THE GUYANA-ALCAN CONFLICT AND THE NATIONALIZATION OF DEMBA*

You cannot be an independent country and be an

economic satellite, not merely of another nation,

but of a private corporation.

Forbes Burnham

On the 23rd of February last Prime Minister Forbes Burnham of Guyana announced – in what has since been called a ” momentous declaration” · his Government’s decision to nationalise the Demerara Bauxite Company. Demba is by far the larger of the country’s two bauxite undertakings and is indeed the largest single generator of foreign exchange and Government revenue in Guyana; it is also the largest bauxite operation belonging to Alcan Aluminium Limited, a giant multinational aluminium company with assets of Canadian $2,100 million and annual sales of Canadian $1,300 in 1969.

Thus the significance of the Government’s decision goes far beyond the mere fact that negotiations between it and the company broke down and it decided to apply the ultimate sanction of a sovereign nation. At the very least, it implies a major change in the organisation of the Guyanese economy: and ii is the first concrete departure by a Commonwealth Caribbean Government from the policy of accommodation to external capital which has been a bulwark of post war economic policy in the region. Politically it is easily the most significant consequence to date of the pressure for economic decolonization being exerted on Caribbean Governments by the population of the region. And as a direct result, the confrontation between people and Governments which has hitherto been the most visible manifestation of this pressure is now likely to be transferred at least in part to the relationship between the Government of Guyana and Government of the North Atlantic and possible, to its relations with other Caribbean Governments as well. There is little doubt therefore that the February 23rd declaration will prove to constitute something of a watershed in Caribbean political economy.

What is more. there is a sense in which the Government decision was no mere accidental result of a deadlock around a negotiating table. It was a measured and deliberate action taken in full awareness of both the economic and political implications. In retrospect it can be seen as a part of the logic of development of the Government; domestic and external policy since the decision to establish the “Co-operative Republic” was taken over a year ago. For since that time the Guyanese political system has been characterised by a continual tension between rhetoric and action i.e. Government words and Government deeds – and what is now happening to a large extent can be explained by the need of the Government to resolve this tension. And in resolving it a new tension has been created – the tension between the need to implement new policies on the one hand, and on the other an obsolete political system based on ‘”Government” and “Opposition” made worse in Guyana by the fragmentation of the two components of the system along racial lines. How constructively the Guyanese polity responds to this tension and the need to mobilise the population in defence of it economic interest against external capital will determine not only the relative success of the nationalisation of Demba but also the course of future Guyanese development and through that. development in the wider Caribbean area. This must already be clear lo the imperial interest in the North Atlantic, if not yet to the Caribbean people.

Having indicated these wider issues raised by the nationalisation, I should point out that this paper does not attempt to elaborate upon them in any detail. Rather it is by way of being a preliminary analysis of the political economy of the Akan-Guyana relationship since its inception over fifty years ago. In other words, it attempts to expose the inner logic of the developments which led to the nationalisation of Demba in the context of the structural relationship between the economic needs of the multinational company and the political economy of the Caribbean country.

Moreover, as one who was personally involved in an advisory capacity in the events leading up to the nationalization, this writer must begin by stating that the analysis is necessarily characterised by the privilege, the responsibility and the deficiencies implied by such involvement. The privilege which arises from knowing a great deal about what was never made public, the responsibility not to reveal classified information nor to publish conclusions made on the basis of classified information , and the deficiencies in objectivity and detachment which necessarily result from being personally involved.

The paper outlines first a brief history of Alcan’s involvement in Guyana’s economic under ­ development through Demba, to show the incipient clash of interest which was always a feature of the Alcan-Guyana relationship. Then it discusses the prelude to the negotiations in order to show the connections both with the historical clash of interest, and with more recent political events in Guyana and the Caribbean. There follows an analysis of the negotiations between Demba/Alcan and the Government which started in December 1970 and were broken off in February. Finally there are some comments on the decision to nationalise and its immediate aftermath.