Guyana: attracts international investors.

Drawn by a wealth of natural and human resources, major companies from around the world are investing in Guyana, an English-speaking nation of 700,000 on the northern coast of South America.

Under the leadership of President Bharrat Jagdeo, Guyana is focused on attracting international investment, while committing domestic funds to improving hospitals, schools and other infrastructure projects. To stimulate private sector growth, Guyana is establishing an Investment Promotion Council and simplifying procedures for registering and incorporating new businesses.

Guyana's budget goals for 2005 include expanding the nation's traditional industries--sugar, rice, mining and manufacturing--while diversifying the economy. With expanded private investment and moderate inflation, the government projects real gross domestic product (GDP) growth of 2.2 percent in 2005. At the same time, Guyana will continue its policy of prudent borrowing; only 20 percent of the nation's revenue is used to service its external debt.

In the past year, the Guyana Office for Investment (GO-Invest) was able to facilitate 75 investment projects, 33 of which involved overseas investors. In addition, the European Investment Bank (EIB) is examining possible investments with local businesses--an important development, since the EIB lends about 42 billion Euros annually in such diverse areas as industry, agro-industry, mining, tourism and transport.

In the agriculture sector, a contract has been signed with China National Technical Import and Export Corporation (CNTIC) for the construction of the Skeldon Sugar Modernization Project, which will be completed in 2007.

Certification has been received from the European Union and the United States to allow Guyana to export fish products to both markets. This year, the government has allocated more resources to non-traditional agriculture to help its domestic producers obtain certification and meet international standards to develop Guyana s exports.

Mining is another vital sector of Guyana's economy. The Russian Aluminum Company (RUSAL) will be investing US$20 million in a new entity, Bauxite Company of Guyana Inc. (BCGI) that will eventually be merged with Aroaima Mining Company (AMC). AMC plans to double its production capacity by 2006.

A Spanish firm, REPSOL, has joined CGX Energy Inc. in a heightened search for oil in Guyana. CGX is investing a further US$7.3 million to drill up to five wells in an area with a high probability of gas and oil reserves. In addition, Groundstar Resources Limited is examining the feasibility of searching for oil in the Takutu Basin, while Vanesa Ventures, Gold Stone Reserves and Guyana Goldfield are conducting major explorations for gold.

In manufacturing, Barama Company will invest US$35 million in a new sawmilling complex and two state-of the-art wood processing plants in the Essequibo River. This will create 500 new jobs and open road links and improve power supply in that location.

Guyana's tourism sector will benefit from an increase in room capacity, while GO-Invest will be assisting outside investors in a variety of projects.

With such a wide range of investment opportunities, Guyana is expected to attract a continuing flow of international capital, while playing a growing role within the Caribbean region. "The acceleration of the processes of regional integration, through the Caricom Single Market Economy, presents opportunities for the region over the medium-term, particularly as it relates to efficiency and productivity gains through the more effective sourcing and utilization of inputs," said Dr. Compton Bourne, president of Barbados-based Caribbean Development Bank (Caribank), in a recent economic report. "This becomes even more critical as the region competes not only in already established markets, but also as it seeks to carve out niches in an increasingly competitive environment."

A key financial player in the region, Caribank provides assistance for development projects and humanitarian relief in the region. Summing up the key trends of 2004, the bank said economic activity accelerated in the Caribbean, despite hurricanes Frances, Ivan and Jeanne, which seriously affected Granada, Jamaica, the Cayman Islands and Haiti.

"Tourism was the main driving force, supported by construction and to a lesser extent financial services, manufacturing and agri-culture," said the Caribank report. "Tourism will continue to play a major role in the economic performance of the region. In financial services, growth is also expected to continue as international economies strengthen."

Overall, the region's agricultural production, which has been declining in recent years, also showed improvement, largely on the basis of an expansion in the production of the Caribbean's main commodities, sugar and bananas.

In financial services, most of the region's jurisdictions showed an increase in the number of company registrations, according to Caribank. "Within jurisdictions, there were continuing efforts to enhance the operational environment both from a legislative and supervisory/perspective," the report said.

Despite the overall growth, the highly diverse economies of the Caribbean performed very differently in the past year. Petroleum-producing Trinidad and Tobago, for instance, benefited from rising oil prices, and posted another year of strong growth. In contrast, Hurricane Ivan devastated Grenada, and redevelopment of the island nation's infrastructure is a continuing challenge.

One of the more diversified Caribbean economies is Barbados, which is expecting solid growth in its tourism sector thanks to reopening of several hotels and increased airlift. In the international financial services sector, Barbados is seeking to attract high-quality entities with good track records, according to Dr. Marion Williams, governor, Central Bank of Barbados.

"Barbados' long-term plan is to significantly raise the average rata of growth and, by extension, living standards, by the year 2025," said Williams. "In the process, the environment should become more investment-friendly, as well as much more competitive, particularly in the area of services where there is a clear comparative advantage. For example, the telecommunications sector has recently been liberalized, resulting in a significant decrease in rates."

Trinidad and Tobago is also seeking to diversify its economy, while investing in new training and education facilities to help it achieve developed country status by 2020. "We recognize that developed countries, including oil-rich nations, are shifting from energy-based economies to knowledge-based economies in which innovation and communication are key to long-term competitiveness," said Colm Imbert, minister of science, technology and tertiary education, at the recent opening of a new technology center.

Another Caribbean nation rich in oil and mineral reserves is Guyana, which is hosting the Caribank Board of Governors annual meeting May 18-19 in Georgetown, Despite serious flooding in January, Guyana has attracted outside investment in a number of economic sectors, including oil exploration, agriculture and gold mining.

"Guyana has been placed on the path to viability," said President Bharrat Jagdeo in his 2005 budget report. Guyana this year is aiming to expand output in the traditional industries of sugar, rice, mining and manufacturing, while diversifying the national economy. Supporting these efforts is Guyana's Investment Promotion Council, which is simplifying procedures for new businesses.

Looking ahead, a key to the success of small developing economies in their integration into the international economy is the ability to build competitive industries and economic sectors, according to Lourdes Smith, executive director, Belize Trade and Investment Development Service (Beltraide). "Given their resource constraints however, it is often necessary for countries such as Balize to be able to take advantage of the synergies and opportunities that arise from region-wide approaches to trade and investment," she said.

Smith added that Baliza is strategically positioned to emerge as a true bridge between Latin America and the Caribbean as it is a member of the CSME and the Central American Integration System (SICA) at the same time that it is integrating deeper into Central America. "Given its natural endowments and comparative advantages, it is critical for Belize to adopt an approach that seeks to make the most of the opportunities from both the Caribbean and Latin America in a fashion that allows it to realize its development objectives," she said, "while allowing each sub-region to be able to realize and benefit from a stronger interregional relationship."

FACT BOX

Guyana's 2004 Performance

* Merchandise export grew by 9.2%

* Private sector deposit grew by 11.4%

* Inflation rate was 5.5%

* Average lending rate decreased to 13.45%

* Exchange remained stable

Projections for 2005

* GDP growth of 2.2%

* Rice output to increase by 12.1%

* Bauxite production to rise 51.7%

* Inflation expected to be 5.6%

For more information about investment opportunities in Guyana, contact www.gina.gov.gy.