MINISTER of Finance Mr. Winston Jordan recently advised the nation that the International Monetary Fund (IMF) is calling on Guyana to diversify the economy.  The IMF’s role in Guyana’s economy has, at best, always been complex. Guyana’s immediate post-independence legacy shows that diversification was doggedly pursued as a matter of policy in the nation’s developmental thrust.
For instance, besides producing sugar, GuySuCo (The Guyana Sugar Corporation) was also encouraged to become involved in dairy and cash-crop farming, as well as aquaculture. As such, cows were primarily reared for the making of milk and cheese, while tilapia and hassar rearing and the cultivation of black-eyed peas were popular activities in the aquaculture and cash-crop farming sectors.

And in the bauxite industry, outside of mining for bauxite, the production of alum was also encouraged for water treatment purposes, as was the rearing of poultry, goats and sheep. This same spirit of diversification would also consume the rice industry, which, in addition to producing white and parboiled rice, was heavily involved in the production of such by-products as rice flour and rice cereal.

Then there was Region One, in the Barima-Waini area, which was engaged in a major way in the production of palm oil, primarily in the village of Wauna.

And the Guyana National Service (GNS), operating in the Berbice River, has long been associated with the production of items such as red beans, mung, black-eyed peas, cotton and peanuts.

But history will also show that, outside of a few large companies, the private sector landscape has not been big on diversification. To a large extent, it has been small, market-driven, and very averse to taking risks.

Risk taking was left to the Government to fill that void through State institutions, in much the same way as Research and Development (R&D) which nevertheless redounded to the benefit of the private sector through merchandising with, or the provision of service to, the Government.

Entities like the State-owned Guyana Pharmaceutical Corporation (GPC), for instance, researched and produced pharmaceuticals and notable products such as Limacol, Ferrol Compound and Nutrophos. There was major fruit processing, and Guyana’s carambola (known locally as the five-finger) entered the European market. There were state-owned institutions that assembled such things as radios, stereo sets, refrigerators, bicycles, and the famous ‘Tapir’ vehicle. Though these were produced for the local market, if such efforts were encouraged, and with R&D, there would have been improvement and the ability to compete in external markets.

Guyana’s earlier efforts show a deviation from the reliance on primary products such as rice, sugar, bauxite and gold.
The State, through the Guyana Gold Board, continues to train goldsmiths with the intent of establishing a jewellery industry. An industry of this nature would create value-added products to our precious metals.

The slowing down and calls on Government to get out of business, which impacted negatively on diversifying the economy, was pushed by the IMF. A long-held view is that forces with political influence within the IMF caused pressure to come to bear on the Forbes Burnham and Desmond Hoyte administrations, to shift their policies and privatise State institutions, placing them in private hands which, on many occasions, were only interested in making money, and at the expense of national development.

The record would show that privatisation negatively impacted employment. Where Government institutions factored in maximising the use of human resources/capital, privatisation saw labour as a fixed cost that needed to be reduced significantly.

Some of the consequences suffered were an increase in social ills such as poverty, crime, homelessness, and family instability, where member(s) moved to seek employment/economic opportunities. The intensification of the notion that the private sector was the engine of growth, which was built on the neoliberal model, saw less attention being paid to the cooperative movement, which is part of the nation’s tri-sectoral economy.

What is patently apparent is that the IMF’s present position to diversify the economy, and its advice as to the direct role of the State in this regard, is a clear indication that this institution has come full circle.
It also confirms that Guyana was on the right path from the very onset, but was compelled to change course in order to qualify for funding and technical assistance.

And where presently the global focus is on sustainable development, the IMF is hard- pressed to embrace the principles and elements that were enunciated and practised here from the early years of Independence.

As such, in light of where the country is, in order to make diversification sustainable, it would require a national policy, supported by diverse programmes but led by the Government, which has a greater responsibility to society.