Guyana Resource Center
Set like a gem in the crown of South America, nestled on the North-Eastern shoulder, defying the raging Atlantic Ocean, Guyana's many waterways reflect the source of it's name "The Land of Many Waters"
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Tuesday, May 02, 2006 - 03:24 AM

Press Release - World Bank

The World Bank’s Board of Directors has approved a $9.6 million International Development Association (IDA) grant to support the government of Guyana in its efforts to strengthen economic governance and reduce poverty. In particular, the new program aims to improve transparency, accountability and efficiency with which resources are used across the public sector, including by strengthening the role of Parliament in fiduciary oversight.

“We have found that in many countries strengthening fiduciary oversight, notably through effective parliamentary oversight of public finances, curtailment of discretionary powers of public officials, and public disclosure of officials’ assets, are key to improving financial management,” said Caroline Anstey, World Bank Country Director for the Caribbean. “The Government of Guyana’s commitment to the fiduciary oversight agenda and, in particular, the bi-partisan support for the reforms are very encouraging signs and augur well for the implementation of the program.”

The Poverty Reduction and Public Management Operation (PRPMO) supports the implementation of key public sector reforms that were identified by the Government in the country’s Poverty Reduction Strategy Paper (PRSP) of 2001. The new operation places special emphasis on strengthening the monitoring and evaluation of poverty reduction programs, a need underscored in the successive PRS Progress Reports. “An effectively functioning monitoring and evaluation system is essential for ensuring that public resources allocated for poverty reduction are targeted for the benefit of poor people.” said Homa-Zahra Fotouhi, World Bank Acting Country Representative and Task Team Leader for the Operation. “It is encouraging that Guyana has already made important steps forward in this regard..”

Environmental, Social and Poverty Benefits

The new IDA-funded grant supports the Government’s program in a number of key areas:

implementation of the Government’s poverty reduction strategy laid out in the original PRSP and the most recent PRSP progress report which provide a road map for Guyana to achieve the Millennium Development Goals;

improvements in financial administration, audit and procurement which will increase efficiency and transparency in public resource use;
improvements in the Government’s institutional capacity to monitor progress

under the PRSP, evaluate the impact of poverty reduction programs, and improve the statistical information for poverty analysis and targeting; and
support for sustainable development of natural resources, including controls to prevent over-harvesting, and reduce environmental damage.

Debt Sustainability Analysis

The World Bank’s Board of Directors today also discussed a Debt Sustainability Analysis (DSA) for Guyana, which concludes that the country’s risk of debt distress after the implementation of the Multilateral Debt Relief Initiative (MDRI) is moderate since the initiative will significantly reduce its level of indebtedness. Furthermore, the analysis indicates higher revenues and additional debt relief have led to an improvement in the DSA indicators.

The new program comes less than a week after the World Bank announced that the MDRI had been approved, clearing the way for cancellation of International Development Association (IDA) debt to some of the world’s poorest countries, including SDR128 million for Guyana. Starting on July 1, 2006, IDA is expected to provide more than $37 billion in debt relief over 40 years for 17 heavily indebted countries.

The World Bank in Guyana

The new program builds on the support provided under the Poverty Reduction Support Credit I (PRSC-I), approved by the Board in December 2002. IDA activities in Guyana include a Public Sector Technical Assistance Credit in the amount of $4.8 million, an HIV/AIDS Prevention and Control Project, in the amount of $10 million, a Water Sector Consolidation Project in the amount of $11.3 million, and an Education for All Fast Track Initiative (EFA-FTI) grant in the amount of $8.0 million.