Guyana is expected to benefit from a new initiative which will soon be introduced by the European Commission (EC) to help developing countries better cope with the current financial crisis that has had damaging impact on many economies.
Head of Delegation of the EC to Guyana, Ambassador Geert Heikens, yesterday emphasised the urgency and benefits developing countries could be exposed to.
“I think it is very needed at this moment. We all know about the financial crisis and the adverse trends that are anticipated to intensify its impact in some developing countries… although sometimes you hear that the Caribbean is not much hurt at the moment, but I am quite sure that it will eventually reach the Caribbean… right now think about remittances already.”
According to Heikens, the current financial trends are driven by the general economic downturn, and therefore will result in a decline in foreign direct investment and contraction in international trade, in addition to the reduction in remittances.
As a result of this situation, he noted, the access to credit will also become problematic for affected countries.
Moreover, he disclosed, as a result of the crisis, compounded by some of the reactions, developing countries’ Gross Domestic Products are projected to decline by about 3.3 or 3.2 per cent this year.
“That is more than half… what was seen over the last five years. One per cent reduction of growth could drag 20 million people additionally into poverty, so in this case you can’t say the crisis cannot reach us.”
Heikens pointed out that it is quite evident that the extent of the crisis can significantly impact countries in various ways.
“We have different factors that come into play as the integration of the financial markets, the export/import of commodities, and you cannot say about the trade links that ‘one size fits all’, but there are very serious consequences already being seen.”
For this reason, he revealed that the European Commission has been discussing a response to the economic crisis.
“We had in November 2008 the G-20 Summit in Washington, and after that meeting it was stated that support towards the poorest developing countries should be part of the global solution.”
The Summit also saw the Commission pledging to mobilise all sources of financing for development, and a call for a greater voice and representation in the move to help the developing economies.
The European Commission has over the years been offering immense assistance to Guyana, particularly in the areas of sea defence and macroeconomic support.
“From now till 2013, to enhance sea defence, Guyana will receive something around 55 million Euros, and we are also managing ongoing commitments in the social and health sectors.
“We have the Caribbean HIV programme (which attracts) $17M, and there is also the Regional Laboratory programme of $7.5M, along with another programme linked to the health sector as the support to disaster management.”
Heikens revealed that the European Commission has been heavily financing the sugar industry in the Region, even as he noted that some import changes are now merely serving to “kill the sugar industry”.
Through macroeconomic support the sugar sector, according to Heikens, has been able to receive $90M over a period of four years from the Commission, and more funds will be forthcoming, particularly for the restructuring of the sugar industry.
“This may be our biggest support to Guyana, but we are also supporting the rice sector and some regional programmes, such as in the Linden area.”
The Commission, through the Linden Economic Advancement Programme (LEAP), has been assisting the Region Ten town of Linden, which was once a bauxite-mining-oriented community.
The community is also being supported through micro programmes that are also funded by the Commission.
According to Heikens, although there are a few other donors operating in Guyana, including the United Nations Organisation, the Inter-American Development Bank, the Canadian, British and American entities, all are working well together towards the benefit of the country.
“In my experience, coordination and cooperation is not always so evident, so this will hopefully be better for Guyana.” Heikens also has responsibility for Suriname, where infrastructural programmes are being undertaken; Trinidad and Tobago, where funding is being directed primarily to tertiary education; and the Netherlands Antilles, where projects the likes of sewage system and water programmes have commenced.
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