Why is globalization proceeding selectively, including and excluding segments of economies and societies in and out of the networks of wealth and power that characterize the new dominant system? Is there a new form of colonization/imperialistic domination in place? It is my intention to examine the impact of “globalization” on poor nations, especially Guyana, within the framework of the theory of the state, which rests on the premise that the state is a capitalist state. I will demonstrate that the government of Guyana is under severe pressures to maximize exploitation of its resources and to forgo environmental laws in order to attract foreign investment. As the re-emergence of a new form of colonization unfolds, environmental issues are not the only threats to this nation. Other threats include the worsening of poverty and political instability. I conclude by pointing out that while globalization is proceeding with an unrelenting vigor, the inequalities that it reveals will continue to prevail in poor nations. The control of central parts of Guyana's economy, for example, has been handed over to foreign interests, with little or no return to the Guyanese people and little impact on its enormous debt. As such, the government control of the economy is more urgent than ever.
In the Post-Cold War era, “globalization” has unrelentingly dominated the international political scene, which represents dramatic changes in the world’s political and social order. “Globalization” within a world economy remains capitalist as well as global. Capital’s search for raw material, cheap labor, and growing markets has unfolded into an intricate international division of labor. The massive migration of industry to take advantage of cheaper labor costs has become a familiar phenomenon amongst developed nations. States that are considered as belonging to the “ Third World” have been targeted for this purpose. Nonetheless, the concept of the “ Third World” no longer has a clear meaning. Some of the countries once considered as belonging to the “Third World” have either found some niche as producers of manufactured products, or have been relegated to the “Fourth World” or what the United Nations (UN) has referred to as “least developed” because of their “weak growth in the productive sectors, poor export performance, deterioration in social conditions, increasing decay in institutional capacity” (Cheru, 1997:146), and their huge indebtedness to the International Monetary Fund (IMF) and the World Bank. Of the forty-seven countries, which have been classified by the UN as least developed, including Guyana, Haiti, Somalia, Rwanda and about thirty-two nations in sub-Saharan African, “ Zambia, Zaire, and Madagascar were added to the list in 1992.”(ibid.) It is not astounding, but still vexing, that many of the Fourth World nations, sunken in poverty, have become a part of the world system not as a potential partner in future growth, but avenues for the exploitation of their resources by multinationals. Are these nations now the sine qua non of capitalist exploitation because they cannot avoid adjustment conditionalities that are imposed on them by the economic policemen, the IMF and the World Bank?
Why is globalization proceeding selectively, including and excluding segments of the economies and societies in and out of the networks of wealth and power that characterizes the new dominant system? Is there a distinction between the powers of the governments and the power of governance in the Fourth World? In other words who control the policy decisions of these governments, which in fact affect human capital? Can we then conclude that a new form of colonization/imperialistic domination is in place? On reflection, this conclusion is certainly not too rushed. Yet, we need to ask more probing question that will provide meaningful answers to these complicated issues surrounding globalization and “vulnerable societies.” I explain and describe vulnerable societies as poor nations, which are sunken irretrievably in poverty and have been retrieved to the Fourth World, a concern to the global competitors, not as potential partners in further growth but as objects of insurmountable abuse of their natural resources and raw materials. Take the case of Guyana, it has one of the largest remaining rain forest areas in the world (9.1 million hectares), but its forest continues to be under relentless pressure from degradation caused by assaults from foreign companies. Accordingly, using Guyana as a case study to examine the impact of “globalization” on vulnerable societies within the convoluted methodological and ideological argumentation surrounding the theory of the state, which rests on the premise that the state is, itself, a capitalist state, is my preoccupation. The capitalistic structure, with its hegemonic codes, manipulates the subordinated agents, the “body of humanity” to used the words of Giorgio Agamben, in thinking that this kinds of concession from the dominant class is incompatible for capital’s expansion. In the case of unions, for example, the benefits that labor receives from the state cannot be attributed to labor overtly politicizing its economic struggle. Rather, the state recognizes that labor’s resistance to capital can significantly block capital’s progress, and in some meaningful ways stunt its growth. Hence, as Leo Panitch and Donald Swartz recognize that trade unionism is used as a vehicle to maintain the dominant position of capital by establishing collective bargaining legislation to defend the rights of workers within the capitalist system (1988: 34). It is in this vein, then, that the cooptation of the agents is inevitable. Thus, I deem it as fruitless to even attempt to formulate any discussion as it pertains to agency which, for some, may be a flaw.
As necessary and desirable, I will focus on the challenges of globalization on vulnerable societies, particularly Guyana, although the basic moral, political, economic, and social issues are similar in most of these countries designated as the Fourth World. Accordingly, I will demonstrate that the government of Guyana is under severe pressures to maximize exploitation of its resources and to forgo environmental laws in order to attract foreign investments. As the re-emergence of a new form of colonization unfolds, environmental issues are not the only threats to this nation. Other threats include the worsening of poverty and an increasing political instability. It is for this precise reason that as a conclusive remark, I will point out that while globalization is proceeding with an unrelenting vigor, the inequalities that it reveals will continue to prevail in poor nations. Guyana’s economy, for instance, continues to decline, corruption flourishes, and the situation for the poor is increasingly precarious as people are battling to make ends meet. The control of central parts of Guyana's economy has been handed over to foreign interests with little impact on its enormous debt and the maintenance of a decent standard of living for its citizens. The government’s push for foreign investment would continue to create more dangers and challenges for this nation. In light of these perils and challenges, the government control of the economy is more urgent than ever.
The two main traditions within political thought, which have found widespread expression in informing well-founded accounts on the theory of the state, are the liberal-pluralist and the Marxist traditions. Reflecting on both traditions, they generally share a common concern about the relationship between capital and the state. Accordingly, state action has been explained in terms of state-society interaction. However, how this interaction is conceptualized has significant bearing on understanding how the state is structured, and the capacity for democratic participation in collective decision making within liberal-democratic structures. It is possible to generalize competing views into distinct camps. There are those liberal-pluralist theorists like Robert Dahl1 and Nelson Polsby who view the state as a neutral forum for the expression of contending interests. Marxist theorists like Gianfranco Poggi, Claus Offe, and Nicos Poulantzas argue that the state retains a position of relative autonomy.2 In fact, relative autonomy of the state differs from state autonomy where the state is able to pursue goals in spite of the demands from fledging interest groups. Relative autonomy of the state, on the other hand, to infer from Poulantzas’s Political Power and Social Classes, is the notion that the state is autonomous from the capitalist class and from the interests of particular fractions of capital. Nonetheless, the state best serves the interests of the capitalist class, especially when the members of this class are not directly involved in the state apparatus.
Theda Skocpol was right when she claimed that “[we] do not need a new or refurbished grand theory of ‘The State’” (Skocpol, 1985:28) because of the internal complexities of the capitalist state structures. Nevertheless, I will modestly attempt to [re]formulate a theory of the state by transcending the 1970s Marxists thought where the state retains a position of relative autonomy. Marx and Engels were the first to introduce the notion of relative autonomy in their discussion of the imperial Bonapartist regime of Napoleon III. In the 1970s, the relative autonomy of the state was re-examined and made popular by Poulantazas. Others Marxists, included Miliband and Offe, during the same period, were also exemplifying the relative autonomy of the state. 3 For these Marxists, then, the state cannot be viewed as an instrument in the endorsement of the common interest of the governing class. Instead, the state protects and sanctions a set of institutions and social relationships necessary for the domination of the dominant class. It is for this particular reason that Claus Offe recognizes that “the state is neither a ‘servant’ nor an ‘instrument’ of any one class. While it does not defend the specific interests of a single class, the state nevertheless seeks to implement and guarantee the collective interests of all members of a class society dominated by capital.”4 (1982:120)
In interesting new ways, it is my contention that in contemporary setting it is quite noticeable that the notion of the relative autonomy of the state is declining in epochal significance. This is not because the state has become more pluralist. The state is becoming increasingly less autonomous from the interest of capital, which indeed is not astounding. In fact, the interests of the state and multinationals appear to have become synonymous, a fashionable phenomenon endemic to most liberal democratic structures. In this regard, it is imperative not to see the state and capital as distinct categories of global capitalism, but as linking together to create the internationalization of capital so that the state’s hypnotic fascination with promoting the hegemonic position of business interests within the political arena can be maintained. As such, the concerns of capital must be actively articulated. Therefore, the role of the state is to remove any hindrances that threaten the flow of capital and its access to new markets.
Capital has not only framed the state’s agenda, but it stands as a gateway to exert significant influence over the range of possible outputs. The hegemony of business interests within the political arena becomes a normative mechanism to be used by capital to achieve its objectives.5 One of it objectives is to exploit poor and vulnerable societies in the Fourth World. What is more is that the Fourth World is a euphemism for the oppressed and the exploited. In fact, “we” use it knowing that it implies non-white, colonized people and most of all, the “other.” Yet, only when there is the “other” can “we” know who “we” are. Stuart Hall reminds us that “there is no identity that is without the dialogic relationship to the ‘other’.” (Hall, 1989:16) These Fourth World Nations are needed for capitalist exploitation. With the implementation of structural adjustment programs initiated by the IMF and the World Bank6, poor countries have no choice but to accommodate and privilege foreign investments on lucrative terms. In fact, as Fantu Cheru recognizes that:
Structural adjustment and global integration are mutually reinforcing. While the process of globalization gave birth to structural adjustment as a response to the world economic crisis, the adoption of reform measures [by vulnerable societies] has in turn widened and deepened the thrust towards global integration (1997:148).
At the core of this analysis is that governments of the Fourth World nations are committed to providing further security guaranties to global capital. In this regards, Robert Cox rightfully reminds us that the global process whereby national policies and practices have been adjusted to the exigencies of the global economy has not created a diminishing of the state, but the internationalizing of the state (1987:254). Cox explains the meaning of the internationalizing of the state:
First, there is a process of interstate consensus formation regarding the needs or requirements of the world economy that takes place within a common ideological framework (i.e., common criteria of interpretation of economic events and common goals anchored in the idea of an open world economy). Second, participation in this consensus formation is hierarchically structured. Third, the internal structures of states are adjusted so that each can best transform the global consensus into national policy and practice, taking account of the specific kinds of obstacles likely to arise in countries occupying the different hierarchically arranged positions in the world economy (1987:254).
It is clear, then, that these hierarchically arranged position imposed upon states could be interpreted as core and peripheral relation within trading blocs. This relation, which is reinforced and perpetuated by free trade agreements such as the Canada-United States Free Trade Agreement (CUFTA), the North American Free Trade Agreement, the European Union, and t he Association of South East Asian Nations (ASEAN) in the South-East Asia,7 enables capital’s freedom to move from borders to borders. In this sense, what is occurring in all nations as Karl Marx and Friedrich Engels, in the revolutions of 1848, have predicted with unsurpassed clarity in the Communist Manifesto is an “institutional innovation of capitalism.” They correctly point out that “the bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most [underdeveloped] nations into civilization….It compels all nations, on pain of extinction, to adopt the bourgeois mode of production.” (Marx and Engels, 1964:64-65)
As a matter of fact, it is fundamental to place a vehement emphasize on the logical realization that globalization, the most intractable issue of our era, is not getting rid of nation states. However, the state has lost its legitimacy in the sense that a capitalist state that openly uses its coercive forces to ensure that the dominant class accumulates capital at the expense of the masses, most naturally, undermines the basis of its loyalty and support. In other words, the state must try to create conditions in which capitalists accumulate capital by making a profit, and at the same time ensuring that social harmony is maintained among capitalists and workers. Social programs and services are required to maintain social harmony so that the legitimization/redistribution function of the state can be fulfilled. A capitalist state has to adhere to an accumulation and a redistribution function, even though these two functions are paradoxical.8 Governments have been cutting back on social spending, curtailing welfare benefits, and in some cases, especially in the industrialized West, the governments have implemented mandatory work programs, which deny benefits to welfare recipients and force them into a low-waged labor market.
What follows in the next section is an extension of globalization’s logics. I will examine specific distinctiveness of globalization and the complex framework in which it has been elaborated.
It is not a secret that globalization rests on the premise that the state is a capitalist entity. In this sense, the state is the coercive instrument of the capitalist class “itself defined in terms of its ownership and control of the means of production.” (Miliband, 1984:7) Eric Hobsbawn in his book, The Age of Extremes: A History of the World, 1914-1991, points out that capitalism was challenged by “real socialism” or in its own term “world communism.” With the disintegration of the Soviet Union and the collapse of communism, capitalism is now the only viable system (Hobsbawn, 1994).
Globalization has been evolving over many centuries in terms of mercantilism and colonialism. Today, its multi-faceted and multi-leveled expression is underpinned by neo-liberalism, which is prescribed by the laissez-faire economic doctrine of the 18 th century philosopher Adam Smith where market forces are to be free to pursue their immediate private interests and be subjected to minimal government regulation. Within this discourse, there is the assumption that once the economy is deregulated and privatized, and thereby the conditions for competition are created, markets will emerge and their operation will cause resources to be reallocated across sectors.
The role of trade liberalization schemes and the formation of trading block including North American, European, and Asian blocs have been crucial in accelerating globalization, and it involves many factors. Some of these factors include the internationalization of the state, the internationalization of production, the new international division of labor, global migration from North to South, and the removal of restrictions on the free flow of capital across national borders. In this sense, globalization is defined as the expansion of economic activities across political boundaries of nation states. However, this does not mean that capital has managed to get away from the state’s grip by becoming global in its scope. Ellen Meiksins Wood warns us that there is a need “to scrutinize the relation between global capital and nation states.” (2003: 139) Wood’s erudite observation that “the state is the only non-economic institution truly indispensable of capital” (ibid.) begs for a careful analysis that engages with the question of the strong link between global capital and the state.
Global capital has occurred not in spite of the nation-state, but really, to a large extent, because of the actions and political decisions of elected officials within nation-states. The government has found ways to reconstruct not the old state but a new state stripped of many functions that were assigned to it. The “old,” capitalist state did dedicate itself pellucidly , seriously, and ethically to questions of social welfare, education and job training, health, and the preservation of the environment — functions that were basically its responsibility. Moreover, it performed these functions with clarity and efficaciousness . It is not so unusual that the priority of the state has now shifted to one of adapting domestic economies to the perceived exigencies of the global economy (Cox, 1987:254). The state has to complement the underlying structure of the global economy because global capital has to be maintained. As such, what we see are active states and highly politicized sets of capitalist classes working to secure what Panitch refers to as “the new constitutionalism for disciplining neo-liberalism.” (1997:85). The CUFTA and the NAFTA are forms of the new constitutionalism for disciplining neo-liberalism. For example,
[Canadian] state was not only acting in terms of the interests of their domestic bourgeoisies, nor were they just concerned with providing further security guaranties to U.S. capital in [Canada or vice versa]. It was also in Poulantzas’s terms, taking responsibility for the interests of the dominant capital by endorsing [CUFTA] and NAFTA as exemplary “staging posts”… for a similar constitutionalizing of neo-liberalism on a global scale (ibid. 98).
Furthermore, the General Agreement on Tariffs and Trade (GATT) established in 1947, which is now the World Trade Organization (WTO), constitutes a bill of rights for the guaranteed protection of the freedom of multinational corporations to move from border to border to take advantage of cheap labor, the lack of collective bargaining legislation, and to maximize exploitation of natural resources in poor nations by disregarding all environmental concerns. The WTO is the current institutional framework for globalization. The laws of the WTO now define how things are done, and transnational corporations are unabashed about exploiting and profiting from these vulnerable societies.
While globalization generates uneven and in some cases, exclusionary and marginalizing consequences, within, as well as amongst countries and regions, it is necessary to understand the specific impact of globalization on vulnerable societies by using Guyana as a case study. In the following section, I will, in an epigrammatic way, examine the position of Guyana.
Today, Guyana is one of the most highly indebted nations (Ramsaran, 1992:143), and is documented as one of the poorest country in the Western Hemisphere with a per capita Gross Domestic Product (GDP) of US $800 in 2000 (Egoumé-Bossogo, 2003:1). Yet, the theme of increasing poverty within this poor nation is not a part of the narrative of the proponents of globalization when they preach about its so-called benefits. A central concern for Laura D’Andrea Tyson, former national economic adviser in the Clinton’s administration is that “as globalization intensifies, the gap between per capita incomes in rich and poor countries has widened.” (Cutter et al., 2000) Moreover, there is not any strategy that has yet emerged to help this country reap any benefits from globalization. This country, I argue, continues to be peripheralized and [re]colonized as it continues to succumb to the dictates of the IMF and the World Bank.
In the guise of attempting to [re]claim its debts, the World Bank and the IMF developed a Structural Adjustment Program (SAP) by playing an increasingly important role in regulating the economy of this indebted country without pausing to consider the staggering adjustment cost in terms of soaring unemployment and social distress facing this nation. This country “cannot now avoid adjustment conditionalities as [it has] become the sine qua non” of capitalist exploitation (Cheru, 1997:148). More importantly, economic restructuring is based on the assumption that the free market, acting without restraint, is the only efficient allocator of resources and the best instrument of social discipline. As such, freeing market forces would not only reshape Guyana’s economy by modernizing it, but it will destroy the basis for the state controlled economy as practiced by the People’s National Congress (PNC) government. From the 1970s until the 1980s under the Burnham’s administration, the government had utilized a state controlled economy. Nonetheless, under the SAP, the preceding governments have cemented the country’s historic allegiance with a centralized state-controlled system to one that is market-oriented with the private sector playing the leading role.9 In Guyana from the 1980s, the trade liberalization schemes imposed by the IMF and the World Bank make sure that its forest and mining sectors are opened to exploitation by foreign investors. A number of foreign investors such as the Berjava Group and Solid Timber Sendirian from Malaysia, and the Buchanan Group from Canada, companies with dubious environmental and social tract records, have acquired logging rights in Guyana (Sizer and Rice, 1996:46). What is vexing is that under the terms of a recent IMF agreement Guyana now offers multinationals a ten-year exemption from all taxes.
The following section will look briefly at Guyana’s history, an illuminating and sagacious narrative background for providing a discursive analysis on the impact of globalization on the Fourth World. It is about Guyana’s centering economic development beginning from the 1980s, when Guyana’s economy began to take on its ultimate shape.
When President Desmond Hoyte took office in 1985, the President’s intention was to revitalize the economy and placed it on a path of economic growth and development, which proved more difficult than he had ever anticipated. The severe fall in bauxite, one of Guyana’s leading export and declining sugar production had resulted in lower foreign exchange earnings and this created economic difficulties for the government (Ramsaran, 1992:p.x). It was not unusual that the government began borrowing abroad to finance the purchase of essential imports. External debt ballooned to US$1.6 billion by 1988, almost four times as large as Guyana's Gross Domestic Product (GDP), (ibid. 143) which was $295 million US dollars (Agency for International Development, 1992:112). The government became increasingly unable to meet its debt obligations. Overdue payments reached a staggering US$1 billion in 1988. Rather than risk a curtailment of all foreign credit (even short-term loans), the government myopically lifted all curbs on foreign activity and ownership in 1988 and introduced the Economic Reform Program (ERP) in the same year. The ERP’s interrelated objectives were to restore economic growth, to incorporate the ‘parallel economy’ into the ‘official economy,’ “to eliminate external and internal payments imbalances, and to normalize Guyana's financial relations with its foreign creditors.” (U.S. Library of Congress, 1992)
Under the ERP, the government’s role in the economy was reduced significantly. International corporations were hired to manage the two largest state-owned bauxite mines, for instance. However, efforts to privatize the two state-owned bauxite mining companies, Berbice Mining Company and Linden Mining Company, have so far been unsuccessful. Also, under the ERP, the Guyana dollar became almost worthless because of its devaluation. By the end of the 1980s, in the face of a rapidly sliding socioeconomic landscape, the Guyanese dollar was equivalent to about $27.00 US. More importantly, the prices of basic consumer products were increasing at a faster pace, while wage and salary adjustments, as would be expected, lag significantly behind these price increases. The economy continued to contract with high rate of inflation and a declining GDP. By 1990, the nation ended its disastrous twenty years experiment with a closed government controlled economy and moved toward a free-market economy under the direct guidance of the IMF and the World Bank, which provided for the three-year Enhanced Structural Adjustment Facility (ESAF). After the ESAF ended in December 1993, it was again extended. In September 1996, the ESAF became the centerpiece of the IMF's strategy to help low-income countries including Guyana. What this meant was the abandonment of control of its economic directions by the Guyanese government, which was replaced by the new actors the IMF and the World Bank. Neocolonialism, an updated form of control by another country or interest, in this case the IMF and the World Bank, is the system that now engulfs Guyana.
The IMF and the World Bank, the defacto tools of global governance, are directing the course that Guyana’s economy should pursue. However, this is not a new phenomenon. Guyana’s history has deepened and confirmed that it has always been one of adapting and adjustment to external forces. For example, colonial power, namely Britain, dictated its values, laws, well-being, foreign policy, and its social and economic stability (Ramsaran, 2002:8). Against the background of the historical legacy of colonial dominance in Guyana, a much more fruitful context for understanding Guyana’s economic development in which Guyana has played an increasingly peripheral role in order to sustain the mother country, which is worth overemphasizing, is inevitably provided. Yet, as Chaitram Singh describes, Guyana’s struggle to be independent of colonial rule was not a big struggle between the colonial ruler, Britain and Guyana. He explains that:
Delays in setting a date for independence were tactical and were linked to Cold War considerations. Essentially, the British was seeking to leave behind in power in Guyana a party, or it turned out, a coalition of parties that was acceptable to them and to the United States. In these circumstances, the struggle for independence became transformed into an internal struggle for power, one that resulted in the racial polarization of the Guyanese society (Singh, 1988: 35-36).
More fundamental, in Guyana, power and politics have been centered more on race/ethnicity rather than on ideology since the split of the multiracial People’s Progressive Party (PPP) in 1955.
In his book titled Neo-Colonialism: The Last Stage of Imperialism , Kwame Nkrumah summed up the dangers of this new form of control. He noted that:
For those who practice [neocolonialism], it means power without responsibility and for those who suffer from it, it means exploitation without redress. In the days of old-fashioned colonialism, the imperial power had at least to explain and justify at home the actions it was taking abroad. In the colony those who served the ruling imperial power could at least look to its protection against any violent move by their opponents. With neocolonialism neither is the case. (1965::xi)
For Nkrumah, his critical reflection affords him to conclude that “neocolonialism is the worst form of imperialism” (ibid.) “in [imperialism’s] final and perhaps its most dangerous stage.” (1965:ix) Given the present economic constraints, in the form of structural adjustment programs imposed on Guyana by the IMF and the World Bank allowing them to dictate the economic path that Guyana’s government should embark upon, a spiral of economic and social problems for the majority of Guyanese are prevalent. In the meanwhile, the ruling elite and the foreign companies are the absolute beneficiaries.
Thus far, I have focused on the general effect of globalization on poor nations. I will now look specifically at trade liberalization in Guyana within the framework of globalization and the theory of the state.
Like many of these poor nations, Guyana has adopted the Foreign Direct Investment Plan (FDIP) initiated by the World Bank, which grants generous fiscal incentives to lure multinational corporations into the country. Guyana's drive for foreign investments is based, almost solely, on the liquidation of its natural resources namely its rainforest for commercial logging and mining. Guyana's mining sector with sizable reserves of bauxite, gold, and diamond has been under severe attack by foreign companies. It is not a secret that over exploitation of these resources can result in environmental degradation. In light of this dilemma, the Guyanese government has implemented certain environmental laws. However, these foreign companies have indicated their reluctance to respect the environmental laws. Buchanan, a Canadian company sought a 1,400,000 hectare concession and was, unfortunately, successful (Toni, 1997). The Canadian Labor Union indicates that “Buchanan has a long, notorious track record of doing all that it can to avoid forestry, environmental, and labor legislation.” (ibid.) It is not a secret that “ Guyana has no comprehensive laws on land-use planning, monitoring, and enforcement,” (ibid) and as a result, the Guyanese government is faced with a huge and complex problem as is illustrated. It becomes easy, then, for companies to effortlessly bypass these laws. A commonly known case is the major cyanide spill by the Canadian Omai Gold Mines Company in 1995 causing massive damage to the Omai and Essequibo rivers, the main source of drinking water for many of the Indigenous Peoples or Amerindians.10
Although the government did appropriately implement the Environmental Protection Act No. 11 of 1996, requiring that an environmental impact assessment be observed before companies can conduct mining in the areas; these companies continue to bypass the environmental laws without any qualms. It is discernible that the government’s lack of adequate resources to regulate and enforce environmental standards for large-scale mining has superciliously contributed to the bypassing of the laws by foreign companies. Ana Toni clearly highlights the extent of this overriding quandary. She illuminates this by explaining that “ The Guyana Forestry Commission (GFC) is responsible for monitoring registered cutting practices on some 6.3 million hectares of forest as well as unregistered activities. The GFC has about 7 fully qualified foresters on its staff, none of whom are directly involved in the management of the forestry.” (ibid.). As a World Bank Report acknowledges that not only does the Guyana Geology and Mines Commission has no scientists to carry out meaningful studies of the environmental problems, more so there are no appropriate regulations to properly manage and harness the environmental impacts of mining (World Bank, 1993). More distressing and equally appalling is that an agreement with the IMF, in its utter disengagement and failure to police these foreign companies, allows them to be exempted from being taxed by the Guyanese government for ten years as I have already mentioned.
A readable observation, as relevant, is that Guyana faces a serious dilemma. The hyperrealism is that natural resources are scarce, and their full ecological, social, cultural, and economic values need to be recognized. The current model of economic development that is being pursued by the IMF and the World Bank has proved to be utterly useless as well as fundamentally flawed. Even so, it seeks growth at all costs without regard to ecological limits.11 Instead of allowing the IMF and the World Bank to solely dictate its economic path, the main task for the government is to create policies that would shape market forces. As such, the main emphasis “is not getting the state out, but finding the state’s appropriate roles for fostering economic growth and development with both the state and private sector.” (Callaghy, 1993:165) At the core of this analysis is that the state and the market cannot be substitutes for each other, but must be linked to each other. David Harvey provides important evidence that states which maintain a balance between the state and the market and organize on corporatist principles, like Singapore and Taiwan12 have done relatively well in this era where the free market ideology is more the norm within the capitalist globalization process (Harvey, 1995:11).
In Guyana, many of these mines and prospects are still in their primary phases of development and it is not a secret that the cumulative environmental impact of all this mining is severe and consequential. A substantial increase in aluminum and gold mining by foreign mining corporations is evident, and this, in no uncertain terms, is having serious environmental consequences for Guyana’s rainforests. Yet, Canada's Home Oil, a company owned by Canadians is exploring for oil in Guyana's interior. Certainly it is true that Canada's Alcan, another Canadian owned company is also involved in mining what is left of Guyana's bauxite and aluminum (Gifford, 1994-1995)
A report produced by the World Rainforest Movement indicated that “the environmental impacts of mining in the area are apparent: the water is discolored and heavy with sediments, piles of debris accumulate at the river banks, some of which have disappeared because of missile dredging.” (WRM, 2001) Despite greater attention paid to environmental issues and problems internationally, it is instructive to recognize that environmental degradation, which is of the least concern to the disengaged international community, is accelerating in Guyana. The unruly practice of mining continues to the detriment of Guyana’s forests and the continued alienation of its indigenous peoples whom historically have their widely acclaimed affinity to these lands. Yet, the government continues to issue mining permits. Under Guyanese law, according to Section 6 of the 1989 Mining Act, the government is the owner of all mineral resources. Conclusively, then, the government can legally issue mining permits to these foreign investors.
The government's decision to open the mining sector to foreign investment attracted companies from countries including the United States, Canada, and Australia. What is unsettling is that even though the government established the Guyana Manufacturing and Industrial Development Agency (GMIDA) to streamline foreign investment process, companies have been able to secure favorable contracts. Some of the stipulations within the contracts include “the exemption of paying consumption and capital gains taxes, duty-free imported goods, support for tax treaties with foreign countries, and the right to export unprocessed timbers.” (U.S Library of Congress, 1992) The injection of western capital into this nation points into the direction of a new form of colonization taking place.
What is more is that in spite of Guyana's forest wealth, government income from logging activities in 1995 totaled less than US$1 million (Toni, 1997). The reason for this is twofold. The minimal royalties and fees in the forestry sector further reduce the contribution to the national economy and the fees charged to companies extracting timber are extremely low. It is about less than 1 to 2 percent of total production and export costs (ibid.). In addition, the government collects little direct revenue from the operations of foreign companies. Take the case of Barama Company13, the three sources of direct revenue the government collects are:
In 1994, about 13,000 cubic meters of timber were exported for a total of $2.8 million US dollars (Flaming, 1995). While these companies are benefiting from the exploitation of Guyana’s natural resources, many Guyanese continue to have low living standards. A study done by the World Resource Institute (WRI) accurately identifies that the wages these companies pay are about US$2.25 to US$4.25 per day (WRI, 1994).
Guyana’s painful historical legacy of colonial exploitation lays the ground for the specificity of neo-colonization under the SAP. In fact, the adjustment strategy has been predicated entirely on the exploitation of this country’s natural resources, including tropical forests and minerals. This strategy has benefited only the multinationals and has failed to translate into real benefits for the ordinary people. As a result, local communities are disempowered and Guyana’s natural resources are in the hands of foreign companies. As this form of neo-colonization manifests itself, the Guyanese government needs to re-negotiate the contracts with these companies on lucrative terms that will benefit its citizens instead of protecting and sanctioning the interests of multinationals.
The implementation of the SAP has undoubtedly caused economic hardship for many Guyanese despite some observers’ centering propagation that the SAP is working to the benefits of Guyana’s economy. In fact, it clearly subordinates the needs of Guyana’s domestic economy to that of the global economy. The “economic crisis” facing Guyana is deepening considerably and it is accompanied by the rapid deterioration of public services, the collapsed of the infrastructure,14 the repositioning of needed skilled and professional staff, and a sharp decline of upward social mobility. The remittances that Guyanese citizens received from relatives and friends living abroad and the country’s self-sufficiency in producing basic food crops, to a great degree, keep the economic decline in this country from becoming a huge disaster. While the formal economy is compressing, the black market economy is thriving. For example, foreign currency exchanges are performed on the streets because of the higher returns by a street vendor than the banks. Social inequality has started to spread like wild fire and the government, in a state of extreme disarray, tries to deal with the racial tension between the two largest social groups, Blacks and East Indians as it inevitably surfaces.15
Before the implementation of the SAP in 1988, workers in both the private and the public sectors received overtime pay for working more than forty hours a week, fringe benefits, and vocation pay. By 1990, over time pay has become a thing of the past. What is more, almost half of the country’s workers are working waged jobs under poor working conditions, low pay, and the lack of collective bargaining legislation. The United States Department of Labor estimated in 1990, that a mere 25 percent of Guyana’s work force was unionized.16 Meanwhile, the role of trade unions has been redefined. Like in most of the capitalist economies, labor unions in Guyana are not currently able to guarantee workers their hard won rights. One reason for this, I think, is that the state sees no need to disciple capital because globalization has been accompanied by a fundamental shift of political power away from unions towards multinational corporations.
Many of the unionized jobs no longer exist. A large proportion of Guyanese are wage-workers, the new proletarians of the 21 st century, working within the service sector. From 1997 to 2002, the highest pay for employees in grocery stores, hardware stores, drug stores, dry good stores, and taverns was $G.1,824.00 per week. In areas of hotels, guesthouses, discotheques, night-clubs and liquor restaurants the highest pay was $3,124.00 per week. For those working in non-service jobs including timber grant workers and saw mill workers, the pay rate was $332.00 per day (Caribbean Labor Statistics, 2002).17
These low wages often are not enough to even cover basis need such as food and clothing, and also the costs of daily commuting to work. Many children are taken out of school and are selling candies, peanuts, cigarettes, and other items on the streets, especially in Georgetown, Linden and other urban cities, so that they can supplement the income of their households. A process of pauperization amongst children and adults is becoming visible as it envelopes the streets, especially within the volatile, urban settings, while profits from the forest and mining sectors enrich the foreign companies. Comparable is the situation in many poor African nations where for instance, the Royal Dutch Shell, which controls half the oil production, Chevron and Mobil are enriched in the oil producing Niger Delta region.
Statistics, in rich detail, reveal the projecting, harmful impact of the SAP, in terms of the hypervisibility of escalating poverty level, in Fourth World nations. In the case of Guyana, some formative attempts to quantify the poverty level were done by the Inter-American Development Bank (IADB), which, in a distressing way, highlighted the extensiveness and scope of the problem. In 1988, 61 percent of the population was living below the poverty and by 1989 it has increased to 67 percent (Nallari, 2003:9). Also, the Food and Agriculture Organization Investment Center Studies and Report series in 1997 confirmed that in 1992-1993, a national Household Income and Expenditure Survey (HIES) was carried out by the Statistical Bureau, and in order to provide more data on the social sectors, a Living Standards Measurement Study (LSMS) was agreed to, under the guidance and direction of the World Bank in collaboration with HIES. It was not so shocking that these surveys estimated that more than half of the total Guyanese population continued to live in poverty, far below the GYD 47,500 absolute poverty line (SPSS, 1997).
Clearly, Guyana is among the poorest countries that are suffering from globalization as I have illustrated. Today, 35% of the population lives below the poverty line (as defined by the Government's recent Living Conditions Survey) (Egoumé-Bossogo, 2003:135) with virtually 19% living under conditions of extreme poverty. The significance of poverty, then, is not just the suffering it involves, though that is undeniably important, but that it represents an undeserved exile from a society where economic well-being and prosperity are unreachable. In addition, these conditions have better provided a fertile breeding ground for growing involvement in drug abuse and drug trafficking, especially in urban communities. In addition, violence has grown to an alarming proportion. As social upheavals increase which, at times, have led to rebellion against the government, crime and the fear of crime are two markedly dissimilar problems not just one and both are regrettably out of control.
Economic and social rights are fundamental, and with out them, civil and political rights are meaningless.18 On this score, a sound economy is a prerequisite for political stability. It is not a secret that economic insecurity can lead to political instability. Guyana’s former President, the late Cheddi Jagan, in his speech during a World Summit on Social Development held in Copenhagen, Denmark, March 6-12, 1995 summarized the situation with unmatched lucidity. He recognized that “the spread of poverty unchecked … in [ Guyana], the continuous swelling of the ranks of the unemployed and those that are underemployed…has led to increasing social tension” (Gardhari, 2000) and political tensions in this poor nation. In this sense, there is a need for “structural adjustment with a human face… [we] must return to [the] original mandate to mediate between capital markets and the developing countries…. We need economic growth with equity, with social justice and ecological justice" (ibid.) he concluded. Therefore, the rallying cry should be for the government to [de]neo-colonize its economy by renegotiating a more favorable term with the IMF and the World Bank that would benefit civil society instead of the multinationals. The government needs to develop strategies that would create decent paying jobs for its citizens. Social and economic securities are necessary for the improvement of the human condition and thus in the end would result in a change in the political climate for the better.
Globalization is proceeding selectively including and excluding segments of the economies and societies in and out of the networks of wealth and power that characterizes the new dominant system. In countries including Guyana, what is apparent is the government’s unwillingness to control its policy decisions. Under the guidance of the IMF and the World Bank, with the implementation of the SAP, the government is pressured to adopt policies that are responsive to capital needs, which are translated into continued social discontent, suffering, and impoverishment of civil society. Despite the dilemma that Guyana faces, the government was negotiating to enter the Free Trade Area of the Americas (FTAA) that was supposed to create a single free trade area by 2005 with 33 other countries. Fortunately, it came to an immediate halt after Brazil, Argentina, Bolivia, and Venezuela refused to sign the FTAA. In all of these countries, particularly those in the Caribbean and Central America, there is an on-going debate, especially with the signing of the Dominican Republic and Central America Free Trade Agreement (DR-CAFTA), as to whether or not free trade would bring any benefits for the smaller economies. The smaller economies, like Guyana, obviously have some clear disadvantages that can work against them in any free trade arrangement. As such, the main task for these governments is not “getting the state out” but “to bring the state back in.” As such, “bringing the state back in does require a break with some of the most encompassing social-determinist assumptions of pluralism, structure-functionalist developmentalism, the various neo-Marxist” (Skocpol, 1985:20), and a recognition that the state is racist, sexist, classist, and homophobic.
Furthermore, it makes no sense for any government to follow economic dogma blindly, especially when such a paradigm serves the interests of multinationals and produces hardship for many of its citizens. Like capital, the syndrome of poverty has been internationalized. In this sense, a pressing question is how can the government deal with the interrelatedness of global capital, uneven growth, and poverty? As the Guyanese case shows that often there is a lack of consistency between macro-economic objectives and the goals of poverty reduction.
A more fundamental challenge the government will face, if it continues to move towards the neo-liberal model of economic restructuring, is the tension between the two dominant communities, East Indians and Blacks. As such, in reality, structural adjustment programs in Guyana,
require more flexible domestic and international political structures to deal with increasingly autonomous groups in civil society ¾families detached from the farm, workers who have lost their jobs, export producers whose products have declined in value as a result of artificial substitutions…For [Guyana and other poor nations], the challenge for the next decade is how to expedite the democratization process while revitalizing the economy (Cheru, 1997:149).
The present government under the Bharat Jadego’s administration19 will have to make visible and meaningful political concessions to the Afro-Guyanese community. This may be difficult for the People Progressive Party (PPP) to contemplate but it might, nonetheless, be necessary if a considerable recovery of Guyana’s economy is to be achieved. Thus, the final question is whether politics can transcend the racial divide that is sharply increasing between Indo-Guyanese and Afro-Guyanese? The answer is nothing but simple given the state of Guyana’s economy and the widespread of poverty among both groups.
1 Even though Robert Dahl (1971), in his book, Polyarchy Participation and Opposition recognizes the existence of inequality, he maintains that all groups have an opportunity to pressure the state.
2 A feminist theory of the state does not see these two main traditions informing the theory of the state as mutually exclusive. Feminists have argued that the relative autonomy of the state, with its mediating role among competing class fractions, as is emphasized mainly by the pluralist theory, is a useful starting point. Nonetheless, it must move forward with the human dimensions that a gender analysis provides.
3 Another focus has emerged, which view the state as a distinctive structure with its own specific histories, operating in a sphere of real autonomy. Writers influenced by this tradition, which claims allegiance to Max Weber and Otto Hintze often utilize the distinction between “strong state” and “weak states,” claiming that the degree of effective autonomy from societal demands determines the power of a state. Furthermore, Weber emphasizes territoriality, monopoly of the means of physical violence, and legitimacy as the three aspects of the modern state. Weber argues that anarchy would develop if social institutions do not claim a monopoly of the legitimate use of force within a given country. Michael Mann argues that these theorists fail to analyze this autonomy. He points out that the militarist tradition of state theory embodied in the beginning of the century in the work of Gunplowicz, Ratzenhofer, and Schmitt, which view the state as supreme over economic and ideological structure is an alternative theory upholding state autonomy (see Michael Mann, 1986).
4 A major problem with Marxists theory of the state is its failure to recognize that class domination as well as women’s subordination are both features of the capitalist state.
5 Mechanisms for the effective articulation of the hegemonic concepts have developed and materialized throughout the past two decades. For example, in Canada, this was realized through the emergence of the Business Council on National Issues (BCNI). While the BCNI holds a hegemonic position, such a position is not challenged. The BCNI exists to ensure that counter-hegemonic ideologies remain on the margin, while effectively utilizing status quo discourses to push forward its agenda.
6 It is suggested that the IMF and the World Bank approaches the question of structural adjustment on a case by case basis, depending on the country. While the programs may vary, and the policy emphasis may differ, within poor nations the emphasis is the same (see Ramsaran, 1992:49).
7 Even though the ASEAN was established on August 8, 1967 in Bangkok with five members, today there are ten members. Its important economic position has made ASEAN an essential partner for the European Union in Asia.
8 For a more comprehensive reading on the fiscal crisis see James O’Connor The Fiscal Crisis of the State, which was published in 1973. In all western democracies, except the United States, social welfare spending has always served their accumulation and legitimization functions. In Canada, for example, universal health care was supported by business as a way to pass on to taxpayers, the costs of producing a healthy and productive workforce, the costs which would otherwise have to be taken on by the each company in terms of fringe benefits, I suppose. It is important to note that during World War II, as a part of the War effort, in the United States, women were offered health insurance by manufacturing companies.
9 Guyana had adopted a policy from the mid-1970-1989, which included the nationalization of private companies in mining, agriculture, banking and the distributive services. By 1988, the government controlled over 80 percent of the total value of recorded imports and exports and 85 percent of total investment.
10 The Amerindians have lived in these mining areas for centuries. They have voiced their objections to any mining or logging company operating on their ancestral lands, and are demanding that their rights to their lands be legally recognized and respected . Nonetheless, there is no legal support for the Amerindians, and their demands are overly ignored by the Geology and Mines Commission. Nevertheless, in October 1997, all of the community leaders of the Wai Wai, Wapisiana, and Macusi First Nations peoples formed the Touchau's Amerindian Council of Region 9 to defend their ancestral territorie s from miners and loggers. Despite the formation of the Council, two years later in July 1999, two mining concessions were granted to companies. Even though, these concessions are affecting over 400 indigenous communities, none of them were informed or consulted prior to the granting of concessions. Concessions continue to be granted.
11 The IMF and the World Bank is partly responsible for the environmental problems in Guyana, but its policies and conditions have only exacerbated the situation.
12 In terms of economic policy, Singapore has a socialist course on domestic policy and state owned enterprise but a free market orientation with regard to FDIP. Taiwan emphasizes government intervention. Despite the move towards privatization, the government still has a substantial role in the banking sector for example. Sugar, salt, and iron continue to be state monopolies.
13 In October 1991, the Barama Company Limited was given an investment contract giving the company logging rights. The 25 years logging license which ends in the year 2016 is renewable automatically for another 25 years.
14 Over 70 percent of Guyanese live in the rural areas and are involved in agriculture, mining, fishing, and forestry. Others are involved in road and river transportation. Yet, Guyana did not have the resources to maintain its infrastructure.
15 In Guyana, the relation between Blacks and East Indians was pronounced in 1964 during the country’s Civil War.
16 Organized labor in Guyana was closely tied to the major national political parties. In 1990, the largest labor organization, the Trades Union Congress (TUC), comprised eighteen unions, most of which were affiliated with the ruling People's National Congress (PNC) party. President Hoyte was honorary president of the oldest TUC member, the Guyana Labor Union (GLU).
17 Sometimes workers work six days for the week and will receive $1992.00 for the week.
18 For a more comprehensive discussion on the concept of rights from a Marxist perspective see “On the Jewish Question,” David McLellan (ed.). (1977). Karl Marx, Selected Writings. Oxford University Press.
19 In March 2001, Bharrat Jagdeo won a second term in elections that underscored Guyana's bitter racial tensions. The re-election of Jagdeo, an ethnic East Indian, caused rioting among Blacks. Blacks claimed that there was widespread election fraud in order for the Jagdeo’s administration to gain power.
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