March 21, 2003

GUYANA has benefited from an approximate US$20M debt write-off as a result of the decision by the Big Food Group Company (BFG) to abandon its claim against the Government for outstanding compensation for the nationalisation of the local sugar industry in 1976, President Bharrat Jagdeo said yesterday afternoon.

At a brief news conference he hosted at State House specifically to comment on the timely decision by the United Kingdom-based company, the President publicly expressed his appreciation to the firm, Guyanese Glen Greaves, an active member of the UK-PPP branch, and a number of other private individuals and companies who were instrumental in one way or the other in forging the outcome.

According to the President, he was concerned after the issue had resurfaced, about the resulting consequence if the claim had gone in favour of BFG, and was loud in praise of the efforts of Greaves.

The overseas-based Guyanese, through his several linkages in the UK, worked with a number of groups and individuals to organise a campaign and sensitise the British public as well as others about Guyana's plight, he said.

As a consequence, Guyana, the President said, is indebted to Greaves, along with Nick Mathiason of The Observer in London, Geoff Gibbs of the Guardian, Susan Mitchelle, Betty Ford and Romilly Greenhill of Jubilee Research, Ashok Sinha and Kim Patel of the Jubilee Debt Campaign and Martin Powell and David Trims of the World Development Movement.

He noted that through the innovative campaign, they were able "to hold BFG to what it had publicly represented itself to be, a friend of the Third World, and as a company that believes in fair trade."

In addition, a number of British Member of Parliament among them, Mr. Gordon Brown, had raised a number of questions relating to the debt write-off.

President Jagdeo noted that the claim was due for an arbitration hearing on March 31, before the International Court for the Settlement of Investment Disputes, when it was expected that the final adjudication would have been handed down.

Former Attorney General of Guyana and prominent attorney, Mr. Fenton Raysahoye had been retained by the Government to represent its case during the arbitration hearing.

In addition, Guyana held consultations with a number of other institutions and had written to the World Bank for support, in terms of making finances available, should the compensation had gone against Guyana, Mr. Jagdeo said.

According to the President, the money will now go a far way in helping the Government address other issues of concern, as such a payout would have had a tremendous impact on the country's budget, due to be presented before the March 31 constitutional deadline, and its ability to provide for a number of social and sectoral programmes.

Reiterating that it will go a far way to bring some level of stability to the country's debt payment situation, the President reminded that some 40 per cent of the country's revenue goes toward servicing debt repayment.

He expressed the hope that with the Enhanced HIPIC Initiative, the percentage will be significantly reduced to between 15 to 20 per cent.

Guyana had paid approximately 6.2 million pounds sterling in compensation, the equivalent of almost half the nationalisation debt, but had defaulted in payment in 1989 at the time of the Latin American currency crisis.