PNC Regime's Shifting Ideological Positions in the 1970s
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When the PNC-UF coalition government took over in Guyana in late December 1964, it was natural for it to develop a very close, friendly relation with the US. After all, it was the US which helped to manoeuvre the PPP out of government and heavily backed the PNC and the UF in their destabilisation activities from 1962 to 1964 and provided them with material assistance during the election campaign. The relations were so strong that the US Government which knew of the PNC plan to rig the 1968 election failed top raise any objection to this anti-democratic scheme aimed at preventing the return of the PPP to power.
But from, mid-1971, this chummy relationship began to change. This came about after the PNC government bowed to local political pressure and decided to nationalise the Canadian-owned Demerara Bauxite Company (DEMBA) instead of having "meaningful participation" in the bauxite industry.
In the Cold War era, this act of nationalisation was seen as a move to the left, and was regarded by the Americans as a direct blow against capitalist ideology. The PNC government had announced that it would also move to nationalise the America-owned bauxite company, Reynolds Metal Company, Guyana Mines Limited. Immediately, the US applied pressure by having its representative on the World Bank abstain in a vote on a $10.8 million sea-defence loan to Guyana.
The screws were further tightened after this nationalisation when US aid was drastically reduced. Compared to the favourable 1967-71 period, loans were cut by 40 percent to G$6 million per year in the period 1972 76 while grants were just G$356,000 per year in 1972 73.
It must also be noted that in 1969 Guyana received over 50 percent of USAID's commitments to the entire Caribbean and 94.3 per cent of those to the English speaking Caribbean. However, by 1971, Guyana's share of USAID's commitments had fallen to 3.2 per cent of the total for the Caribbean as a whole and 5.6 percent of the total for the English-speaking Caribbean.
In the DEMBA nationalisation negotiations, the Canadians applied some pressures, and were able to win higher compensation terms than the PNC had first offered. These were changed from US$100 million to US$107 million; from no interest to 6 percent, less 1½ percent withholding tax; from a repayment period of 40 years and over to 20 years.
Through US pressures, Philipp Bros., the subsidiary of the giant Anglo American Corporation of South Africa, was appointed as sales agent for the new state owned Guyana Bauxite Company. Further pressures forced the government to defer the nationalisation of the American-owned Guyana Mines Limited until the end of 1975.
As part of the concessions squeezed out from the Guyana government, the US and Canadian banks, headed by Chase Manhattan Bank, provided working capital to the state owned Guyana Bauxite Company.
In 1972, Guyana, along with Jamaica, Trinidad and Barbados, established diplomatic relations with Cuba. At the same time, it cut diplomatic relations with Israel and voted in favour of a UN resolution denouncing Zionism as racism. And through internal and external exhortions, pressures, it allowed Cuban planes bound for Angola to pass through Guyana.
Immediately, the US administration applied diplomatic pressure which was in keeping with US Secretary of State Henry Kissinger's threats that the US would take firm action against those states which voted in the UN against its interests. This pressure was felt very strongly when the British-owned Booker's sugar company was about to be nationalised in May 1976. As result of strong PPP pressure, the government offered the Booker company a compensation of G$1. But immediately faced with economic pressure from the US, the government, without consulting with the opposition, somersaulted from its original position and agreed to pay US$102 million at 6 percent interest in 20 years!
Earlier, in July 1973, the PNC had outrageously rigged the general election to give itself a two-thirds majority. This action was just winked at by the US Government since it still felt that Burnham's action kept at bay the "communist" Cheddi Jagan for whom it still nurtured a pathological dislike and fear.
However, not too long after, Burnham and the PNC suddenly claimed they were "Marxist-Leninists" and began an expansion of relations with socialist countries, which set the stage for confrontation with the US government. At the same time, the "new" socialist ideological cloak the PNC wore enabled it to win "critical support" from the PPP in August 1975, an act which apparently further caused consternation in US circles.
The relationship with the US took a dive in October 1976 when a terrorist bomb blew up a Cuban plane in which 73 persons, including 11 Guyanese, were killed. Only a few weeks before there was a bomb explosion in the Guyana Consular Office in Port of Spain, Trinidad, and this was blamed on "anti-communist" terrorists.
At a public rally in Georgetown to condemn the terrorist attack on the Cuban plane, Prime Minister Forbes Burnham accused the CIA of involvement. The US State Department immediately responded by calling him "a bald faced liar", and withdrew the US Charge d'Affaires from Georgetown.
This badly deteriorated state of affairs caused great worry within the Burnham administration and efforts were made to mend the fences. By this time, the government had established strong relations with socialist countries and more and more Guyana was earning a reputation in US circles as a possible bridgehead for socialist expansionism in the Caribbean and South America. In an attempt to ally such fears, government leaders made a number of trips to Washington to meet with senior State Department officials.
Apparently, some patching-up occurred and in June 1977, US Assistant Secretary of State for Inter American Affairs, Terrence Todman, in a statement before the Sub Committee on Inter American Affairs of the House International Relations Committee, declared:
"Guyana is seeking a different path to social and economic development, one with which we have no quarrel and which we have no reason to fear. Despite its different political philosophy, and our differences of the past, Guyana looks to us for understanding and co operation. By co operating with Guyana we can emphasise once again our readiness to respect different ways of political and social development."
Mr. Todman also pointed out that Guyana can eventually attain the kind of economic viability which can contribute to the region as a whole and allow it to assist its Caribbean neighbours in their development as well.
But the US was also concerned over the anti-imperialist trend in Guyana, and viable economic aid was only possible if this trend was slowed down or halted altogether.
Shortly after Todman's statement, there were visible signs that the PNC government was buckling under US "imperialist" pressure and was shifting ideologically back to the right. It announced that it was shelving the nationalisation of foreign banks and insurance companies which had been planned for the end of 1976. At the same time, it said it was opening "the door" to private foreign investment while announcing that the period required a temporary shift to selected capitalist strategies of development.
In July 1977, a director of the International Finance Corporation (IFC), the private investment arm of the World Bank, visited Guyana. After discussions with Guyanese businessmen about seven projects covering agriculture, agro industries, manufacturing, forestry and logging, he stated that "private enterprise is alive and well in Guyana."
While ties were strengthened with the British, Canadian and US military, Guyana re-established close diplomatic contacts with the US government through visits of Foreign Minister Fred Wills and Finance Minister Frank Hope.
The government also moved Guyana into the ambit of the US controlled International Monetary Fund (IMF) as part of its policy to solving the existing financial crisis. As a "solution" the IMF recommended the reduction of essential subsidies which imposed further burdens on the Guyanese working people. The government also devalued the Guyana currency in relation to US currency by changing the rate from US$1 equivalent to G$2.55 instead of G$2.00 - a devaluation of about 25 percent.
No doubt, these "pressures" forced the PNC in 1977 to break off unity talks with the PPP. These discussions had commenced not too long after the PPP had announced its "critical support" for the government. However, the PNC broke off the talks and re-commenced its harassment of PPP supporters. The PPP felt that the PNC's action was keeping in line with Kissinger's warning about incorporating socialist parties into established pro-western governments.
Imperialism Backing the PNC
The PNC regime's move to the right won political and economic support from imperialism. In March 1977, the conservative Senator Daniel Moynihan listed Guyana among the six nations (India, Sri Lanka, Guyana, Barbados, Jamaica and Gambia) which "have been able to change their governments through free elections." This statement was made despite the full knowledge of the US government that the PNC blatantly rigged the 1968 and 1973 elections.
And despite the violation of democratic freedoms and fundamental rights in Guyana during the 1970s, the US saw no problem concerning human rights in Guyana. At the end of a short visit to Guyana in June 1977, US Under Secretary of State, Philip C. Habib, stated as regards human rights: "This is not, in our view, a problem in Guyana."
The US also took a new position regarding loans to Guyana. Previously problematical under the "leftist" PNC regime, loans became rather easy to obtain in 1977 when the regime was shifting to the "right". A G$2.5 million loan application made to the US since 1973 was suddenly approved in July 1976. Minister of Finance Frank Hope stated the loan application had been put in cold storage because of "a difference of views". He added that there had been a "closing of the gap in views" when the new Carter administration took over and this had led to the successful conclusion of the agreement.
Then on July 26, 1977, the Guyana Chronicle reported that Mr. Peter Kolar, director of USAID, handed over a cheque for G$500,000 to the Ministry of Finance for the 4 lane lower East Coast highway. He explained that in the past USAID made disbursements to the Government only after work was done, but "because of the present economic situation in Guyana, we have decided to change the system and make advances'."
The British government also stepped up its loans to the PNC regime. It authorised the offer of a $44 million development loan to the Guyana government in June 1977. Frank Dunnill, leader of the visiting British project mission to Guyana said that Guyana was a country with great potential, and that Guyana government's "Feed, Clothe and House" programme was very much in keeping with the British government's policy.
All these efforts by the imperialist countries to shore up the anti-democratic PNC government were ultimately aimed at keeping the PPP at bay. This was made clear by Nelson Rockefeller who in the report of the special Mission he headed in Latin America in 1976, stated:
"Guyana is not a politically stable nation. Its political sphere reflects both the strength of a Communist Party and the depth of racial tension. A communist victory would completely change Guyana's foreign policy. It is therefore of crucial concern to the United States and other nations of the Western Hemisphere as well as Great Britain. . . Brazil in particular has indicated its concern in this area."
The US also saw the containment of leftist movements in terms of its own security. The Guyana Chronicle of 2 July 1977 reported that Terrence Todman outlined how this US policy relates to the Caribbean region:
"We used to see Caribbean mainly in security terms. Our interventions there were often largely motivated by security considerations, and we sometimes referred to the Caribbean as "our lake. We still have security interests in the Caribbean. It is our "third border". . . . But we no longer see the Caribbean in quite the same stark military security context that we once viewed it. Rather, our security concerns in the Caribbean are increasingly political in nature. . . ."
Clearly, the Guyana government in the last half of the 1970s was being rewarded in order to keep it in the camp of capitalism. It was obviously because of this that the western powers, through blatant hypocrisy, continued to pretend that the PNC regime was practising democracy and that it had an unblemished record in the area of human rights.
19 April 2005