Kaieteur News – Did Forbes Burnham err when he nationalized the commanding heights of the economy and removed foreign involvement from the local financial sector?
If Forbes Burnham erred, it means that the socialist experiment pursued by the PNC was ill-conceived. The fundamental basis of the socialist experiment was both national ownership and control of the main pillars of the Guyanese economy, namely sugar and bauxite. If it was an error to nationalize, then the socialist experiment was a colossal mistake.
The PPP has never accused Burnham of making an error by nationalizing the commanding heights of the economy. The PPP supported those policies and had it not been cheated out of office, would have most likely also nationalized the bauxite and sugar industries which at the time were owned and controlled by foreign multinationals.
The PPP offered critical support to the PNC because of the PNC’s decision to nationalize and its accompanying anti-imperialist postures at the time. What the PPP has always contended was that the PNC mismanaged the nationalized, resulting in inefficiency and the loss of export markets at a time when had it enjoyed the benefits of increased exports, Guyana would never have found itself in the situation in which it found itself.
In making a decision as to whether Guyana should have nationalized the commanding heights of the economy, Forbes Burnham must have considered the ability of locals to manage the industries. Did Guyana at the time have the capacity to manage the industries? Was it a blunder by Forbes Burnham to have concluded that we did when we did not?
Forbes Burnham was never in doubt as to the ability of Guyanese to become masters of their own destiny. He believed that the commanding heights of the economy should and could have been wrested from the hands of foreigners.
He believed not just in ownership of the bauxite and sugar industries but in keeping with nationalism that if independence was to have any meaning, then locals had to occupy the upper rungs of the managerial chain. Ownership of the commanding sectors of the economy had to be complemented by the Guyanese managing these enterprises. Burnham believed this and died believing this.
He cannot ever be described as a visionary if he was wrong on this score because this was the main plank of his economic policies and his political beliefs.
For him, Guyanese were not second to any other and if believed that locals had a right to own and control (manage) all aspects of national life.
This is why he did not restrict nationalization to only sugar and bauxite but also extended it to the banks.
In the financial sector, Burnham pressured a number of foreign owned banks, including the Royal Bank of Canada and Barclays Banks International, to dispose of their shares to the State. Most did for $1. As such Burnham not only ensured national control of the productive sectors but also of foreign-owned financial sector.
It should be noted that these banks when nationalized continued to make a healthy profit and added to national development. There were locals who rose to top positions in those nationalized banks but some foreign management was also retained right into the 1980s.
Was it the foreign managers that ensured that these banks succeeded? Not so at all, because over time local mangers took over and the formerly owned foreign banks continued to do well.
On the other hand, Forbes Burnham also established local banks. These banks did not do well, not because of the absence of foreign management, but because of political considerations which affected their lending policies and which eventually led to these banks accumulating massive bad debts.
What this says is that the problem was never about Guyanese not being able to manage their own affairs. The problem was political interference which was greater in the indigenous banks than it was in the nationalized banks. The managers of the latter enjoyed greater autonomy and were free from political influences.
The problem therefore could never have been our inability to manage our own resources. It was the implanting of political lackeys by the PNC within state-enterprises that were mainly responsible for the failure.
It is posited that if Burnham erred by underestimating the local capacity to manage the bauxite and sugar industries, then is it safe to say that Guyanese will be unable to manage the oil and gas sector. And this has implications for any decision to nationalize the oil blocks which were handed out, as well as for local content.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)
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