Download Trade Assessment – Guyana Suriname Brazil

TERMS OF REFERENCE
Assessment of Framework and Opportunities for Enhancing Export Trade
between Guyana/Suriname and Brazil
1. BACKGROUND INFORMATION
1.1 Beneficiaries
The beneficiaries to this project are Guyana, Suriname and the Caribbean Export Development
Agency
1.2 Contracting Authority
Caribbean Export Development Agency (Caribbean Export)
1.3 Relevant sector background
Caribbean Export Development Agency is the regional trade and export development agency of
fifteen (15) CARIFORUM States. Caribbean Export is seeking to recruit a consultant to conduct an
assessment of the potential opportunities for increased exports and trade from and between
Guyana/Suriname and Brazil. All CARIFORUM States have identified the need for diversifying their
export markets away from the traditional centres of Europe and North America. Latin America (in
particular South and Central America) has been identified as one which holds potential for
CARIFORUM in terms of both expanding trade and diversifying target markets. To that end, the geostrategic location of Guyana and Suriname on the South American continent with contiguous
borders to Brazil is an important one. However, and despite both countries sharing borders with
Brazil, the data shows that trade between these countries and Brazil has historically been very
limited and under-developed, and largely comprised of relatively few export products mostly of a
primary nature. With the emergence of Brazil as an economic power within the Western
Hemisphere and its growing importance globally as a trading partner, Caribbean Export, being the
region’s export development agency, is therefore interested in examining the opportunities that the
Guyana/Suriname-Brazil nexus can play in increasing the volume of trade among the troika and by
extension expanding CARIFORUM export trade diversification of export markets.
Overview
Guyana, Suriname and Brazil are independent states, who along with French Guiana collectively
occupy the central and north eastern portion of South America. Each state shares similar borders,
with Suriname to the east of Guyana and Brazil to the south of both Suriname and Guyana. There
are many roads and bridges that link each state, where informal trade takes place. Guyana’s most
recent link to Brazil came with the completion of the Takutu River Bridge in 2009,1and the
1 Kaieteur News Online, 29th July 2009
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Surinamese government signing of a Memorandum of Understanding with Chinese firms for the
construction of a road and rail to Brazil.2
Brazil, Guyana and Suriname possess low population densities, with 60, 10, and 8 persons per square
mile, with the estimated average for South America being 22 persons.3 These three states (including
French Guiana) are also non Spanish speaking. There is also significant population of Brazilians living
in both Suriname (40,000) and Guyana (10,000) mostly involved in the mining industry.
The economies of Brazil, Guyana and Suriname also concentrate significantly on the agriculture and
extractive industries. Brazil has signed partial scope agreements with both Suriname (2005) and
Guyana (2001) that give preferential access to a wide range of goods into the Brazilian market.
Below are the individual economic country profiles and indicative trade potential between the three
states.
Brazil
The Brazilian economy is characterised by large and well-developed agricultural, mining,
manufacturing, and service sectors. After strong growth in 2007 and 2008, the onset of the global
financial crisis hit Brazil in 2008. Brazil experienced two quarters of recession, as global demand for
Brazil's commodity-based exports dwindled and external credit dried up. However, Brazil was one of
the first emerging markets to begin a recovery. In 2010, consumer and investor confidence revived
and GDP growth reached 7.5%, the highest growth rate in the past 25 years. 4
Brazil’s GDP (purchasing power parity) was estimated at $2.362 trillion in 2012 with average growth
of 2% over a three year period. Real GDP growth rate was estimated at 1.3% in 2012, down from
2.7% in 2011 and 7.5% in 2010. GDP per capita was estimated $12,000 in 2012, a 3% growth over a
three year period. Agriculture, industry and services represented 15.7%, 13.3% and 67.2% of GDP
respectively. 5
Using per capita income as a measure of economic well-being, it is noted that the per capita income
of Brazil stood at 12,594 us dollars in 2011 a 5% increase over 2008. Using the United Nations
Development Program Human Development index as an indicator of socioeconomic well-being,
Brazil between 1980 and 2012 Brazil's HDI rose by 1.2% annually from 0.522 to 0.730 today, which
gives the country a rank of 85 out of 187 countries with comparable data. The HDI of Latin America
2 Stabroeknews 10/12/12
3 UN world population prospects, 2010 revision
4 CIA World Factbook - Brazil
5 Data.Worldbank
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and the Caribbean as a region increased from 0.574 in 1980 to 0.741 today, placing Brazil below the
regional average.6
The World Bank’s “Ease of Doing Business” survey (2013) ranks Brazil 130th a decline of 2 points in
2012. “Starting a Business” and “Getting Electricity” were the only two indicators that reflected
moderate increases.7
Brazil was ranked a modest 2.8 (1=low to 5=high) on its overall trade facilitation performance index
by the World Bank. The index on the quality of trade and transport-related infrastructure was also
ranked a modest 2.8.8
Brazil is party to a number of free trade and partial preferential trade agreements. It is part of the
MERCOSUR customs union and is party to its agreements with Israel, Peru, Bolivia and Chile. Brazil
has partial scope agreements with Suriname, MERCOSUR – (Colombia, Ecuador and Venezuela),
MERCOSUR – (India), MERCOSUR – (Mexico Auto Sector), Mexico, Guyana, Argentina and Uruguay.
Trade agreements signed but not in forced are MERCOSUR – Southern African Union and MERCOSUR
– Egypt.9
The value of Brazil’s overall goods imports in 2011 stood 226 billion dollars, with a positive trade
balance of approximately 30 billion dollars. Imports grow in value between 2007 and 2011 was 14%.
It is noted that Total export growth in value, between the corresponding period 2007 - 2011 was
only 5%. Its top 5 import partners include China, USA, Argentina, Germany and the Republic of
Korea. Heavy industrial products and input characterised the top imports by Brazil which included
Mineral fuels, Machinery, Electrical equipment, Vehicles and Organic Chemicals.10
The value of Brazil’s overall services imports in 2011 stood 76 billion dollars, with modest average
growth of 2% over a 5 year period.11
Total inflow of Foreign Direct Investment stood at 51 billion dollars and inward stock stood 660
billion dollars in 2010. The top 5 sectors that attracted investment in 2010 were Petroleum, Metal
and Metal Products, Mining, Food and Beverages and Chemical products.12
6 International HDI, UNDP
7 World Bank Doing Business in Brazil 2013
8 World Bank Logistics Indicators 2012
9 OAS Foreign Trade Information System S.I.C.E
10 Trademap.org
11 Trademap.org
12 Investmentmap.org
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Guyana
The Guyanese economy based largely on agriculture and extractive industries. The economy is
heavily dependent upon the export of six commodities - sugar, gold, bauxite, shrimp, timber, and
rice - which represent nearly 60. Guyana's entrance into the CARICOM Single Market and Economy
(CSME) in January 2006 has broadened the country's export market, primarily in the raw materials
sector.13
Guyana’s GDP (purchasing power parity) was estimated at $6.164 billion in 2012 with average
growth of 5% over a three year period. Real GDP growth rate was estimated at 3.7% in 2012, down
from 5.4% in 2011 and 4.4% in 2010. GDP per capita was estimated $8,000 in 2012, a 5% growth
over a three year period. Agriculture, industry and services represented 20.3%, 34.8% and 44.9% of
GDP respectively.
Per capita income of Guyana stood at 3,408 us dollars in 2011 a 33 % increase over 2008. Guyana
Between 1980 and 2012 Guyana's HDI declined by -0.2% annually from 0.513 to 0.636 today, which
gives the country a rank of 118 out of 187 countries with comparable data. The HDI of Latin America
and the Caribbean as a region increased from 0.574 in 1980 to 0.741 today, placing Guyana below
the regional average.14
The World Bank’s “Ease of Doing Business” survey (2013) ranks Guyana 114th with no change in rank
from 2012. Resolving insolvency was the only sub indicator that showed improvement.
Guyana was ranked low 2.1 (1=low to 5=high) on its overall trade facilitation performance index by
the World Bank. The index on the quality of trade and transport-related infrastructure was also
ranked a low 1.8.15
Guyana is party to a number of free trade, partial preferential trade agreements, and economic
association agreements. It is part of the CARICOM customs union and is party to its associated
agreements with Costa Rica and the Dominican Republic. Guyana has an economic association
agreement in the form of the CARIFORUM-European Community and partial preferential
agreements with Brazil, CARICOM – Colombia, CARICOM – Venezuela and Venezuela (AAP.A25TM
Nº 22).16
The value of Guyana overall goods exports in 2011 stood at just 1 billion dollars, with a negative
trade balance of approximately 600 million dollars. Exported growth in value between 2007 and
2011 was 7%, and 12% between 2010 and 2011. It is noted that Total export import in value,
13 CIA Worldfactbook
14 Wordbank
15 Worldbank ease of doing buinsess Guyana 2013
16 OAS Foreign Trade Information System S.I.C.E
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between the corresponding period 2007 - 2011 was 5%. Its top 5 export markets include USA,
Canada, UK, Venezuela and Germany. The top 5 exported products are Pearls, Sugars and
confectionary, ores, Cereals, and Fish.
The value of Guyana’s overall services exports in 2011 stood 200 million dollars, with modest
average growth of 1.1% over a 5 year period.17
Total inflow of Foreign Direct Investment stood at 165 million dollars and inward stock stood 1
billion dollars in 2011. The top 5 sectors that attracted investment in 2011 were, Agriculture and
hunting, Forestry, Mining, Petroleum, and Food and Beverage.18
Suriname
The Surinamese economy is dominated by the mining industry, with exports of alumina, gold, and oil
accounting for about 85% of exports and 25% of government revenues, making the economy highly
vulnerable to mineral price volatility. Economic growth, which reached about 7% in 2008, owing to
sizeable foreign investment in mining and oil, slowed to 2.2% in 2009 as investment waned and the
country earned less from its commodity exports when global prices for most commodities fell. Trade
picked up, boosting Suriname's economic growth about 4% per year in 2010-12.19
Suriname’s GDP (purchasing power parity) was estimated at $6.685 billion in 2012 with average
growth of 4% over a three year period. Real GDP growth rate was estimated at 4% in 2012, down
from 4.2% in 2011 and 4.1% in 2010. GDP per capita was estimated $12,300 in 2012, a 3% growth
over a three year period. Agriculture, industry and services represented 10.4%, 36.6% and 52.9% of
GDP respectively.20
Per capita income of Suriname stood at 8,131 us dollars in 2011 a 18 % increase over 2008.
Suriname's HDI is 0.684, which gives the country a rank of 105 out of 187 countries with comparable
data. The HDI of Latin America and the Caribbean as a region increased from 0.574 in 1980 to 0.741
today, placing Suriname below the regional average
The World Bank’s “Ease of Doing Business” survey (2013) ranks Suriname 164th a decline of 4 points
form 2012. There was no available data on Suriname’s logistics performance.
Suriname is party to a number of free trade, partial preferential trade agreements, and economic
association agreements. It is part of the CARICOM customs union and is party to its associated
agreements with the Dominican Republic. Suriname has an economic association agreement in the
17 Trademap.org
18 Investmentmap.org
19 CIA worldfactbook Suriname
20 Worldbank Data
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form of the CARIFORUM-European Community and partial preferential agreements with Brazil, and
CARICOM – Venezuela. Trade agreement signed but not yet in force is CARICOM-Costa Rica. 21
The value of Suriname overall goods exports in 2011 stood at just 2.6 billion dollars, with a positive
trade balance of approximately 800 million dollars. Exported growth in was 12% between 2010 and
2011. Its top 5 export markets include UAE, Canada, USA, Belgium, and Switzerland. The top 5
exported products are Mineral fuels, Machinery, Beverages, Cereals and Fish.
The value of Suriname’s overall services exports in 2011 stood 200 million dollars, with a decline of
4% over a 5 year period. 22
Brazil, Suriname and Guyana Trade Potential
Based on the graph below, overall imports of goods from Surname and Guyana by Brazil both as a
composite and as individual market saw increases from 2006 to 2009 with as subsequent decline. It
can also noted that Suriname’s exports comprised the majority of trade.
Suriname’s top exports to Brazil comprise of Inorganic chemical, Electrical equipment, Optical
equipment, and Vehicles. The only available data shows Suriname’s top export to Brazil (Inorganic
chemicals) having decline in the overall trade of 84%. Guyana’s top exports to Brazil comprises of
Pearl and precious stones, Plastics, and Electrical equipment.
21 OAS Trade Information Systems
22 Trademap.org , Investment Map
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The graph below shows goods currently demanded by the Brazilian market verses their international
supply. The in the top right quarter of the graph shows the goods that are in increasing demand and
overall supply of those goods are also increasing. Goods that fall in this quadrant are Rubber,
Mineral fuels, chemical and pharmaceutical products. It noted the products in this quadrant already
represent what is being exported to Brazil by Guyana and Suriname.
The treatment of imports under the Brazil Guyana agreement, stipulates the tariff preferences and
other conditions for imports of the products listed are from the respective parties. The agreement is
based on the granting of tariff preferences which consists of percentage reductions applied to
imports from third parties. Preferences granted by Brazil under this agreement includes zero 100%
on products under the categories: meat & edible meat offal, fish & crustaceans, edible vegetables,
fruits & nuts, peel of citrus/melons, coffee, tea, mate & spices, cereals, milling industry products, oil
seeds/misc. grains/med. plants/straw, vegetable plaiting materials, sugars & sugar confectionery,
preps of vegs, fruits, nuts, etc., misc. edible preparations, beverages, spirits & vinegar, salt, sulphur,
earth & stone, lime & cement, plastics & articles thereof, wood & articles of wood, wood charcoal,
paper & paperboard, articles of paper pulp, and metals. 23. The current Brazil Suriname partial scope
only provides preferential access to the rice.
OBJECTIVE, PURPOSE & EXPECTED RESULTS
The objective of this TOR is to conduct an assessment of the opportunities for maximizing the
enormous potential presented by the Guyana/Suriname-Brazil nexus, and to develop a strategy for
enhancing trade between Guyana and Suriname, and well as trade between Guyana/Suriname with
Brazil, including for the negotiation of any trade agreements as would be deemed necessary for such
23 Economic Complementation Agreement Brazil - Guyana (AAP.CE No. 38), preferences granted by Brazil
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trade to develop and flourish. It will also seek to identify the specific market areas which would
enable the highest level of market penetration in the short, medium and long terms.
In addition it will aid Suriname and Guyana to synchronize there customs and trade policy; support
both countries in attracting Foreign Direct Investment; help present Suriname and Guyana as one
investment destination; support them in creating clusters between and within their respective
countries; and support Business Support Organisations to enhance their support services to their
members.
1.4 Overall objective
To conduct an assessment of the opportunities for increased trade and investment between Guyana
and Suriname, as well as increased trade and investment between Guyana/Suriname and Brazil and
the development of a strategy and plan of action to take advantage of the opportunities identified.
1.5 Purpose
To assist Guyana and Suriname in recording the performance of historical trade between their
respective countries and Brazil and to identify what sector and or products/services are best
positioned for enhanced trade performance between the two. This will help to guide the Agency in
the provision of export development programs and activities to facilitate an integrated trade
program similar to the Haiti-DR Bi-National program.
1.6 Results to be achieved by the Consultancy
The main result to be achieved by this consultancy will be the development of a strategy and a plan
of action to support the development and enhancement of trade between Guyana/Suriname and
Brazil..
The Strategy and Plan of Action should provide guidance in the following areas:
 The sector, sub-sectors, products and services that should be covered
 The steps necessary to overcome any legal, regulatory, and or administrative hurdles to trade
between both partners
 The areas of support required by all stakeholders, including the private sector, government
agencies, Regional Organisations and Trade and Business Support Organisations and
necessary to effectively enhance export trade between Guyana and Suriname with particular
Brazil
 The status of institutional relationships between business and trade support agencies and
organizations within Guyana and Suriname with those in Brazil, and recommendations for
strengthening those relationships
 External financial and technical support programs that may be available and accessible to
Guyana and Suriname to undertake projects and activities under this initiative
1.7 Assumptions underlying the project intervention
The following assumptions underlie these Terms of Reference:
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(i)
This strategy and plan of action will support regional initiatives that serve to improve the
export performance of Guyana and Suriname;
(ii)
That data exists and is available on the subject.
(iii)
That stakeholders from both member states will provide accurate and current
data/information and in a timely fashion.
(iv)
That public and private sector stakeholders are aware of any trade agreements that exist
between Guyana, Suriname and Brazil, and the potential opportunities arising from such
Agreements.
1.8 Risks
The following are anticipated risks:
(i)
(ii)
(iii)
The unavailability of requisite data on the trade flows
Lack of sufficient access to the key stakeholders, particularly in the private sector
In this regard the Caribbean Export Development Agency will work closely with the Consultant
throughout the exercise to ensure that the Consultant receives fullest possible cooperation from all
relevant stakeholders.
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SCOPE OF THE WORK
2.1 General
2.1 .1 Specific Activities
To achieve the expected results of this review, the Consultant will:
(i)
Review any trade agreements between Guyana/Suriname and Brazil, both partial scope
and fully fledged trading agreements and highlight the key market access opportunities
included;
(ii)
Assess the trade legal and regulatory framework currently in place between
Guyana/Suriname and Brazil and make recommendations for improving those as
necessary;
(iii)
Carry out consultations with key public and private sector representatives to capture
some of the challenges related to the development of export trade between
Guyana/Suriname and Brazil;
(iv)
Conduct an assessment of the institutional relationships between and among trade
support agencies and organizations among the three countries
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(v)
Develop a Strategy outlining key recommendations and a Plan of Action required to
effectively enhance export trade between Guyana/Suriname and Brazil. This will include
an identification of the key sectors, sub-sectors, products and services within the two
countries that are best positioned (export ready or near ready) for enhanced trade
performance into the Brazilian market.
(vi)
Identify potential sources of funding to implement the findings and recommendations
of the Strategy and Plan of Action.
2.2 Project management
2.2.1 Responsible body
The Caribbean Export Development Agency will be responsible for contracting the Consultant and
ensuring the required deliverables are produced.
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LOGISTICS AND TIMING
3.1 Location
The Consultant must be a national of either an African, Caribbean, and Pacific (ACP) State or of a
European Union Member State and will be required to conduct most of the research from in-country
assessments in Guyana and Suriname in collaboration with Caribbean Export staff. In addition, the
Consultant may be required to travel to other destinations, as appropriate and as agreed with
Caribbean Export. Where possible, the Consultant should make optimal use of Information
Communication Technologies, including videoconferencing and Skype to enhance collaboration
among team members and organisations.
3.2 Commencement date & Period of implementation
The intended commencement date for this assignment is July 15th 2013 and is expected to be
completed by the October 15th 2013.
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REQUIREMENTS
The Consultant must have the following qualifications:
 A proven track record in international economics and/or international trade;
 An MSc in Economics, International Trade, International Relations or a related discipline;
 At least 10 years’ Experience in working on matters related to international trade and or
export development;
 An excellent command of English (working knowledge of Dutch and or Portuguese is
desirable);
 Excellent oral and written communication skills;
 Ability to work effectively in a multi-cultural, diverse, dynamic environment;
 Ability to use Microsoft Office and other related software
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Interested and suitable candidates are required to submit a project proposal (technical and financial)
as well as a resume addressed to:
David Gomez, Manager - Trade and Export Development
Caribbean Export Development Agency
1st Floor Baobab Tower
Warrens, St. Michael
BARBADOS
WI
Or emailed to David Gomez at [email protected].
We anticipate that 50 man-days will be required to undertake this consultancy and ask that financial
proposals differentiate between professional fees and other expenses.
ALL applications must be received no later than July 4, 2013 at 4:30pm AST.
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REPORTS
5.1 Reporting requirements
1. An inception report to be submitted one week after the consultant has been contracted;
2. The submission of an interim report after field research and consultations with key
stakeholders have been conducted;
3. Submission of a Draft Strategy for enhancing export trade between Guyana/Suriname and
Brazil and including the following:
 a road map and action plan for achieving export growth in trade
 identification of the key sector(s), sub-sector(s), products and or services that are
export ready and which could achieve export growth in trade with Brazil
 Identification of key institutional relationships between trade support institutions
that require strengthening, or which would need to be established
 Identification of external financial and technical support programs that could be
accessed to implement the Action Plan above
4. Submission of a Final Strategy incorporating comments and feedback from Caribbean Export
and representatives from Guyana and Suriname
5. Submission of a Final report describing the work undertaken, challenges and constraints
encountered, and other recommendations or actions necessary for addressing those
challenges and constraints
5.2 Submission & approval of outputs
The reports referred to above must be submitted to the E x e c u t i v e D i r e c t o r . All reports
must be submitted in English in electronic format. The final report must be submitted in
electronic format along with three (3) hard copies.
Performance on the project will be measured by timely submission of the deliverables outlined
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in Section 4.2 and as outlined within the work plan. Feedback on each submitted Progress
Report is not a requirement for the continuation of the project. The Contracting Authority
will provide feedback to the consultant within 7 days of receipt of the final report.
5.3 Special requirements
Confidentiality in the discharge of the obligations is a requirement.
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