Guyana - Country assistance strategy

Although an overview of the last decade shows significant gains in economic performance, by the late 1990s, such gains from economic stabilization, and the first generation of structural reforms in Guyana had been exhausted. In parallel, a series of domestic and external shocks, political uncertainty, social unrest, and declining commodity prices impacted heavily on the country. Yet, Guyana, should be on the path to economic, and investment growth, owing to its natural resources, proximity to North America, and benign climate, a potential however, the country has yet to realize. The Government recently completed a full Poverty Reduction Strategy Paper (PRSP), which sets a coherent agenda for poverty reduction. This Country Assistance Strategy (CAS) draws on the PRSP consultations, and process, which combined, yield a strategy whose main approach is to focus Bank support on the implementation of the policy reform agenda set in the PRSP, and on helping the authorities bring increased, coherence to the overall donor effort. This will involve a fundamental shift from investment lending, to a program of Poverty Reduction Support Credits (PRSCs), as the principal lending vehicle. This CAS covers a three-year period, with a series of PRSCs, supported by a Technical Assistance (TA) project to help implement PRSC reforms. As well, economic and sector work will help refine the policy agenda, and monitor the impact of the PRSP. The low case assistance program, comprises a core set of policy reforms, in the areas of financial management, procurement, sugar, mining and forestry, a sine qua non for going ahead with PRSCs. Risks include political instability, fiduciary risks, implementation capacity, partnership risks, and fiscal discipline. However, the Bank would defer new lending as outlined in the low case scenario, continuing its reform dialogue with the Government, and, the macroeconomic management trigger for the low case scenario, will also ensure that resources are not directed to increasing government current consumption.