The loan is intended to be used to expand and modernise Guyana's information technology sector and approval has been held up because of protest by the phone company, the President reported.

At a news conference at the Presidential Secretariat, Mr. Jagdeo said the key idea behind the loan is to give people across the country access to information technology and to transform their lives.

He, however, pointed out that GT&T "is not very happy about this" and is claiming that the Government is "infringing on their monopoly rights".

The President said he does not think that the telephone company has "monopoly rights in some of these areas" but it was "protesting the loan at the level of the IDB and the (bank's) Executive Director (Mr. Jose Fourquet)."

Based on this protest by GT&T, Fourquet last week secured a postponement of the IDB board's consideration of the loan for Guyana.

"I see this as an attempt by GT&T to blackmail the country and an attempt to prevent ordinary Guyanese, every single Guyanese, from having improved services at a competitive rate and access to these services," the President declared.

"I am sure that the U.S. Government will assess all of these things and see that what is being proposed here is contrary to what the U.S. is doing itself, that is, liberalising telecommunications. And it is contrary to what we discussed in the FTAA (Free Trade Area of the Americas) with President (George) Bush himself suggesting...closing the digital divide within the context of the FTAA and with assistance from the IDB," Mr. Jagdeo said.

He said if the Government here was moving to liberalise telecommunications and close the digital divide, "that is in no way expropriation because that is what they (GT&T) are arguing (expropriation)," he told reporters.

The Atlantic Tele Network (ATN) company, based in the U.S. Virgin Islands, is the major shareholder of GT&T and has been pressing its case in the U.S.

According to the Guyanese Head of State, he is convinced that within the United States Government, "they are fair and that they will take these analyses themselves and review the total relationship and then make a decision on this matter".

"And if the (IDB) is serious about wanting to help ordinary people then they will support this loan and fight off the attempt by GT&T to blackmail this country and its people," he declared.

According to the President, the idea behind the loan is to expand telecommunications and to give access to people all across Guyana to Internet and other facilities that are now enjoyed in very limited places.

He said this would allow the Government to install about 200 telecommunication centres/sites across the country ranging from the Rupununi, Linden, and villages along the coast right up to the Corentyne.

The President noted that he spoke with the IDB's Executive Director while in Washington, DC, last week for the Caribbean Group for Cooperation in Economic Development (CGCED) meeting, and they are trying to find a way to move the issue forward to an amicable resolution.

He indicated that he clearly said to the IDB official that GT&T had problems with the FCC (Federal Communications Commission) in the U.S.; with Sprint, AT&T and other large U.S. telecommunication carriers.

The firm also had problems with the Government of Guyana and with others who have licences for cellular services here, he said, noting that because of GT&T's high interconnection rate, it has been "exercising a monopoly over something that they do not have a monopoly over."

Mr. Jagdeo explained that that is the rate that the others who have licences have to pay GT&T to interconnect.

"So if they (GT&T) charge themselves $7 and then market it at $10, the others may not be able to compete," he added.

He said, too, that he explained to the IDB's Executive Director the history of how the GT&T privatisation took place.

"There was no valuation of the assets, no public tendering. I spoke about the six per cent advisory fee. I spoke of the contentious relationship over the years, not only with the Government of Guyana but with U.S. companies and with the U.S. regulatory authorities."

ATN took over GT&T in 1991 under an agreement with the previous Guyana Government.

The President noted that the idea of the matter going to arbitration, as was done with a similar situation in Costa Rica, was floated during his meeting in Washington.

"They were suggesting that if we commit ourselves to arbitration (on) whether they are getting the rate of return, then we will be able to move forward as Costa Rica has done," he said.

"Let me state one thing - at this point in time we are still considering that but if we are arbitrating, we are arbitrating the agreement (and) how it came about; we are arbitrating the non-compliance with, or the non-fulfillment of the expansion plan that was originally agreed to; we have to arbitrate the six per cent advisory fee; we have to arbitrate the tax issues; and we have to arbitrate whether they are getting a fair rate of return," Mr. Jagdeo told reporters.

He noted that, among other things, under the project the IDB loan is intended for, vouchers will be given to school children to go to an Information Technology Centre (ITC) in an area to upgrade their computer skills and their parents will not have to pay for this.

He said the loan document covers many initiatives aimed at helping ordinary people in poor communities across the country.

"If we don't prepare our young people now, they are going to be left far behind," he stated.

The President also said the idea of going to arbitration was floated because Costa Rica committed itself to a similar situation such as that between the Guyana Government and GT&T, although it is "not exactly the same".

"...should a dispute arise, they are willing to go to ICSID (a council which settles international disputes) to arbitrate the dispute," Mr. Jagdeo said, noting that this was the step taken in Costa Rica's case and which cleared the way for the loan to proceed.

"So it is from that position that a precedent has been set before...it is not about going to arbitration at this point in time but making sure that should a difference arise, that you can go to ICSID," he said.

President Jagdeo also noted that the Government has had negotiations with GT&T in an effort to break the monopoly it has enjoyed.

He pointed out that a team from the Government side was working with a team from GT&T on the issue of de-monopolising the telephone company.

The two teams went to Trinidad and Tobago, had discussions there and came up with a document that is now being considered by the Government.

In this regard, the Guyanese Head of State said he saw the attempt by GT&T to block the IDB loan as "an act of bad faith."

"I see this as an act of bad faith by GT&T in that whilst we are negotiating with them, we sat down, we considered the proposals and we did reach agreement on some issues; then (they) go and try to block Guyana's access, not the Government's access. Because if I don't get this loan who do you think will suffer? It's the ordinary people across this country..."

"...it's an act of bad faith whilst we are negotiating with them and this must have some implications to our (ongoing) negotiations," Mr. Jagdeo stated.