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POLITICAL CONSCIOUSNESS DISPELS MYTH
Nationalization devastates Guyana’s economy

                        

Many Guyanese who were domiciled in foreign countries prior to our country’s attainment of political Independence, might never comprehend the extent to which external intervention affected decisions of the PNC government.

Following the attainment of political Independence, Guyana could not perpetuate the pattern of the former colonial system, that of exploitation and discrimination. By removing the vestiges of colonialism, the country embarked upon the most difficult phase, constructing an economy consistent with its political ideology.

Economic liberation meant solidifying the newly won freedom and at the same time fashioning an economy whereby the means of productions would be owned and controlled by all Guyanese. In an effort to prevent the rape of, and export to world market of Guyana’s natural resources, the People’s National Congress (PNC) government decided to nationalize the main means of production.

This was to affirm the nation’ inherent rights over all national wealth included its natural and mineral resources. But while this plan was important to conform to the political ideology of the government, it unfortunately negated economic growth.

The ownership and control of these assets were to be primarily State or Co-operative, considered as pre-conditions for real change. After nearly two hundred years of colonial exploitation it had proven unequivocally that, true development could not be possible within a capitalist framework.

Nationalization was therefore intended to set the country on a path towards economic emancipation. Unfortunately the government failed in its pursuits to recognize the international repercussions of its policy and miscalculated the socio-political and economic ramifications that would precipitate such take-over.

Further, the PNC government in its naivety had expected that nationalization would have secured already held markets, prices and quotas but much to the chagrin of the regime this did not happen. It had also failed to envisage the immediate withdrawal of key administrators from these industries and the realization that local replacements were inadequately prepared to meet the expected challenges.

The PNC had either unconsciously or deliberately repudiated the notion that a significant increase in public debt and deficit would devastate the country’s economy and create an unacceptable level in the citizens’ standard of living. In addition, the national economy was seriously affected by low production and productivity, as a result of constant industrial unrest, more often encouraged by the opposition parties.

The in-climate weather had also contributed in some ways to production short falls in several industries. But, most debilitating to Guyana’s stability was the collusion of western industrialized countries in setting prices and quotas that assisted in paralyzing the economy.      

Many people are infuriated when Guyanese especially those living in foreign lands, constantly condemn the former PNC government for the pathetic conditions that citizens now endure. Ironically, those very individuals had never contributed to or participated in, any political activity to bring about tangible change.

These passive observers of Guyana’s march to political and economic emancipation, for the most part had very little if any interest in governmental affairs, decades later disdainfully ridicule the PNC for every conceivable problem. It seems ludicrous that Guyanese who for many years have besmirched the image of the country and discredited our leaders now have the temerity to describe themselves as freedom fighters.

By conferring accolades on themselves some Toronto newspaper columnists have invoked a renaissance of buffoonery. Their assertion can only be perceived as unrivalled hypocrisy or interpreted as political opportunism.    

The prevailing condition in Guyana, which everyone condemns, is directly related to the political and economic policies that the PNC instituted and for ideological reasons were vigorously opposed and even sabotaged by some Western democracies. The PNC thrust to economic liberation and social reform had intended to infer a psychological and emotional transformation in the Guyanese people. This cerebral metamorphosis in part should have provided the basic foundation for our National Revolution.

Whether real or imaginary the PNC had realized the significance of economic liberation and was committed to Feeding, Clothing and Housing the Nation, by using the resources of Guyana. Emancipating ourselves from the shackles of imperialist domination and colonial economic subservience, warranted initiative and a capacity to recognize the importance of Burnham’s philosophy of self-reliance.     

Granted that every democratic government is obligated under its constitution and bolstered by the rule of law, inevitably all must determine the destiny of their people. All governments out of necessity operate within a global market place, conform to the rules of the United Nations and for a few exceptions accede to international Laws and conventions.

It should be remembered that during this period, attempts to establish socialist regimes in the Caribbean, Latin America, Africa and elsewhere were rejected by the so-called Western democracies. In Chile the thrust to socialism was not only denied, but the assassination of Salvador Allende has left a cruel and pertinent reminder to those countries and leaders you want to establish political systems contrary to the wishes of certain Western powers.     

Most Third World Nations respected Guyana, during the PNC administration and our government officials had played a constructive role at maintaining a non-aligned posture in international affairs. The PNC had always insisted that Guyana merited the right to self-determination, as a member of the international community had the prerogative to determine a political system and without recrimination pursue its commitment to establish a socialist state-an egalitarian society.

Invariably, the latter goal fostered resentment from opposing camps and led to a deliberate strategy by western countries to de-stabilize Guyana’s economy by curtailing or preventing the spread of socialism. Unlike Chile the American economic interest was not as vital in Guyana, perhaps for this reason Burnham’s life and regime survived but the forces of intervention used alternatives policies in their quest to curtail if not halt the spread of communist expansionism in Guyana.    

The PNC thrust to economic freedom included its first five-year development plan-Feed, Clothe and House the Nation. In many ways this was a success, as is evident in the many houses that are still being constructed around the country.     

By their political socialization Guyanese have discovered much pride and a renewed sense of identity and patriotism. Guyanese have become more sensitive to products produced locally and now appreciate improvising many basic essentials from ingredients found in the country.    

The economic revolution which started in the mid-seventies (70s), triggered by the nationalization of the bauxite and sugar industries and the take-over of other foreign companies may serve as a deterrent to future governments in Guyana.

However, this failed attempt at economic emancipation during a period of extensive international socialist dogma must become the catalyst for future initiatives. The euphoria, which had engulfed many countries emerging from the vestiges of colonialism, could serve to remind all Guyanese that we must be ever mindful of the governments we elect and the programs and policies they propagate.    

Maybe, political debates pertaining to the nationalization of Guyana’s major industries will continue between those people who recognized the complexity and intricacy of international politics and others who inappropriately equate the advances of developed societies with that of Guyana. All subsequent leaders of our country must be more conscious of the international ramifications of their domestic policies and try to minimize the consequential repercussions when they eventually introduce new policies and programs.    

It has become necessary for developing countries like Guyana to hasten the process of re-evaluating their international relations with western democracies. With the threat of communism all but eliminated from the Caribbean region, it is imperative that the present administration in Guyana focuses its attention on attracting and securing more foreign investments to expand the economic base and diversify the local economy.                                 

Very few prominent companies will be prepared to invest enormous capital if they are not reassured that the political climate would remain stable. Consequently, the government must refrain from imposing intemperate restrictions and extracting unreasonable taxes for conducting business in the country.

The sad reality seems to indicate that only when the PPP/Civic or any future government persuades big corporations to invest in Guyana will the economic forecast desist from remaining predictably dismal at best.    

The world is undergoing rapid, complex and far-reaching changes that have implications for our economic structure and interrelationships. These changes derive mainly from scientific and technological innovations, readjustments in political forces and the convergence of interests among major powers.

 Indeed, the emergence of Trading Blocs, such as the North America Free Trade Agreement (NAFTA), the European Union and the Pacific Rim countries as an economic giant, will inevitably affect, even imperial, the economic interest of most developing countries, including Guyana and threaten if not undermine their decrepit security.    

The economic prospects for most developing countries remain bleak. Their difficulties multiply daily. Low commodity prices, adverse terms of trade, protectionism, and debt burden: all these negative factors shatter their hopes for growth and development.    

Guyana must therefore take appropriate action to protect its economic interest, while not being isolated or manipulated by transnational institutions as the World Bank, the IMF, multinational corporations, cartels and trading systems. The sugar industry has to be diversified so as to reduce its dependency on income coming only or principally from the export of sugar. Its success is vital not only to the employment security of the 26,000 workers directly employed by the sugar companies and 5,000 self-employed cane farmers, but also to the further development of the country’s economy.    

The much touted aluminum smelter in partnership with Jamaica and Trinidad, which was expected to produce about 150,000 metric tons of aluminum, must eventually become a reality. This would necessitate the construction of hydropower facility in Guyana, resulting in reduced importation of petroleum products and consequently a tremendous surplus of foreign reserves.    

Another crippling aspect is Guyana’s escalating national debt and deficit which must be seriously addressed and brought under control before undertaking projects for political expediency and partisan reasons. Moreover, the PPP/Civic administration must implement without further delay new and innovative policies and strategies.

It seems preposterous that the current regime be given recognition or for that matter considered plausible if it continues to run the country without initiating policies that are distinct from the previous government. For it must be remembered and reinforced that it was the PPP which once perpetrated numerous acts of industrial sabotage, instigated racial animosity and tarnished the international image of Guyana. As the official opposition the PPP conducted a relentless battle, its illogical allegation of election rigging and the paucity of democratic rule.    

Given the vicious smear campaign conducted by the opposition PPP both at home and abroad it is therefore unacceptable, perhaps perfidious to those supporters who voted for the PPP/Civic during the 1992 elections, expecting substantive transmutation in Guyana. After twenty-eight years in opposition (political wilderness), the current government still appears comatose and reluctant to make decisive decisions that would improve social and economic conditions in the country.           

The leader of the PPP/Civic and his party must be judged on their performance or lack thereof after 31/2 years in office. They should now be held accountable for the fallacious characterization of the late Forbes Burnham as a dictator and all the acrimonious statements attributed to his Party-The People’s National Congress (PNC).    

What the electorate must demand is a restoration of prudent leadership in the Presidency and a commitment by government not to equivocate its responsibility. Guyanese of all political persuasions must set aside their racial bigotry and avoid being manipulated by politicians who demonstrate a capacity merely to shout loud and lack the ability to produce action with veritable results.   

Guyana’s economy primarily because of nationalization has been ravaged over the years. The economic situation became evident in 1977 when the national budget had called for a cut in public expenditure from G$795 to $546, a decrease of 30%. This resulted in retrenchment/redeployment, cuts in workers’ incomes and increased unemployment.

Another aspect of the budget was the removal of subsidies on such items as transport, poultry feed, flour, water (metering), and electricity. The removal of these subsidies led to increases in the cost-of-living, acute poverty, a high crime rate and a decline in social services.    

The public debt in 1970 stood at G$267 million and by 1976 it was about $900 million an increase of 230%. The external debt increased from $160 million in 1970 to $488 million in 1975. The main contributory factor for this increase in public debt was the nationalization of industries that proved to be unproductive.    

While Guyana’s malaise can be blamed on the weather (both flood and drought) were reasons for low productivity, the overriding problem appeared to be the colonial structure of the economy, which had not changed. Sugar, rice and bauxite accounted for 38% of the gross value of output. In 1976 these industries earned 87% of the value of all the country’s exports.    

The United States market, which was an important outlet for Guyana’s sugar, had dissipated rapidly over the years. In 1970 the country had exported over 105,000 tonnes to that market. But what followed during those early critical years subsequent to Independence was a progressive reduction of quotas, as the forces of protectionism gained in the United States. The 1987, sugar quota had dwindled to a mere 10,920 tonnes. Even more disturbing was the marked decline of sugar exports to the region, the Caribbean Community (CARICOM) countries, which had totaled 255,000 tonnes in 1975, had plummeted to 53,000 tonnes by 1987.     

As local politicians struggle to improve the economy, which was ravaged by a significant drop in production, they must recognize the importance of industrial tranquility and a fundamental shift in their economic and political policies.

Guyana’s economy has been on the decline for the most part, induced by the global oil crisis, which occurred during the mid 1970s. This predicament had reduced Guyana’s foreign reserves to almost zero, created a budgetary deficit, while simultaneously necessitating large amounts of finance to import petroleum products.    

 The prolonged economic stagnation has been a derivative of many tangible components all of which dictated a massive increase in government spending. Moreover, the escalated cost of maintaining all major industries at a time when foreign reserves were dwindling rapidly, have indubitably ruined the economy for perhaps many years to come. It will only experience real growth until and unless the government is prepared to make investing in Guyana more attractive.   

 Finally, the Guyana government must take cognizance of prevailing structural weakness in the economy as well as the global economic and political changes currently under-way. All future developmental programs should be carefully studied and evaluated, and the population informed of occurrence that could fundamentally transform their lives.

Every citizen must be considered an active agent of change, avoiding incrimination or the perception of being on the fringes while major structural reorganizations are implemented.                           

As Guyanese everywhere observe the thirtieth (30th) anniversary of the country’s Independence on May 26, we must reflect with great trepidation, that economic liberation has proven to be illusive. Perhaps, nationalizing the major industries might have done graved or irreparable damage to the national economy.

What are the resultant effects of such a policy or price on the nation? I believe that answer is still undetermined because the quality of life and accomplishments of today’s maturing youths will indicate whether those who live through the 1980’s austerity period provided adequately for their offspring.

The negative consequences of nationalization under the PNC are inescapable. This ill-conceived policy has inflicted tremendous burden on the entire population. Decades later a large percent of our population-men, women and children still live under deplorable conditions and must endure serious social and economic deprivations.                             

But, rather than waging a campaign of retribution, every Guyanese should without cynicism seize this occasion to engage in constructive discourse and productive activities. Let us harness our human and financial resources and participate in substantive programs and events, which would enhance nation building.

Change is possible, but this can only be accomplished if we believe in our capacity to overcome the present pathetic social and economic quandary. For those skeptics and scoffers, at least they can reaffirm their allegiance to Guyana, the country of your birth, which was once described as the food basket of the Caribbean.

We can reverse the current trend if Guyanese now living abroad discern that the country still has the capacity to be a great place to invest and live. Moreover, nationals everywhere endeavor to maximize the tremendous amount of untapped natural resources and perfect climatic conditions for business initiatives. This vast potential for economic recovery depends not only on the government, with its ability to manager the economy and avoid negative external interventions but on every able-bodied citizen.

Each one of us whether living in Guyana or abroad must be prepared to make tangible contributions. Are we courageous enough to seriously contemplate or even answer the well-known quotation of John F. Kennedy, the late U.S. President: Ask not what the country can do for you but what you can do for your country.

      Perhaps our individual and collective riposte may ascertain the depth of our patriotism. Only time will tell whether there is any hope for macro economic growth and positive development in all spheres of life. However, as Guyanese and the world at large anticipate with great expectation the dawn of a new millennium, positive change is still possible for the place many once called home.
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