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IMF
Completes First Review of Guyana's Performance Under the PRGF
Arrangement, Grants Waivers, Extends Program Period, and Approves
Additional Interim HIPC Assistance
The Executive Board of the International Monetary
Fund (IMF) today completed the first review of Guyana's economic
performance under its three-year SDR 54.55 million (about US$75
million) Poverty Reduction and Growth Facility (PRGF) arrangement,
which was approved on September 13, 2002 (see Press Release No.
02/42). This decision entitles Guyana to the release of a further
SDR 5.97 million (about US$8.2 million) under the arrangement.
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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Tuesday
September 9, 2003