P. 1
2011 Index of Economic Freedom

2011 Index of Economic Freedom

|Views: 654|Likes:
Publicado porjdfogg
Source: http://www.heritage.org/Index/
Source: http://www.heritage.org/Index/

More info:

Published by: jdfogg on Apr 08, 2011
Direitos Autorais:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

12/11/2012

pdf

text

original

World Rank: 151

Regional Rank: 26

Guyana’s economic freedom score is 49.4, making its
economy the 151st freest in the 2011 Index. Its overall
score is one point higher than last year, mainly as a result
of improvements in fiscal and monetary freedom. Guyana
is ranked 26th out of 29 countries in the South and Cen-
tral America/Caribbean region, and its overall score is well
below the world and regional averages.

Broad-based economic growth in Guyana is held back by
structural weaknesses in the economy. Long-standing con-
straints on economic freedom include widespread corrup-
tion in many areas of government, fragile protection of
property rights, and weak rule of law. Guyana’s oversized
government is a serious impediment to private-sector devel-
opment and the achievement of sustained economic growth.
Significant restrictions on foreign investment and inefficient
bureaucracy continue to undermine the entrepreneurial
environment.

The government has acted to improve the transparency and
quality of its management of public finances, but results
have been mixed. The average tariff rate has gradually
decreased, but non-tariff barriers continue to limit overall
trade freedom.

BACKGROUND: Guyana gained its independence in 1966.
Support for the two major parties is ethnically and racially
polarized, and attempts at reform have been made only
under framework agreements with international organiza-
tions. In August 2006, President Bharrat Jagdeo of the Peo-
ple’s Progressive Party–Civic was returned to office in the
first nonviolent elections in more than 20 years. Although
the main opposition parties accepted the result and the risk
of political violence is at its lowest since the early 1990s,
relations between the PPP–Civic and the People’s Nation-
al Congress–Reform remain hostile. Guyana is one of the
poorest countries in the Western Hemisphere, and its state-
dominated economy, dependent mainly on agriculture and
mining, has been stagnant for many years. Violent crime
and drug trafficking are serious concerns.

Quick Facts

Population: 0.8 million
GDP (PPP): $5.1 billion
3.3% growth in 2009
4.3% 5-year compound annual growth
$6,688 per capita
Unemployment: 11.0% (2007)
Inflation (CPI): 2.9%
FDI Inflow: $144 million

Economic Freedom Score

Country’s Score Over Time

Country Comparisons

Least Most
free free

50
25 75

0 100

49.4

1995 ’97 ’99 ’01 ’03 ’05 ’07 ’09 2011

30

40

50

60

70

0

20

40

60

80

100

49.4

Country

59.7

World
average

60.2

Regional
average

84.1

Free
economies

208

2011 Index of Economic Freedom

GUYANA (continued)

THE TEN ECONOMIC FREEDOMS

Business Freedom

No. 87

Trade Freedom

No. 120

Fiscal Freedom

No. 157
Government Spending No. 159
Monetary Freedom No. 87

Investment Freedom

No. 134

Financial Freedom

No. 106

Property Rights

No. 99
Freedom from Corruption No. 128
Labor Freedom

No. 92

COUNTRY’S WORLD RANKINGS

BUSINESS FREEDOM: 66.8

+ 3.4

Despite some progress, the overall freedom to conduct
a business remains restricted by Guyana’s burdensome
regulatory environment. The major constraints stem from
lingering government interference and a lack of political
will to promote development of a dynamic private sector.
Enforcement of existing regulations is not always consis-
tent, and a lack of regulatory certainty often increases the
cost of doing business.

TRADE FREEDOM: 71.3

no change

Guyana’s weighted average tariff rate was 6.9 percent
in 2008. Import restrictions, high import taxes on agri-
cultural goods, import-licensing requirements for a rela-
tively large number of products, burdensome standards
and regulations, inefficient customs administration, weak
enforcement of intellectual property rights, inadequate
infrastructure, and corruption add to the cost of trade. Fif-
teen points were deducted from Guyana’s trade freedom
score to account for non-tariff barriers.

FISCAL FREEDOM: 64.6

+ 8.7

Guyana has relatively high tax rates. The top income tax
rate is 33.3 percent, and the top corporate tax rate is 45 per-
cent. Other taxes include a property tax and a value-added
tax (VAT). Excise taxes on fuel, temporarily suspended in
2008 in an effort to protect domestic consumers from high
international prices, were reinstated in 2009. In the most
recent year, overall tax revenue as a percentage of GDP
was 20.2 percent.

GOVERNMENT SPENDING: 29.1

+ 2.9

Total government expenditures, including consumption
and transfer payments, remain chronically high. In the
most recent year, government spending equaled 48.6 per-
cent of GDP. Privatization of state-owned enterprises has
achieved mixed results. Poor management of public expen-
ditures has led to persistent fiscal deficits. Public debt has
fallen below 60 percent of GDP, in part because of debt
relief and fiscal consolidation efforts.

MONETARY FREEDOM: 75.8

+ 4.8

Inflation has been moderating, averaging 5 percent
between 2007 and 2009. Guyana has made progress in
removing price controls and privatizing the large public
sector, but the government still influences prices through
the regulation of state-owned utilities and enterprises. Ten
points were deducted from Guyana’s monetary freedom
score to account for measures that distort domestic prices.

INVESTMENT FREEDOM: 30

no change

The government generally does not discriminate between
foreign and domestic investment, but most new foreign
investments are screened. The approval process for invest-
ments can be burdensome and non-transparent. Invest-

ment is hindered by crime, corruption, inefficient and
burdensome government bureaucracy, non-transparent
regulations, a weak and burdensome judiciary, and an
inadequately educated workforce. Foreign exchange,
credit, and capital transactions face some restrictions. The
constitution guarantees the right of foreigners to own land.

FINANCIAL FREEDOM: 40

no change

Guyana’s underdeveloped financial sector continues to
be plagued by inefficiency and a poor institutional frame-
work. There have been no major reforms in the sector. High
credit costs and scarce access to financing remain barriers
to more dynamic entrepreneurial activity. The percentage
of loans that are considered non-performing is relatively
high. Six commercial banks operate in Guyana, and the
two largest are foreign-owned. There are restrictions on
financial transactions with non-residents. Guyana has six
insurance companies and a small stock exchange.

PROPERTY RIGHTS: 30

5.0

Guyana’s judicial system is often slow and inefficient. It is
also subject to corruption. Law enforcement officials and
prominent lawyers have questioned the independence of
the judiciary and accused the government of intervening
in some cases. A shortage of trained court personnel and
magistrates, poor resources, and persistent bribery pro-
long the resolution of court cases unreasonably. There is
no enforcement mechanism for the protection of intellec-
tual property rights. Guyana is ranked 104th out of 125
countries in the 2010 International Property Rights Index.

FREEDOM FROM CORRUPTION: 26

no change

Corruption is perceived as widespread. Guyana ranks
126th out of 180 countries in Transparency International’s
Corruption Perceptions Index for 2009. There is extensive
corruption at every level of law enforcement and govern-
ment. The ruling party’s reputation has been tarnished
by allegations of collaboration with criminal elements.
Widespread corruption undermines poverty-reduction
efforts by international aid donors and discourages for-
eign investors.

LABOR FREEDOM: 60.3

4.9

Labor regulations are relatively flexible, but because the
public sector is so large, an efficient labor market has not
yet emerged. The non-salary cost of employing a worker is
low, but dismissing an employee can be costly.

209

How Do We Measure Economic Freedom?

See page 447 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.

2009 data unless otherwise noted.
Data compiled as of September 2010.

You're Reading a Free Preview

Descarregar
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->