Unmasking Jagdeo’s Economic Legacy

Apr 19, 2024 Features / Columnists, Peeping Tom

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Kaieteur News – For years, the disciples of Bharrat Jagdeo have woven a narrative of economic success during his tenure as Minister of Finance and President of Guyana. Yet, a comprehensive examination of the facts reveals a different reality.

Recently, Jagdeo was asked about what he was most proud about after 30 years as a member of the government. He was also asked what he regretted the most. Jagdeo’s claims of restoring credibility to the country’s economy crumble under scrutiny. They reveal a legacy marked by stagnation, poor management and missed opportunities. The period between 1999 and 2005, under Jagdeo’s presidency, was characterized by lackluster economic growth. Guyana experienced a feeble average GDP growth of a mere 0.7% in those years. Annual figures tell a tale of woe: from negative growth rates to sluggish expansion.

The economy languished under Jagdeo’s watch. In 1999, annual GDP growth was 3.6%; in 200) it was -1.4%; the following year, it was 2.3%; in 2002, it declined to 1.1% and then fell further the next year to –o.6%. In 2004, growth was a mere 1.6% and in 2005, it slumped to -2% mainly on account of the floods of that year. From 2006 onwards, the economy began to show better growth due to the rebound from the floods of 2005 and because of the rebasing of the economy.  However, in the seven years between 1999 and 2005 Guyana’s economy, under Jagdeo’s presidency grew at an average of 0.7%. This is Jagdeo’s record, a record of failure.

The PPP/C’s contention that Jagdeo reclaimed Guyana’s economic credibility hinges largely on Guyana securing debt relief. However, this claim glosses over crucial facts. Debt relief wasn’t a result of Jagdeo’s astute economic stewardship but rather a consequence of a global initiative aimed at alleviating the burdens of heavily indebted poor countries (HIPCs). Guyana benefitted from this initiative irrespective of its leadership.

The Paris Club terms, for example, were part of a broader international effort, not a testament to Jagdeo’s personal achievements. Debt relief had nothing to do with the PPP/C’s or Jagdeo’s efforts. Guyana was benefitting from debt relief even before Jagdeo and the PPP/C took office. Under the PNC government, Guyana benefitted from Paris Club terms. These terms got better under the PPP/C because there was intense international pressure to address the debts of developing countries. Guyana being a HIPIC country benefitted generously.

When a country is granted Paris Club terms, it means that the Paris Club member countries, which are creditors of that nation, have agreed to provide debt relief or restructuring according to certain agreed-upon terms. One critical aspect of the Paris Club process is the principle of comparability of treatment. The principle of comparability of treatment stipulates that once a Paris Club agreement is reached with a debtor country, all Paris Club member countries who are creditors of that nation must offer the same terms to that country. This principle ensures fairness and consistency among creditors and prevents any one creditor from receiving preferential treatment over others.

This is why Guyana got hundreds of millions of dollars of its debt written off by Trinidad and Tobago. Under the Paris Club agreement, Guyana could not repay those sums to Trinidad and Tobago. The twin-island state therefore had to forego those sums as debt relief. Jagdeo’s tenure, as both a Minister and as President, was marred by a litany of failures and controversies conveniently omitted from the PPP/C’s narrative. The public service strike, which precipitated Janet Jagan’s resignation, remains a dark chapter in Guyana’s history. She got the wrong advice.

Guyana was never as unsafe as it was under Jagdeo’s Presidency. The surge in crime rates during his presidency underscores the failure of the government’s failure to ensure public safety and security—a fundamental duty of any government. One of his own Ministers was assassinated. The Skeldon Sugar Factory debacle stands as a glaring example of a Jagdeo’s failures. Plagued by problems, the factory became a drain on resources rather than helping to revive the ailing sugar industry.  Similarly, the Amaila Falls Hydroelectric Project was mired in controversy. The developer eventually walked away over the lack of political consensus.

Jagdeo’s track record on investment is equally dubious. The ill-fated decisions surrounding CLICO and the Santa Complex privatization are sore thumbs. The flawed models of the Marriot Hotel (including debt owed to unknown syndicated investors) and the Berbice River Bridge further tarnish his legacy and led to him having to end his second term under a cloud of criticism and disaffection, both of which contributed ultimately to the loss of the 2015 elections by the PPP/C. Jagdeo’s legacy, unfortunately, is not one of progress and prosperity; rather, it is one of stagnation and missed opportunities. The narrative of economic credibility and success crumbles in the face of scrutiny, revealing a legacy defined by mediocrity and failures.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• different, Economic, legacy, Minister, Peeping Tom

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