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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 geo-strategic 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, 29

th 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) The unavailability of requisite data on the trade flows (ii) Lack of sufficient access to the key stakeholders, particularly in the private sector (iii) 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.

2 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. 3 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. 4 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 dgomez@carib-export.com. 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. 5 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 xe 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.