Guyana Worse Than Haiti

Guyana Worse Than Haiti - Wall St Journal/Heritage Foundation's Index Of Economic Freedom World RankingsCaribbean World News: When it comes to economic freedom globally, Guyana is even lower than Haiti , the country deemed the poorest in the world.According to the latest Index of Economic Freedom World Rankings, a compilation of economic freedom globally by the Wall Street Journal and the Heritage Foundation, Guyana is at 155 on the overall list, lower than Haiti at 147. Overall, it scored 48.4 on the economic freedom scale, meaning its freedom is repressed.This makes it the worst CARICOM country for economic freedom in several areas, including business, trade, government size, investment, property rights, corruption and labor.As analysts summarized in the report: ` Guyana does not rank strongly in any category of economic freedom and is slightly above the world average only in labor freedom. Although macroeconomic and financial-sector stability has been maintained, Guyana's average economic growth over the past five years was only about 1 percent.`The size of government was also slammed, with researchers saying government's size is the biggest barrier to development since expenditures exceed half of GDP.Additionally, `Significant restrictions on foreign investment have been addressed only marginally, and these restrictions, combined with an inefficient bureaucracy, substantially limit investment and business freedom,` the report added. Analysts found that the overall freedom to conduct a business is restricted by Guyana 's regulatory environment since starting a business takes an average of 40 days, which is roughly equal to the world average of 38 days.Further, obtaining a business license requires less than the world average of 18 procedures while closing a business can be lengthy and costly.The foreign investment approval process was found to be burdensome and non-transparent, since according to the report, government still screens most investments, and the relevant ministries have significant discretion in issuing licenses and approvals.The banking system was also dubbed as `inefficient,` since the percentage of loans that are considered non-performing is relatively high at 14 percent, down from 25 percent during the mid-1990s.Six commercial banks operate in Guyana , and the two largest are foreign-owned.High inflation, averaging 10.4 percent between 2005 and 2007, did not help Guyana`s overall standings, since analysts claimed the Guyana government still influences prices through the regulation of state-owned utilities and enterprises. Ten points were deducted from Guyana 's monetary freedom score to adjust for measures that distort domestic prices.There was also found to be burdensome standards and regulations when it comes to the import and export business while researchers found inefficient customs administration, inadequate infrastructure, and corruption, factors of which all add to the cost of trade.And corruption is perceived as widespread, and at every level of law enforcement and government.This widespread corruption perception undermines poverty-reduction efforts by international aid donors and discourages potential foreign investors, analysts said.Guyana ranks 123rd out of 179 countries in Transparency International's Corruption Perceptions Index for 2007. There is extensive corruption at every level of law enforcement and government. Widespread corruption undermines poverty-reduction efforts by international aid donors and discourages potential foreign investors.The country`s high tax rate of 33.3 percent for high income earners, and 35 percent for top corporations, also did not help its rank and neither did its high government expenditures, including consumption and transfer payments.Researchers found poor management of public expenditures and constantly increasing social spending which contribute to persistent fiscal deficits.. In the most recent year, government spending equaled 56.8 percent of GDP.And Guyana 's judicial system was criticized as often slow and inefficient and according to researchers, `is also subject to corruption.``Law enforcement officials and prominent lawyers question the independence of the judiciary and accuse the government of intervening in some cases. A shortage of trained court personnel and magistrates, poor resources, and persistent bribery prolong the resolution of court cases unreasonably. There is no enforcement mechanism to protect intellectual property rights,` researchers added.
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