Chavez and our debt relief

Mar 22, 2013 Editorial

The debt-burden albatross on the necks of our Caricom partners has risen to the fore over the past two years. Guyana was once in an even more desperate situation not so long ago. Debt relief was one of the signal achievements of the present PPP regime. However, as is to be expected in such mammoth international tasks, it takes a tremendous number of players to bring matters to a successful conclusion.
On the passing of Venezuelan President Hugo Chávez, an incident has surfaced that explains he had a critical role in the cancellation of a large chunk of Guyana’s debt: US$467 million from the Inter-American Development Bank. The story is told by Greg Grandin in “The Nation” of March 5, 2013, in the obituary “On the legacy of Hugo Chávez “.
“When I met Chávez in (September) 2006 after his controversial appearance in the UN, (where he called US President Bush “the Devil’) it was at a small lunch at the Venezuelan consulate. Danny Glover was there, and he and Chávez talked the possibility of producing a movie on the life of Toussaint L’Ouverture, the former slave who led the Haitian Revolution.
Also present was a friend and activist who works on the issue of debt relief for poor countries. At the time, a proposal to relieve the debt owed to the Inter-American Development Bank (IADB) by the poorest countries in the Americas had stalled, largely because mid-level bureaucrats from Argentina, Mexico and Brazil opposed the initiative. My friend lobbied Chávez to speak to Lula and Argentina’s President Néstor Kirchner, another of the region’s leftist leaders, and get them to jumpstart the deal.
Chávez asked a number of thoughtful questions, at odds with the provocateur on display on the floor of the General Assembly. Why, he wanted to know, was the Bush administration in favour of the plan? My friend explained that some Treasury officials were libertarians who, if not in favour of debt relief, wouldn’t block the deal. Chávez then asked why Brazil and Argentina were holding things up. Because, my friend said, their representatives to the IDB were functionaries deeply invested in the viability of the bank, and they thought debt abolition a dangerous precedent.
We later got word that Chávez had successfully lobbied Lula and Kirchner to support the deal. In November 2006, the IDB announced it would write off billions of dollars in debt to Nicaragua, Guyana, Honduras and Bolivia (Haiti would later be added to the list).
And so it was that the man routinely compared in the United States to Stalin quietly joined forces with the administration of the man he had just called Satan, helping to make the lives of some of the poorest people in America just a bit more bearable.”
A month later, on November 17 2006, an IADB press release announced “At a meeting of the Committee of the Board of Governors of the (IADB) in Washington, DC, The Committee of the Board of Governors of the Inter-American Development Bank today announced that its members reached an agreement on a framework for debt relief for Bolivia, Guyana, Haiti, Honduras and Nicaragua… The Committee of the Board of Governors will meet in January 2007 in Amsterdam to define technical details for the implementation of the new debt reduction framework.” In January of 2007, the US$467 million of debt was cancelled in full for Guyana as part of an overall package that cancelled US$4.4 billion in total debt to the five named countries.
And so in addition to the relief provided to Guyana for our oil supply through the PetroCaribe facility, the rice contract that has made Venezuela the largest single market for our rice and the placing of the Venezuelan claim to Essequibo on the back burner, the late Hugo Chavez played a role in our debt relief. All Guyanese should salute this champion of the poor of this region and beyond.

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