> Published Thursday, December 30, 1999, in the Miami Herald
>
> Guyana's president sets free-market course
>
> BY DON BOHNING
> dbohning at herald.com
>
> Guyanese President Bharrat Jagdeo, 35, is the hemisphere's
> youngest head of government. He's also the only Soviet-trained
> economist among them, having earned a master's degree at Moscow's
> Patrice Lumumba University in 1990.
>
> But instead of imposing Soviet-style centralized state control
> over the former British colony of 775,000 on the northeast coast
> of South America, he is leading an effort to implement free
> market economic policies, promote foreign private investment,
> privatize state-owned industries and carry out civil service
> reforms.
>
> ``I believe that you have to give greater incentives for private
> initiative to flourish and find a balance in the tax system to
> ensure that private initiative is rewarded but, at the same time,
> take care of the social problems and the disadvantaged in
> society,'' the soft-spoken Jagdeo said recently in an interview
> during the annual Miami Conference on the Caribbean and Latin
> America.
>
> Jagdeo became Guyana's president in August when President Janet
> Jagan resigned for health reasons. His party, the People's
> Progressive Party (PPP), was founded by the U.S.-born Jagan with
> her late husband, former President Cheddi Jagan, and two others
> in the late 1940s.
>
> ``Even though . . . the PPP was branded in the '50s as communist
> and socialist, it was when the private sector experienced its
> greatest growth in the country, because our program has always
> been to stimulate private investment but at the same time have
> social justice, and I still share the same view,'' Jagdeo said.
>
> SCORNS SUBSIDIES
>
> As finance minister and chairman of the privatization board, ``I
> saw what state enterprises were doing to the treasury,'' he said.
> ``That doesn't fit in with any form of economics. I think a
> layman would understand that if you are subsidizing state
> enterprises it doesn't make sense when a country is like ours.''
>
> In the last two years, he noted, Guyana has ``privatized the
> largest commercial bank in the country. The airline was
> privatized. The electric company was privatized and the two
> bauxite companies are currently on the market'' in addition to
> the privatization of several smaller enterprises.
>
> ``We had eight companies in the financial sector that the
> government had shareholdings in,'' he said. ``We are down to one
> in three years.''
>
> Jagdeo went to Moscow in 1984, the year before Mikhail Gorbachev
> became president of the Soviet Union and ushered in glasnost, a
> process of political liberalization.
>
> ``When we were there, it was so interesting because it was the
> period of transition,'' Jagdeo recalled, ``so every day there
> were new theories. The university itself became like a discussion
> group.
>
> ``For example, we were saying `Why would you not want to develop
> cross-republic trade?' A company in Estonia used to produce
> machinery for a company in Lithuania, just 10 miles across the
> border, but it had to come to Moscow and be sent back to the
> other republics because everything was centralized.
>
> ``When we went there, all the Russian students used to say
> everything was paradise and we used to say, `No, that's not
> true.' And then two or three years later they were saying,
> `Everything is bad about our system.' And we were saying `No,
> that's not true. You have good transportation. You have cheaper
> health care. You have free education. Try to hold those things as
> you fight for the other issues.' ''
>
> DIFFICULT TIME
>
> Jagdeo assumed the presidency at a time when Guyana's economy was
> reeling from a drought, low commodity prices and simmering
> political conflict based on the country's ethnic division.
>
> For the seven years before 1998, Guyana had an average annual
> growth rate of 7 percent, one of the highest in the hemisphere.
>
> In late 1997, however, Jagdeo said Guyana was hit by the worst
> drought in a century which continued into 1998, devastating the
> sugar and rice crops, and affecting small miners by drying up
> river tributaries. At the same time, ``we had a drop in
> international commodity prices for our major exports . . .
> bauxite, forest products and gold.''
>
> Added to that was the political turmoil in the wake of December
> 1997 elections, in which the predominantly black Peoples National
> Congress claimed that the victory of the East Indian-based PPP
> was achieved by fraud.
>
> Things began to recover in 1999. A 1.8 percent growth rate was
> forecast but Jagdeo said it ``will probably end up around 2.3
> percent.'' Three percent growth is being forecast for 2000.
>
> In the meantime, there is the challenge of globalization as it
> affects small, developing countries like Guyana.
>
> ``We have to recognize that in some areas globalization will
> bring us benefits,'' Jagdeo said, ``and in other areas we are
> going to lose. We have to prepare ourselves to quickly take
> advantage of those areas where we can have immediate benefits.''