Guyana WT/TPR/S/122
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IV. TRADE POLICIES BY SECTOR
(1) INTRODUCTION
1. The Guyanese economy is still heavily dependent on the primary sector.  Agriculture and
mining continue to be of principal importance.  Primary activities represented some 45% of GDP in
2002, and generate most of Guyana's foreign exchange earnings.  Between 1997 and 2002, the
contribution of services and agriculture to GDP increased, while the share of manufacturing andmining decreased.
2. Traditional agriculture, comprising mainly sugar and rice, has been sustained largely by
preferential access to the CARICOM, EU, and U.S. markets.  Production in this sector faces
competitiveness problems;  the Government has been trying to remedy this by seeking to improve
productivity while also promoting non-traditional crops.  Export taxes are applied to agriculturalproducts such as unrefined cane sugar, molasses, and wildlife.  Imports of agricultural products
generally  face higher tariffs than industrial goods.  Tariffs are particularly high for beverages, spirits,
and tobacco, which also face high consumption tax rates.  The sector is subject to a range of non-tariff
measures.  Although Guyana applies no quantitative restrictions on the importation of agricultural
products, and uses no tariff quotas, some animal and vegetable products are subject to import licensingand SPS requirements.  Guyana does not provide export subsidies, nor does it extend non-exempt
support to agricultural producers.  Support to the sector is provided through programmes that have
been notified to the WTO as Green Box measures.  An agricultural sector programme is currently in
place, is aimed at introducing policy reforms to improve the sector's efficiency.
3. Although mining has faced difficulties in recent years, it continues to be an important activity
for Guyana.  The main products are gold, bauxite, and diamonds.  The production of bauxite in
particular has suffered from high costs, and attempts to redress the industry, including throughprivatization, have proven unfruitful.  The mining sector is also affected by high domestic taxation.
4. Services account for some 40% of GDP.  Guyana has made GATS commitments in five
sectors:  business, communication, financial, tourism, and transport services.  Tourism is the most
important service activity in terms of foreign exchan ge earnings, although it is less important to Guyana
than it is to most other CARICOM countries.  The i ndustry enjoys various incentives.  Financial services,
like most other service activities, are generally open to  foreign investors, as witnessed by the relatively
large number of foreign banks operating in the c ountry.  In telecommunications, there is a monopoly in
the provision of fixed telephony services until 2010, but the provision on non-landline services, such as
cellular telephony, is open to domestic and foreign competition.
(2) A
GRICULTURE
(i) Features
5. Agriculture is of major importance for the economy of Guyana.  Value added in the
agriculturë sector in constant prices (excluding food products and fisheries), was equivalent to 30% of
GDP in 2002, with sugar alone contributing to 16% of GDP.  Its contribution has increased slightly
since 1997, when the share was 29% of GDP, but has declined slightly since 1992 (Table IV.1).Including agri-industry products (food processing, be verages, and tobacco), agriculture represented
about a third of GDP in 2002.
1  Some agricultural subsectors are labour-intensive, although
mechanization is widespread in sugar and rice.  Ag riculture employed 23.1% of the total labour force
                                                     
1 These items are classified in national accounts as manufactures, but fall under the WTO definition of
agriculture.WT/TPR/S/122 Trade Policy Review
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in 1997-98, and some 70% of the population live in rural areas.  Traditional agriculture is mainly
sugar and rice.  Non-traditional products include a variety of tubers, corn, peanut and coconut oils,
plantains, some vegetables, herbs and spices, fruits (pineapple, pear, carambola, watermelon, mango,
cherry, grapefruit, orange, and tropical fruits), as well as coffee, cocoa, and cotton.  Livestock includes
dairy and beef cattle, swine, poultry, sheep, goat s, and rabbits.  Bee-keeping and hunting are also
practiced in Guyana.
Table IV.1
Agriculture as percentage of total GDP, and growth rates, 1992-01
Sector 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Share of total GDP
S u g a r 2 01 01 81 71 71 61 51 81 61 6
R i c e 3334444434
L i v e s t o c k 1122222222
O t h e r  a g r i c u l t u r e 5555555555
F i s h e r i e s 3333333333
Total agri sector 32 31 30 30 31 29 29 32 29 30
Total GDP 100 100 100 100 100 100 100 100 100 100
Growth rates
Sugar 52.1 -0.3 4.1 -0.6 10.3 -1.2 -7.5 25.8 -15.0 4.0
Rice 11.7 22.9 10.9 35.7 6.2 1.9 -0.5 7.7 -20.0 10.6
Livestock -1.8 11.1 15.0 21.7 25.0 5.7 -1.8 1.8 4.5 2.6
Other agriculture -1.0 5.2 5.9 8.4 3.9 5.4 6.7 1.1 1.1 1.1
Fisheries -3.5 2.8 7.1 10.0 2.3 8.1 -2.7 0.7 14.6 0.6
Total agri sector 27.6 0 5.9 6.8 8.8 1.5 -3.4 14.8 -9.4 3.8
Total GDP 7.8 8.2 9.0 4.6 7.9 6.3 -1.3 2.6 -0.8 1.9
Source : Guyana Bureau of Statistics.
6. Growth in the agriculture sector has been highly volatile, alternating between periods of
stagnation, pronounced declines, and rapid growth.  Over the 1993-01 period, agricultural activities
expanded at an average annual rate of 3%, compared with average GDP growth of 4.2%.  Agricultural
exports are dominated by traditional products, especially sugar and rice, which accounted for over
30% of Guyana's total merchandise exports in 2001.  Exports of shrimp have gathered importance inrecent years.  Traditional agriculture faces major competitive challenges in the global market, but has
been sustained largely by preferential access to the CARICOM and EU markets.  Recently, the
Government has been seeking to improve productivity in the traditional sectors while also promoting
non-traditional crops.  Greater attention and emphasis are being given to the cultivation of crops such
as oil palm, coconuts, green vegetables, ground provisions, fruits, and flowers.  The authorities reportthat while a significant amount of these products would be utilized locally, the greater proportion
would be destined for the tourist resorts of the Ca ribbean, and the niche markets of North America and
Europe.
7. Various projects emanating from the Food and Agriculture Organization (FAO) have been
designed to encourage increased diversification away from traditional crops.  The different projects
come under the FAO umbrella project, the Regional Transformation  Programme (RTP).  The RTP is
designed to achieve international competitiveness and food security for the region and to redress thebalance between food imports and exports.
8. Guyana has about 25,000 farm households;  some 90% are concentrated along the narrow
coastal plain.  The total arable land in this area is 400,000 hectares, most of which lies below sea level
and is protected by sea defences.Guyana WT/TPR/S/122
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(ii) Policy considerations
9. Several institutions deal with or support the agriculture sector, including the Ministry of
Agriculture (MOA);  the Ministry of Fisheries, Crops, and Livestock (MFCL);  the Ministry of
Regional Development;  the Regional Democratic Councils;  and the National Agricultural Research
Institute.  The MOA and the MFCL are responsible for policy formulation and for monitoring
implementation.
10. The Crops and Livestock Department of the MFCL is primarily responsible for providing
technical and extension services to the farming co mmunities.  The Veterinary Diagnostic Laboratory,
which is supposed to provide parasitology, haem atology, pathology, mi crobiology, and other
diagnostic support to the livestock rearing community, is currently not operational due to a lack of
trained personnel and equipment.  Other institutions collaborating with the provisions of services ofthis type include the Agricultural In-Service Training Communication Centre (AITCC), which
provides agricultural information and trains farmers and extension personnel, and the Livestock
Station at Mon Repos, which was originally designed as a centre for livestock research in the MOA,
before these activities were transferred to the National Agricultural Research Institute (NARI).
11. The NARI's mains functions are:  to advise on and develop systems to promote balanced
agricultural development and optimize agricultural production through research;  and to facilitate the
use of more advanced production technology by agricultural producers in order to achieve and
maintain national self-sufficiency and export capacities in food and fibre.  An Agricultural Research
Committee advises the Minister of Agriculture on agricultural research policy issues.  This committee
also supervises and controls the functioning and activities of the NARI, and is in charge of approving,
overseeing, and evaluating the programmes it is implementing.
12. The Guyana Marketing Corporation (GMC) was created in 1963 as a marketing board for
agricultural products.  The GMC bought all farm products offered to it by farmers at a predetermined
price, and then sold the produce to consumers at various outlets and from trucks.  Consumer and
producer prices were both subsidized:  the GMC ran at a loss as it made up the difference.  In 1985 the
GMC was drastically reformed and stopped all buying and selling operations.  Instead, the "new"
GMC (NGMC) was mandated to provide market facilitation services to the private sector for theexport of non-traditional agricultural produce, facilitate local market development, develop and
disseminate post-harvest technology, conduct market research, and provide market intelligence and
technical support services to farmers, processors, potential exporters, exporters, and investors.  In
1997, NGMC resumed the buying of farmers' "quality" produce (i.e. top-end vegetables and fruit), at
prices negotiated directly with them, for sale both to domestic and overseas buyers.  The authoritiesreport that these activities are now winding down.  The NGMC also acts as a one-stop brokerage desk
for the exportation of fruit and vegetables.
13. The needs of farmers are coordinated through plans and decisions under the Neighbourhood
Democratic Councils (NDCs) of the Regional De mocratic Councils (RDCs);  according to the
authorities, both sets of councils face constraints.  There are also several quasi-governmental entitiesas well as non-governmental and other organizations (co-operatives, producer associations, etc.) that
operate at the community level.
14. The structure of the agricultural policymaking machinery has come under some criticism in
recent years.  The National Development Strategy (NDS), for example, argued that the large number
of institutions dealing with agricultural issues hinders their performance.
2  The NDS characterized the
MOA and the MFCL capacity for policy review as weak, and stated that severe financial constraints
                                                     
2 Government of Guyana (2001b), Chapter 11, "Agricultural Institutions".WT/TPR/S/122 Trade Policy Review
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have led to an inadequate availability of equipm ent and supplies, further limiting the effectiveness of
the Ministries' staff.  The NDS considered that there is a dualistic institutional structure for
agricultural products:  well-organized marketing and other support arrangements for rice and sugar;
and fragmented, underfunded, and ineffective arrangements for non-traditional crops and livestock.
The NDS also noted that the supply of credit to farmers has been traditionally limited by the risks
linked to agricultural production and markets and the sector's small size and informal nature;  inconsequence, the penetration of rural areas by commercial banks is low, leading to inadequate credit
mobilization and delivery.  The NDS proposed the development of institutions that would help to
improve agricultural operations, such as the creation of a new Guyana Agricultural Research and
Development Board to encompass the roles currently being performed by NARI, NDDP, NGMC, and
the Crops and Livestock and Fisheries Department s of the MOA and the MFCL.  As of June 2003,
discussions on the recommendations were still ongoing.
15. Guyana has joined with other CARICOM countries to contribute a number of proposals and
submissions to the WTO negotiations on agriculture.   For example, submissions have been made on
the Green Box and food aid, together with Antig ua and Barbuda, Barbados, Belize, Dominica,
Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Vincent and the Grenadines, Suriname, andTrinidad and Tobago.  The same group of countries also tabled a submission on export competition
and domestic support.  Guyana is one of the promoters of the Sustainable Agricultural and Rural
Development (SARD) initiative, launched in a G77-country meeting in Georgetown, and which
resulted in the Georgetown Declaration on Sustainable and Competitive Agriculture.  This declaration
noted that agriculture must be promoted as a complex of social, economic, and technological inter-
relationships, based on the active involvement of a wide range of participants, providing multiple and
diverse opportunities for business, adding value, and conserving natural resources.
16. The authorities hold the view that the regularization of land tenure is an important component
in development of the agriculture sector.  They note that efforts have been undertaken to streamline
the bureaucratic process with respect to lease is suance, and to improve the land tenure information
maintained by the Lands and Surveys Commission, with assistance from the U.K. Government as part
of the Guyana Lands and Surveys Project (GLASP).
3  The lease term of state lands has been extended
from 25 to 50 years.  Up to early 2003, over 5,600 agricultural leases covering 136,000 acres had been
issued to farmers.
(iii) Market access
17. Tariffs on agricultural products are generally higher than those on industrial goods.  Products
falling within the WTO definition of agriculture are subject to an average tariff of 21.6%, comparedwith 12.1% for all products.  Applied tariffs ra nge between 0 and 100% for spirits and tobacco
products.  Products under headings HS 01 to 24 face an average tariff of 23.8%.  Among the main
categories of agricultural products, animals and products thereof must pay an average tariff of 25.4%;
dairy products are subject to an average tariff of 14.2%;  coffee and tea, cocoa, and sugar to 19.1%;
fruit and vegetables to 25.5%;  grains to 16.0%;  oilseeds, fats, and oils to 16.6%;  beverages andspirits to 49.3%;  and tobacco to 71.5% (Table III.3).  The highest tariff rates are applied on goods
competing with domestic or CARICOM produc tion.  Products imported from other CARICOM
countries are generally duty free, with the exception of alcoholic beverages, which are subject to
tariffs between 20% and 30%, vinegar (5%), and ginger and curry (30%) (Table III.4).  Some agri-
industrial products (mainly alcoholic beverages and tobacco products) also face high consumption tax
rates (50% and 128% respectively).
                                                     
3 MOA and MFCL online information.  Available at:  http://www.sdnp.org.gy/minagri/moa_
mfcl/index.htm.Guyana WT/TPR/S/122
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18. Tariffs on agricultural products were bound in the WTO at a ceiling rate of 100%.  Other
duties and charges were bound at 40%, with a few exceptions (Chapter III(2)(ii)(c)).
19. Guyana applies no quantitative restrictions on the importation of agricultural products, nor
does it use tariff quotas.  However, a large number of animal and vegetable products are subject to
import licensing requirements, as notified by Guyana to the WTO (Chapter III(2)(vii) and Table
AIII.2).  Imports of some products are also subject to SPS requirements:  the Food and Drugs Actrequires that the importation of livestock, and other animals, and of plant materials into Guyana, be
subject to an import permit from the Animal Services Division (animals) or the Plant Quarantine
Section (plant materials) of the Ministry of Agriculture (Chapter III(2)(xi)).
(iv) Measures of support
20. Guyana does not provide export subsidies, and has made a notification in this respect to the
WTO.
4  No base or annual total AMS commitment levels exist in Part IV of Schedule CXII (Guyana).
Guyana has notified to the WTO that it does not provide non-exempt support to agricultural
producers.5
21. A number of programmes have been notified under the WTO Agreement on Agriculture as
Green Box measures.  With respect to general services, current expenditure activities by the Crops andLivestock Department of the MFCL, as well as those of the National Agricultural Research Institute
(NARI) and the National Dairy Development Programme (NDDP), have been notified.  Also in the
Green Box are the training programmes of the Guyana School of Agriculture and the Regional
Education Programme for Animal Health Assistants (REPAHA).  The government allocation to the
Guyana Marketing Corporation (GMC) has also been included.  A number of infrastructural service
programmes, mostly financed or co-financed by international agencies, also feature in the
notifications.  In the domestic food aid component, Guyana has included purchase of food, and food-for-work programmes.
22. Among the infrastructural programmes notified, the MOA supports drainage and irrigation for
approximately 115,000 hectares of irrigated crop production (mostly sugar and rice) in the coastal
plains.  Approximately half  of the MOA's capital budget is devoted each year to drainage and
irrigation works.
23. The objective of the Agricultural Sector Programme (ASP) is to introduce policy reforms to
improve the efficiency of drainage and irrigation and of administration of public lands, while
improving the environmental framework and consol idating trade liberalization.  The ASP is being
executed under two contracts, both concluded in Au gust 1996 between the Government of Guyana
and the Inter-American Development Bank (IADB).  The first contract, the Agricultural Sector Loan(ASL), provided US$34 million to meet the cost of eligible imports and bank expenses associated
with general inspection and supervision.  The se cond, the Technical Cooperation Programme (TCP),
provided financing up to the equivalent of US$6.6 million.  To manage the programme, a Policy
Coordination Unit (PCU) for the ASP was created in the MOA.
24. The FAO Telefood Special Fund aims to increase access to and production of food in
developing countries by providing support to poor farmers and vulnerable groups.  Three such projects
have been funded within Guyana dealing with the rearing of poultry and with crop production.
                                                     
4 WTO documents G/AG/N/GUY/2, 28 Septem ber 1998;  G/AG/N/GUY/6, 2 August 2001;
G/AG/N/GUY/7, 2 August 2001;  and G/AG/N/GUY/8, 2 August 2001.
5 WTO document G/AG/N/GUY/1,  28 September 1998.WT/TPR/S/122 Trade Policy Review
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25. The National Dairy Development Programme (NDDP) was created in 1984 with the objective
of achieving national self-sufficiency in fresh milk by 1988.  Subsequently, the NDDP's mandate was
expanded to seek the development of a self-sustaining, self-regulating, economically viable cattle
industry within the context of national self-suffici ency in milk and dairy products, and beef and beef
products.  The NDDP was also mandated to seek and promote the exportation of these commodities.
Up to early 2003, the NDDP had established 582 nurseries, small and large farmers units, andcommunal forage plots totalling 6,000 acres of improved grass.  It had also increased milk yield
substantially.  The authorities nevertheless report that self-sufficiency has not been achieved because
of the competition for land usage on the coast where dairy cattle are situated.   The domestic industry
finds it difficult to compete with imports of powdered milk products, which benefit both from duty-
free entry and the attraction of a lengthy shelf life.  The NDDP encourages the formation of cattlefarmers associations;  some 44 are currently registered.  In 2002, three regional cattle farmers
associations were formed, as well as a national association.
(v) Main crops
(a) Sugar and sugar-derived products
26. Sugar and sugar derived-products account for 16% of Guyana's GDP and 30% of its
agricultural GDP.  The industry is the largest net earner of foreign exchange and the biggest
contributor to public revenue;  it directly employs 25,000 people, or 10% of Guyana's labour force,
and it is estimated that it employs the same number indirectly.  Guyana supports the view that sugar
production has enormous spillover effects on the rest of the economy, for example, in retail and
distribution and in maritime transport services.
27. The sugar sector is export-oriented.  In 2001, exports accounted for almost 90% of
production;  the rest was consumed in the home market.  The main export markets are theEuropean Union, the United States, and CARICOM countries, all under some type of preferential
scheme (see below).  Sugar exports totalled US$109.2 million in 2001.  Exports of unrefined cane
sugar (tariff heading 17.01) are subject to a tax of G$1 per tonne.
28. The Guyana Sugar Corporation (GUYSUCO) is the largest employer in Guyana, with a
payroll of about 18,000, and a wage bill of so me US$63.5 million in 2000.  GUYSUCO was created
in 1976 by the Government's nationalization and merger of the sugar estates operated by Booker
Sugar Estates Limited and Jessels Holdings.  It now operates five sugar estates comprising
164,000 acres, and runs eight factories (four in Demerara and four in the east of the country on the
banks of the Berbice and Corentyne Rivers).  GUYSUCO is still the only producer of sugar, and
exports all cane products other th an rum.  Although state-owned, GUYSUCO has been managed since
1990 under a contract with the privately owned British company Booker-Tate.  The Government
announced plans in early 2003 to introduce a new management contract, with an incentive structure
that emphasizes profitability in a sustainable manner.
6
29. The sugar industry suffered a period of crisis in the late 1980s and early 1990s, with output
dropping from some 395,000 tonnes in the early 1970s to about 130,000 tonnes by 1990.  Since then,however, production has increased (Table IV.2) .  Production reached 331,057 tonnes in 2002, a 16.4%
increase over 2001;  and earnings from sugar exports reached US$119.5 million.
7  The authorities
report that the target for 2010 is to have increased production to 450,000 tonnes and a reduction in
costs of production to a level where Guyanese sugar could be competitive in the world market.
                                                     
6 Ministry of Finance (2003a), p. 24.
7 Ministry of Finance (2003a), pp. 7 and 9.Guyana WT/TPR/S/122
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30. Guyana is a high-cost sugar producer compared with other countries.  GUYSUCO's estimated
cost of production is US$0.18/lb; this is higher than other producers in developing countries such as
Brazil, Mauritius, India, and Fiji, but also above the costs of production in the United States.8
Production costs are not evenly distributed across Guyana;  they are higher in the Demerara estates(Wales, Uitvlugt, LBI, and Enmore) than in the ot her four estates (Skeldon, Albion, Rose Hall, and
Blairmont).
31. Due to its relatively high costs, the industry depends heavily on its preferential access to
foreign markets.  The ACP/EU Sugar Protocol, the EU Special Preferential Sugar Agreement, and the
U.S. Sugar Programme all grant access to imports from Guyana at prices higher than world-market
prices (Table IV.2).  Guyana's exports of sugar also benefit from duty-free access to CARICOM
markets, where MFN imports of sugar face a 40% tariff.  In 2002, direct exports to the EU accountedfor more than half of the volume and nearly two thirds of the value of Guyana's sugar exports.  The
EU was responsible for another 11.9% (by volume) under the Special Preferential Sugar Agreement.
Other major export markets, by volume, were CARICOM (21.2%), the United States (4.3%), and
Haiti (2.7%)  (Table IV.3).
Table IV.2
Main indicators of the sugar industry, 1990-02
(Tonnes and U.S. cents per lb)
Year Production EU import price U.S. import price Brazil price
1990 129,920 26.45 23.25 15.94
1991 162,245 27.77 21.55 11.87
1992 246,898 28.48 21.30 11.12
1993 248,522 28.10 21.61 11.61
1994 256,857 28.20 22.03 13.14
1995 253,837 31.21 23.06 13.75
1996 280,116 31.15 22.36 13.1
1997 276,392 28.38 21.93 12.34
1998 254,668 27.13 22.06 10.37
1999 321,438 26.84 21.14 6.74
2000 273,317 25.16 19.40 7.95
2001 284,406 23.88 21.34 ..
2002 331,057 23.00 18.00 8.00
.. Not available.
Source : Guyana Sugar Corporation;  Bank of Guyana, and information provided by the authorities.
32. The ACP/EU Sugar Protocol (SP) , which took effect in 1975, is of particular importance for
Guyana due to the large market share of its exports to the EU.  The SP is a government-to-government
agreement covering individual agreed quantities of cane sugar for each ACP party, as well as
guaranteed prices.  The SP has an indefinite duration, and is annexed to the Cotonou Agreement.Guyana's agreed quantity under the SP is 159,410 tonnes of white sugar equivalent or 167,000  tonnes
per year.  ACP guaranteed prices are negotiated annually between the EU and the ACP states
signatory to the SP.
9
                                                     
8 Government of Guyana (2001b).
9 Under the Sugar Protocol, guaranteed prices for the ACP white or raw sugar apply to bulk sugar cost,
insurance and freight paid (c.i.f.) to European ports.WT/TPR/S/122 Trade Policy Review
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Table IV.3
Breakdown of sugar exports by destination, 2000-02
Quantity exported
(tonnes)Value exported
(G$ million)Unit value
(G$/tonne) Destination
2000 2001 2002 2000 2001 2002 2000 2001 2002
EU SP Protocol 179,222 163,642 158,426 15,721.9 14,583.0 15,391 87,723 89,115 97,149.5
Special Preferential Sugar Agreement 31,757 31,912 33,720 2,385.4 2,415.0 2,848.7 75,114 75,677 84,481.0
United States 24,253 12,094 12,184 1,533.2 905.0 926.4 63,217 74,830 76,034.1
CARICOM 42,038 44,683 60,043 2,465.2 2,601.0 3,563.3 58,642 58,210 59,345.8
Total 277,270 252,331 282,659 22,105.7 20,504.0 23,257.8 79,726 81,258 82,282.0
Share of total
EU Protocol 64.6 64.9 56.1 71.1 71.1 66.2 110.0 109.7 118.1
Special Preferential Sugar Agreement 11.5 12.6 11.9 10.8 11.8 12.2 94.2 93.1 102.7
United States 8.7 4.8 4.3 6.9 4.4 3.9 79.3 92.1 92.4
CARICOM 15.2 17.7 21.2 11.2 12.7 15.4 73.6 71.6 72.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 - - -
Source: Guyana Sugar Corporation and information supplied by the authorities.
33. Guyana has also traditionally benefited from the Special Preferential Sugar Agreement
between the EU and ACP states, reached on 1 June 19 95, initially for six years.  Under the agreement,
the EU undertook to open annually a special tariff quota for the importation of raw cane sugar forrefining that originates in ACP states, on the basis of the needs determined by the
European Commission.  The conditions of the Special Preferential Sugar Agreement include a
minimum delivered price to be paid by EU refiners, equivalent to approximately 85% of the ACP
guaranteed price for raw sugar.  Quantities are de termined annually for each marketing year (July-
June).
34. The United States Department of Agriculture issues sugar quotas under the Tariff Rate Quota
system on a country-by-country basis.  Under this system, raw sugar is allowed to enter duty-free intothe United States.  Guyana's quota in 2002-03 was 12,636 tonnes raw value.
35. The sugar industry suffers from inadequate infras tructure and equipment.  According to the
National Development Strategy, even though extensive repairs have been undertaken in recent years
and much of the old farm machinery replaced, the eight sugar mills in Guyana are generally
obsolescent and are hampered by a low capacity, which prevents GUYSUCO from making the overallproductivity gains that the industry needs to become competitive.
36. To respond to this and other challenges, GUYSUCO formulated a plan in 1998 aimed at
making it an entrepreneurial, customer driven, retail-market-oriented producer of top-quality sugar
and associated value added by-products, at a cost that will enable it to compete in any foreseeable
market environment.
10  The Strategic Plan 1999-08 for the sugar industry seeks to reduce unit costs to
a level that will ensure viable and sustainable operations in the anticipated future markets.  The
strategy is to concentrate investment on increasing production in the lower cost areas of Berbice;  to
maximize the use of the best class of lands;  and to develop larger processing facilities that benefit
from economies of scale and more modern technology.  However, the plan envisages continued
operations in the less favourable areas where, despite their cost disadvantages, it can be demonstratedthat they are making a net contribution to the economy.  It foresees the construction of a new factory
at Skeldon, the expansion of an existing one in Albion, and the closure of the Rose Hall mill;  with
these changes it intends to bring production levels up to 457,000 tonnes per annum, and unit costs
down to US$0.1261 per pound, including depreciation.  To increase productivity, the plan envisages
                                                     
10 GUYSUCO (1998).Guyana WT/TPR/S/122
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the restructuring of the administration and management of the estates and at the corporation's head
office, the amalgamation of contiguous estates, the mechanization of cane loading, the introduction of
more modern processing technology into existing factories, and the out-sourcing of a range of
activities and services.
37. The cost of the project is estimated at US$187 million, financed through a combination of
self-generated funds (US$85 million over the plan period);  sales of land (US$30 million);  andborrowing (US$72 million).  GUYSUCO estimates a resulting increase in gross foreign exchange
earnings to a minimum of US$145 million per year, and net earnings of US$80 million.  The plan
assumes that the current preferential markets will remain although at reduced prices but with similar
allocation levels, and that Guyana will increase sales to other CARICOM countries in which sugar
production has declined.
38. The authorities report that the building of a sugar refinery is being seriously considered in
order to satisfy the CARICOM market's refined suga r requirements.  Other ventures are also being
planned, such as a joint development of a distillery to generate revenue from the increased molasses
produced, as well as co-generation of electricity for the national grid.
39. GUYSUCO is developing an environmental management system for the cultivation of sugar-
cane and the manufacture of sugar and its by-products, which will be in conformity with ISO 14001.
GUYSUCO collaborates in this with the EPA.  As part of its efforts to manage the environmental
effects of sugar-cane cultivation, GUYSUCO uses bagasse (the fibre remaining after the cane juice
has been extracted) to generate power for use in the factories.
40. Guyana also produces rum and molasses from its sugar.  Until recently, Guyana was strictly a
producer of bulk rum;  the country's rum industry now distils a premium product that fetches much
better prices in export markets.  This industry is heavily protected, since MFN imports face a 100%tariff.  Imports from other CARICOM countries had been subject to a 20% tariff, but this has been
waived by the Ministry of Finance.  The producers in this subsector also make soft drinks, beer, malt,
and wine.  The two major operators are DDL and Banks DIH, while the smaller operators are devoted
primarily to the manufacture of soft drinks (another downstream product of the sugar industry).
41. One issue of interest to Guyana is the use of the term "Demerara" as a geographic indication
for both sugar and rum.  Demerara sugar, which is a special type prized for its use in making deserts,
is named after the Demerara region of Guyana.  While the process for making this yellow sugar was
originally developed in Guyana it has also been employed by other countries, some of which market
the product under the Demerara name.  Rum producers in Guyana have had success in the sale of a
premium product under this same name, and the potential for obtaining unique rights for Demerarasugar are now under study.
(b) Rice
42. Rice is second only to sugar in its importance to Guyana's economy.  There are some 18,000
farm families involved in rice cultivation and thou sands more in milling, exporting, transportation,
and other activities linked to the industry.  It is estimated that 20% of the population depends directlyon the rice industry.  Rice accounts for 4% of GDP and about 10% of total exports.
43. Rice production fell dramatically during the 1980s, partly due to the effect of price controls,
which discouraged production.  The industry was also characterized then by strong government
intervention and subsidies, and a low level of inte rnational competitiveness.  During the 1990s, the
rice industry showed major increases in the acreage harvested, and the quantity produced and exported
(Table IV.4).  Much of this success is attributed to  the removal of price controls, and the privatizationWT/TPR/S/122 Trade Policy Review
Page 72
of the milling and export industries.  The authorities also credit an increase in drainage and irrigation
activity after 1992, better marketing, the freeing up of foreign exchange controls, and improved land
tenure.  In 2002, Guyana produced 287,755 tonnes of rice, representing a 10.7% decline from 2001
levels;  exports, at US$45.4 million were 9.6% below 2001 levels.11
44. Productivity in the rice industry has improved considerably;  per-acre yield rose by 45%
between 1975 and 2001 (Table IV.4).  These improvements however appear to have reached a plateauin recent years, and while the volume of rice exports has been fairly steady, the prices obtained in
foreign markets have dropped sharply.  Moreover, average yields still seem to be well below potential
and are inferior to those of other South American countries.
12  Low processing efficiency is also a
major concern.
Table IV.4
Rice statistics, 1975-01
(Year to year percentage change, unless otherwise specified)
1975 1980 1985 1990 1995 2000 2001
Acreage harvested 267,961 237,100 192,110 126,878 326,892 286,204 307,676
Yield per acre (tonne) 1.11 1.19 1.35 1.23 1.61 1.57 1.61
Rice equivalent (tonne) 172,259 169,107 156,124 93,444 315,301 291,967 322,310
Quantity exported (metric tonne) 82,035 81,008 29,339 50,943 200,336 207,638 209,042
Value exported (G$ million) 84.9 87.5 56.6 513.2 .. .. ..
Value exported (US$ million) .. .. .. .. 76.4 51.8 50.1
..Not available.
Source: Adapted from Guyana Rice Development Board (2002), Annual Report 2001 , Appendix I.
45. Although the Ministry of Agriculture has overall responsibility for the policies of the rice
industry, the Guyana Rice Development Board (G RDB), and the Guyana Rice Producer's Association
(GRPA) play key roles in the planning and overseei ng of the subsector.  The GRDB was established
in 1994, with representation from GRPA and the Guyana Millers and Exporters DevelopmentAssociation (GRMEDA), to develop the rice industry  and promote the exportation of rice.  Through
their involvement in the GRDB and GRPA, farmers and millers participate in decisions regarding the
industry.  The GRDB plays the role of a facilitator of selected activities within the rice industry, which
is now almost completely in the hands of the private sector.  The GRMEDA is the representative
organization of rice millers, exporters, and other rice industry operators.  Its mission is to promote thedevelopment of the rice industry through the design and execution of appropriate programmes and to
function as a channel for technical and financial assistance to rice industry operators.
46. Rice exports are subject to fees of US$2.50 per tonne for rice by-products, US$3 per tonne for
broken rice, and US$6 per tonne for whole grain rice.  The revenue from these export fees is devoted
to funding the operations of the GRDB.  Guyana has long enjoyed a preferential market in the EU via
the Lomé Convention and more recently the Cotonou Agreement.  Guyana has been successful in
broadening its marketing base by increasing sales in the Caribbean and currently supplies 50% of theCARICOM market.  As a result, virtually all of Gu yana's rice exports go to these two markets, at
prices above the world market.  In 2002, over 59.3% of Guyana's rice exports went directly to the EU,
and another 5.9% was shipped to the EU via ri ce mills in the Caribbean.  CARICOM countries
imported the remainder.
13
                                                     
11 Ministry of Finance (2003a), pp. 7 and 9.
12 Government of Guyana (2001b).
13 Calculated using raw data supplied by the Guyana Rice Development Board.Guyana WT/TPR/S/122
Page 73
47. Preferential access has made exports to the CARICOM and the EU markets very profitable,
but the high prices in each of them have attracted greater competition from other suppliers.  A dispute
over Jamaica's imports of duty-free rice from out side CARICOM was resolved in early 2003 though a
negotiated settlement between Jamaica and Guyana.  In the EU market, Guyana shares an ACP quota
of 125,000 tonnes of rice.  It also has access to the EU market via the OCT (Overseas Countries and
Territories) route.  Guyana's access to the EU market via the OCT route has, however, been limited bya safeguard action brought by European producers in 1997.   Prior to that action, Guyana's access to
the EU market was not limited by quota, and it had exported about 200,000 tonnes of rice per year.
Following the imposition of a safeguard action, however, Guyana is now limited to a 35,000-tonne
OCT quota of levy-free rice, which it shares with Suriname.  Guyana supplies the majority of the rice
under this quota.  Guyana's rice producers are concerned that the rules of origin under the EU'sEverything But Arms (EBA) initiative may have an impact on their access to the EU market, by
conferring LDC origin on rice that is grown in non- LDCs but is milled and imported into the EU from
the EBA beneficiary countries.
48. The authorities report that the rice industry is still suffering the effects of the limitations set on
the OCT export route to the EU rice market.  They note that overly enthusiastic investment, made as aresult of the temporary OCT window of sales into Europe, has left many in the industry facing
bankruptcy.  With the threat of loss of market and reduced preferences to the EU, focus has shifted to
supplying the local CARICOM market.  The authorities note that the difficulties here include
competition from subsidized U.S. rice.
49. According to the Ministry of Agriculture, the future of Guyana's rice industry will rely heavily
on advances in research, the development of value-added products, and improvements in its global
competitiveness.
14  The Government is working to secure financial assistance from the EU for a
comprehensive restructuring of the rice industry;  it is hoping to obtain €24 million to finance the
national plans of Guyana and Suriname.15  The threats posed to Guyana's preferential access to rice
markets, coupled with production difficulties and a high debt load, led the rice industry to adopt a plan
to restructure the sector in 2001.16  The plan, initiated by the GRDB and funded by the IADB,
envisages an integrated, sustainable, and profitable industry producing and marketing rice in a ten-yeartime span.  The goals of the plan include increasing productivity and production on a sustainable basis.
Productivity is expected to increase by almost three quarters, to 7 tonnes/hectare by 2007;  it is also
expected that 70% of growers will use high quality seed and adequate inputs by 2004.  Other goals
include exporting 60% of rice production to CARICOM by 2003, and 20% to non-traditional markets.
The plan envisages an increase in profit margins by adding value to rice and its by-products, through,for example, increasing the percentages of parboiled and packaged rice production to 25% and 10% of
whole grain production by 2006.
50. The rice industry has also benefited from an agreement that the Government of Guyana
negotiated with the banking sector in early 2002, providing for debt and tax relief for smaller rice
farmers.
.17  Among the elements of the agreement were a waiver of unpaid interest on certain non-
performing loans;  suspension and eventual write-off of 25% of the principal on non-performing
accounts;  the rescheduling of principal over a maximum of ten years;  and a moratorium on principal
payments to the end of 2002.  In exchange, banks are to receive corporate tax relief on the write-back
of bad debt provisions and on all payments made on new category loans.  The authorities reported that
                                                     
14 Ministry of Agriculture online information.  Available at:  http://www.sdnp.org.gy/minagri/moa_
mfcl/index.htm
15 Ministry of Finance (2003a), p. 24.
16 Guyana Rice Development Board (2001), p. 6.
17 Guyana Review "Agreement between the Government of Guyana and the Guyana Association of
Bankers on Rice Sector Relief Package, 31 January 2002" Volume 10, No 111, March 2002, p. 23.WT/TPR/S/122 Trade Policy Review
Page 74
the Government will not lose anything from the tax breaks to the banks because it would not have
received any tax revenue if there were no repayments on the non-performing loans.  The banks
reported that there was some reluctance on the part of the farmers to sign on to the new arrangement
because of concerns with the new mechanism for rea lizing collateral.  Most of the affected loans were
at various stages of the restructuring process in June 2003;  the process completed for about a third.
51. The 2002 debt-relief package was designed to benefit smaller farmers, insofar as it did not
cover the debts of about 100 large-scale rice farmers;  the larger producers were expected to deal with
the banks on an individual basis.  In June 2003, larger rice farmers became eligible for loan
restructuring on a case-by-case basis.  The Government reportedly agreed to grant tax relief on interest
income from the restructured loans.  This arrangem ent covers fewer farmers but more debt than the
deal made with small farmers in 2002.  In 2001, the large farmers were responsible for G$7 billion of
the total rice sector debt of G$12 billion.18
(c) Poultry
52. Poultry meat production is increasing.  The authorities note that Guyana is currently self-
sufficient in eggs and 80% self-sufficient in poultry meat, and that the country has begun to export
eggs to Suriname.19  The poultry industry comprises about 3,400 enterprises including 300 pluck
shops, four processing plants, 50 commercial farms, 3,000 small farmers, 12 hatcheries, 80 trucks, and
four stock-feed factories.  It employs some 5,000 people.
53. Like other producers in the Caribbean Basin, Guyana's producers have concerns over the
competitiveness of the industry vis à vis major producers in North America.  A recent regional study
concluded that, on the basis of the importance of the broiler industry in CARICOM and given its
vulnerability to low priced imports, a clear case existed for treating the industry as sensitive.20  In this
respect, imports already face relatively stringent market-access conditions since, in addition to the100% tariff imposed on most chicken cuts, imports of poultry into Guyana require a sanitary permit.
54. The Ministry of Fisheries, Crops, and Livestock (MFCL) implements a Livestock
Development Programme to promote efficiency in the rearing of poultry, cattle, swine, sheep, and
goats.  The aim is to increase production and productivity and attain self-sufficiency of livestock and
livestock products.
(d) Horticulture and processed products
55. In the 2002 Budget Speech, the Government noted its plans to introduce sustainable cut-
flower, honey, and integrated fish and crop farming industries.
21  Guyana may also benefit from the
niche marketing of such specialities as organic sugar, cocoa, peanuts, and cashew nuts.  In this respect,
a peanut production programme has been put in place with the aim of improving the volume andquality of the product to suit local and overseas markets.  Organic farming programmes have been
started, with the rehabilitation of 100 acres of co coa plantations, and an export target of 50,000 pounds
per year, mainly to Europe.
                                                     
18 Starbroek News  (18 June 2003), p. 10.
19 Ministry of Fisheries, Crops and Livestock with Responsibilities for Forestry online information.
Available at:  http://www.sdnp.org.gy/minagri/moa_mfcl/mfcl/index.htm.
20 Singh et al. (2001), p. xi.
21 Ministry of Finance (2002a), p. 27.Guyana WT/TPR/S/122
Page 75
56. Exports of non-traditional agricultural products may be facilitated as a result of effective fruit-
fly trapping programmes.  In early 2003, the United States began to permit the importation into Miami
of cucumbers, peppers, eggplant, and pumpkins from Guyana.
(3) FISHERIES
57. Fisheries account for some 3% of GDP.  Expor ts in 2001 exceeded US$50 million, of which
shrimp exports totalled US$49.3 million.  Exports of shrimp had faced a 10% export duty, but this hasbeen waived by the Ministry of Finance since 1997;  exports of aquarium fish are subject to a 5%
levy.  Imports of fish and fish products face a relatively high average tariff rate of 27.7%, ranging up
to 40%.
58. Guyana's fishing fleet consists of around 120 trawlers based in Port Georgetown;  they exploit
the waters in the continental shelf.  Their main ob jective is the smaller shrimp and fin fish that are
found in depths of 13 to 30 metres.  Another 65 ships are based in Guyana but are foreign-owned, and
fish for larger prawns at depths of 25 to 90 metres.  Guyana also has a fleet of some 1,200 artisanal
boats that fish in river mouths, and near the shore at shallow depths.
22
59. The Ministry of Fisheries, Crops, and Livestock is responsible for policies in the fisheries
sector.  A Fisheries Advisory Committee has been established to advise the Minister on mattersaffecting the industry.  The authorities have noted that R&D subsidies are provided to the industry, but
that no direct support is granted.
60. The Fisheries Act No. 12 of 2002, which replaced the  Fisheries Act, 1957 (Cap. 71:08)
regulates fisheries in Guyana.  It provides for the registry of fishing boats with the Chief Agricultural
Officer, the inspection of vessels, and the licensing of fishing operations, both domestic and foreign.
Foreign fishing vessels may be granted licences if they are locally based, or if they engage in test
fishing, unless there is a fishing agreement with the flag country.
61. The Maritime Boundaries Act, 1977 (Cap. 100:01) establishes a territorial sea of 12 miles and
a fishery zone that extends 200 miles out from the baseline of the territorial sea.  Foreign ships, other
than warships, enjoy the right of innocent passage th rough the territorial sea.  The law also gives the
President the authority to designate an exclusive economic zone in an area beyond and adjacent to the
territorial sea.  Research and other activities can be conducted in such a zone with a licence from theGovernment of Guyana.  The law declares Guyana's full and exclusive sovereign rights over the
seabed and subsoil resources of the continental shelf, while also providing for the licensing of
operations by domestic or foreign persons.
62. Some aquaculture projects have been developed in recent years and the cultivated acreage has
risen from 2.5 acres in 1997 to over 2,000 acres in 2002.  A freshwater aquaculture demonstrationfarm and training centre has been set up at Mon Repos, East Coast Demerara, to promote freshwater
aquaculture development by providing on-site training of farmers.  The project is funded by the
Canadian Development Agency (CIDA), FAO, and the Government of Guyana.
                                                     
22 Guyana Review "Fishing in Troubled Waters," Volume 10, No. 116, August  2002.WT/TPR/S/122 Trade Policy Review
Page 76
(4) FORESTRY
63. Forestry accounted for some 2.2% of GDP in current Guyana dollars in 2001.  It is estimated
that Guyana has 14,000 square miles of commercial forest;  another 40,000 square miles of forest are
potentially commercial.23  Export earnings in 2002 were US$35.6 million.24
64. The Ministry of  Fisheries, Crops, and Livestock with Responsibilities for Forestry oversees
policies in the sector;  it is trying to promote value-added activities.   The forestry sector is regulated
by the Guyana Forestry Commission (GFC) under the authority of the Forests Act of 1953
(Cap. 67:01), as amended.  The law provides for the issuing of exploratory permits: it specifies that
only citizens of Guyana may be granted permits as individuals, but either domestic or foreign
corporations may be granted such permits;  a similar law governs minerals and petroleum.  The law
makes these permits contingent upon various factors, including the applicant's proposals for theemployment and training of Guyanese.  Any area of State land may be declared a State forest, and the
law mandates that all forest produce from State forests remains the property of the State until the
prescribed royalty thereon has been paid.  The GFC has the authority to sell timber from State forests,
or to issue permits for the harvesting of timber in these forests.  The law authorizes the MFCL to
prohibit or regulate the export of forest produce from State forests and to prohibit or regulate theimportation of sawmill equipment (Article 45(c) and (j)).
65. The GFC monitors forest operations to en sure compliance with its operational and
environmental standards.  It has established a 24-hour monitoring unit to reduce the incidence of
illegal activities by loggers, and is aiming to have Guyana certified internationally as an exporter of
wood and wood products in accordance with environmentally friendly practices.
66. The Guyana Forestry Commission produced a draft National Forest Plan in 2001.  The overall
objective of this plan is the conservation, protection, management, and utilization of Guyana's forestresources, while ensuring that the productive capacity of the forests for both goods and services is
maintained or enhanced.
25  Among the points emphasized in the plan is the need to promote export
trade and underpin this with research and development aimed at both processing and marketing, as
well as offering training and extension programmes.  The plan called for the approval of a new Forests
Act.  Revised legislation is currently being reviewed by a Cabinet subcommittee.  When approved bythe Cabinet, the legislation will be sent to Parliament.
67. There is substantial foreign involvement in Guyana's forestry sector.  Among the major
foreign investors are:  Caribbean Resources Ltd., owned by the Colonial Life Insurance Company
(Trinidad and Tobago);  the Barama Timber Company, a joint South Korean/Malaysian venture;
Demerara Timbers Ltd., owned by a consortium of European banks;  and the UNAMCO/CaseTimbers, a Guyanese/Malaysian enterprise that manufactures plywood.  Some of these investments in
the sector are the result of privatization in the late 1980s and early 1990s, such as by the purchase of
the formerly state-owned Guyana Timbers by Cari bbean Resources, and Demerara Timbers' purchase
of assets that were held by the state-owned Demerara Woods.
26  In 2000, Jilin Industries (Guyana) Inc.
of China, and Forest Enterprise Limited of the Netherlands committed to new investments of someUS$32 million in Guyana's forestry sector.
68. In July 2002, Guyana signed its first conservation concession.  In a letter of approval with
Conservation International, the country agreed to a 30-year concession to 81,000 hectares of forest in
                                                     
23 Bernard (1999).
24 Ministry of Finance (2003a), p. 9.
25 Guyana Forestry Commission  (2001), p. 1.
26 U.S. Department of State (2001), pp. 29-30.Guyana WT/TPR/S/122
Page 77
the Upper Essequibo-Upper Takutu region.  In additi on to an initial payment, the agreement provides
for the payment of annual royalties and acreage fees.27
69. In 1996, the Government imposed a moratorium on new logging permits, pending the
completion of a project that is expected to increase the Government of Guyana's capabilities to
enforce sustainable forestry regulations.  The moratorium was lifted in 1999.
(5) MINING
(i) Features
70. Mining accounted for some 16% of GDP in 2001.  In 2002, exports of bauxite totalled
US$35.3 million (down from US$61 million in 2001).  Gold is taking over as the main earner of
foreign exchange, with US$136.3 million of exports in 2002 (up from US$127 million in 2001).28  It is
estimated that the industry directly employs between 15,000 and 20,000 persons.  Although theindustry per se  is capital-intensive, it requires a considerable range of support services, such as metal
fabrication, machine construction and repair, transportation, carpentry, plumbing, welding, pipefitting,
and blasting, some of which are labour-intensive.  Most of the investment in mining over the last
decade has been by the private sector.
71. In addition to its deposits of gold, diamonds, and bauxite, Guyana's natural resources include
industrial minerals such as kaolin, silica sand, soapstone, kyanite, feldspar, mica, ilmenite, columbite-
tantalite, and manganese;  the base metals copper, lead, zinc, molybdenite, tungsten, and nickel;
ferrous metals, mainly comprising iron as magnetite and laterite;  uranium;  and semi-precious stones
such as amethyst, green quartz, black pearl, agate, and jasper.
72. The mining sector has expanded in recent years, but continues to face problems.  One
difficulty is a high level of taxation by international standards.  While import duties on mining
equipment are generally waived, several mining inputs face customs duties of 15% or 20%.  Exportduties are levied on all mining products (see below).  It may be difficult for local miners to obtain
investment capital to develop their permits, due to credit access barriers and high borrowing costs;  the
authorities note that the underlying problem is the inability of prospectors to supply the required
information to the banks when seeking loans.  The high cost of shipping also diminishes Guyana's
exports competitiveness, particularly in the bauxite subsector;  this is partly due to the limited depth ofthe approach channels to the Demerara river, from where bauxite is shipped, which allows vessels to
load a maximum of 22,000 tons capacity.
29  Dredging in the Berbice River has freed it up for larger
ships.
(ii) Regulatory framework
73. The Prime Minister holds the portfolio of mines, and is responsible for the formulation and
implementation of policy.  The Guyana Geology and Mines Commission, which is attached to the
Prime Minister's office, regulates this sector.  It is in charge of granting licences.
74. The Mining Act, 1991 (Cap. 65:01) is the principal regulating statute.  The Act declares the
right of the State to resources, while also creating the system by which licences may be granted for the
                                                     
27 Guyana Review,  "CI Concession", in Volume 10, No. 116, August 2002, p. 32.
28 Ministry of Finance (2003a), p. 9.
29 Government of Guyana (2001b), Chapter 16.WT/TPR/S/122 Trade Policy Review
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extraction of these minerals.30  The law establishes the procedures for the granting, renewal, and
exercise of licences for prospecting and mining.  Mining licences are granted for a maximum of 20
years;  renewals are for periods of seven years.  Prospecting licences may be granted for a maximum
of three years, renewable for periods of no more than a year each time.  Special permits are required
for the exportation of radioactive materials.
75. Operations are designated as small-scale (up to 27 acres), medium-scale (up to 1,200 acres),
or large-scale.  Small and medium-size operations can be owned only by Guyanese.  There are also
differences in the regulatory environment;  the arrangements made with large-scale operations are
very formalized and subject to more specific requirements (e.g. the preparation of feasibility studies).
While small-and medium enterprises are allowed to prospect and mine at the same time, this is not
permitted for the large-scale producers.  However, th ere are fiscal incentives specific for large-scale
mining, through the granting of a mineral agreement with the Government.
76. Licences may be granted to individuals or companies.  While foreign corporations may
operate large-scale properties either alone or in joint ventures, small-and medium-scale operations
open solely to citizens of Guyana.  Foreign individuals may not be granted prospecting or mining
licenses;  these may only be granted to individuals who are nationals of Guyana (Article 17(1)).Prospecting licences for large-scale operations may be denied for various reasons, including a
determination by the Guyana Geology and Mines Commission that an applicant has not made
satisfactory proposals for the employment and training of citizens of Guyana (Article 30(2)(c)).  The
authorities indicated that this provision has never been the cause for the denial of an application.  A
similar condition applies to the granting of mining licences for large-scale operations, which must also
take into account the applicant's proposals with respect to the procurement of goods and services
obtainable within Guyana (Article 46(1)).
77. Royalties must be paid on minerals, and the law permits the authorities to specify that these
royalties be paid in foreign currency.  Royalty rates are set at 1.5% for bauxite, 3% for sand and stone,
between 3% and 5% for gold (on a sliding scale that rises with the world price), either 3% or 5% for
diamonds (the lower rate applies to small-and medium-scale enterprises;  there are currently no large-
scale operations for diamonds), and 5% for other precious metals and minerals.  Mining companies arealso subject to a 35% corporate income tax.  Expor ts of all mining products are subject to a 1.5%
export tax, with the exception of precious stones (subject to a tax of G$3 per metric carat).  Bauxite is
in principle subject to an export tax of G$0.45 per tonne, but this tax is currently waived by the
Government.
(iii) Main products
(a) Bauxite
78. Bauxite production has been under way in Guyana since 1917.  Originally developed by U.S.
(Reynolds) and Canadian (Alcan) firms, the industry  was nationalized with the creation of the Guyana
Mining Enterprise Limited (Guymine, 1971) and the Berbice Mining Enterprise (Bermine, 1975).  The
first replaced the Alcan subsidiary, Demerara  Bauxite Company (DEMBA), and the second the
Reynolds subsidiary, Reynolds Berbice Mines.  Three firms currently operate in Guyana:  two are
state-owned, Linmine and Bermine;  the third is  the Aroaima Bauxite Company (ABC), initially a
50/50 joint venture between Reynolds International (United States) and the Government of Guyana.
                                                     
30 Note, however, that for minerals other than gold and silver, private rights are grandfathered for land
grants made prior to the Mining Ordinance of 1903.Guyana WT/TPR/S/122
Page 79
ABC's total investment in Guyana was US$100 million, including the company's deep-water port
facility at the mouth of the Berbice River.31
79. The bauxite industry initially exhibited sustained growth, but a considerable decline became
evident by 1981.  A decade later it was practically bankrupt.  In 1991, the Government received World
Bank financing to revive the industry before its divestment.  The dissolution of Guymine was set as a
precondition for this assistance.  It was replaced by Bermine, which continued under localmanagement, and Linden Mining Enterprise (Linmine), which was placed under foreign management
and subject to an Initial Reconstruction Programme (IRP).  Attempts to redress Linmine's situation
failed.  Employment of bauxite workers in the town of Linden had fallen from 4,000 to just 700 as of
early 2003.  The production of refractory bauxite declined in an environment of plummeting prices.
The market expressed little interest in the proposed privatization of  Linmine in 1996.  The company'sprofitability did not improve during the five-year grace period that the Government opted to provide,
leading to yet another try at privatization in 1998.  This process also failed.  As of early 2003, the
Canadian firm Cambior was in the process of recapitalizing Linmine.  The deal will lead to Cambior
owning 70% of the venture, and the Government retaining 30%.  The firm signed an initial agreement
to this effect in June 2002;  in April 2003, it was anticipated that the process might be finalized withinthree to six months.
80. Bermine's performance was slightly better than Linmine's and privatization was also
attempted in 1998.  The Government rejected a tentative offer by ABC in 2000 for a merger with
Bermine.  In November 2001, the Aroaima joint venture between Alcoa and the Government came to
an end.  Alcoa handed its shares in the compan y to the Government for US$1.  Since then, the
Government has been running the company on a cash-neutral, non-subsidized basis.  In
September 2002, Bermine was restructured and the management of its operations passed to ABC.Plans are under way to merge Bermine and ABC fully, and to privatize the combined company as
soon as possible.
81. Linmine and Bermine control considerable bauxite reserves, but their scale of operations is
well below the minimum necessary for commercial viability.  Linmine's costs of production are above
the price received for its product;  its losses are met by the Treasury.  High costs of production arepartly due to difficult exploitation conditions (considerable depth of overburden), high costs of
transportation, and the cost of providing a number of community services.
82. Bauxite production declined in both 2001 and 2002 to reach 1.6 million tonnes (18.9% below
the 2001 level).  The Government has expressed the hope that the actions taken in 2002 will result in a
turnaround of the industry's production and profitability in the near future.
32  The authorities report
that the Government is looking for strategic partnerships to lower the costs of production and to
improve the viability of the industry, and is open to majority ownerships.
(b) Gold
83. Although designated as a "non-traditional" export  to differentiate it from sugar, rice, and
bauxite, gold mining has a long history in Guyana;  large-scale production began in the 1880s.33  As
mentioned above, gold now vies with sugar as the leading export commodity from Guyana.  The
largest gold producer in the country is Omai Gold Mines Ltd.  Once a joint venture by two Canadian
firms (Cambior and Golden Star), since 2002 it is 95% owned by Cambior;  the Government of
                                                     
31 U.S. Department of State (2001), p. 29.
32 Ministry of Finance (2003a), p. 8.
33 Bernard (1999), pp. 38-41.WT/TPR/S/122 Trade Policy Review
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Guyana owns the other 5% share.  Other foreign-owned or funded ventures are also mining gold in
Guyana.
84. Gold was traditionally mined mainly from alluvial and eluvial deposits.  However, in recent
years, Omai Gold Mines has been mining gold from a large open pit;  this considerably increased the
country's gold production.  Omai produced 339,798 ounc es of gold in 2002, but anticipates production
of just 273,000 ounces in 2003 due to depletion of ore resources.  Small-scale miners increasedproduction to 117,240 ounces in 2002.  Declared exports of gold fell slightly from 14,181 kg. in 2001
to 13,582 kg. 2002.
34
85. The Guyana Gold Board holds the monopoly on the commercialization of gold in Guyana.
The Board collects the royalty rate of between 3% and 5%.  It is thought that significant amounts of
gold production may evade regulation;  the authorities indicate that perhaps one third to one half ofproduction goes undeclared.
(c) Diamonds
86. Diamond production has been traditionally important;  however, the industry was in decline
between the 1970s and the mid 1990s.  Production has been steadily increasing in the past few years.
Declared exports rose from 184,309 carats in 2001 to 248,437 carats in 2002.
35  Cumulated earnings
from the export of diamonds reached US$43 million during 1998-02.36  Guyana is a signatory to the
Kimberley Protocol, designed to combat the problem of "conflict diamonds".
(d) Petroleum
87. Guyana has laws to regulate the development of a petroleum-extraction industry.  The
Petroleum (Production) Act (1939) and the Petr oleum (Exploration and Production) Act (1986) will
govern any future exploitation of this resource (Cap. 65:05 and 65:10).  These laws provide that oil
may not be explored without a licence.  Licences may not be granted to individuals unless they arecitizens of Guyana, but may be granted to foreign or domestic corporations (Cap. 65:10, Article 9(1)).
Decisions to grant licences for the production of petroleum take into account  several factors, including
the applicant's proposals for the employment and training of citizens of Guyana, and proposals with
respect to the procurement of goods and services obtainable within Guyana (Cap. 65:10,
Article 36(1)).
88. There has never been any commercial production of oil in Guyana, but it is a sector of long-
standing and increasing interest for the country.  Active exploration has been under way since 1917,
and wells have been drilled onshore in the coastal zone, offshore, and in the Takutu Basin.  The latter
region is situated near the border with Brazil, and is the only area, thus far, in which petroleum has
been found.  The Guyana portion of the Takutu Basin is approximately 10,300 square kilometres.  In1979, Home Oil Canada drilled two wells.  Over a dozen exploratory wells have been drilled in
offshore Guyana since 1967.  Although the last one was drilled in 1992, CGX Energy Inc. was granted
a prospecting licence to drill offshore in the Corentyne area.  Exploration for offshore oil in Guyana's
Exclusive Economic Zone has been considered by international firms such as Esso, CGX Energy,
                                                     
34 Production data for 2002 are from Ministry of Finance (2003a), p. 7.  Prospects for 2003 are from
Guyana Review, "Gold Production", Volume 11, Nos. 121 and 122, January and February 2003.  Export data are
from Guyana Review (various issues), "Selected Financial Indicators".
35 Guyana Review, (various issues) "Selected Financial Indicators".
36 Guyana Review, Volume 11, No. 123, March 2003, p. 24.Guyana WT/TPR/S/122
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Maxus Guyana Ltd., and Century (Guyana) Ltd.37  The authorities remain optimistic in light of
promising indications from explorations carried out to date.
89. Since there is currently no production, Guyana is entirely dependent on imports for its oil
supply.  The Petroleum Act (1930) regulates the establishment of procedures for the importation,
unloading, and storage of petroleum products.  Consumption taxes on imported oil account for nearly
10% of government revenue.
90. The Guyana Energy Agency (GEA) is the official agency dealing with energy issues in
Guyana.  The GEA's mission is to encourage  the rational and efficient use of imported petroleum-
based energy sources, while encouraging, where economically feasible and environmentally
acceptable, increased utilization of indigenous and renewable sources of energy.
(e) Silica sands
91. Silica sands cover about 5,000 square miles in north-eastern Guyana.  The sands are a vast
source of high-purity silica oxide.  Guyana has sold silica sands to other countries in the Caribbean
region since 1993.  These sands are used both for the production of glass and to refurbish beaches.
(6) MANUFACTURING
(i) Features
92. Guyana's manufacturing sector remains small, and is devoted primarily to the processing of
the country's major agricultural, mineral, and forestry products.  The sector has declined in relative
significance in the past few years, falling from 6.8% of GDP in 1997 to a budgeted 5.8% of GDP in
2003 (Table I.2).38
93. Some manufacturing activities have disappeared altogether in the last 30 years, while most
others produced less in 2000 than in 1972 (Table IV.5).  The composition of the Bank of Guyana
index may no longer be an accurate representation of the manufacturing sector in Guyana, insofar as itdoes not cover some industries that are now active (e.g., furniture).  It is nonetheless notable that
overall production of the items that comprise the index fell in 2000 to just 62.9% of the levels
achieved over a generation before.  The more successful sectors in this index are classified by the
WTO as agricultural rather than manufactured goods.
Table IV.5
Index of manufacturing output, 1990-00
(1972 = 100)
Unit 1990 1995 1997 1998 1999 2000
Beer & stout litre 142.0 125.3 167.1 169.9 171.7 156.7
Margarine kg. 38.4 89.6 128.0 125.7 139.2 133.5
Flour tonne 97.7 111.8 102.9 96.4 107.0 108.8
Stockfeeds kg. 36.7 50.2 81.7 79.2 96.3 93.9
Biscuits kg. 48.3 86.4 62.4 65.5 69.0 65.0
Garments dozen 14.2 97.3 80.9 76.7 67.5 51.1
Aerated beverages litre 9.3 24.7 26.3 26.1 54.4 49.6
Rum litre 92.6 114.5 118.3 108.5 72.1 48.2
Edible oil kg. 0.04 49.1 24.1 36.7 44.6 26.7
                                                     
37 U.S. Department of State (2001), p. 5.
38 Bank of Guyana (2002a).WT/TPR/S/122 Trade Policy Review
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Unit 1990 1995 1997 1998 1999 2000
Soap tonne 23.8 12.4 12.8 9.7 14.2 6.5
Cigarettes kg. 54.0 69.6 50.4 0.0 0.0 0.0
Matches gross boxes 70.8 16.8 0.0 0.0 0.0 0.0
All manufacturing 75.0 97.0 99.0 89.9 77.3 62.9
Source: WTO calculations, from Bank of Guyana  (2002), Annual Report and Financial Statement of Accounts 2001 .
94. Guyana enjoys preferential access to the U.S., EU, and Canadian markets for its manufactured
products, provided under the CBI, Cotonou, and CARI BCAN arrangements, respectively.  Guyana is
also the beneficiary of the GSP schemes of a numbe r of other countries, and has duty-free or reduced-
duty access to the markets of other CARICOM countries as well as Venezuela and Colombia.  Despitethis preferential access, the development and growth of the manufacturing sector has been limited.
Apparel is the one notable area of growth in Guya na's exports of manufactures, benefiting notably
from the "NAFTA parity" that the United States has extended to CBI beneficiary countries since
enactment of the Trade and Development Act of 2000.  Between 1990 and 2002, U.S. imports of
apparel from Guyana increased from US$2.2 million (4.2% of U.S. imports from Guyana) toUS$10.8 million (10.4%).
39
95. Apart from apparel, much of Guyana's exports of manufactured products consist of goods that
are elaborated from domestically produced raw materials.  These include furniture and other wood
products (from timber), rum (from sugar), and a variety of processed food products.40  Guyana does
not have the capacity to produce aluminium fr om bauxite, which would require a vastly greater
volume of electrical energy than is presently available domestically.  The country also produces
footwear, chemicals, pharmaceuticals, building materials, jewellery, and other products, but
production figures for most manufactured goods are generally not available.
96. Guyana's furniture industry is predominantly geared to serving the domestic market, although
some firms are increasingly focusing on exports.  Among the problems that have reportedly inhibited
the development of an export-oriented furniture industry are the lack of finance, scarcity of skills, and
restricted markets.41  The metal-fabrication industry concentrates on servicing the local market.  It
produces castings and pumps, as well as spare parts, components, and other equipment used by the
sugar, rice, and mining industries.  Guyana Pharmaceutical Corporation is the leading producer in the
country's small pharmaceutical industry, and is involved in the manufacture and dispensing of a
number of drugs.  The printing and publishing industries cater mainly to the local market.
97. Some enterprises in the manufacturing sector represent intra-CARICOM investments.
Examples include glass bottles produced by ANS A McAl (Trinidad and Tobago), publishing by
Caribbean Communications Network (Trinidad and Tobago), and paint manufactured by Harris Paints
Ltd. (Barbados).  Other enterprises in the manufacturing sector benefit from Chinese participation in
the form of investments, joint ventures, or technical assistance.  These include the Sanata Textiles Mill
and the Golden Bridge bicycle assembly plant.42
                                                     
39 Calculated from data on the U.S. International Trade Commission DataWeb.  Available at:
www.usitc.gov.
40 While rum is counted as a manufactured product by Guyana, it falls under the WTO definition of
agriculture, together with other beverages and other processed food products.
41 Guyana Review, "The Furniture Business," Volume 10, No. 116, August 2002, p. 23.
42 Guyana Review,  "The Chinese Connection," Volume 10, No. 18, October 2002, pp. 16-18.Guyana WT/TPR/S/122
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(ii) Policy considerations
98. The Ministry of Tourism, Industry, and Commerce is responsible for formulating,
implementing, and monitoring the policies for the manufacturing sector.  The responsibility for
investment promotion is vested in the Guyana Of fice for Investment Promotion (GO-INVEST).  The
Food and Drugs Department of the Ministry of Agri culture, the Guyana National Bureau of Standards,
the Pesticide Control Board, and the Public Health Office of the Municipality are responsible for thesetting, monitoring and enforcement of standards and quality, principally but not exclusively in the
manufacturing sector.
99. The Consumer Affairs Division of the Mini stry of Tourism, Industry, and Commerce is
responsible for policy formulation with regard to consumer affairs.  Consumer organizations that
represent public interests in respect to manufactured products include the Guyana ConsumersAssociation, the Consumers Advisory Bureau, a nd the Consumer Movement of Guyana.  These
organizations receive quarterly subventions from the Ministry, and statutory monthly meetings are
held under the chairmanship of the Minister.  Corporate interests are represented by the Chambers of
Commerce in Demerara, Berbice, and Essequibo,  the Guyana Manufacturers Association, and the
Consultative Association of Guyanese Industry.  In 1992, the Private Sector Commission was created
as an umbrella institution.  Some of these institutions are represented on the National Advisory
Committee on External Negotiations.
100. The policy for the manufacturing sector follows CARICOM broad guidelines, which is to
encourage those industries with a higher degree of value-added.
101. The Government employs industrial estates as a mechanism for the promotion of
manufacturing and agri-processing in Guyana.  Two estates are currently in operation, in Eccles and
Coldingen near Georgetown in Region 4, and two more are being established in Lethem andNew Amsterdam.  The Eccles and Coldingen estates contain a range of industries:  food processing,
warehousing, engineering, chemicals, garments, furniture, electronics,  pharmaceuticals, fish
processing, and light manufacturing;  warehousing, furniture, and electronics are the most prominent.
The estates offer the users benefits of civil infrastructure works and utilities;  75% of the development
costs of the sites themselves are absorbed by government.  The National Industry and CommercialInvestment Ltd. (NICIL) holds the title to all industri al estates in Guyana, and the sites are operated by
the Ministry of Tourism, Industry, and Commerce, and estate Management Committees.  Applicants
for these estates must provide to the Ministry an  implementation schedule for the investment and a
floor plan for the structure.  In reviewing applicat ions the Ministry considers the nature and scope of
the business, export potential, employment, level of investment, history of the applicant, and ability to
finance.  When agreement is reached, NICIL prepares a lease document for the investor.  Initial leases
were for 25 years, but the leasing structure has since been reviewed, and 99-year leases are now
available for the Eccles site.  The annual lease rate is G$1 per square foot;  investors are responsible
for reimbursing the Management Committee the costs of infrastructure maintenance.  The
Government is also considering the establishment of export processing zones to promotemanufacturing and agri-processing.
102. The Guyana Manufacturers Association views the processes of globalization and regional
liberalization with some alarm.
43  Citing the reduced prices that Guyana has received for its
manufactures and the increased costs for power and other inputs, the group has advocated the
negotiation of a safety net similar to the programme developed for the country's rice industry.
                                                     
43 Guyana Manufacturers Association (2001), p. 5.WT/TPR/S/122 Trade Policy Review
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(iii) Market access
103. The simple average MFN tariff in 2003 for non-agricultural products (WTO definition) was
10.3%.  The average tariff for manufacturing (ISIC definition) was 11.5%, while that for
manufacturing, excluding food processing, was 9.8% (Table III.3).  HS Chapters 25-97 were subject
to an average tariff of 9.7%.  Some HS sections facing above-average tariffs included:  textiles and
apparel (11.4%);  footwear, headgear (16%);  precious stones (30.3%);  transport equipment (12.2%);precision equipment (13.9%);  arms and ammunition (42.5%);  and miscellaneous manufacturing
products (15.3%).  As mentioned in Chapter III.1, tariff escalation is present in some industries, such
as textiles and clothing, chemicals, wood products, paper, non-metallic minerals, and fabricated metal
products.  Guyana has a general ceiling binding of 50% for manufactures (with some exceptions).
Guyana also bound other duties and charges applied on imports at 30% for non-agricultural products,with the exception of certain petroleum products, bound at 50%.  Most items are subject to
consumption tax at a rate of 30% (Chapter III(2)(iii)).
104. Under CARICOM rules, Guyana grants full tari ff exemptions to 78 products included in the
List of Conditional Duty Exemptions to the CET (not  classified by HS heading), for approved industry
and agricultural purposes.  A number of products used in manufacturing have partial exemptions fromimport duties, such as protective clothing and equipment imported by industrial concerns, and
uninsulated wire cables and ropes of iron and steel for industrial use.  In general terms, the
manufacturing sector may enjoy a number of incentives, including duty and consumption tax at a rate
of zero on a wide range of machinery and equipmen t;  exemption on auxiliary plant equipment such as
boilers and fork lifts;  exemption from duty and consumption tax on vehicles imported exclusively for
the business;  exemption from import duty and consumption tax on packaging materials for
manufacturers registered under the Consumption Tax Act;  duty and consumption tax rate of zero onmost raw materials for companies registered under the Consumption Tax Act;  and waiver of 30%
consumption tax on power generators (Chapter III(4)(ii)).  Also, the In-Aid-of-Industry Act provides
for accelerated depreciation on capital expenditures, and the Industries Aid and Encouragement Act
allows duty-free importation for five years of prescribed items for the purpose of establishing a new
industry or developing an existing one.
(7) E
LECTRICITY AND OTHER UTILITIES
105. The electricity sector in Guyana is small and at an early stage of development.  Activity in this
field is regulated under the Electricity Sector Reform Act (1999) (ESRA), the Guyana Energy Agency
Act 1997, the Hydroelectric Power Act (Cap. 56:03) , and the Energy Sector (Harmonisation of Laws)
Act 2002.  ESRA 1999 repealed ESRA 1997, the Elec tricity Act and Electric Lighting Act (Cap.
56:01 and Cap. 56:02) respectively.  The Prime Minister is vested with responsibility for the energy
and electricity sector, including the formulation, implementation, and supervision of policies for the
sector;  the Prime Minister is also responsible for Guyana Power & Light.  The Public Utilities
Commission is the industry's regulator.  Guyana has made no GATS commitments in energy
distribution services.
106. Total demand for electricity in Guyana is about 175 MW.  The principal public supplier,
Guyana Power & Light, Inc. (GP&L), currently meets about 80 MW of this need;  the forestry,
mining, sugar, and other manufacturing entities account for the balance.  The demand on the national
grid is projected to increase to about 90 MW by 2005 and to 120.2 MW by 2010.  Electricity
generated by GP&L totalled 477 GWh in 2000, 505 GWh in 2001, and 513 GWh in 2002.
107. The Guyana Electricity Corporation was priva tized in 1999 and the Guyana Power and Light,
Inc. (GP&L) was established as the principal public supplier.  The mission statement of the companyGuyana WT/TPR/S/122
Page 85
is to provide an expanding customer base with electricity services that are technically, financially, and
environmentally sustainable, achieving best practice and acceptance norms.44  From 1999 to 2003,
Americas & Caribbean Power (AC Power) held half of the company and exercised management
control.  AC Power's shares were held 80% by CDC Capital Partners (United Kingdom) and 20% by
ESB International (Ireland).  The Government of Guyana held the other half-share.  Although the
country's electricity generation increased by 31.3% between 1997 and 2002 (Table I.3), there weresignificant problems in the management and regulation of the company.  The private investors sold
their full share in the company back to the Go vernment in early 2003 for US$1, and the Government
resumed full ownership of the utility as of 8 April 2003 and management control as of 1 May 2003.
108. The main policy goal in the energy sector is to secure an adequate and dependable supply of
electricity.  This requires improving the quantity, to meet increases in demand, quality and reliabilityof electricity supply, and reducing system losses.  Guyana's energy policy is also aimed at reducing
dependency on imported petroleum products, and at increasing the use of new and renewable domestic
energy resources where commercially feasible.  The National Development Strategy seeks to
encourage, through fiscal incentives, investment in  the energy sector, particularly in locations away
from the coast, to enhance energy-generating capacity.
109. Government policy in the electricity sector aims to promote the use of renewable fuels.  As
part of the privatization arrangement in 1999, GP&L was granted tax and customs duty exemption on
fuels.  Beginning in October 2004, GP&L will be required to pay related customs duties of 10% on
fuel.  This amounts to an oil tax, insofar as GP&L does not use gas or coal or any other form of
renewable source to generate electricity.  In early 2003, the Government declared that it would review
its energy policy to emphasize conservation and the  development of alternative sources of power,
including hydro, solar, and bagasse, over the medium-to long-term.
45
110. The Electricity Sector Reform Act (ESRA) provides for self-generation at all levels;
domestic, commercial, and industrial.  In addition, generation is opened to competition through power
purchase arrangements open to the private sector, including foreign producers, subject to these
independent power producers obtaining a licence.  Licence periods are determined in each licence.
Licences issued under ESRA could be for up to 25 years and may be renewed for a period up to 15years, while licences for the generation of hydroelectric power could be granted for a period up to 50
years and renewed for another 50 years.  Through its licence, GP&L has been granted exclusivity in
transmission and distribution of electricity in Guyana for 25 years (until 2022) with the exclusion of
certain areas.  Other providers are permitted to offer transmission and distribution services in any
areas of the country where the company does not wish to go.
111. The responsible Minister (currently the Prime Minister) must approve any extension and
construction of new facilities for the generation of electricity.  Licensed suppliers may be required to
implement rural electrification programmes.  Suppliers must be companies established under the
Companies Act.
112. The ESRA established that tariffs will be basic energy rates that include allowed expenses and
a certain allowed margin of return.  In addition, basic rates in any year could be adjusted to reflect an
increase or decrease in fuel costs or a change in the exchange rate of the Guyana dollar.  The rate-
setting procedures are further elaborated in a formula detailed in Schedule 1 of the 1 October 1999
Licence to Supply Electricity for Public Purposes Granted to Guyana Power and Light, Inc.  That
formula is based on a target rate of return, and takes into account such factors as the cost of fuel and
other charges, the exchange rate of the Guyana dolla r, amortization of GP&L debt, etc.  ESRA sets the
                                                     
44 Guyana Power and Light, Inc., (2002), p. 4.
45 Ministry of Finance (2003a), p. 31.WT/TPR/S/122 Trade Policy Review
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rates that were in effect from the date of the agreement through 1 January 2001, and establishes the
procedure by which rates are determined in the subsequent period.  The licence also provides for such
matters as an obligation on GP&L to enter into power-purchase agreements with independent power
producers of alternative sources of energy, such as GUYSUCO and Amaila Falls developers, provided
that such proposals are commercially feasible.
113. The principal primary sources of energy in Guyana are petroleum products (which are all
imported), bagasse, and fuelwood.  In 1999, they accounted for 67%, 26%, and 7% respectively, of the
energy produced.46  In 1999, electricity generation, industry, and mining used 90% of the primary
energy supplied.  Mining and timber enterprises in the country's interior are generally outside of the
national electrical grid, and hence must generate their own electricity.  These include the Linden
Power Company, a private company in Linden that produces about 12 MW from petroleum fuel.There are provisions for GP&L to take over Linden Power Company.  In the Lethem area, electricity
is provided by a Chinese-supported Government project known as Moco-Moco, through a 0.5 MW
hydroelectric plant.  Bagasse is used for the co -generation of steam and electricity in the sugar
industry.  Rice husk is also used by two rice millers for steam and electricity generation.
114. Guyana has not yet developed its potentially significant hydropower potential.  It is estimated
that the economic potential of hydropower is 7,000MW.  The Guyana Natural Resources Agency
(GNRA) has conducted preliminary study of six site s for the development of medium and large-scale
hydroelectric facilities.
47  Developers have shown strong interest in developing the Amaila Falls
Hydroelectric Project (AFHEP) with an installed initial generating capacity of 105 MW (Phase I),
larger than current domestic demand, to be expanded to 165 MW (Phase II).  The feasibility study for
the project has been substantially completed and the developers are working on financing
arrangements.  Phase I is scheduled to be implemented by December 2004.  The project is the largestever in Guyana, with Phase 1 costing US$315 million, including the construction of the 105 MW
power plant at Amaila, 145 miles of transmission lines, and 35 miles of roads.  An additional cost of
US$50 million is estimated to build Phase II.  The project is being developed as a private-sector
venture, without any public funding, and is financed by a consortium of foreign banks and investment
companies.
115. In the 1980s, Guyana considered purchasing power from Venezuela but this prospect is no
longer being pursued.  Prospective developers of a hydroelectric plant at Turtruba in Guyana are
exploring the possibility of exporting power to Brazil.
116. Linden Mining Enterprises provides potable water in Linden.  In most of the rest of the
country, the provider is Guyana Water, Inc. (GWI).  This is a Government-owned, private-managedfirm formed in early 2003 by the merger of the Georgetown Sewerage and Water Company and the
Guyana Water Authority.  The Government signed  a five-year contract under which a firm based in
the United Kingdom will manage the GWI.  GWI's approval is required before a private enterprise
drills a well for water.
117. The NDS proposed the creation of a National Water Commission (NWC) to oversee and
coordinate the activities of all water-related agencies.  Representatives of the main water-users were
expected be on the Commission, which would also be authorized to formulate the mechanisms for the
implementation of this National Water Strategy.
                                                     
46 Government of Guyana (2001b), Chapter 7.
47 Tiboku (Mazaruni Potaro River Basin);  Amaila and Tumatumari (Potaro River Basin);  Kamaria
(Cuyuni River Basin);  Tiger Hill (Demerara River);  and Arisaru (Essequibo River Basin).Guyana WT/TPR/S/122
Page 87
(8) SERVICES
(i) Features
118. Services (not including engineering and construction) account for some 40.2% of Guyana's
GDP in 2003 (Table I.2).  The main subsectors identified in the national economic statistics  are
Government, followed by transport and communications, distribution, and financial services;  the
tourism sector is not separately identified.  Guyana traditionally posts a deficit in trade in non-factorservices.  This deficit was US$23.5 million in 2002.
119. Several services sectors have formal associations in Guyana to promote their interests.  These
include engineering, banking, legal, construction, information technology, domestic air transportation,
travel agency, and real estate sectors.  MOFTIC has sought to advance services trade by promoting the
creation of a new National Coalition of Service Prov iders.  This umbrella organization of private-
sector representatives is intended to identify and represent the interests of all users and exporters of
services.  At present it is working to identify all aspects of Guyana's laws affecting services sectors
that may need to be updated in light of  the country's international commitments.
(ii) Commitments under international agreements
(a) WTO commitments
120. Guyana has made GATS commitments in five sectors (business, communication, financial,
tourism, and transport services) (Table IV.6).  In its horizontal commitments, Guyana left the
movement of natural persons (mode 4) unbound except for market access with respect to measures
relating to senior management personnel and techni cal experts not available in the local labour market,
and for national treatment to those categories of natural persons.  No list of MFN exemptions was
presented.  Guyana did not present offers in the WTO negotiations on telecommunications and financial
services.
(b) Commitments under regional agreements
121. Mode 4 issues are important at the regional level.  Within the CARICOM countries,
restrictions on the extension of work permits remain a significant barrier to trade in services.  Guyana
has made significant progress in removing these restrictions as provided under the Caribbean
Community (Free Entry of Skilled Persons) Act of 1996 (Cap. 93:02).  While foreign nationals whoseek to work in Guyana generally must obtain a work permit from the Ministry of Home Affairs,
CARICOM nationals who are graduates of either the University of the West Indies or the University of
Guyana are exempt from this requirement.
(iii) Financial services
122. Financial services accounted for 3.6% of GDP in 2001.  As of June 2003, the financial sector
comprised six commercial banks, as well as insurance companies, a building society, trust companies,
finance companies, pension schemes, credit union s, bank and non-bank cambios, and private sector
organisations (PSOs) financing small and micro enterprises. A stock exchange was established on 30
June 2003, under the supervision of the Guyana Securities Council.
(a) Banking services123. There are six commercial banks currently operating in Guyana.  Banks were among the
industries targeted for nationalization in the 1980s and the Government became the primary lender.
Nationalized banks included the Royal Bank of Canada, Chase Manhattan, and Barclays Bank.WT/TPR/S/122 Trade Policy Review
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Following privatization, the largest banks in the country are the National Bank of Industry and
Commerce (much of which is owned by the Republic Bank of Trinidad and Tobago) and the Guyana
Bank for Trade and Industry.  Other banks with substantial foreign ownership include the Bank of
Baroda (India), the Citizens Bank (Guyana) Ltd. (J amaica), and the Bank of Nova Scotia (Canada).
The Demerara Bank is partly U.S.-owned.  All the banks offer a full range of banking services.  The
banking business of the Guyana National Co-operative Bank, which was one of the largest three banksin Guyana, was sold to the National Bank of Industry and Commerce Limited in early 2003, and the
banking licence issued to the former was revoked with effect from 15 March 2003.   This public sale
was done to end government participation in the financial sector.  Commercial banks now make up
over 70% of the assets of the financial system.
48
Table IV.6
Summary of Guyana's specific commitments in individual service sectors
Market access National treatment
Mode of supply:
Cross border 1 1
Consumption abroad 2 2
Commercial presence 3 3
Commitments (■ full; ◨ partial; □ none; − not in the Schedule)
Sector-specific Commitments
1.   Business services
A. Professional services
a. Legal services ■■■ ■■ ■
b. Accounting, auditing, and book-keeping services ■■■ ■■ ■
d, e. Engineering and architectural services ■■■ ■■ ■
h. Medical and dental services ■■■ ■■ ■
2.   Communications services
Value-added services
j. On-line information and data base retrieval■■◨■■ ■
7.   Financial services
B. Banking and other financial services (excl. insurance)
a. Acceptance of deposits and other repayable funds from the
public■■■ ■■ ■
b. Lending of all types, incl. inter alia consumer credit,
mortgage credit, factoring and financing of commercialtransactions■■■ ■■◨
A. Insurance services
I. Direct insurance
a. Life, accident, and health insurance services ■■■ ■■ ■
b. Non-life insurance services ■■■ ■■ ■
d. Services auxiliary to insurance (including broking and
agency services)■■■ ■■ ■
9.   Tourism and travel related services
A. Hotels and restaurants □■■ □■ ■
B. Travel agencies and tour operators services ■■■ ■■ ■
11.  Transport services
C. Air transport services
a. Aircraft repair and maintenance services ■■□ ■■ □
c. Computer reservation system ■■■ ■■ ■
F. Road transport services
a. Passenger transportation ■■■ ■■ ■
b. Freight transportation ■■■ ■■ ■
e. Supporting services for road transport services ■■■ ■■ ■
Source : WTO document GATS/SC/37, 15 April 1994;  and WTO Services Database.
                                                     
48 Guyana Office for Investment  (2000), p. 67.Guyana WT/TPR/S/122
Page 89
124. At year-end 2002, the commercial banks of Guyana had assets of G$134.9 billion (about
US$703.6 million).  Of this, 8% represented balances due from foreign banks, loans to non-residents,
or other foreign assets.  The banks' liabilities also totalled G$134.9 billion, of which 3.9% consisted of
balances due to banks abroad or deposits by non-residents.  Of the total liabilities, 16.5% consisted of
capital and reserves.  Only 3.1% of total loans were to non-residents.49
125. The Bank of Guyana has statutory responsibility for authorizing and supervising all licensed
financial institutions in Guyana.  One of the Bank's objectives is to foster sound financial
intermediation.  The Bank of Guyana exercises its supervisory functions under the Bank of Guyana
Act 1998 and the Financial Institutions Act 1995.
126. The Financial Institutions Act (1995) requires that an institution obtain a license from the
Bank of Guyana (Cap. 85:01) to operate in Guyana as a "licensed financial institution" (LFI).  Theapplication fee of G$25,000 must be accompanied by information specified in the law regarding the
applicant (name, address, nationality, etc.), the proposed activity, the articles of incorporation, and so
forth.  The law requires a minimum paid-up capital of G$250 million;  foreign companies that are not
incorporated in Guyana and that  seek a licence to conduct deposit-taking financial activities must have
the overall capital equivalent of at least G$2.5 billion.  The law, together with the Bank of Guyana'sregulations, form the Supervisory Guidelines for fi nancial institutions.  They provide for such matters
as capital adequacy ratios, the categorizing of loan performance, etc.  This 1995 statute supplemented
and modified the Banking Laws Act of 1991 (Cap 85:07).  The Off-Shore Banking Act (Cap. 85:05)
was enacted in 1986, but reportedly has not been applied.
127. The Financial Institutions Act distinguishes between companies that conduct "banking
business" and those that conduct "financial business."  The former category of business is licensed to
accept demand deposits that are repayable in less than 30 days, while the latter may not.  A licensedfinancial institution that is permitted to conduct banking business may also be licensed to engage in
financial business, but the reverse is not normally allowed.
128. A bank or other LFI in Guyana cannot grant secure loans, advances, financial guarantees, or
other extensions of credit and other liabilities in excess of 25% of its capital base, with respect to an
individual, or 40% for borrower groups with inter-dependent incomes.  No shareholder is permitted tohold more than 25% of the shares of any LFI unless authorized by the Bank of Guyana;  the
shareholder must be a person "fit and proper" to conduct financial business within Guyana.
129. Guyana has made GATS commitments on services for (a) the acceptance of deposits and other
repayable funds from the public and (b) lending of all types, including inter alia consumer credit,
mortgage credit, factoring, and financing of comm ercial transactions.  In  both of these subsectors,
Guyana made full commitments in modes 1 and 2.  The only limitation in mode 3 concerns national
treatment commitments for "lending of all types," wh ere Guyana stipulated that "loans to non-residents
need to be approved by the Central Bank of Gu yana."  In mode 4, Guyana made no commitments
"except as indicated in the horizontal section."
(b) Merchant banking
130. The Guyana Bank for Trade & Industry (GBTI) has obtained a merchant banking licence in
Guyana.  Among the bank's functions is to provide advice to corporations.  Other services identified
include private and public sector advisory services, trade and equity financing, leasing, factoring,
mergers, and acquisitions.  This bank has substantial foreign ownership;  it is a U.S.-Guyanese joint
venture.
                                                     
49 Bank of Guyana (2002b).WT/TPR/S/122 Trade Policy Review
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(c) Foreign exchange services
131. The Dealers in Foreign Currency (Licensing) Act provides for the licensing of dealers in this
business (Cap. 87:01).  The Bank of Guyana is th e regulatory agency.  Decisions on the granting of
these licences are to be based upon the applicant' s experience in dealing with foreign currency,
financial resources, and character.  Among the grounds on which a licence may be denied is the
determination that "an adequate number of persons have already been granted licences" in the areawhere the applicant proposes to carry on the busine ss.  About two dozen banks and other firms are
currently licensed to deal in foreign currency.  In 2001, the volume of foreign currency transactions in
Guyana was US$1.8 billion, 96.3% of which was handled by commercial banks.  The U.S. dollar
accounted for 94.2% of the transactions;  the rest were in British pounds, Canadian dollars, or
CARICOM currencies.
50
132. The Foreign Exchange (Miscellaneous Provisions) Act of 1996 prohibits the borrowing of
gold or foreign currency from anyone other than an authorized dealer (Cap. 86:01).  The law generally
requires approval from the Minister of Finance before local businesses may borrow in foreign
currency, foreign-based companies and their subsidiaries may borrow in Guyana, or residents may
operate foreign currency accounts.  The law also requires that any travellers entering or leavingGuyana with more than US$10,000 or its equivalent  in any currency make a declaration to the
Comptroller of Customs.  The Bank of Guyana has guidelines regarding permission for exporters to
maintain and operate foreign currency accounts, and commercial banks are allowed to open such
accounts for non-residents without the prior approval of the Bank.
133. Guyana has made no GATS commitments in foreign exchange services.
(d) Non-bank financial institutions (NBFIs)
134. NBFIs comprise pension schemes, trust companies, a building society, finance companies,
and insurance companies.  They accounted for about 30% of the total assets of the financial system in
2002.
135. The only building society currently operating in Guyana is the New Building Society (NBS);
its major activity is mortgage financing for residential properties.  Traditionally its mortgage rates are
lower than those of other institutions in the financ ial system.  Apart from mortgages, most of the New
Building Society's investments have been in treasury bills and government debentures.  The NBS
accounts for about a third of the share in the total assets of NBFIs.
136. There are three trust companies operating in Guyana:  GNCB Trust Corporation Inc., Trust
Company Guyana Ltd., and Globe Trust and Investme nt Ltd., engaging mainly in the provision of
mortgages and some types of loans and advances.  They accounted for some 11.5% of NBFIs assets in2001.
137. Finance companies also provide loans and mortgages, but may not accept demand deposits
that are repayable in less than 30 days.  There are three institutions classified by the Bank of Guyana
as finance companies:  one stock broker (Beharry Stock Brokers, Ltd.), one finance company
(Laparkan Financial Services, Ltd.), and one investment company (Secure International FinanceCompany Inc.).  These three companies are minor players in the financial market, accounting for just
1.8% of total NBFI assets.
                                                     
50 Bank of Guyana (2002b), p. 18.Guyana WT/TPR/S/122
Page 91
138. Pension schemes accounted for some 20% of NBFI assets in 2001.  Pension plans are subject
to a registration process and must be approved by the Commissioner of Insurance, in accordance with
the requirements established by the Insurance Act of 1998 (Cap. 91:02).  Among the requirements is
that 70% to 80% of the assets must be invested in Guyana.
(e) Private sector organizations (PSOs) and other providers of financial services
139. There are six PSOs offering financial assistance to small and micro enterprises:  the Institute
of Private Enterprise Development (IPED);  the Scotia Enterprise (affiliated to Bank of Nova Scotia);
the Small Business Development Initiative;  the Women's Affairs Bureau;  the Red Thread;  and the
Commonwealth Youth Credit Initiative.
140. PSOs provide financial services that banks usually do not make available.  For example, they
offer credit with little or no collateral;  they link savings with credit provisions;  and provide credit togroups.  Additionally, they offer technical expertise su ch as counselling, training in basic education,
and entrepreneurship.  These agencies also tend to have an interest in small and micro financing by
foreign financial institutions.
141. Credit union funds are supplied through members' deposits and "shares" purchasing.  Credit
unions have a large membership, but play a small role in the financial system largely because lendinglimits are too restrictive, and deposit rates are very low.  In 2001, they accounted for only 0.1% of the
assets of the financial system.
142. Precise data on the amount of transactions in informal financial markets are not available, and
opinions differ on its magnitude.
(f) Insurance services
143. The Insurance Act No. 20 of 1998 (Cap. 91:02B), provides for the regulation of this industry
replacing the Insurance Act (1970).  The authorities note that as of mid 2003 the regulatoryenvironment for the sector is still in a process of development.
144. The law requires insurance companies, brokers, and agents to be registered with the
Commissioner of Insurance, who supervises the industry and reports to the Minister of Finance.  The
law authorizes the Commissioner to delegate some supervision of intermediaries to the Insurance
Association of Guyana.  Only companies or  associations of underwriters may carry on  insurance
business in Guyana.  Also, only companies or partnerships can act as brokers;  these companies may
not carry out any other type of insurance business.
145. Fifteen local companies have applied to offer li fe and/or general insurance, as well as two
foreign companies, from Barbados and the United Kingdom.  The assets of insurance companies were
G$13.6 billion (some US$72.6 million) in 2001;  this represented 24.8% of total NBFI assets.  The lifesegment of the insurance business accounted for 74.8% of the industry's resources.  Life insurance
premiums were G$7.2 billion (US$38 million) in  2001, of which the non-resident component was
57.4%.  Insurance companies' holdings of foreign assets totalled G$6.8 billion (US$36.5 million), and
comprised mainly deposits and foreign securities.
146. Registration is contingent upon criteria established in the law.  Any company may make an
application for registration, including foreign companies.  Companies applying for registration must
make a deposit of G$5 million per class of business (the figure is adjusted for inflation since 2001).  In
the case of general insurance, the deposit must be  equal to 20% of the net premium income of theWT/TPR/S/122 Trade Policy Review
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insurer in that class of insurance (with deductions for re-insurance), or G$5 million per class,
whichever amount is larger.
147. Insurance companies are not precluded from engaging in other financial activities, except as
specified in the Financial Institutions Act, but are re quired by law to keep separate accounts, even for
the different classes of insurance activities in which they engage.  Insurers must conduct an actuarial
investigation of their financial situation every three years and submit the results to the Commissionerof Insurance.
148. A number of investment requirements apply.  Companies are required to establish a statutory
fund equal to their liabilities and contingency reserves, in respect of the policies subscribed in Guyana,
deducting the deposit paid for registration.  Companies carrying out business other than long-term
insurance must keep the statutory fund separate from other activities.  Insurers are required to invest inGuyana and maintain assets there equivalent to 75-85% of their statutory fund.  However, for each
percentage point of the fund invested in stock or debt of Guyanese companies, a percentage point may
be deducted from the 75-85% up to ten percentage points.  To comply with the asset requirement, the
law specifies that an insurance company carrying on long-term insurance business may invest each
year in assets in Guyana an amount not less than 80%  of its premium income in that year in respect of
long-term insurance policies issued in Guyana, before making deduction of fees and other expenses.
Every insurance company carrying on long-term insurance business in Guyana must invest each year
in securities approved by the Commissioner an amount equal to 20% of the increase in that year of its
statutory fund.
149. The Commissioner of Insurance submits to the Minister of Finance an annual report on the
situation of the insurance companies.  The Commissioner may prohibit a registered company from
writing new policies in any class of insurance business if  he is satisfied that it is in the interest of the
policy-holders or prospective policy-holders to do so.  The company must be previously notified and
may appeal the decision.  Disputes and complaints are handled by the Insurance Arbitration Board,
which comprises a representative from the Commissioner's office, a representative of the Insurance
Association of Guyana, and a representative of the insurance brokers.  Decisions of the Board may be
appealed in court, up to the High Court.
150. Guyana made GATS commitments in three insurance subsectors:  life, accident, and health
insurance;  non-life insurance;  and services auxi liary to insurance (including broking and agency
services).  The commitments were identical in the th ree subsectors:  they have no limitations for modes
1, 2, and 3, while for mode 4 Guyana has made no commitments "except as indicated in [the] horizontal
section."
(g) Securities and other financial services
151. The Securities Industry Act (1998) regulates the activities of the securities market
(Cap. 73:04).  The Act mandates the creation of a Securities Council, which led to the establishment
of a Securities Commission;  a Chief Executive Officer to the Commission was appointed in early
2003.  The law defines the membership and powers of the Council, provides for self-regulatoryorganizations, and sets rules for the registration of market participants, the conduct of market
operations, and enforcement provisions.  With effect from 30 June 2003, the Guyana Association of
Securities Companies and Intermediaries (GASCI) was registered by the Guyana Securities Council as
a self-regulatory organization to function in the capacity of a stock exchange and an association of
securities companies and intermediaries.  GASCI opened its doors for trading on 30 June 2003, with
the first trade being made on the exchange on 8 July 2003.Guyana WT/TPR/S/122
Page 93
152. Guyana has made no GATS commitments in securities and other financial services.
(iv) Tourism
(a) Market developments
153. The tourism industry in Guyana has not yet been highly developed, and contributes much less
to the national economy than the sector does in many other Caribbean countries.  As of 2002, Guyana
recorded 104,300 visitors, a notable increase over the 65,600 in 1998 (Table I.3).  Detailed data on thevalue of tourism for Guyana are not available.  Exit surveys of visitors were suspended in 1999 in
order to divert resources to the conduct of the national census.  These surveys recommenced in
May 2003;  the current process of company registration with the new Tourism Authority will provide
further data on the composition and size of this sector.  The lower reliance on tourism has meant that
Guyana's economy was hurt less by the recent decline in leisure travel than were other Caribbeandestinations.
154. The tourism industry of Guyana hopes to capitalize on the fact that it is the only English-
speaking country on the South American continent.  Unlike many other destinations in the Caribbean,
Guyana does not have expansive stretches of sandy beach or ports that are suitable for frequent
landings by large cruise ships.  It must therefore rely upon tourists who arrive by air to see attractionsin the interior of the country, either natural (for example, Kaieteur Falls and the associated national
park) or man-made (for example, the historical architecture of Georgetown).  Among the niches in
which Guyana hopes to compete are the related fields of nature and adventure tourism, eco-tourism,
and cultural and heritage tourism, as well as the usual array of business meetings and entertainment.
155. The industry has been the subject of several recent studies and development projects,
including the release of a policy framework in 2001.  This plan highlighted the country's advantages,
but also observed that the single most important co nstraint to tourism growth has been that tourism
has not been recognized as a priority economic sector for the country.
51  Since 2000, the annual budget
speech has identified this as a priority sector for the country.
(b) Regulations and WTO commitments
156. The Guyana Tourism Authority Act of 2002 (Cap. 91:12) regulates activities in the sector.
The Act established a Tourism Authority, a semi-autonomous agency linked to the Ministry ofTourism, Industry, and Commerce.  Under the law, tourism operations must be licensed by the
Tourism Authority.  The Tourism Authority is also charged with developing and enforcing standards
for the industry.  The law does not appear to draw any distinctions between citizens and foreigners in
the issuance of licences, nor does it explicitly pr ovide for the conditioning of licenses upon factors
such as the employment of Guyanese.
157. In the 2002 Budget Speech the Government announced plans to enhance the contribution of
the tourism sector through, inter alia, the abolition of the 10% room tax for tourism facilities that are
deemed to be resorts.
52  The Government of Guyana is encouraging an increase in the number of hotel
rooms and improvement in existing plant and other facilities in the tourism sector.  To facilitate this
growth, the government has made available a package of incentives.  This comprises mainly duty-freeand consumption tax concessions for basic furnishings, plant, equipment, and building materials.  In
order to qualify for duty and consumption tax exemption an applicant must provide, inter alia, a
project profile or business plan and an environmental impact assessment.  Duty-free concessions will
                                                     
51 Nokta (2001), p. 4.
52  Ministry of Finance (2002a), p. 50.WT/TPR/S/122 Trade Policy Review
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be limited to 25% of the value of the investment for refurbishing, and 50% of the value of investment
for new facilities or expansion.
158. Guyana made GATS commitments in two subsecto rs related to tourism.  For hotels and
restaurants modes 2 and 3 are bound with no restrictions, but mode 1 is unbound due to the lack of
technical feasibility, and mode 4 is unbound except as indicated in the horizontal secti on.  For travel
agencies and tour operator services, Guyana bound both market access and national treatment in modes
1, 2, and 3, leaving mode 4 unbound.
(v) Transport services
(a) Maritime and other water transport services
159. The Minister of Transport and Hydraulics, in the Ministry of Public Works and
Communications, is responsible for maritime transport policy.  The Maritime AdministrationDepartment is responsible for safety in coastal waters and is also the exclusive provider of pilotage
services.  The Department also regulates non-maritime water transportation service, which are of
particular importance for Guyana.  The Ports and Harbours Department  is responsible for harbours
and ports, and operates river ferries, and a network of stellings (ferry landings) and wharves.
160. The Guyana Shipping Act (1998) establishes the legal framework for maritime services in
Guyana (Cap. 49:01).  Among the many topics dealt with in this statute are the registration and
licensing of ships, flagging, the manning of ships, the welfare of seamen, navigation and safety,
regulation of cargo, wrecks and salvage, and legal proceedings.  Under Section 10 of the Act only
Guyana ships may trade exclusively between Guya na ports;  this rule, however, is subject to
regulations, exemptions, or "any bilateral or multilateral treaty or agreement."
161. The registration of ships in Guyana is, in principle, limited to nationals of Guyana or of other
CARICOM countries, or to corporate bodies established in Guyana and having their principal place ofbusiness in the country.  The Government of Guyana continues to own the National Shipping
Company, and there are currently no plans to privatize this enterprise.
162. The flagging of vessels affects the fees and taxes to which they are subject.  On the one hand,
foreign-flag vessels have preferential access to fu el:  they may purchase fuel duty-free, while the fuel
purchased by Guyana-flagged vessels will include the consumption tax on fuel.  On the other hand,foreign-flag vessels are subject to port fees, most of which are not applied to Guyana-flag vessels.
163. Guyana has made no GATS commitments on maritime transport services.  Guyana
participates in a relatively large number of maritime conferences administered by the International
Maritime Organization.
53  There is also a Caribbean Memorandum of Understanding on Port State
Control, which came into being in 1996, dealing with the inspection of ships to ensure their
compliance with international safety standards.
164. The two main ports are in Georgetown and New Amsterdam;  much of the shipping in
Guyana is on the major rivers that fragment the country.   Guyana's shipping costs are relatively high.
This is a particular problem for the bauxite industry.  The heavy deposits of silt in the Demerara River
create narrow channels, necessitating the use of smaller, less efficient ore carriers.54  Shortages of
suitable barges create another bottleneck.  These factors contribute to the high cost of shipping bauxite
from Guyana to the United States, of US$10.12 per tonne compared with US$2.52 per tonne from
                                                     
53 IMO online information.  Available at:  http://www.imo.org/home.asp
54 Bernard (1999), p. 44Guyana WT/TPR/S/122
Page 95
Jamaica.  The average cost of shipping this product to the U.S. market from all sources is US$6.49 per
tonne.55
165. Although the management of ports is in the hands of the State, operational services (except for
pilotage) may be provided by private companies.  Several such companies are currently operational,
most of them are foreign.
(b) Air transport services
166. The Minister of Transport and Hydraulics, in the Ministry of Public Works and
Communications, is responsible for civil aviation policy.  The Civil Aviation Act (2000) regulates this
sector (Cap. 53:01).  The Act created the Civil Aviation Authority, which is responsible for advising
the minister and providing air navigation, air-traffic, and safety services, including the registration ofaircraft, and for the supervision of all aerodromes.  The Authority also sets the fees and charges of
airports and other segments of the industry, whic h are subject to approval by the minister.  The
Authority is responsible for air transport-related competition policy.
167. The Government has set up an air-transport reform programme, partly funded by a loan from
the Inter-American Development Bank, to provide assistance for reform of the entire aviation sector.
168. Guyana is among the 188 contracting states of the International Civil Aviation Organization
(ICAO).  Guyana and the other South American ICAO members are aiming to put in place, by 2007, a
new system of communication, navigation, surveillan ce, and air traffic management.  Guyana is a
party to the Multilateral Air Transport Agreement of CARICOM.  Discussions are currently being
held with the Association of Caribbean States for another air transport agreement for the freemovement of airlines.
169. The two major airfields in Guyana are the Cheddi Jagan International Airport at Timehri
(40 kilometres outside Georgetown) and the Ogle Municipal Aerodrome on the East Coast of
Demerara (8 kilometres outside Georgetown).  The Cheddi Jagan International Airport is administered
by the Cheddi Jagan International Airport Corporation, created by Order No. 20 of 2001 under the
Public Corporation Act.  Under the Air Transport Reform Project, G$798 million has been allocated in
the 2003 budget to commence work to improve the condition of the Cheddi Jagan InternationalAirport.  The Ogle airport is used primarily for dom estic flights.  The Government has privatized the
Ogle airport through a lease agreement to Ogle Airport Incorporated.  This entity is owned by a
consortium of the businesses that operate out of th e airport.  The businesses are negotiating with the
Government for various forms of tax holiday or other support.  It is the intention of the Government to
make Ogle a hub for regional connections, taking advantage of Guyana's status as host country for theCARICOM headquarters.  Another G$62 million is scheduled to be spent on improving coastal and
hinterland airstrips, of which there are more than 100.
170. Most international air service to Guyana is operated by carriers that are either national or
regional (e.g. BWIA International Airways and Suriname Airways).  Universal Airlines is a quasi-
national carrier, insofar as its principal place of business is Guyana and its principal ownership isGuyanese-American.  Universal has applied for service to Brazil, and flies to North America.  North
American Airlines is U.S.-owned and based and has weekly service to Guyana.  None of the larger
North American or European carriers have regular service to Guyana.  About half a dozen local
commercial operators service the hinterland, and GUYSUCO has a small fleet of its own.  The
Guyana Airways Corporation once offered both international and domestic service, but it failed in1997 following privatization.  Many travellers to and from Guyana, whether from neighbouring or
                                                     
55 Calculated from 2001  data on the DataWeb of the U.S. International Trade Commission.WT/TPR/S/122 Trade Policy Review
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distant countries, must make connections through regional hubs such as Barbados or Trinidad.  While
a round-trip, economy-class ticket to Georgetown from North America on a small carrier that flies
directly may cost around US$500, a flight that involves connections with one of the larger
international carriers will typically cost more than US$1,000.  Flights within the country are also
relatively expensive:  a round-trip ticket betwee n Georgetown and Lethem costs about US$150.  It has
been noted that these expenses constitute an impe diment to the development of the tourism sector,
increase costs for businesses such as mining, and hinder agricultural activities.56
171. Guyana made GATS commitments in two subsectors related to air transport services.  For
aircraft repair and maintenance services, Guya na bound, without limitations, market access and national
treatment for modes 1 and 2, but left modes 3 and 4 unbound.  For computer reservation system services,
Guyana made full commitments in modes 1, 2, and 3.
(c) Ground transport services
172. Guyana has some 2,347 kilometres of road networks.57  Ground transportation is expected to
become a more significant contributor to the national economy as a result of the construction of a road
linking Guyana with the Brazilian state of Roraima.  It is anticipated that the new link will expand
trade and other exchanges between Guyana and the largest economy in South America.  Guyana has aroad link to Suriname with a ferry across the Corentyne River.
173. Guyana made GATS commitments in three subsectors related to ground transport services:
passenger transportation, freight transportation, and suppo rting services for road transport services.  The
commitments were identical in the three subsecto rs.  They are bound with no limitations for modes 1, 2,
and 3, while mode 4 Guyana is unbound, except as indicated in the horizontal section.
(vi) Telecommunications
(a) Features
174. In June 1990, the Government privatized the state-owned Guyana Telecommunications
Corporation.  Pursuant to that privatization, a new company called Guyana Telephone and Telegraph
Co. Ltd. (GT&T) was formed.  GT&T is still 80% owned by Atlantic Tele-N etwork Inc. (ATN) and
20% owned by the Government of Guyana.  By its operating licence issued on 19 December 1990
under the Telecommunications Act, 1990 (No. 27 of 1990), GT&T was granted an exclusive licencewith respect to the provision of public telephone and national and international voice and data
transmission services for a period of 20 years from the date of grant of its licence, with an option to
renew this licence on an exclusive basis for a further period of 20 years.
175. With assistance from the Inter-American Development Bank (IADB), the Government has
embarked on a Modernization of the Telecommunications Sector Project aimed at establishing a
competitive telecommunications sector.  In the view of the authorities, this requires an early end to the
GT&T monopoly.  To pursue this objective, negotiations between the Government and ATN/GT&T
commenced in February 2002 but were stalled in June of that year due to a lawsuit instituted by ATN
against Guyana, the IADB, and the United States Government in Federal District Court ofWashington, D.C.  This lawsuit challenged the Government's decision to pursue another IADB loan
for development of the information and communicat ions technology sector and was grounded in some
of the issues that were being negotiated with the Government.  ATN's lawsuit was dismissed in
                                                     
56 Guyana Review,  "Trying Times for Flying," Volume 10, Nos. 109 and 110, January and
February 2002.
57 Guyana Office for Investment  (2000), p. 13.Guyana WT/TPR/S/122
Page 97
March 2003, and the period for appeal of the dismissal has expired.  ATN/GT&T and the Government
have agreed to resume their negotiations.
176. Provision of cellular service is open to competition.  However, operators other than GT&T are
required to interconnect with GT&T with respect to international service.  GT&T is the main operator
in this area, with a subscriber base of over 100,000.  This company operates a TDMA service in the800 MHz range.  A much smaller company, Caribbean Telecommunications Limited (CTL), is
operating in Berbice, with a small subscriber base.  CTL commenced operation in 1997 and offers
analogue service in the 800 MHZ range.  Two other cellular service licences have been issued:
Caribbean Wireless Telecom received a licence in 2000 for the PCS band C, but has not yet
commenced operations;  Cel*Star Guyana Inc. was licensed in 2001 to provide a GSM 900 MHzservice, and is expected to commence service by September or October of 2003.
177. The telecommunications sector could play a larg er role in the country in the future.  The
National Development Strategy  noted that through electronic commerce Guyana "could be in a
position to provide or receive, for example, a range of legal, accounting, medical, educational,financial, data processing, retailing, and tourism services."
58  Achievement of that objective will
depend, in part, upon the improvement of Guyana's connections to the Internet, which in parts of
Georgetown is still limited to 28K bandwidth.  As of early 2003, DSL service was being introduced.
(b) Regulation
178. Many provisions in the Post and Telegraph Ac t (1894)(Cap. 47:01) are now superseded by the
Telecommunications Act (1990), which provides for the regulation of both telecommunications andcable programmes (Cap. 47:02).  The law requires persons to be licensed before providing
telecommunications or cable programming services, and establishes the procedures for the granting of
such licences.  The law does not appear to dist inguish between domestic and foreign applicants.
There are provisions that allow the granting of exclusive licences.  The Minister responsible for
telecommunications (currently the Prime Minister) issues licences under the Act.  The term of each
licence is determined individually and is included in  the licence.  The law authorizes the promulgation
of a telecommunications code, but this has not yet been issued.
179. The Public Utilities Commission is responsible for regulating telecommunications operators
with respect to tariffs and to the quality of service offered.  The 1990 Act created the post of Directorof Telecommunications, with a mandate to regulate technical aspects of the operations of licensees
and to develop a telecommunications code.  This post was never filled due to concerns regarding the
overlap of regulatory powers and the resulting unc ertainties regarding the roles, functions, and
procedures of the various telecommunications regulatory authorities.  Numbering and spectrum
management are the responsibility of the National Frequency Management Unit (NFMU).
180. In 2001, pursuant to the telecommunications project,  the Government of Guyana issued a
"consultation paper" on reform in the telecommunications sector.  Although the paper does not
represent government policy, it advanced an array of issues for consideration, presenting a pro-
competitive vision including market-based reforms to promote the supply of sufficienttelecommunications services to meet real economic demand.
59
181. Like other services, telecommunications is subject to a relatively high tax rate.  While the
corporate income tax rate for manufactures is 35%, for telecommunications and other services the rate
is 45%.  The 10% consumption tax on overseas telephone bills accounts for 0.5% of governmentrevenue (see Table 1.5).  In early 2003, the Government announced that effective 1 April 2003 there
                                                     
58 Government of Guyana (2001b) p. 65.
59 Office of the Prime Minister and Minister of Public Works and Communications (2001) p. 2.WT/TPR/S/122 Trade Policy Review
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will be a tax of 10% on all domestic telephone calls, regardless of whether such calls originate from a
landline, cellular telephone, or fax machine.60
(c) WTO commitments
182. Guyana made GATS commitments in on-line information and data base retrieval.  In both
market access and national treatment, Guyana made full commitments for modes 1 and 2.  With
respect to mode 3, Guyana specified in its market access commitments that public telecommunication
transport networks and services were being provided by a monopoly supplier operating under a 20-yearlicence with an option to renew for a further 20-year period.  Guyana made full commitments for
national treatment in mode 3.  As in all other sectors, Guyana made no commitments in mode 4 except
as indicated in the  horizontal section.  Guyana has not yet adopted the WTO telecommunications
reference paper.
                                                     
60 Ministry of Finance (2003a), p. 34.Guyana WT/TPR/S/122
Page 99
REFERENCES
Bank of Guyana (2002a),  "Functions, Poli cy Implementation and Bank Activities",   Annual Report
and Financial Statement of Accounts 2001, Georgetown.
Bank of Guyana (2002b), Banking System Statistical Abstract, Georgetown.
Bernard, Deryck M., (1999), A New Geography of Guyana,  London.
Caribbean Community Secretariat (2000), Caribbean Trade and Investment Report 2000:  Dynamic
Interface of Regionalism and Globalization  Kingston.
CARICOM (2003), Communiqué from the 14th Inter-Sessional Meeting of the Conference of Heads
of Government of the Caribbean Community, Press Release 36/2003 [Online].  Available at:
http://www.caricom. org/expframes2.htm [16 February 2003].
Castillo, Gabriel (2001), Economic Situation and Prospects:  Guyana, Washington, D.C.:  Inter-
American Development Bank.
Faal, Ebrima (2003), Currency Demand, the Underground Economy, and Tax Evasion:  The Case of
Guyana IMF Working Paper,WP/03/7, IMF, Washington, D.C.
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