The Important role and Magnitude of selective intervention in Guyana from

1992-2010.
Manufacturing define in the Guyanas national development strategy as the
application of technical knowledge and processing equipment, in alliance
with capital and labor, to the transformation of locally available or imported
raw materials and/or intermediate inputs, into final or intermediate
products.
Guyana Manufacturing sector contributes a very small amount to GDP. Given
our large volume and quality of natural resource and countrys geographical
location, you would expect a large manufacturing and highly industrial and
commercial sector with a significant chunk added to GDP. However it is not
so and as we allude earlier; the sector is not doing enough to operate at
potential. Majority of the manufacturing being done in the 90s were of
agricultural processing (sugar, rice , coconut, etc.), minerals and forestry
products. Small amounts of garments, pharmaceutical and ceramics which
were mainly stated own enterprises. From 2000 to 2010 a decrease in the
production of these products were observed. Increases in garments and new
industries such as paint showed potential until a late 2000s where decreases
where observe once more. Pharmaceutical being the most potential for
growth in these years.
Over the period of 1992 to 2010 there has been a steady decrease in the
manufacturing contribution to GDP. 1992 to 1997 being 14.3 to 11.4
following a steeper decrease to 8.2 in 2000. A constant decreasing to 7 in
2007 and 2010 6.9.
The manufacturing and agro-processing of rice and sugar has undoubtedly
been the highest contributor to manufacturing sector throughout 1992 to
2010 period. Timber production which have not been included by the Bank of
Guyana indicators of manufacturing would add to the increase in the figures
since this industry had thrive from late 90s to 2007,until the U.S and EU
crises hit, where many of the wood furniture produce lost its markets and
local companies were mostly export base. However most manufactured
products are produce for local consumption. The manufactured goods
exported are mostly exported to the U.S, EU and Canada where Guyana
holds preferential market access. It also has special advantages of CARICOM
member and receives duty-free or reduced tax to their markets.
Garments from 1990 to 2002, shown the highest growth in manufacturing
and export of the products, from an export value of U.S 2.2 million to U.S

10.8 M respectively. In2000s period, it saw an all time high of 289.8 but
decrease in production from 2005 to 2010 but has been one of the most
successful industries in Guyana. The main reason for stems from duty free
access it receives from the U.S from the CBI and North American Free trade
Agreement. The Garment production in Guyana however has been able to
compete with Asians garment firms and has been known to provide a high
quality. Guyana incentive regime supports the industry with a rebate on
export profits and duty free on importation of inputs.
The wooden furniture industry has mainly provided the local with the
products but some companies were able to export to EU and U.S mainly.
However the problems arise in exportation in the skills shortage, lack of
financing and restricting markets.
Some enterprises in the manufacturing sector represent intra-CARICOM
investments. Examples include glass bottles produced by ANSA 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.

The Guyana government invests in industrial estates in promotion the

manufacturing and agri processing in Guyana. There are currently 4
industrial estates in Guyana; the Eccles industrial estate, Coldingen,
Belvedere and Lethem industrial estate. Annual Rent of
G$1.00/US$.005/sq. foot

Concessions on building materials, vehicles, plant and machinery

The investor is responsible for reimbursing 25 percent of the costs of

basic infrastructure, currently ranging between G$153/US$0.76 to
G$210/US$1.06 per sq. foot.

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 Commercial Investment Ltd. (NICIL)
hold the title to all industrial 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 applications 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.
Caricom member states rules; Guyana grants full tariff exemptions to 78
products in the list of conditional duty exemptions. Partial exemptions and
both consumption and duty exemptions on plant equipments and vehicles.,
exemption from duty and consumption tax on packaging equipment
reguistered under the consumption Tax Act. duty and consumption tax rate
of zero on most raw materials for companies registered under the
Consumption Tax Act; and waiver of 30% consumption tax on power
generators

Manufacturing
Index of manufacturing output, 1990-00
(1972 = 100)
Unit 1990
Beer & stout

litre

Margarine

kg.

142.
0
38.4

Flour

tonne

97.7

Stockfeeds
Biscuits
Garments
Aerated
beverages
Rum

kg.
kg.
dozen
litre

36.7
48.3
14.2
9.3

litre

92.6

Edible oil
Soap
Cigarettes

kg.
tonne
kg.

0.04
23.8
54.0

1995

1997

1998

1999

2000

125.
3
89.6
111.
8
50.2
86.4
97.3
24.7

167.
1
128.
0
102.
9
81.7
62.4
80.9
26.3

169.
9
125.
7
96.4

171.
7
139.
2
107.
0
96.3
69.0
67.5
54.4

156.
7
133.
5
108.
8
93.9
65.0
51.1
49.6

114.
5
49.1
12.4
69.6

118.
3
24.1
12.8
50.4

108.
5
36.7
9.7
0.0

72.1

48.2

44.6
14.2
0.0

26.7
6.5
0.0

79.2
65.5
76.7
26.1

Matches
All
manufacturing

Unit 1990
gross
70.8
boxes
75.0

1995
16.8

1997
0.0

1998
0.0

1999
0.0

2000
0.0

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.
.

Guyana is lacking of/ Constrains

Total demand for electricity in Guyana is about 175 MW. The principal public
supplier, Guyana Power & Light, Inc., 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.
The manufacturing sector demands a large amount of electricity for
production and with high rates and low supply of electricity pose the risk
their failure and bars away investments into the sector.
Basic infrastructures inhabit problems of startup and consistent
manufacturing production. For success in industrial estate and export
marketing zones, location is important factor. Availability of either laborer,
markets, material or physical infrastructure such as access to transportation
and transportation facilities, power, water and communication are
important. Even though there are industrial estates, the absence of these
factors in the Coldingen estate, which manufactures have avoided the
estate? The cost of transportation and electricity doubled compared to St.
Lucia, Jamaica and Grenada.
Economies of scale do not kick in from the domestic market size. Low
population and thus low consumption of goods do not allow companies to
expand to reap the benefits of large production at low costs which makes
them incapable of competing on world market prices. Since low protection
from foreign products which are initially cheaper penetrates the market, it
stifles the local manufacturers the chance expand without a higher risk of
surviving.

Export zones are yet to be established. Mainly from the inability of the
government to control the factors already existing to the industrial estates
and long term solution fix of the factors.
17.IV.1.I The creation of two export processing zones, one in Demerara and
the other in Berbice, is one of the foundations of this National Development
Strategy as regards the promotion of the manufacturing sector. It is essential
that the EPZs be located within close reach of a deepwater harbour.
Accordingly, the area around the improved port facility in Berbice
recommends itself for this purpose. However another will be established in
Demerara, once the deep water harbour facilities are created there. This
Demerara harbour EPZ appears to be essential if the increased export and
import traffic, that is envisaged through the establishment of the road to
Brazil, materialises. The harbour in the Berbice River will be deepened,
principally by dredging the channel, until the goal of permitting ships of
60,000 dwt to pass easily is attained.
17.IV.1.2 Concomitant improvements in the unloading and warehousing
facilities will be pursued in order to be competitive with other harbours in the
region.
Competitiveness
17.IV.1.3 These policies are presented elsewhere in the National
Development Strategy. They are of the highest importance, if the
manufacturing sector is to be made able to prosper in the future. Some of
the most important of the policies include labour force training, improved
mechanisms for industrial relations, a more uniform and liberal tax regime,
and the maintenance of a stable exchange rate over time. It is worth
reiterating that, at the moment, the manufacturing sector in Guyana is at a
competitive disadvantage vis-a-vis other countries in the region in these four
policy areas, and that this disadvantage offsets a significant portion of the
cost advantage which Guyana obtains from its relatively low-cost labour.
17.IV.1.4 The corporate taxes on manufacturing enterprises will be further
reduced in order to widen the existing differential between the
manufacturing and commercial sectors, thus encouraging more investment
in manufacturing.
17.IV.1.5 Fiscal incentives for value-added export products will be put in
place by way of an export allowance.

17.IV.1.6 Investors will be encouraged, through a package of incentives, to

locate their manufacturing enterprises in certain areas of Guyana, (for
example, the Intermediate and Rupununi Savannas; and Regions 1, 2,7, 8, 9
and 10), in order to place industries closer to the raw materials wherever
possible, to attain an equitable distribution of economic activity, and to
occupy our hinterland.
17.IV.1.7 Investors will be encouraged to establish townships within these
areas, to facilitate the recruitment of personnel and to provide amenities to
workers. These matters are discussed in the Chapters on land and housing.
17.IV.1.8 For a wide range of machinery and equipment the duty and
consumption tax rates will be zero.
17.IV.1.9 The duty and consumption tax rates will also be zero on most raw
materials imported by manufacturers.
17.IV.1.10 There will be accelerated allowances for capital expenditure,
depending on the rate of expenditure incurred.
Institutional Aspects of the Private Sector and Business Ethics
17.IV.1.11 A Task Force will be established to focus on Smart Partnerships, a
new framework for encouraging businesses. Such an initiative would
encourage community members to work together. International donors may
be willing to support an amplified programme of this nature.
17.IV.1.12 A Joint Action Plan will be developed by Private Sector
entrepreneurs and Public Sector support agencies to formulate a structure of
responsibilities based upon their institutional capabilities. The Action Plan will
focus on the Effective Transformation of enterprises and will contain
measures to drive value added changes into the enterprise, and increase
productivity and efficiency in order to strengthen export led growth.
Regulatory Arrangements
17.IV.1.13 Regulatory mechanisms will be rationalised and intensified in
order to standardise and regulate various aspects of commerce and
production. These will assist in the elimination of malpractices such as
importing expired items and relabelling them. Regulatory batch testing by

the FADA will be institutionalised especially in food and food related products
including fertilisers, pesticides, insecticides etc.
Industry and the Amerindian Community
17.IV.1.14 Too often in discussions of industrial policy little or no
consideration has been given to the possible role of the hinterland
communities, including the Amerindians. A more balanced regional
development, wherever it makes financial sense, would have the advantage
of generating more stable employment and lowering the incidence of poverty
in the hinterland. Such development will be based on small-scale
manufacturing and agro-processing, and specialised developments such as
the proposed regional gold refineries. In this respect, without doubt the
completion of the all-weather road to Lethem and the lifting of restrictions on
private air services will be essential ingredients of the policy. The potential of
the Rupununi, especially in vegetables and livestock products, will be
integrated into the rest of the economy, as well as that of other hinterland
areas that are endowed with deposits of semi-precious stones and other
resources.
Policies for Selected Subsectors
17.IV.1.15 The GGMC and GGDMA will rehabilitate the lapidary operations,
initially as a pilot project, to demonstrate their possible commercial viability.
Gold and diamonds which are used locally, specifically for the manufacture of
jewellery for the domestic market and for informal export will be supported
by the following strategy: it will seek (a) to infuse design expertise and stateof-the-art technologies, into the industry, and will train craftsmen and
upgrade management in order to reduce unit costs and to break into the
higher value market niches and (b) transform the informal into formal
exports and expand marketing opportunities.
17.IV.1.16 Again the GGMC and GGDMA will, with the existing manufacturers
and distributors and other established parties, detail an operational strategy
that would enable the country to capture an increasingly larger stream of the
potential benefits which the raw materials in question are capable of offering
by way of manufacturing activities.
17.IV.1.17 Government will divest itself of the provision of abattoir
services and have them transferred to the private sector on strict
performance conditions while strengthening the capacity of the

municipal agencies to monitor compliance with tariffs and sanitary

standards.
Some Investment Opportunities
17.IV.1.18 Manufacture of high quality wooden furniture in both finished and
knock-down forms.
17.IV.1.19 Manufacture of fitted kitchen furniture.
17.IV.1.20 Manufacture of furniture made from lianes (nibi and kufi)
17.IV.1.21 Manufacture of standard sized doors, windows, panels (groove &
tongue), and other household fittings.
17.IV.1.22 Manufacture of plywood and veneers.
17.IV.1.23 Manufacture of particleboard
17.IV.1.24 Manufacture of wooden garden furniture.
17.IV.1.25 Manufacture of prefabricated wooden houses.
17.IV.1.26 Manufacture of parquet material and floor tiles.
17.IV.1.27 Manufacture of an assortment of wooden items: toys, coat
hangers, clothes pins, walking sticks, wooden brushes, etc.
17.IV.1.28 Processing, canning and bottling of agricultural produce.
17.IV.1.29 Manufacture of chemical products (such as fertilizers, insecticides,
herbicides for agricultural production and for use in processing and
preservation).
17.IV.1.30 Manufacturing of packaging materials and containers for transport
of finished products.
17.IV.1.31 Manufacture of jewellery and ornaments based on gold, diamond
and semi-precious stones.
17.IV.1.32 Manufacture of leather products and souvenirs 3.5.6 Ceramics and
Non-Metallic Minerals.

17.IV.1.33 Manufacture of articles based on clay, kaolin and silica sand.

17.IV.1.34 Manufacture of garments and textiles for local and export markets
(mainly U.S.A. and Canada). This sub-sector is a very dynamic one with over
80% of the companies in the industry being export oriented.
17.IV.1.35 Production of building materials such as stone, cement, clay
blocks, tiles.
17.IV.1.36 Manufacture of glass.