CARIBBEAN STUDIES ASSOCIATION

XV ANNUAL CONFERENCE

Trinidad ti Tobago

I"laq 22-26. 1390

GUYANA AND THE INTERNATIONAL MONETARY FUND

Today, Guyana has replaced Ha i t i as the "sick man o f the Americas." In terna l causes seem to have been more responsi ble than external factors, f o r the long s l ide since independence i n 1966. A3 a las t resor t , l i k e Forbes Buraharn before h i m , Desnsond Holjte has tu rned to the IMF. Considering the la t te r 's v e r y l i m i t e d ohjectives, Gurnham's cost1 y fa i lu re , and Hoyte's f r us t ra t i ons w i t h the Fund, prospects a re not 2ncouragirty. Although the Cornn-ionwealth-sponsclfed M c l n t y r e Report (1989) concludes that Georqetown has "no a l te rnat ive at present but to w o r k w i t h i n the IMF-approved Framework," c r i t i c s argue that Guyana's real problerns a re jocio-pol i t ical r a the r than economic. Only a government o f national consensus, capable o f r a l l y i n g both the Afro-Guyanese and Indo-Guyanese peoples behind it, can put the count ry back on i t s feet. How a stable coal i t ion government could be formed, and then rescue the count ry f r o m r u i n , remains a moot question. Meanwhile, on ly ti rile w i l l t e l l whether conventional economic therapy can prevent the patient f r o m becorni ng a te r rn i nal case.

Roland E l y

School o f P o l i t i c a l S c i e n c e Facl.11 t.y uf Juridical and Pclli t ics1 S c i e n c e

lJniversidad de Los A n d e s

Met- i ds - Venezuela

1. The Long Sl ide Since ltidependetice

2. What Went Wrong i n Guyana?

3. Burnt-tarn and the IMF: "recipe f o r r i o t "

4. The IMF and Hoy te's Economic Recovery Program

5. The Mclntyre Report

6. Misconceptions of t t ie IMF and I t s Mission

7. Conclusions

Reference Notes

GUYANA AND THE INTERNATIONAL MONETARY FUND

The Long Sl ide Since l ndependence

When B r i t i s h Guiana achieved independence i r l 1966, i t was

underdeveloped but showed consider-able po ten t ia l f o r g rowth . One

legacy f r o m the colonia l per iod was an economy a lmos t exclus ively

or ien ted t o w a r d the export o f three basic commodit ies, i n the f o l l o w i n g

order o f importance: alutminum ore (bauxite), sugar ( inc luding molasses

and rum), and r-ice. Together, they accounted f o r 85% o f Guyanese

exports, valued a t US$96 m i l l i o n i n 1967. ' D i r e c t l y o r ind i rec t ly ,

something l i k e 95% u f t o t a l personal income i n the p r i va te sec to r was .-I

re la ted t o the export trade.'

On the o t t ie r hatid, tt ianks t o fo re ign cotnmer-ce, goods and

serv ices avai lable i n the cap i ta l c i t y o f Georgetown were comparable t o . .

those of economical ly advanced ~ o u n t r i e s . ~ Re la t ive ly speaking, Guyana

was ii heal thy place t o l i ve . In fan t m o r t a l i t y pe r 1000 was 39.8, w e l l

belocrt the average r a t e of 66 p e r 1000 f o r L a t i n America, w h i l e l i f e

expectancy was approaching F i r s t -Wor ld l e ~ e l s . ~ W i t h respect t o

na tura l resources, Guyana was -and s t i l l ' i s - the m o s t abundant1 y

endowed o f B r i t a in ' s f o r m e r Caribbean colonies. The Gross National

Product (GNP) pe r cap i ta averaged about t w o - t h i r d s t h a t o f Barbados

and w a s 2 5 1 h igher than Dominica's f o r the per iod 1960- 1 976.5

By the 1980's, tiowever, the Co-operative Republic o f Guyana

presented qu i te a d i f f e r e n t p ic ture . For example, i n f a n t m o r t a l i t y had

r i s e n t o 47 deaths pe r 1000 i n 1386. Per cap i ta GNP aniounted t o barely

one-tenth Bar-bados' US$5,150 and less than ha l f o f Dominica's

US$1,2 1 To purchase the same quant i t ies o f eleven basic consumer

i terns t h a t could be bought w i t h the I-riinimum da i l y wage o f G$4 i n 1 9 6 4

(US$l = G$2), a Guyanese housewi fe rleeded G$400 by the I-niddle o f

1989 (US$l = G$33), whet1 the rninirrlurri da i l y wage w a s only G$30. To

put t h i s d ramat ic change f o r t t ie worse i n o ther terms, i t tiow required

13.3 days o f work t o obta in wha t could be bought w i t h one day's labor

twen ty - f i ve years ago. 7

Outside observers were concerned. In May 1989, f o r instance,

the Washington-based Council on Hemispheric Affair-s warned t h a t

Guyana was s l i d ing i n t o "economic and p o l i t i c a l chaos." The People's

National Congress CPNC), wh ich had main ta ined i t s e l f it1 power by

quest ionable means si t ice 1964, showed no ':sigtis o f s wi l l i t igness t o

accept a t-riul t i - p a r t y approach t o the cur rent socio-economic calamity ."

Wi thout reform, the Couticil p red ic ted that, "Guyana w i l l cont inue t o

crumble, w i t h i t s economy becot-rlitig South Atnerica's basket case and

i t s p o l i t i c a l sys tem degenerating i n t o open warfare."'

According t o an a t l a s publ ished by the Wor ld Bank, Guyana was

"ranked as having undergone the f o u r t h l a rges t economic decl ine i n the

w o r l d during 1980-87, f o l l o w i n g L i bya, Mozambique and ~a ta r - . " '

L i v ing stat ldards are now among the wor ld ' s l owes t . To c i t e bu t one

evidence o f the country 's collapse, it-I 1989 the Guyanese worke r was

earning l e s s than h i s counterpar t it1 Ha i t i , long known as t t ie Western

Hemisphere's poorest nat ion. l '' One m i g h t ask, therefore, wha t has

happened t o a land that , barely t w o decades ago, dreamed "of becorning

the food s to re and rnsnufactur-itig base o f the Caribbean

4.

a combinatiot-I o f fr-auduletit elect ions, var ious f o r m s o f coerc ion

( inc luding violence), as w e l l as econornic and m i l i t a r y a i d f r o m bo th

Washington atid Br-asilia, who usual lg have regarded the PNC as a l esse r

ev i 1 than any o f the ideological a1 ternat ives, Eiurnham's pa r t y has

mansqecl t o perpetuate i t s e l f in power f o r a quar ter o f a century.

l nept administ rat ion, bureaucrat ic corrupt ion, p o l i t i c a l

repression and nat iona l iza t ion o f sonie 80% o f the econorriy - to convert

Guyana i n t o a non-aligned and general ly s e l f - s u f f i c i e n t s tate, renarned

a Co-operative Republic i n 1370- have helped reduce Guyana t o

bankruptcy. They a lso have exacerbated under1 y ing h o s t i l i t y between

the Indo-Guyanese rr-ia j o r i t y (more than ha l f t he populat ion) and t h e

Afro-Guyanese niinor-ity (about a t h i r d o f the .inhabitants), ft-oni w h i c h

the FNC d raws nlost o f i t s suppot-ter-s. A pr iv i leged e l i t e i n t h i s l a t t e r

r a c i a l group has cont ro l led Par l iament , a l l l eve ls o f t he government

bureaucracy ( inc luding autononious s t a t e enterprises), and the ar-med

forces throughout the en t i re per iod o f nat ional independence. lJ

As a resu l t , tens o f thousands o f Guyanese, p r i n l a r i l y o f East

Indian ancestry, have emigrated t o the ~ n i t ed Kingdom, Canada, the

Uni ted States, English-speaking count r ies o f t he Caribbean, Suriname,

and Venezuela. l5 T h e unabated exodus o f Guyanese c i t i z e n s bas

prompted a prornit ient econot-riist a t the Un ivers i ty o f Guyat-la t o w a r n

tha t "we are ac tua l l y depopulat i ng."16 An o f f i c i a l government

document adnii t t e d t h a t t he populat ion had decl ined f r o m an e s t i t-fiated

818,000, it1 1978, t o 755,600 a decade later-. "Where have a l l those

people escaped to'?" demanded a nlerriber o f the opposi t ion i n

~ar l iarnent .

The Canadian Council f o r In ternat iona l Cooperation (CCIC)

publ ished a report, i n January 1989, tha t wen t much f u r t h e r

quan t i t a t i ve l y and also st ressed the qua l i t a t i ve l oss o f human

resources.

The exodus o f a la rge p a r t o f the population, approximately 150,000 persons, u r 20% o f the tota l , i n the l a s t 7 years, dran-iatizes the response o f the professional, business arid rni ddl e c lass t o the econorrli c decl ine and s ta te hegemony. AH en t i re c lass o f midd le and top management emigrated. Many work ing people a lso l e f t , especia l ly technicians, rr~actsinists, e lectr ic ians, teachers and those o f s k i l l e d trades.

T h i s massive f l igh t , o f the m o s t dynamic and product ive elernents in

Guyanese society, i s remin iscent o f the diaspora o f the "best and the

b r igh tes t " i n South Amer ica 's Southern Cone dur ing- the notor ious

m i l i t a r y d i c t a t o r s i i p s o f the 1970's and 1980's. When condi t ions

become into lerable, w i t h no hope f o r improvement, they voted w i t h

t h e i r feet . Those who l e f t Guyana ranked "among the mos t

soph is t ica ted i n the Caribbean.,"1g wh ich expla ins t h e i r success

3. B.urnham and the IMF: "recipe f o r r i o t "

What can be learned f r o m the experience of the l a t e Comrade

Leader (as Burnham was known dur ing h i s l i f e t i m e ) w i t h the IMF? The

record i s no t encouraging. f o r Desrnond Hoyte's present pas de deux w i t h

6.

the Fund. Burntiam's F i r s t Developnient PI-ograni 11 366- 1372) and the

Second ( 1 972 - 1376, w i t h a one-year extension i n t o 1377) d id no t l i v e

up t o t h e i r respect ive slogans: " i ndus t r i a l i za t i on by i nv i ta t i on " and

"feed, c lo the and house the nation."20 H is T h i r d Development Program

o r Plan, as i t was knowti local ly , purpor ted t o increase econotnic g r o w t h

by 17% over the four-year per iod 1978- 198 1 .2

To utiderwt-ite the Plan, the Comrade Leader souqht f inanc ia l

support frat11 the IMF. He had no o ther a1 ter t ia t ive. Notwi ths tand ing h i s

f l i r t a t i o n s w i t h t t ie Soviet Bloc arld se l f -congra tu la tory r h e t o r i c about

"Co-operative Socia l ism" i n Guyana, Moscow's mu1 t i b i l l ion- rub le

subsidies t o Cuba precluded s ig t i i f i ca t i t economic a id t o low-pr-iot-i t y

cap i ta l s l i k e Georgetown. And so, on 12 June 1978, t t ie Guyanese

Government signed a L e t t e r o f In ten t w i t h the ~ u n d . ~ ~

I n l i n e w i t h the IMF's cond i t ion t h a t Georgetown put i t s

f inancia l tiouse it1 order, the L e t t e r o f In tet i t s ta ted that , "The

Government has a lso taken t-rieas'ures t o st rengthen the f inances o f t he

publ ic sector."23 Wi th the pui-pose o f o f f s e t t i n g h igher costs, the

Burnham reg ime ra ised r a t e s f o r var ious Services furn ished by the

state, such as e lec t r i c i t y , te leconimunicat iot is at-~d t ransportat ion. I t

also doubled the p r i ce o f r i ce , an indispet is ib le s tap le f o r w o r k i t ig-class

fami l ies .

The 1978 L e t t e r of ln te t i t protmised, fur thermore, t o irnpose a

new 10% sales tax, increase the dott iest ic p r i ce o f sugar and h ike

i n te res t rates, as w e l l as t o "take f u r t h e r measures t h a t /-flay be

appropr iate ... a f t e r cotisul t a t i o n w i t h t t ie Fund." The purpose o f these

sacr- i f ices was " to b r i fig about a subs tant ia l irriprovet-rrent i n Guyana's

balance o f paymerits and, i n t h i s way, c rea te cond i t ions t h a t w i l l

per-mi t a s t rong and sustainab1.e economic g r o w t h i n the future."24

During August 1978, the; IMF granted Guyana c r e d i t s t o t a l l i n g

US$18,8 m i l l i on , f o l l o w e d by at1 addi t i ona l US$BO r n i l l i o n (r-epayable

w i t h i n th ree years) i n 1979. The Fund's condit iorrs were as fo l l ows : a

rea l g r o w t h o f 5% i n the GNP between 1978 and 198 1, reduct io t i o f the

governt-rient's cur ren t account d e f i c i t f r o m 32% t o 10% o f the GNP, an

i I-~cr-ease i n fo re ign exchange reset-ves, reduct ior i o f a r rears i n fo re ign

payments, and maititenatice o f the o f f i c i a l exchange r a t e a t US$1 =

~ $ 2 . 5 5 . ~ ~

Georgetown's i f iabi l i t y t o mee t the focegoirrg t a r g e t s fo rced the

gover-rinlefit t o renegot ia te i t s agreement w i t h the IMF on harsher t e r m s

i n 1980. These inc luded a rea l g r o w t h o f 6% ins tead o f 5W, elirrsit iation

r a t h e r tt iati reduc t ion o f a r rears i n f o re ign payt-rients (when exchange

assets o f the country 's cen t ra l batik reached US$52 mi l l ion) , and

l i m i t i n g the balance-of-payments d e f i c i t t o US130

Corresponding1 y, t he Fund extended another t hree-y ear c r e d i t t o t a l 1 i rig

US$132 m i l l i on , w h i c h w a s ra i sed t o US1174 m i l l i o n i n 1931. The

l a t t e r sum was equivalent t o 400% of t he o f f i c i a l loan quota assigned

t o Guyana by the ~ u n d . ~ ?

Because o f i t s cont inued f a i l u r e t o cotnply w i t h the IMF's

s t ipu la t ions , the Burtiham reg i rrie could on1 y . d raw down i t s f resh

c r e d i t s by .US$J7 m i l l i o r l dut-ing the f i s c a l year ending. in J u l y 198 1. For

exarriple, the Guyariese d o l l a r had s i ~ n k t o the l eve l o f US$1 = G$3 by

a. June 198 1, and paymerits of1 the e a r l i e r IHF loatss had f a l l e n i n arrears.

The f o l l o w i n g year, Destnond Hoyte, then servir ig as the Comrade

Leader's m i n i s t e r o f Econot-rsy, confessed t h a t Guyana. was "not e l i g i b l e

a t present t o d raw upon the resources o f the I M F . ' ' ~ ~ The government

could no t even catscel a modest US$2.5 nsilliots paytrient due on the 1978

c r e d i t f a c i l i t y , l e t alone another US$6 ow ing on the 1979 loan.29

A j o i n t IMF-World Bank teatn a r r i ved i n Georgetowts duri t ig J u l y

1982, " to sc ru t i n i ze the economy and d iscuss nseasures pronsised by the

reg ime as a cond i t ion f o r rescuing the country f r o m bankruptcy."J0 The

rriissiots w a s not successful . I n the nieantime, i n t e r e s t and

a t~sor t iza t ion paymeti ts cont i t iued t o pyramid upward. A f t e r one l a s t

rourid o f f r u i t l e s s negot iat ions i n 1984, Burnha[~s declared tha t t he IMF's

ternss amounted t o "a rec ipe f o r r iot ."3

Confronted w i t h a no-wi t i s i tua t ion , the Comrade Leader

proceeded t o f u l f i l l a prophecy he had made f o u r years previously. "Of

course, i f w e at-e not able t o reach the [IMF] tat-gets ..." he declared a t

t ha t t ime, 'we w i l l j u s t have t o opt out o f the a c ~ r e e r n e r i t . " ~ ~ Opting

out eartied Guyana a place on the Fund's b l a c k l i s t o f defaul ters, wh ich

e f f e c t i v e l y cu t o f f it-rsportatit sources o f c r e d i t frons o ther in terr ia t ional

lenditsg aget~cies, as w e l l as fo re ign governments atid cot-rsmercial banks.

By 3 388, the Governrrient o f Guyana had f a l l en some US$70 t-rsillion i n

arrears oti payments due f o r serv ic ing t t ie debts t h a t Burtiham had

col i t racted w i t h the I M F . ~ ~

Meanwhile, vvhat d id t i is T h i r d Developmetst Plats do f o r t t ie

people o f Guyana? Did any, o f tt ie IMF's mu1 t i rn i l l i on -do l l a r trarssfusions

t r i c k l e dowt-I t o them? Did c red i t s ff-of11 the Fund ac t as a x a t s l y s t f o r

economic g f - o ~ ~ t h , as Burnham Rad pred ic ted i n j u s t i f y i f-~g recourse t o

the lender of l a s t reso r t? The i n t e r i m analys is o f a Guyanese

spec ia l i s t i n economics and pub l ic f inance bears uncanny resemblance

t o c r i t i c i s tns o f Desrnond Hoyte's deal ings w i t h the IMF a decade l a t e r .

In a publ ic l ec tu re a t the Un ivers i ty o f Guyana, dur ing May 1980,

Narbada Persaud described the r e s u l t s o f Gurnharn's t h i r d and l a s t

tiatiotsal developnsent progratn a t t he ha l f -way mark.

Guyana today faces cotnplete r u i n stid bankruptcy. Economic development has been strangled, basic tiurrian r i g h t s and freedonis have beet1 eroded, standards o f l i v i n g have mar-kedl y f a l l e n w h i l e the cos t -o f - l i v i ng has sky-rocketed. Waqes and sa lar ies have remained s t a t i c with'the value o f the Guyanese do l l a r dropping dai ly . Long queues cont inue t o be the order o f the dau as shortages and u n f a i r d i s t r i b u t i o n o f f oods iu f f s plague the nat ion. Unetnployrnetit, insecur i ty , p ros t i t u t i on , iuven i le delinquency and c r i m e have beconle in tegra l p a r t s o f our l i f e . Degradation, m ise ry and hunger i n our land can no lot iger be obscured by the denlagoguery and tneatiingl ess slogans of t he [PNC] m i n o r i t y r e g i r r ~ e . ~ '

A f t e r t w o years o f operat ion, the T h i r d Developt-r~ent Plan was

"in shat-ribles." Instead o f reaching the 1.1% rea1,growth p ro jec ted f o r

the years 1978 at-td 1979, t-he economy was ac tua l l g found t o have

shrunk by 2%; when adjust t - i~ents were rnade f o r i n f l a t i on . The Burnhatn

regirrse had promised t h a t "several. tisousands" o f Guyanese wou ld be

giveti jobs as a resu l t of the Development Plan. On the contrary,

unemployment had "reached 25-30 per cent of the labour force."35 For-

in terest and ai i ior t izat iot i paymerits on i t s external debt, the

Governt-nent of Guyana had t o earmark 76.6% of currerit revenues

projected i n 1982's de f i c i t Budget. Th is was equal t o 41% of export

earni figs, o r 5 1.8% of current expenditures, a crushitig burden frorrs any

s ta t i s t i ca l point of view.36

That same year, i n order t o save scarce foreign exchange f o r

debt servicing, Burnhar~i prohibited the i m p o r t a t i o of wheat. Th is

draconian measure gave r i se t o a f lour ishing cotltraband trade i n wheat

f lour. Utiable t o pay black-market prices, tt ie less pr iv i leged sectors of

Guyatiese society suf fered the most. The i r Comrade Leader t o l d them to

bake bread f r om r i ce f lour, which happetis t o be niost unsat isfactory f o r

that purpose, part icular1 y because of i t s i n f e r i o r nu t r i t iot ial value.

Deficiericies it1 thiamine, an essential B-corriplex v i tamin found i n

wheat, led t o outbreaks of ber iber i among. prisoners and the poor it1

Guy a ~ a . ~ ~

4. The IMF and Hoyte's Ecotiotnic Recovery Prooram

Forbes Burtiham's suddeti death, i n August 1985, l e f t h i s he i rs

w i t h the urienviable task of t r y ing t o salvage Guyana's shipwrecked

economy. Unt i l such tirrie as Georgetown came t o terms w i tti the IMF,

however, i t could expect no re l ie f f rot i i ariy of the mu1 t i l a t e ra l lendirig

agencies, fot-eigti governmetits and commercial batiks, o r other potent-ial

sources of c red i t i n the West. Thus, w i t h l i t e r a l l y nowhere else t o

turn, President Desr-riotid Hoqte opened c landest ine conversat i orss w i tti

the Fund i n 1387. The t-nere p o s s i b i l i t y o f a t iew accord w i t h the IIAF

exc i ted h o w l s o f p r o t e s t f ro tn Guyanese l abo r unions and opposi t ion 7 r

par-ties i n the Nat ional Assembly, as Par l iament w a s now known.~"n

March of the f o l l o w i n g year, Hoyte could no longer evade a d m i t t i n g t h a t

t i is yover-nt-rient had del ivered a pre l i r r i inary "pol icy f ramework paper" t o

ttie ~ u t i d . ~ '

A t t h i s point , Guyana w a s in de fau l t on something l i k e USS875

m i l l i o n t o i t s over-seas c red i to rs , t h a t i s t o say, an amourst equal t o

t w i c e the country 's GNP?' Actual ly , the t o t a l ex terna l debt exceeded

US$1,5 bill iot-t, a t r u l y s tagger ing sutn f o r a s m a l l and inipoverist ied

s t a t e such as Guqana. Reserves o f for-eiqn exchange stood a t l ess than

US$10 t-rsillioti. Accor-ding t o f inanc ia l analysts, on1 y t t ie "para l le l "

(black) t-riar-ket, wh ic t i accounted f o r rough1 y 80% o f a l l commerc ia l

a c t i v i t g i n Guyana, had saved the countrg's economy frot-n comple te 6

c o l l apse. 4 1

Dur ing debate on t t ie 1988 Budget i n t t ie Nat ional Assembly,

Cheddi Jagan, founder arid l i f e t i m e leader 'of the n i a r x i s t Feople's

Pr-ogressive Par t y (PPP), challetiged Desrnolid Hoy te 's ra t i ona le f o r

recourse t o the IMF. Jagats i n s i s t e d t h a t Guyana's enonssous pub l i c

debt was ba th the cause arid e f f e c t o f t t ie country 's economic cr-isis. As

3 percentage of government receipts , debt serv ic i r ig cos t 35% i n 1986,

50% i n 1987, and wou ld reach 60% i n 1958. Payment-s f o r t h i s purpose

were pr-i nc ipa l l y r-espotisible f o r the na t iona l budget's la rge arid chrot i i c

d e f i c i t . As Jayan po in ted out, the v ic ious upward sp i ra l o f indebtedness

began duritig the l a te 1370's, when Burt-iham went t o the Futid f o r

c red i ts t o launch h is i l l - f a t ed Th i rd Development ~ 1 a n . J ~

To get Guyana o f f the FMl's b lack l i s t atid qua l i fy f o r f resh

ct-edi ts, the Hoyte Admi t i i s t ra t ion prepared an Economic Recovery

Program (ERP) f o r the period 1953- 199 1 (a f terward extended through

13921, i n accordance w i tti guidelines and goals suggested by o f f i c i a l s

f rom the Fund. A l e t t e r of intent, dated 3 1 March 1989, was del ivered

to the IMF and approved by the l a t t e r on 28 Apr i l . Ar i t ic ipat ing

strenuous ob ject iot is t o commi tmeti ts rriade i t i the docurrietit-, i t was not

released publ ic ly un t i l the second week of August, j us t before

Par1 i anletit began i t s antsual two-mont h recess. 43 In the meantime,

Fi tiatice Mi t i i s ter Carl Greenidge wa i ted up t o the l a s t possible moment,

before presenting the f i t-st ERP Budget on 3 1 March 1 9 8 9 . 3 ~ Dictated

by the IMF as a precondit ion f o r rer~ewed cred i t fac i l i t i es , the 1389

Gudget exploded' l i k e a bombshell upon the populace of Guyana.

The sever i ty of i t s provisiot is caused host i le demotistrations i n

the s t reets of Georgetown, ending w i t h hundreds of persons detained by

the forces of publ ic order. With in a f e w days, the rr i i l i tat i t Federation

of ltidepetident Trade Urliotis of Guyana (FITUG) begati a pro test s t r i ke

which lasted f o r almost t w o The FITUGaS seven tneniber

utiiotis comprised approximately two- th i rds of the organized labor

movement i n ~uyana." In addit ion t o the v i t a l sugar (GAWU) and

bauxite (GNWU) industr ies, i t s met-i~bership included workers f rorrl the

commercial and publ ic service sectors and the Univers i ty of Guy aria.

Para1 ysis of sugar atid bauxite production cost the country US$ 1 m i l l i o n

13.

per day i n foreigrs Exchatige, which i n tut-ti made i t it-r-~possible for- the

Gover-nment of Guyat-la t o reach targets established f o r the ERP i n

1989. J7

One need not look very f a r t o f i nd reasons f o r the FITUG's pro test

s t r ike . One of the ERP's most contentious rneasures was devaluation by

70% (US$l = G$33) of the local cur-retlcy, w i t h the poss ib i l i t y of

fur ther downward revis ion later- that year. The paral le l exchange

market was operatirig a t US$l = G$50 and beyond by I\lovember,

which was tantamount t o de fac to devaluation, considering the

under-ground economy's pararrioutlt importance i t i preventing the

countr-yes collapse. S im i la r l y explosive provisiorls were the spectacular

hikes i n the pri tne ra te of i n te res t ( f r om 14% to 3523, the cost of

e lec t r i t y (200%) and pr ice r i ses of up t o , 300% f o r r ice, sugar-, arid

petroleum products.48

Firiance Min is ter Greenidge further- announced elimination of

rnost exernptioris fr-oni corisurner taxes, a t the same t irne ra is ing excise

taxes on alcohol ic beverages, along w i t h starnp duties on cornmer-cia1

l icenses and passports. Publ ic enterprises, . including the bauxi t e and

sugar i fidustr-ies would be required t o resume payrnent of dividends and

incurne taxes, which they had ignored since the early 1980's. They

would also lose a wide range of tax exernptioris. Gr-eenidge indicated,

further-mot-e, that the Gover-nment of Guyana would undertake t o d ivest

i t s e l f of a dozen money - losing s ta te enterpr-ises.49 An obvious

cotisequence of the 1st ter- r-eforni would be more unemployment i n

Guyana.

14.

The immedia te e f f e c t s o f Guyana's IMF-inspired 1989 Budget

were numbing. P r i ce r i s e s o f 200-300% f o r consurnet- necess i t ies

cont ras ted c r u e l l y w i t h a toket i increase o f only 20% iii the tr-iinimut-n

da i l y wage of G$30 -o r US$0.91 a t the o f f i c i a l exchange rate, 30%-35%

less on the para l le l market . Even the pa the t i c G$33.70 pet- day

dematided by the Trades Utlioti Congress (TUC), "a doc i le f r i e t i d o f the

P N C " ~ ~ , was considerably l e s s than an equivalent i n Guyanese do l l a rs o f

the m i n i mirm Amer ican wage per hour. Farmers, profess ionals,

i ndus t r i a l i s t s , rilerctiatits, cons t ruc t i on vtorkers, banks and lending

agencies - v i r t u a l l y everyotie bu t b lackrnarket speculators- ree led

under the isnpact o f IMF recornmendations embraced by the ~ u d ~ e t . ~ '

I n o rder t o cushion b l o w s t o the tnore vulnet-able groups i n

Guyana, t he Hoyte g o v e r t i n ~ e t ~ t devised a Socia l Impact Ame l io ra t i on

Program (SIMAP) t o func t i on sirr iul taneously w i t h the ERP. The Finance

H i t l i s t e r atlnounced t h a t US$8 t ~ i i l l i o n wou ld be s e t aside t o f inance

SIMAP over- a per iod o f t w o years, beginning i n the l a t t e r h a l f o f

1 9 8 9 . ~ ~ Funding was expected t o come f r o m the Wor ld Bank and fo re ign

governments inb.olved w i t h r-enegotiation o f Guyana's ex terna l debt?

Unfortunate1 y, these expectat ions had n o t m a t e r i a l i z e d by

February, 1990, and G e o r g e t o j ~ t i had t o corrse up w i t h a US$2 r n i l l i o n

package, "as an emergency re l ie f " , disbur-sed through the M i n i s t r i e s o f

Heal th and Labor r a t h e r than S I M A P . ~ ~ The i n i t i a l bene f i c i a r i es were

some 90,000 ch i ld ren "frot-rl s i x t ~ i o n t h s t o f i v e years; l a c t a t i n g mo the rs

w i t h babies up t o s i x tnonths and pregnant (rvomen f r o m 14 weeks

upwards."55 For the t i m e being, aging pensioners and phys ica l l y

handicapped persons were apparently l e f t t o fetid f o r themselves -not

to ment ion thousands of unemployed blue- and white-col lar- wor-ker-s.

Hoping t o persuade potent ia l investor-s of the ERP's mer i ts ,

Pr-esidetit Hoyte paid a wel l-publ icized, ten-day v i s i t t o the United

States during June 1989. A t the White House, he explained t o George

Gush that h i s government was determined t o put Guyana's house i n

~ r - d e r . ~ ~ President Bush praised Hoyte f o r s t i ck ing t o h i s guns i n the

face of widespread resistance and h o s t i l i t y t o tt ie ERP Budget,

r-ecoyni ti fig the d i f f i c u l t i e s o f carryit-ig out such an unpopular auster i ty

progr-atti. During t a l k s w i t h business and f i t iancia l leaders i n f i v e

Plidwestern states, Hoyte repeatedly t o l d h i s audiences tt iat, "Guyana

has a 'rendezvous w i tti prosperity'," and t t ia t under t t ie ERP "tt iere were

no 'sacred cows' i n Guyana o f f l i m i t s t o i n v e ~ t m e n t . " ~ ~

Wtiat does Guyana have t o show f o r i t s sacr i f i ces? Up t o tt ie

ear ly tnonths of 1990, the rep ly would be: not much. Hopes were

raised, a t the end of Apt-il 1989: by an o f f i c i a l announcefnent f r om the

Guyatia Publ ic Cot-rirtsunications Agency (GPCA) t o the e f f e c t that the IHF

had pledged a stand-by (short-tertsi) loan o f US$80 mi l l i on , as w e l l as

an enhanced str-uctural adjustment f a c i l i t y (rtiediut-ri-tert-ri loan) of

US$18 1 But t w o months l a t e r Finance Minister- Gr-eenidge

backtracked on the GPCA's previous press release \vi t h the s t a r t l i ng

declarat ion t ha t both of ttiese agreerrients were s t i l l pending. In shor-t-,

ther-e could be no disbursements f r om the Fund before 1 9 9 0 . ~ ~

The c red i t s i n question had not been released because e f f o r t s o f

the ERP Support Group continued unsuccessful or1 t w o coutits. Composed

16.

of Canada ( the chairman) and seven o ther m a j o r c r e d i t o r countr ies, the

Support Group w a s supposed t o ease Georgetown's balance-of -payments

problem, w h i c h i n t u r n wou ld c lea r the way f o r the IMF's stand-by loan.

S h o r t f a l l s i n a l locat ions promised by some members, m o s t

conspicuously those o f the Uni ted States, were prevent ing the Support

Group f r o m complet ing t h i s pa r t o f i t s mission.60

Guyana's pr inc ipa l c red i to rs were a lso expected t o arrange a

br idging loan o f US$165 mi l l i on , w i t h w h i c h the government could

s e t t l e i t s del inquent payments on debts with the IMF, the Wor ld Bank,

and the Caribbean Regional Development Bank. Ear ly i n March 1989,

Greenidge g loomi ly observed that, "The amount owed t o the IMF i s more

than t h a t i n s t i t u t i o n can make avai lable t o ,this country. ae6 1. I n such

context, Guyana seems something l i k e a man t r y i n g t o reach the ground

f l o o r on an esca la tor t h a t i s moving upward f a s t e r than he can manage

t o r u n downward. For a l l h i s exert ions, l i k e Burnham before him, Hoyte

has ye t t o s low, much less at-rest, the esca la t ion o f Guyana's ex terna l

debt.

2. The Mc ln ty re Report

Few docunients have s t i m u l a t e d as much pub l ic d iscussion dur ing

recent years i n Guyaria as the so-cal led Mc ln ty re Report, whose o f f i c i a l

t i t l e i s "Guyana: The Economic Recovery. Program and Beyond." The

Report w a s researched and prepared by a Commonwealth Advisory Group

under the d i rec t i on o f A l i s t e r Mclntyre, a Grenadian-born econot-riist

w i t h i nipressive credent ia ls as a t rouble-shooter i n senior pos ts a t t he

17.

Uni ted Nat ions and Vice-Chancellor o f t he Un ivers i ty o f the West

Indies, Jamaica. A s s i s t i tig h i tn were t w o o the r un ive rs i t y p ro fessors

(Sussex and Toronto) and a team o f technician^.^^ Mclntyre 's Group f i r-st m e t i n A p r i l 1988. They del ivered t h e i r

Report t o President Hoyte i n November 1989. During the ensuing months

i t w a s debated i n the National Assembly, exhaust ively.discussed in the

loca l press, atid analyzed by academics. As the execut ive chairtnan o f

the GPCA explained towards t h e m idd le o f February 1990: "In a pub l ic

debate, p o l i t i c i a n s and commentators, o f course, deal w i t h repor t s o f

t h i s k ind very much the way they deal wi th s t a t i s t i c s ; they ex t rac t

f r o m them, i f they can, wha t w i l l serve t h e i r o w n interests."63

On t h e one hand, the Mc ln ty re Report ~ a i n t s an ex t remely bleak

p ic ture. "Guyana i s now ranked be low H a i t i as the poorest country i n

the Western Hemisphere." It i s a lso one o f " the m o s t heavi ly indebted

developing count r ies i n the world," w i t h an external debt probably

approaching "US$2,500 f o r every r-nati, woman and c h i l d in the ,.64. country. On the o ther hand, the Conitnonweal t h Advisory. Group made

i t qu i te c lea r t h a t they bel ieved Desmond ~ o y t e w a s on t h e r i g h t t rack.

"We are a l l agreed on the absolute necess i ty o f Guyana car ry ing through

the ERP, toughitig i t out through wha t w e are cet-taiti t o be per iods o f

hardships, d i f f i c u l t y and c r i t i c i sms . " For Mc ln ty re atid h i s associates,

the b o t t o m l i n e w a s that, "The Governrrient o f Guyana has no a1 tert-iative

a t present bu t t o work w i t h i n the IMF-approved framework.'*65

Addressing a symposium on the Mc ln ty re Report sponsored by the

Univer-si t y o f Guyana, ear ly i n February 1390, Pro fessor C l ive Thomas

found something i n i t f o r alrriost everyone -government, opposit ion,

p r i va te sector, in te rnat iona l community, press- except " the fa rmers '

organizat ions and the t rade union movement." in scholar1 y fashion he

then wen t on t o po in t ou t " fou r fundamental methodological f l a w s i n the

~ e ~ o t - 1 . " ~ ~

The f o u r t h and f i na l f l a w c i t e d by Pro fessor Thomas i s the m o s t

serious. It concerns the lack o f a nat ional consensus, an obstacle t o the

country 's developnlent since 1955, when Burnhatn and Jagan po lar ized

rac ia l d iv is ions i n Guyanese soc ie ty around t h e i r respect ive p o l i t i c a l

par t ies . I n h i s paper, Thomas noted t h a t t he Commonweal tti Advisory

Group tiopes "changes can be generated fr-otn w i t h i n

the government ranks, and no t w i t h o u t i n the ,larger community." He

warned h i s audience that, "Solut ions wh ich take the present

conste l la t ion o f p o l i t i c a l power [ i t . m i n o r i t y r u l e by the PNC] as given,

cannot work, f o r the economic c r i s i s has become inex t r i cab ly bound up

w i t h the w i d e r po l i t i ca l , economic, soc ia l and cu l tu ra l c r is is . " I n o the r *

words, cot~trat -y t o basic premises o f the IMF and ERP, "a pure ly .

technical so lu t ion does not exist."67

Pro fessor Thomas wen t on t o remind h i s l i s tene rs t h a t "none o f

the f i v e key macro-econot~i ic ta rge ts o f the ERP have been m e t so

fsr.l*68 F i r s t o f a l l , the rea l GIqP g r o w t h in 1989 was negative, it1

cont ras t t o the 4% increase p ro jec ted f o r t h a t year. Secondly, i n f l a t i o n

eas i ly surpassed tha t o f the previous year, and eventual reduct ion t o an

annual r a t e o f 10% seems complete ly ou t o f s ight . Third1 y, t h e pub l ic

sec to r d e f i c i t was nowhere near the ERP's ta rget o f 20%. Fourthly,

arrears in p a y m e n t s o n the external debt were s t i l l a long way f r o m

13.

being e l iminated. Final ly, ther e had beet1 no improvement i n Guyana's

net i n te rna t i otial exchatlge reserves. 69

According t o Thomas, t t ie Mclntyr-e Report i s co r rec t i n c a l l i tig

a t te t i t ion t o tt ie f a c t t h a t economic "ad jus tment i s no t achieved by the

c reat ion o f at1 apparent balance o f finances," w i t h help f rorn the IMF.

Quite t o the contrary, i t "requires s h i f t s i n r e a l resources and

product ion f r o m one s e t o f a c t i v i t i e s t o others." Furthermore, the

external debt o f a lmost US$2 b i l l i o n i s so la rge f o r a sma l l country l i k e

Guyana that, rea l i s t i ca l l y , i t "cannot hope t o receive t h a t amount o f a i d

-given the cotnpet i t io t i f r o m othei- countr ies. .*70

Major i t i ternat ional lenders have already given p r i o r i t y t o f orrrler

s a t e l l i t e s o f t he Soviet Uniori i n Eastern Europe, such as Poland and

Hungary. Around the Caribbean Basi ts, the Gush Admin is t ra t i on has

promised hutidreds o f m i l l i o n s o f do l l a rs t o rebu i l d the shat te red

ecor~omies o f Nicaragua and Patlama, apart f r o m cont inuing expensive

a id progratns w i t h Colombia, Peru and Bo l i v ia t o suppress the

product ion and export o f cocaine. Even i n the hypothet ica l case t h a t

Guyana were somehow able t o negot iate US$2 'b i l l i on i n f resh credi ts , t o

pay o f f i t s loans dat ing back t o Burnham's t ime, "as much as 6 0 pe r cent

o f export ear-tiings" wou ld s t i l l have t o be earmarked f o r serv ic ing the

external debt.' '' I t i concluding h i s remarks, t t ie in ternat ional1 y respected

Guyanese economist emphasized that, " f o r any economy t o surv ive i n the

present wor ld, bo th i t s p o l i t i c a l and economic s t ruc tu res mus t be

l ibera l ized." The lessons o f Eastert i Europe and, i t~deed, the Soviet

Union i t s e l f , were so obvious t h a t reference t o them would have been

superfluous. The only hope t h a t Pro fessor Thomas could see f o r

improv ing Guyana's " a b i l i t y t o niobilime funds wou ld be an ear ly so lu t ion

t o the p o l i t i c a l cr is is."72 The fundamental obstacle to economic

recovery it1 Guyana i s the socio-pol i t i c a l s i tuat iot i , no t t he country 's

external debt. The atiswer, i n the words o f C l ive Thomas, " l i e s i n our

c reat ing a l i be ra l po l i t i ca l , economic and soc ia l order.''73 I f he i s

r ight , no amount o f new money can cure the cancer in Guyana's economy

because the PNC i s no t about t o surrender i t s i l l e g i t i m a t e monopoly o f

p o l i t i c a l power. The IMF-inspired Ecotiomic Recovery Program i s thus

foredoomed t o fa i lu re .

6. Misconceptions o f t he IMFaatid I t s Missiot i

Non-economic obstacles t o a country 's recovery, such as those

mentioned i n the case o f Guyana; pa ten t l y l i e outs ide the cotnpetetice of

an in ternat iona l lending agency. I n fa i rness t o the In ternat iona l

Monetary Fund, one should a lso d is t ingu ish i t s m iss ion f r o m those o f

the Wor ld Bank, commerc ia l batiks, arid the fore ign-aid programs o f

indiv idual governments. From a ra t i ona l statidpoint, i t i s u n j u s t t o

c r i t i c i z e the IMF f o r being.what i t i s and no t being something else.

It hardly bears repeating. here tha t bo th the IMF and i t s s i s t e r

ins t i tu t io t i , the Wor ld Bank, were c res ted a t t he Erettorr Woods

conference, i n 1344, t o impose some order on the w o r l d econot-ny and t o

ass i s t post war- reconst ruc t ion. ' John Maynard Keynes, the pr inc ipa l

a rch i tec t o f both, reportedly."once sa id that, the fund ought t o be ca l l ed

a- bank atid the bank a fund." The Wor ld Bank became "a pool o f tnoney

f o r development projects," w h i l e the Fund w a s expected " t o ac t as a

global cent ra l bank, accepting deposi ts and making loans t o count r ies i n

need.'s74'

The IMF's ob jec t ives were def ined as fo l l ows : 1) t o promote

s t a b i l i t y i n the in ternat iona l exchange r a t e s between nations; 2) t o

es tab l ish a global sys tem o f tnu l t i l a te ra l payments; 3) t o operate

something l i k e an in ternat iona l cent ra l bank, through the c reat ion o f

t-rionetary , reserves subscribed by met-riber countr ies, and t o help those o f

them w i t h balance-of -payments d i f f i c u l t i e s through shor t - t o

mediut-n-term loatis. In pract ice, these loat is have usua l ly been f o r

three-year periods.75 . By 1990, the 152 governments belonging t o both the IMF and the

Wor ld Bank had subscribed US$120 b i l l i o n t o the f o r m e r i n s t i t u t i o n .

F i tiance nii t i i s te rs f r o m the wor ld 's leading. i ndus t r i a l count r ies (known

as the Group o f Seveti), m e e t i n g a t the Fund's t ieadquarters i n

Washington ear ly i n May o f the same year, approved a 50% increase i n

the subscr ipt ions o f i t s members, i n add i t ion t o rev ised rankings i n

t h e i r hierarchy. Members are ratiked according t o t h e i r subscr ipt ions,

based upoti r e l a t i v e economic strength, w h i c h determine the we igh t o f

each country 's vote on po l icy quest ions and loans. Having cont r ibu ted

20% o f the cap i ta l it1 bo th the IMF and Wor ld Bank, the Uni ted Sta tes tias

the l a r y es t 'uveigtited vote. I n recogn i t ion o f t h e i r remarkable economic

g r o w t h dur ing the 1980's, Japan and Germany now share second place,

3 3 L.&.

w i t h Great B r i t a i n I f o r tne r l y Ng 2) and France together i n th i rd,

f o l l owed by Canada and l taly.76

The Wor ld Bank was o r ig ina l l y conceived o f as a source o f

cap i ta l t o rebu i ld countr ies devastated by Wor ld War II and t o promote

economic g r o w t h in the underdeveloped wor ld . , A s wi th t t ie IMF,

members subscribe cap i ta l in propor t ion t o t h e i r economic importance.

I n addit ion, the Bank can ra i se cap i ta l through the sale o f i t s o w n bonds.

Wi th the proceeds fr-om subscr ipt ions and bonds i t makes long- term

loans t o count r ies w i t h development p r o j e c t s t h a t appear econon~ ica l l y

sound but wh ich cannot be f inanced a t l o w i n t e r e s t r a t e s through

p r i va te sources. During the ear ly . 1980's t o t a l Wor ld Batik loans

averaged US$6 b i l l i o n annually.'17

Notwi ths tand ing the IMF's litni t e d object ives, i t has been obl iged

t o assutne a great1 y enlarged r o l e s ince the energy c r i s i s o f the 1970's.

As of J u l y 1989, i t was reported t o have "ac t ive programs w i t h f i f t y

count r ies and cornnii t m e n t s t o t a l l i n g US$17.3 b i l l i o n -a p i t t ance i n

comparison w i t h t t ie USS1.3 i i i l l i o n in outstanding loans t o t h e

developirrg. wor ld, w 7 8 f r o m a l l sources.

In the words o f a f o r m e r execut ive d i rector , t he Fund "has

recent ly been pushed by circutnstances i n t o becorning a superagency i n

charge o f t t ie global debt and development problems ... tasks f o r wh ich i t

has ne i the r adequate experience no r s u f f i c i e n t I - e s o ~ t - c e s . " ~ ~ The IMF1s

present French-bot-n tnanaging d i rector , Mictiel Camdessus, has

explained i t t h i s way: "We are a poor, i t i s u f f i c i e n t i t i s t rument o f the

w o r l d cor-rimunity, wh ich great ly lacks a l l the therapeut ic too l s

23.

necessary f o r deal ing w i tti these problems. We do the best w e can w i t h

wha t w e have."80

Erroneous percept ions and unreal expectat ions have l e d t o

re len t l ess a t tacks upon the IMF by the mass media, as w e l l as

po l i t i c i a t i s hunt ing scapegoats f o r t h e i r own poor judgment o r

incompetence. C r i t i c s i n l ess developed count r ies (LDCs) accuse the

IMF o f r i g i d i t y , a na r row v i e w o f t he world, and o f subservience t o i t s

wea l th ies t subscribers. They a lso bel ieve t h a t the Fund i s c rue l l y

i n d i f f e r e n t t o the p o l i t i c a l and soc ia l cos ts o f i t s s t a b i l i z a t i o n

programs.8 For t h e i r part , the wea l t h y i ndus t r i a l count r ies have found

f a u l t w i t h the IMF f o r extending c r e d i t t o communist countr ies, and " f o r

progressive1 y evolv ing i n t o a sof theaded fore ign-aid agency.'82

Soine det rac tors can no longer see a const ruc t ive r o l e f o r t he

Fund i n a w o r l d economic order t h a t has undergone d ras t i c changes

since the B re t ton Woods conference, a ln ios t ha l f a century ago. When

Richard Flixon fo r tna l l y abandoned t h e gold and fo re ign currency

co i i ve r t i b i l i t y o f t he U.S. do l l a r on demand, by the ce t i t ra l banks o f o the r

countr ies, "he brought the B r e t t o n W o o d s e r a ' t o an end."83 Thus, f o r

the 1 as t three decades, f l o a t i n g exchange r a t e s have e l im ina ted the

IMF's m iss ion of s t a b i l i z i n g the currencies o f i t s members. No one

f o l l o w i n g the w i l d f l uc tua t ions o f the wor ld 's fo re ign exchange marke ts

wou ld argue w i t h t h i s point. Other judgnients are more subject ive. "A

hodgepodge of consumer-ists, re1 ig ious a c t i v i s t s and neol i berals oppose

the Fund," according t o one o f i t s defenders, "because the IMF al legedly

b a i l s out b i g t'rsul t ina t iona l banks, favors the r ich, helps b i g business,

arid supports dictator- ial r-egirnes. d 4 -

2 4.

Wi th respect t o d i c ta to r ia l regimes, such as t h a t o f Forbes

Burnham dur ing the l a s t decade o f h i s l i f e , i t should be s t ressed once

again t h a t ttse s ta tu tes and covenants o f ttse IMF r e s t r i c t i t s a c t i v i t i e s

t o very prec ise areas. To deviate f r o m these wou ld be t o v io la te i t s

lega l mandate and in ter t ia l guidelines. The A r t i c l e s o f Agreement

" spec i f i ca l l y p roh ib i t p o l i t i c a l considerat ions f o r t he use o f i t s

For tha t reason, i f no other, t he Fund scrupulously

eschews "pol icy measures c lose ly re la ted t o a country 's soc ia l and

p o l i t i c a l ~ h o i c e s . " ' ) ~ Burnham may o r m a y not have been the Monster o f

the Essequibo, atid the PNC m i g h t be as bad o r worse than the PRI i n

Mexico. Bu t those are quest ions f o r t he people o f Guyana t o decide, no t

tt ie lntertsat ional Monetary Fund.

To g ive the Dev i l h i s due, one should a lso bear i n m ind that, when

the LDCs l i m p t o the doors o f t he IMF as a l a s t resor t , t h e i r ecotsomic

d isorders are general1 y advanced. The longer they have postponed

treatt-netit, t he more expensive and d i f f i c u l t the cure. External fac tors ,

beyond the cotstrol o f e i t h e r doc tor o r pat ient , have a lso impeded the

ad jus tments necessary f o r r e c o v q y . R is ing dosts o f energy, h igh r a t e s

o f itsterest, global recessions, i n add i t ion t o p ro tec t i on i sm i n the

European Economic Comrnutiity, t he Un i ted S ta tes and Japan, have riot

made th ings any eas ier f o r the Fund o r i t s c l ien ts . Nor should the f a c t

be overlooked, t h a t IMF programs o f t e n uncover weaknesses

i t i ten t iona l l y concealed by past o r present governments i n the count r ies

seeking assistance. The underlying. causes o f chronic d e f i c i t s i n a

c l i en t ' s balance o f paytnents, f o r example, cotnprise an over-valued

25.

currency, a r t i f i c i a l 1 y l o w consirtmer pr ices, and a de fac to sys tem of

ra t i o t i i rig revealed i n sca rc i t i es and b lack-market speculat ion. 8 7

" I f t he IMF's condi t ional assis tance produces no more than

ce r ta in sho r t - te rm iniprovements i n the coui i t ry 's external balances and

some temporary reduct ions i n the r a t e o f i n f l a t i on , a t the cos t o f

growth, f u l l employnient, soc ia l wel fare, and s e l f -reliance," asks a

fo rmer funct iot iary o f the Futid, " i s i t w o r t h the at tet idant

sacr-i f i ces? u88 Those who rep l i ed in t h e negative, l i k e p o l i t i c a l

adversaries o f the PNC and m o s t o f t he Guyatiese people, wou ld have

three options. F i r s t1 y, they could repudiate the country 's external

debt, o r declare a un i l a te ra l n iorator iurn on i n t e r e s t and amor t i za t i on

payments. They wou ld run the r i s k o f los ing "1,arger and more valuable

access t o fo re ign reserves, assets, credi ts , marke ts and technology."8g

Secondly, the d issenters could look f o r b i l a t e r a l arrat igements

w i th f or-eign credi tors, a1 though t h e l a t t e r usual1 y requ i re LDC debtors

t o accept the IMF's f i s c a l and monetary d isc ip l ine, before enter ing i n t o

negot iat ions o r g rant ing f resh credits.90 Third ly , they could do noth ing

or, as Forbes Burnham pu t it, j u s t "opt out." The consequences o f t h i s

decision, amp1 y i l l u s t r a t e d by Guyana's experierice under the l a t e

Fouiider Leader, wou ld be f u r t h e r de te r io ra t i on o f the economy and the

impos i t i on of very s t e r n measures t o hoard scarce fo re ign exchange.

7. Coiiclusions

Considering the IMF's l i m i t e d ob jec t i ves arid the f o r n i i n wh ich i t

i s s t i l l cot ist i tuted, as w e l l as Buriihani's f a i l u res w i t h the Fund and

26.

Hoyte's l ess than successfu l negot iat ions a decade la ter , i t i s no t easy

t o be op t i t n i s t i c about Guyana's prospects f o r econornic recovery. Nor,

for- t h a t mat ter , i s t he t rack record ericout-aging f o r 21 A f r i c a n

cout i t r ies wt i i ch had ongoing programs w i t h t h e IMF during the past

decade. Targets f o r curb ing i n f l a t i o n wet-e achieved in about ha l f o f

them. Balance-of-payments ob jec t i ves were reached i n rough1 y

t w o - f i f t h s , w h i l e goals f o r econoniic g r o w t h eluded a l l bu t o n e - f i f t h of

the count r ies rece iv ing assi s t a n ~ e . ~ ''

C l ive Thonias and o ther analysts o f the Guyanese c r i s i s may be

r-igtit i t i assigriing. top prior-i t y t o p o l i t i c a l r a t h e r than econotiiic re form,

begirining w i t h f ree and honest e lect ior is a t a l l l eve ls o f government. 92

But what, indeed, wou ld happen, i f some m f r a c l e were suddenly t o

I-erriove the d iscred i ted PIK reg ime f rorn power? Could the present

opposi t i or1 groups piece together a v iab le coa l i t i on governtnerit? T h i s i s

a moot questiori.

The squabblitsg, f i ve-par ty P a t r i o t i c Coal i t i o t i for- Derriocracy

(PCDI, whose leading members are Cheddi Jagan's PPP and the l a t e

Wal t e r Rodney's Working.Peoplels Al l iance, has n o t as ye t been able t o

agree upon a s ing le spokestman t o deal w i t h Hoyte on quest ions

a f f e c t i n g the nat ional i n te res tg3 "They m u s t ge t t h e i r ac t together-,"

declared the resident.^^' "I don't wan t t o w a s t e t i m e w i t h a number o f

people saying d i f f e r e n t things," he complained, "wtieri there i s no one I

can hold accountable f o r agreements w e have ar-r-ived at.w95 Could the

PCD r e a l l y be expected t o forrn a s tab le government and run the country

successful 1 y?

27.

Further-more, where wou ld the new Adn i i n i s t ra t i on r e c r u i t

competent per-soritiel t o reor-ganize and s t a f f key pos i t ions in the

nat ional bur-eaucracy? The PPP has been i n opposi t ion since 1964 and

lacks younger niertiber-s w i t h experience i n government. Islone o f the

other- pa r t i es have even come c lose t o t a s t i n g p o l i t i c a l power i n the

execut ive branch. Nor should i t be fo rgo t ten t h a t thousands o f

ivel l -educated and etier-getic Guyanese have emigrated t o o ther

countr-ies. How could s u f f i c i e n t t-~utnber-s o f these ta len ted expat r ia tes

be per-waded t o r e t u r n and help a r e f o r m governnient w i t h the daunting

task o f g e t t i n g Guyatia back on i t s fee t?

I f Ottornan Turkey was considered the "s ick rnan o f Europe" a

cet i tury ago, the Co-operative Republic o f Guyatia could be sa id t o have

earned a s i t r ~ i l a r d i s t i t i c t i on on t h i s s ide o f the A t l a n t i c i n our t ime.

Thus fat-, t o cont inue w i t h the admi t ted l y super-ficial analogy, there are

no s igns o f sotlie la t te r -day Kernal A ta tu rk su r f acing i n Geor-getowri.

Walter- Rodtiey looked l i k e such a cha r i smat i c leader, otie capable o f

r-all y i fig bo th the Afro-and Indo-Guyanese peoples t o rebu i l d the country

through a gclvertiment o f nat ional consensus. Bu t Rodney w a s b lowt i up

by a bomb tet i yuears ago. Since then, the "s ick man o f the Amer icas"

has got teri s icker . IMF-sponsored r-emedies niay a1 l e v i a t e the syniptorns

temporat-i l y, bu t can they cure the disease i t s e l f ? On1 y tisrie w i l l t e l l

whether converit ional therapy car1 prevent the pat ie t i t f r o m becorning a

tet-I-rii rial case.

REFERENCE NOTES

1 . 'fiilliam e. Mitchell et al.. Area Handbook for Guy= (Washington, D.C.: U.S. Government Pri nti ng Office, 1969), 227- 228, 293, 296.

3 . Ibid., 227.

4. I bid., 85.

5. Clinton Collymore, "A Quarter Century of Failure," Thunder (Cieorgetown) 21 :4 (Fourth Quarter, 1989),2 1.

6. I hid.,, 21, 25.

7. Clinton Collymore, "Massive Protests Against 1989 Budget," Thunder 21 :2 (Second Quarter, 1989), 22.

3. Latin American Regional Reports: Caribbean (London) (RC) - 89- 05 i 15- 06- 89), 2.

9. Quoted i n Guyana I nforrnation Bulletin (Geot-getown) (GUEI) 2 9 5 (June 19892, 4.

1 O. Caribbean Insight (London? (Q) 1 2 2 (February 1989), 2.

1 2. Ivo Davnay & Canute James,, Financial Times (London) (FT) 26- 05- 89.

13. Kit Nascimento, Stabroek News (Georgetown) (34) 29- 04- 89. Nascimento is executive chairman o f the government-sponsored Guyana Public Cornmunicstions Agency.

1 4. See for example: Rishee Thakur, Catholic Standard (Georgetown) (C5) 03- 09- 89; Csri bbesn Contact (Bridgetown) 17:3 (August 1 989), 6- 7, 1 7 d 17:4 (September 19891, 6; Percy C. Hintzen & Ralph R. Prerndas, "Guyana: Coercion and Control i n Political Change," Journal of lnteranlerican Studies and World Affairs 2 4 3 (August 1982), 344-352; Ralph R. Premdas, "Politicsof preferencein theCaribbean: TheCase of Guyana," i n N. Neville & C.H. Kennedy (eds.), Ethnic Preference and Public Pol icyin Developing States (Colorado: Lynne Riemer, 19861, 155- 183; Susan Hayward, & -- hgeles T i rnes (H) (AP) 28- 05- 89.

15. Latin American I-lonitor i London) (LAM) 6:s (June 19891, 666; 3406- 09- 89.

I El. Clisie Thomas, quoted by Bert Wilkinson, a 0 3 - 0 5 - 8 9 .

17. Collymors, "Quarter Centut-y," 24. I

18. Quoted i n @ 28-05-89.

13. Williarn R. Lonq, LAT 27- 1 1 -88; Hugh O'Shaugnessy, "The Country That i s Bleeding to Death," Observer (London), 25-02-90, a summary o i which appears i n 30:4 (Apri l I rsa), 3.

LO. Franz J. T. Lee, "The Evolution-l nvolution of Co-Operative Socialism i n Guyana" (ur1p~bl13hed MS, CEPSAL, Universidad de Lo3 Andes, 19841, 10, 25- 26. This i s a revised and ahridged version ( 102 pp.) of the author's much longer work (547 pp.), cited below.

21. Ibid., 39; Franz J-; T. Lee, "The Evolution-Involution of Co-Operative Socialism i n Guyana" (unpublished MS, CEPSAL, Universidad de Las Andes,, 19823, 274, 284.

22. Sadio Garavini di Turno A., Politica Exterior de Guy-(Caracas: IAEAL, Universidad Sirnin Bollvat-) . 122.

23. Qui:~ted i n open Word (Georgetovn), Ng 362 ( 15- 05- 89), 2.

24. Quoted from Cheddi Jaqan, The IP1F Takes Over (Georgetovn, 1982), by Lee, "Guyana" ( 1982), 293.

25. Lee, "Guyana" ( 1982),292.

26. I bid., 296.

27. Gat-avini, Politica Exterior, 122.

28. IJuoted iron1 Cari titlean Contact (Play 1982) by Lee, "Guyana" ( 11382), 3171

30. Quoted ft-or11 06- 06 -82 by Lee, "Guyana" ( 1982), 302.

?

31. Canute James, 25-05-89.

32. Ql~oted from Jagan, m, b y Lee, "Guyana" ( 1982), 298.

33. - LAH 5:2 (March 19891, 509; Canute James, E 0 6 - 1 1-89.

34. Quoted frorrr Thunder 1 2 2 (Second Quarter, 1980) by lee, "Guyana" ( 19821, 284.

35. I bid., 285.

36. Cited from 19.3 (April 1982) by Lee, "G~~yana" ( 19821, 28E1.

37. See, fc~t- example, the follclwi ng articles i n Cari titlean Contact: "In Georgetown the Cry is for 'tread not guns"' d "Beriberi Disease Brinqs Fear and Death arnid Guyana's Econornic Cri3i3,' ' 10:9 (January 1382)) 6, 13; "Face of Famine i n Guyana ...," 10:7 (t.lovemter 1982), 5.

38. - LAP1 4:9 (November 1987), 450.

39. - LAM 5:2 (t-larch 1988), 504.

40. 1 4 5:s (June 19881, 55 1

41. 4 5:6 (August 19881, 563.

44. 1 2 4 (April 19891,. 1.

45. 12:5 (I-lay 19891, 1.

48. Collymore, "Massive Protests," 16- 18; IAM 6:4 (May 19891, 651 ; L 1 2 : 5 (May 14891, 1-2; 29:4 (April 13891, 1 ; W P A lnternatiunal Gulletin (Georgetown), May 1989, 1 - 2; open Wot-d (Georgeto~tin) NO 386 (06- 1 1 - 891, 1 .

50. Collyri~ore, "Massive protests," 17.

52. &yana Chronicle (Georgetc~wn) (GC) - 08- 1 1-89; Sunday Chronicle (Georgetown) (z) 04- 02- 90.

53. C o l l ymore, "Massive Protests," 21 ; &- 89- 0 4 ( 1 1 - 05-89), 3.

57. - RI:-89-06 (20-07-89?, 6; LAJ 6% (Jul y-August 1989), 682.

58. - LAM 6:4 (Flay 13831, 651 ; C_L 12:8 (Jurte 19831, 5.

53. 6:s (June 1 989), 666.

6 0 . The ERP Support Group's rnernbers a re as follo.w.3: Canada (cha i rman) , United States, 12t-eat B r i t a i n , Japan, Trinidad & Tobago, Venezuela, West tiermany, France and l t a l l j {observer) . For a detailed account o f the ro le played by Michael Wilson, the Canadian I- l inister of Finance, p a r t i c i ~ l a r l y h i s cont i r i i~ed pressure on Washington, see the a r t i c l e t i t led "Canada's Rescue Act ," repr in ted f r o m the T o r r J n t o i n 2 4 - 0 5 - 8 9 . The Support Group had o r i g ina l l y requested US$13 m i l l i o n f r o m the Arnericari Col$ernrnent, which, i n the end, pledged less than ha l f that amount (US$6 mi l l i on ) . 'The f i r s t ins ta l lment (US$1 m i l l i on ) o f the 11.5. grant funds was not made available u n t i l e a r l y i n February 1'390. C& 0 7 - 0 2 - 9 0 .

66. C l ive Thomas on the Mc ln t y re Report (Georgetown), February 1990 , 2.

6 7 . I bid., 3.

68 . I bid., 4.

69. Ib id. An author i ta t ive source overseas sumri iarized the g row th o f i n f l a t i on as fo l lows: "Pr ices pushed up to 5 0 % rate as a rmult o f the [ERP] adjustment package a f te r 4 0 % i n 1 9 8 8 ; programme foresees reductions to 1 0 % [annual ra te ] i n th ree years." La t in American ~ i e k l Report (London) - 8 9 - 5 0 ( 2 1 - 1 2 - 891, 1 0.

7 0 . Thomas, I-lclntut-e Rec~ort, 7.

71. l b i d

72. Ib id.

73. I bid., 3.

74. Howard G. Chua- Euan, T i 3 1 - 0 7 - 8 9 , 3 1 - 3 2 .

7 5 . Jack C . Plario & Roy Olton, Diccionario de Relsciones lnternacionales (Plkxico: Edi tor ia l L i r i~usa-Wi ley , 1 9 7 1 1, 16; Paul A. Sari i i~elson & W i l l i s r i ~ D. t~lordhaus, Economics, 1 Z th ed. (New York: I-IcGraw-Hill, 1 9 8 5 ) , 8 8 0 - 8 8 1 ; The Da i ly Journa l (Caracas) (Islev York Times News Service) 0 7 - 0 5 - 9 0 .

77. Plano & Ulton, Uiccionario, 44; Sarrtl~elson h Nordhaus, Economics, 881.

78. Chua- Eoan, Time 3 1 - 07- 89, 3 1.

79. Jahanqi r Arnuzeqar . "The IMF Under Fire ." Foreian Pnlic~j Hn 64 ( F a l l 1 986), 98.

$0. Interview with Gisela Bolte, Time 31 -07- 89, 35.

61. Amuzagsr, "IMF," 98-99.

132. I bid., 99.

83. Saml~elsor~ W I.lordhaus, Econornics, 882.

54. Amuzegar, "IMF," 99.

85. I bid., 1 10.

86. I bid., 1 1 2,

87. I bid.,, 1 14.

89. 1 bid.

91. Ibid.. 1 14.

92. See, for example, E: "The Ploy That Failed," 02-04-89; "Ease IMF Burden on Poor: Canadian WGO I-lission," 28-05-59; "Time for Guyana," & "The Death of a State," 09-07-89; "Open Letter tcl IPIF Tearn," 13-08-89; "Free and Fair Elections," 20- OH- 89; "End of the Hoyte Era," 27- 08- 89; "Political Refor-rn Needed, Hot Economic Adj ustment." 03- 09- 89.

93. "Political Girnrnickry" 4 "Elections Ilear?" CS - 30-07-89; !?&- 89- 09 (02- 1 1 - 891, 6; RC-90-01 (25-01-90), 2. -

94. 12:8 (August 19891, 7.