Guyana is a country located on South America’s North Atlantic coast, bordering Venezuela, Suriname, and Brazil. In 2015, A Partnership for National Unity+Alliance for Change (APNU+AFC) coalition won the presidency and a one-seat majority in the National Assembly, ending 23 years of rule by the People’s Progressive Party/Civic (PPP/C). Preceding the election, the economic uncertainty slowed down investment, with the implementation of many governmental projects either put on hold or curtailed until after the elections. APNU+AFC reorganized several ministries and, after having been out of power for over 20 years, faced challenges in making the improvements promised during the campaign. Despite the difficulties, Guyana remains one of the better performing economies in the region, despite slower growth in 2017 at 2.9 percent, a marginal increase from 2.6 percent in 2016. The World Bank had originally estimated growth closer to 4 percent growth in 2017. However, Guyana’s mid-term prospects are very positive with the production of petroleum expected to begin in 2020.
The Government of Guyana (GoG) actively encourages foreign direct investment (FDI). According to the Bank of Guyana’s Mid-Year Report for 2017, Guyana’s FDI increased by USD 66.9 million to USD 96.1 million, up from USD 29.2 million in 2016. Increasing FDI in Guyana is a recent phenomenon, bolstered by expansion in oil and gas exploration and gold mining. Guyana offers potential investors (both foreign and domestic alike) a broad spectrum of investment choices such as mining, sugar, rice, lumber, petroleum, aquaculture, agro-processing, fresh fruits and vegetables, light manufacturing, and value-added forestry products. Additionally, there are opportunities to invest in service sectors, such as tourism, call centers, and information technology enabled services. Many products receive duty-free or reduced-duty treatment in destination markets. The GoG continues to promote inbound FDI but with limited success outside of the extractive industries sector.
In March 2015, ExxonMobil began exploratory drilling off Guyana’s coast, initially investing roughly USD 300 million into the project. ExxonMobil has since reported significant findings of offshore petroleum that, as of April 2018, are estimated at over 3.2 billion barrels of oil-equivalent, with exploration continuing for the foreseeable future. This venture would generate billions in revenue for the country and could potentially transform the social, political, and economic landscape.
Perceptions of corruption persist in Guyana. Transparency International (TI), in its 2017 report on the subject, scored Guyana 91 out of 180 ranked economies, an improvement from Guyana’s rank at 108 in 2016. Corruption, GoG inaction, inadequate infrastructure, and crime, remain barriers to attracting foreign investment.
Guyana continues to benefit from official development assistance from multiple donors with projects focused on health care, education, economic development, climate change adaptation, disaster mitigation, and citizen security. In 2016, the United Kingdom announced it would provide significant funding for infrastructure development in Guyana to be administered over the next five years through the Caribbean Development Bank.
Guyana successfully exited the Financial Action Task Force (FATF) International Cooperation Review Group in October 2016, having addressed all the deficiencies identified in the group’s Core and Key Recommendations. Subsequently, Guyana was removed from FATF’s watch list. During the first year of the APNU+AFC government, the coalition passed three sets of amendments to the Anti-Money Laundering and Countering Terrorist Financing (AML/CTF) legislation. The amendments were directly based on recommendations from the Americas Regional Review Group (ARRG). The government has also focused on fighting crime, particularly financial crime. According to the Minister of Finance, success in tackling crime has slowed down the economy, as a large number of illicit funds have been removed from Guyana’s predominantly cash-based economy.
Political gridlock and infighting have historically hampered the country’s development efforts, but the GoG is moving forward on a number of priority projects. Even with expected oil production in 2020, the GoG’s Green State Development Strategy (GSDS), launched in 2016, remains a GoG priority. Analysts expect small hydro-electric and renewable energy projects to come under GoG consideration, in line with the GoG’s efforts to pursue a green economy, help lower Guyana’s electricity costs, and reduce dependency on imports of hydrocarbons. If successful, these projects could go a long way in promoting greater investment because high electricity costs are one of the largest impediments to significant value-added investment.
|TI Corruption Perceptions Index||2017||91 of 180||http://www.transparency.org/
|World Bank’s Doing Business Report “Ease of Doing Business”||2017||126 of 190||www.doingbusiness.org/rankings|
|Global Innovation Index||2015||86 of 128||https://www.globalinnovationindex.org/
|U.S. FDI in partner country (M USD, stock positions)||N/A||N/A||http://www.bea.gov/
|World Bank GNI per capita||2016||4,240||http://data.worldbank.org/