President Bharrat Jagdeo told US officials in 2007 that he intentionally kept bureaucracy in place to protect “the little guy” and blamed the entrepreneurial class for chasing away potential foreign investors by telling untrue tales of the difficulties of doing business in Guyana.
This is according to US embassy cables released by whistle-blowing website, WikiLeaks. Jagdeo made the comments in a meeting with US officials prior to the signing ceremony for a Millennium Challenge Corporation (MCC) project in August 23, 2007, according to the confidential cable sent by then Charge d’Affaires at the US embassy in Georgetown, Michael Thomas.
The two-year US$6.7 million Guyana Threshold Country Plan/Implementation Project (GTCP/IP) funded by the US Government’s MCC, ended last year. More funding was not extended to Guyana and it was explained that it was a competitive process with a board examining different indicators before coming to a decision on additional funding.
The MCC, according to its website, forms partnerships with some of the world’s poorest countries, but only those committed to good governance, economic freedom and investments in their citizens. It provides the well-performing countries with large-scale grants to fund country-led solutions for reducing poverty through sustainable economic growth. The grants complement other US and international development programmes, with two primary types of grants—“compacts” and “threshold” programmes. Guyana’s Threshold programme sought to help Guyana reduce its fiscal deficit by improving its ability to collect revenue and better manage its budget.
Thomas, in the cable said that MCC Deputy Chairman Rodney Bent reassured chiefs of bi- and multi-lateral donor missions that the MCC understood the prospect of a multi-million dollar MCC Compact agreement was “about the only incentive available to the donor community to encourage necessary governance reforms and arrest the slide towards democratically sanctioned autocracy.”
According to Thomas, at events throughout the day, Jagdeo revealed interesting insights into his thinking on economic issues, as well as his personality and leadership style. “His themes included: more bureaucracy is better and public (and parliamentary) opinion are irrelevant,” Thomas said. “A key measure of success for the Threshold Program will be whether Jagdeo’s perspective changes over the coming months,” he stated.
The cable said that before the signing ceremony, a 70-minute meeting between Jagdeo, Thomas and then USAID Mission Director Dr. Fenton Sands took place in the Office of the President. Thomas said that during this meeting, Jagdeo told Bent and him that his number one priority was to rebuild the entrepreneurial class. The president praised USAID/GTIS’s efforts to provide direct assistance to farmers and entrepreneurs who need help rather than simply studying issues and funding elite business associations, the official reported.
“He blamed the small remaining entrepreneurial class for the negative business climate in Guyana, saying that after 28 years of PNC state socialism, they want government to do everything for them. He went on to say that this small group deliberately chases away potential foreign investors by telling supposedly untrue tales of the difficulties of doing business in Guyana,” Thomas added.
The official reported that as he, the president and Bent were reviewing MCC indicators for Guyana, “Jagdeo pointed out the “days to start business” indicator and remarked that he could easily reduce the number from 46 days to 5, but that he intentionally kept the bureaucracy in place to protect “the little guy” who could be victimized if a lack of government vetting allowed unscrupulous people to start businesses.”
Jagdeo also complained about the Control of Corruption indicator noting that it measured perceptions of corruption rather than actual corruption. “When Bent suggested that transparency and a reduction in regulation were common methods other developing nations used to combat corruption, Jagdeo countered that more and stronger bureaucracy and regulation were appropriate for Guyana,” Thomas said. “Jagdeo gave the example of a “deliberate decision” he had made to add layers of bureaucracy to the customs processes in order to increase the cost of bribery, which he believes will reduce corruption,” he added.
Jagdeo also told Bent that there is an Auditor General whose function it is to investigate and report any corruption that may occur in the government but Thomas noted that Jagdeo neglected to mention that the last AG, Anand Goolsarran, had been forced out of office in 2004 when he was investigating a Presidential Advisor who was illegally exporting endangered dolphins.
According to Thomas, Jagdeo was also of the opinion that the public does not understand fiscal policy and government budget processes. “He volunteered that even polling members of Parliament would be futile, in his opinion, as most MPs also do not understand fiscal policy and government budget processes. Jagdeo also volunteered to the group that his management style is that of “micromanaging and firefighting, because that is the only way to get things done”,” Thomas reported.
The diplomat said that at the MCC-hosted lunch, the Chiefs of Guyana’s traditional bilateral and multilateral donors gave Bent a significantly different view of Guyana and the difficulties the Threshold Program will have in engendering reforms. “Bent reassured all in attendance that the MCC seeks strong partnerships with both donors and Guyanese civil society, and that the MCC understands that the potential of a multi-million dollar compact is just about the only incentive available to prod Guyana’s government to move forward with governance reforms which it has been resisting,” he said.
“The day’s event provided a first-hand view of the President’s leadership and personality traits that the business community, government officials, and PPP leaders are complaining about with increasing volume: Jagdeo blames others for all of Guyana’s ills, does not value the opinions of the public, the business community or the political leaders, and believes he personally is the only person with the ability and aptitude to solve Guyana’s problems,” Thomas commented.
The single most difficult challenge of the Threshold Program will be to change Jagdeo’s thinking, or, failing that, to convince Jagdeo that the potential of an MCC Compact is incentive enough to implement policy reforms he does not believe in, the diplomat concluded.