Dear Editor,

The incredible increases in electricity rates, the stern threats by the GT&T lawyers issued in respect of reducing the monopoly enjoyed by GT&T, the pushing around of President Jagdeo by the Surinamese all these indicate that a country divided as ours along racial lines, is weak. All around the United States of America at this time, there are signs affirming "United we stand." In respect of their international relations since Sept. 11th, the United States are very clear about their need to demonstrate unity.

In Guyana, on the other hand, with respect to our international relations with transnational corporations and hostile governments, we are weak. The foreigners can see this, even if our leaders do not, and the foreigners exploit our internal division for all that it is worth. The foreigners recognise that the single party government is desperate about the dearth of investments and is anxious to sign agreements and contracts that demonstrate progress and firm leadership. Like a drowning individual snatching at a feather, our single party government will sign almost any deal, in spite of severely injurious clauses. For a government desperate to establish its legitimacy, a bad agreement is better than no agreement.

In the late 1980s and early 1990s, Mr. Hoyte was able to attract much needed investments from Omai, Barama, ATN, Reynolds and the Upper Demerara Forestry Project. But the haste and the desperation to clinch those deals led to the conclusion of bad agreements. The incoming PPP in 1992 was advised to seek the help of the World Bank to streamline the investment regime and, in the context of revised investment regimes, to revisit those agreements and remove some of the more injurious clauses.

The PNC opposed that approach on the grounds that international agreements, once entered into, are sacred and should not be trivialised by frivolous changes. After all, we had damaged our reputation by our nationalizations of sugar and bauxite and we should not damage our reputation once again by reneging on our contracts. Those objections are sound but an even sounder argument is that unity of the PPP and the PNC, supported by the technical help of the World Bank, is the best guarantee for a credible and sustainable investment regime.

Since the opportunity was missed to put some common sense into our management of international contracts and agreements, we are forced not only to live with destructive agreements but to embark on new ones which are even more damaging. We agreed to a Venezuelan environmental imprimatur for new investments in Essequibo. We allowed Suriname to enter CARICOM without a clear agreement to recognise our ownership of the New River triangle and our command of the Corentyne River up to the thalweg. We were about to give away large portions of the country to Beal. We sold the electricity operations at Linden with disastrous consequences for the operations of Linmine. We were prepared to be persuaded by Reynolds to give away bauxite resources for debts we never incurred. We allow GT&T to break the law by their audiotext operations and we do not have the courage to take them to court for their misdemeanour. That very company now has the gumption to assume the high moral ground and threaten the Government in respect of the necessary measures to bring an end to the monopoly.

The present electricity fiasco must be seen in this context. As Mr. Tyndall indicates, the Government's agreement with the company provides GPL with the authority to impose the present excessive increases. In most instances, when companies expand via investments in physical capital, the expectation is that average costs will fall. This is not so with our situation. When physical investments increase, it can be, in Guyana, an occasion for rate increases.

The solution to this mess requires racial unity, not endless argument about what has gone wrong. The Government and the PNC should get together and agree to a three part investment regime project. The first part should subject the GPL Agreement to the test of its conformity with the PUC Act that has been overridden by the extra ordinary provisions in the GPL Agreement. It has been alleged, for example, that certain provisions of the GPL Agreement and the Electricity Sector Reform Act are in conflict with the Constitution. This important aspect has to be re examined. Any subsequent renegotiation of the GPL Agreement in a new context should be conducted by a team appointed jointly by the PPP and the PNC.

The second part of the three part project is to involve the World Bank in revising the investment regimes for electricity, telecommunications, forestry, gold mining, bauxite mining and petroleum mining. We have Guyanese experts in the World Bank, CARICOM and elsewhere who may be willing to help with this part of the overall project. When this second part of the project is completed, the PPP, PNC, GAP/WPA and ROAR should agree to revise the present agreements with Barama, Omai and the other companies. It should be made clear to the companies that the re negotiations will be transparent for the whole wide world to see and that Guyanese will be firm in requiring company operations that benefit both the country and the company and not just the company alone.

The third part of the project should be finalisation of the Investment Code. It should be obvious from this analysis that a simplistic approach to finalising the Investment Code is inappropriate because of the mess of existing investment agreements in the above mentioned sectors.

The approach of multi party negotiations should be insisted upon for every single international negotiation including negotiations with the IMF, the IDB and the World Bank. There should be nothing secret about any clause in those agreements. The present overtures to Brazil to build an international highway should be based on a multi party agreement. International respect will return only when the foreigners see that all parties are united in agreement of the contracts. At present, the single party negotiators, including the President, are viewed by the foreign companies like ATN and by foreign governments as puerile. Our national negotiators are full of sound and fury which, indeed, signify almost nothing.