-Index of Economic Freedom finds
Guyana’s ranking has fallen in a worldwide survey of economic freedoms that lists “oversized government” as the biggest barrier to the country’s development.
In the Wall Street Journal/Heritage Foundation 2009 Index of Economic Freedom released yesterday, Guyana’s economic freedom score was put at 48.4 for a ranking of 155 of 183 nations that were surveyed. Guyana’s overall score is 0.4 of a point lower than last year because improvements in four of the 10 economic freedoms were offset by a large decline in the government size score. “Guyana does not rank strongly in any category of economic freedom and is slightly above the world average only in labour freedom,” the Index said, explaining that although macroeconomic and financial-sector stability has been maintained, average economic growth over the past five years was only about 1%.
The Index groups the country among economically “repressed” nations, and places it 27 of the 29 countries surveyed in the South and Central America/Caribbean region, and its overall score is well below the world average. Only Cuba and Venezuela were ranked lower in the region. Five Caribbean countries were listed in the top ten countries in the South and Central America/Caribbean region rankings. Barbados was at the top with a score of 71.5, followed by the Bahamas with 70.3, Saint Lucia with 68.8, Trinidad and Tobago with 68 and Jamaica with 65.2.
Hong Kong topped the survey with a score of 90.0, followed by Singapore with 87.1, Austria with 82.6, Ireland with 82.2 and New Zealand with 82.0. The entire index is available at: http://www.heritage.org/Index/Ranking.aspx
According to the Index, Guyanese face substantial constraints on their overall economic freedom. It said property rights are protected only erratically under the weak rule of law, and corruption is a problem in all areas of government. It identified the biggest barrier to development as Guyana’s oversized government, noting that expenditures exceed half of GDP. It added that significant restrictions on foreign investment have been addressed only marginally, and these restrictions, combined with an inefficient bureaucracy, substantially limit investment and business freedom.
Scores are computed based on 10 broad factors of economic freedom, using statistics from organizations like the World Bank, the IMF and the Economist Intelligence Unit. Equal weighting is given to Business Freedom, Trade Freedom, Monetary Freedom, Freedom from Government, Fiscal Freedom, Property Rights, Investment Freedom, Financial Freedom, Freedom from Corruption and Labour Freedom. Each indicator is graded on a scale of 0 to 100, where 100 represents the maximum freedom. A country’s overall score is based on an average derived from the total score.
In the area of Business Freedom, Guyana’s score is 60.9. The index found that overall freedom to conduct a business is restricted by Guyana’s regulatory environment. Starting a business takes an average of 40 days, it said, roughly equal to the world average of 38 days. Obtaining a business licence requires less than the world average of 18 procedures, but it noted that closing a business can be lengthy and costly.
For Trade Freedom, the score is 72.6. Import restrictions, import taxes, import-licensing requirements for a relatively large number of products, burdensome standards and regulations, inefficient customs administration, inadequate infrastructure, and corruption were said to add to the cost of trade. Fifteen points were deducted from Guyana’s trade freedom score to account for non-tariff barriers.
In the area of Fiscal Freedom, Guyana’s score is 66.5. The index said that the country has high tax rates. The top income tax rate is 33.3 percent while the top corporate tax rate is 35 percent. Other taxes include a fuel tax and a sales tax. A value-added tax (VAT) was implemented in January 2007. In the most recent year, it said that the overall tax revenue as a percentage of GDP was 31.9 percent.
With only 3.2, Guyana scored poorly for the size of its Government. Total government expenditures, including consumption and transfer payments, were listed as high. Additionally, it was noted that privatization of state-owned enterprises achieved mixed results, while poor management of public expenditures and constantly increasing social spending were found to contribute to persistent fiscal deficits. In the most recent year, government spending equalled 56.8 percent of GDP.
The Monetary Freedom score is 69.6 against a background of high inflation, averaging 10.4% between 2005 and 2007. The Index said Guyana has made progress in removing most price controls and privatizing the large public sector, but noted that the government still influences prices through the regulation of state-owned utilities and enterprises. Also, ten points were deducted from the country’s monetary freedom score to adjust for measures that distort domestic prices.
The Investment Freedom score is 40.0 and although it was found that the government remains cautious about approving new investments, the Index noted that the country has been moving toward a more welcoming environment for foreign investors. At the same time, it added that the approval process can be burdensome and non-transparent. “The government still screens most investment, and the relevant ministries have significant discretion in issuing licenses and approval,” it said. Residents (with restrictions) and non-residents are allowed to hold foreign exchange accounts. Payments and transfers are not restricted. And while most capital transactions are unrestricted, all credit operations are controlled.
In the area of Financial Freedom, the country’s score is 40.0. According to the Index, Guyana’s “underdeveloped” financial system is dominated by banking. It said high credit costs and scarce access to financing remain barriers to more dynamic entrepreneurial activity. Overall, it said the banking system remains inefficient. The percentage of loans that are considered non-performing is relatively high at 14 percent, down from 25 percent during the mid-1990s.
The country scored 40.0 in the area of Property Rights, with the judicial system being described as being often slow and inefficient and subject to corruption. It was noted that law enforcement officials and prominent lawyers question the independence of the judiciary and accuse the government of intervening in some cases. Additionally, a shortage of trained court personnel and magistrates, poor resources, and persistent bribery were highlighted as being responsible for prolonging the resolution of court cases unreasonably. The absence of enforcement mechanisms to protect intellectual property rights was also noted.
Guyana also received a poor score for Freedom From Corruption, with 26.0. It was noted that corruption is perceived as widespread and the country’s ranking at 123 of 179 countries on the 2007 Transparency International’s Corruption Perceptions Index was cited. “There is extensive corruption at every level of law enforcement and government,” the Index said, pointing out that widespread corruption undermines poverty-reduction efforts by international aid donors and discourages potential foreign investors.
For Labour Freedom, the score was 65.2. Guyana’s relatively flexible labour regulations were cited as being responsible for enhancing employment and productivity growth. The non-salary cost of employing a worker is low, but dismissing a redundant employee is relatively costly, it added. The difficulty of laying off workers was also cited as a disincentive to employment growth.
This is good news for Guyana!! right Evil eyes and Lambada and MackyDog and some ah yall out deh!!!
yes its good news for me at least when you compare the last 16 years of ppp/c govt as oppose to the last 16 years prior to 92 under pnc rule…compare duh….
when you try to fired them they cry fowl, racist and the GHRA jump in, so who can you please.
don’t forget the unions, all politically attach, trying to serve their own agenda.
what the PNC WHO HAD SIX VP
Sandman! What a shame, what a report, you ranking below Haiti. On a good note what you can do to change things just shake Big Jag coat tail and tell him cut the fat and ask some of the people to turn to farming. Tell him food is the wepon in the world. If you can’t get to him write him a letter. The world will soon go hungry and this may be the only turning point for Guyana. Everone plant a seen and the Government must grow more food.
A disgrace is what i call it….A DISGRACE!!!
Sandhurst you have to let these people know that Guyana is worst off now than under the PNC. We never had these negative reports before now. Under Burnham the Guyana dollar was 4 to 1 and we enjoyed a higher standard of living. Now we are paying taxes through the roof and there is more govt corruption than ever. evileyes, freespeech and lambada might be too young to know what i am talking about. they are talking from what they heard. As for six vp, that was only title to determine seniorority in govt unlike the ppp that has no functionality.
john brown
wat crap u dumping here?
you tell the people here who devalued Guyana dollar…
tell the people here it was Burnham and Hoyte…
Tell the people how Hoyte already planned to devalued the dollar more if he could have had the chance to rig the 92 elections…tell the people here how much the Guyana dollar was devalued since ppp took over in 92….stuff it now….
evil, the guyana dollar is even more devalued now than before, what you talking bout?
John…The govt. is definately in a bad state according to this report, I do not thik it caught most people by surprise, people knew of the status before, only that it is now published.
I will like you to examine your thoughts again..
“Under Burnham the Guyana dollar was 4 to 1 and we enjoyed a higher standard of living. Now we are paying taxes through the roof and there is more govt corruption than ever.” You are complicating your self.I do not like to compare the PPP and the PNC.
1.The only people who enjoyed a better standard of living under the Burnham administration was the ones who had party cards.
2.You are admitting that under burnham people used to pay little or no tax at all “and now you are paying through the roof” and then you made another admission by saying “and there is more govt. corruption.
The other fellas you mentioned may be too young to understand but I will like you not to try compare this govt. with the PNC under Burnham,,,it was stink then….I have the facts.
tiger
dont talk what you dont know..simple as that….you know who devalued the guyana dollar…
Evil, you are swimming here about devaluation. I am sure you are just regurgitating here, because you do not have a clue what led to the devaluation or who demanded a devaluation!!!! It was just unfortunate that it was the PNC at the helm. Tell me what the opposition at that time contributed to prevent this from happening before you start to ring your bell.
WELL WE GOT THAT RANKING BECAUSE WE ARE EXPORTING MORE NOW THAN EVER UNDER THIS PPP WATCH YES. WAT WE DIDN,TO EXPORT UNDER PREVIOUS REGIME WE DOING IT PLENTIFUL NOW. THAT IS DE COKE.
PAN IN HAND HERE HE GOES AGAIN TO THE OIL RICH PLACE. OUR PRESI BEGINNING FOR WE.
Article seems to be getting a lot of comments.
For those who are wondering how these surveys are done, let me give you an insight.
Usually (I don’t know if it has changed) there are a few surveyors who go around the world trying to set up fictitious companies in each country. Their aim is to test the speed at which one can get a business up and running among other things. These researchers start by learning what it takes to get a business moving from conception all the way to start up in the country they are surveying. They then put this system to the natural test; that means no bribes, no string pulling but just as somebody who is following the system. The test includes start-up paper work, time it takes to get government license, bank loans, permits,custom clearance etc. The time the whole process takes, number of industrial strikes per year, the time it takes to get a court matter resolved are other factors which they use to come up with a value and subsequently a rating.
Essentially it is a bureaucracy and systems audit. The higher one scores, investors view the society as more conducive to business as the article says, the lower the society is less friendly to private investment, socialist.In short these surveyors do it and report it so that a business would know what he is about to go into once he sees an investment opportunity in a specific country.
Hope I did not sound too professorial
Re: “yes its good news for me at least when you compare the last 16 years of ppp/c govt as oppose to the last 16 years prior to 92 under pnc rule…compare duh….”
How about trying to make sense sometimes!!! Well, over $300,000.000.000 U.S was pumped into the U. S. economy in recent weeks; and, apparently we have not seen the bottom of things. Besides, how much better is the country of the Maple Leaf doing; and, if you are oblivious to the positive achievements of the PNC Administrations (minus the burning of the sugar cane fields…) then your ignorance (lack of knowledge with regards to certain achievements under the PNC Administrations) is understandable.
Huh! Re: “[...bank loans...]” Guess you must be talking about a “Commercial Bank Loan…”; as, the current PPP administration in their “Solomonist” Wisdom shuttered to doors to the only “Developmental Financial Institution” which was established during th PNC’s Administration while in office.
Think that hundreds of Guyanese scholars were not trained locally and overseas based on the superb higher educational policies/programmes of the late L. F. S. Burnham’s and the late H. D. Hoyte’s Administration (including the Big Jag) – Think Again!
sn did you send this article to OP i hope you did what a shame on the ppp govt.
blah, blah, blah……just confirming what we already know!!!
The Government is top heavy because they’re all square pegs in round holes.
Hey, this is Guyana…we do things our own way. Look at the new mall with the stolen transformer, the housing schemes funded by drug proceeds, the importer of beer masquerading as soda pop, about to build a factory. It’s all good.
Jagdeo will be proud of this,Guyana being compared to Cuba and Venezuela.I figured that was the path he was on.
The international community should stop giving the Guyana Government money and give it directly to the NGO to develope the communities and lave the Big egg to fall and let us see his supports put the egg back together. Big Jag want to do what Bush do to Obama…
WOW! i know whats up in gt ,but it is still crushes me to read this about my country.i am interested to hear the goverment’s response to the results of this survey.
yes ye syes guyanese massive support your ppp led government they are
doing a great job keep supporting them, you are guaranteed protection,
become rich quick,you are able to abuse the laws of guyana, and be a
respectable businessman, all under the ppp umbrella…
Exactly!Refugee
Evil, GY was never the poorest in the WH when the PNC was at the helm. Their rating dropped in the last 16 years. If you want to compare then by all means start.
Sarkar
open you eyes….read and re-read what you are reading–then understand it—then remain quiet…
Exactly!Refugee. The likes of lambada,mackydog and evileyes Glorifies this government to the max but would not leave the comfort of their aboptive homes to resettle if being paid to do so by this Perfect Admin.
tash were you glorified when the news report came from united nation that guyana was the poorest country in the western hemisphere under burnham and hoyet’s illegal reign of power? glorified or horridfied then??? make up your mind…and yes i will glorified this government and compare it to your previous govenrment…
Re: “[...tash were you glorified when the news report came from united nation that guyana was the poorest country in the western hemisphere under Burnham and Hoyte’s illegal reign of power?...]”
These are Lies; and, damn lies: (See the attached link to the “Declassified Documents on British Guiana”):
Re: “[...Foreign Relations, 1964-1968, Volume XXXII,
Dominican Republic; Cuba; Haiti; Guyana"
Which continues as follows:" Burnham and the PNC won the December 1964 election. With the pro-American leader in power, the United States, with British approval, provided assistance to Burnham, his party, his political allies in the United Front party, the police, the unions, and on the country as a whole. (403, 405, 423, 433) Presidential Special Assistant for National Security Affairs McGeorge Bundy, Consul General (later Ambassador) Carlson, and the small group of officers in the Department of State and the CIA formed a management group determined to keep Jagan out of power. With Burnham in office and in control, they encouraged the British to grant independence sooner rather than later. (411) After independence was granted by the British in May 1966, the country took the name of Guyana. The United States supplied economic assistance for road building and other development projects, and it also provided food assistance. When political disputes and personal animosity between Burnham and Peter D'Aguiar of the United Front threatened the anti-Jagan front, U.S. officials worked to keep the two parties allied and the government together until the last days of 1968. (407) The United States again provided financial support and electoral expertise to get Burnham reelected in 1968. (419) Burnham met with President Johnson and other U.S. Government officials several times during this period after formal independence in May 1966. (420, 426)
Even though East Indians became the majority group in the country and despite friction between Burnham and other members of his coalition, the PNC won the elections in December 1968 and Burnham was returned as Prime Minister. Part of Burnham's success was based on the use of absentee overseas Guyanese voters, a plan of which the United States was aware and did not oppose. (419, 421, 422)...]”
http://www.guyana.org/govt/US-declassifed-documents-1964-1968.html
Which of the two (your or the CIA Report) do you think intelligent people will want to take to the bank???
Keep harping on that L.F.S Burnham thing and he might rise from the grave to get ya.he might even ban you from the united states as well and give you 15 guyana dollars to make your heights home to live breath and expand.