Chapter 34: THE MANUFACTURING SECTOR AND TECHNOLOGY

DRAFT October 14, 1996

Introduction

It is recognised in current economic theory and practice that the development progress of a country has a direct correlation with the expansion in the privately driven manufacturing and agro-processing sector. Attendant upon growth in the latter are sharp increases in output and labour productivity as a result of deeper backward and forward linkages. The employment-creation effects of the manufacturing and agro-processing sector exert a beneficial distributive influence on the pattern of ownership of income and wealth, thereby weakening the factors militating in favour of endemic poverty. Hence, most countries tend, historically, in the pursuit of prosperity, to highlight in their development strategy a policy for the rapid expansion of the manufacturing and agro-processing sector.

The comparative record of the effects of manufacturing and agro-processing on economic development indicates that for the process itself to be most rapid and for its impact to be maximum certain conditions must be satisfied. These include as significant:

(a) coherence between macro economic policy and sector strategy;

(b) promotional reliance on the private sector;

(c) supportive infrastructure;

(d) augmentation of labour force skills and training for that purpose;

(e) an enabling legal environment;

(f) appropriate financial, fiscal and monetary instruments; and

(g) strengthened institutions.

These interlinked factors, along with the progressive elimination of preferential arrangements and other barriers are critical, but not sufficient, for the definition of a workable, demand-driven manufacturing and agro-processing policy framework. The sector progresses best in an open, competitive market in which investment decisions are based on dynamic, comparative advantages.

Manufacturing and agro-processing is defined in this Chapter as the application of technical know-how and process equipment (embedded knowledge) in alliance with capital and labour to the transformation, with clear value addition, of locally available or imported raw materials and/or intermediate inputs into final or intermediate products for the domestic and/or export markets. These include, in the case of Guyana, as indeed in other cases, agricultural (marine, forestry, livestock, crops), industrial and mineral materials.

Guyana's manufacturing and agro-processing sector developed against a background of official policy and mechanisms employed to encourage the establishment of light industries for import substitution in the late 1950s and early 1960s. Production by essentially small-scale enterprises was targeted solely for the domestic market, which was and still is relatively small.

Some producers enjoyed production under a regime that either restricted importation of locally produced commodities or discouraged importation through tariff measures. A regime also provided encouragement for investment and offered generous fiscal incentives. Government further provided infrastructure and institutional arrangements for establishment of industries. It was during that period that the first industrial site was provided at Ruimveldt and the Industrial Development Corporation was created.

The raw material inputs to manufacturing were mostly imported and financed by foreign exchange generated mainly from the exports of sugar, bauxite, and rice. This sector requires regular access to foreign exchange for its operations. The decline of the export-oriented sugar, bauxite, and rice industries during the 1970s and 1980s, accompanied by adverse macroeconomic policies, obviously led to the virtual collapse of the local manufacturing sector over the last two decades, but very recently there have been indications of a revival, at least in some subsectors.

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I. Basic Features of the Sector

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A. General Characteristics

Guyana is manifestly rich and abundant in commercially exploitable natural resources and the range of its micro climactic conditions is conducive to varied agricultural production. Outside Guyana, areas such as the Caribbean, North America and Western Europe offer immense market opportunities for manufactured⁽¹⁾

products via the enabling CBI, Lomé and CARIBCAN arrangements and, of course, the single market, CARICOM. Some of these markets are consistent with Guyana's known resource endowment and in the case of others, Guyana could readily develop the required comparative advantage for the production and export of manufactured products. In spite of these possibilities, growth in the manufacturing sector has been limited, and hence it has not contributed significantly to the gross domestic product (GDP) of the country, with the exception of bauxite processing and sugar milling. In a typical manufacturing nation, the share of manufactures in total production increases in relation to the expansion in national income, if not more rapidly. The growth of the secondary sector (which apart from manufactures includes engineering and construction) rises as value is added in the processing of materials and products invariably at the expense of the primary sector's (raw materials') share. The tertiary sector (basically, services) also develops at the expense of the primary sector in the typical model.

In Guyana the secondary sector's share of GDP was actually higher in the period 1950-75 than it has been in recent years. In part, this has been because of lack of fully adequate policies at the macroeconomic level and for the manufacturing sector. A cursory review of the pattern of phased political development and the attendant economic strategy adopted by successive governments would highlight this fact.

Table 34-1 below highlights pertinent characteristics of the manufacturing and agro-processing sector that underpins its importance to the national economy. The number of operating units has risen in keeping with output and employment trends. Also in key subsectors such as engineering and wood products there has been significant expansion in average plant size due to consolidation of old and the establishment of new units.

It can be seen from the table that while natural resource-based subsectors, such as wood processing and agro-processing, account for the bulk of the employment in manufacturing, nonetheless there are other subsectors of importance, such as textiles and metal working.

For convenience of review, the manufacturing and agro-processing sector could be subdivided as follows:

(a) metal fabrication, foundry and machine related products

(b) leather, textile and packaging products

(c) beverages

(d) chemical and paper related products

(e) food and food related products

(f) marine related products

(g) forestry related products

(h) mineral related products

(i) livestock and dairy related products

(j) other products

These subdivisions are all related in terms of intersectoral linkages and sector diversification. While manufacturing faces a number of issues and constraints cutting across the sector, at the same time each subsector in turn has its own unique problems. Hence, it is proposed to examine briefly each one to isolate the key policy issues which require attention in the formulation of an overall policy as well as to take on board the sector-wide concerns.

Table 34-1

Profile of the Current Manufacturing Sector

Category of Activities	Principal participants	Products	No. of Operators (Approx.)	Employment (very approx.)	Source of Inputs	Export Markets	Value Added
1. Fabricated metals (including small workshops)	ACE, BEV Enterprise, BACIF, GNEC, GRL, IDI Engineering Industrial, IEL Engineering, Parris Manufacturing, etc.	Grass and via castings pumps, facilities, fabrication for the sugar, rice and mining sectors	50	2,000	Imported principally	CARICOM, North America	Not significant
2. Textiles (including garments)	Atlantic Garments, Briana Manufacturing, Gobins, Sanata Textiles, Guyana 807, Windsor Manufacturing, etc.	An assortment of finished garments for ladies, men, children, ties, handkerchiefs, etc.	75	5,000	Imported principally	CARICOM, North America	High, because of low wage rates, relatively
3. Leather and leather-related (including bags, footwear, etc.)	Bettencourt Bags, Show World, IDS Holdings, Wrays	Bags, Shoes, Belts	20	1,000	Local and imported	CARICOM	High
4. Minerals (metallic and non-metallic)	Omai, LINMINE, BERMINE, Golden Star and a number of jewellers	Bauxite, gold, diamond jewelry	120	8,000	Local	Europe, North America, CARICOM	Significant
5. Forestry and wood-related (p)	Plywood Industries Limited, Toolsie Persaud Limited, Willems Timber and Trading Barama, Mazaharally, CRL, Precision Woodworking, Shiva, Ideal, etc.	Sawn lumber, furniture, veneers, poles, piles, plywood, logs	200	20,000	Local mainly. Small amounts of imported inputs	North America, CARICOM, Europe. Export value approx. US$50m annually	Very high because of large usage of local inputs

6. Chemical and chemical-related	Guyana Pharmaceutical (GPC), Rome Manufacturing, Continental Industries Limited, Demerara Oxygen Company Limited	PVC pipes and fittings, pharmaceutical (drugs), mosquito nets, pants, domestic and industrial gases	30	2,000	Mostly imported	CARICOM, North America	Not significant
7. Paper and paper-related	Sapil, Guyana Publications Limited	Packaging materials, newspapers	10	1,000	Mostly imported	CARICOM	Not significant
8. Food and Food Processing (p)	Banks DIH, Vinelli, Amazon Caribbean, Guyana Limited, Chins, Guysuco	Jams, jellies, chowmein, curry powder, cereals, ice cream, sugar	35	30,000	Local and imported	CARICOM, North America, ACL	Significant
9. Beverages - alcoholic and non-alcoholic	Banks DIH, DDL, Verdun	Soft drinks, rum, beers, malta, start	10	2,500	Imported	Europe, North America, CARICOM	Very significant
10. Livestock related (p)	Lidco, small farmers, Guysuco	Beef, milk	1,000	5,000	Local	-	Significant
11. Others	GRL, Colgate Palmolive, Guyana Limited, Demerara Tobacco Company Limited	Refrigerators, stoves, toothpaste, detergent, cleansers, cigarettes	10	500	Imported	CARICOM	Not significant

(p): Includes operators and employment in the primary sector.

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B. The Subsectors of Manufacturing

1. Minerals, Sand, Stones, Rocks and Clays

Guyana is rich in mineral resources and the geological surveys and exploration activities undertaken to date underscore the fact (see Chapter 32). However, the only minerals exploited to date on a commercial basis have been manganese, bauxite, gold and diamonds. Semi-precious stones are available extensively but not yet exploited commercially. Petroleum is known to exist but not commercially produced. There are widespread deposits of clay types suitable for a variety of ceramic applications. A few are being commercially exploited and exported to Trinidad and Tobago. Apart from construction and recreation for which it is being used locally and exported in small amounts, sand is also a vital raw material in the manufacturing process. Bauxite and gold have been the only products from the earth subject to some amount of processing .

All the above products have significant long-run potential as inputs for the global manufacturing process. They have the characteristic of being energy-intensive and they require extensive investments and perspective planning. In the short and medium run the minerals with the greatest economic potential appear to be gold, diamonds and semi-precious stones (Chapter 32).

This part of the subsector has both large and small operators. At one extreme is OMAI and at the other are the pork-knockers. Responsibility for the sector on the Government's side is vested in the Guyana Geology and Mines Commission (GGMC) and on the part of the operators the Guyana Gold and Diamond Miners Association (GGDMA). Consecutive governments have focussed policy largely on the foreign exchange potential, particularly of gold, and less so on diamond and semi-precious stones, rather than more comprehensively on the potential contribution they could make to expanding the national manufacturing base. Had their policies for producing, purchasing and taxing been more realistic, a large part of the trade probably would not have been diverted to the informal sector as was recently revealed. Table 34-2 below highlights the officially declared production and input figures for both gold and diamonds. At the moment semi-precious stones are neither produced nor exported.

Table 34-2

Gold and Diamond Production and Exports

	1970	1980	1985	1990	1991	1992	1993	1994	1995
Gold production (ounces '000)	-	-	10.6	38.7	59.3	79.6	309.8	375.6	289.5
Gold export (in mill USD)	-	-	-	25.2	20.4	24.6	99.8	128.0	94.7
Diamond production (in mill USD)	-	2.6	1.7	1.4	2.1	2.0	2.0	2.7	3.1
Diamond export (in mill USD)	-	1.9	0.8	1.2	1.5	1.3	1.2	1.5	1.9

Source: Research Department, Statistical Bulletin, Bank of Guyana, Georgetown, Dec. 1995.

2. Marine Sector Products

The marine subsector has been a cornerstone of the economy in processing and exports for a number of years as Table 34-3 below indicates. The subsector encompasses harvesting in the offshore and coastal zones and inland fisheries, plus processing and export.

The offshore and coastal zone components currently concentrate on quality prawns largely for external markets, although significant quantities of snapper and grouper also are caught. Export values have fluctuated reflecting both price movements and changes in the size of prawns being caught. Sizes and total harvest volumes have fluctuated over the years according to official statistics but artisanal fishermen are reporting much reduced catches. The structure of the subsector is such that it embraces large operators, as for example Georgetown Seafoods Limited (GSL) with 43 trawlers and its own plants for processing, deep freezing, packaging and storage, and local operators with one to three trawlers. There used to be several overseas trawling fleets based in Georgetown. The Government's imposition of duties on imported fuel used by the foreign-based fleet drove many of them to the duty free haven of Surinam, but nonetheless most trawlers operating out of Guyana's ports still are foreign-owned (Chapter 31). In retrospect, this partial switch in location was seen to be necessary in light of the requirements of a sustainable management harvesting regime, to avoid further stock depletion.

The bulk of the prawns caught are merely beheaded and or shelled, blast frozen, packaged and exported to markets in North America. Further processing of quality prawns would not add much value. There is a serious need to effectively patrol the fishing grounds to ensure strict adherence to the sustainable management plan and to deter illegal trawling. To implement a meaningful policing system, the Government would need to join with the coast guard and related services of other countries and patrol the fishing grounds in question. There is also the need for the Government, in conjunction with the subsector operators, to promote the consolidation and/or expansion of the domestic fleet on a strictly commercial basis, with emphasis on pelagic species of the continental slope and beyond. Intensity of investments and high insurance costs are formidable barriers to entry and expansion and should be focussed on.

Coastal zone fishing is dominated by independent operators and co-operative members who specialise in catching seabob and fin species close to shore largely for the domestic market.

Table 34-3 highlights the production trends and exports of prawns and finfish. Exporting is done largely via the co-operatives and specialist processing firms such as Bruce E. Vieira Limited (BEV) and intermediaries. The sophistication of the BEV plant points (in terms of technology, management and scale) to the direction in which both the co-operatives and the other operators could productively move in terms of adding value.

Inland fishing, largely in the rivers, lakes and the many drainage and irrigation canals, is the most underdeveloped element of the subsector. Because it is a subsistence activity, it does not readily lend itself to organisational arrangements and quick improvements and most probably will continue approximately in its present form over the medium term, although Chapter 31 indicates some ways to improve its productivity.

By contrast, there is considerable scope for aquaculture in the brackish waters along the coast which are most suitable for the commercial cultivation of prawns and fish. Private investment should be encouraged in this field, to bring in technology as well as capital. There is a ready export market, especially for cultivated prawns.

Table 34-3

Marine Products: Production and Trade

	1970	1980	1988	1989	1990	1991	1992	1993	1994
Prawns Prod (tons) Exp (in Mill USD)	1,927 2.5	2,142 3.1	1,866 23.1	1,810 22.4	1,557 23.5	1,927 18.6	1,511 13.0	1,747 11.4	2,168 13.1
Fish Prod (tons) Exp (in Mill USD)	29,315 n.a.	35,108 1.3	41,216 n.a.	32,437 n.a.	32,985 2.9	35,998 3.6	37,097 2.4	37,200 3.5	29,992 4.1

Source: Bank of Guyana and the Statistical Bureau

3. Forestry Sector Products

Products derived from wood draw from the extensive forest resources of Guyana (18.0 million hectares of which 13.5 are commercially exploitable) governed by a fragile Amazonian eco-system. The management of the subsector is vested in the Guyana Forestry Commission (GFC) and the interests of operators is represented by the Guyana Forest Products Association (GFPA). The forest products subsector is highly segmented and embraces logging, saw milling, plywood manufacturers, charcoal producers and furniture manufacturers, and makers of prefab structures, among others. Operators range from individuals with chain saws to large firms. The saw milling and plywood operations tend to be vertically integrated. Of recent, the subsector has attracted significant foreign investments, e.g., Barama, Demerara Timbers Limited, CRC, UMACO, etc., which has induced extensive competition in the market and forced local firms to upgrade technologies and management systems in the battle to retain and gain market share.

The structure of output and exports is shown in Table 34-4 below. In 1994, the subsector as a whole, like rice and sugar, surpassed earlier production, but did not set export records for all products. The most positive developments in the subsector are the:

(a) emergence of plywood as a principal export accounting in 1995 for USD18.3 million, 95 percent of which originated from the Barama operation; and

(b) expansion of production and export of furniture, totalling USD 5.1 million in 1994.

Unfortunately, the share of prefabricated structures, which hitherto occupied a prominent position in export, has shrunk on account of limited supply capacity and an inability to conform to delivery deadlines. The principal operators in the subsector, CRL and National Screen Printers Limited (NCE), have since shifted the structure and focus of their business operations. There exists, however, a market niche for prefabricated houses, and the GFC and GFPA need to design and implement a marketing strategy to recapture this niche.

Plywood, no doubt, with Barama and Plywood Industries Limited (PIL) the sole manufacturers, will take care of itself. Both output and export should continue to increase sharply. Furniture manufacturing calls for a farsighted strategy, based perhaps on the emulation of Precision Woodworking Limited (PWL) and Furniture Industries Limited (FIL) and MSFIL, which rely on progressive management, state-of-the-art technology, standard designs and competitive pricing to penetrate and capture overseas markets.

Equally such a strategy would have to address the potential of the subsector to increase the range of other high value added manufactured wood products such as handles, veneers, hardboards, matchsticks, etc. Obviously the subsector has a tremendous contribution to make to the national development process. Products such as millwork, furniture and floors produce much more employment per cubic metre of wood harvested from the forest than plywood does.

Table 34-4

Output and Export of Forest Products

OUTPUT
PRODUCT	UNIT	1970	1980	1990	1991	1992	1993	1994	1995
Greenheart logs	Cu. ft	3793	2462	1399	1481	1754	1869	2103	n.a.
Other logs	Cu. ft	2628	2527	2015	2094	2116	4155	4319	n.a.
Sawn lumber	Cu. ft	490	318	2075	2923	5897	8498	9703	n.a.
Plywood	In mill USD	n.a.	n.a.	1.3	0.8	2.7	1.9	7.5	18.3
Furniture	In mill USD	n.a.	1.4	2.1	3.3	3.8	4.4	5.1	n.a.
Prefab buildings	In mill USD	2.6	3.1	0.7	0.6	1.1	0.8	0.4	0.5
EXPORT
Greenheart logs	Cu. ft	80	200	2.1	80	14	121	180	n.a.
Other logs	Cu. ft	29	62	n.a.	45	n.a.	29	40	n.a.
Sawn lumber	Cu. ft	1364	260	139	209	256	304	410	533
Plywood	In mill USD	n.a.	0.6	0.6	0.6	1.5	1.3	5.5	17.3
Furniture	In mill USD	n.a.	0.4	1.1	1.5	1.9	2.2	2.5	n.a.
Prefab buildings	In mill USD	0.7	1.1	0.5	0.4	0.8	0.7	0.3	0.4

Source: Statistical Bureau and Bank of Guyana

4. Dairy and Livestock

Some of the production centres for dairy and livestock, inclusive of beef, mutton, pork, poultry, eggs and milk, are spatially mismatched in relation to the demand points. This is particularly true of beef, in which the country largely satisfies its needs along with mutton. There is significant import of chicken and eggs from North America and milk products from Europe. The import bill in 1995 averaged USD 1.6 million per month, with chicken and eggs accounting for close to 75 percent. Table 34-5 below highlights the domestic production trends in this area.

The beef and dairy cattle population is estimated by the NDDP at 255,000 head and is free from hoof and mouth disease. Producers cover the spectrum in terms of size and location. Guyana was once a beef exporter and was almost self-sufficient in dairy products in the 1950s and 1960s.

a. Dairying

Dairy production is concentrated along the coastal belt in order to facilitate quick access to markets. There are only three large commercial units, namely Fairfield Investments Limited (FIL), Guyana Sugar Corporation (GUYSUCO) at Versailles and Livestock Development Corporation (LIDCO) with modern milk processing facilities. GUYSUCO also has a cheese plant which is not operational on account of inadequate volume of milk. LIDCO also maintains a manufacturing and packaging plant for milk products in Georgetown. Both Guysuco and LIDCO management could benefit from a close examination of the more effectively run FIL. The bulk of the existing milk production comes from farmers with between one to twenty-five head of cows in close proximity to Georgetown. Despite the efforts of consecutive governments via the NDDP to expand production, milk output has been on the decline as shown on Table 34-5.

Table 34-5

Dairy and Livestock Production Indicators

	1980	1990	1991	1992	1993	1994	1995
Beef (thousand tons)	2143	1672	3021	4200	3840	-	4190
Pork (thousand tons)	712	535	447	600	1137	-	1280
Mutton (thousand tons)	...	56	44	71	53	65	...
Poultry (thousand tons)	2112	1789	1718	3084	4067	6236	7229
Eggs (million)	10.8	11.3	5.3	7.3	8.5	18.0	30.4
Milk (thousand litres)	2.3	1.7	1.6	1.6	1.1	0.8	0.8

Source: Research Department, Statistical Bulletin, Bank of Guyana, Georgetown, December, 1995, and Statistical Bureau.

Contributing to this trend are the low prices for milk products, supply difficulties and the high costs of feed supplements, the enforcement of municipal and local government laws on grazing and the disappearance of community pastures. The lack of pasteurising, storage and transport facilities causes considerable spoilage and adds incalculably to costs.

b. Beef

The Rupununi had been the principal supplier of beef until the 1969 insurrection caused the dislocation of the large ranches there. Those that have remained, inclusive of the Rupununi Development Company (RDC), have suffered from rustling of late, the closure of the railway system and the termination of the Guyana Airways cargo flight from Lethem. These have made it impossible to maintain and expand the shipment of live animals and carcasses from the Rupununi. As a result some trade has developed between the adjoining regions across the Takatu River. The Rupununi has immense potential for the expansion of production which is stymied by inaccessibility to markets. In this respect, the projected completion of the road to Lethem and the lifting of restrictions on air traffic (Chapter 38) should provide a great assist to production in the Rupununi.

There are many other ranches closer to the consumption points, the sizes of which vary over time as owners switch land use away from cattle to rice and vice versa. There are also innumerable small farms with herd sizes varying from five to one hundred cattle, frequently as part of a mixed farming practice. Despite the experience of the Rupununi, beef production has been on the increase overall.

c. Mutton

This is the least popular meat but recently demand for it appears to have surged, as depicted in Table 34-5. In the Guyana context it is not a versatile meat that readily lends itself to processing activities. This may change in the medium term with changing tastes and continuing growth of demand for meats in general.

d. Pork

Pig farming, with two exceptions Bounty Farms Limited (BFL) and C and F Meat Centre (CFMC), is largely small in scale and is, as a rule, part of mixed farming operations. Pork, as Table 34-5 shows, is the third ranking meat by volume. Both BFL and CFMC have modern facilities for the dressing and packaging of pork and for the manufacturing of ham, bacon and sausages.

e. Chicken and Eggs

By far the most popular meat in Guyana is chicken, for which the country was near self-sufficient in the 1950s and 1960s. The expanding production, shown in Table 34-5, only partially satisfies ballooning demands. The bulk of the demand is satisfied by imports from North America, and also imports account for most of the eggs consumed locally and all the eggs used for the reproduction of meat birds and layers. This component of the subsector is dominated by medium size farms rearing between one and five thousand birds on a batch basis.

5. Processed Foods

Guyana boasts an extremely wide cross section of foods which are manufactured locally for both the domestic and export markets. Traditional produce are rice and sugar. However, non-traditional produce are increasingly holding their own against the influx of foreign products that resulted from liberalised trading policies. Indeed, a positive element of the structural adjustment programme has been fewer import restrictions, enabling the ready availability of machinery, fertiliser and pesticides among other inputs. The current business environment is far removed from pre-1980s with its concomitant market distortions and ought to allow more new manufacturers to enter the market and existing manufacturers to expand and become more export ready.

Though the quantity and value of non-traditional exports have consistently risen, for example, from 2,102 tonnes in 1993 to 4,662 tonnes in 1995, with the value of exports totalling approximately US$3.1 million in 1995, demand has consistently outstripped supply for both domestic and overseas markets. As a consequence, domestic prices have spiralled upward for most locally produced foods. A case in point is that the price of eddoes has increased by nearly 100 percent over the past two years (1994-1995), while imported potatoes (from North America and Europe), which are often used as a substitute, are cheaper than the local produce.

The New Guyana Marketing Corporation is responsible for advising farmers and manufacturers on production, processing and marketing of non-traditional agricultural products. However, this institution does not have sufficient human and capital resources to effectively dispense its mandate. According to the New GMC the major agro-processing products exported over the past three years (1993-95) are:

Juice - Carambola

Beverages - Ground coffee

Condiments - Achar, carambola (preserved), cherry pulp, guava, puree,

crushed pepper and dried sorrel

Other - Pineapple and guava jam and jelly, cassava bread and starch and coconut shell powder

Entrepreneurs engaged in local agro-processing are generally motivated by identifying niche markets particularly in the Caribbean and North America. However, greater emphasis ought to be placed on high valued products and plans and programmes to capture significant market share outside niche markets. Additionally, market research ought to focus on, "off season" produce in North America and Europe. Mexico, Central America and Kenya have effectively utilised this strategy to export tomatoes to the USA and vegetables to Europe during seasonal "windows".

Conglomerates have been the major local players in the manufacture of food and food-related products. The two brewery giants, Banks DIH and Demerara Distilleries Ltd. (DDL), threatened with declining profit margins, have successfully ventured into the food business. Banks DIH, with over 8,500 shareholders and hundreds of persons in its employ, has not only manufactured alcoholic and non-alcoholic beverages but biscuits, snacks, cereals and tomato ketchup. Packaging and labelling are up to international standards. Local ingredients are mainly used in their manufacture, for example, snacks are made from rice flour, plantain flour and sugar, among other products. DDL, famous world-wide for its Demerara rums, purchases the bulk of the locally produced molasses from GUYSUCO, refines it and uses it for producing rum, vinegar, liqueurs and methylated spirits. DDL has recently ventured into the seafood business. Edward B. Beharry Co. Ltd. is another conglomerate associated with the food business. For a number of years they have produced sweets and bubble gum and also manufactured curry powder, baking powder and custard powder, black pepper and pasta products.

Vinelli Industries Ltd., with a work force of 300 individuals on a factory area of 44,000 square feet, produces ice-cream, frozen novelties, pasta products, bakery products and snack foods. They are integrated vertically through a 3,300-acre farm which produces rice, coconut and fruits which are partially utilised by the manufacturing process. Sterling Products Ltd., established since 1955, produces among other food products Golden Cream margarine which is a household name and UMDA Phalka Ghee for local and export markets. Ricks and Sari are household names for the production of curry powder, pepper sauce and tomato ketchup.

6. Metal Fabrication, Foundry and Machine Related Products

This subsector has been gaining momentum within recent years, primarily because of the high cost of procuring metal products from overseas sources and the difficulty experienced quite recently in accessing foreign exchange for the purchase of metal, steel and iron components.

The major concentration in this sector is the manufacture of brass and iron castings, pumps and fabrication of equipment for the sugar, rice and mining industries. Most of the items produced are for replacements or spares and for the repair of engine blocks and crank shafts.

The major operators IEL, BEV Enterprises, BACIF, GRL, IDI Engineering, Swiss Machinery, etc. have installed quite modern and sophisticated equipment and are manufacturing and fabricating top quality parts and components.

The scope for the development of this sector is great and new small operators surface almost on a regular basis to add to the ingenuity and innovation of Guyanese craftsmen who benefit from training courses at the local Technical Vocational Institutes, the University of Guyana, the GITC and even from overseas training programmes.

7. Leather, Textile and Packaging Products

This subsector is not well developed but has the potential of making a substantial contribution to the growth of the economy. The major producers are Shoeworld, Sanata Textiles, SAPIL, Caribbean Clothing Co. Ltd., Guyana Fertilisers Ltd., R.C. Bettencourt and Company Ltd.

Given the heavy incidence of livestock rearing in the Lethem-Rupununi area, this Region can be seen as a potential area for the development of the leather industry in all its diverse forms (shoes, belts, bags etc.). Leather treatment facilities can be set up quite easily and, with the relevant research and development programmes put in place, the prospects for a dynamic leather craft and related industries should be bright.

8. Beverages

This subsector, which includes the distilling and/or manufacturing of soft drinks (aerated), beer, malta, wines and rum, is becoming a very significant contributor to the manufacturing sector. Within recent years, a greater degree of competition has been infused into the subsector with the two giant operators (DDL and Banks DIH) now introducing on a regular basis beverages of international brand names. Along with these two major manufacturers are a number of smaller operators, primarily in the manufacture of soft drinks, for example, Verdun, Rahaman's (Republic Soda Factory Ltd).

The following table depicts the rise in the production of beverages.

Table 34-6

Beverage Production

	1990	1994	Percent increase
Rum (litres)	12.5	25.3	102.4
Beer (Litres)	10.5	10.0	(4.7)
Aerated (cases)	1425	3449	142.0
Malta (cases)	2004	203.8	2.0

From all indications, the manufacturers of the sector are mainly devoted to import substitution whereby the relatively high volume of imports of exotic beverages will be partly replaced by the manufacture of these on the local market, basically under patent operations. This subsector contributes significantly to the employment profile of the country.

9. Chemical and Paper Related Products

This subsector subscribes mainly for the satisfaction of the local needs of the inhabitants. Guyana Pharmaceutical Corporation, the largest operator in this subsector, is involved in the manufacture and dispensation of a number of drugs. Between 1990 and 1995, its production of liquid preparations increased from 206,000 litres to 227,900 litres.

Inasmuch as it is not a substantial actor on the manufacturing stage, given the diversity of available herbs, etc., locally, the subsector can be developed further to a stage where it would not only satisfy local needs but could find overseas markets (once the requisite quality and standards are met).

Paper-related activities (printing, publishing, etc.) are carried out by the Institute of Applied Science and Technology (IAST), many computer companies, and Guyana Publications Ltd., and they cater basically for the needs of the local inhabitants. There are some operations devoted to the production of simple packing materials based on imported paper.

10. Other Products

This category includes the operations of such companies as Guyana Refrigerators Ltd. (GRL), Colgate Palmolive Guyana Ltd., Demerara Tobacco Company Ltd., etc.

The important contribution of these to the economic well-being of the country is the import substitution nature of their products in that they save the country much needed foreign exchange by making available their products on the local market, which otherwise would have had to be imported.

Within the context of a much broader and clearly articulated development strategy for the manufacturing sector, a number of small manufacturing entities can be established for the satisfaction of local needs, the final impacts being the saving of foreign exchange and the generation of more employment and income.

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C. Science and Technology

The science and technology sector in Guyana is made up of a number of different research institutes. There has been some specific division of labour among these with the major emphasis being on agriculture and mining. Other research that has been undertaken is generally related to these two major themes of the economy.

Research organisations that currently play a prominent role in research and development are:

1. The Institute of Applied Science and Technology (IAST)

2. The National Agricultural Research Institute (NARI)

3. The Guyana Rice Development Board (GRBD)

4. The Inter-American Institute of Cooperation in Agriculture (IICA)

The Institute of Applied Science and Technology (IAST): This institute has a number of research interests ranging from mining to agriculture. It also houses the laboratories of the National Bureau of Standards and contains a number of important research equipment. The IAST has, however, not lived up to its full potential. With current restructuring efforts on the way, it is expected that a revitalised IAST can play a leading role in the development of new technologies and processes.

The National Agricultural Research Institute (NARI): This institute was established by the Government of Guyana in 1984. More details on its operation are given in Chapter 28 of the National Development Strategy, The Institutional Framework for Agriculture. In summary, NARI currently focuses on two areas: 1) advising Government on the promotion of diversified and sustained agricultural development and the optimisation of agricultural production through research and, 2) facilitating the use of improved technology and maintaining feedback systems with farmers o the performance of new technologies and processes.

Along with NARI, the 1984 act also established the Agricultural Research Committee (ARC) which essentially supervises and controls the functions of the Institute.

The Guyana Rice Development Board (GRBD): This board is concerned with the overall development of the rice industry in Guyana, including research. Its research activities were previously performed by NARI but these have been shifted to the GRDB because of the widely held perception that NARI was not performing well. The successful housing of many activities related to rice such as research technology transfer and marketing under one institution provides a good example of how organic linkages between different aspects of an industry may be successfully merged.

The Inter-American Institute of Cooperation in Agriculture (IICA): IICA has been involved in agricultural research and extension in Guyana for some time now. The organisation has performed pilot projects in geographic specific locations such as Region 2. IICA has reported successful grass-roots results in enhancing the productivity of farmers in areas of non-traditional agriculture.

There are other organisations that are involved in research and development. With regards to agriculture, this includes the Guyana Sugar Cooperation (GUYSUCO), the Faculty of Agriculture of the University of Guyana and the Caribbean Agricultural Research and Development Institute (CARDI). However, the latter two do not have a large impact on agricultural research and development in Guyana and are not expected to do so in the future. GUYSUCO is crop specific in its research and does not have an impact on the wider agriculture sector.

With regards to manufacturing, the Linden Mining Company (LINMINE) once boasted a well-equipped laboratory and research facility that focused research on the bauxite industry. However, this has run into disrepair associated with the general economic decline of the company. Other large companies such as Banks DIH and Demerara Distilleries Limited (DDL) have developed technologies in-house that are focused on their needs and these are rarely extended to the wider manufacturing community.

Other engineering firms in Guyana are making an increasingly significant contribution to the development of appropriate technologies. Among these are Industrial Engineering Limited (IEL), and Brass Aluminum and Cast Iron Foundries (BASIF). Many of these technologies have been directed at the gold mining industry and the pace of their development has expanded in keeping with the needs of the industry. Of note is the relative speed with which these technologies are disseminated to the entire mining community despite the absence of a formal extension network. This can be largely attributed to the fact that the technologies are "sold" and easily obtainable. More importantly, these technologies have been developed in response to the direct requirements of the users who generally have the same needs. This can be contrasted with the case of other agriculture (excluding rice and sugar) where there is a lack of linkages between needs, research and extension.

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II. Policies of the Sector

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A. Past Evolution of Policies

1. Pre-Independence to 1960

British economic policy on colonial development was explicit in its assumptions. It was to secure the supply of vital raw materials for its industrial machine and guarantee outlets for its manufactured products. The natural resource base of Guyana meant that the country lent itself, more than many other colonies, to a pattern of export of primary commodities. This covered cotton, rice, sugar, timber, gold, bauxite and manganese, etc. Further, investments were directed to these areas by the Imperial Preferential Trading and Sterling Payment System (PTSPS) which ensured that the local market was saturated with imported manufactures. This policy spawned the local merchant class which, due to its intrinsic interests, evolved a vision of development as being synonymous with the prosperity of distributive agencies and enunciated it via the Georgetown Chamber of Commerce (GCC) which was created in 1889. The PTSPS drove not just the production structure but likewise the framework for development across the country.

To ensure the timely movement of goods at low cost, a reliable, albeit limited physical infrastructure was developed, all publicly owned, except power. Basic social services evolved, particularly education boosted by an efficient public/private schooling system, in order to meet the expanding demand for a literate and skilled labour force. The Companies Act of 1892 of the UK applied to the incorporation of firms locally and the Tax Ordinance of 1895 of the UK was modified and applied.

British economic policy and attendant instruments did not visualise the development of a local manufacturing sector. Yet the emergence of elements of it could not be prevented. Specific cases in point are the processing of cane and rice, namely, factory milling. Also, both the First and Second World Wars, which disrupted transatlantic supply between Britain and Guyana, boosted locally some manufacturing activities, e.g., bakeries, sawmill, and factories for matches, cigarettes, beverages, soaps, garments, machinery maintenance and fabrication, etc. As a result the manufacturing sector accounted in 1960 for 3.4 percent of GDP compared with 2.1 percent in 1950. However, an enabling integrated policy framework was not put in place to sustain this development, albeit some key elements were present, as earlier highlighted.

2. Pre-Independence, 1962 - 1966

The establishment of a self- governing administration in 1962 led to the adoption of important measures with respect to manufacturing. The Government of the day (The People's Progressive Party, PPP) established the first industrial estate at Ruimveldt, provided fiscal breaks to investors particularly in the rice milling and sawmilling subsectors, and facilitated further secondary manufacturing in fields such as paints, packaging, confectionery, etc. It may have gone further in these directions had the Government of that time had access to external resources or control over all aspects of macroeconomic and financial policies.

3. Post-Independence, 1966 - 1988

This section provides a summary of the key features of economic policy as related to manufacturing from independence up to 1988.

For a decade after independence (1966-1975), the Government of the day (the People's National Congress, PNC), was mostly preoccupied with the consolidation of its political base in the context of a newly-independent nation. The key coalition partner, the United Force (UF), representing specifically local manufacturing interests and more generally the private sector, insisted on an open economic policy as a condition sine qua non for participation in the Government. This was effected and found reflection largely on the monetary and financial plane in terms of the abolition of restrictions on foreign exchange movements and the market determination of interest rates in 1967 and 1968, respectively, in order to boost domestic and foreign investments in the local economy. Investment expansion in the late 1960s and early 1970s led to record increases in the output of manufacturing without the benefit of an enunciated, clear-cut manufacturing policy. As a result, manufactures accounted in 1972 for 5.9 percent of GDP.

Following the 1968 election, which was won outright by the PNC, the ensuing Forbes Burnham Government's macroeconomic policy and sectoral strategy was no longer constrained by a market-oriented coalition partner. Accordingly, the Government contracted the services in 1969 of Professor Arthur Lewis to prepare the first Five-Year National Development Plan (FYNDP), 1972-1976. Arising from the discussions on the FYNDP and preceding its implementation was the establishment of the Small Industries Corporation (SIC) in 1971 and the creation of the Guyana Agricultural and Industrial Development Bank (GAIBANK) in 1972. The SIC was mandated to design and implement sectoral policy and to identify projects, and GAIBANK was made responsible for evaluating and financing both small and large manufacturing and agricultural projects and industrial estates.

The first FYNDP itself attempted a comprehensive definition of the framework for manufacturing policy. It sought to combine elements from the Puerto Rican model with the principles of self sufficiency and an enlarged role for the State. Specifically it advocated:

(i) import substitution industrialisation

(ii) preferential development of high forward linkages projects

(iii) intensive utilisation of indigenous materials

(iv) equitable distribution of industries on a regional basis

SIC was later charged with detailing the policy framework and ensuring execution and GAIBANK was tasked with project evaluation and financing in order to implement the policy.

While the FYNDP was infused with some pragmatic and positive ideas and elements which could have, to an extent, contributed to the development of the sector, SIC and GAIBANK never produced an integrated framework as an operational strategy. Even had they succeeded the intensity of the overall thrust of the inward-looking policy threatened to limit success and reinforce the old supply-oriented development strategy of the British, a strategy which the Coalition Government had attempted to reverse with its open door policy. Moreover, the entire first FYNDP was soon superseded by a more radical, all-embracing perspective on economic development, bereft of the pragmatism of the Lewis Plan.

After 1974 economic policy favoured the import-substitution model. Its key features were:

(a) State control of the "commanding heights" of the economy in terms of public ownership of the operating entities in the production and distribution of both essential and non-essential services. This was accomplished via an extensive nationalisation programme, which focussed initially on foreign investment and subsequently on domestic investment (inclusive of real estate and productive entities). In the process, even the mixed ownership of the education and training system was altered in favour of State ownership.

(b) Deficient management of public sector enterprises (PSEs). The new PSEs took no account of market access, management capacity, or technology availability. Hence, instead of contributing revenue to the exchequer, the PSEs became net users of funds. This was aided by their preferential access to external public inflows, domestic savings garnered in the largely nationalised commercial banking system and generous national subventions.

(c) A co-operative subsector, largely created by the State, that also became dependent on public transfers, largely via public subventions, commercial banking write-offs and GAIBANK lending (yet to be recovered). Again, instead of the co-operatives providing support to the manufacturing sector at the margin, they ended up as yet another category of competitor for diminishing resources on a playing field which did not favour private sector operators.

(d) A crowding out of the private manufacturing sector by the public and co-operative, in terms of access to physical space, investment opportunities and financial resources.

(e) Monetary, financial and tax policies that began to work assiduously against the manufacturing sector as the economy became subject to stringent supply management arrangements, at the expense of weakened market forces and price signals. These policies included:

(i) Foreign Exchange Controls. As export earnings slumped, foreign exchange became scarce. Manufacturers were unable to remit due payments and arrears began to build up. As a result, the Bank of Guyana (BOG) introduced in 1977 the External Payment Deposit Scheme (EPDS) to eliminate commercial arrears. Further deterioration in foreign exchange availability meant, however, that the EPDS could not effectively respond to the ballooning demands for transfers. Priority imports thus became subject to strict licensing and foreign exchange queuing. At the beginning of the 1980s the Export Development Fund (EDF) was created to ease the pressure on export-oriented manufacturing, but the resultant delays in the acquisition of imports adversely affected production. This caused the emergence and fuelled the expansion of the parallel economy in foreign exchange and then in imports and exports of goods and services. While on the one hand it further constrained the formal sector by flooding the market with cheap, often non-dutiable manufactured products, on the other hand, it made possible inputs for the manufacturing sector albeit at higher costs, thereby keeping a part of the sector going. But, overall it worked against the sector's development.

(ii) Exchange Rate Management. During this period the Guyana dollar was devalued on several occasions. While these were intended to reduce the financial losses of the PSCs, public sector deficit, borrowing from the banking system and government subventions, they did not succeed in creating an enduring equilibrium value for the exchange rate. After each devaluation the exchange rate was again controlled at its new level and hence fell behind the trend in domestic inflation once again. A disproportionate share of the cost of the devaluations was shifted on to the manufacturing sector. Apart from rising input costs the sector had to carry, for example, electricity tariffs were increased (97.5 percent in April, 1987) and wages also (16.3 percent), owing to bargaining by the Trades Union Congress to cushion the effects of devaluation. Accordingly, operational costs moved upwards, while the disequilibrium exchange rate meant that prices received for manufactured products (import substitutes and exports) could not rise in proportion to costs.

(iii) Pricing Policy. In the early 1980s, controlled prices were introduced on a wide range of commodities in an attempt to minimise the rate of price inflation. The market prices of these goods underestimated the true social cost of inputs. This divergence between controlled prices and the opportunity costs of inputs exerted a negative impact on the growth of the manufacturing sector. Resources were thus reallocated from the manufacturing sector to the service sector.

(iv) Consumption Tax Policy. Consumption tax was imposed on both imported inputs and manufactured goods for the domestic markets. Measured in terms of world prices, this system of consumption tax reduced the international competitiveness of manufactured exports. Manufacturers faced unfair competition from the parallel economy in which goods entered illegally. This unfair trade practice also prompted many firms to switch their real resources from the secondary to the tertiary sectors.

(v) Interest Rates. During this period the spread between savings and interest rates was inordinately narrow, and both were below the World Bank estimated rate of inflation. This in effect deterred savings and increased borrowing largely by the PSEs and the parallel economy operators.

(f) Deteriorating public finance and the breakdown of financial discipline which compounded the above trends and which meant there were no funds to maintain or develop the publicly owned physical infrastructure. As a result, power supply became unreliable, roads impassable, telephone system less functional, and water supplies quite erratic while unit output costs kept escalating and were transferred in part to users. The situation was further compounded by ineffective attempts to regionalise the management of some of these services, which also worked against the manufacturing sector.

(g) Parallel to (f) above, a deterioration of the social infrastructure. The health, housing and sanitation subsectors received minuscule funding as did the education, training and manpower development sector. While the government had a perspective on the latter it simply had not the wherewithal to improve the sector. The system was thus incapable of responding to the manpower needs of the manufacturing sector, and indeed the economy as a whole, which proved to be yet another constraint to the sector's development.

Serious distortions of incentives for resource allocation emerged as a consequence of the above policies and institutions such as GUYMIDA, established to promote manufacturing and agroindustry, could not function well in such a framework.

Overall, the performances of the public sector entities were nothing short of catastrophic. Mismanagement and political paramountcy literally brought surplus-generating operations into deficit positions, and they became for a number of years a continuous drain on an economy that was badly short of financial resources and which had to borrow externally in order to sustain public expenditure at minimal real levels.

During the 1980s real GDP continually declined, at the pace of 2.8 percent per annum for the period 1980-1988.⁽²⁾

In summary, the State domination of the economic base culminated in technical, organisational and financial problems in key sectors, compounded by falling world demand for Guyana's key export commodities. Interest on foreign debts and losses in public enterprises added to the pressure on Government finances. By the mid-1980s the Government was unable to service its debt obligations and ceased making payments to most bilateral and multilateral lenders.

With economic activity virtually retrogressing year after year, it became obvious that the core of the problem was rooted in a mixture of incorrect policies administered by the political directorate as well as too tight a stranglehold of the Government on economic activities.

The worsening economic situation lowered real wages and consumption and resulted in a wave of migration overseas of skilled Guyanese which added to an already adverse situation.

4. Economic Liberalisation, 1988-1992

Over this period a major reorientation of the economy was undertaken and a structural adjustment programme (SAP) was launched. Some of the general measures initiated under the SAP were the:

(i) elimination of most controls on prices and foreign exchange;

(ii) reduction in tariffs and trade restrictions and the reduction of subsidies;

(iii) rationalisation and denationalisation of some of the public sector corporations;

(iv) promotion of direct investments, both local and foreign;

(v) attempts at rehabilitation of physical and social infrastructure and limited introduction of cost recovery;

(vi) overhaul of the public services and the re-establishment of a degree of financial discipline in the Government.

With the above listed general measures underway, relations were soon normalised with the multilateral agencies and a Policy Framework Paper (PFP) was agreed upon with the IMF and the World Bank in 1989. This paved the way for significant debt relief, balance of payments support, and receipt of funds for the rehabilitation of physical and social infrastructure from both the bilateral and multilateral institutions to facilitate rapid implementation of the SAP. In recognition of the fact that compliance with the PFP would entail further short term adjustment difficulties for the impoverished lower income groups, the donor agencies also made commitments to provide financial support for an amelioration or social safety net programme.

Consequent upon the implementation of the general measures of the SAP and with the agreed external financial support now flowing, the economy registered in 1991 and 1992 positive growth for the first time in over fifteen years. As some confidence was re-established in the economy, the SAP induced significant new investment flows. Among those from overseas were Omai (Canada), Reynolds (USA), Barama (Korea), and DTL (UK). From the CARICOM region came Caribbean Resources Limited (Trinidad), CARICOM Rice Mills Limited (St. Vincent), the Alesie Group (Aruba), Grace Kennedy (Jamaica). The Kayman Sankar Group, Demerara Distillers Limited and Continental Agencies were some of the locally based firms that embarked on an extensive programme of domestic and overseas investment activities. The leading local investors during this period were DDL, KSL, Banks DIH, IEL, IDI to mention just a few.

Parallel to the new investments and, in some cases, as a result of these, but more in the context of the overall SAP, the sugar industry was turned around under private management, and the rice industry surged forward with the elimination of restrictions on prices and the exchange rate, as did gold and diamond output and trade. Timber products followed suit. But in bauxite LINMINE's fortunes slipped even further.

On balance, the economy responded to the SAP. However, the lag between the implementation of the general measures of the SAP and the scheduled flow of resources aggravated social pressures. And the long delays in the preparation and execution of the interventions listed in the PSIP for the rehabilitation and expansion of the physical and social infrastructure detracted from the potential impact of the SAP on the pace and pain of the economic turn-around.

But what specific measures did the SAP envisage for the secondary sector and what were the effects of the general SAP measures on manufacturing? The answer to the first part of the question is unambiguously "none". The answer to the second part of the question is more complex and no doubt has several aspects to it.

First, the impact of the financial, monetary and trade reforms, all intended to restore market forces and price signals, had varied short-term implications for firms in the sector. Those with a weak financial base and cash flow problems found the cost of commercial bank borrowing prohibitive due to the introduction positive real interest rates. Servicing of debts denominated in foreign currency became insurmountable for others due to the sharp devaluation of the Guyana dollar against the principal trading currencies. The upward adjustment in the prices of imported inputs and domestic raw materials and intermediates with high import content, such as electricity and transport, affected cost structures adversely, relative to prices, in the short run, although this effect was reversed over time. Competition from imported manufacturers, supplied via both the parallel market largely without duty being paid and the official market at reduced tariffs, compounded the problems of adjustment for many firms. Several, inclusive of GRL, Ideal, Beesons, Wrays which were export-oriented manufacturers, did not by way of compensation benefit from expanded and/or new markets quickly enough and almost became bankrupt.

Yet, over the medium term as the beneficial effects of the reforms worked themselves through most of the firms in question readjusted and emerged stronger than they were before. The real devaluation of the Guyana dollar eventually had its expected effect of shifting price-cost ratios in the direction of greater profitability for both the primary and secondary sectors. Those firms with a strong financial base and/or market niche abroad quickly overcame the "disruptive" effects of the adjustment measures and further strengthened their position. Among them were DDL, KSL, IEL, and DIH, to mention a few.

Second, the general measures visualised in the SAP were intended to create an enabling environment for operators in the sector. Divestiture, encouragement of private investment, greater foreign exchange availability, removal of price controls, all were meant to expand the space and scope for, and remove the restrictions on, manufacturing and other components of the private sector. And the results bear this out. Investments in the economy revived. While the international investments were largely directed to natural resource sectors, most had a strong manufacturing (milling and processing) component. More significantly, they were principally for export-oriented projects.

Third, in some cases the potential beneficial effects were not allowed to fully unfold, thus fundamental obstacles to the progress of the manufacturing sector remained. For instance, the conduct of the Internal Revenue Department (IRD) and Customs and Excise Department (CED) in relation to the interpretation and administration of taxes, levies and duties did not follow fully consistent and transparent policies. Fiscal policy packages remained a source of contention. Lack of full coordination between the Ministry of Finance and the Ministry of Trade pre-empted the key operating agency in this issue area, namely GUYMIDA, from discharging effectively its responsibilities. This, plus the lack of a clear policy in the granting of incentives deterred some manufacturing investments that might otherwise have occurred. The tendency to politicization of appointments made the EPC, for example, ineffective. Neither was the mandate of GUYMIDA in relation to its policy responsibility for manufacturing renewed, nor was the mission of GAIBANK fulfilled in respect to financial support for manufacturing activities.

Overall, in the absence of a specific policy for manufacturing, the general measures produced on balance desirable structural changes. The share of the secondary sector and particularly manufacturing did increase in total production, albeit marginally.

The general measures in the SAP while necessary were not a sufficient condition to induce the private sector to renew and expand investments on the required scale to significantly augment manufacturing output. Even if the irritants and obstacles to the manufacturing sector referred to above had been removed in a timely way, and had GAIBANK, GUYMIDA and the EPC been rendered fully effective, these steps would all have helped but they might not have made a significant difference to the performance of the manufacturing sector. What the SAP lacked was clear pointers and specific measures addressed to the particular concerns of the private sector in general and the manufacturing sector in particular. These could then have been followed up by the concerned sectoral agency, GUYMIDA, in developing a coherent framework for the manufacturing sector. (Chapter 36 presents many of the issues concerning the development of the private sector.)

5. Post-Independence, 1992-1996

To date, the economic policies of the present Government have continued the SAP, emphasising poverty reduction, human resource development and a return to financial accountability. This National Development Strategy in effect represents the culmination of an effort to formulate a distinctly Guyanese framework for economic policy and to provide much more sectoral specificity to that framework than has been heretofore available.

In the period 1992 - 1995 priority was placed on modernising the instruments of fiscal and monetary policy, with the institution of the mechanism of the Treasury Bills and the promulgation of the Financial Institutions Act, among other measures. The accumulated and inherited financial problems of GAIBANK forced its merger with GNCB, accompanied by special measures to deal with delinquent loans. Two new private banks have opened their doors to the public, so that it now can be said that there is a robust and diverse private banking sector. In the fiscal area, the tax base has been widened considerably, although more remains to be done on that score, and Public Service salaries have begun to recover some of the ground lost in real terms over the preceding years. Fiscal revenues have increased in real terms, but concerns remain about the tax structure and tax collection, and in response a proposal has been developed to form an overarching Revenue Authority with the requisite mandate and staffing (see Chapter 13).

Inflation was controlled successfully, foreign exchange reserves began to increase again, and the arrears on foreign debt payments were significantly reduced. Recently a very significant reduction in the outstanding stock of external indebtedness was achieved.

Privatisation efforts slowed while a stocktaking was carried out, with GNEC and Guyana Stores representing the most notable privatisation in recent years. The additional distribution of shares in DDL encountered problems of uptake on the part of the public. However, there has been a re-initiation of the programme of privatisation at an accelerated rate, starting with GEC. See Chapters 39, 33 and 36 in that regard. Several more enterprises have been earmarked for sale recently, including GCIS, NBIC and LINMINE. Large-scale direct foreign investments also slowed in the early 1990s, the tax policy with respect to them was reviewed, and now they appear to be on the upswing again. A Caribbean financial entity (Citizens Bank) has invested in Guyana and a new foreign investor agreed in early 1996 to take over Demerara Timbers Ltd.

As for the institutional dynamics of the manufacturing sector, GUYMIDA was abolished in 1991 and all but one of its functions transferred to the Ministry of Trade, Industry and Tourism (MOTTI). The remaining function was assigned to the new Guyana Office for Investment (GOINVEST), but concerns about the effectiveness of this last institution have led to its being reviewed in Chapter 36, with consequent proposals for its modification.

MOTTI still is very much understaffed at higher levels, as are other agencies of the Government, a reflection of the long-term fiscal crisis. Perhaps for this reason the Coldingen Industrial Estate got off to a slow start, with only two operators in place out of a projected number of 32. Similar concerns beset the proposed Eccles Industrial Estate. Chapters 35 and 36 have concluded that the emphasis in the future should be placed on an export processing zone (EPZ), closely linked to the enhanced deepwater port.

Other landmark legislation approved recently includes a repeal of the Exchange Control Act, thus bringing the legal framework into conformity with actual practice regarding the exchange rate, and the Environmental Protection Act.

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B. Science and Technology Policies

1. Past Policies of the Sector

The first Government efforts at formulating a science and technology policy can be traced back to 1974 when a mechanism was created for the initiation, coordination and implementation of a comprehensive national science and technology policy. Act No. 26 of 1974 placed this responsibility at the ministerial level under the control of the Minister responsible for Economic Planning and Development. The act also created the National Science Research Council (NSRC). By the end of 1975, a secretary-general was appointed, temporary offices were identified and staff had been employed.

The functions of the NSRC are largely spelled out in the act giving it wide powers and authority over the development of science and technology in the country. Readily apparent is the "control" given to the NSRC over the activities of the sector. These included authority on:

directing all research in the country,

determining "priorities for scientific and technological activities in Guyana",

advising Government of the "allocation of funds for scientific research and on the recruitment and use of research staff",

advising Government on "managing and coordinating scientific activities at various levels, including the establishment of Research Institutes",

reviewing and advising on the "programs and budgets of research institutes".

Since its inception, the NSRC has been responsible for the establishment of the Bureau of Standards, the National Agricultural Research Institute (an extension of the Department of Research of the Ministry of Agriculture) and the Institute of Applied Science and Technology. Notwithstanding these successes, the NSRC has largely failed to achieve its objectives. These failures should not be associated with the NSRC itself or its staff. Its failure could be largely linked to its original objectives; surely no organisation could be expected to successfully achieve the objectives that the NSRC was set. Its intention to centrally plan the science and technology sector could have only led to a disaster.

In 1985 the Government again placed emphasis on the science and technology sector. The role of technology was mentioned as a priority area in the 1985 budget speech and a state paper on a draft national science and technology policy was prepared. However, the draft policy did not advocate any radical reforms of the NSRC except a recomposition of its membership. Of note is that the recommended recomposition comprised only one representative of the private sector. No private sector organisations representing the farming community was included. State-run enterprises recommended included GUYSUCO, DDL (then subsumed under the Guyana Liquor Corporation), LINMINE (then GUYMINE), and the Guyana Pharmaceutical Corporation (GPC). Several ministries were listed ranging from the Ministry of Health to the Ministry of Education. The Office of the President and the National Council of Local Democratic Organs were also recommended for membership. The draft paper acknowledged the failures of the NSRC and recommended that the body should now revert "to what is considered its vital role --that of coordination of activities in science and technology..."

The 1985 paper provided no bold initiatives and preserved the "control" orientation of the NSRC as the agency responsible for centrally directing the sector. It is obvious that between 1974 and 1985 not much had been learned about what needs to be done to promote the development of science and technology in Guyana. Needless to say, the NSRC remains inactive. The science and technology sector remains fragmented, synergistic relationships are poor and the potential users of science and technology are unattended.

2. Current Policies of the Sector

In efforts to rectify the current situation, some efforts are currently being pursued but these are not linked into a cohesive policy. The recently created GRBD has taken on responsibility for research in the rice sector in response to the lack of relevant research being undertaken by NARI. This should provide a good basis for research owing to the effective linkages that the GRDB has formed between the wants and needs of rice farmers.

The performance of NARI as it focuses on the remainder of the agricultural sector, primarily "other agriculture", remains to be seen. Recent reforms at NARI include the appointment of a new Director. The Institute of Applied Science and Technology has also undergone some reforms in recent times including closer collaboration with the National Bureau of Standards.

There are efforts to link science and technology under the broad heading of natural resources management out of the Office of the President but not much has been done in this area. In developing proposals in this regard, caution should be exercised that responsibility for the sector is placed under the relevant authorities. While there are piecemeal attempts to reform the sector, these are not coordinated.

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III. Description of the Principal Issues and Constraints Facing the Sector

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A. Regional Imbalances in Manufacturing Facilities and Inputs

A casual review and quick mapping of processing facilities and inputs would highlight some important inconsistencies. The first is that raw materials subject to processing are often not located where optimal returns are possible, taking into account the high cost of transporting bulk commodities. In some cases there are inadequate processing facilities where there are considerable low cost primary inputs. For instance, Region 2 has an abundance of coconuts, cassava, plantain, nibi, coffee beans, carambola, citrus, pineapple, guava, etc. They readily lend themselves to the production of oil and animal feeds, pulps, jellies jams, juices (fruits and citrus), chips, crisps, bread, flour (plantains and cassava) , furniture, and ground coffee. Yet there are only two old, antiquated manufacturing operations in the Region producing jams and jellies of a quality that sells country-wide and possibly could be exported. There is thus considerable scope for manufacturing and agro-processing activities in Region 2. The same is true for Region 9 with its vast potential for dried and processed meats, cashew and peanuts processing, to mention just a few. Here again there is ample scope to establish viable local entities.

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B. Export Processing Zones and Industrial Estates

Industrial estates have already proven their usefulness as a mechanism for the promotion of manufacturing and agro-processing in Guyana. They offer the users benefits of externalities and scale and common services at significantly reduced unit costs. The industrial estates of Ruimveldt and Beterverwagting are cases in point where all the sites are beneficially occupied. For industrial estates to succeed, they have to be located at the source of either labour, markets or materials. In this context, adequate physical infrastructural facilities are critical, such as access to transportation, power, water, and telecommunications. The lack of these partly explains why the Government is currently having some difficulties in having genuine manufacturers, and not land speculators, avail themselves of opportunities at the Coldingen complex.

A recent version of the industrial estate which has attracted much attention is the science park based on high technology and focusing on activities with a high component of value added. Apart from requiring all the conditions for industrial estates to be present, they additionally need linkage with a research and development institution, to identify and supply technology and provide technical back-up. The science park concept is worth exploring in association with the National Agricultural Research Institute (NARI) and the Institute of Applied Science and Technology (IAST). In the NARI case, viable ventures could be supported in the genetic propagation of high value, seasonal exports to temperate markets. Similarly, in the IAST case, high technology manufacturing could be supported in the electrical and electronic fields. MOTTI could spearhead their establishment in consultation with the relevant private sector bodies.

Another possibility in this realm is to develop a technology-based manufacturing zone in the field of more sophisticated wood processing and link it to the proposed centre of excellence in forest products at the University of Guyana (see Chapter 20).

The establishment of an Export Processing Zone (EPZ) is another mechanism for the promotion of manufacturing and agro-processing. Most of the CARICOM member countries, particularly Jamaica and Barbados, have long established EPZs. But the success story of EPZs in the Caribbean is the Dominican Republic. There the concept was implemented in 1970 and has been credited with the creation of 165,000 jobs by 1993. The static short term gains from an EPZ are largely employment creation and foreign exchange earnings. The dynamic gains tend to be more diverse and derive from the development of linkages between the EPZs and the primary and tertiary sectors. Without strong linkages of this nature, there always exits the danger that firms could pack up and leave the EPZ. However, on balance, EPZs are strongly conducive to the expansion of manufacturing and agro-processing. The conditions for their success are similar to those of industrial estates and science parks. Hence, they pose no unique set of challenges in terms of establishment and operation. As such, they should be promoted. Here again, the Government, specifically MOTTI, will consider the establishment and promotion of EPZs. The respective cases of Barbados, Brazil, Honduras and the Dominican Republic offer applicable ideas in the Guyana context on how the Government could proceed. Further discussion of EPZs is found in Chapters 35 and 36.

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C. Competitive Performance

While the manufacturing and agro-processing sector offers considerable scope for expansion in the future, broader changes within the economy could undermine its long-term potential competitiveness. A complete assessment of these will have to await more comprehensive data on the sector as a whole. Meanwhile, a considered preliminary review of the available data suggest important concerns regarding the sector's competitiveness.

Table 34-7 below indicates that in a number of key manufactured items, Guyana may not be a competitive producer, even where it is held that the country has a comparative advantage in terms of having the required raw materials and technical competence. The table points to the fact that in two of the three manufactured items listed therein, costs of production are lower in Jamaica and in all four items they are higher in Guyana than Mexico, the Philippines and Egypt.

Table 34-7

Cross Country Comparison of Cost Structure for

Manufactured Products in 1994

	Jamaica	Mexico	Phillippines	Egypt	Guyana
Cotton - Dress shirt (in USD)	1.14	0.98	0.73	0.81	1.12
Bottled beer (in USD/300 ml)	0.17	0.16	0.14	0.15	0.21
Unsmoked bacon (in USD/kg - Streaky)	1.94	1.78	1.59	-	2.40
Plywood - " (in USD - AQ/BS)	-	3.60	-	5.01	5.2

What is the source of the high costs? Table 34-8 attempts to shed some light on this in a regional comparison. True to form, of the four countries involved, Guyana's labour costs are the lowest. As one would expect, energy and international transport costs are the highest here. (International costs do not affect the comparisons of costs of production shown in Table 34-9, but of course they do influence competitiveness.) There is greater industrial relations instability and rising transaction costs, both of which are becoming formidable impediments to business establishment and expansion. The transactions costs include the time spent in paperwork with the Government.

Still, Guyana's labour cost advantage in 1994 was sufficient that it should have offset the other factors mentioned. Thus Tables 34-7 and 34-8 pose the question of what are the unidentified additional factors that cause our costs to be so high in an international comparison. The consumption taxes no doubt are responsible for part of this result, but at least part of the answer also must reside in the exchange rate, which determines our costs in US dollars. After we gained competitiveness by the 1991 devaluations, the movements in the exchange rate failed to keep up with our rates of inflation, so once again our goods became expensive in foreign currencies. Seen in this light, the comparisons in Table 34-9 represent a strong danger signal for the future viability of our industries, including sugar and rice as well, for another consideration is that they are quite likely to face declining real prices on world markets.

In addition, Guyana's cheap labour cost reputation is rapidly becoming a record of the past. Cost push inflation originating largely in the sugar cane subsector could create problems for agro-processing in general where margins tend to be small.

Table 34-8

Competitive Factors - 1994 Manufacturing Cost Structure

	Jamaica	St. Lucia	Grenada	Guyana
Cost of energy (USD/per KWH)	0.08	0.07	0.09	0.18
Semi-skilled wage rates (USD/per day)	6.10	7.03	5.96	5.34
Number of strikes (Private sector/public utilities)	7	5	3	11
Transport cost (USD/20' container to Miami)	900	1,240	1,491	2,200
Transaction cost	High	Low	Low	Very high
Technology	Appropriate	Appropriate	Not appropriate	Not appropriate

We are an export economy, so maintaining competitiveness is vital to our very survival. The issues raised here suggest that the very top priority must be assigned to sustaining a policy framework that aids competitiveness. This means that the liberalisation of the economy has to be taken to the point where:

(a) The remaining vestiges of protectionism which sheltered and nurtured import substitution manufacturing (uncompetitive production of goods primarily for the domestic market) are fully dismantled (with some provision for infant industry and development retained).

(b) Manufactured and agro-processed exports such as rum, rice, sugar and that are subject to special preferential arrangements via CARIBCAN, Lomé and CBI begin to effectively respond to the progressive decline in the level of preference dictated by global changes.

(c) Wage bargaining, taxes, tariffs and the exchange rate do not become converted into instruments that destroy the competitiveness of our productive base.

Adjustment of the sector to a competitive market environment, in which comparative advantage drives output and exports, has become all the more urgent in the light of the irreversible enlargement of trading blocs such as NAFTA and the EU, the implications of the Uruguay Round, and the establishment of the WTO as successor to GATT. However, the adjustment must proceed in a manner that minimises dislocation in social costs, specifically to the sector and the economy more generally. The proposed policy in manufacturing and agro-processing must address what could be classified as the key challenge to the sector, namely, the transition from protected and preferential markets to the dynamics of the competitive global market place. Once this is achieved, the sector would have been launched on the path to sustainable development.

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D. Business Ethics

There is also need to focus on the ethical dimension of the conduct of representatives of the business community and, particularly, manufacturers who are also exporters or importers of final and/or as intermediate products and/or base materials for transformation. These pertain to the strict and timely compliance with the existing laws, regulations and guidelines laid down by the competent authorities in the public interests.

Far too often, the view prevails in segments of the business community, and with justification sometimes, that the laws, regulations and guidelines are inappropriate. In such cases, there is a tendency for normally law-abiding individuals, to circumvent conformity particularly in the area of taxes and duties, pricing policies, often inducing public functionaries to bypass established procedures. This approach in a maturing society, where the case is being advocated for the business community to feature increasingly prominently in the development thrust, is ill advised. It has negative consequences for revenue targets, equitable distribution and public morality. In this scenario, there is urgent need for the corporate agencies of the private sector to design and implement a code of conduct, and to sanction its members for non-compliance. The private sector must recognise that as its scope to operate is expanded via an improved enabling environment, that its response to the ensuing challenge must in part entail a discernible effort to improve corporate behaviour.

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E. Regulatory Arrangements

Generally in the manufacturing sector, there is ever the need for a regulatory mechanism either of the type that:

(a) prevents monopolistic behaviour mainly in terms of pricing policies; and/or

(b) reviews and approves potential mergers which could lead to monopolies.

In both cases, monopolies could work against the public interests, more so in a small economy, such as Guyana, than in a large one. For instance, what provisions are there in place to stop, in principle, either the sugar manufacturer or the plywood producer from exploiting its monopolistic position and selling on the local market their respective products at significant margins? Similarly, what rules are currently on the statute books that would prevent, say, DDL and Banks DIH from either colluding on prices in relation to alcoholic and aerated beverages or merging to form a single entity? While the latter may make sound economic sense and prove most rewarding for shareholders, it may not serve public interest especially that of the consumers of manufactured products. Hence, it is vital to begin to look at the design of an appropriate, arms-length, autonomous oversight agency and in its pursuit the private sector agencies will no doubt have a leading role to play.

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F. Institutional Roles and Linkages in the Manufacturing Sector

As with the manufacturing sector the world over, in Guyana institutional actors have proliferated at the governmental, private and consumer levels. Their respective evolving roles, scope and interactions remain somewhat obscure and are yet to be clearly defined in relation to the promotion of the manufacturing sector.

1. Governmental Agencies

At the governmental level, the concerned agencies fall into two categories. In the first category, the apex institution is the Ministry of Trade, Tourism and Industry (MOTTI). The MOTTI is currently the responsible body for the manufacturing sector for policy making, implementing and monitoring. Specific aspects of its sectoral responsibility, such as the one stop investment promotion function and the trade promotion function, are vested in the Guyana Office for Investment Promotion (GOINVEST) and the Guyana Export Promotion Council (GEPC) established in 1993 and 1984, respectively. Neither of these has yet achieved full effectiveness. MOTTI, which itself has retained core responsibility for the sector, does not have sufficient capacity for policy design. Its management is preoccupied with the day-to-day tasks and related activities of the management sector, with little policy coherence. At the central level, the Ministry of Finance, through its fiscal, monetary and planning instruments could, and does, profoundly affect the course of the sector. MOTTI has not the capacity to relate to basic issues for the sector at the key political and technical levels. On this, the feeling in the private manufacturing sector is that there is a distinct asymmetry in authority, not responsibility. Unless some balance is restored overtime, MOTTI might find that when it comes to policy design for the manufacturing sector that it has the responsibility without the authority to deliver effectively on its prerogative but remains accountable for sectoral performance.

Other subject agencies in this category are the Forestry Commission (GFC) and the Geology and Mines Commission (GGMC). Outputs from the areas covered by both the GFC and the GGMC are subject to the manufacturing process. In the final analysis, the Ministry of Agriculture, by virtue of its responsibility for crops, livestock and fisheries, must also have a say in the design of a national manufacturing policy. Given the number of agencies with potential inputs into the manufacturing sector, a standing, interagency committee or working group on the sector may be one suitable mechanism that could be established to keep manufacturing policy under continuous review with appropriate inputs from key public stakeholders.

The other category of governmental agency is the quality assurance bodies. These are responsible for the setting, monitoring and enforcing of standards and quality principally, but not exclusively, in the manufacturing sector. They include the Food and Drugs Department, the National Bureau of Standards and the Public Health Office of the Municipality, among others. There are no interlinkages between these bodies and they do not function in the context of a clear Government sectoral policy. In the absence of such a policy, they tend to go off tangent and have become minimally effective. Again, a standing committee or working group among them is necessary which perhaps could include the proposed Environmental Protection Agency and in which MOTTI would also be represented. Working within a policy-oriented institutional structure should better enable these agencies to become more focused and effective in setting relevant and practical standards and ensuring compliance.

2. Consumer Entities

At the second level, there are the Guyana Consumers Association (GCA) and the Consumers Advisory Bureau (CAB). They are institutionally weak and lack adequate financial support. They attempt, as they best possibly can, to represent public interests in respect to manufactured products among others. The fact that they have no statutory base and their relationship with the Consumer Affairs Division of MOTTI is ill defined, hinders their effectiveness. Despite the similarity in function, there is no interlinking between them. Perhaps it would be best for MOTTI to consider divesting its responsibility in this area to the GCA and CAB with attendant support and to confer them with statutory power to represent consumer interest, with MOTTI being represented on its board.

3. Private Sector Bodies

At the third level, namely that of corporate, private sector interests, institutions have multiplied over the years with the development of the manufacturing sector in response to perceptions on how well existing agencies have responded to the interests of differing constituencies, and how effectively they have represented their specific interests, particularly in relation to the first level, core Governmental agencies. There are two types of private sector bodies. Among the first category is the Georgetown Chamber of Commerce (GCC), dating back to 1889 with its strong merchant class interests, which added to its name Industry, thus becoming GCCI, one hundred years later in 1989. There are affiliated bodies in the counties of Berbice and Essequibo. The creation of the GCC was followed much later by the establishment of Guyana Manufacturers Association (GMA) in 1956, in response to the expanding manufacturing lobby, whose interests it was felt at the time were not adequately attended to by the import and distributive trade body, namely, the GCCI. Therefore the task of the GMA, like that of the earlier GCCI, was to represent the interest of its membership in relation to the Governmental agencies concerned with the sector. In 1963, the Consultative Association of Guyanese Industry (CAGI) came into being to represent the collective interests of private and public sector operations largely, but not exclusively, in the production of goods and services. In the 1980s, it became more oriented to public sector interest and found an important niche in training and consultancy within the economy as a whole.

Efforts from the late 1980s and early 1990s to integrate these various bodies to enable the private sector to speak with one voice vis a vis the Government and more effectively serve the overall and particular interest of the various constituencies failed. In an attempt to supersede intractable difficulties of personality and organisation that existed chiefly between the GCCI and GMA, the umbrella Private Sector Commission (PSC) was created in early 1992. The expectations for this new body have not materialised and the PSC management has been accused of being ineffective.

Organisational fragmentation has to be overcome by the members themselves in the interest of more effective representation of sectoral interest at the national and governmental levels. They would also need to integrate more visibly the interests of the other class of private sector organisations with a strong interest in the manufacturing sector as regards policy matters at the level of the various Governmental agencies. These include the Guyana Forest Products Association (FPA) which has been around since 1944, and the Guyana Gold and Diamond Miners Association (GGDMA), which came into being in 1976.

A process of continuous consultations institutionalised between these three levels of agencies referred to above has to be put in place at the earliest opportunity in order to significantly improve on the design and execution of an all-embracing policy for the manufacturing sector. Partisan consultations and the persistence of organisational conflicts will certainly work against a full and beneficial involvement of the private sector in the process of accelerated development of the manufacturing sector of Guyana.

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G. Physical Infrastructure

1. Telecommunications

Privatisation has resulted in very significant improvements in the provision of telecom-munication services but they still have important deficiencies. They are now supplied on a reliable basis on the coastlands and, coupled with transmitting and related systems for hinterland communication along with the recent introduction of cellular telephones and beeping systems, a network of telecommunication services is in place which is helpful to manufacturers and, indeed, to the entire country.

2. Energy

This stands today as the major obstacle to the development of the manufacturing and agro-processing sector. The State-owned Guyana Electricity Corporation (GEC) is nearing total collapse and is in urgent need of a complete overhaul. A short-term measure already in process of implementation is to put in place a number of diesel-operated generating sets. In spite of a very unreliable supply of power, its costs to the manufacturing sector are high. This, and the fact that manufacturers are forced to install power-generating sets of their own, adds significantly to the final costs of production. Local manufacturers are thus placed at a disadvantage vis-a-vis overseas competitors as earlier highlighted. The privatisation of the GEC now underway (Chapter 39) will help considerably in overcoming this problem.

3. Transportation

The main roadways are in differing stages of deterioration. Recently, the Government has earmarked large sums of money for the rehabilitation of existing, and the construction of new, roadways. However, the Lethem-Linden road should be included in the programme as an urgent priority, as underscored in Chapter 38.

Improvements are being made with respect to air transportation, especially to the hinterland areas. However, there needs to be a resumption in the bulk-cargo which is commercially viable. Limitations on private air carriers need to be reviewed (Chapter 38). Water transport has benefitted from rehabilitation and refurbishing of existing ships, etc., thereby making available a more dependable water transport system, but further improvements of the ferry services are urgently needed.

Manufacturers themselves need to enter into discussion with the ocean freight lines servicing the country on improved rates to North America and Western European destinations.

4. Water

Water supply has been a major deficiency but a programme is in place for its improvement.

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H. Social Infrastructure

1. Basic Education

The development of a viable manufacturing sector depends critically on a literate and numerate work force rooted in a quality, basic education embracing all school ages. This could be achieved through the re-introduction of the public/private schooling system and by the Government placing the appropriate priority, hence resources, on this level of education. See the extensive recommendations in this regard in Chapter 20.

2. Technical and Vocational Training

The network of technical and vocational institutions providing training in the array of skills and techniques essential to the efficiency of the operations of the manufacturing and agro-processing sectors are in disarray. Some are not clear on their mission and all are in dire need of:

(a) improvements to physical facilities,

(b) revision of the curriculum and,

(c) introduction of relevant programmes, etc., in keeping with the dynamics of the market place.

Above all, a system of management is required which links these institutions with the workplace of the manufacturers. In this regard, the industrial attachment progressive of the University of Guyana points to the direction in which technical and vocational training should be moving. Chapter 35 discusses the issue and presents key recommendations for fundamentally revising the system of technical and vocational training.

3. Tertiary Education

The private sector on the whole feels that graduates coming out of the University of Guyana into technical and managerial positions find it difficult to function effectively in the work place. In general there are:

(a) communication problems,

(b) questions about the relevance of the imparted technical and managerial expertise,

(c) concerns about leadership quality, and

(d) an apparent lack of independence and drive on the part of the graduates.

All of these concerns should be urgently reviewed by the university staff and management in order to improve and render more relevant its product to the dynamics of the market place.

4. Research and Development

The non basic research work programmes of the National Agricultural Institute (NARI) and the Institute of Applied Science (IAST) should be demand driven, i.e., by the needs of the manufacturing and agro-processing sector. Research results could then be more readily commercialised and both NARI and IAST could strengthen their financial autonomy. The management of both institutions need to be more pro-active in developing and presenting to the business community their profiles of technology-driven projects and opportunities, either within or outside of the context of the science park schemes.

A useful mechanism to translate these proposals into reality in the context of a clear policy on manufacturing and agro-processing would be to establish a working group embracing the relevant private sector institutions and the teaching and research agencies, chaired by MOTTI and, in which arrangement, the Ministry of Education might be invited to participate.

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I. Industrial Relations and Labour Markets

The British Labour Act of 1912 and its many amendments, the last having occurred in 1995, provides the framework for industrial relations in Guyana. The industrial relations record indicates higher volatility in Guyana than in the rest of CARICOM particularly in relation to this sector. But there is no evidence that the private sector is more prone to strikes than the public sector in the area of manufacturing and agro-processing. For instance GUYSUCO (in factories and workshops, not fields) and GPC had two and three strikes respectively in 1995, which was only matched by Toolsie Persaud Limited (TPL) in the private sector.

The manufacturing sector in Guyana is characterised by two types of operating firms. Family-owned enterprises dominate in terms of number, with methods of management varying considerably. They all share in common a paternalistic approach to labour, with all its limitations (inclusive of the view that unions are a nuisance, and that their leaders should only be related to in the event of a strike). The second type is the large shareholding firms, both local and foreign, where the management of industrial relations is given due attention.

This pattern of ownership, and the contrasting approaches to and styles of management, are partly the source of stability and volatility of industrial relations in the sector. The shareholding firms have established over the years mechanisms for regular consultations with the trade unions and have put in place proven procedures to address and resolve grievances before they result in industrial action. Some of these firms have even gone further. Banks DIH, for instance, with hundreds of employees in various manufacturing and agro-processing activities, has only had one strike in its sixty-year history. In its category, it has traversed farthest along the path of workers' participation in management. Here, the labour force is consulted in the process of decision making. This more enlightened approach to the management of industrial relations is a source of stability in union and management. This has not been the case for some other firms of respectable size.

The are significant imperfections in the labour markets. The labour legislation is in process of being updated. The framework it presently provides is derived from the period of import substitution industrialisation. It needs to be modified to better balance the interest of the two key social partners, with a neutral public authority. Further, as the structure of ownership in the sector shifts over time from the family-owned to the shareholding type firms, industrial relations stability should improve. But it would certainly help for other shareholding firms to review the experience of Banks DIH to see what lessons could be learnt and to put then into practice. Harmony in the sector is a key factor in the competitive market place, source consideration to employee shareholding ownership plan could help the process.

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J. Livestock and the Agro-processing Sector

The livestock and dairy subsector faces a number of shared constraints to expansion. The first pertains to stockfeed. While rice bran, copra meal and molasses are available, the element of seasonality generates a mismatch between supply and demand occasionally and thus artificially forces up the price. The key component of stockfeed is protein which is imported as concentrates. It is costly and proper formulas for blending imported inputs with local materials are yet to be worked out. Most farms improvise, without a basis of scientific research, the mixes used under local conditions. This has to be done separately for the different types of animals and birds.

The second constraint is abattoir facilities. The ones under municipal ownership and management are neither sanitary nor functional. The private sector has demonstrated that it can efficiently run such facilities. Both Bounty Farms Limited and C and F Meat Centre have their own modern abattoir facilities which are most efficient.

Third, backward integration of the livestock sector is generally insufficient. As the cases of BFL and CFMC have shown, it contributes significantly to value added. The scope for further processing of livestock products is considerable. While ham, bacon, sausages etc. are being processed, quality and variety could be enhanced and new products introduced such as dehydrated meats for soup mixes and other manufactured food preparations.

The agro-processing industries can be aided enormously if greater effort is made towards large scale orchard production for crops. Far too often, there is inconsistency in both quantity and quality of fruits produced.

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K. Issues and Constraints in Science and Technology

1. Institutional Mechanisms for Coordination

One of the principal issues facing the science and technology sector is the lack of any oversight. In speaking of oversight, it is important to distinguish this from the "control" of the sector that formerly prevailed under the authority of the NSRC. It implies the establishment of organisational linkages between needs, research and development and delivery. These linkages are most lacking in agriculture and are exacerbated by the fact that farmers are mostly rural based --away from where the research is being done.

Given the scarcity of resources, it can be expected that for many years there will and should be a good deal of interdependence within the sector for manpower, facilities and equipment. A coordination unit could serve the role of facilitating these linkages. This form of oversight should be distinguished from that of determining what research and technologies should be developed, these are better decided at the local level by the users and developers of technologies. There should be no centralization of authority in directing the course of science and technology. This condition is key if scientists and engineers are to be given the freedom to respond to changing demands for new technologies.

One key requirement for advancing the sector is information sharing among the different actors in research and development. Often, organisations that are relatively close to each other physically are not informed of what the other is doing. There is therefore need for a "clearing" house of information between the different actors. Information sharing leads directly to the need for a relevant data base which is absent in Guyana. The University of Guyana's library is focused on the needs of students and does not meet the requirements of nascent research industry. Library facilities at IAST and NARI are lacking. The cost of operation of a proper data base facility at a central location should be inordinately expensive and may be funded by a donor agency.

2. Organic Linkages

This problem is especially severe in the agriculture sector. In the Crops and Livestock Department of the Ministry of Agriculture, NARI and the agricultural focused institutions, there seems to be a lack of representation and understanding of the needs of farmers. Some feel that research is not driven by the needs of farmers (Chapter 28). Clearly better linkages need to be developed between the needs of farmers, research and extension and mechanisms need to be worked out to achieve this. Community participation is important and their needs should drive the research agenda. The delivery of the results of such research should then follow as a logical extension. The use of one institution in the field of agriculture to perform research, extension, marketing and crop reporting should be explored as advocated in Chapter 28 of the National Development Strategy.

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IV. Sectoral Objectives

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A. Manufacturing

The principal national objective for the manufacturing sector is that it increase its contribution to the economy's overall development. As this Chapter has demonstrated, in the past the relative contribution of the sector has been quite low, both by standards of the developing world in general and relative to Guyana's potential. There are two aspects to this broad objective:

1) Promoting a rapid increase of production and employment in the manufacturing sector, including agro-processing; and

2) Encouraging a judicious degree of diversification, in keeping with Guyana's current and potential comparative advantages.

Faster growth of the manufacturing sector will contribute to both of the first two overarching objectives for this National Development Strategy: sustaining rapid growth of incomes in general, and helping to reduce poverty (Chapter 2, section 2). The employment creation effects of an expansion of the manufacturing sector provide a powerful boost to the standard of living of poor families and therefore contribute directly to placing those families on a self-sustaining path of economic betterment.

The diversification objective is important for accelerating the growth of the sector, and it also reduces the risks that the economy is exposed to by dependence on a few primary products. A narrowly based economy is vulnerable to both supply-side shocks (as in the shutdown of Omai, or potential effects of bad weather on agricultural harvests) and demand-side volatility, particularly fluctuations in international prices.

In addition to stochastic risks of this nature, the current structure of our economy makes it exceedingly vulnerable to a possible loss of preferential rice prices four years hence, and in equal measure to possible reductions in the real price of sugar received by our exports of that product. Those two crops, in their growing and processing, accounted for an extraordinary 33 percent of GDP in 1995,⁽³⁾

placing this vulnerability in high relief. It is widely regarded as virtually certain that sugar prices will decline in real terms, as indeed they have over the past ten years (Chapters 12 and 33) and a loss of the rice preferences is a distinct possibility. Hence both crops could suffer severe setbacks and the economy will need an alternative source of growth to be able to offset such contingencies and continue its recent dynamism. Mineral and wood products will help fill the void to some extent, but it will be essential to increase the value added and employment generated from each pound of mineral excavated from the earth and each cubic metre of timber felled in the forest.

Viewed in this perspective, the overall roles of the manufacturing sector are to enhance the vertical integration of principal resource-based sectors and to produce a constantly more diverse and widening stream of goods. This means not only expanding outputs such as millwork, furniture, doors and mouldings, veneer, etc., and industrial diamonds, processed gold, polished semi-precious stones and jewellery, but it also means reviving former traditions in sectors such as metal working and textiles, building vigorously on the rich base of non-traditional agriculture to produce a variety of processed foods, and introducing over time the manufacture of entirely new products.

Meeting these challenges will be crucial to Guyana's moving to a higher stage of development in the first decade of the next century. The obstacles in the path are formidable, but the potential is there to be reaped, for the benefit of all citizens.

The seven operational sub-objectives set out for the private sector as a whole in Chapter 36 (section IV) are all directly relevant to achieving the broad objectives established above for the manufacturing sector. Rather than repeat those sub-objectives here, the reader is referred to the text of that section.

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B. Science and Technology

The overriding objective of a science and technology policy is to create an environment where appropriate research and development can take place. The following specific objectives have to be achieved if a science and technology policy is to be successfully implemented:

1. The establishment of organisational mechanisms to make the sector more efficient.

2. The establishment of mechanisms for improving the linkages between needs, research and extension.

3. As part of the organisational mechanism, the establishment of a clearing house for information.

4. The creation of financial incentives that make research and development attractive to firms, research institutes and individuals.

It is clear from the foregoing that the agenda for research in Guyana is focused on that which affects the productive sectors of the economy. Little attention has been paid to research in other sectors, for example, in health or the pure sciences. This is deliberate and recognises the absence of sophisticated laboratories and infrastructure that are needed to conduct such research. One can, however, envisage that as the country develops there could be a shift in the objectives of the research agenda as better infrastructure is put in place.

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V. Policy Recommendations and Their Technical Justifications

In this Chapter, many of the policy recommendations have been developed, in effect, in the course of the discussion of the issues and constraints in section III above. Here they are summarised briefly and complemented by additional policies of importance for the sector.

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A. Manufacturing

1. Export Processing Zones

The creation of an export processing zone is one of the foundations of this National Development Strategy as regards the promotion of the manufacturing sector. As such, this policy is highlighted also in Chapters 35 and 36, given its importance for employment creation and the general development of the private sector.

It is essential that the EPZ be located within close reach of a deepwater harbour; accordingly, the area around the improved port facility in Berbice recommends itself for this purpose. It will be important to continue deepening that harbour until the goal of permitting ships of 60,000 dwt is attained, principally via dredging the channel. Concomitant improvements in the unloading and warehousing facilities should be pursued in order to be competitive with other harbours in the region.

The EPZ will cater only to production for export. Rebates on duties and consumption taxes will be offered upon the certification of the export activity. Emphasis will be placed on those industries with backward linkages to production in the primary sector in Guyana, although selected other industries will be accepted as well. The EPZ will be accompanied by industrial infrastructure in the form of land, water, electricity, roads and telecommunications. Government will make available land nearby for construction of housing and, as the zone develops, schools and other social infrastructure will be provided also.

A pre-feasibility study will be carried out for the EPZ, specifying possible industries and their markets abroad, the layout of the zone and the infrastructure requirements, costs, and the time phasing of its development. Necessary improvements in the harbour facility also will be analysed in the study. The review of the financing mechanisms will include the possibility of a BOOT operation by an international corporation with experience in the manufacturing sector and in exporting.

In the same vein, the prospects for a science park warrant careful exploration, particularly in connection with a potential centre of excellence at the University of Guyana, either in geology and mining or in forest management and utilisation (Chapter 20).

2. Policies to Maintain the Sector's Competitiveness

These policies are presented comprehensively in Chapter 36. They are of the highest importance for the manufacturing sector to be able to prosper in the future. Some of the most important of those policies include labour force training, improved mechanisms for industrial relations, a more uniform tax regime, and maintenance of an equilibrium exchange rate over time. It is worth reiterating that right now the manufacturing sector in Guyana is at a competitive disadvantage vis-a-vis other countries in the region in these four policy areas, and that disadvantage offsets a goodly portion of the cost advantage which Guyana obtains from its relatively low-cost labour, and hence the cited improvements have a character of urgency. The policies of Chapter 36 in respect to the privatisation programme, and moving it along more smartly, are also highly relevant to the future of our sector of manufactures.

3. Institutional Aspects of the Private Sector and Business Ethics

The leadership of the private sector needs to strengthen the internal cohesion of the business community and increase the representativeness of its consultative organs. Clearly a soul-searching review of the structure and function of the PSC is needed. One way to increase the interest of members of such an organisation is to launch a programme of events, including workshops on particular policy issues and guest speakers from the private sector in other countries. It would also be important to organise fact-finding visits of teams of 8 to 10 private sector leaders to other countries. Once members find that the sessions of the organisation have more promising content, then in all likelihood there will emerge a greater willingness to work together collegially. It is possible that international donors may be willing to support an amplified programme of this nature.

Once the sector's representative and consultative organisation is functioning with greater intensity, it can take the lead in drawing up a code of business ethics for the membership and investigate the corresponding mechanisms for sanctions from the private sector itself.

4. Regulatory Arrangements

Government needs to develop a fair code in regard to monopolistic and monopsonistic practices. In addition, the improvements recommended in Chapter 36 for the system of investment approvals and other regulatory mechanisms urgently need to be implemented.

5. Physical and Social Infrastructure

Full implementation of the recommendations of Chapters 38 - 40 would be of utmost importance for restoring the competitiveness of our manufacturing sector, which now suffers unwonted increases in the cost of production because of the inadequacy of the network of infrastructure. By the same token, full execution of the programmes of Chapters 18, 19, 20 and 23, for the environment, health, education and housing, will be essential to enable the country to attract and retain the calibre of managers and specialist professionals that its nascent manufacturing sector requires in order to develop. Our health and educational services once figured among the best in the Caribbean, now they are sadly degraded. We should not shrink back from effecting the necessary structural reforms in these areas, to make those systems functional again.

In a world of increased mobility of professionals, the so-called amenities of living, some of them very basic indeed, are of increasing importance for the development of the productive side of an economy, and Guyana should not consider itself an exception to this circumstance.

6. Industrial Relations

As pointed out in the foregoing discussion, the Labour Act has become an anachronism. It seriously requires review and updating, with an orientation toward replacing a confrontational labour-management relationship with one that is more consultative and cooperative, and to give greater emphasis to labour force training and policies that increase labour mobility. The current legislation builds rigidities into the system of employment when a modern economy demands greater flexibility.

7. Industry and the Amerindian Community

Too often in discussions of industrial policy little or no consideration has been given to the possible role of the hinterland communities, including the Amerindians. A more balanced regional development, wherever it makes commercial sense, would have the advantage of generating more stable employment and lowering the incidence of poverty in the hinterland. Such development could be based on small-scale manufacturing and agro-processing, and specialised developments such as the proposed regional gold refineries (Chapter 32). In this respect, without doubt the completion of the all-weather road to Lethem and the lifting of restrictions on private air services would be essential ingredients of the policy. The potential of the Rupununi, especially in vegetables and livestock products, could be integrated into the rest of the economy, as well as other hinterland areas that are endowed with deposits of semi-precious stones and other resources.

8. Policies for Selected Subsectors

a. Processing Semi-precious Stones

The GGMC and GGDMA should, in consultation, find a way to commercially rehabilitate the lapidary operation, perhaps initially as a pilot operation, to demonstrate possible commercial viability with external technical assistance in designs using the range of available local stones. Gold and diamonds which are used locally, specifically for the manufacture of jewellery for the domestic market and informal export need a two-pronged strategy.

Such a strategy should seek to :

(a) Infuse design expertise, state-of-the-art technologies, training of craftsmen and upgrading of management in order to reduce unit costs and to break into the higher value market niches.

(b) Transform the informal into formal exports and expand marketing opportunities. Again the GGMC and GGDMA could, with the existing manufacturers and distributors and other established parties, detail an operational strategy that would enable the country to capture an increasingly larger stream of the potential benefits which the raw materials in question are capable of offering by way of manufacturing activities.

b. Credit for Fishermen

Credit policies in relation to fishermen have to be addressed and here there may be a special niche role for an institution like the Institute for Private Enterprise Development (IPED). Perhaps, it could be pursued in association with donor agencies that have had a traditional interest in the building of this subsector, but in the context of an overall national policy framework.

c. Livestock Processing

Government should divest itself of abattoir services and have them transferred to the private sector on strict performance conditions while strengthening the capacity of the municipal agencies to monitor compliance with tariffs and sanitary standards.

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B. Recommendations for Science and Technology

1. Need for a Coordinating Body

Because research activities take place in several different organisations, there is need for some coordination. As stated before this coordination function is not designed to control the research agenda but to at a minimum to know what research is going on in the country. The body can assist in the development of new technologies by awarding grants, scholarships and internships. The issuing of research grants should become a major role of the new institution as a source of funding for research. The body should itself not engage in research activities.

Since there already exists a legal framework for the National Science Research Council, then this body should be resuscitated. However, the organisation and functions of such an agency should be better constructed and defined. First, there must be clear and appropriate ministerial responsibility for science and technology. The present responsibility to the Office of the President places an unnecessary burden on this already busy office. The responsibility (not necessarily the physical offices) for such a sector may be more appropriately placed in a revitalised Ministry of Tarde, Tourism and Industry. Such an office need not be very large.

It is clear that the organisation referred to above will need to have an adequate budget. While the NSRC can charge user fees to organisations and individuals, this could be inadequate for its functioning. The Government will have to make budgetary allocations to the NSRC out of its national budget. The private sector should also be encouraged to contribute. The establishment of specific pots of funds, for example, an "industrial research fund" which is funded by the private sector will guarantee funds for a specific research activity each year.

Critical to any research and development is a proper functioning library and information source which should be the responsibility of the resuscitated NSRC. Even more critical is the continuous updating of all research information. The use of current technology such as the Internet (which Guyana is scheduled to be hooked onto soon) should reduce the burden of such an exercise. Of importance would be a data base on current local research activities, the potential of indigenous materials, the needs of industry, potential for collaboration between researchers, etc.

In the past, such organisations floundered due to a variety of reasons and measures should be put in place to keep the resuscitated NSRC active. This can occur only if the user community (the community of researchers, developers and industry) insists on a high degree of accountability from the NSRC. Such accountability may include annual reports (both written and oral) to Parliament or reports back to interest groups that pay user fees and dues to the NSRC. These requirements are essential if the NSRC is to be held accountable for its work. An established ratio or administrative costs to its active research budget may be a way of measuring the efficiency of the NSRC.

The NSRC itself depends on the commitment of the research community to use and support its activities. In this regard, some measures can be put in place to ensure that participating institutions fulfill their obligations, such as notification and periodic information requirements (for example, monthly information summarising new research activities, progress in ongoing research, new appointments, etc.). If such obligations are not met in a satisfactory manner, then the defaulting institutions may be barred from using the services of the NSRC, receiving research grants or having current research grants terminated.

Note that this form of the institution, unlike its predecessor, will not determine what research is carried out in the country. In other words, it will not dictate the research agendas of any institution. Notwithstanding this, the NSRC may award grants from its budget for specific work which it determines has priority. Similarly, a sponsoring agency that is funneling money through the NSRC may earmark such money for specific research.

The composition of the NSRC is also important for its success. In its new form, the NSRC should have a balance between representatives of technology users, research institutions and Government. It should also not be very large. Technology users can be represented by interest groups such as the Private Sector Association and farmers' associations.

2. Other Organic Linkages

As mentioned before, linkages in the agriculture sector are poor. The recommendation mentioned in Chapter 28 of the Strategy for integrating research, extension, marketing and crop reporting into one institution should be pursued. This would of course absorb the functions of NARI. The new institute may also include the agriculture related functions of the IAST or if not, then there should be careful coordination between the two in their activities.

This structure should encourage research that responds to community needs. By integrating crop reporting and marketing on one side, scientists will have a much better idea of research requirements. This can in turn be distributed through agriculture extension.

3. Markets for Technology

The development of a market for the sale of technology is important for several reasons. While the Government can be expected to provide certain extension services in agriculture, it cannot do so in other industries. Marketing of technology (whether developed by the private or public sectors) is the most efficient way to distribute it. It also lessens the burden of extension on the Government which can focus its efforts (more specifically in agriculture) on meeting the needs of small farmers and leaving the larger farmers to pay for extension services.

The marketing of technology also provides financial incentives for people to become involved in its development. Again, this reduces the burden on the Government as the profit incentive will provide the motivation for the private sector to be more actively involved in all aspects of technology development.

Science and research also needs to be made more attractive to those working in the public sector. While there exists a formula at the University of Guyana which established the portion of income for work contracted to the university that goes to the researcher, and that which goes to the university, Government may reconsider this formula to make it more favourable to the researcher. A similar system exists at IAST, but it is not as formal as at the University. Formal mechanism need to be determined at IAST, NARI and other Government research institutes that adequately compensates researchers for the work they do. The compensation may be directly linked to the sale of the technology, that is, the researcher gets an established percentage of all sales of the technology. Thus, the active marketing of technology need not only be for that which is developed privately. This practice would also provide an indirect mechanism which guides researchers in responding to market demands. (This would, of course, not hold in the case where research institutes develop technologies under contract with a firm. In this case royalties from the sale of the technology will depend on the agreement between the firm and the institute.)

The marketing aspect also need not be carried out by the research institute. One can envisage the University of Guyana, IAST or NARI developing a technology and then selling it through a marketing agency or through an interest group such as farmers' association or a miners' association. Mechanisms would, however, have to be put in place to ensure that in the case of agriculture, the sale of technology does not discriminate against small farmers. Thus, the recommendation in Chapter 28 for the establishment of a technology transfer unit in the Guyana Marketing Corporation is endorsed to ensure that small farmers have access to technology.

The development and sale of technology in a market environment also implies the development of appropriate patent and copyright laws. Without these the profit motive from developing technologies is eroded. This may be one area that a resuscitated NSRC may focus on immediately.

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VII. Recommended Legislative Changes

The legislative changes required to implement this policy framework for manufacturing are effectively those that are described in Chapters 35 and 36, supported by the legislative programmes of Chapters 29, 30, 31 and 32. It is important to emphasise the need for full implementation of this legislative agenda, for partial measures still would leave the manufacturing sector at a handicap. It is equally important to carry out the many policy changes that do not require legal changes but rather can be put into effect by means of decisive administrative action within the present legal framework.

The National Science Research Council Act No. 26 of 1974 needs to be revamped to reflect the policy directions indicated above. Important aspects or amendments are:

1. Amending the act to reflect less Government representation and more collective representation from the private sector. Organisations such as LINMINE, GUYSUCO, the Office of the President and the National Council of Local Democratic Organs should be dropped from the legislation and replaced by representatives of the private sector and farmers' organisations.

2. Certain powers of the NSRC should be removed such as its powers to review and advise on the programs and budgets of research institutes and to determine priorities for scientific and technological activities in Guyana.

3. In line with the general thrust of the new policy recommendations, the NSRC should no longer have the sole authority to "advise on suitable arrangements for planning, managing and coordinating scientific activities at various levels, including the establishment of Research Institutes."

Legislation governing institutions such as NARI should be rewritten to remove the element of authority imposed on these organisations by the NSRC.

Patent and copy right laws should be developed. There are other chapters in the National Development Strategy which highlight the need for similar laws, for example, in the chapter dealing with Amerindian development. While the context in the case of science and technology is different, the preparation of these laws should be consistent across sectors.

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VIII. Investment

Immediate investment needs for the science and technology sector are:

1. Funding for resuscitating the National Science Research Council and providing it with an office.

2. Funding for setting up a library to support the sector.

In addition to the seed money required for these two efforts, Government would have to provide recurrent funding in each year's budget to sustain the NSRC and the library.

1. ⁰ Hereafter the phrases "manufacturing" and "manufactured products" will be taken to include agro-processing and its products. The discussion in this Chapter excludes the rice and sugar processing industries since they are treated elsewhere in this Strategy.

2. ⁰ World Bank, Guyana: From Economic Recovery to Sustained Growth, IBRD, Georgetown, Guyana, 1990, p.3.

3. ⁰ Measured at current factor cost. (See Government of Guyana, Estimates of the Public Sector, Current and Capital Revenue and Expenditure for the Year 1996, as Presented to the National Assembly, Georgetown, Guyana, 1996, p. 485.)