The National Development Strategy -- A Summary

The National Development Strategy (NDS) sets out priorities for our nation's economic and social development for the next decade. The draft document - which is made up six volumes - contains careful technical analysis of problems and future prospects in all sectors of the economy and in areas of social concern. It presents us with an opportunity to work together to prepare Guyana for the challenges of the next century.

The draft NDS - which was launched on Monday 6th January, 1997 by the late President His Excellency Dr Cheddi Jagan - is a result of over 300 hours of meetings by 23 "technical working groups" consisting of over 200 Guyanese. These efforts were co-ordinated by the Ministry of Finance, but the contributors came from a wide cross-section of organisations including the private sector, government agencies, non-government agencies, and the University of Guyana. The Carter Center assisted the Ministry of Finance with the overall co-ordination of the exercise.

This article summarises the key recommendations made by the NDS in the areas of macroeconomics (Volume 2), the social sectors (Volume 3), the productive sectors (Volume 4) and the infrastructure sectors (Volume 5). We encourage you to read the summaries and send your comments and recommendations to the NDS Secretariat, Ministry of Finance, Main Street, Georgetown (Tel: 02-67242; Fax: 02-73458).

The Macroeconomic Strategy (Volume 2)

The macroeconomic strategy put forward in the NDS is directly concerned with economic growth, employment, the distribution of income, inflation, poverty and sustainability in fiscal, environmental and institutional terms.

Principal Macroeconomic Issues and Constraints

In this chapter, the NDS looks at the issues and constraints facing Guyana at the level of the economy as a whole, such as the level of debt, the lack of competitiveness of several of the country's exports, and the weaknesses in the public sector. In some respects, a number of improvements have occurred in the economy, including a reduction in inflation, smaller "fiscal deficits" (the gap between government expenditure and revenue), higher foreign exchange reserves, and a stronger banking system. The NDS identifies some remaining problems:

• a high level of external debt. A number of debt relief initiatives have reduced Guyana's debt to its donors. However, debt payments remain high, which severely squeezes the funding for vital infrastructure, social services, and salaries in the public sector. The NDS calls for continued lobbying for additional debt relief and other debt reduction measures.
• uncertainty over preferential access to rice and sugar markets. This is serious given the importance of these sectors and the fact that many of the producers are currently unable to compete at the world market price. The NDS recommends continued lobbying for the maintenance of preferential markets, and various strategies to modernise operations and improve competitiveness.
• a lack of competitiveness of several of Guyana's exports. The NDS calls for a reduction in import tariffs, as well as reforms in the banking sector to ease exporters' access to credit and foreign exchange.
• a need for the clarification and strengthening of the incentive regime for private sector investment. The NDS recommends a clear investment code that provides comparable treatment to investors in all sectors; the simplification and greater transparency of the investment approval process; and a review of consumption taxes and customs duties, so that different products and sectors are treated more equitably. The NDS also calls for the acceleration of the privatisation process.
• very low levels of pay in the public service, resulting in staff shortages (especially at the management levels) and an inadequately skilled workforce. The low level of pay is linked to the government's narrow revenue base. In addition to measures to increase government revenues, the NDS recommends the progressive improvement of salaries in the public sector; reforms to the budgeting system; and a more focused role for the government. The NDS suggests that by concentrating on guidance through policies, the government can make the best contribution to economic growth.

Principal Orientations of Macroeconomic Policy

The objectives of macroeconomic policy for the next ten years can be summarised as follows:

• Promote continuing high growth rates of output and employment.
• Ensure that inflation remains at relatively low levels.
• Ensure that the population's basic needs are met and that the growth process contributes to a reduction in poverty.
• Ensure that the growth path is sustainable in fiscal, environmental and institutional terms.

In order to meet these objectives, it will be necessary to meet a number of sub-objectives:

• enhance the institutional and financial effectiveness of the public sector to fulfil its roles and responsibilities.
• adopt policies that encourage exports and improvements in the international competitiveness of Guyana's producing sectors.
• continue to improve the efficiency of the banking system, to promote both savings and investment.
• promote policies that enhance the role of the private sector in the economy and encourage greater levels of participation in decisions related to economic development and economic management on the part of families, communities, associations, and local governments.

The External Sector and Monetary Management

The principal objectives of the NDS in this area are to promote the growth of output and employment and to keep inflation at low levels. The NDS recommends:

• strategies to support the development of international trade. The NDS suggests, for example, the creation of an Export Processing Zone (EPZ) which will provide substantial employment opportunities, export earnings and foreign exchange. The NDS also calls for a review of the fiscal regime; the improvement of the system of agricultural research to give sectors such as rice the opportunity to enhance their technologies and become more competitive; the restructuring of GO-INVEST to separate its investment promotion function from its investment approval function; and the strengthening of technical vocational education and training (TVET) facilities to enhance to the supply of skilled labour.
• measures to ensure an appropriate exchange rate.
• the maintenance of the government's "monetary policy", as it relates to interest rates, the supply of money, inflation and legislation concerning the banking sector, the Bank of Guyana and the financial markets.

Fiscal Policy and the Public Sector

In this chapter, the NDS looks at appropriate policies relating to government spending and revenue, as well as at the problems faced in the public sector. The NDS recommends:

• the continued reduction of fiscal deficits. Domestic borrowing to pay for the excess of spending over revenues received causes prices and interest rates to rise. This, in turn, reduces the rate of private sector investment. Therefore, it is important to limit and prioritise expenditures and enhance revenues.
• the prioritisation of expenditure on basic social needs for health, education, poverty alleviation and social infrastructure such as potable water and sewerage systems. Other priorities should be productive infrastructure (especially transport and electricity) and public sector salaries. In addition, the NDS recommends that subsidies and transfers should be well targeted on social priorities.
• the enhancement of revenues, through a review of the fiscal regime, the broadening of the tax base, improved collection and staff training. The NDS stresses the importance of implementing the Revenue Authority. The incorporation of the Inland Revenue Department and the Customs and Excise Department into one body should reduce administrative inefficiency, informational gaps, and the overlapping of responsibilities. The NDS also supports the proposed computerised Unique Tax Identification Number to facilitate the sharing of information between agencies.
• the examination of the feasibility of introducing value added tax (VAT). With the move to a lower Common External Tariff (for CARICOM countries), it will be important to move away from consumption and import taxes in order to maintain current levels of revenue.
• the reduction of the high staff vacancies in the public sector. This will require action on wages; the NDS recognises that the issue of wages must be tackled before any other reforms can be properly implemented. In addition to consolidating some of the vacancies into more highly-skilled positions, the NDS calls for a review of the size of the public sector in line with its role; the development of a transparent pay policy, an incentive structure, performance evaluations, and clear disciplinary procedures; the introduction of retraining schemes to enable staff to fill vacancies at higher levels; and, the training of managers in the management of change.
• the improvement of expenditure management, including the ending of the separation of capital and current expenditure management; the move to "programme budgeting" which rationalises expenditures based on programme objectives and results; the continued computerisation of the budget process; and, a recognition of the important links between resource utilisation and the NDS.
• the adoption of a more clearly defined and focused role for the government. The NDS sees the private sector as the engine for growth, employment and higher incomes. It is recommended that the government focus mainly on assuring the provision of basic social services and infrastructure, and that it strengthens its regulatory and monitoring role, especially in the areas of natural resource development and the financial sector. Above all, the government should ensure that the basic needs of the poorest groups in the population are met.
• the continuation of the privatisation programme. This is recommended by the NDS as part of the greater emphasis on the private sector. The NDS also suggests the establishment of an updated regulatory framework for newly privatised utilities.

Debt Management

Guyana faces high debt payments for both domestic and external debt, despite declining interest rates (in the case of domestic debt) and recent debt write offs (in the case of external). This has resulted in a reduction in the resources available for important expenditures, such as social infrastructure. The NDS recommends:

• strategies to deal with the domestic debt, including strengthened management of the money supply and the use of appropriate levels of "treasury bills" (on which the government must pay interest); prudent fiscal and monetary policies to lower inflation; and reductions in fiscal deficits and the level of domestic debt.
• strategies to deal with the external debt, including policies to accelerate economic growth (to reduce the relative size of the debt); further efforts to obtain debt write-offs; the paying off of some non-concessional debts with concessional borrowing; and various mechanisms to reduce the cost of debt servicing.

Banking Policy

The NDS seeks to promote the viability of the banking system while preserving competitiveness and a sound financial environment. The commercial banks and other financial intermediaries play an important economic role, such as by mobilising savings for investment purposes. The NDS recommends:

• an improvement of accounting and disclosure standards, to ensure the harmonisation of practices across different banks (including local operations of foreign-based banks).
• the introduction of regulations to prevent credit concentration (where significant amounts are lent to a few borrowers) and the associated risk, as well as regulations concerning provisioning for bad debts, in order to maintain the stability of the financial system.
• the establishment of a Legal Review Committee to look at existing financial laws and identify areas of obscurity and uncertainty, and to make recommendations for tighter enforcement of contracts.
• the strengthening of the Bank of Guyana's ability to supervise financial institutions. This will require legislative reforms to provide it with sufficient legal powers.
• the involvement of Guyana in the consideration of a Regional Stock Exchange for the Eastern Caribbean.

The Social Sectors (Volume 3)

Social policies are given a central place in the National Development Strategy (NDS); Volume III (The Social Sectors) is the largest of the six volumes of the NDS. Social policies are crucial to satisfying the national objectives of poverty alleviation, satisfaction of basic social and economic needs, and sustainment of a democratic and fully participatory society.

Poverty Alleviation/Reduction

Despite recent improvements, poverty remains a critical issue for many people in Guyana. The NDS has four priorities for poverty alleviation:

• the need to promote rapid and sustainable economic growth in a labour-intensive manner, since this expands employment opportunities and raises income levels. As exports are generally the most labour-intensive products, they should be promoted through, for example, an export processing zone.
• the need to increase the productivity of the poor. For the poor to truly benefit from these employment opportunities, emphasis must be placed on formal and non-formal education and training, improved access to land for small farmers, and enhanced access to credit for micro and small enterprises.
• reform of the institutional structure and operating procedures of social safety nets. Until everyone is able to meet their own basic needs, effective social safety nets targeted at the poor must remain a priority. The NDS also recommends the strengthening of the relevant Government agencies, and sees an important role for non-government organisations.
• policy reforms to replace generalised subsidies with ones that are targeted on the poor. Recognising that resources are not available for addressing all the problems of all groups immediately, the NDS suggests that priority be given to women and children, youth, senior citizens, the disabled, and the Amerindian communities.

Environmental Policy

Environmental issues affect the health, well-being and future of the people of Guyana. The environmental policies of the NDS intend to promote the sustainable management of natural resources and preserve a healthy environment in coastal, urban and hinterland regions:

• The NDS is strongly in favour of the Environmental Protection Agency as a body to focus on issues such as, the management of renewable resources, environmental degradation, agricultural and industrial pollution, public awareness and legislation.
• In coastland areas, the NDS calls for the rehabilitation and maintenance of the sea defences and irrigation infrastructure, as well as protection of the mangroves.
• In urban areas, the NDS recommends strategies to deal with waste management and pollution.
• And for the hinterland, the NDS supports a National Forestry Code of Practice and a similar set of standards for the mining sector; the use of "environmental impact assessments" for forestry and mining operations; the development of non-timber uses of forests; the promotion of "ecotourism"; and the establishment of a system of protected areas to preserve Guyana's unique biological diversity.

Health Policy

The objectives of the NDS are to improve the population's access to health care and the quality of that health care. Throughout, the aim is to ensure that no-one is denied access to health care because they are unable to pay. Recommendations include:

• improvements to the referral system alongside improvements in local health care facilities. It is also suggested that the Ministry of Health becomes the sole health authority in the public sector, and that individual hospitals are given greater autonomy.
• improvements in the supply, management and distribution of drugs and medical supplies.
• increased investment in primary health care (with the establishment of a primary health care division in the Ministry of Health). It is suggested that efforts be made to improve hinterland access to primary health care, and that overall priority be given to children, adolescents, and pregnant or lactating women.
• the tackling of the staffing and resource constraints in the sector.
• the upgrade of air and water ambulances and an expanded programme of rotating physician visits to some of the more remote communities.
• the encouragement of private medical personnel to practice in hinterland areas.

Educational Policy

The NDS recommends strategies to boost the levels of literacy and numeracy in the population and improve the availability of all levels of education from pre-school care and nursery, to technical vocational education and training (TVET), adult education and university. The NDS recommends:

• increases in funding, particularly for the primary level - which faces the greatest constraints, and yet has the greatest payoffs for economic development. In addition, it is suggested that regional variations in expenditure be reduced.
• increases in teachers' salaries and the introduction of performance incentives.
• improvements in teacher training (including for special needs education) through the setting up of new training centres.
• improved targeting of subsidies.
• encouragement of private sector and non-government organisation involvement in the provision of education and training.
• the development by the University of Guyana of a long-term plan for establishing centres of excellence in areas such as tropical forestry and forest management, geology and mining, and fisheries management.

Women, Gender and Development

This chapter of the NDS looks at the situation of Guyanese women in terms of poverty, employment, health, education, the household, and the media. Recommendations are made to tackle the higher incidence of poverty amongst women, the difficulties women face in the work place (such as low pay), the high incidence of domestic violence, and the specific health problems they face (including malnutrition and high maternal mortality). Specific suggestions include:

• the promotion of microenterprises and the creation of a national credit institution.
• investment in distance learning education and training in non-traditional (and higher paying) fields.
• the introduction of "family-friendly" working environments (through such things as "flexi-time", child care facilities at work, and maternal and paternal leave).
• increased investment in social services.
• strengthening of the Women Affairs Bureau alongside the establishment of a National Commission on Women that will recommend and lobby for policy reforms.
• a greater role for the media in raising public awareness, as well as enhancing women's understanding of their legal rights.

Amerindian Policies

The NDS seeks to tackle issues facing Amerindians in the areas of land, poverty and education. Recommendations are made to tackle Amerindians' marginalisation in the development process:

• reforms to secure Amerindian land rights. Those communities affected by resource development and extraction should share in the benefits.
• the expansion of the Amerindian Development Fund. It is recommended that funds be spent on community development projects and training.
• increased investment in health facilities, schools and training centres, as well as improvements to salaries of personnel working in hinterland areas.
• the development of more relevant curricula in schools.
• the strengthening of the Ministry of Amerindian Affairs.

Urban Development and the Housing Sector

The main objective is to improve access to housing, basic services and amenities in Guyana's cities. The sector faces a lack of adequate planning; human and financial resource shortages; a scarcity of land for housing; and poor water and sewerage systems. The NDS recommends:

• strategies to increase the supply of housing. One suggestion is to make land available in freehold to entrepreneurs who will commit to constructing housing on the lots, while the Government commits to supplying the necessary infrastructure services. It is suggested also that the Government supply serviced lots to needy families.
• policies to enhance the capacity of lower and middle income groups to purchase and rent housing. One method would be the use of rental and mortgage supplements for low income families. In the case of State land occupied by squatters, an option would be to grant freehold title in exchange for a supplemented mortgage.
• the strengthening of the municipalities.
• the development of export processing zones and industrial estates to generate employment in urban areas.
• the allocation of land to the greenbelts to curtail urban sprawl.

The Role of Regional and Local Government

The objective of the NDS is to create a more decentralised framework of regional and local government. Recommendations include:

• the clarification of the structure, roles and responsibilities of the Regional Democratic Councils, the Neighbourhood Democratic Councils and the numerous other levels of local government.
• various administrative and legislative reforms to give a greater degree of autonomy to regional and local government.
• the streamlining of the local government structure and the strengthening of regional and local agencies through staff training and improvements in the budgeting system.

The Productive Sectors (Volume 4)

- Agriculture and Forestry -

Agriculture is the single most important sector of Guyana's economy; more that 70% of Guyana's population live in rural households and are primarily dependent on income generated from agriculture and related activities.

Rice Development

Rice is Guyana's second major crop and a major source of income, employment and foreign exchange. Despite improvements since the late 1980s, the rice sector continues to face a number of constraints that hinder its development. The NDS makes the following suggestions to address problems such as, the lack of competitiveness on the international market, inadequate access to credit and land (especially for small farmers), and institutional weaknesses:

• strengthen the Guyana Rice Development Board (GRDB), in terms of its ability to conduct forward looking analysis; regulate contractual procedures, payment mechanisms and rice quality; and raise revenue from sources other than export taxes, which decrease the competitiveness of the sector.
• reinvest the benefits from Guyana's preferential export markets back into the rice sector to improve competitiveness. The rice sector may find itself in a precarious position if and when the preferential markets provided by the "Lomé IV Convention" are lost or reduced. Efforts should centre on focusing the sector on the CARICOM market; rehabilitating infrastructure, such as wharf facilities, water channels, and D&I; the creation of a deep water harbour; and diversification within the rice sector.
• increase productivity and promote technology development by, for example, improving access to credit for both millers and producers. The NDS also calls for the promotion of research, based on market demands and the experiences of farmers, to look at productivity, yield variability, pest control, and the development of characteristics demanded by the export and domestic markets.

The Sugar Industry

Historically, the sugar industry has played an important social and economic role within Guyana. Today, it is the largest single employer in the country. The NDS makes recommendations to reduce its high production costs and increase its competitiveness; particularly important given the likely reduction in the preferential prices Guyana receives through the European Union:

• continue lobbying for the maintenance of preferential markets. There is currently uncertainty over preferential access to sugar markets. This is serious given the importance of this sector in the economy and the fact that less efficient estates are currently unable to compete at the world market price.
• invest in the modernisation of the industry and reduce recurrent production costs. The NDS calls for a thoroughgoing review of the industry's cost structure.
• pursue policies to improve the sector's competitiveness, including an appropriate exchange rate policy.
• strategies to enhance the financing, management and efficiency of the sector, such as through a participatory privatisation involving workers.

Other Agriculture

Non-traditional crops are labour intensive and generate substantial levels of foreign exchange. Promoting the output of this sector will, therefore, increase rural incomes, employment and foreign exchange earnings, and reduce rural poverty. The NDS recommends:

• the development of land and infrastructure. As part of this effort, the Lands and Surveys Department should be strengthened to enable it to improve its surveying capability, provide more efficient services to farmers, and co-ordinate with other land management agencies. Government should also ensure reliable electricity and potable water supplies to rural districts. In addition, it is suggested that participatory programmes be developed for the operation and maintenance of drainage and irrigation schemes.
• the focusing of research on selected commodities and certain geographic zones based on marketability and production potential. The Ministry of Agriculture should focus on developing agronomic programmes for crop varieties that have assured markets, taking into consideration their applicability to existing farming conditions and the varying economic resources of farmers. It is also suggested that plant protection and quarantine services be improved.
• the encouragement of private sector involvement in the sector through workshops, the creation of a computerised information centre, and the reintroduction of the National Science Research Council. Private sector involvement should also be encouraged in agricultural extension.
• the assistance of farmers in accessing credit. For example, the government should support rural development centres and agricultural co-operatives which can assist farmers in preparing proposals to credit agencies.
• the establishment of an advisory services agency that informs farmers of market opportunities, assists in finding inputs and obtaining access to markets, and directs farmers' concerns to relevant agencies. One option is marketing centres managed by the private sector.
• the promotion of agriculture as a core subject in school curricula. Learning institutions should be better equipped and practical agricultural training must be emphasised.
• the introduction of strategies to promote livestock nutrition and health, including the development of energy based and protein feeds production; improvement of the productivity of saline and acid soils to ensure adequate pasturage; and strengthening of abattoir and veterinarian services, financed partly by cost-recovery measures.

The Institutional Framework for Agriculture

The institutional framework for the agriculture sector is made up of various agencies ranging from the Ministry of Agriculture and the National Agricultural Research Institute (NARI) to the producer organisations and Neighbourhood Democratic Councils (NDCs). The NDS makes a number of recommendations to deal with the constraints these agencies face, such as limited financial and human resources; weak linkages between national agencies; a weak policy review capacity; and a lack of decentralisation:

• the development of a plan by the Ministry of Agriculture for the future direction of agricultural support services, which would prioritise government functions and provide measures for the development of the small farm sector.
• the provision of financial support for the development of the small farm sector by, for example, targeting a proportion of the preferential gains from rice and sugar exports; introducing higher rentals of State land and taxes on freehold; and initiating a system of charges for larger farms for extension services.
• the strengthening of local level institutions, such as the Neighbourhood Democratic Councils, non-government organisations, and producer organisations. It is suggested that the Government grant NDCs greater scope in the determination of resource use, and provide technical training in legal issues, management, finance, budgeting and resource mobilisation.
• the introduction of Government incentives to encourage banks to locate branches in rural areas, and the consideration by banks of group lending schemes.

Agricultural Land Policy

The NDS makes recommendations to promote rapid growth through improvements in the efficiency with which land resources are used, and to support poverty alleviation by increasing access to land for the landless and small rural farmers:

• improve leasing practices by, for example, developing clear selection criteria for approval and denial of leasing applications; ensuring both the land selection committee and the regional committee be comprised of elected members; and speeding up the approval process.
• formulate a standard agricultural lease with provisions for 99 or 999 year limits; transferability after 5 years; the ability to use leased lands as collateral or to sublet leased land without the approval of the lessor; and the option to convert to freehold after 10 to 15 years beneficial leasehold.
• annually adjust land rental rates to market values, with special provisions made for the rural poor. The revenue generated by the new rent levels should be re-invested back into improved land administration and agricultural development.
• promote better utilisation of freehold agricultural lands by eliminating unnecessary restrictions on land rental practices; and introducing a rural land tax (to discourage underutilisation of land).
• design a National Land Use Plan to define sustainable land use practices, targeting areas in need of reforestation or suitable for long-term agricultural development. The Plan should give special priority to benefiting the indigenous population, and deterring illegal occupancy of reservation lands.

Forest Management

The forest industry represents vast economic potential for Guyana. The NDS makes recommendations to increase the economic benefits derived from the forests; improve the sustainability of the sector; and spread the benefits of forest-based development to Guyana's rural areas:

• conduct a review of forest fees.
• develop a policy framework for concessions that will make the process more transparent; protect the rights of the investors; and enable the enforcement of their obligations. The policy will address the location and size of the new forest management concessions; the length of tenure; questions of transferability; the sustainable use of forests for non-timber products and nature tourism; and log exporting.
• encourage labour-intensive wood processing industries through fiscal incentives.
• strengthen and streamline the Guyana Forestry Commission (GFC). The GFC should focus on sustainable forest management and move away from commercial marketing of forest products. The NDS also recommends granting the GFC more autonomy with regards to raising revenue. A new organisation, with a board made up from the private and public sectors, should be set up to provide marketing and product development support, research and training.

Fisheries Policy

The NDS aims to maintain and improve the nutritional, social and economic benefits from the fisheries sector in a sustainable manner. The following recommendations are made:

• support artisanal fishermen by improving cold-storage and processing facilities and the marketing system.
• strengthen Guyana's fisheries management system (such as the Department of Fisheries and the Coast Guard) to promote a sustainable use of fish stocks; improve the enforcement of regulations; accurately assess current stocks; enhance the extension system; and improve quality control to strengthen export potential. It is suggested that the Department of Fisheries be reorganised and reinstituted as an autonomous Guyana Fisheries Commission.
• focus efforts more towards deep water finfish, and introduce strategies to limit fishing of marine prawn and seabob to sustainable levels. Regulations for gear types should be introduced.
• develop a policy for the long-term development of the aquaculture sector, which is the sub-sector of fisheries with the greatest potential for expansion of production, creation of employment, and generation of foreign exchange. Improvements in access to freehold land or secure leases of a reasonably long duration will be necessary. Expansion of aquaculture activities in shrimp production may be an important way to sustainably manage shrimp populations, and maximise their export potential.

The Productive Sectors Cont'd (Volume 4)

- Non-Agriculture -

Outside agriculture, there are various important productive sectors that are addressed in the NDS. This section summarises some of the recommendations made. Also discussed is the policy framework for the private sector, which applies to all the productive sectors.

Policy Framework for the Private Sector

In the NDS, a central challenge has been finding the most appropriate ways of combining the power of market forces, as the primary impulses to development, with the role of the State in providing the development framework, monitoring the process, and providing special assistance to target groups. The NDS makes various recommendations to ensure that the private sector continues to play a key role in the growth of the economy and that it is the major engine of employment creation and improved living conditions:

• the provision of infrastructural support to the private sector by the government.
• a focus by the government on upgrading the human resources of the economy through education and training, as well as through the provision of basic social services.
• the development of a definitive national policy aimed at stimulating investments, industrial performance and commercial development. The government should involve the private sector in this process.
• a review of the tax system, especially with respect to consumption tax and import tariffs, in order to facilitate private sector production planning and investment. The NDS also suggests considering the feasibility of a value-added tax (VAT) as a replacement for consumption tax.
• the setting up of Export Processing Zones (EPZs) to promote and facilitate investment, as well as to create employment and generate foreign exchange.
• the publication and wide distribution of a clear and simplified investment code. It is recommended that a "one-stop" investment approval office be established to improve the current time-consuming approval process. It is also suggested that a separate entity, made up of representatives of the public and private sector, be set up to deal with investment promotion.
• the improvement of the information database on external markets and market niches, so as to assist the private sector to search for new markets, in addition to the domestic market and CARICOM. The NDS also urges that the government support the private sector by sharing information on the availability of development aid and technical assistance.

Mining Policy

Despite the decline of the bauxite industry, mineral development has the potential to once again become an engine for economic growth in Guyana. The NDS makes several recommendations to deal with the constraints experienced in all subsectors of mining, and to ensure the continued growth of the mining sector as a whole:

• the enhancement of the mining policy so that it embraces a fiscal regime, marketing arrangements, policies on technology, security of titles, training, the environment, and an approach to social issues in mining communities.
• the encouragement of infrastructure development related to mining. The high cost of transportation and lack of essential services in the hinterland often deters foreign direct investment.
• a review of the fiscal regime. Specifically, the NDS calls for a review of royalties, export duties, and income taxes. It also suggests the introduction of fiscal incentives to encourage technology that is environmentally friendly.
• the replacement of the Guyana Gold Board with a system of licensed and bonded gold buyers who will be responsible for remitting royalties to the Government.
• the strengthening of the Guyana Geology and Mines Commission (GGMC). The GGMC needs to commission a national mineral resource inventory, continue to explore state of the art mining and milling technologies, and construct a modern integrated laboratory for relevant analysis and testing.
• the establishment of a commission to reconsider land rental policies.
• the development of a programme for the bauxite industry, including the privatisation of BERMINE and LINMINE.

The Manufacturing Sector

Guyana's abundant endowment of natural resources provides an important basis for manufacturing development. However, for the growth of this sector to be realised, a number of constraints need to be addressed. The NDS makes recommendations to promote the rapid increase of production and employment in the sector:

• the creation of at least one Export Processing Zone (EPZ), located in close proximity to deepwater harbour facilities and to the Linden -Lethem road link.
• the development of adequate social and physical infrastructure. In addition to the improvements in the social sectors (discussed in Volume III), the NDS suggests improvements to the electricity supply (including the privatisation of the Guyana Electricity Corporation) and to the all-weather road network (especially the Linden-Lethem link). The high cost of transporting raw materials for processing and the undependable power supply are two key constraints to the development of the sector.
• the development of a labour force educated and trained for the modern era.
• the improvement of the policy framework, including the framework for the industrial relations, the tax regime and exchange rate policy.
• the improvement of access to credit through institutions such as the Institute for Private Enterprise Development (IPED).

Science and Technology

the establishment of a co-ordinating body for science and technology; essentially a new National Science and Research Council with a different definition of its organisation and functions. The NDS also suggests that there needs to be a clear and appropriate ministerial responsibility for science and technology. The co-ordinating body would also be responsible for reviewing the role of information technology in Guyana's development.

Labour and Employment Policy

The NDS aims to reduce unemployment and underemployment and the accompanying poverty by creating greater amounts of productive employment and greater labour flexibility and mobility. The NDS recommends:

• the development of a macroeconomic framework (see Volume II) to accelerate economic growth, which in turn will increase both employment and real wages. The growth path recommended in the NDS is one that is as labour-intensive as possible in the short term. Specific measures would include the promotion of small and micro-enterprises, and the creation of an Export Processing Zone.
• the establishment of a small business development department which will co-ordinate agencies and bodies involved in this sector, work to certify and register businesses, and implement government policies. The NDS also recommends the review of the Companies Act; the creation of legislation to ensure small enterprises pay household and not commercial rates for public utilities; and the waiving of costs associated with the transfer of personal property to a business.
• the development of a highly flexible and trained labour force. This will require a strong focus on technical and vocational education and training (TVET) guided by the needs of the private sector and partially subsidised by a small tax on the industry. The private sector and lending organisations such as IPED should play a central role.
• the increase of Central Government salaries. Two alternatives are setting public sector salaries at 70 to 80% of the private sector salaries in corresponding job classifications and the increasing of real salaries in the Central Government by 100% over the next 5 years. The NDS also recommends that wages and salaries be linked to performance.
• the establishment of a labour market information system as a basis for formulating, implementing and evaluating human resource policies and training schemes, as well as to give workers timely access to employment information.
• the creation of an industrial relations framework to resolve disputes, including improved structures and procedures for bargaining and a move away from industry-wide bargaining.

Tourism

Guyana possesses vast areas of interior that are still pristine, with untouched forests that are so diverse they can show the entire spectrum of tropical rainforest at its best. The potential for a thriving eco-tourism industry is promising but several key constraints to the sector's development must first be addressed. The NDS recommends:

• a focus on high quality eco-tourism in controlled numbers that do not exceed scientifically determined carrying capacities of interior sites. The NDS also suggests improvements in marketing with better targeting and wider advertising, funded in a joint arrangement between government and the industry.
• the development of the required institutional framework. This will involve laws and behaviour codes for both eco-tourism operators and eco-tourists, as well as for monitoring activities. Since tourism is essentially a private sector enterprise, the NDS recommends the establishment of an incentive regime to attract private sector investment. Also, in all eco-tourism development, priority must be given to Amerindian involvement.
• the establishment of a National Tourist Board. Its main responsibilities would be regulation, marketing, research, and product development.
• the removal of impediments to investment in the private aircraft industry, and the encouragement of international airlines to come to Guyana.
• investment in infrastructure to support the tourist industry, particularly in relation to airport, airstrip and medical evacuation facilities, visitor security, the prevalence of malaria and the deficiencies in the potable water systems.

The Infrastructure Sectors (Volume 5)

The infrastructure sector is basic to the functioning of any economy, and crucial to the success of Guyana, given its geography and dispersed settlements. A growing economy requires a rapid expansion of capacity and improvements in efficiency in the areas of electricity generation and transmission; all modes of transportation; water supply and drainage; and sea defences. Guyana faces a number of bottlenecks in the infrastructure sectors, damaging the economy's ability to grow and the country's ability to compete on the world market.

Transport Development

The transport sector is critical to Guyana's economic development. The NDS looks at the areas of road, maritime, and air transport and makes various recommendations:

Road Transport

The road system in Guyana - which has played a central role in the country's development - faces a number of constraints, which the NDS seeks to address. The NDS suggests:

• investment to rehabilitate and expand the paved road system.
• the development of all-weather road links to mining, forest, and agriculture areas to facilitate development.
• the completion of the Lethem-Georgetown road link. This will facilitate the economic development of the southern parts of the country, and create opportunities for trade with neighbouring regions in Brazil.
• investment in the construction of bridges across major rivers. Specifically, the NDS calls for the construction of a bridge across the Berbice River.
• the encouragement of private sector involvement in the sector
• the institutional strengthening of the Road Administration Division (RAD).
• the introduction of measures to improve safety levels.

Maritime Transport

With the decentralisation of economic activity and the corresponding development of the interior regions of the country, there is an increasing demand for water transport in Guyana. The NDS makes recommendations to overcome the various constraints faced by the sector:

• the development of a deep water harbour. This is seen as critical to support to the recommended Export Processing Zone, as well as the rapidly expanding exports of bulk goods, such as rice, sugar and new kinds of wood products.
• the strengthening of the ports and harbours system. The NDS calls for improvements to the administration of the ports and harbours; measures to increase the efficiency of the port handling systems; and investment to enhance aids to navigation in harbours.
• the reform of the Transport and Harbours Department and its incorporation in the National Port Authority.
• the strengthening of safety standards regarding coastal, regional and international shipping

Air Transport

As with the other two areas of transportation, air transportation is vital to the economic development of the country. In addition, air transport plays a vital role in linking the coastal areas and hinterland communities, many of which are inaccessible by any other means of transportation. The NDS recommends:

• a review of civil aviation legislation in light of the evolving changes in the aviation environment locally and internationally. The NDS also suggest the ratification of major international conventions on civil aviation.
• the upgrade and expansion of airport facilities and navigational aids, many of which are in a deteriorated state.
• the encouragement of private sector involvement in the sector.
• the introduction of measures to encourage international airlines to fly to Guyana, including the expansion of the international airport.
• the establishment of an Airport Authority for the co-ordination and management of the international airport and other facilities.
• the establishment of an effective and fully equipped Search and Rescue Unit within the air transport sector to provide emergency services

Energy Policies

If Guyana is to realise its very considerable development potential, a reliable system of electricity generation and transmission is essential. An inadequate system raises the costs of production in all sectors of the economy - particularly for small producers - by requiring companies to install their own generating capacity and by damaging equipment through severe voltage fluctuations. This acts as a discouragement to potential investors. In addition, a poor electricity supply effects a wide cross-section of households. The NDS makes recommendations to overcome the various constraints faced in the sector, and to create a system capable of dealing with the growing energy demands of an expanding economy:

• the upgrade of the transmission and distribution system.
• the encouragement of private sector participation in the power sector, including the participatory privatisation of the Guyana Electricity Corporation (GEC).
• the consideration of alternative energy sources, such as mini-hydro, wind and solar.
• the establishment of a Guyana Energy Agency for national energy planning, including the development of an energy conservation programme.
• the strengthening of the Public Utilities Commission's capacity to regulate the sector.

Water Management and Flood Control

Guyana's geography make effective water management and flood control crucial. The coastal area of Guyana - where most of the population lives and where the main crops are cultivated - lies below sea level and is subjected to flooding and erosion. The NDS makes several recommendations to deal with the problems facing the country's sea defences and drainage and irrigation (D&I) system. The NDS also considers the important role of the hydrometeorological service, which evaluates the country's climate and water resources, and operates the National Meteorological Station Network (NMSN) and the National Hydrological Station Network (NHSN).

Sea Defences

• the rehabilitation of critical coastal protection structures, and the maintenance of the existing infrastructure.
• the reorganisation and strengthening of the Sea and River Defence Board. The NDS also suggests the establishment of a Shorezone Management Unit.
• the reduction of construction costs for sea defences. The NDS suggests examining means of reducing the costs of production and supply of rocks to sites, including a review of current designs.
• the protection of mangroves. The past failure to protect mangroves has contributed to the deterioration of the sea defences. The NDS calls for a gradual mangrove reforestation programme.

Drainage & Irrigation

• the rehabilitation and maintenance of D&I works. Inadequate maintenance of drainage works reduces yields and keeps some agricultural land out of production.
• a review of legislation governing the management and operation of D&I.
• the institutional strengthening of the sector. The NDS calls for an institutional framework which identifies clear policy objectives; ensures adequate supervision and co-ordination; prevents overlapping jurisdictions between agencies; and specifies clear roles for each agency. The NDS recommends that the national D&I Board take a lead in developing the new institutional structure.
• the encouragement of farmer participation in the development, operation and maintenance of an efficient D&I system, through local Water Users' Associations. The current lack of participation of users in decisions on maintenance has undermined the effectiveness of the drainage and irrigation systems. The NDS also calls for the strengthening of the Local Government Authorities to administer local D&I systems where farmers are satisfied with the current institutional arrangement.

Hydrometeorological Service

• the upgrade of existing stations; improved communication links to data collection centres; automation of stations; and staff training.
• the introduction of measures to strengthen the financial position of the hydrometeorogical service, including the introduction of charges to users (such as airports and the media).

The NDS Secretariat encourages your comments on the draft NDS, preferably in writing. Alternatively, you are invited to attend and give your comments at any of the public consultation workshops which will be held shortly in various regions of the country. The dates of these will be advertised.