Guyana shows significant growth in productive sectors
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| Published on Saturday, June 9, 2007 |
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GEORGETOWN, Guyana (GIS): Growth in the productive sectors last year was significant when compared to 2005 while mining and quarrying was the only sub-sector estimated to have registered a decline. This is according to the 2006 Annual Economic Review of the Caribbean Development Bank (CDB).
The Review stated that real GDP growth was estimated at 4.7% in 2006 compared with revised growth of -1.9% in 2005. The turn-around in the performance was credited to both the agriculture and non-agriculture sectors rebounding.
In the Sugar sector, the production grew by 5.5 percent to 259,588 tonnes last year as compared to 246,050 tonnes in 2005. This was due to severe flooding at the estates. However, the Review stated that this was still below the five-year production average of 297,858 tonnes as well as the record high of 331,067 tonnes produced in 2002.
“This notwithstanding, the ongoing modernisation project in the sector led to higher levels of mechanisation with an associated reduction in average production cost. In many respects, 2006 can also be considered a watershed year for sugar as it marked the commencement of the new price structure governing the EU sugar regime,” the Review noted.
The Review further explained that exports to that crucially important market were subjected to the first price cut of 5% from July 1, 2006. This reduction is expected to be applied until October 2008 when an additional 20% reduction will be in force.
It was stated that a stronger output performance was thwarted by above average rainfall levels which adversely affected both planting and reaping conditions, and also served to reduce the sucrose content in harvested canes thereby limiting sugar yields.
Rice production recorded a growth of 12.4 percent when compared with a 14.1 percent contraction in 2005. Production in 2006 was recorded at 307,041 tonnes, an increase from 277,531 tonnes in 2005.
This was due to more favourable weather conditions in addition to improvements in husbandry practices, seed quality, and better drainage and irrigation.
“The improved performance was also buttressed by greater public sector support over the review period particularly through the ongoing implementation of the EU-funded rice competitiveness project as well as the agricultural support services project. Among other things, the interventions were designed to enhance production and boost productivity by increasing research and extension services, and infrastructure development, and by providing farmers improved access to credit,” the Review stated.
The turn-around in the sector was also evident in rice exports as buoyant prices and further market penetration particularly in Haiti, led to a 25.8% increase in export volume. The robust export growth was supported by strong demand in the European market following the mid-year ban on European imports of genetically engineered rice products, which affected supplies from the US.
The Review stated, “Output performance in the mining and quarrying sub-sector continued to be adversely affected by structural changes ongoing in the sector, involving the closure of large operations. Output of gold and bauxite continued to contract.”
The closure of the Omai goldmine in the second half of 2005, contributed significantly to the drop in gold production which contracted by 25.3% to 200,000 ounces in 2006, compared with 267,556 ounces in 2005. This primarily reflected the past dominance of the Omai operation.
However, declarations from small and medium-sized operators over the same period grew by some 23.1% as record high gold prices served to sustain significant investment in the sector.
In addition, two new medium- to large-scale exploratory operations which commenced during the year served to boost expectations of higher production levels in the future. Diamond declarations declined by 7.5 percent to 330,000 carats.
Despite some consolidation in bauxite operations during the year, including the commencement of operations by a large foreign entity which purchased the former state-owned bauxite company as a going concern during the last quarter of 2005, the year 2006 proved very challenging for production. It contracted by 9.8% compared with growth of 6% in 2005.
Production of all grades of bauxite fell. In the case of calcined bauxite, depressed prices forced the temporary closure of one of two major operations during the year.
“Preliminary estimates indicate a creditable performance by other sectors and industries in 2006.
Significant growth was recorded in forestry operations (11%), distribution (10%) and engineering and construction (12%),” the Review noted.
Increased activity in forestry was credited to the strong export demand, while the growth impetus in distribution and construction was precipitated by strong domestic demand, particularly in relation to CWC 2007 preparations.
Real output in the manufacturing sector, in transport and communications, as well as in financial services grew by 4%, 10%, and 8%, respectively, in 2006 compared with growth rates of 2%, 9.5%, and 6.5%, respectively, in 2005.
The increased output in the manufacturing sector partially reflected further market penetration in both the Caribbean and North America for value-added products.
“Growth in the telecommunications operations continued to benefit primarily from liberalisation in the wireless segment of the market,” the Review stated.
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