REVIEW OF GUYANA’S
FOREIGN TRADE
2001 & 2002
PRODUCED BY:
MŨTHONI MŨGO
Trade Promotion Specialist
United Nations Volunteers
COMPLIMENTS:
Bank of Guyana
Customs and Trade Administration
Bureau of Statistics
SPECIAL THANKS:
Ms. Gayathri Radhakrishnan
Economist
Overseas Development Institute
Ms. Bibi Ahamad
Research Assistant
Ministry of Foreign Trade
& International Cooperation
2
Contents
Page
________________________________________________________________________________
____
Foreword from Hon. Clement J. Rohee
Minister for Foreign Trade & International Cooperation
v
Section One
Overview of Global Trade 2001 & 2002
1
Section Two
Overview of Guyana’s External Trade
4
Section Three
Annual Imports and Exports, 2001, 2002
6
___________________________________________________________________________
____
Section Four
A Closer Look at Exports
9
Section Five
A Closer Look at Imports
16
________________________________________________________________________
___
Section Six
Direction of Trade
22
________________________________________________________________________________
____
Section Seven
Foreign Direct Investment
32
________________________________________________________________________
___
Section Eight
External Trading Relations
35
________________________________________________________________________
___
Section Nine
3
Guyana: Outlook for 2003
39
________________________________________________________________________
___
Foreword
Hon. Clement J. Rohee
Minister for Foreign Trade & International Cooperation
This is the second edition of the publication Review of Guyana’s Foreign
Trade.
On this occasion, the Ministry of Foreign Trade and International Cooperation
publishes its first yearly Review 2001-2002.
We have tried to make this edition more analytical and comprehensive as
regards Guyana’s trade flows with CARICOM and the rest of the world.
As usual we have sought to make this edition more user friendly.
The feed back we have received thus far is encouraging and positive. We take
this opportunity to thank all those who were kind enough to share these
sentiments with us.
While we believe we are on the right track we are fully aware that there is
always room for improvement and we shall endeavor to press on this
direction.
We look forward to receiving your comments and opinions on the contents of
this Review.
4
Section One
Overview of Global Trade
2001 & 2002
According to the World Trade Organization’s (WTO) analysis1 of global trade, growth in
trade underwent one of the most severe decelerations in modern times in 2001. Though
some recovery was made in 2002, the reports noted that uncertainty within the global
economy still exists and could very well cloud trade growth prospects for 2003.
WTO studies report that growth in trade decreased from over 13% in 2000 to 1% in 2001.
Furthermore, analysts note that the year 2000 witnessed the first decline in the volume of
world merchandise trade since 1982 and the first decrease in world merchandise output
since 1991. Global GDP growth edged up only by about 1% due to a more resilient
services sector. This was a great contrast to the previous year, when trade and output
recorded their best performance in more than a decade.
The disappointing performance in trade mirrors the overall global downturn in economic
activity for these years. Factors that have contributed to such a decline include “the
bursting of the investment bubble in ICT sector, the tragic events of September 11th and the
sharp corrections experienced in all major stock market indices”2.
In 2001, it was reported that all sectors of trade were affected by the global downturn.
Manufactured exports slumped by 2.5 percent, while trade growth in agricultural and mining
products was limited to 1.5 percent, markedly less than in the preceding year.
North America was recorded as experiencing the strongest decrease among all regions in
merchandise exports and import volumes (by 5 per cent and 3.5 per cent respectively) in
2001. Asia’s export decline was noted as second only to that of North America, and imports
decreased by as much as the global average. Imports of Western Europe shrank by 3 per
cent, which was faster than the decline in exports of 1 percent.
The WTO analysts also noted that developing countries confronted a 10% drop in the
growth in demand for their exports3. The share of developing countries in world exports of
merchandise decreased to 29 percent in 2001. The share of developing countries in world
merchandise imports stagnated at 26 percent.
1
WTO Press Releases “ Supachai: disappointing trade figures underscore importance of accelerating trade talks”, 7
October 2002 & “ Trade Recovered in 2002, but uncertainty continues”, April 2003, available at www.WTO.org
2
WTO Press Release “ Trade Recovered in 2002, but uncertainty continues”, April 2003, available at www.WTO.org
3
World Bank, “Global Economic Performance 2002”.
5
It was noted however that a small number of developing countries weigh heavily in
determining developing countries’ merchandise trade performance. Five out of 150
developing countries account for more than 60 percent of developing countries’
manufactured goods exports. The country concentration of developing country exports —
as measured by the top five exporters — has increased in the 1990s , largely due to strong
trade growth in China and Mexico4.
Despite an adverse environment in which world trade has contracted, falling commodity
prices, and the slowdown of demand in major developed regions, the least developed
county group managed to expand both its exports and imports. According to the WTO, a
strong export expansion in the volume of both primary and manufactured goods offset the
impact of weaker prices for many primary commodities.
In their 2002 analysis however, it was noted however that some economic recovery has
been made. In 2002, merchandise trade, driven by strong demand in the US and the big
Asian, economies grew by 2.5%. But trade growth, which was significantly above the 1.5%
increase in total world output, was uneven and masked the sluggish trade performance in
many regions including Latin America and Western Europe.
Again, it was noted that trade performance largely mirrored the pattern of economic growth.
Trade expansion was strong in Asia and the transition economies. North America’s imports
recovered in line with stronger domestic demand although exports decreased in 2002.
Trade remained stagnant in Western Europe and Japan. And it contracted in Latin America
as a result of economic turmoil in a number of countries in the region.
Imports into the US grew by 3% driven by continuing consumer spending and an
increasingly expansionary fiscal stance. But exports declined by nearly 4% partly reflecting
reduced demand from some key trading partners whose economies were either hardly
growing, such as Western Europe and Japan, or in outright contraction, as in Latin
America. The WTO also noted that a lack of price competitiveness might have also played
a major role as US exports decreased even to those regions whose imports grew strongly.
LDC exports and imports rose last year although it was noted that this did not change their
overall situation as marginal participants in world trade. With regards to the Caribbean, in
2002, with the exception of Guyana, Belize and Trinidad and Tobago, Caribbean countries
suffered a weak economic performance. Barbados and the Bahamas, which have recently
been consistently strong economies, felt a reduction in output. Dominica had a particularly
challenging year, facing a contraction in its economy by 3.1%5. Imports into Latin America
and the Caribbean fell 9% between 2001 and 2002. Exports rose by an estimated 0.6% to
0.8%, as some countries managed to boost volumes to offset the steady decline in prices
for most good6s.
Latin America saw one of its worst years with the crises in Argentina, Venezuela and
difficulties in Brazil in the run-up to the national elections. Latin America’s merchandise
imports declined by over 5% in 2002 although merchandise exports rose by about 2% with
4
WTO Press Releases “ Supachai: disappointing trade figures underscore importance of accelerating trade talks”, 7
October 2002
5
Budget Speech; “Sessional paper No 1. of 2003 Eight Parliament of Guyana”, Page 4.
6
ECLAC, “Downturn in Latin American and Caribbean Economies in 2002”
6
the decline in intra-regional trade (especially intra-MERCOSUR trade) being balanced by
increased shipment to other regions.
Section Two
Overview of Guyana’s External Trade
For the years 2001 and 2002 there
was an increase in the level of exports
for Guyana, and in both years total
exports accounted for over ¾ of Gross
Domestic Product (GDP). While the
levels of imports into Guyana
declined, the value of total imports,
approached the value of GDP
between 2001 and 2002. Although the
balance of trade figure was still
negative, the movement in imports
and exports level resulted in an
improvement in Guyana’s balance of
trade.
There was a decrease in Guyana’s
GDP between 2001 and 2002 (from
1.9 % in real terms to 1.1 %), however
a comparison of the trade data over
this period reveals an overall positive
outlook for Guyana’s external trade.
This,
therefore,
reinforces
the
importance of international trade to
Guyana’s economy.
Looking
specifically
at
the
commodities exported, it can be seen
that during 2001 and 2002, over 2/3 of
Guyana’s export earnings arose from
the exporting of six products: gold,
sugar, shrimp, rice, timber and
bauxite.
In the six commodities mentioned,
three of these commodities (gold,
sugar and timber) recorded a positive
growth in exports between 2001 and
2002. The other three sectors
experienced a fall in export earnings,
the worst of which was in
the
Selected Socio-Economic
and Trade Indicators
2001
2002
774,800
774,800
GDP at factor cost (US$M)
602.5
617.8
Growth Rate of Real GDP
1.9%
1.1%
GDP per capita (US$)
777.5
797.3
1.9
6.1
187.30
190.5
Total Exports (US M $)
490.3
494.9
Total Exports (% GDP)
81.4%
80.1%
Total Imports (US M $)
583.9
563.1
Total Imports (% GDP)
96.9%
91.1%
Trade Balance (US M $)
(93.6)
(68.2)
Number One Export Market
(Non-CARICOM)
USA
USA
Number One Import Market
(Non-CARICOM)
USA
USA
Number One Export Market
(CARICOM)
Jamaica
Jamaica
Number One Import Market
(CARICOM)
Trinidad
& Tobago
Trinidad
& Tobago
Gold
Gold
Population
Rate of Inflation (% change in
Urban CPI)
Average exchange rate
GY$/US$
Top Exported Commodity (by
value)
7
bauxite sector, which faced a
dramatic fall in export earnings of 42%.
Table 1 Source: Budget 2003 and Bank of Guyana
The export of gold was the greatest revenue earner in both 2001 and 2002, contributing to
over a quarter of total export earnings and over one-fifth of GDP in both years. Sugar was
Guyana’s second largest export, in terms of value, during the two years. Together gold and
sugar exports accounted for approximately half of Guyana’s total exports.
Data from 2001 and 2002 also revealed an increase in the exports of non-traditional
agricultural commodities (by 8% in value and 23% increase in volume). Despite this
increase, the total value of exports of non-traditional agricultural commodities still only
accounted for less than 1% of total exports in 2002.
The data on imports, on the other hand, reveals that the composition of imports did not
greatly vary between 2001 and 2002, with the same percentage of consumption goods,
intermediate goods and capital goods being imported into Guyana. Guyana’s two largest
imports for both years were ‘fuels and lubricants’ and ‘food for final consumption’.
Turning to the direction of Guyana’s external trade between 2001 and 2002, the data
clearly highlights that the United States was Guyana’s leading export market in both years.
The US was followed by Canada and then the UK as the most important export markets for
Guyana (the European Union, as a bloc, accounted for approximately one quarter of
Guyana’s exports). The data also revealed that CARICOM has become an increasingly
important export market for Guyana. Whilst in 2001, only 15% of Guyana’s exports were
directed to the CARICOM market, in 2002, almost a quarter of Guyana’s exports went to
CARICOM Member States (predominantly Jamaica, Trinidad and Tobago and Barbados).
In terms of sources of imports, the US was also Guyana’s main source of imports in both
2001 and 2002. Its second most important source was Trinidad and Tobago (which
accounted for over ¾ of total imports from CARICOM in both years). CARICOM, in both
years, accounted for almost one fifth of imports into Guyana and the European Union
accounted for over 10% in both years (half of such imports originated in the UK).
Overall, it can be seen that Guyana’s exports continue to be dominated by the agriculture
and mining sectors. Expansions in the agricultural and mining sectors (particularly in gold
and sugar) combined with a fairly low inflation rate have enabled Guyana’s economy to
enjoy a moderate economic growth rate. Contributions to GDP, in 2002, were 33% for
agriculture and 28.2% for the mining sector. This moderate growth has been achieved
despite growing international competition and low prices for key exports that have severely
affected the rice and bauxite industry.
8
Section Three
Annual Imports & Exports
2001, 2002
The data in this section provides an overview of annual exports and imports for 2001 and
2002, on a monthly basis.
From the data, it is evident that total exports increased between 2001 and 2002 and total
imports decreased during the same period. This resulted in a smaller trade balance in
2002 though the trade balance continues to be negative. Average monthly exports were
approximately US$41 million in both 2001 and 2002 and average monthly imports were
US$49 million and US$47 million respectively.
Comparing trade to annual GDP (see fig 4 on page 12), it is clear that as in previous years,
international trade continues to be of paramount importance to Guyana’s economy. In 2001
and 2002, annual exports amounted to 81% and 80% of GDP respectively. Annual
imports in both years approached the value of GDP, being 97% of GDP in 2001 and
91% in 2002.
Monthly Imports, Exports and Trade Balances 2001 & 2002 (US $ Million)
2001
2002
Months
Exports
Imports
Trade
Balance
Exports
Imports
Trade
Balance
Jan
Feb
March
April
May
June
July
Aug
Sept
Oct
Nov
Dec
31.6
36.8
33.9
40.6
36.2
36.2
44.8
39.1
47.9
53.2
42.3
47.8
66.7
37.6
45.7
44.1
48.0
46.5
53.3
48.2
47.1
56.8
48.5
41.4
(35.1)
(0.9)
(11.9)
(3.4)
(11.8)
(10.3)
(8.5)
(9.1)
0.8
(3.7)
(6.2)
6.5
31.2
36.9
53.7
34.3
37.7
45.2
31.7
31.2
56.4
51.3
45.4
40.0
47.6
40.4
44.2
48.6
48.5
48.5
47.4
44.3
45.7
56.0
43.5
48.5
(16.4)
(3.5)
9.4
(14.3)
(10.8)
(3.3)
(15.7)
(13.1)
10.8
(4.7)
1.9
(8.5)
TOTAL
Average
(Monthly)
490.4
583.9
(93.5)
494.9
563.1
(68.2)
40.9
48.7
(7.8)
41.2
46.9
(5.7)
Table 2 Source: Bank of Guyana
9
Comparison of Monthly Exports,
2001 & 2002
60
US $ Million
50
40
30
20
10
2001
ec
D
ov
N
ct
O
pt
Se
g
Au
y
Ju
l
e
Ju
n
ay
M
Ap
ril
h
ar
c
M
Fe
b
Ja
n
0
2002
Fi
g 1 Source: Bank of Guyana
Comparison of Monthly Imports,
2001 & 2002
80
70
US $ Million
60
50
40
30
20
10
2001
ec
D
ov
N
ct
O
pt
Se
g
Au
y
Ju
l
e
Ju
n
ay
M
Ap
ril
h
ar
c
M
Fe
b
Ja
n
0
2002
Fi
g 2 Source: Bank of Guyana
10
Comparison of Total Exports and Imports
2001 & 2002
600.0
583.9
580.0
563.1
US $ Mn
560.0
540.0
520.0
500.0
490.4
494.9
480.0
460.0
440.0
Exports
Imports
2001
2002
Fig 3 Source: Bank of Guyana
Comparison of Contribution of External Trade to GDP
2001 & 2002
120.0
% GDP
100.0
80.0
96.9
81.4
80.1
91.1
60.0
40.0
20.0
0.0
Exports % GDP
Imports % GDP
2001
2002
Fig 4 Source: Bank of Guyana
11
Section Four
A Closer Look at Exports
In both 2001 and 2002, foreign exchange was mostly generated by the export of six
commodities: gold, sugar, shrimp, rice, timber and bauxite products. Together the
six export commodities mentioned accounted for 73% and 69% of GDP in 2001 and
2002 respectively. Overall, of these six major exports, exports of gold, sugar and timber
recorded a positive growth between 2001 and 2002. (See tables 3 & 5 below).
Guyana’s Top Six Export Commodities
Contribution to Total Exports and Annual GDP
2001, 2002
2001
2002
Value
(US $
Mn)
%
Contribution
to Total
exports
%
Contribution
to GDP
Value
(GY $
Mn)
Value
(US $
Mn)
%
Contribution
to Total
Exports
21.1
25,985.80
136.3
27.5
22.1
22.3
18.1
22,801.20
119.5
24.1
19.3
59
12
9.8
10,018.10
52.6
10.6
8.5
9,404.20
50.2
10.2
8.3
8,663.30
45.4
9.2
7.3
Timber
6,180.60
33
6.7
5.5
6,780.80
35.5
7.2
5.7
Bauxite
11,420.60
61
12.4
10.1
6,729.10
35.3
7.1
5.7
Total
80,479.50
439.4
89.6
72.9
80,978.30
424.6
85.8
68.7
Export
Products
Value
(GY $
Mn)
Gold
23,769.60
127
25.9
Sugar
20,494.60
109.2
Shrimp
9,209.90
Rice
%
Contribution
to GDP
Table 3 Source: Bank of Guyana
Gold
Gold was the number one export (in terms of value) and accounted for over a quarter
of total exports in both 2001 and 2002. Between 2001 and 2002, exports both in terms
of volume (by 4.1%) and value (by 7.3%). Revenue from gold exports contributed 21%
and 22% to GDP in 2001 and 2002 respectively, which was over one-fifth of total GDP
each year.
Sugar
Sugar was the second highest foreign exchange earner in 2001 and 2002
accounting for roughly 22% and 24% of exports respectively. Sugar exports also
experienced positive growth between 2001 and 2002 in terms of volume (by 11.6%) and
in value (by 9.4%). Next to gold, sugar exports were also the second highest
contributor to GDP, accounting for 18% and 19% towards GDP in 2001 and 2002
respectively.
Shrimp
In 2001, shrimp exports were the 4th highest contributor to export earnings (and GDP)
accounting for 12% of exports and 9.8% of GDP. In 2002, however, shrimp exports
became Guyana’s 3rd major export commodity group constituting 10.6% of total exports
and 8.5% of GDP. In actual terms, however, revenue from these exports decreased
from 2001 to 2002 by 10.9%.
Rice
Rice exports were the 5th highest contributor to export earnings (and GDP) in 2001;
however in 2002 it ranked as the 4th highest contributor. Though the relative position of
rice exports improved in terms of export earnings, actual exports of rice decreased in
both volume (by 7.5%) and by value (9.6%). In 2001, rice contributed 10.2% to the
value of total exports and 8.3% to GDP; in 2002 rice exports were only 9.2% of total
exports and 7.3% of GDP.
The main export market for rice continued to be the European Union, which imported
approximately 120,400 metric tons, representing 62.3% of total exports in 2002. The
most important markets in the EU were Portugal, 56,000 metric tonnes and Holland,
25,000 metric tons. Rice enters the EU market on preferential terms.
Other significant markets were: CARICOM, 30.7% (76,000 metric tons) and the
Overseas Countries and Territories (OCT) 7.0% (13,636 metric tons). Though exports to
the Caribbean were much reduced in 2002, the primary CARICOM markets continued
to be Jamaica (37,900 metric tonnes) and Trinidad (16,500 metric tonnes).
Timber
Exports of timber products were the sixth largest export in 2001, by value and the 5th in
2002. Timber exports constituted 6.7% of total exports in 2001 and 7.2 in 2002. In
actual quantities, timber exports rose during this period in value (by 7.6%) but
decreased in total volume exported (by 1.2%). The overall contribution of timber to
GDP increased during 2001-2002 from 5.5% to 5.7%.
In 2002, as in previous years, plywood, sawnwood and logs have continued to be the
main foreign currency earners for this sector. Total combined revenue earned from the
three products was 94% of the overall exports earnings from forest products exported in
2002. Similar performance was recorded between 1999 to 2001.
In the face of competition by market giants, exports of plywood (Barama) declined by
31.7% in 2001, and a shortfall in production in 2002 led to a decrease in exports.
13
Other timber exports showed an increase of 16.9%, from 117,303.1 cubic metres in
2001 to 137,152.6 in 2002, in dollar terms a 51.0% increment from US$Mn 16.1 in
2001 to US$Mn 24.3 in 2002.
Bauxite
Bauxite exports were the third highest contributor to export revenues in 2001 (making
up 12.4% of total exports) however in 2002, the relative contribution of this sector to
total exports fell to 7.1%.
Low prices and high production costs depressed the production of bauxite so that
exports decreased significantly between 2001 and 2002, by 17% in volume and 42%
in value. In 2001, exports of bauxite contributed 10.1% to GDP but in 2002, they only
accounted for 5.7%.
Contribution to GDP of Top Six Export Commodities
25
% Total GDP
20
15
10
5
Sh
rim
ps
be
r
Ti
m
G
ol
d
te
Ba
ux
i
e
ic
R
Su
ga
r
0
% contribution of exports to GDP (2001)
% contribution of exports to GDP (2002)
Fig 5 Source: Bank of Guyana
14
Non-Traditional Agricultural Exports
Exports of non-traditional agricultural products significantly increased between 2001 and
2002 (See table 4 below), volumes increased by 23% and the value generated by
exports of these products by 8%.
Featuring prominently on this list of non-traditional agriculture products, in both years
were copra, pineapple, plantains, hot pepper and heart of palm.
The major commodities accounted for 82% and 94% of total volume of non-traditional
agricultural products exported in 2001 and 2002 respectively.
During the period under review, exports were concentrated on the traditional markets –
CARICOM, North America and Europe. The CARICOM region accounted for
approximately 35% and 45% respectively in 2001 and 2002 (with the main markets
being Trinidad & Tobago, Barbados and Jamaica). Trade with North America stood at
18% and 12% respectively, while Europe accounted for 47% and 42% for 2001 and
2002 respectively.
Volumes Exported of Major
Non-Traditional Agricultural Exports
2001 & 2002
Major Commodities
Heart of Palm
Coconuts (crude oil)
Copra
Plantain
Others
Mango
Pineapple
Watermelon
Lime
Pepper (hot)
Pumpkin
Pepper (wiri wiri)
Total Non-Traditional Agriculture
Exports (Volume in tones)
Total Non-Traditional Agriculture
Exports (Value in US$ ‘000)
2001
(tonnes)
% Total
(2001)
1888.2
0
312.5
371.16
263.5
96.36
113.13
0
38.42
186.63
59.52
8.58
56.6
0.0
9.4
11.1
7.9
2.9
3.4
0.0
1.2
5.6
1.8
0.3
2002
(tonnes)
% Total
(2002)
1381.5
742
741.63
371.67
256.11
222.61
143.66
90.36
63.47
46
41.91
10.08
33.6
18.0
18.0
9.0
6.2
5.4
3.5
2.2
1.5
1.1
1.0
0.2
3,338
100
4,111
100
3,524
-
3,805
-
Table 4 Source: New Guyana Marketing Corporation (NGMC)
15
Exports by Commodity (Volumes and Values), 2001 & 2002
Export Commodities
2001
2002
January - December
%
Change
January - December
1. Sugar
Volume (metric tonnes)
Value (US$Mn)
252,333.0
281,619.0
11.6%
109.2
119.5
9.4%
209,041.4
193,419.4
(7.5)%
50.2
45.4
(9.6)%
1,825,254.2
1,514,743.0
(17.0)%
61.0
35.3
(42.2)%
433,496.3
451,251.7
4.1%
127.0
136.3
7.3%
187,197.0
184,920.1
(1.2)%
33.0
35.5
7.6%
69,893.7
47,767.5
(31.7)%
16.9
11.2
(33.9)%
117,303.1
137,152.6
16.9
16.1
24.3
51.0%
59.0
52.6
(10.9)%
3,338
4,111
23.2%
3.5
3.8
8.0%
2. Rice
Volume (metric tonnes)
Value (US$Mn)
3. Bauxite
Volume (metric tonnes)
Value (US$Mn)
4. Gold
Volume (ounces)
Value (US$Mn)
5. Timber (Total)
Volume (cubic metres)
Value (US$Mn)
Plywood (Barama)
Volume (cubic metres)
Value (US$Mn)
Other Timber Exports
Volume (cubic metres)
Value (US$Mn)
6. Fish and Shrimps (US$Mn)
7. Non-Traditional Agricultural products
Volume (Tonnes)
Value (US$ Mn)
Table 4 Sources: Bank of Guyana & NGMC
16
Distribution of Exports by Product
Guyana's Exports 2001
Other
10%
Shrimps
12%
Sugar
22%
Timber
7%
Rice
10%
Bauxite
12%
Gold
27%
Fig 6
Guyana's Exports 2002
Other
14%
Sugar
24%
Shrimps
11%
Timber
7%
Rice
9%
Gold
28%
Bauxite
7%
Fig 7
17
Section Five
A Closer Look at Imports
Examining total imports by category; consumption goods, intermediate goods and
capital goods (see tables 6,7 and 8, pages 21 and 24), it is evident that in both 2001
and 2002, intermediate goods represented the greatest share of imported
products, representing over half of total products imported (58%). Consumption goods
were over a quarter of total imports (28%) in both years and capital goods accounted for
one fifth of total imports (20%).
In terms of actual commodities, Guyana’s largest imports (by value) in both 2001 and
2002 were ‘fuels and lubricants’ (22% and 23% of total imports in 2001 and 2002
respectively), followed by ‘food for final consumption’ (10% of total imports in both
years). The latter figure is particularly noteworthy given that Guyana is an agricultural
economy yet 10% of its total imports are food products from abroad, amounting to
US$61 and US$55 million in 2001 and 2002 respectively. Other major imports included
intermediate parts and accessories, building machinery, non-durable consumption
goods, chemicals and agricultural machinery.
Although there was no change in the percentage distribution of imports, the actual
quantities imported in 2002 fell in all three categories. Consumption goods fell by the
greatest amount (3.8%), whereas imports of intermediate goods and capital goods both
fell by 3.6%.
18
Comparison of Import Value by Economic End Use 2001,
2002
350
300
US $ Mn
250
200
150
100
50
0
Consumption goods
Intermediate goods
2001
Capital goods
2002
Fig 9
19
Merchandise Imports by Economic End Use (US$M)
2001
ITEMS
CONSUMPTION GOODS
Food For Final Consumption
Beverages & Tobacco
Other Non-Durables
Clothing & Footwear
Other Semi-Durables
Motor Cars
Other Durables
Sub - Total
Jan-Mar
Apr-Jun
Jul-Sept
Oct-Dec
Total
12.9
3.8
7.6
2.8
1.8
2.8
7.1
38.9
13.8
2.8
7.3
3.0
1.4
2.8
5.9
37.1
16.4
3.6
8.2
3.6
1.9
2.6
6.1
42.4
17.0
3.9
7.8
3.6
2.9
2.9
7.5
45.7
60.1
14.1
30.9
13.0
8.1
11.2
26.7
164.1
INTERMEDIATE GOODS
Fuel & Lubricants
Food For Intermediate Use
Chemicals
Textiles & Fabrics
Parts & Accessories
Other Intermediate Goods
Sub - Total
38.4
3.4
8.9
1.5
10.5
14.5
77.1
31.3
5.0
7.9
1.9
10.0
18.7
74.8
33.9
6.5
8.4
3.0
6.5
17.9
76.0
28.8
4.2
6.1
3.5
14.6
16.6
73.8
132.4
19.0
31.3
9.8
41.5
67.7
301.8
CAPITAL GOODS
Agricultural Machinery
Industrial Machinery
Transport Machinery
Mining machinery
Building Machinery
Other Capital Goods
Sub - Total
8.0
2.3
3.9
1.0
7.5
11.2
33.9
6.1
2.6
3.7
0.5
7.0
6.5
26.5
5.0
2.9
3.1
0.3
7.8
10.2
29.4
5.2
1.4
3.4
0.3
8.3
6.6
25.1
24.3
9.3
14.0
2.1
30.7
34.5
114.9
MISCELLANEOUS
TOTAL IMPORTS
0.1
150.0
0.2
138.6
0.8
148.5
2.0
146.7
3.1
583.9
Table 6 Source: Bank of Guyana
20
Merchandise Imports by Economic End Use (US$M)
2002
ITEMS
CONSUMPTION GOODS
Food For Final Consumption
Beverages & Tobacco
Other Non-Durables
Clothing & Footwear
Other Semi-Durables
Motor Cars
Other Durables
Sub - Total
Jan-Mar
Apr-Jun
Jul-Sept
Oct-Dec
Total
13.9
2.4
6.2
3.8
1.6
3.1
4.8
35.8
12.9
2.6
8.4
3.3
2.2
3.3
5.1
37.6
13.5
3.0
7.7
4.7
1.9
3.2
4.9
38.9
14.8
3.4
8.1
4.2
3.1
2.3
9.5
45.5
55.1
11.3
30.4
16.0
8.8
11.8
24.3
157.8
INTERMEDIATE GOODS
Fuel & Lubricants
Food For Intermediate Use
Chemicals
Textiles & Fabrics
Parts & Accessories
Other Intermediate Goods
Sub - Total
28.4
2.8
6.8
1.7
7.0
17.9
64.6
30.3
3.9
8.0
2.4
16.4
19.0
80.0
29.7
4.1
7.8
3.4
7.4
18.7
71.0
37.4
6.5
6.9
2.0
6.2
16.4
75.3
125.8
17.3
29.5
9.5
36.9
72.0
291.0
CAPITAL GOODS
Agricultural Machinery
Industrial Machinery
Transport Machinery
Mining machinery
Building Machinery
Other Capital Goods
Sub - Total
8.0
3.2
5.5
0.3
6.7
7.9
31.6
5.2
2.2
5.8
0.6
7.6
6.3
27.7
6.7
1.4
3.4
0.5
9.2
5.9
27.2
7.2
2.4
3.3
0.3
7.9
5.6
26.8
27.1
9.3
18.0
1.8
31.5
25.6
113.3
MISCELLANEOUS
TOTAL IMPORTS
0.2
132.2
0.2
145.6
0.2
137.3
0.3
148.0
1.0
563.1
Table 7 Source: Bank of Guyana
21
Summary of Change in Imports By Product
2001, 2002
(US$ Million)
ITEMS
CONSUMPTION GOODS
Food For Final Consumption
Beverages & Tobacco
Other Non-Durables
Clothing & Footwear
Other Semi-Durables
Motor Cars
Other Durables
Sub - Total
INTERMEDIATE GOODS
Fuel & Lubricants
Food For Intermediate Use
Chemicals
Textiles & Fabrics
Parts & Accessories
Other Intermediate Goods
Sub - Total
2001
2002
%
Change
60.1
14.1
30.9
13.0
8.1
11.2
26.7
164.1
55.1
11.3
30.4
16.0
8.8
11.8
24.3
157.8
(8.2)
(19.7)
(1.7)
23.0
8.9
5.7
(9.0)
(3.8)
132.4
19.0
31.3
9.8
41.5
67.7
301.8
125.8
17.3
29.5
9.5
36.9
72.0
291.0
(5.0)
(9.1)
(5.8)
(3.1)
(11.1)
6.4
(3.6)
CAPITAL GOODS
Agricultural Machinery
Industrial Machinery
Transport Machinery
Mining machinery
Building Machinery
Other Capital Goods
Sub - Total
MISCELLANEOUS
24.3
9.3
14.0
2.1
30.7
34.5
114.9
3.1
27.1
9.3
18.0
1.8
31.5
25.6
113.3
1.0
11.6
0.3
28.2
(12.3)
2.6
(25.7)
(1.3)
(69.4)
TOTAL IMPORTS
583.9
563.1
(3.6)
Table 8 Source: Bank of Guyana
22
Relative Distribution of Imports by Economic End Use
2001 & 2002
capital goods
20%
consumption
goods
28%
intermediate
goods
52%
Fig 10
23
0.0
Fig 11 Source: Bank of Guyana
Miscelleanous
Other Capital Goods
Building Machinery
Mining machinery
Transport Machinery
Industrial Machinery
Agricultural Machinery
Other Intermediate Goods
Parts & Accessories
Textiles & Fabrics
Chemicals
3.1
1
14.0
30.4
24.3
27.1
34.5
25.6
31.5
30.7
41.5
36.9
29.5
31.3
26.7
24.3
19.0
17.3
18
9.8
9.5
9.3
9.3
2.1
1.8
Food For Intermediate Use
8.1
8.8
11.2
11.8
13.0
16
67.7
72
55.1
60.1
125.8
132.4
140.0
Fuel & Lubricants
Other Durables
Motor Cars
Other Semi-Durables
Clothing & Footwear
30.9
40.0
Other Non-Durables
20.0
14.1
11.3
60.0
Beverages & Tobacco
Food For Final Consumption
US$M
Summary of Imports (US$M)
120.0
100.0
2001
2002
80.0
Section six
Direction of Trade7
Guyana’s Major Trading Partners
USA
The USA was Guyana’s most significant trading partner, both in terms of the value
of imports received from the US and goods exported from Guyana for 2001 and 2002.
In 2002, one quarter of Guyana’s total exports (by value) went to the USA. This was a
smaller share than in 2001 (where 31% of total exports were sold to the USA). The
USA was also Guyana’s largest source of imports. In 2001, 37% of Guyana’s imports
came from the United States although this share fell in 2002 to 35% of total imports.
Canada
Canada was Guyana’s 2nd largest export market in 2001 and 2002. Guyana’s
exports to Canada increased, in value terms, between 2001 to 2002 as did the share of
Guyana’s imports from Canada between the two years, In 2001, the Canadian market
absorbed 22% of Guyana’s total exports and in 2002, 25% of Guyana’s exports went to
Canada. Canada was Guyana’s 8th largest source of imports in both 2001 and 2002.
The European Union
Roughly one quarter of Guyana’s exports in 2001 and 2002 were to the European
Union. Within the European Union, the United Kingdom was the most significant export
market for Guyana accounting for 67% of the total exports from Guyana to the
European Union in 2001 and 40% in 2002. Indeed, the United Kingdom, alone, was
also Guyana’s 3rd largest export market in 2001 and 2002. Other significant export
markets within the European Union in 2002 were Portugal, Belgium, France and the
Netherlands.
Regarding imports, 12% and 13% of Guyana’s total imports in 2001 and 2002,
respectively came from the European Union. In both 2001 and 2002, the UK was the
greatest source of European imports to Guyana accounting for 51% and 56% of total
imports from the EU. On its own, the UK was Guyana’s fourth most important
source of imports and actual values increased between 2001 and 2002. The
Netherlands was also a significant source of imports in 2001 and 2002 accounting for
29% and 24% of total imports, respectively.
7
All data in this section ‘Direction of Trade’ has been taken from Bureau of Statistics Preliminary Data and therefore may be
subject to revision. A preliminary analysis has however been undertaken with a view to identifying broad trends in the
direction of trade for this edition of the Foreign Trade Review.
CARICOM
In 2001, 15% of Guyana’s total exports were directed to other CARICOM Member
States. In 2002, the CARICOM market increased in importance for Guyana,
accounting for 23% of Guyana’s total exports.
Within CARICOM, Guyana’s main markets for exports, in 2002, were the following
(listed in descending order with largest markets first): Jamaica, Trinidad & Tobago,
Barbados, Antigua and Barbuda and Suriname. These countries together accounted for
88% of Guyana’s exports to CARICOM.
Overall (including CARICOM and non-CARICOM markets) Jamaica was Guyana’s 4th
most important export market. Trinidad and Tobago was 5th most important and
Barbados 6th. The data also revealed that Suriname was Guyana’s 10th largest export
market.
With regards to imports, 18% and 19% of Guyana’s imports came from CARICOM in
2001 and 2002 respectively. These imports came, mainly, from Trinidad and Tobago
(82% and 84% respectively of CARICOM’s total imports to Guyana). Other sources of
imports from CARICOM came, both in 2001 and 2002, mainly from Jamaica and
Barbados. The three countries together accounted for approximately 92% of Guyana’s
imports from CARICOM.
Overall, Trinidad and Tobago was also Guyana’s second largest source of imports
(after the US) in both 2001 and 2002. Barbados was Guyana’s 9th largest source of
imports in both years.
28
1. Guyana’s Top 10 Export Markets by country 2001, 2002
1
2
3
4
5
6
7
8
9
10
Destination
2001 (G$ ‘000)
USA
28,243,887
Canada
20,127,924
UK
15,811,690
Jamaica
4,683,461
Trinidad & Tobago
3,189,409
Barbados
2,450,072
Belgium
1,812,370
Portugal
1,451,116
Netherlands
1,421,115
Suriname
1,211,375
Table 9 Source: Bureau of Statistics
Destination
1 USA
2 Canada
3 UK
4 Jamaica
5 Portugal
6 Trinidad & Tobago
7 Barbados
8 Belgium
9 France
10 Netherlands
2002 (G$ ‘000)
20,844,427
20,327,538
7,905,117
5,408,219
4,492,022
4,148,095
2,463,427
2,276,642
2,141,508
2,024,125
Table 10 Source: Bureau of Statistics
2. Major Export Destinations by region 2001, 2002
Destination
Of Exports
USA
European Union
Canada
CARICOM
Sub-Total
Other Countries
Total Exports
Exports
(GY $‘000)
2001
% of Total
Exports
2001
Exports
(GY$ ‘000)
2002
% of Total
Exports
2002
28,243,887
30.9
20,844,427
25.1
23,767,673
26.0
20,314,161
24.5
20,127,924
22.0
20,327,538
24.5
13,891,490
15.2
19,462,270
23.5
86,030,974
94.1
80,948,396
97.6
5,398,435
5.9
2,013,620
2.4
91,429,409
100
82,962,016
100
Table 11 Source: Bureau of Statistics
29
% Total Exports
Share of Exports to CARICOM and Non-CARICOM markets
2001, 2002
120
100
80
60
40
20
0
85
77
15
23
2001
2002
CARICOM
Non-CARICOM
Fig 12
Major Export Markets 2001, 2002
120.0
% Total Exports
100.0
80.0
5.9
2.4
15.2
23.5
22.0
60.0
40.0
20.0
26.0
24.5
24.5
30.9
25.1
2001
2002
Other
CARICOM
Canada
EU
USA
0.0
Fig 13
30
3. Guyana’s Top Ten Import Markets by country 2001 & 2002
2001
Countries
1
2
2002
USA
Trinidad & Tobago
Netherlands Antilles
UK
Venezuela
Netherlands
China
Canada
Barbados
Brazil
3
4
5
6
7
8
9
10
Imports
(G$ ‘000)
41,027,076
16,615,761
13,043,661
6,696,161
4,378,655
3,863,720
2,972,613
1,578,532
1,187,535
888,065
Countries
Imports
(G$ ‘000)
37,066,812
16,890,752
12,802,792
7,893,131
4,372,266
3,665,129
3,340,864
1,880,937
1,198,071
1,195,955
1 USA
2 Trinidad and Tobago
3 Netherlands Antilles
4 UK
5 Venezuela
6 China
7 Netherlands
8 Canada
9 Barbados
10 Brazil
Table 12 Source: Bureau of Statistics
Table 13Source: Bureau of Statistics
4. Major Import Markets by region, 2001 & 2002
Region
USA
CARICOM
European Union
Netherland
Antilles
Sub-Total
Other Countries
Total Exports
Imports
(GY $‘000)
2001
% of Total
Imports in
2001
Imports
(GY$ ‘000)
2002
% of Total
Imports in
2002
41,027,076
37.4
37,066,812
34.6
20,218,351
18.4
20,053,409
18.7
13,150,454
12.0
14,056,065
13.1
13,043,661
11.9
12,802,792
11.9
87,439,542
79.7
83,980,097
78.3
22,281,272
20.3
23,288,160
21.7
109,720,814
100
107,267,238
100
Table 14 Source: Bureau of Statistics
31
Share of Imports from CARICOM and Non-CARICOM Markets,
2001 and 2002
120
% Total Imports
100
80
60
82
81
18
19
2001
2002
40
20
0
CARICOM
NON - CARICOM
Fig 14
Major Sources of Imports 2001, 2002
120
% of Total Imports
100
80
60
40
20
20
22
12
12
12
13
18
19
37
35
2001
2002
Other
Netherland Antilles
EU
CARICOM
USA
0
Fig 15
32
Intra-Regional Trade (‘000 G$)
CARICOM
ANTIGUA AND BARBUDA
Exports 2001
Imports 2001
Trade Balance
2001
Exports 2002
Imports 2002
Trade Balance
2002
420158
76328
343830
1521202
226650
1294552
2450072
1187535
1262537
2463427
1198071
1265356
93517
170600
(77083)
178493
254011
(75518)
264510
678711
(414201)
182146
514613
(332467)
104973
8751
96222
2788
28518
(25730)
350620
20965
329655
522758
48154
474604
4683461
820564
3862897
5408219
628242
4779977
1724
244868
(243144)
1019
n/a
n/a
1211375
244869
966506
1137235
67728
1069507
3189409
16615761
(13426352)
4148095
16890752
(12742657)
656315
101851
554464
636503
109664
526839
422298
46125
376173
403705
23502
380203
43058
1423
41635
70978
63504
7474
13891491
20218351
(6326860)
16676568
20053409
(3376841)
BARBADOS
BELIZE
COMMONWEALTH OF DOMINICA
COMMONWEALTH OF THE BAHAMAS
GRENADA
JAMAICA
MONTSERRAT
REPUBLIC OF SURINAME
REPUBLIC OF TRINIDAD & TOGAGO
SAINT LUCIA
SAINT VINCENT & THE GRENADINES
ST. KITTS AND NEVIS
TOTAL CARICOM
Table 15 Source: Bureau of Statistics
Main CARICOM Markets for Export
2001
12%
5%
33%
9%
18%
23%
JAMAICA
BARBADOS
SAINT LUCIA
TRINIDAD & TOGAGO
SURINAME
Other CARICOM Countries
Fig 16
Main CARICOM Markets for Export
2002
12%
7%
32%
9%
15%
25%
JAMAICA
BARBADOS
SURINAME
TRINIDAD & TOGAGO
ANTIGUA AND BARBUDA
Other CARICOM Countries
Fig 17
34
Main Source of Imports in CARICOM
2001
8%
4%
TRINIDAD & TOGAGO
6%
BARBADOS
JAMAICA
82%
Other CARICOM
Countries
Fig 18
Main Source of Imports in CARICOM
2002
7%
3%
TRINIDAD & TOGAGO
6%
BARBADOS
JAMAICA
Other CARICOM
Countries
84%
Fig 19
35
Guyana’s Trade with the European Union
Exports
2001
Imports
2002
2001
2002
Austria
N/a
N/a
N/a
2,122
1,812,370
2,276,642
849,925
840,312
25,405
23,454
275,906
117,041
886,412
868,929
N/a
11,494
1,060,605
2,141,508
502,057
265,185
1,108,395
161,369
539,138
735,480
26
200
62,273
4,095
27,742
36,430
219,196
647,378
N/a
335
2,220
N/a
1,421,115
2,024,125
3,863,720
3,340,864
1,451,116
4,492,022
N/a
6,170
159,892
384,030
121,234
150,781
2,905
N/a
18,624
42,012
15,811,690
7,905,117
6,696,161
7,893,131
23,767,673
20,314,161
13,150,454
14,056,065
Belgium
Denmark
Finland
France
Germany
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
UK
Total
Table 16 Source: Bureau of Statistics
36
Section Seven
Foreign Direct Investment
Though over the years Foreign Direct Investment (FDI) to Guyana has improved,
there has been more domestic investment than FDI. In any given year since
1997 domestic investment has been three to four times larger than FDI.
Investment Flows (G$ Millions)
1997
1998
1999
2000
Total
Investment
Foreign
Direct
Investment
Domestic
Investment
2001
2002
47,099
44,779
47,603
50,065 51,375
n/a
7,488
7,271
8,303
12,397 10,612
n/a
39,611
37,508
39,300
37,668 40,763
n/a
Table 17 Source: Bank of Guyana
FDI flows into Latin America and the Caribbean
For the third year running, FDI flows into Latin America and the Caribbean have
continued to fall, declining 33% from US$84 billion in 2001 to US$56.7 billion in
2002, according to the Economic Commission for Latin America and the
Caribbean (ECLAC), in its Foreign Investment in Latin America and the
Caribbean, 2002 Report.
Not only has the falling trend continued for the third year running, but also the
pace of the decline has risen, following a 12.6% drop in 2000 and an 11% drop in
2001.
Declining FDI worldwide reflects multiple factors, among which ECLAC points to
"the sharp decline in the share prices of many transnational corporations (TNCs),
mainly those associated with the new economy, the steep drop in privatizations
and acquisitions of international assets and the downward spiral in the amount of
financing generally available to TNCs."
In Latin America and the Caribbean, this was further affected by "increased
instability, slower economic growth and the apparent end of the cycle of
privatizations." Crises in Argentina, Uruguay and Venezuela, "were also
conducive to increased risk aversion and reduced foreign investment, all of which
tended to heighten uncertainty on the part of foreign investors," ECLAC reports.
FDI flows into Central America and the Caribbean countries fell 13% in 2002, but
remained similar to inflows from 1995 to 1999, with Costa Rica, where FDI
37
income rose 41%, a case apart. In South America, FDI inflows fell 31% in 2002,
reaching just 60% of the annual average posted between 1995 and 1999.
In the Andean Community, where natural resource-seeking strategies
predominate, FDI income did not suffer as much from the global downturn.
Although it dropped 18% in 2002, this was somewhat less severe than the
downturn for the region as a whole, and reflected conditions in Venezuela. FDI in
hydrocarbons rose the most, reflecting the threat of war in the Middle East, while
investment in minerals fell off considerably.
In Mercosur countries and Chile, FDI inflows fell 35% in 2002. These countries
saw biggest rise in the previous decade and the sharpest fall in the new
millennium. In 2002, FDI inflows were slightly higher than the annual average
posted between 1995 and 1999. In this subregion, market-seeking strategies
prevail among transnational corporations and FDI inflows were stymied by the
completion of privatization processes, economic crises in Argentina and
Uruguay, and lower growth in Brazil and Chile.
The Top 19 Recipients of
Net FDI as a percentage of GDP
(1997 – 2000)
20% or more: 3 Countries
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Lesotho
St. Vincent & the Grenadines
Angola
10%-20%: 9 Countries
St. Kitts and Nevis
Azerbaijan
Trinidad and Tobago
Grenada
Vanuatu
Nicaragua
Panama
Bolivia
St. Lucia
7%-10%: 7 Countries
Seychelles
Chile
Equatorial Guinea
Estonia
Guyana
Czech Republic
Armenia
21.8
21.2
20.4
17.1
16.2
11.8
11.3
10.5
10.5
10.4
10.4
10.3
9.3
8.0
8.0
7.7
7.5
7.4
7.2
Table 18 Source: www.theglobalist.com/DBWeb/StoryId.aspx
38
With the exception of Lesotho8, whose main products are clothing, footwear and
other light manufactures, of the top FDI recipients, seven are relatively small
economies which depend mainly on mineral exports: Angola (20.4%), Azerbaijan
(16.2%), Trinidad and Tobago (11.8%), Bolivia (10.4%), Equatorial Guinea
(8.0%), Guyana (7.5%) and Kazakhstan (6.9%).
Another six of the top 20 countries are small island states (with a GDP of
between US$ 200 – 600 million) which attract tourism-related investment: St.
Kitts and Nevis (17.1%), Trinidad and Tobago (11.8%), Grenada (11.3%), St.
Lucia (10.3%) and Seychelles (9.3%).
Chile, with a GDP of over US$70 billion, is the only sizeable economy among top
FDI recipients, with the highest FDI inflows in relation to its size. The others –
Estonia and the Czech Republic pursued successful foreign investment polices9.
8
The Globalist, “Global Markets – Sizing Up Foreign Direct Investment,” pg1-4. “Lesotho, a small
country in southern Africa has a very small economy. Its total production is worth less than one billion US
dollars (out of a world GDP of well over 30 trillion dollars), yet, the contribution of foreign investors to the
economy was 21.8% of GDP during the years 1997 – 2000”
9
Ibid. pg1-4
39
Section Eight
External Trading Relations
Given Guyana’s small leverage in world economy and interests - Guyana
represents around one-tenth of the population of CARICOM, about one-tenth of
one percent of the population of the FTAA, and an even smaller percentage of
the WTO membership – it is imperative that it seek to cooperate with partners
that have similar objectives.
Currently, Guyana is engaged in four major negotiations:
I. The Caribbean Single Market and Economy (CSME)
At the regional level, the Caribbean Community (CARICOM) is still strengthening
the economic integration of its Member States through the CARICOM Single
Market & Economy (CSME). It is intended to facilitate economic development
within Member States and across the Region. In essence, the CSME was
conceived as an instrument to facilitate economic development of the Member
States in an increasingly liberalised and globalised international environment. In
the area of trade, the CSME aims to assist in the realisation of full employment of
all the factors of production; increased economic leverage and effectiveness visà-vis other States, groups of States and entities; expansion of trade and
economic relations with other Caribbean, and Central and Latin American
Countries; the achievement of increasing levels of competitiveness; and
organisation for increased production.
CARICOM is also engaged in negotiations for the formation of a Free Trade Area
of the Americas (FTAA). The establishment of the CSME will provide the Region
with a basis for production integration and assist in positioning the Region to
participate as an equal partner in the agreements already finalised and those that
are currently being negotiated.
With the establishment of the CSME, which is being undertaken in a phased
manner with a series of parallel activities ongoing, a number of benefits are
expected to accrue to Guyanese and all other CARICOM nationals.
•
•
•
•
•
•
Optimal allocation of all the Region's resources.
Increased output of goods and services through production integration.
Access for national producers to entire CARICOM Market in first instance and
to market opportunities further a field.
Enhanced competitiveness of regionally produced goods.
Net positive impact on the profitability of regional companies
Increased opportunities for CARICOM Nationals for investment, service
provision and employment in the new CSME environment.
40
The CSME provides Guyana, as well as the Region with a singular opportunity to
organise itself for efficient and competitive production and trade in a globalised
world. For Guyanese companies and nationals, the CSME not only offers
opportunities in the wider world market, but also in the Regional (CARICOM)
market.
II. African, Caribbean and Pacific - The European Union
The African, Caribbean and Pacific (ACP) Group of countries on June 23, 2000
signed a new partnership agreement with the 15 member states of the European
Union (EU) in Cotonou, Benin. This agreement is referred to as the Cotonou
Agreement. It provides the basis for building a new relationship between the
parties that encompasses economic, political, and financial and development
dimensions.
The Agreement is aimed at:• The eradication of poverty.
• Sustainable development.
• The gradual integration of ACP countries into the world economy.
With regard to trade relations, it sets the platform for building, “new trading
relations” between the ACP and the EU. It makes reference to the negotiations of
Economic Partnership Agreements (EPAs) that will replace the past forty years of
partnership with the EU including the past twenty-five years of relations under the
various Lomé Conventions that was entered into since 1975. The Lomé
arrangements are no longer compatible with WTO rules and are required to
conform to the WTO requirements. The WTO at the Doha development Round
granted a waiver to the EU for such trading arrangements until January 1, 2008.
The ACP Group of countries on September 27, 2002 officially launched
negotiations on new WTO compatible EPAs. The new EPAs that will be
negotiated over the next five years will replace the past 25 years of nonreciprocal trade relations with the EU under the various Lomé Arrangements.
Guyana, among other ACP countries, is continuing to benefit from the
preferential access to the EU markets for our exports of rice, rum and sugar.
Under the new trade arrangements that will come into effect in 2008 and when
the WTO waiver for preferences granted by the EU is set to come to an end,
trade with the EU will be on a reciprocal basis and will be based on the new
framework that will be put in place which must be WTO compatible.
The negotiations for EPAs will be undertaken in two phases. Phase 1 is referred
to as the “ALL-ACP” phase in which matters of common interest and concerns of
all ACP countries will be addressed. This phase will conclude in September
2003. Phase 2 will address matters of concern and interest to a specific country
41
or regional grouping. The Caribbean is poised to undertake Phase 11 of the
negotiations at the regional level. The ACP and EU negotiations are currently in
Phase 1 of the negotiations. The task facing the negotiators, who have been
partners for several decades looks like a difficult one give the many issues and
respective interest to be addressed.
The ACP has identified six clusters for the conduct of the negotiations.
These are:1.
2.
3.
4.
5.
6.
Market Access.
Agriculture and Fisheries.
Trade in services.
Development Cooperation.
Trade related issues.
Legal Issues.
For each cluster a lead and alternate spokesperson at the Ambassadorial and
Ministerial levels have been identified. Guyana is the alternate Ambassadorial
Spokesperson for Agriculture and Fisheries.
For Guyana the EU’s preferential markets are critical to the development and
sustainability of the sugar, rice and rum industries. Guyana has benefited from
prices higher than the world market prices and preferential access into the EU.
The likely erosion of such access will impact on the ability of the industries to
become competitive on the international market and undermine the development
aspects of the Cotonou.
Guyana has submitted a number of proposals on sugar and rice, which have
been adopted at the ACP level and presented as motions for Resolutions to
different fora of the ACP/EU. The Resolutions are intended to safeguard trade
under the different Commodity Protocols under the Cotonou Agreements.
III. The Free Trade Area of the Americas (FTAA)
In December 1994, at the first Summit of the Americas, 34 Heads of State of the
Western Hemisphere, encompassing all countries in the Americas except Cuba,
agreed to create a Free Trade Area of the Americas (FTAA) by 2005. The FTAA
will create the world's largest free trade area — approximating 800 million people
and a GDP of almost US$ 11 trillion.
Current negotiations for the establishment of the FTAA are well advanced. At the
3rd Summit of the America in April 2001 the Heads of State of the Hemisphere set
January 1, 2005 for the negotiations to conclude and December 31, 2005 for the
implementation of the Agreement to commence.
42
Guyana has been participating actively in the FTAA negotiations from its
inception in 1995 and continues to do so within the framework of CARICOM’s
joint approach to the external negotiations. Guyana is actively represented in the
Negotiating Groups on Market Access (NGMA) and Agriculture (NGAG), the
consultative Group on Smaller Economies (CGSE) and the oversight Trade
Negotiations Committee (TNC).
From the inception of the Summit of the Americas (SOA) process in December
1994, Guyana spearheaded the Caribbean Community’s call for the
establishment of a Regional Integration Fund (RIF) that would help the “smaller
economies” respond effectively to the adjustment challenges that would result
from the implementation of the FTAA and the adjustment to the hemispheric and
wider trade liberalization.
IV. The World Trade Organisation (WTO)
Guyana became a member of the World Trade Organisation (WTO) on January
1, 1995, following the earlier conclusion of the Uruguay Round Negotiations.
Although Guyana became a contracting party to the General Agreement on
Tariffs and Trade (GATT), immediately after the country gained became
independent in 1996, and a member of the WTO when that organisation replaced
the GATT in January 1995, the country has not been able to participate as
actively as it would like to in GATT or WTO deliberations since it does not have a
permanent mission in Geneva.
In February 2002 CARICOM Heads of Government agreed on the appointment
of Ministerial lead spokespersons for the region in the key external trade arenas.
Guyana, in the person of the Minister of Foreign Trade, was designated the
region’s Ministerial spokesperson on WTO matters. Following this decision of
CARICOM Heads, the Government of Guyana, with a view to strengthening
appropriate institutional arrangements, strategically accredited its Embassy in
Brussels as the country’s non-resident Mission to the WTO in Geneva, taking into
account the need to effectively co-ordinate the country’s participation in both the
Geneva process at the WTO and the ACP-EU Negotiations in Brussels. This
arrangement will suffice as an important one until Guyana is able to establish a
resident Mission or presence in Geneva.
43
Section Nine
GUYANA: OUTLOOK FOR 2003
With regards to the improvements and expansion that have taken
place under the Agricultural Improvement Plan, positive developments
are expected in sugar and rice. It is estimated that Guyana’s GDP will
grow by 1.2% in 2003. Sugar production is projected to grow by 2.9%
to 340,552 tonnes. Rice output is expected to increase by 3% to
296,388 tonnes10.
Delayed recovery in the bauxite industry, decline in gold production
and non-growth in diamonds production will cause the mining sector to
fall by 7.1%11
Merchandise exports are projected to increase by 4.1%, while
merchandise imports are expected to rise by 14.2%12 .
10
Budget 2003, “Confronting the Challenges: Staying on course for a prosperous Guyana,” pg44
Ibid, pg. 44
12
Ibid, pg45
11
44