The World Bank in its final review of Guyana's development policy has stuck to its guns on its views that Guyana suffers a crisis of governance; that the government is seen as indecisive; and that the business climate has to be radically improved to foster economic growth.

The just released report restates that Guyana is once more at a tipping point and could either "go backwards" (as opposed to "becoming a failed state" in the draft report) or begin anew the long march to improved governance and economic recovery.

"Guyana's contemporary crisis is in a [very] profound sense, a crisis of governance," the World Bank repeats in its final report, which reflects minor changes to take some of the sting out of the draft which had upset the government. It also took into account discussions with the government in August, as well as events which succeeded the draft report. Some errors on figures in the chapter on the economy were also corrected. Coby Frimpong, policy advisor to the President, had not seen the report and as such could not offer any comments yesterday.

"Although the present version of the report reflects, to the extent feasible, most government comments, it does not necessarily represent the official views of the government, particularly with respect to the policy economy analysis," the World Bank says in the preface to the report.

The Bank maintains that Guyana is characterised by a deadlocked political system and suffers a crisis of governance and notes as well that at crucial times the ruling PPP/C and the opposition PNCR find it difficult to accept the political costs of doing what is right or necessary in the national interest.

It reiterates that in the jostling for economic, social and political power, ethnic security was deemed an imperative, "seemingly even more important than economic well being". It held out that the strategies used in the last 50 years to hold onto the ethnic dominance included constitutional engineering, executive aggrandisement, parliamentary marginalisation, boycotts of parliament, patrimonial resource allocation, ideological posturing and politicisation of bureaucratic appointments.

"The focus on ethnic security, survival and competitive prestige consumed a great deal of political, administrative and judicial time and energy with the result that little was left to undertake the many policies that were necessary to facilitate growth and development or to discourage corruption and crime which have now become deeply embedded," the Bank restated. It notes that while the PPP/C was in the seat of government, because the main supporters of the PNCR are Afro-Guyanese, dominant in the public sector, the police and defence forces, the PNCR has paralysed the city to further its political agenda.

The report says the government is concerned that many of its crucial decisions are perceived as being driven by racial or party considerations and not in the national interest, hence policy decisions are routinely delayed or deferred.

"...the government is regarded by supporters and detractors alike as being irresolute [synonyms for which are weak, wishy-washy, unsure, vacillating, indecisive]," says the Bank. The term used in the draft report to describe the perception of the government was "weak". The report restates that the PNCR is also politically risk averse and fearful of taking decisions which might alienate either its militant or its middle class supporters. It reiterates that decision avoidance is therefore both strategy and a tactic for the PNCR.

The report refers to undermined efforts to reform state bodies because issues are looked at as zero sum outcomes rather than win-win alternatives. The draft had said that reform efforts had either "failed" or had their effectiveness undermined.

In the draft report, the Bank had said that the PPP/C "remains embittered" about its past marginalisation during the 1964-92 years when it had been forced to languish in opposition. The term was replaced with "often complains" in the finalised report.

The draft report had also said that poor governance was one of the key constraints to poverty reduction, an issue recognised by the Poverty Reduction Strategy Paper (PRSP). That draft said the governance problem, identified in the PRSP, had worsened until quite recently, but this statement was removed from the final report.

The final report maintains that because Guyana's political system is driven by demographic realities and historical experiences and has resulted in the country being unable to develop its fabled resource potential, the country suffers a crisis in governance. This crisis, the report repeats, is as a result of the failure of the post independence political class to do the things necessary to transcend that historical and demographic inheritance.

The entire section on shared governance is repeated except for the deletion of the paragraph which says that the PPP/C is opposed to power sharing because it spent too many years in the political wilderness and feels it should therefore enjoy the monopoly of executive power which the PNC had for 28 years. But the final report restates that observers feel that the PPP fears concessions to the PNC would be regarded by its supporters as appeasement and a "sign of weakness".

To break the deadlock, the report notes that as of September, significant progress had been made under the May 2003 Communiqué [all seven new standing committees of Parliament were appointed and appointments were also made to a number of constitutional commissions though more work has to be done to finalise some of the composition]. The report says this suggests that both parties had taken their responsibilities in respect of improved governance seriously.

"This augurs well for the future providing of course that the trust is sustained and that the parties use the new measures as platforms for confidence building," the report says. The World Bank reiterates that these constitutional and parliamentary arrangements should be given a chance to work before any further instalments of power sharing are contemplated.

The report also restates that nowhere is the crisis of governance more evident that in the area of security. With the exception of the changing of the wording of one sentence and the addition of two sentences, the entire section remains intact.

The report now adds that though the security situation, including in the village of Buxton, has improved in recent months, it requires an "in-depth analysis of the causes and impact of the crime situation in Guyana".

"The study should lead to an action plan to enhance the capacity of the security services with the aim of improving the security environment in the country," the Bank says.

The report says that unless the recent agreements between the PPP/C and the PNCR are "sustainably implemented" (as against "fully implemented and good governance put in place" in the draft), Guyana's political, social and economic situation could be further undermined.

The report repeats its suggestions for the government to take initiatives to ensure the agreements entered into to resolve the parliamentary [political] deadlock are fully implemented and that the issues which undermine ethnic trust are addressed; that it take steps to ensure that by the next local and general elections the Elections Commission has the capacity and is equipped to conduct free and fair elections which will require expeditious completion of the local government task force work; to ensure that members of the National Assembly and civil society are generally informed about the commitments being contemplated or negotiated with donor countries and agencies in order to allow for timely debate and discussion as is constitutionally required; and to enhance the capability of the security services to reduce the incidence of crime and violence.

In terms of the economy, the report restates that in the long run, renewed growth must come largely from exports given the small size of the domestic market. And without radical improvement in the business climate, diversification of the economic base and the restructuring of the traditional activities of mining and sugar, the outlook for exports remain bleak.

"The structure of the economy remains similar to what it was at independence, implying that structural change and economic diversification have yet to emerge as new sources of growth. Ultimately the private sector must lead the process of economic growth and poverty reduction. But this will happen only if the ethnic political divide is bridged and a bipartisan political commitment to good economic governance emerges," says the report. It feels the joint-communiqué was a step in the right direction.