The long-term outlook for Guyana continues to be discouraging. The problems of shortages caused by setting prices and fixing the exchange rate have ended with the abolition of these regulations, but economic recovery will remain slow until the government earns the full confidence of the international community. The country still suffers from the accumulated costs of past policies, including an external debt that is over 240 percent of the GDP and a very low per capita income in comparison to the rest of Latin America and the Caribbean.
Severe drought and political turmoil caused Guyana to report a negative growth rate of-1.5 percent in 1998, following 6 straight years of growth of 5 percent or higher. Growth rebounded to 1.8 percent in 1999 and 3 percent in 2000. Underlying factors in the GDP growth have included expansion in the key agricultural and mining sectors, a more favorable atmosphere for business initiative, a realistic exchange rate, a moderate inflation rate , and continued support from international organizations. President Jagdeo, the former finance minister, is taking steps to reform the economy, including drafting an investment code and restructuring the inefficient and unresponsive public sector. Problems hindering the economy include a shortage of skilled labor and an inadequate and poorly maintained transportation system. Electricity has been in short supply, but the privatization of the sector in 1999 is expected to improve prospects.
Guyana is rich in minerals, especially bauxite, gold, and diamonds. In comparison to general worldwide deforestation, Guyana has suffered little and until 1990, only a small fraction of the extensive forests had been felled. An improved infrastructure will harness the potential in mining and forestry and enable Guyana to experience steady progress.