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Guyana The Economic Recovery Program
The Hoyte government signaled its commitment to reform in 1988
when it announced a far-reaching Economic Recovery Program (ERP).
The plan had four interrelated objectives: to restore economic
growth, to incorporate the parallel economy into the official
economy, to eliminate external and internal payments imbalances,
and to normalize Guyana's financial relations with its foreign
creditors.
Restoring Economic Growth
To create a climate favorable for growth, the government
removed many of the most onerous limitations on economic activity
that had been put in place during the period following
independence. First, the government liberalized foreign exchange
regulations. For the first time in many years, the government
allowed exporters to retain a portion of their foreign currency
earnings for future use. Previously, only the government-owned Bank
of Guyana had had the legal right to hold foreign currency. Second,
the government lifted price controls for many items, although key
goods such as petroleum, sugar, and rice remained controlled.
Third, the government lifted import prohibitions for almost all
items other than food and allowed individuals to import goods
directly without government intervention. Fourth, private
investment was encouraged by offering streamlined approval of
projects and incentives such as tax holidays. To reassure potential
foreign investors that Guyana's policy had indeed changed, the
government announced in 1988 that "It is no part of Government's
policy to nationalize property . . . . The era of nationalizations
is therefore to be considered at an end."
Data as of January 1992
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