Guyana

This 10th EDF Country Strategy Paper (CSP) and National Indicative Programme (NIP) for the period 2008 to 2013 articulates a strategic and programming framework to facilitate Guyana-EC cooperation on critical aspects of Guyana’s development agenda. This agenda, since 2001, has been driven by the combination of a National Development Strategy (NDS) and Poverty Reduction Strategy Paper (PRSP). Recently, two additional “drivers” – the National Competitiveness Strategy (NCS) and a Sugar Action Plan – have been developed and added to this mix. This integrated portfolio of strategic interventions – which the EC and other donors endorse and support - is aimed at achieving and maintaining the following seven pillars of broad-based economic growth as expressed in the Guyana Poverty Reduction Strategy:

1. A sound macro-economic, trade, investment, and business environment;
2. Environmental protection;
3. Stronger and better governance;
4. Investment in human capital with emphasis on basis education and primary health;
5. Investment in physical capital with emphasis on better provision of safe water and sanitation services, farm-to-market roads, drainage and irrigation systems and housing;
6. Improved safety nets; and
7. Implementation of special intervention programmes in areas where poverty levels are still high.

Guided by these objectives, the 10th EDF CSP and NIP are based on a combination of 1) elaboration of the EU/EC-Guyana framework of relations; 2) a diagnostic assessment of the political, institutional, economic and social programmes and their implementation; 3) an appraisal of Guyana’s development strategies and the viability of reforms, policies and medium term challenges; 4) consideration of the action plan to rationalise and enhance the competitiveness of the sugar industry and the non-traditional agricultural sector; 5) a review of the EC’s recent experience regarding implementation of programmes initiated under the 8th and 9th EDFs; and 6) identification of lessons learned from the above points of reference.

One well-known observation is that inadequate institutional capacity and acute shortages/losses of human capital are slowing progress toward realisation of the PRSP goals. A second conclusion is that improving the depth of governance and its effectiveness is essential to engendering stronger ownership of the identification and implementation of development priorities. A third finding is that the expected impacts of the two new thrusts (the NCS and the Sugar Action Plan) will initially be incremental and, in the case of sugar, could have socioeconomic consequences for sugar-dependent areas over the short term. A fourth and final observation is that Guyana will have to broaden its growth model and pursue more ambitious targets than the projected 1% - 3% GDP growth annually in order to attain economic sustainability and realise its social goals over the long term.

The proposed EC response strategy will concentrate on 1) support to coastal protection and management to assist Guyana in defending its social and economic assets in the low-laying arable coastal zone to take account of climatic changes and 2) macro-economic support to the implementation of PRSP II, in particular focusing on the social sectors where gradual but commendable progress is being made. In addition, the strategy will support non-focal sector interventions aimed at advancing governance and unblocking bottlenecks to private sector investments. Finally, it will focus on improving institutional capacity, and initiate exploration of new potentially transformative opportunities that could eventually boost GDP growth to sustainable levels, in particular through the response to Guyana’s sugar adaptation strategy.

To this end, under the 10th EDF NIP, Guyana will be allocated €51 million under the A Envelope and €4.4 million under the B Envelope. Of the €51 million, €14.8 million (29%) will be allocated to coastal protection, €30.2 million (59%) to macro-economic support and €6 million to non-focal interventions