Press Release: IMF Completes First Review of Guyana's Performance Under the PRGF Arrangement, Grants Waivers, Extends Program Period, and Approves Additional Interim HIPC Assistance

September 5, 2003

The Executive Board also approved Guyana's request for waivers on the non-observance of the end-December 2002 quantitative performance criteria on the net foreign assets and net domestic assets of the Bank of Guyana, and the end-December 2002 structural performance criteria.

In addition, the Board approved an extension of the program period for six months through March 19, 2006 as well as Guyana's request for additional interim assistance under the Heavily Indebted Poor Country (HIPC) Initiative of SDR 5.07 million (about US$7 million) to help the country meet its debt service payments on its existing debt to the IMF.

Following the Executive Board's discussion of Guyana, Agustín Carstens, Deputy Managing Director and Acting Chairman, said:

"Guyana has faced significant challenges since the start of its reform program in September 2002, including a more difficult political and security situation. As a result, private investment and growth have fallen significantly short of expectations. Implementation of key structural reforms was also delayed, with adverse effects on fiscal performance.

"The authorities' program aims at regaining momentum for reforms. Most 2002 structural performance criteria were implemented as prior actions for the completion of this review, including in key areas such as public enterprise restructuring and tax reform. Corrective revenue and expenditure measures are now in place to contain the 2003 fiscal deficit to a level consistent with macroeconomic stability.

"Sustained structural reforms remain key to achieving Guyana's poverty and growth objectives. The 2003-04 structural reform agenda focuses on strengthening tax administration in the Guyana Revenue Authority, improving public expenditure management, privatizing or restructuring the loss-making state-owned bauxite company, implementing a profitability-oriented wage and employment policy in the sugar company, and strengthening financial regulations and supervision.

"In concluding the first review under the Poverty Reduction and Growth Facility, the Executive Board commended the authorities for regaining reform momentum. Implementation of the program should lay the basis for sustainable growth and poverty reduction," Mr. Carstens stated.


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