The World Bank Group announced on Monday that it has approved a US$35 million Development Policy Credit to support Guyana’s efforts to strengthen financial sector development and fiscal management to better prepare the country to benefit from its newly discovered oil and gas reserves and transform its oil wealth into human capital.
“This financing provides critical support to our reform agenda and efforts to strengthen institutions and build a resilient economy that is capable of withstanding both external and domestic shocks. These reforms will be key to guide the management of oil revenues for the benefit of present and future generations,” said Finance Minister Winston Jordan.
While currently nearly one in four people in Guyana live in poverty, experts estimate that GDP will surge when commercial production of newly-discovered oil and gas begins. In response, the government has embarked in a series of reforms to diversify the economy and turn oil windfalls into human development and sustainable growth in the long term.
“Guyana is making important strides to promote financial resilience and improve fiscal management, and has embarked on a broad-based reform program,” said Tahseen Sayed, World Bank’s Country Director for the Caribbean. “These reforms will be key to build a strong economy that is underpinned by a strategic management of public resources for the benefit of the Guyanese people.”
This financing focuses on strengthening financial stability and enabling sound financial development to promote macroeconomic stability and long-term growth. In particular, it will support banking reforms and depositor protection, the establishment of a deposit insurance scheme, implementation of a new insurance law, and the country’s anti-money laundering efforts.
This Development Policy Credit, the first of a series of two programmatic financial and fiscal development policy credits, is financed from the International Development Association (IDA).