Chapter 5

 LONG-TERM ECONOMIC GROWTH OF BRITISH GUIANA


Growth of investment, 1950-60
 The post-war development in British G'iana began with financial assistance under the
Colonial Development and Welfare Act of 1945. With the help of Colonial Development
and Welfare Act grants and loans, the government of British Guiana embarked upon de-
velopment planning. A 10-year Development Plan for 1947-56 (Ref. N. 1.9, Appendix II)
was drawn up in 1947 and revised comprehensively in 1950 providing for an expenditure
of BWI$28 million. Itpeteredout in 1953, and the government launched a 2-year pro-
gramme for 1954-55, with a planned expenditure of BWI$44 million. This was to be the
forerunner of a long-term programme based on recommendations of the International
Bank for Reconstruction and Development Mission (Ref. N. 1. 10). However, during
1944-45 only BWI$26 million could be spent. The long-term programme was then formu-
lated for 1956-60, and later revised to 1956-59, at a total expenditure of BWI$91 million
(later revised to BWI$103 million), of which only BWI$ 77.5 million was spent till the end
of 1959 (Ref. N. 1. 11). Finally there is the Development Programme 1960-64, based on
the Berrill Report (Ref. N. 1. 12) at the total cost of BWI$110 million. All these develop-
ment plans are oriented towards laying basic services, viz., sea defences, drainage and
irrigation, roads and other means of transportation and communication which are essen-
tial to economic development. Programmes for geological surveys, research and experi-
mentation for diversification of agriculture, extension of available credit facilities and
some social welfare have also been undertaken.

 Apart from agriculture, where drainage and irrigation schemes provided expansion
facilities, all other producing activities have been left to the private enterprise to develop.
To attract entrepreneurs the government has been giving since 1951 considerable income
tax and import duty concessions, e. g. tax-holiday for five years from the date of produc-
tion, generous depreciation allowances, duty-free imports of machinery, building mate-
rials, etc. for factories, hotels and so on. British Guiana is, however, very much de-
pendent on foreign private capital. In the absence of a money market in British Guiana,
all of the local savings cannot be aggregated for fruitful investments, and the tendency of
the local people is to invest their small savings abroad.

 Table 2. 5. i shows the gross fixed capital formation in British Guiana during 1950-60.

 The government development fund was established in 1954, therefore comparable
figures for earlier years are not available. The large amounts of private overseas capi-
tal invested in 1951 and 1957-59 are mainly due to expansion of the mining industry, es-
pecially for bauxite, and in recent years for alumina.