A Prime Minister and cabinet are responsible to the National Assembly, which has 65 members elected for a maximum term of five years. The President is Head of State. The country is divided into 10 administrative regions.
Structure of Production
The agriculture, fishing and forestry sector of the economy makes up almost 50% of gdp and is a major exporter. Most agriculture is concentrated on the coastal plain, where sugar is the main crop. Most of Guyana’s sugar exports go to Europe under the EU quota system. Output of rice has also grown in the 1990s, following a decade of decline because of greater investment in machinery and different varieties of rice with higher yields. Other farm products are coffee, cocoa, cotton, coconut, copra, fruit, vegetables and tobacco. Dairy herds are kept mostly on the coast and beef herds on the savanna inland. Fishing is mostly small scale, but both fish and shrimp are exported. Between 1991 and 1996 the Government leased millions of hectares of forest in the northwest and Mazaruni districts for ‘sustainable logging’. The largest company, Barama, leases 1,670,000 acres and is investing US$154mn in 1992-2001 in its forestry complex, which produces plywood for export.
The area of greatest growth in the mining sector is gold, which is now the leading export earner. A new pricing system was introduced in 1990, which resulted in more of the gold produced being officially declared, but it was the development of the Omai gold mine, one of the largest open pit mines in South America, which pushed growth and it now produces 80% of total output. Reserves at the mine are 54 million tonnes of gold-bearing ore. Total gold production was 450,000 ounces in 1998.
Guyana was the world’s largest producer of calcined bauxite, the highest grade of the mineral, but has lost its dominance to China. Nationalized in 1971, bauxite and alumina were traditionally the biggest foreign exchange earners but the industry collapsed in the 1980s. In 1992 the heavily indebted state company, Guymine, was dissolved and replaced by two new entities, Linden Mining Enterprises (Linmine) on the Demerara River and Berbice Mining Enterprises (Bermine) at Kwakwani. Production in 1998 was 2.3 million tonnes a year, up from a low of 1.3 million in 1988.
Guyana’s economy was in almost permanent recession between 1970 and 1990. Venezuela’s long standing claim to the Essequibo region discouraged exploitation of the natural resources in that area but the overall investment climate was damaged by inefficient management in the dominant state sector. During the 1980s the Government struggled to come to terms with the IMF, which declared Guyana ineligible for further lending in 1985 because of the accumulation of arrears. It was only in 1990 that the Bank for International Settlements and a group of other donors provided funds to clear the arrears to the IMF and other creditors. This opened the way for new loans from a variety of sources as well as debt rescheduling or cancellation agreements and the resumption of foreign aid.
The 1990s have seen a dramatic turnaround with gdp growing for seven consecutive years as gains continued in production of sugar, rice, gold and bauxite. Growth was 6.4% in 1997, but the 3.2% forecast for 1998 turned into a fall of 1.5% as a result of El Niño drought, low world commodity prices and a crisis of confidence caused by political unrest. Three-year Enhanced Structural Adjustment Facilities were agreed with the IMF in 1994 and 1998 in recognition of the Government’s meeting targets. Tax reform and improved collection methods have greatly increased fiscal revenue. The Government is committed to poverty eradication and makes annual budget allocations. The drain imposed upon the economy by a foreign debt of US$1.4bn has been eased by economic growth, reductions in the trade and current account deficits and the writing off of debt by creditor nations.
Guyana has suffered from serious economic problems for almost 20 years. Wages are very low and many people depend on overseas remittances or ‘parallel market’ activities to survive. The country’s infrastructure is seriously run down. Electricity blackouts occur and last anywhere from 10 minutes to days on end. Outside Georgetown, facilities are much more basic.