GUYANA: ECONOMIC AND POLITICAL PROSPECTS IN THE WAKE OF GRENADA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00367R000100040001-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 22, 2016
• Document Release Date: March 29, 2010
• Sequence Number: 1
• Publication Date: February 1, 1984
• Content Type: REPORT

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Directorate of See. e..
Intelligence
in the Wake of Grenada
Guyana:
Economic and Political Prospects
ALA 84-10012
February 1984
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Directorate of Secret
Intelligence
in the Wake of Grenada
Guyana:
Economic and Political Prospects
This assessment was prepared by~ Office
of African and Latin American Analysis, with
contributions from
of the Office of Soviet Analysis;
he Office of Near Eastern and South Asian
Analysis; f the Office of East Asian
Analysis; and
It was coordinated with the Directorate
of Operations.
Comments and queries are welcome and may be
addressed to the Chief, Cuba-Caribbean Branch,
Middle America-Caribbean Division, ALA, on
Secret
ALA 84-10012
February 1984
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Guyana:
Economic and Political Prospects
in the Wake of Grenada
Key Judgments Guyana, now in its 20th year under the dictatorship of Forbes Burnham, is
Information available a sociopolitical tinderbox and an economic wasteland. The government,
as of 1 February 1984 operating behind a transparent facade of democracy, is dedicated to
was used in this report.
fulfilling Burnham's personal need for power and to black domination of
the ethnically mixed society. Large numbers of people with no economic
opportunity or hope for political expression have simply emigrated; those
who remain are sharply divided between Burnham's privileged and corrupt
coterie and the increasingly deprived and oppressed citizenry.
Guyana's economic fortunes will, in our view, take an even sharper
downturn in 1984. The slump in production of key exports will send foreign
exchange earnings to new lows and dictate even steeper import cuts.
Government refusal to formulate a credible strategy for recovery, including
much greater participation by the private sector, precludes- resumption of
assistance from the World Bank and other international financial institu-
tions. In the months ahead, therefore, Burnham may no longer be able to
dispense the privileges that buy him loyalty from the security forces that
uphold his regime. Although he faces no threat from the declared
opposition-which is cowed-cracks appearing in his own party and in his
traditional support from labor suggest that some of these elements may be
ready to turn against him.
Faced with the possibility of economic collapse in the coming year and
accompanying political unrest that would in all likelihood topple his
regime, Burnham has turned to the USSR and other Soviet Bloc states for
assistance. Although we do not yet know the outcome of these negotiations,
we believe it is unlikely that Burnham will be able to obtain the substantial
level of financial assistance needed to solve his economic troubles. So far,
the USSR has shown no signs of intending to exploit Burnham's growing
vulnerability or to increase its influence in Guyana. The Soviet view may
be that because of the unstable political situation in Guyana the price for
any marginal political or military advantage to be gained is too high.
Despite its low valuation of Guyana's military or strategic usefulness, we 25X1
believe Moscow will continue to look for opportunities to influence
Guyanese affairs at low cost and to use Guyana as a base for Latin
American activities. The Soviets may propose jointly owned commercial
ventures as cover for KGB operations and increase their disinformation
activities in Georgetown, planting material for exploitation elsewhere in
the region. 25X1
iii Secret
ALA 84-10012
February 1984
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The Soviets have agents of influence within the government of President
Burnham and his People's National Congress
Several senior party members are convinced that a new pro-
Moscow clique, including Burnham's chief political adviser, is competing
for influence with the President's older colleagues. Moscow, with an eye to
protecting its longer term interests, will probably seek to identify and very
discreetly cultivate yet other possible successors to Burnham.
Cuba's recent setbacks in Grenada and Suriname enhanced Burnham's
potential value to Havana, but so far the Castro regime has not moved to
fill this gap.
With the Cuban presence in Grenada and Suriname eliminated,
however, Havana is likely to be reassessing its relationship with the
Burnham regime as a first step in recouping some of its losses in the region.
Although Cuba may decide to increase its activities in Guyana, it simply
does not have the resources to provide substantial economic aid. Moreover,
so long as the aura of mutual distrust prevails in the Castro-Burnham
relationship, we doubt that any agreements would be of lasting value.
In this reassessment, the Cubans typically would look for an ideologically
suitable leadership figure and one or more local institutions with solid
grassroots underpinnings-a trade union, perhaps, or student or profession-
al organizations-as a basis for influencing a move to the, left in the
unstable period that is likely to ensue when Burnham leaves the scene.
While we have no evidence that the Cubans-currently preoccupied with
much higher priority issues in Central America and Africa-are actively
engaged in such a quest, it would fit the pattern of their behavior
elsewhere.
In the meantime, Havana is certain to take advantage of Guyana's location
to maintain contact with the leftists of the region, to channel propaganda
into the neighboring countries, and to facilitate official travel to and from
the area. If Castro is permitted to bolster his intelligence activities targeted
against other countries, he might be prepared to give Burnham assurances
of nonintervention in Guyana's internal affairs.
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North Korea is likely to continue the longstanding careful cultivation of
Burnham that has enabled Pyongyang to use Guyana as a base for its anti-
Seoul and anti-US diplomatic and propaganda activities. Its Guyana
operations have enabled P'yongyang to expand its influence in the region in
recent years. Similarly, Libya will maintain its relationships so as to ensure
continued use of Guyana as the hub for its activities in support of various
regional political organizations and to maintain access to Guyana's
government-owned radio station for regional propaganda purposes. Like
Cuba and the USSR, these countries will try discreetly to identify
ideologically reliable members of Burnham's circle who might step into his
shoes. The token economic and technical assistance and limited arms and
training they are likely to provide to Burnham to advance their interests,
however, will not be adequate to keep his head above water. Burnham's
staying power, at this point, probably turns on his continued ability to
deliver privileges to his security forces and their families.
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Contents
The Economy: Root of the Crisis
Declining Economic Performance
1
The Political Setting
The Opposition
4
Cracks in the Ruling Party.
4
Military Loyalty
4
Relations With the Soviet Bloc
6
Soviet Policy Toward Guyana
6
Cuban Involvement in Guyana
7
Cuban Military Presence
8
Relations Since Grenada
9
North Korean Support
10
Libyan Goals in Guyana
10
Outlook for Political Stability
12
I
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Guyana:
Economic and Political Prospects
in the Wake of Grenada
The Economy: Root of the Crisis
Declining Economic Performance. Despite Guyana's
wealth of resources, its economy has declined sharply
since 1976. Output of the chief export commodities-
bauxite, alumina, sugar, and rice-has fallen steadily
as a result of pervasive corruption, mismanagement,
and costly labor disputes. Undeterred by clear evi-
dence of mounting inefficiency, Burnham has expand-
ed the state's control of the economy, shrinking the
share produced by the private sector to about 15
percent. At the same time, dwindling foreign ex-
change reserves coupled with a chronic inability to
maintain support from international financial institu-
tions have forced Guyana to implement stringent
import restrictions.
The decline of Guyana's economy continued last year
after a drop in GDP of 10 percent in real terms in
1982. Production of sugar, bauxite, and rice was more
tightly shackled than ever by shortages of spare parts
and equipment, fertilizers, and other imported inputs.
Marketing difficulties multiplied as foreign buyers
turned to other suppliers offering better quality, more
reliable delivery, and lower prices.
More than a year after adopting a carefully framed
plan to return profitability to the sugar industry, the
government has yet to implement any of its provisions.
the head of
the state sugar corporation warne tat this inaction
was dooming the industry to escalating production
losses and spiraling costs. Heavy rains have also cut
short the 1983 sugar harvest. According to press
reports, the industry registered a 13-percent drop in
output over the previous year's poor performance.
The decline of Guyana's bauxite and alumina indus-
try has been accelerated by a combination of produc-
tion problems and soft world markets; output in 1982
slid to the lowest level since independence in 1966. In
an effort to cut huge operating losses, the labor force
was slashed by one-third last year. Guyana's sole
alumina plant has been closed since mid-1982, await-
ing the required foreign exchange for renovation. The
People's Republic of China, which had taken over 40
percent of Guyana's US markets for refractory-grade
bauxite by 1982, continued to enlarge its share in
1983.
Once the rice bowl of the Caribbean, Guyana in
recent years has been unable to meet even declining 25X1
foreign demand for rice. The production of rice has
fallen off dramatically, and buyers are deterred by its
poor quality, unreliable supply, and highly uncompeti-
tive prices. The sharp deterioration in rice production
has taken on added significance since the cessation of
wheat imports in 1983 made rice the country's princi- 25X1
pal food. US Embassy estimates of extremely low
yearend 1983 rice inventories point to the possibility
of a severe rice shortage before the first harvest in
March or April 1984.
Guyana's failing export performance has crippled its
ability to finance the imports on which its economy
depends. In 1982, export earnings fell 30 percent from
1981. Struggling to balance its international accounts,
Georgetown slashed imports 36 percent, drained its
foreign reserves, and built up commercial arrears.
External debt stood at $694 million by the end of
1982. According to government estimates, the current
account deficit in 1983 was slightly smaller than in 25X1
either of the two previous years. If accurate, we
believe the improvement to have been achieved
through a reduction of imports, forced by continuing
foreign exchange shortages and lack of credit.F
The government budget deficit was estimated by the
International Monetary Fund (IMF) to have reached 25X1
a level equal to 47 percent of GDP in 1982. The IMF
projected the deficit would climb to well over 50
percent of GDP in 1983. US Embassy reports of the
budget currently planned for 1984 lead us to believe
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Guyana: Real GDP Growth, 1970-83
ij]"
0
-5
-10
-15 1970 71 72 73 74 75 76 77 78 79 80 81 82 83a
Guyana: Selected Commodity Production,
1977-83
0
1977 80
Calcined bauxite
Sugar
Rice
Alumina
that the deficit could hit 150 percent of likely GDP
this year.' A deficit even approaching this magnitude
would plunge the country into hyperinflation.
While the legitimate economy approached virtual
collapse, black-market trade increased. Manufactur-
ers and retailers, unable to obtain licenses and foreign
exchange legally, have turned to illicit sources for the
imports they need, and illegal exports of rice, gold,
and diamonds increased. Although these activities
deprive the regime of desperately needed customs
duties and export commodities, efforts to clamp down
have been ineffective in the face of widespread cor-
ruption and collusion at all levels of government.
Official government statistics showed a 23-percent
increase in the urban price index in 1982, but this
figure is a sharp understatement since it does not
include goods traded on the black market.
Despite the gravity of the situation, according to US
Embassy reporting, Burnham remains adamantly op-
posed to taking the measures necessary to regain
financial support from the IMF. Past IMF programs
have foundered on Guyana's repeated failures to meet
agreed fiscal and monetary targets. The last agree-
ment became inoperative after only three months and
was canceled in 1982. Underlying Burnham's refusal
to come to terms with the IMF is that organization's
insistence on a complete restructuring of the key
economic institutions and revival of the private sector.
According to Embassy analysis, with which we con-
cur, Burnham believes such a development would
directly threaten his power base. Burnham has been
able to maintain the support of his Afro-Guyanese
constituency by rewarding black Guyanese with jobs,
favors, and privileges, while discriminating against
the more numerous but politically weak East Indian
ethnic groups. As a result, there is little chance that
Burnham will meet any of the IMF's major require-
ments.
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Deprivation Fuels Social Unrest. Guyana's economic
unraveling has reduced the living standards of the
bulk of the population, especially among the majority
Indo-Guyanese, who also face growing victimization
by Burnham's Afro-Guyanese ruling party and securi-
ty forces.
While Guyana's shortages of food, drugs, transporta-
tion, electricity, and water are endemic, deprivation
became even more widespread and severe in 1983;
indeed, according to Embassy and press reports, water
shortages threatened public health and increased fire
hazards. Crime has also increased, with robbery and
associated assault falling most heavily on the Indo-
Guyanese, whose traditional distrust of banks has
caused them to hoard cash in their homes. The
educational system, once the region's best, has disinte-
grated and is now given over to a curriculum of
indoctrination and mass games on the North Korean
model.
The Guyanese people have endured this increasing
level of misery over the years without serious protest,
although they have grown cynical toward constant
government exhortations to work for "self-sufficien-
cy" and to resist "imperialist plots."
survival increas-
ingly consumes the attention of most Guyanese, who
believe-accurately-that the country's leadership,
while preaching sacrifice, secretly indulges its taste
for banned commodities.
We believe, however, that, with further economic
deterioration a certainty, Guyanese passivity can give
way to sudden rebellion at any time-particularly as
the living standards of the relatively more privileged
Afro-Guyanese decline. Indeed, according to Embas-
sy reporting, the Burnham regime, alarmed when
Afro-Guyanese bauxite workers struck to protest food
shortages in the spring of 1983, did not hesitate to
send riot police and troops to the area
The Political Setting
Burnham as Leader. Despite the democratic trappings
he still retains, Burnham has in fact established a
dictatorship in the nearly 20 years that he has led
Guyana. As creator and undisputed leader of the
black-dominated People's National Congress, he has
realized his goal of black dominion over Guyana's
Linden Forbes Sampson Burnham, Leader, Peo-
ple's National Congress, President, the Coopera-
political and economic landscape, despite the numeri-
cal superiority of Guyana's East Indian community.
He maintains his grip on power by electoral fraud,
intimidation, and manipulation and by playing on the 25X1
racial fears that have haunted Guyana since the 25X1
bloody riots of the early 1960s. Over the years he has
deeply entrenched his black followers in every govern-
ment and parastatal institution, including the military
and the police. By changing ministerial, military, and 25X1
corporate assignments abruptly and frequently, he
also maintains a climate of fear and insecurity and
sows confusion about who is in his favor. This tactic
discourages the formation of conflicting loyalties or
conspiracies.
Burnham, while still reserving all decisionmaking to
himself, now sets aside difficult problems rather than
attempting to resolve them
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The Opposition. The Marxist-Leninist People's Pro-
gressive Party (PPP), comprised almost entirely of
Indo-Guyanese and headed by the once impassioned
but now spent Cheddi Jagan, is the official opposition
party. No longer a threat to the all-powerful ruling
party, the PPP is useful to Burnham as "proof' that
Guyana tolerates a free and unhampered opposition.
The Working People's Alliance, another Marxist par-
ty founded in the late 1970s, appeals for support
across racial lines. Burnham regarded the Alliance as
a potentially serious threat and took early steps to
hamstring it, according to Embassy and press report-
ing. The bombing death of its leader in June 1980 is
widely believed by Guyanese to have been directed by
Burnham, and further harassment by the government
has stunted party growth and effectively inhibited
remaining members. Virtually the only other opposi-
tion grouping is the recently formed Democratic
Labor Movement, which is relatively moderate in the
Guyanese context and probably favors a better rela-
tionship with the United States. Nevertheless, it
suffers from inadequate resources and so far has been
unable to generate meaningful support. We believe
that, if Burnham disappeared from the political scene,
none of these organizations would be able to move
into a position of influence in the near term.
Cracks in the Ruling Party. If significant opposition
develops, we believe it will come from within Burn-
ham's own coterie. The ruling party's weakening
control over the country's labor unions, for example, is
now of more concern to Burnham than the activities
of the few opposition elements in the country. Orga-
nized labor, largely a bulwark of ruling party support
except for the Indo-Guyanese sugar workers, has
taken an increasingly independent path since the
bauxite workers' strike in the spring of 1983.
That strike lasted six weeks, during which Indo-
Guyanese sugar workers staged sympathy strikes in
solidarity with the Afro-Guyanese miners. The min-
ers, however, lacked a strike fund and were forced to
bow to government demands without any of the
underlying issues-assurance of food supplies and job
security-being resolved. Under the terms of the
settlement, the bauxite workers unions were required
to participate in the formulation of a program to
return the industry to profitability-a tactic by which
the government sought to make the unions bear the
onus of the massive layoffs that shortly followed.
Many of the strike leaders and militant workers lost
their jobs.
The strike and its aftermath appear to have severely
weakened the links between the ruling party and
organized labor. Erosion of ruling party control over
the umbrella Guyana Trades Union Congress has
become apparent. In October 1983, according to
Embassy reporting, only obstructionist tactics by par-
ty loyalists prevented adoption of antigovernment
resolutions at the labor organization's annual confer-
ence. In the past few months, the number of independ-
ent unions has grown from four to eight, and Embassy
reporting states that antigovernment sentiment now
predominates in the bauxite unions. In our view, this
trend-largely a result of Burnham's inability to
protect his black supporters from rising unemploy-
ment, inflation, and shortages of basic necessities-is
likely to intensify
Military Loyalty. The key element of Burnham's
power base is the loyalty of his security forces.
President Burnham
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The Guyanese Military
The US Embassy estimates that the Guyanese de-
fense establishment, which includes the Guyana De-
fense Force (GDF), People's Militia (GPM), the Guya-
nese National Service (GNS), and the Tactical
Services Unit (TSU), has a total strength of approxi-
mately 6,400. We believe the government could near-
ly double the size of this force if it orders a general
mobilization. The Army has one understrength infan-
try brigade with 2,250 men. The Embassy believes a
second infantry brigade is being organized, although
the government has still not acknowledged its exist-
ence. The GDF also includes a small navy and an air
corps, with a combined strength of 500. Most of the
senior officers in the GDF were trained by the British
and are reported by the Embassy to be highly
competent and professional. Since the early 1970s,
GDF officers have received training in Cuba, East
Germany, North Korea, the United States, and
Canada.
Paramilitary forces include the People's Militia that
has an estimated strength of 1,200 to 1,500; it is
poorly organized and in need of discipline, according
to the Embassy. The strength of the Guyanese Na-
tional Service is not known; however, the Embassy
reports that some 1,000 to 1,500 young recruits are
selected annually for an 18-month basic training
program, and that since 1975 an estimated 15,000 to
20,000 have been trained. Another paramilitary
ensures this loyalty by personally appointing all senior
officers. Both the military and paramilitary forces are
almost exclusively Afro-Guyanese. All officers receive
political indoctrination, and, before an officer is pro-
moted to field grade rank, he must swear an oath of
loyalty to Burnham. In return, Burnham takes care of
the military by ensuring that salaries are paid and
that the messes are kept well supplied with food. In
1982, Guyana's defense expenditures were officially
reported to be $33 million-5.8 percent of the total
government budget-most of which went toward sala-
ries.
e ense spending is tar higher than the o icia
figures. Burnham gave
organization, the Tactical Services Unit, is a battal-
ion-size police unit similar to a light infantry battal-
ion. In a general mobilization, these paramilitary
organizations would probably be incorporated into
GDF line units.
Most of the weapons in the GDF inventory were
supplied by Brazil, North Korea, Yugoslavia, and the
United Kingdom. uy-
ana has also approached the USSR, East Germany,
and France for arms, but so far apparently has been
unsuccessful in working out terms.
a shipment of Eastern
February 1983,
some used Land Rovers and antiaircraft guns arrived
in November from the United Kingdom
The armed forces are capable of coping with most
internal security problems, but we believe they would
be hard pressed to deal with external attacks. The
GDF's greatest weaknesses are its lack of air defense
and its limited logistic capability. The US Embassy
estimates that the military is capable of border
surveillance and maintaining internal security, but
probably could not hold out for more than 30 days
against, for example, a full-scale invasion by Venezu-
ela.
Relations With the United States
US-Guyanese relations have chilled since mid-1981,
when a US veto-subsequently withdrawn-of an
Inter-American Bank loan for Guyana's rice sector
was denounced by Georgetown as an attempt at
economic destabilization. This charge has been re-
peated publicly many times since: for example, when
the United States supplanted Guyana as Jamaica's
principal supplier of rice and when the United States
vetoed permanently an Inter-American Bank loan in
July 1983 and subsequently canceled most of its AID
portfolio. US refusal to ship wheat without first
receiving irrevocable letters of credit has rankled, and
the military a large pay increase in 1983.
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US insistence that. Guyana take concrete steps-
instead of making promises-to give the private sector
more freedom to participate in the country's economic
life has infuriated Burnham. He has suggested public-
ly that the United States is behind the insistence of
the international financial institutions on the same
point.
Economic freedom for Guyana's private sector would
quickly translate into greater economic benefits for
the entrepreneurial East Indian, Anglo, and Portu-
guese communities, while impinging on the status of
Burnham's black constituencies. As a result, the issue
has been nonnegotiable for Burnham. So far, the
Guyanese leader has indicated he is prepared to
compromise only in the area of foreign private invest-
ment.
Government propaganda incessantly warns the people
that all their economic woes spring from a US
campaign designed to force Guyana to abandon "co-
operative socialism" and return to dependence on
"imperialism." These efforts, however, appear to be
widely disregarded by the Guyanese people.
Relations With the Soviet Bloc
With little hope of gaining financial aid from Wash-
ington or loans from the IMF, Burnham is increasing-
ly turning toward the USSR and its allies. Since 1982
Burnham has initiated a media campaign to highlight
joint activities.
he People's National Congress in August
agreed to:
? Strengthen Guyana's relationships with socialist
countries.
? Support socialist initiatives worldwide.
? Intensify socialist ideological training and the dis-
semination of anti-US propaganda.
? Develop a contingency plan for going it alone
without funds from the IMF.
Since the US intervention in Grenada, Guyana has
accelerated its contacts with the Soviet Union and its
allies. A Guyanese delegation signed an exchange-of-
information agreement with TASS officials in early
December
Korea on his return from the Commonwealth Confer-
ence in New Delhi last December, and technicians
from Romania and Bulgaria arrived in Georgetown
early the same month, as did a commercial mission
from Yugoslavia
Soviet Policy Toward Guyana. The USSR clearly
values Guyana as a supporter of Soviet causes in
international forums and as a participant in Commu-
nist front organizations and peace groups. Beyond
exploiting prevalent leftist attitudes and an eagerness
for free foreign travel, however, Soviet interest seems
to be limited. We believe Moscow has been wary of
becoming committed in any way to propping up the
country's deteriorating economy. It has not shown any
serious interest in trying to take advantage of Guy-
ana's location for strategic purposes.
there were about 30 Soviets, including
embassy dependents, in Guyana as of early December
1983. This is a small embassy by Soviet standards.
Ambassador Kharchev was a municipal Communist
party official in Vladivostok before receiving diplo-
matic training, after which he was sent to George-
town.
Burnham's chief political ad-
viser, Elvin McDavid, a former Guyanese Ambassa-
dor to Moscow who is consistently pro-Soviet and
frequently consults with Soviet Ambassador Khar-
chev in Georgetown,
several senior party members are convinced
that a new pro-Moscow clique including McDavid is
trying to reduce the importance of Burnham's older
colleagues. Moscow probably gives more importance
to prospects of this clique than it does to the opposi-
tion People's Progressive Party, which is a Soviet-line
Communist party. Moscow, with an eye to protecting
its longer term interests, will probably seek to identify
and very discreetly cultivate other members of Burn-
ham's inner circle to strengthen its position in the
event Burnham disappears from the scene.
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The Soviets, nevertheless, have shown an unwilling-
ness to promise any significant aid to Guyana. Ac-
cording to a US Embassy report, Ambassador Khar-
chev-who had economic training and supervised
economics as well as ideology in Vladivostok-said in
August 1983 that Moscow viewed economic aid to
Guyana as a very poor business risk because of a poor
repayment record and no notable economic results. F
Ambassador Kharchev has
told the US Charge that Guyana had turned down
Moscow's proposal in December 1983 to barter baux-
ite for Soviet vehicles, machinery, and farm imple-
ments, preferring instead to sell bauxite for hard
currency; the Soviets rejected that counteroffer.
Despite the apparent impasse on trade, Moscow will
continue to look for opportunities to influence Guya-
nese affairs at low cost and to use Guyana as a base
for Latin American activities. In 1981, the Soviet
airline Aeroflot proposed to Guyana creation of a new
jointly owned airline to serve the region apparently as
cover for KGB operations and possibly in hopes of
earning hard currency. Guyana did not act on the
proposal, but similar schemes might be offered in the
future. The Soviets also might increase their disinfor-
mation activities in Georgetown, planting material for
exploitation elsewhere in the region
Cuban Involvement in Guyana. Cuba's 11-year rela-
tionship with Guyana has been marked by mutual
suspicions and distrust that have prevented the Castro
regime from fully exploiting the ties politically. Cu-
ba's early hopes of helping Burnham dismantle Guy-
ana's political, economic, and social infrastructure
and replacing it with Marxist-Leninist institutions
faded years ago, and we believe Havana has become
convinced that Burnham is a crafty and unprincipled
opportunist with fraudulent ideological credentials.
At the same time, the Cubans probably realize that
their ideological kinsman in Guyana, Cheddi Jagan,
has neither the political power nor the organization to
challenge Burnham and that they must deal directly
with Burnham if Havana is to take advantage of his
anti-US bent.
maintains a staff of at least 11 officials in its George-
town embassy, in addition to a medical team and a
handful of various educational, cultural, and technical
advisers who have been in Guyana almost continuous-
dent Burnham's visit to Cuba in April 1975. Cuba
later signed an economic collaboration pact with
Guyana that included a fishing agreement 2 and the
provision of Cuban nonmilitary advisers. Havana
Although diplomatic relations were established in
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In late 1975 and early 1976, when Cuba's military
airlift to Angola was temporarily stymied by the
withdrawal of refueling privileges elsewhere in the
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flights to and from Luanda. Texaco, which operated
the only refueling facility at Timehri, serviced several
Cuban aircraft but refused to continue once the
nature of the flights became known. A Cuban tanker
then delivered collapsible fuel tanks with a capacity of
300,000 gallons to a Guyana Defense Force installa-
tion outside the airport, and a team of Cuban techni-
cians was flown in from Havana to install them. The
effort failed, however, when the fuel from the tanker
proved to be contaminated and the only Cuban air-
craft to be refueled from the tanks was stranded in
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The meeting in February 1981 of the Guyana-Cuba
Mixed Commission included discussions on possible
joint projects, increased trade, and cooperation in
' The fishing agreement was terminated and Cuba's 13-trawler fleet
returned to Cuban waters in late 1979. The Guyanese Government
claimed at the time that the Cubans had cheated on the fishing
agreement and subsequently demanded that Havana withdraw its
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Two recent articles in a Washington newspaper al-
leged that since 1979 the Cubans and the Guyanese
military had been building a dozen 6,000- to 8,000-
foot airstrips with military facilities in the remote
Essequibo region of southern Guyana. The author of
the articles claimed that this activity was document-
ed on. foreign-made aerial reconnaissance photo-
graphs taken in July and December 1981 that showed
the rapid improvement of the airstrips and construc-
tion of "Cuban military-type" buildings and commu-
nications "towers" near them)
More than 25 airstrips scattered
throughout the Essequibo region were analyzed for
signs of improvements or military construction activi-
ty. With the exception of one 6,000-foot asphalted
airstrip located south of Lethem on the Brazilian
border, which the Canadians are helping the Guya-
nese to improve, we found no major improvements at
any of the other airstrips.
Almost all of the airstrips studied had short earthen
runways-only three had asphalt all-weather run-
ways-and were less than 4,000 feet long. Some
airstrips were completely overgrown with heavy vege-
tation. Although small military camps or outposts
cultural, scientific, technical, and educational mat-
ters. In July 1981, Havana offered Guyana a $1.5
million line of credit for the purchase of various
Cuban goods. Cuba
exported,over $1.2 million in goods-mostly ce-
ment-to Guyana in 1982 and purchased only
$12,000 worth of Guyanese products in return. The
Guyana-Cuba Mixed Commission in March 1983
discussed the possibility of establishing a medical
school-and a joint publishing house in Guyana, as well
as arrangements for countertrading Guyanese rice
and timber for Cuban goods
were located at some of the airstrips, we detected no
significant military presence or construction activity.
We concluded that there was no evidence of the
alleged major airfield improvements or military fa-
cilities and that most of these airstrips were usable
only in dry weather by light aircraft.
Moreover, the ill-fated Cuban attempt to install a
refueling facility at Guyana's Timehri Airport in
January 1976 and the Cuban airport construction
project in Grenada begun in 1980 provide suitable
precedents for assessing our intelligence collection
capabilities for detecting a Cuban effort to build or
improve an existing airfield in Guyana's interior. In
both cases, Cuban intentions were noted in the very
early stages of the projects and keeping abreast of
their progress was a simple matter.
n 1980 the Cubans did not even try
to hide their role in the airport project on Grenada. In
view of Guyana's difficult geography and primitive
transportation system, we believe it would have been
impossible for the Cubans to undertake without
detection such a large-scale project as the building of
a major airfield
basis.
Periodic rumors and flurries of unconfirmed reports-
usually propagated by Venezuelan sources-suggest-
ing a larger Cuban military presence in Guyana
persist, but efforts to evaluate this information have
thus far failed to turn up any evidence of Cuban
troops or military activity. These rumors, mainly of
Cuban forces stationed in the Essequibo region of
Guyana adjacent to Venezuela's border, appear to
grow out of Caracas's fear of a Cuban-Guyanese
military alliance and typically lack any evidential
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Relations Since Grenada. Events in Grenada and the
subsequent decision of Suriname to downgrade its ties
with Cuba have greatly enhanced Burnham's poten-
tial value to Havana. As long as Cuba had a more
promising and secure operational foothold in Grena-
da-and to a lesser extent in Suriname-the need to
use Guyana as a staging area for Cuban activities in
the eastern Caribbean was minimal. With the Cuban
presence in Grenada and Suriname eliminated, how-
ever, Havana is likely to be reassessing its relationship
with Guyana as a first step in recouping some of its
losses in the region
the intervention in Grenada and the reduction of
Cuba's mission in Suriname have hurt the morale of
Cuban officials.
We have not perceived any shift in the Guyanese
Government's official relationship with Havana since
the intervention in Grenada nor any indication that
Burnham's suspicions of Cuba's motives have abated.
In the past, Burnham has been concerned over the
possibility of the Cubans supporting opposition leader
Cheddi Jagan; he probably will continue to resist any
attempts by Havana to establish a large military
presence in his country, fearing what he calls the
Cuban "Trojan Horse." Burnham probably is also
aware that an increased Cuban presence, if combined
with an outbreak of social and political unrest in his
country, might be perceived by Venezuela as reason to
intervene. Nonetheless, he probably will continue to
investigate all avenues for increased trade and other
support from the Cubans, while being careful not to
give Havana a clear hand to meddle in Guyana's
affairs.
With Grenada lost, we believe Havana will probably
attempt to take advantage of Guyana's location by
using it as a convenient meeting place for maintaining
contacts with the radicals of the region. Its usefulness
as a transportation point has been enhanced now that
direct Cuban flights between Havana and St. Georges
have been terminated. The Cubans may also try to
develop Georgetown as a regional center for the
distribution of propaganda and may hope to use
broadcasting facilities in Guyana now that their ac-
cess to Radio Free Grenada has ended. A move in this
direction was made even prior to the Grenada inter-
vention; on 21 October, a cooperation agreement was
signed by the Cuban Broadcasting Institute and the
Guyana Broadcasting Service.
would become apparent to us fairly quickly.
Prospects for Increased Soviet and Cuban Aid. The
loss of Grenada as a possible future site for Soviet air
and naval facilities also might increase Soviet interest
in Guyana, whose location offers many of the same
geographic advantages for such uses as basing naval
reconnaissance planes or refueling flights between
Cuba and Africa. Since the intervention in Grenada,
however, we have not seen any increase of Soviet
interest or any change in Soviet relations with Burn-
ham's government. We believe that increased Soviet
military interest or any important change in relations
Moscow is probably reluctant to become too closely
involved with a leader who has presided over such a
decline in economic standards as to make his future
uncertain and has failed to develop a strong, disci-
plined control apparatus. The development of useful
military facilities in Guyana would require of the
Soviets a long-term investment not only in developing
those facilities-which at present are not adequate for
air or sea deployments-but also in stabilizing the
economy. We do not believe the Soviets would feel
that, on balance, the investment is worthwhile, at
least as long as Burnham remains in power.
Although we have no evidence that they are doing so
at present, we believe the Cubans, as a logical part of
their long-range policy toward Guyana, are probably
also assessing local personalities and institutions to
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identify those that can be co-opted and used to effect
a move to the left in the uncertain period that is likely
to follow Burnham's departure from the scene. Ha-
vana typically would look for charismatic individuals
with mass appeal and for institutions-trade unions,
women's or peasants' groups, student organizations,
professional associations-that had a solid grass-roots
foundation. The Cubans would also want to locate
and cultivate friendly assets in the media and security
establishment but would keep the effort very low key
to avoid provoking Burnham. In short, even though
they now are preoccupied with high-priority Cuban
interests in much more critical areas such as Central
America and Africa, the Cubans would undertake
measures designed to enable them to take advantage
of any opportunities that arose to push Guyana
further to the left or, at a minimum, increase Guy-
ana's estrangement from the United States. F_~
Should Fidel Castro, in the wake of events in Grena-
da, decide to try to breathe new life into his relation-
ship with Burnham, he is likely to focus on offering
those kinds of assistance that would help Burnham
maintain his grip on power while costing Cuba little.
This would probably include image-building proj-
ects-perhaps road construction and medical teams-
and programs involving propaganda and leadership
security. Cuba does not have the capability to provide
substantial economic assistance. In return, Cuba
would probably want a larger diplomatic presence and
the freedom to meet in Guyana with the leftists of the
region. Castro might even be prepared to give Burn-
ham assurances of nonintervention in Guyana's inter-
nal affairs if he is permitted to bolster his intelligence
activities targeted against other countries.
North Korean Support
P'yongyang has carefully cultivated President Burn-
ham's favor since the mid-1970s.
North Korea has provided Guyana with
two or three patrol boats and limited quantities of
small arms, artillery, and ammunition-possibly un-
der a military protocol.
several dozen Guyanese had received military
training in North Korea and that 12 North Korean
military instructors provided training at GDF bases
during 1980.
According to the British High Commissioner in
Georgetown, Burnham sought additional military aid
from North Korea during the stopover in P'yongyang
in early December-his fourth visit there since rela-
tions were established in 1974. P'yongyang announced
the signing of an economic accord during the visit, but
we have no indication of North Korea's response to
Burnham's arms request. The ranking North Korean
Deputy Minister of Defense-who has been associat-
ed with North Korean military assistance projects-
attended the biennial PNC Congress in Guyana this
August, suggesting that P'yongyang may have been
considering additional military cooperation shortly
before the events in Grenada. The North Koreans
have also provided a small amount of economic aid to
Guyana, chiefly nine technicians at their resident
mission in Georgetown. Some members of this group
probably are assigned to agricultural development
projects. We do not know whether any are involved in
military training activities.
P'yongyang's approach to Guyana is consistent with
North Korea's worldwide competition with South
Korea. The unusually large, 32-member North Kore-
an mission in Georgetown provides a convenient base
for anti-Seoul and anti-US diplomatic and propagan-
da activities and has enabled P'yongyang in recent
years to expand its influence in the region. Documen-
tary evidence acquired in Grenada indicates that
North Korean activities there had been supported
from the mission in Georgetown. In addition, P'yong-
yang's efforts have helped maintain Guyanese support
for North Korea in the Nonaligned Movement and
other international bodies.
Libyan Goals in Guyana
Libya's goals in Guyana are colored by the overall
aim of its operations in the Caribbean and, more
broadly, throughout Latin America. Libya is con-
cerned with promoting the fortunes of leftist govern-
ments and enhancing the influence of the Islamic
religion. The main impulse for Libya's machinations
in Latin America, however, comes from its desire to
undercut US influence in its own backyard-a way of
getting back at the United States for its influence in
the Arab world and for Washington's perceived hostil-
ity to Libya
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Guyana's Relations With Its Neighbors
Venezuela. Guyana's long-running territorial dispute
with Venezuela is quiet at the moment and is likely
to remain so for at least the next several months. The
issue has long provided Burnham with a useful
domestic rallying cry and an excuse for maintaining
his disproportionately large military establishment.
The new Venezuelan Government inaugurated in Feb-
ruary 1984 will most likely be content to leave the
matter in the hands of the UN Secretary General
while it deals with more pressing economic issues. We
believe, however, that Caracas will ultimately press
more vigorously its claim to the Essequibo, which
comprises five-eighths of Guyana. Failure to resolve
the dispute has barred development of the region's
mineral riches and potential hydropower resources.
Moreover, Venezuela views possible unrest in Guyana
as a potential threat to its national security. Any
evidence of increased Soviet or Cuban influence on
Burnham would ring alarm bells in Caracas.
Suriname. Guyana's relations with Suriname have
improved somewhat in the past few months. Para-
maribo's expulsion earlier this year of about 2,000
Guyanese has not been repeated, and Georgetown's
worries that all 40,000 of its citizens estimated to be
living in Suriname might suddenly return have reced-
ed. The New River Triangle border dispute persists,
but is in the background. Talks have been initiated to
enlarge barter trade between the two countries, and
we expect relations to continue to improve, although
Burnham is said to remain wary of Suriname's
unpredictable military leaders.
Brazil. Brazilian interest in Guyana is of relatively
recent origin and stems from security concerns. In
mid-1981 a Foreign Ministry study-according to a
US Embassy source-referred to Guyana and Suri-
name as Brazil's "soft underbelly" and echoed the
military's traditional fear that a neighboring country
might come under Cuban influence or Communist
rule. To enhance Brasilia's role in the region and
increase its leverage with the Guyanese regime, the
paper called for several joint development projects
and requested additional funding.
During 1982, the Brazilians followed up by sending
the Foreign Minister to Georgetown and hosting
Burnham in Brasilia. The two countries signed agree-
ments for cooperative projects in energy, mining,
agriculture, highway construction, and other areas,
but apparently very little has materialized.
Orazil-anxious to avoid offending
Caracas-declined Georgetown's proposal for joint
oil explorations in the Essequibo region. The Brazil-
ians are concerned that armed conflict between Vene-
zuela and Guyana could spill over into Brazilian
territory, and they have cautioned Caracas against
resorting to force.
CARICOM. Longstanding strains in Guyana's rela-
tions with its Caribbean Community neighbors deep-
ened during 1983. Georgetown's inability to pay its
debts led directly to the termination of the Communi-
ty's Multilateral Clearing Facility and subsequently
contributed heavily to the virtual collapse of the
Common Market itself Burnham's dismal record on
human rights and abuse of the democratic process
had earned him pariah status long ago, but his
denunciation of his neighbors for favoring the Grena-
dian intervention and his suspected advance disclo-
sure of the invasion plans exhausted what little
patience remained. As a consequence, the sense of
isolation spawned by Guyana's economic crisis deep-
ened.
Efforts to move the CARICOM Secretariat out of
Georgetown and to restructure the Community to
exclude Guyana are in the wind. If successful, they
will complete Georgetown's isolation from its En-
glish-speaking neighbors and, as a consequence, fur-
ther discourage Guyana's already demoralized
people.
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Libyan activities in
Central America and the Caribbean have been ham-
pered by lack of a secure base from which to distrib-
ute arms and other assistance in the area. F_
Support for Caribbean Islamic organi-
zations is c anneled openly through the Islamic cul-
tural center in Guyana, which Libya funds. Guyana
also serves as a propaganda outlet for the Libyans,
who sponsor an Islamic radio program on the govern-
ment-owned radio station. Libya also might find
Guyana useful for the purpose of refueling certain
types of cargo aircraft traveling to Cuba or Nicaragua
via West Africa. In April 1983, Tripoli attempted to
ship military equipment to Nicaragua by air, but the
cargo was seized by Brazilian authorities during a
refueling stop.
Outlook for Political Stability
Massive inflows of human and capital resources and a
restructuring of the economy to tap the energies of the
private sector will be required, in our view, before
rebuilding of Guyana's shattered economic system
can begin. Burnham's intransigent opposition to a
modification of state control and competing demands
for available resources preclude help from the interna-
tional lending institutions. Without hope of IMF or
World Bank support, more than token aid from
bilateral donors is unlikely, and loans from commer-
cial banks are out of the question.
families.
Guyana's hapless citizens almost certainly will experi-
ence deeper misery, even malnutrition, as the econom-
ic crisis deepens in 1984. Burnham is likely to respond
by calling on international agencies for aid on hu-
manitarian grounds and continuing to blame his
problems on US-inspired economic destabilization.
Emigration will increase as Guyanese flee privation
and victimization in the absence of effective leader-
ship and the means to defend themselves and their
Despite these likely developments, we believe Burn-
ham will cling successfully to power unless he is
unable to maintain the loyalty of his security forces.
Should Burnham lose the support of his armed forces,
a palace coup is possible. The most likely cause of
such an event would be an outbreak of large-scale
violence by dissatisfied labor unions joined by the
growing army of the unemployed. In our judgment,
such violence could provoke the armed forces to
remove Burnham should that be necessary to restore
public order and ensure continued control by the
People's National Congress.
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