas for Private Sector Development (PSD) interventions at the country or sub-regional level. The contrast between what is currently being supported by the

    donor community identified in the DMX, and what should be supported identified in the PSAR, is an important input for the definition of PSD programs and projects, and for improved

    coordination between government, stakeholders and the donor community.”

    It is expected that donors, working together, would use this report to improve coordination and identification of larger, more comprehensive private sector projects and programs to accelerate growth across the region. Improved coordination would lead to increasing the development

    impact of private sector development projects and programs while reducing transaction costs. These activities fall within larger donor coordination efforts to improve the quality and

    effectiveness of development cooperation as reflected in the Paris Declaration on Aid Effectiveness of 2005, the follow-up Accra Agenda for Action of 2008 and the Busan Partnership for Effective Development Cooperation recently agreed on by donors in November

    2011.

    1 Guide for Private Sector Assessment Report (PSAR) in the Caribbean Countries. Version 1.2. InterAmerican

    Development Bank, 2011. 2 Donor Matrix Guidelines. Draft February 2012. InterAmerican Development Bank, 2012.

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    The analysis presented in this report rests on two sources of information: primary data collected during a trip to Georgetown in October 2013 that served to identify actors and PSD programs as

    well as the main bottlenecks for investment and growth; and secondary data and information available from multiple sources that are referenced throughout the document. An important

    contribution from this report, in addition to fulfilling the purpose of the GY-PSAR, is to identify data and information gaps. The PSAR is a long document that provides large amounts of information and priorities, but it does not facilitate its use by decision makers. For this reason

    the PSAR highlights are summarized in the Exe