Economy

Guyana is one of the poorest countries in the Western Hemisphere. Chronic problems include a deficient infrastructure and a shortage of skilled labour. 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, based on an expansion in the agricultural and mining sectors, a more favourable atmosphere for business initiatives, a more realistic exchange rate, fairly low inflation, and the continued support of international organisations.

In addition, the government initiated a major overhaul of the tax code with the start of 2007. The Value Added Tax (VAT) was brought into effect replacing six different taxes. Prior to the implementation of 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 due to the extra paperwork required, however the Government has remained firm on 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 a tough one, it may well improve day to day life due to the significant additional funds the government will have available for public spending.

President Bharrat Jagdeo has made debt relief a foremost priority of his administration. He has been fairly successful, getting nearly $322 million8 (US) of debt written off by the World Bank alone, in addition to millions more from other industrial nations.

The main economic activities in Guyana are agriculture (producing rice and Demerara sugar), bauxite mining, gold mining, timber, shrimp and minerals. The sugar industry, which accounts for 28% of all export earnings, is largely run by Guysuco which employs more people than any other industry in the country. Many industries have a large foreign investment. The mineral industry, for example, is heavily invested in by the American company Reynolds Metals and the Canadian Alcan and 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 balata included the making of homemade cricket balls, the temporarily filling of troublesome tooth cavities, and the crafting of figurines and other decorative items (particularly by the Macushi people of the Kanuku mountains).