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The Effects Of Colonization In Guyana

Info: 3714 words (15 pages) Essay
Published: 8th May 2017 in History

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Over the years I have heard many first-hand stories of how the people of Guyana survived and what type of obstacles they faced every day in their former country. From living in mud-huts, to fighting off the Afro-Guyanese who continuously stole from them, to the stories of the beautiful landscapes, to hearing about the love of their country, and to having my everyday household items pilfered and sent off to family members in Guyana because they could not afford such luxuries (linen, dishes, clothing items, food products, etc); I had to know more about this dynamic country and the inhabitants that lived there. What I have learned through my experiences and research is that immigrants from Guyana only seek a better way of life for themselves and their family due to the hardships that they endure on a daily basis in Guyana.

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In order to understand the dynamics of Guyana and its development, we must become familiar with its history. The foundation of the history of Guyana is based on colonization of the Europeans and the effects of it still impact its citizens today. It gives us a foundation in understanding the social, economic, and political dynamics that are largely responsible for the unrest and economic turmoil that is still being experienced in this country today. The long-term projection of development is not a promising one as external debts continue to increase and racial tensions continue to build and hardships are still endured by the citizens of Guyana.

The Creation of Guyana

There were three main reasons why the Europeans were intrigued to settle in Guyana in the late 1500’s: the legend of El Dorado and the promise of gold; the growing popularity of trade in commodities such as tobacco and dye; and to establish tobacco plantations of their own in order to decrease their dependence on the Amerindians for it (Daly 1974:35). These plantations grew to include cotton and coffee and in order to maintain the plantations, major labour sources were needed.

There were three main sources for this needed labour: the white colonists who had to work in order to pay their passage to Guyana; the Amerindians; and slaves that were brought in from Africa (Daly1974: 35-36). With the occupation of the Dutch in the mid 1600’s came the shift from cotton, coffee, and tobacco plantations to sugar plantations which were mainly run by British planters (Daly 1974: 46, Mangru 2000: 9 -10). In the mid 1700’s, slave revolts started occurring and continued periodically until the abolishment of slavery in 1834 and at this time the rule of Guyana shifted from Dutch to British (Ibid). Turmoil for the plantation owners came with the liberation of slaves.

With the liberation of slavery, plantation workers were demanding higher wages and better working conditions and plantation owners feared that the workers “would leave the plantations and squat on the banks of rivers and creeks” and to control this the plantation owners passed laws to prevent squatting from occurring and made the price of lands high in order to prevent ownership by the workers (Mangru 2000: 10-11). The idea for this was that it would make it impossible for the workers to leave the plantations and would force them to continue to work for menial wages on the plantations. Although the working and living conditions still resembled those of the times of slavery, this did not impede the workers from obtaining land and many of the workers banned together with their meager savings and purchased land as a group effort to overcome the rule of the plantation owners which came to be known as the “Village Movement” (Ibid). This had a great impact on the plantations labour force and forced the owners to come up with a new way to find cheap labour sources.

As a way to overcome this issue, plantation owners turned to immigration. Through immigration they would be able to bring in workers from other parts of the world and set a reduced wage for them, keeping their labour costs down and their profits up. They brought in workers from various parts of the world including the West Indian Islands, Malta, China, Europe, West Africa, and the United States, but the group that had the greatest impact was the people brought in from India (Mangru 2000: 12). This group of peoples was deemed to be hard working individuals and willing participants in the migration to the plantations. In return for working and earning a wage over a period of time (usually a five year span) they were promised a return passage home, however, abuse did occur during this migration period which included “kidnapping, deceit, forced detention, …” and workers on the plantations were controlled, abused, and manipulated by the control of wages or by other means of force such as the introduction of a contract system, and the newly established “Labor Law” and “Vagrancy Law” were used to control the labourers over time (Ibid: 18, 25). Their working conditions at times were no better than those of the slaves. Regardless of these actions, many immigrants decided to continue to stay in Guyana and make it their new home.

And so, Guyana, as part of the colonizing process of fulfilling labour needs, is primarily made up of two different ethnic groups of peoples. There are other ethnic groups; such as the Chinese and the Amerindians, but these groups are a minority in the population of the country and to-date it is the Afro-Guyanese and Indo-Guyanese that make up the majority of the population.

The Two Faces of a Conflicting Guyana

When the migrants from India were brought in to rejuvenate the labour needs the plantation owners pitted one group against the other as a way of controlling the labour force. In the later 1800’s, as the ex-slaves posed work strikes as a way of contesting the low wages and poor living conditions that were forced upon them by the plantation owners, the owners came up with a way to overcome this turmoil and havoc by creating a specific division of unity from the “divide and rule” policy of colonial power to ensure “the safety of the white minority and so in promoting that competition, the seeds of suspicion, resentment and fear were deliberately pursued as principles of good governance” (Seecoomar 2009:17). The plantation owners used this tact as a way to manipulate and control both groups of workers and, in doing so, pitted one against the other so that they would not unite together against the plantation owners and would stay submissive to them. This was the starting point of the conflict between the Afro and Indo-Guyanese.

As time passed, racism between the two ethnic groups flourished and became an underlying current for control. Ethnic racism, brought on and encouraged by the Peoples National Congress (PNC), brought about terror for the Indo-Guyanese inhabitants…

“rape, burglary, and arbitrary arrests by the security forces had become so prevalent that Indian villages became places of terror ” and “police were seen not as a solution, but as the source of the problem” and “Indian homes in particular became a target of official search and seizure exercises” because “the need for public plunder as a source of revenue became compelling” (Premdas 1995: 140)

Because of the economic sanctions put in place by the PNC government, by the 1990’s, living conditions were extremely harsh for the inhabitants of Guyana and only 40 percent of the workers were earning a minimum wage which was equivalent to $0.50 USD a day and, during this time, the only way that the country was able to sustain itself was through self-sufficient food production, monies received from relatives who were living abroad, and illegal activities (Butler 2009: 1). As the sliding economic ruins escalated these conditions became steadfast for both ethnic groups over time. Development of social, public, and industrial infrastructures has never had an opportunity to experience the growth needed to sustain the Guyanese people in terms of social reform, political unity, health, financial independence, and education. Migration to other countries, in order to sustain themselves and their families and to escape the unethical reign and abuse of the governing party, has been a constant with the people of Guyana.

The Debt Crises and Development

Development in Guyana never really progressed over time and has been hindered by the production of its export commodities. As indicated through an IMF (Staritz, Atoyan, Gold, 2007: 4) production of the five main exports remained constant or below the country’s average consistently from 1991 to 2004. The leading export commodity bauxite went from 85% in 1991 to 71% in 2004; gold in 1991 was at 52% and slightly increased overtime to 67% in 2004; timber remained relatively even at 44% during this time period; rice decreased from 42% in 1991 to 35% by 2004; and sugar, starting off at 35% in 1991, decreased to 25% by 2004. To better understand the reasons for the lack of production in export commodities we need to better understand the political history of Guyana. The main political party, outside of British authority, in Guyana in the 1950’s was the Peoples Progressive Party (PPP). The PPP at this time was made up of both Indo-Guyanese (President Cheddi Jagan) and Afro-Guyanese (Deputy Forbes Burnham) party leaders and, for the only time in history, stood in public unity for the people of Guyana.

In 1953 the British government, still in colonial rule, consented to universal adult right to vote, and as a result, the PPP was able to win 18 out of the 24 seats in this election, however, shortly after winning this election against the Working People’s Alliance (WPA), the British and the United States (US) wanted the PPP out of power because the PPP was opposed to the IMF’s involvement in Guyana’s development (Bartilow 1997: 104). As Lange (2009:124) points out to us, it was the British thinking that

“the PPP showed contempt for their colonizers and refused to collaborate with them after their electoral victory …although supporting the principle of democracy, the British expected politicians to cooperate with the administration and follow the guidance of the British”

It was only through military force, which included “arrests, prison terms, detentions, and house confinements,” that the British were able to remove the PPP from power and, in its place, put in a power that was to become the PNC regime (Premdas 1995: 43), for it was only with this regime that the IMF could implement a long term strategy that they felt would “liberalize the Guyanese economy” through development (Bartilow 1997: 104). It would seem that the relationship between the IMF and the PNC formed into a satisfactory one for both parties.

When Guyana officially gained its independence in 1969 the PNC became the political power of the country until 1992, which was led by Burnham until his death in 1985 at which time he was succeeded by PNC President Desmond Hoyte (Butler 2009:1). As an authoritarian government, the PNC became a dictatorship that the IMF was able to utilize in its plan for the country. The PNC used tactics that included suppression of workers, labour unions, and human rights acts and carried out political assassinations and rigged national elections as ways of staying in power and maintaining control of the country which seemed favourable to the IMF (Bartilow 1997: 105). The country’s development was greatly hindered during this time and took a significant turn for the worse adding to its already growing debt problem.

According to the IMF (2003:2) records, from the 1950’s until 1976, the country’s gross domestic product (GDP) showed an increase from 62 to almost 170. Two main contributing factors for this were: firstly, the three main export industries at the time (bauxite, sugar, and rice) were all owned by foreign capital, which included: Alcan, Reynolds Bauxite, and Booker Sugar Industry (which included 22 subsidiary companies); and secondly, the prices of some commodities, like sugar, actually quadrupled as a result of world inflation (Bartilow 1997: 106). The increase of the GDP would have indicated that the economy was starting to thrive and development for Guyana showed promising signs of progression as it entered its independence.

However, from 1976 to 1984, the GDP shows a sharp decrease from approximately170 down to 80 (IMF 2003:2). This was a direct result of the decline of major exports which was due to the PNC government taking control of virtually all of the economic activity in the country and through the “nationalization of foreign owned companies” and also because the high prices of commodities fell dramatically leading the country into a financial crises (Butler 2009: 1, Bartilow 1997: 107). When Jagan had been in power, he committed to several financial programs to ensure the success of Guyana’s main industrial sectors such as “credits, subsidies, marketing, technical assistance, and drainage and irrigation” (Premdas 1995: 121). However, these commitments were abolished by Burnham as most of the agricultural production was carried out by Indo-Guyanese workers and he perceived the industries to be the creation of “a partisan to Indian communal interests” and revamped these sectors, including the land distribution, so that they would be staffed and managed by the PNC members (Ibid). These actions escalated the clash between the ethnic groups and, as a result, Guyana’s economy and development was hindered further, creating a very crippled state.

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As a result of the financial crises, Guyana’s external deficit rose from $35.2 million USD in 1975 to $350.8 million USD in 1977 (Bartilow 1997: 108). During this time the PNC also attempted to pursue a non-alignment policy which allowed the development of relationships with communist states such as Cuba and the Soviet Union and, as these relationships grew stronger, the PNC was able to

“extend its line of credit, technical assistance for the rehabilitation of the bauxite industry, technical assistance to develop the country’s gold production, and an agreement to make purchases of Guyana’s bauxite” … (Ibid: 107),

all of which, undoubtedly, was unforeseen by the IMF when they originally put the PNC in power.

In 1978, the IMF and World Bank (WB) granted the PNC a substantial loan as a way of influencing the PNC to stay away from the world’s leftist influence (Premdas 1995: 132). These loans were given even though Guyana was debt ridden beyond its capacities. The IMF at this time had set target goals for the PNC as part of the loan agreement. These included: a five percent increase in GDP growth: a deficit reduction of ten percent of GDP by December of 1978; credit arrears to be reduced from $100 million GD (Guyana Dollars) to $75 million GD from January to December 1978; and by December 1978, foreign assets of the Bank of Guyana needed so show an increase of $40 million GD (Bartilow 1997: 112). This was done as a lenient way of controlling the downward spiraling debt crises and to help maintain the IMF’s control over the country’s economic state and political influences of other leftist countries.

Needless to say, when Hoyte became the predecessor to Burnham, he was faced with an incredible financial burden. The country’s external debt by this time exceeded $885 million USD and with creditors “threatening to cut off further credit” he was forced in 1988 to make changes to the policies which included opening up foreign investment and “enacting a package of reforms approved by the IMF” (Butler 2009:1). Hoyte, working in unison with the IMF and WB, implemented the strategic Economic Recovery Programme (ERP) as a way of resolving Guyana’s debt crises. According to Ishmael (2007: 1), the ERP was to be exercised over four years and included the three phases of “stabilisation”, “rehabilitation” and “recover” all of which were to reach the following overall objectives:

“(a) achieving real GDP growth of 4 percent annually; (b) reducing the rate of inflation from 50 percent to 10 percent; (c) reducing the public sector deficit to 20 percent of GDP; (d) eliminating the external and internal payments arrears on the debt; (d) building a net international reserve; (e) incorporating the parallel economy into the official economy; and (f) normalising Guyana’s financial relations with its foreign creditors”.

It was during the “stabilization” phase that “the government with the support of an IMF-monitored programme undertook the following measures: (a) an initial 70 percent devaluation of the currency; (b) price increases resulting from the devaluation; (c) a 20 percent ceiling on public sector wage increase; (d) an increase of the prime interest from 14 percent to 35 percent; and (e) the reduction of all foreign exchange retention accounts to 10 percent of export proceeds with the exception of bauxite” (Ibid). By 1991 the deficit had decreased, price controls were removed, foreign currency trading began, trade regulations were lifted, and state owned companies began to be privatized (Butler 2009:1). The IMF (2003:2) records show that, from 1984 to 2000, although unstable at times, the GDP steadily climbed back up to approximately 170 again. Due to the devaluations of the GD, an accompanying wage restraint policy, and high tax rates, life was still extremely harsh for the citizens of Guyana (Ishmael 2007: 1). However, on the international market, it would seem to appear again that the development and financial economic stability was starting to slowly gain momentum for Guyana. But this was not the case as Hoyte had to resort to heavy borrowing in order to meet the demands of the IMF and WB and follow through on the ERP mandates. He turned to international sources including Canada and the Bank for International Settlements (BIS) as resources to help repay loans (Ibid). This only increased the debt and put Guyana into a deeper economic and developmental recession.

“There was a drastic decline in the production levels of the key exports – bauxite, sugar and rice. Sugar production declined from 220,995 tons in 1987 to 129,900 tons in 1990. Rice production was 131,700 tons in 1987 but dropped to 94,000 tons in 1990. Bauxite dropped from 1,486,000 tons in 1987 to 1,321,000 tons in 1990. As a result of the decreased production Guyana could not supply sufficient bauxite to Venezuela for the existing bauxite/fuel deal.” (Ibid)

Eventually, in 1992, the PPP took over the political power of Guyana but unfortunately has not been successful in turning the economic downfall around. When the PPP came into power it decided not to distribute any seats in parliament to the WPA or to any other political party, even though the WPA was primarily responsible for ousting the PNC (Premdas 1995: 143). With the PPP in power, whose majority of members are Indians; the ethnic turmoil continues to this day, impeding unity, development, and economic stability for Guyana.

Ultimately, with the continued limited production of commodities, the country continued its downward spiral and brought the country close to bankruptcy. The projected balance of payment and external capital requirements produced by the WB indicated that exports would increase from 238 (US$ millions) in 1991 to 474 million by 1998 but that imports would increase from 275 (US$ millions) to 513 million during the same time period (World Bank 1993:33). In comparison, in 2008, UNdata (2011) reported that exports in Guyana 834.3 (US$ millions) and imports were at 1417.0. With the increase of imports greatly exceeding its exports it is no surprise that Guyana remains in a state of debt crises today.


Although Guyana attempted to stray from the capitalist and imperialist way of life and become truly independent through its own course of actions and through various government ruling, ultimately it would end in the parody of the debt crises which ultimately was brought on by the IMF in order to control the Guyanese economy. The course that Guyanese people have been on is not different than it was when the first colonizers started the plantations. Historically, it has followed the same course of development, with the foreigner being in the lead and calling the rules of play while the Indo and Afro-Guyanese are forced to comply with their rules in order to survive and pay off their debt. But, it can’t be overlooked that although the foreign financial controllers contributed to the economic demise of Guyana, that the Guyanese government itself played (and still does to this day) a role in the economic demise and poor living conditions of the country’s inhabitants.

The government’s role has hindered the quality of life and development that the people of Guyana should have come to enjoy since gaining their independence in 1969. Independence, however, is only a word and means nothing if it is not practiced with expertise.

“Ethnic hate was not confined to a few select practices and separated from others; allowed to grow on the crucible of continuing electoral competition, it slowly extended its tentacles to all institutions. The entire imported parliamentary apparatus was subverted and transformed into structures of ethnicity, dividing one citizen from the other by claims to narrow communal interests, failing to offer any form of unity to the state” (Premdas 1995: 149).

Guyana needs a unity and solidarity amongst its government and citizens collectively in order to reap the rewards of its independence and gain freedom and liberty on a global scale.


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