Magazine article New Internationalist

Removing the Noose: The Shopworn-Solutions of International Finance Need Democratic Alternatives (Guyanese Experiment)

Magazine article New Internationalist

Removing the Noose: The Shopworn-Solutions of International Finance Need Democratic Alternatives (Guyanese Experiment)

Article excerpt

IT'S pay day for government workers in Guyana - a day people once looked forward to. But these days the money doesn't go far. 'Only God knows how we make two ends meet,' one office worker groaned. 'Today I can buy a chicken. After that it is pure starvation for me and my children.' It is hard times like these that have turned people in this tiny South American country into leaders in the struggle against IMF and World Bank structural adjustment policies. The Guyanese are coming together in support of a unique, country - wide program aimed at fostering the long - term well - being of all the country's citizens, rather than responding to the short - term demands of the international market.

Guyana is one of the most heavily indebted countries in the world and one of the poorest in the Western hemisphere. The irony is that the money - poor nation is rich in natural resources (bauxite, gold and diamonds) and has some of the most extensive tropical rainforests in the world. In the late 1980s under World Bank supervision the government of Desmond Hoyte implemented an 'Economic Recovery Program' which removed the last barriers to foreign control over key sectors of the economy, benefiting outside investors and multinational corporations almost exclusively. Today, three - quarters of Guyana's forests have been leased by foreign corporations - many of them Asian - based firms already responsible for pillaging rainforests in their own part of the world. Under the terms of a recent IMF agreement Guyana now offers multinationals a ten - year exemption from all taxes. (Last August this policy backfired dramatically when Omai Gold Mining Ltd - run by Canadian - based Cambior Inc and US - based Golden Star Resources - was responsible for one of the world's worst cyanide spills. Four billion litres of cyanidelaced effluent spilled into the Essequibo River after a waste - holding pond broke. Guyana is still dealing with the environmental devastation caused by the spill.)

Since the late 1980s, nearly 80 per cent of revenues and 60 per cent of export earnings have gone to service and repay foreign debt while malnutrition, infant mortality, disease, unemployment and poverty have all soared.

The tide turned when voters elected Cheddi Jagan of the People's Progressive Party in the first free elections in 30 years. Ironically, Jagan, a Marxist, was Guyana's first native - born Prime Minister when in 1953 British leader Winston Churchill ordered his Government dissolved. In 1961 Jagan's overtures to US President John Kennedy were rebuffed and a covert CIA operation was mounted to drive Jagan from power. Though keen to introduce much - needed social and economic reforms when he was elected in 1992 Jagan found himself handcuffed by the strict conditions of the IMF deal.

And that's when the Bretton Woods Reform Organization (BWRO) came along. BWRO was launched in 1991 by Davison Budhoo, a former senior economist with the IMF where he had been responsible for designing and implementing structural adjustment programs (SAPs) for Africa, Latin America and the Caribbean. Budhoo resigned from the IMF in disgust, hoping, he said, to 'wash my hands of the blood of millions of poor and starving people'.

Instead Budhoo sought to create the world's first concrete alternative to SAPs - an Alternative Structural Adjustment Program or ASAP. Budhoo calls the ASAP concept 'a people's economic program with equity'. The idea is to combine direct grassroots involvement with the technical skills of governmental officials and other interest groups. 'The IMF/World Bank system is dead,' Budhoo says bluntly. 'What we are trying to do is manage the transition' - to design democratically an economic policy whose main goal is to meet the basic needs of the entire population. In May 1994, Jagan agreed to a resolution proposing 'extensive government co - operation with BWRO and the people of Guyana in designing an ASAP'. The first step was to appoint a National Committee to carry out countrywide consultations. …

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