Dear Editor,
I thank Dr Henry B. Jeffrey for his letter, ‘The public debt began its rise in the colonial era and became unsustainable in the Burnham era,’ (SN May 27), which he said was occasioned by the ongoing exchanges in the letter columns on debt relief. I read it thoroughly and am satisfied that his presentation of ‘facts and figures’ dating as far back as the early fifties was not an attempt at political spin but an effort to help put in perspective the birth and growth of foreign debt and the circumstances that necessitated initiatives at debt relief for Guyana.
But although his aim was to show Guyana’s foreign debt has its genesis in the colonial era, most Guyanese, with even a modicum of interest in this debt relief issue, already had a general idea of the dramatic rise in Guyana’s foreign debt under the PNC regime that reached US$746.6M by 1985 under Forbes Burnham and US$2.1B by 1992 under Desmond Hoyte. In short, most of us knew the PNC was responsible for running up this massive debt, but what most of us never knew was how this would then be used as a political football or weapon by the PPP, even as the PPP prepared to retake power without a clue or plan on how to deal with that mess plus the economy itself.
For example, and thanks to Dr Jeffrey, Dr Cheddi Jagan, who knew he was going to inherit a massive foreign debt from the outgoing PNC regime in 1992, originally held the view as Opposition Leader that Guyana should refuse to pay off its debt, pull out of the capitalist world system and join the socialist bloc. In fact, according to Dr Jeffrey, even after Dr Jagan took power in 1992, he still did not want to pay off the debt; however, since there was no world socialist system in 1992 (the USSR had collapsed), he found himself locked into the capitalist system and ended up dealing with IMF/World Bank programme. “New tactics,” Dr Jeffrey wrote, “were required and what he advised should be done unilaterally when in opposition, he now sought to gain by way of negotiations.”
This thinking by Dr Jagan – whether well thought out or mere wishful thinking – is profoundly revealing because it explained why, up to the time of his death in 1997, his party still had not put out a long-term economic recovery and development plan, and it also helps us get a better understanding of how President Bharrat Jagdeo came to make debt relief his priority, rather than opening up the floodgates of the economy to major foreign investors.
Reading Dr Jeffrey, a one-time cabinet minister in the PPP government, debt relief originally was a matter of concern to Dr Jagan, for both practical and ideological reasons. Practical, because Dr Jagan “believed that requiring poor people to pay back debt, most of which had been squandered by various dictators, was immoral”; and ideological, because by using the debt burden issue as a reason, Dr Jagan believed the best course of action for Guyana was to “refuse to pay off its debt, pull out of the capitalist world system and join the socialist bloc.”
So after Dr Jagan died and President Jagdeo succeeded Mrs Janet Jagan, this President had little or no choice but to continue making debt relief a matter of priority. Any attempt, therefore, by his media spinners today to use debt relief as the centrepiece of his presidential legacy should be carefully viewed against the background of the mitigating circumstances that led the IMF/WB to come up with a menu of initiatives for debt forgiveness. Working towards debt forgiveness, to be fair to all concerned, was never a one-man show; it involved several players, so no one man can take credit for any goal achieved here, even if some would love to play politics with it.
By the way, debt forgiveness aside, we are still waiting to learn how much money has been borrowed since the PPP returned to power in 1992. Any takers out there?
Now, since Dr Jeffrey likely will continue where he left off, what I would like to ask him is, given what he knows of the genesis and growth of debt in Guyana, and the relief initiatives advanced by the IMF/WB and embraced by the government, whether it was not practical and possible for the government to do a double-barrelled approach to dealing with our struggling economy by tackling both debt relief and a major economic recovery and development plan that allowed for the constructive exploitation of our natural resources. I think it was practically doable with greater emphasis on economic development via FDIs than those obtained in the last 16 years, so the horses didn’t have to starve while the grass was growing and waiting to be consumed. How much longer are we going to keep talking about our potential instead of realizing it?
Guyana is not a country that relies on foreign income from tourism, like Barbados, (67% of Guyana’s income in 2008 came from taxes, including the IMF/WB-backed VAT) but it is a country endowed with natural resources, especially in the agriculture sector, and so it would have made sense for the PPP to have come back into power with a major economic recovery and development plan, accentuating agriculture, even as it worked with the IMF/WB on debt forgiveness. Sixteen years into power and it still has not bared any long-term plan that major foreign investors could work around, even though it had ample opportunities long before the current global slowdown to attract major foreign investors.
Last time I checked, despite the shaken capitalist system, that’s the system by which the world is still running, so whether the PPP either still hates the West or is afraid and distrusting of it, Guyana’s economy continues to await a comprehensive development plan that could benefit from foreign investors, including Westerners and Guyanese living in Western nations! After being ousted in 1964 due to a PNC-UF coalition at the height of the East-West Cold War, for the PPP to come back into power 28 years later with a chip on its shoulder against the West is untenable, because it seems to be sacrificing the economic concerns of Guyanese on its altar of ideological expediency.
Yours faithfully,
Emile Mervin
