Thursday, October 6, 2011

Privatisation was only option for bauxite industry under IMF programme

The rationale behind government’s move to privatise the bauxite
industry was explained in detail to the court yesterday by Head of the
Presidential Secretariat (HPS) Dr. Roger Luncheon, chief witness in
President Bharrat Jagdeo’s libel case against Freddie Kissoon and the
Kaieteur News.
Defence lawyer Nigel Hughes, in his cross examination of Dr. Luncheon
at a previous hearing, had asked about the capital investments in the
sugar industry as opposed to privatisation in the bauxite industry.
The questions were rehashed by lawyer for the plaintiff Anil Nandlall
who continued his re-examination of Dr. Luncheon yesterday, but was met
with objections from Hughes on the ground that privatization and
capital investment were dealt with separately.In court yesterday, Dr. Roger Luncheon, with Minister Priya Manickchand and Attorney Anil Nandlall
Allowed a response, Dr. Luncheon said while the sugar industry up to
the 2000s had proven to be profitable, bauxite operations in Linden
and Berbice were quite the opposite, even as there continued to be a
considerable budgetary outlay on an annual basis, and this was long
before the plaintiff assumed the presidency.
He made reference to the International Monetary Fund’s (IMF’s)
programme that imposed the conditionality for cessation of public funds to
the bauxite industry (LINMINE and BERMINE) as a prerequisite to the
debt recovery process.
“If we didn’t execute the IMF agreement, we would have had no debt
Agreement, and debt relief donors would not do so without an IMF
agreement,” Dr. Luncheon explained.
For want of capital, the bauxite industry was inevitably exposed to
privatisation which Dr. Luncheon said turned out to be successful, and
helped the bauxite industry to acquire investments that exceeded the
amount acquired for the Skeldon project.
The IMF programme was inherited by the People’s Progressive
Party/Civic (PPP/C) when it took office in 1992, according to President
Jagdeo, who at the launch of GuyExpo on September 29, noted that Guyana
is no longer dependent on such a programme.
“The IMF was invited into Guyana when our country became bankrupt…
un-credit worthy (and) we could not pay our bills and we worked our
way out of that programme. Today, we do not have an IMF programme when
quite a few countries in our region are contemplating getting into
one because of their balance of payment and other difficulties,”
President Jagdeo said.

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