Jagdeo’s never-ending quest for the next big flop

Dec 10, 2024 Features / Columnists, Peeping Tom

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Peeping Tom…

Kaieteur News- It must be exhausting to live inside Bharrat Jagdeo’s head. The man wakes up every morning and decides which bygone fiasco from the archives of Guyanese history that he can breathe life into next.

His latest candidate for reincarnation? A development bank. Yes, folks, that’s right—another swing at this piñata of government-sanctioned debt. And here I was thinking the after-life was supposed to be for humans, not institutions that repeatedly failed us.

For those of you keeping score, Guyana’s past experiments with development banks resemble the tragic plots of Shakespearean drama, only less entertaining. Remember the Guyana Agricultural and Industrial Development Bank (GAIBANK)? Or the Guyana National Cooperative Bank (GNCB)? These institutions were supposed to be the shining knights of affordable financing, but instead, they fell into the murky waters of political meddling. Loans were handed out like free candy—only the trick was on the taxpayer, who ended up footing the bill when many of those politically-favoured “businessmen” forgot to repay their huge debts.

Jagdeo’s recent musings about bringing back this failed idea has me wondering if he’s trying to write the sequel to Groundhog Day. He knows this story’s ending as well as we do—bad loans, bad decisions, and a big, fat bailout waiting at the finish line. Yet here we are, listening to him talk about development banks like it’s a possible panacea for Guyana’s economic shortcomings.

To be fair, the concept of a development bank isn’t inherently ridiculous. In theory, it’s supposed to address market failures—lending where private banks fear to tread, like long-term infrastructure or agriculture projects. But theory and practice are two different beasts, and in Guyana, they’re practically strangers. The private sector loves to dream of development banks as magical ATMs, spewing out cheap loans. But development banks aren’t just about low-interest financing—they’re about catalyzing growth in sectors that are too risky or too slow for profit-driven banks.

In small economies like ours, where the financial system is about as robust as wet paper, introducing a development bank isn’t just risky—it’s an invitation to rent-seeking. That’s a fancy term for what happens when politically connected folks use public resources for personal gain. We’ve seen this movie before, and spoiler alert: the hero doesn’t save the day. Instead, the taxpayers are left clutching the bill while the politically-aligned villains ride off into the sunset, smug and debt-free.

And let’s not forget about the “contingent liabilities”—a phrase that sounds boring until you realize it’s shorthand for “the government will be bailing this out when it all goes south.” Imagine the PPP/C, adding yet another financial albatross to its neck. It’s like watching someone who can’t swim dive into the deep end with a bag of rocks around their neck.

But what really boggles the mind is how Jagdeo can bring up the idea of a development bank with a straight face. This is the same man who launched, within CARICOM, the Jagdeo Initiative on Agriculture, a plan so ambitious, it could have rivaled the Green Revolution—if only it had left the drawing board.

More than a decade after and what do we have to show for it? A concept paper. A concept paper, people. The Caribbean is still waiting for their green revolution while the latest half year report on Guyana’s economy suggests that the country is importing more food, not less than before. The PPP/C seems to have perfected the art of what I like to call “aspirational governance.” Grand plans are thrown out, enough to excite the populace and, in this instance, the local private sector. And then…nothing. We have had this idea of a development bank before… under the same Jagdeo.

What failed then, is not likely to work now. The resurrection of a development bank fits perfectly into this pattern. It sounds bold and visionary—until you remember that we’ve tried it before, and it was a disaster in one era and a non-starter in another. So, here’s a revolutionary idea for Jagdeo and company: instead of trying to resurrect a failed institution, why not focus on fixing the existing banking system? Guyana’s private banks may not be perfect, but they’re not beyond repair. Strengthen them, expand them, and encourage them to lend to the sectors that matter. Yes, it’s less glamorous than announcing a shiny new development bank, but it’s also less likely to end in tears—and by tears, I mean another multi-billion-dollar bailout.

So, here’s my advice to the PPP/C: before you start building a development bank, take a good, hard look at the ruins of the ones that came before. And then ask yourself: Do we really need another institution to fail us? Or should we focus on building something that actually works? For the sake of Guyana’s taxpayers—and my sanity—I hope they choose the latter. But given the PPP/C’s track record, I won’t hold my breath. After all, governance in Guyana is nothing if not predictable. And, as with any good comedy, sometimes all you can do is laugh to keep from crying.

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

(Jagdeo’s never-ending quest for the next big flop)

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• Guyana Agricultural and Industrial Development Bank, Guyana National Cooperative Bank, Jagdeo’s never-ending quest, Peeping Tom

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