THE PANHANDLING ECONOMY

Oct 09, 2009 Features / Columnists, Peeping Tom

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When the global financial crisis hit last year, the President of Guyana promised that Guyana would formulate a national response so as to build a firewall to protect us from the effects of the crisis. That firewall was never built because the political leadership in Guyana did not know where to begin.
Without a template developed by the World Bank there were simply no answers as to just how to approach the problem.
Now we have a new template. It is called low carbon development. It is not that the visionaries in Guyana have emerged with their own plan. What we have is a plan with the distinct stamp of the World Bank which itself has revealed that a number of countries have either developed or are developing climate change strategies.
Among the countries listed are Bolivia, Brazil, Burkina Faso, Cameroon, Guyana, Haiti, India, Lesotho, Maldives, Mexico, Morocco, Nepal, Philippines, Serbia, Tunisia, Vietnam, and Yemen.
Thus, this low carbon business is neither new nor unique to Guyana. Since 2007, the World Bank had identified climate change as a global threat, and has developed a strategic framework for an international financing response.
If you go to the website of the World Bank you will see for yourself that all this talk about adaptation, mitigation and, carbon trading is straight out of the template which has been developed by the World Bank.
Guyana has latched on to this framework because Guyana has for a long time now become a mendicant nation. All the government has been doing since 1992 has been begging and borrowing its way towards the goal of economic development. It knows no other economic strategy.
It cannot contemplate a future outside of dependence on foreign loans and grants and thus it will continue to tap into new sources of financing that is emerging. And the newest source of financing presently available is for climate change purposes.
When the PPP first came to power, it continued along the neoliberal path to development which at the time saw the West being extremely generous to countries like Guyana. In return for massive injection of funds for development, Guyana agreed to a series of structural reforms which entrenched a market economy and all the perversities that accompany that model, the central one of which is the widening of the gap between rich and poor in countries which openly embraced structural adjustment programmes.
The West, reeling under the criticism that their programmes adversely affected the poor, set about a new round of development financing aimed at what was said to be reducing poverty.
Guyana benefitted under this dispensation, especially through debt relief. But all these things came at a price. The assistance was tied to the continued liberalizing of the economy.
These sources of financing are now drying up and Guyana, desperately in need of new financing to continue economic development, has jumped on this latest “bandwagon” because it stands to benefit from new sources of development financing, and if things are lucky, by the emergence of its ability to trade carbon credits internationally.
The World Bank has already established a number of facilities which no doubt Guyana is eyeing up as possible sources of borrowing and grant assistance. There is what is called the Climate Investment Fund which has a Special Climate Change Fund and a Least Developed Country Fund; and the Forest Partnership Facility, to name a few. In the field of renewable energy alone, World Bank financing has reached its highest level ever of some US 3, 3 billion dollars. Many countries, including China, are already benefitting from funding from the World Bank.
This is not to suggest that Guyana’s plug for a new climate change deal is based solely on the need to find new sources of financing. The government is also most likely coming under the influence of powerful environmental lobbies that are keen to benefit from the consultancies that will emerge following Copenhagen. Also, climate change is something that enhances Guyana’s standing in the world. No one factor can therefore explain Guyana’s stance.
What however is clear is that the manner in which Guyana is pursuing its Low Carbon Development Initiative will push it increasingly into the hands of the powerful western financial institutions and any assistance received will come with strings attached. And these strings will put Guyana’s under the camoudi-like wrap of western institutions such as the World Bank.
This is why President Jagdeo’s climate change proposal needs to be rescued from the hands of the PPP government. If it goes ahead without removing the dependence on the World Bank, the cycle of hopelessness will continue.

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