A section of Bourda Market
Economic Activity in GuyanaThe main economic activities in Guyana are agriculture (production of rice and Demerara sugar), bauxite mining, gold mining, timber, shrimp fishing and minerals. Chronic problems include a shortage of skilled labour and a deficient infrastructure. In 2008, the economy witnessed a 3% increase in growth amid the global economic crisis and is expected to grow further in 2009.
Until recently, the government was juggling a sizable external debt against the urgent need for expanded public investment. Low prices for key mining and agricultural commodities combined with troubles in the bauxite and sugar industries had threatened the government's tenuous fiscal position and dimmed prospects for the future. However, the Guyanese economy has rebounded slightly and exhibited moderate economic growth since 1999, thanks to an expansion in the agricultural and mining sectors, a more favorable atmosphere for business initiatives, a more realistic exchange rate, fairly low inflation, and the continued support of international organizations.
The sugar industry, which accounts for 28% of all export earnings, is largely run by the company Guysuco, which employs more people than any other industry. Many industries have a large foreign investment. For example, the mineral industry is heavily invested in by the American company Reynolds Metals and the Canadian Rio Tinto Alcan; the Korean/Malaysian Barama Company has a large stake in the logging industry.
The production of balatá (natural latex) was once big business in Guyana. Most of the balata bleeding in Guyana took place in the foothills of the Kanuku Mountains in the Rupununi. Early exploitation also took place in the North West District, but most of the trees in the area were destroyed by illicit bleeding methods that involved cutting down the trees rather than making incisions in them. Folk uses of balatá included the making of cricket balls, the temporary filling of troublesome tooth cavities, and the crafting of figurines and other decorative items (particularly by the Macushi people of the Kanuku mountains).
Major private sector organizations include the Private Sector Commission (PSC)and the Georgetown Chamber of Commerce & Industry (GCCI);
The government initiated a major overhaul of the tax code in early 2007. The Value Added Tax (VAT) was brought into effect, replacing six different taxes. Prior to the implementation of the VAT, it had been relatively easy to evade sales tax, and many businesses were in violation of tax code. Many businesses were very opposed to VAT introduction because of the extra paperwork required; however, the Government has remained firm on the VAT. By replacing several taxes with one flat tax rate, it will also be easier for government auditors to spot embezzlement. While the adjustment to VAT has been difficult, it may improve day-to-day life because of the significant additional funds the government will have available for public spending.
Cost of living
The cost of living in Guyana is high. This is because most of the items used in daily life are imported with high transportation costs involved. Monopoly in some business sectors also causes higher profit booking and further raising of prices. For example, approximate prices (as of January, 2010) of Gasoline (Petrol) is 5 US$ per Liter, and electricity prices are close to 0.33 US$ per unit. A domestic gas bottle (or gas cylinder) is slightly over 20 US$. Rent for average family accomodation may exceed 500 US$ per month in safe urban locations, and personal income tax, which is 33.33% (one third) of total taxable income makes the cost of living higher. An employee's salary is normally paid in Guyanese dollars (1 US Dollar = 205 Guyanese Dollars approx.) and income tax is deducted by the employer.
Until recently, the government was juggling a sizable external debt against the urgent need for expanded public investment. Low prices for key mining and agricultural commodities combined with troubles in the bauxite and sugar industries had threatened the government's tenuous fiscal position and dimmed prospects for the future. However, the Guyanese economy has rebounded slightly and exhibited moderate economic growth since 1999, thanks to an expansion in the agricultural and mining sectors, a more favorable atmosphere for business initiatives, a more realistic exchange rate, fairly low inflation, and the continued support of international organizations.
The sugar industry, which accounts for 28% of all export earnings, is largely run by the company Guysuco, which employs more people than any other industry. Many industries have a large foreign investment. For example, the mineral industry is heavily invested in by the American company Reynolds Metals and the Canadian Rio Tinto Alcan; the Korean/Malaysian Barama Company has a large stake in the logging industry.
The production of balatá (natural latex) was once big business in Guyana. Most of the balata bleeding in Guyana took place in the foothills of the Kanuku Mountains in the Rupununi. Early exploitation also took place in the North West District, but most of the trees in the area were destroyed by illicit bleeding methods that involved cutting down the trees rather than making incisions in them. Folk uses of balatá included the making of cricket balls, the temporary filling of troublesome tooth cavities, and the crafting of figurines and other decorative items (particularly by the Macushi people of the Kanuku mountains).
Major private sector organizations include the Private Sector Commission (PSC)and the Georgetown Chamber of Commerce & Industry (GCCI);
The government initiated a major overhaul of the tax code in early 2007. The Value Added Tax (VAT) was brought into effect, replacing six different taxes. Prior to the implementation of the VAT, it had been relatively easy to evade sales tax, and many businesses were in violation of tax code. Many businesses were very opposed to VAT introduction because of the extra paperwork required; however, the Government has remained firm on the VAT. By replacing several taxes with one flat tax rate, it will also be easier for government auditors to spot embezzlement. While the adjustment to VAT has been difficult, it may improve day-to-day life because of the significant additional funds the government will have available for public spending.
Cost of living
The cost of living in Guyana is high. This is because most of the items used in daily life are imported with high transportation costs involved. Monopoly in some business sectors also causes higher profit booking and further raising of prices. For example, approximate prices (as of January, 2010) of Gasoline (Petrol) is 5 US$ per Liter, and electricity prices are close to 0.33 US$ per unit. A domestic gas bottle (or gas cylinder) is slightly over 20 US$. Rent for average family accomodation may exceed 500 US$ per month in safe urban locations, and personal income tax, which is 33.33% (one third) of total taxable income makes the cost of living higher. An employee's salary is normally paid in Guyanese dollars (1 US Dollar = 205 Guyanese Dollars approx.) and income tax is deducted by the employer.
