JAMAICA AND GUYANA - - CARIBBEAN ALTERNATIVES?

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001100100028-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: August 28, 2006
• Sequence Number: 28
• Publication Date: February 23, 1971
• Content Type: IM

 L'' ' I it / o...LC 0 I'
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DOCtJi SE'S
F[E ~Os~Y
DO NOT DESTROY
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
JAMAICA AND GUYANA--CARIBBEAN ALTERNATIVES?
State Dept. review completed
Secret
23 February 1971
No. 1268/71
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WARNING
This dociunent contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP I
Cecbded (ram automatic
dowmgcadina and
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CENTRAL INTELLIGENCE AGENCY
.Directorate of Intelligence
23 February 1971
INTELLIGENCE MEMORANDUM
Jamaica and Guyana--Caribbean Alternatives?
Summary
The emerging nations of the English-speaking
Caribbean, most of which were granted political in-
dependence during the 1960s, face mounting social
and political problems. The gains of independence
have not lived up to popular expectations. Wide-
spread poverty, inadequate health and educational
services, and high unemployment continue. Although
most of the governments are now led by native sons,
political frustrations are rising. The principal
targets of dissatisfaction are the white expatri-
ates and the foreign-based enterprises that still
control a highly disproportionate share of the
wealth.
The two largest nations in the area, Jamaica
and Guyana, are led by articulate, able, and ener-
getic politicians who hope to extend their polit-
ical influence and leadership to the rest of the
English-speaking Caribbean. The styles of the two
prime ministers are different, however, and the
outcome of their competition will have a signifi-
cant effect elsewhere in the English-speaking Ca-
ribbean.
Note: This memorandum was prepared by the Office
of Current Intelligence and coordinated within CIA.
a
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Jamaica and Guyana
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BRITISH
HONDURAS
ONDURAS:
4TL;tN7'C OC/L1N
VENEZUELA.
BRAZIL
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Background
1. Until the middle of the twentieth century,
leadership in the Caribbean devolved almost exclu-
sively upon representatives of the colonial powers--
primarily the British. When the colonial adminis-
trations proved ineffective in dealing with the pre-
independence disorders that erupted during the 1930s,
the British could find no popular leaders or repre-
sentatives with whom to negotiate. They, therefore,
encouraged the development of labor unions. New
leaders grew out of these unions, and, ultimately,
political parties formed around them.
2. With the emergence of native leaders and
the growth of popular political parties, the British-
government found itself under increasing pressure to
grant some of the colonies greater at-tonomy. . It re-
sponded by adopting a policy of pragmatic decoloniza-
tion designed to avoid the fragmentation of the re-
gion into independent units that would he too small
to be viable. To promote a federalist concept--and
to :'acilitate its own withdrawal from the area--London
encouraged the development of the West Indies Federa-
tion (WIF).
3. The WIF which was formed in 1957, was
doomed from its inception. There were deep differ-
ences of opinion as to its proper structure, it
lacked an independent source of revenue, and there
was no assignment of responsibility. Regional com-
petition was also a major obstacle to cooperation.
The members of the WIF--Jamaica, Trinidad-Tobago,
Barbados, St. Kitts-Nevis-Anguilla, Antigua, Mont-
serrat, Dominica, St. Lucia, St. Vincent, and
Grenada--jealously guarded their limited authority.
Guyana remained outside the organization because
Cheddi Jagan, who was the premier at the time,
feared that federation might upset the racial bal-
ance of his territory--the key to his party's suc-
cess. Although the WIF survived for four years,
its death knell was struck in 1961 when Jamaica,
the largest and most populous member, withdrew.
Trinidad followed a year later, and the British
dissolved the WIF in 1962.
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SFC;12 FT
The, Political' Development of Jamaica and Guyana
4. Jamaican politics changed dramatically when
the colonial administration failed to deal effectively
with the turbulence of the 1930s. Universal adult
suffrage and limited self-government when introduced
in 1944, and constitutional changes over the next 15
years gradually reduced British domination. Internal
self-government was granted in July 1959, and full
independence in August 1962. It was the first Western
Hemisphere nation to gain independence since Panama in
1903.
5. Since 1944, Jamaica has enjoyed a stable
government. Politics have been dominated by two
moderate parties--the Jamaica Labor Party (JLP), and
the People's National Party (PNP)--both of which are
based on trade unions. Jamaica is one of the few de-
veloping nations whose multiracial society has re-
mained relatively democratic and prosperous. It is
nevertheless experiencing considerable social and eco-
nomic dislocation, which is reflected in sharp in-
come disparities, a very high rate of unemployment
(23 percent), and incipient racism, Continued hard-
ship could degenerate the latent discontent into vio-
lence or authoritarianism.
6. Guyana's political development has resembled
that of Jamaica, but the large number of East Indians
who immigrated following thr; abolition of slavery in
1838 has somewhat complicated the process because of
the racial cleavage between the East Indians and the
Negroes--the country's predominant racial groups--
the political system is based primarily on race. The
vast majority of the East Indians supported--and for
the most part still support--the People's Progressive
Party (PPP), which is led by Cheddi Jagan, a self-
proclaimed Communist who was premier from 1957 to
1964. The Negroes have rallied behind the People's
National Congress (PNC) led by Forbes Burnham. Burn-
ham, who is a Negro, was premier of British Guiana
from 1964 to 1966 and has been prime minister of Guy-
ana since it became independent in 1966.
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7. Over the years the gap between the East In-
dians and Negroes has widened, but Prime Minister
Burnham's efforts to reduce racial tensions have met
with some success, but the racial character of Guya-
nese politics remains substantially unchanged. In
recent years, Burnham has shifted from his moderate
pro-Western stance toward more radical policies. He
is pursuing a leftward movement toward nonalignment
and is posing as the champion of Caribbean solidarity
and an ally of the "third world."
sEcRE'r
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Shearer''s 'Dome'stic Policies
13. Jamaican society is marked by overpopu-
lation, an unemployment rate of about 23 percent,
wide disparities in wealth, inadequate education,
and poor housing. In the country's multiracial
society there continues to be a high correlation
between color and social status, and black radi-
calism, particularly among the young unemployed
males, is growing.
14. Shearer's party has traditionally as-
serted itself as the champion of the disenfranchised,
the unemployed, and the underpaid, and it has begun
a number of programs aimed at reducing social in-
equities. One project, particularly close to Shear-
er's heart, is an effective family planning program,
something he realizes could contribute greatly to
the economic progress of his nation. In 1970 the
World Bank granted Jamaica a US $2 million loan
that enabled the Jamaica Family Planning Associa-
tion to open additional clinics and counsel new
mothers in maternity hospitals--the first such
grant ever made to a member nation by the bank.
15. Shearer is also trying to stem the flow
of rural workers seeking employment in the urban
centers. He has initiated and expanded an agricul-
tural program designed to keep the workers on the
farms and to increase their production. Many of
the workers, however, object to what they regard
as demeaning manual labor, considering it a ves-
tige of slavery.
16. Shearer has sought to speed economic
development by creating a favorab le investment
climate for local and foreign entrepreneurs.
Foreign investment has played a large part in ad-
vancing the gross national prc?act, which has
been rising at an annual average rate of five
percent. The development of the bauxite and
tourist industries has helped alleviate unemploy-
ment, but because of,the'rapid popu3.ation growth,
more workers come on the market each year than
these industries can absorb.
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17. Another pressing and perhaps more im-
portant issue facing Shearer is black radicalism.
Shearer is strongly opposed to any appearance of
accommodation with black radicals. He refuses
to permit foreign militants on the island, has
dealt swiftly with black demonstrations, and has
imposed a rigid ban on black activist and other
militant literature. Shearer believes that Ja-
maica's vigorous two-party system and its com-
petent security force are more than a match for
the combined force of black-power advocates and
other dissident elements of the population.
18. Because the viewpoints express--d on this
issue by Shearer and opposition leader Michael
Manley are mach the same, the prime minister can
gain little politically by responding to the de-
mands of black militants. Yet he knows that he
will face increasing pressure to provide employ-
ment and adequate housing. The outbreak of
violence in the West Kingston slums in 1968
provided a vivid demonstration of how quickly
social and economic pressures can touch off an
explosion, and the lesson was not lost on Shearer.
For now, however, he remains convinced that the
best-way co avoid similar troubles in the future
is to keep his guard up and to deal firmly with
potential t..-)ublemakers.
Burnham's Domestic Policies
19, Unlike Jamaica, Guyana is an under-
populated country. For years Burnham has sought
to attract Negroes from other Caribbean islands
to offset the rapid increases of the East Indian
voting populace that supports Cheddi Jagan. The
prime minister also wants to develop the interior
of the nation, which is ver,> sparsely settled.
20. Burnham has labored to bring Guyana out
of the civil disorder and political instability
of the preindependence years. Since 1964 he has
been working to reduce the racial tensions that
underlie Guyana's internal political problems.
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But despite his multiracial approach to the nation's
development, Negroes still dominate the puke] i,: serv-
ice and government agencies, and deep distrust con-
tinues to exist between East Indians, who constitute
52 percent of the population, and the Negroes, who
account for 44 percent. The East Indians accept
Burnham only grudgingly, and present tensions could
erupt into violence without warning.
21. Although many grievances of the black
radical elements elsewhere in the Caribbean are not
at present applicable to Guyana, Burnham recognizes
the force of black militancy. He has established a
close relationship with Sydney King (who has adopted
the African name of Eusi Kwayana), the leader of the
major black activist group in the country, and one
of the strongest black power groups in the region,
the African Society for Cultural Relations with In-
dependent Africa (ASCRIA) . By bringing Kwayana into
the government and supporting black activist concepts,
Burnham has so far managed to contain the group's
activities. Publicly his position on black power is
that it is not relevant to Guyana, where blacks al-
ready have political control, are actively seeking
economic control, and where Burnham says he aims to
"make the small man a real man."
22. At last September's nonaligned conference
in Lusaka, Zambia, Burnham tried to project himself
as the leader of the Caribbean and a champion of the
downtrodden blacks by urging all nonaligned members
co give "tangible support to African Liberation move-
ments" and to pledge annual payments to their cause.
Burnham also announced an annual Guyanese contribu-
tion of US$25,000. Burnham was the only Western
Hemisphere chief of state of attend the conference.
23. Burnham's accommodation to black power has
had to be modified somewhat because of pressures
from the large East Indian population. Not only do
the East Indians outnumber blacks, but they also own
most of the small services and businesses. In order
to prevent a recurrence of violence between the race:,
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Burnham is therefore faced with the difficult task
of maintaining the pre-eminence of Guyanese blacks
(a large majority) in a way acceptable to the East
Indians.
Jamaica and Guyana: Economic Contrasts
24. Guyana is far less developed economically
than is Jamaica. In an effort to catch up, Burnham
is shifting his policies toward the left. The most
notable example is his launching of a "Cooperative
Republic," a somewhat vague scheme for a national
economy based on cooperatives, economic independence,
and self-reliance. He intends to make cooperatives
the basic institution--if not the principal economic
and ideological foundation-.-of the republic. Burn-
ham believes that cooperatives will involve the or-
dinary citizen in the economy and give him a stake
that he does not now have. He hopes this new approach
will avoid the shortcomings, as he sees them, of both
the Communist and capitalist systems and will provide
a Guyanese way to development that will serve as a
pragmatic ideological challenge to Jagan and the
opposition PPP0 Thus far, however, the people have
gained little from the grandiose scheme, foreign
.i.nvestment has fallen, and a number of smaller firms
have been forced out of business.
25. The economic stake of the US in Guyana is
far less than that in Jamaica. Total US investment
is somewhat less than US$55 million. As in Jamaica,
most foreign investment is concentrated in bauxite-
alumina production, light manufacturing, and tourism.
Burnham is currently negotiating with the Demerara
Bauxite Company (DEMBA), a local subsidiary of the
Aluminum Company of Canada, for a majority interest
in its operations. He has threatened to nationalize
the industry unless his terms are met.
26. Burnham reportedly intends to undertake
similar negotiations with the US-owned Reynolds
Bauxite Company in the near future. To date he has
shown little inclination to offer the foreign owners
reasonably prompt or adequate compensation for their
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interests. Although the government's final posi-
tion remains somewhat uncertain, Burnham appears
committed to a Guyanese takeover of the industry
even if he has to resort to fully nationalize to
get his way. He plans to announce the nationali-
zation of DEMBA at the first anniversary of the
founding of the Republic on 23 February.
27. Since Jamaica's independence, the Shearer
administration has been seeking the "Jamaicanization"
of foreign investment. The stated purpose of this
policy is to increase local participation in foreign-
owned companies by encouraging companies to sell
some of their shares--bat not necessarily a control-
ling interest--to Jamaicans. Shearer's objectives
are to provide investment opportunities to small
investors and to push into the background the image
of foreign economic domination. The government has
been successful in obtaining an "agreement in prin-
cipal" to acquire 51 percent of the shares in a
number of foreign-owned firms, including several in
the banking and communications fields. Total in-
vestment in Jamaica amounts to nearly US$900 million,
Burnham has embarked on a similar venture called
"Guyanization," but he wants'the foreign shares to
go into cooperatives for the people. In both nations
this transitional phase of the program has been
slowed by the people's lack of capital. Trading on
the Jamaican stock market is very erratic, and it
has on a number of occasions closed down completely
because of the absence of trading.
28. Shearer seems willing to reach mutually
agreeable terms with foreign-owned businesses. A
number of Jamaican Government officials, however,
including Prime Minister Shearer, recently informed
the US A bassador that if Burnham is successful in
obtaining a controlling interest in the bauxite
industry, domestic pressure will force Jamaica to
follow suit. It is becoming increasingly clear that
other nations in the region would also feel compelled
to turn to nationalization, even though they may rec-
ognize that such action runs a heavy risk of bringinn
adverse economic consequences.
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29. Jamaican officials have indicated strongly
that they believe Guyana's policies toward the baux-
ite industry are misguided and that nationalization
can only end in catastrophe. Shearer is convinced
that the surest 'way to discourage outside investors
is to'take over what is alzeady there. Many of the
same officials who spoke to the US Ambassador pri-
vately stated that they hoped Guyana is not success-
ful in its negotiations as Jamaica is not ready to
take, on the bauxite industry.
Foreign Affairs
30. In foreign affairs Jamaica has maintained
its pro-western orientation on most international
matters and enjoys friendly relations with the United
States. Shearer has continued to steer Jamaica on
an independent course in international organizations,
but leans at times toward the Afro-Asian bloc. He
is said to be quite sensitive to racial issues and
problems in the United States. His view of hic
country is more African and more independent than
that of.his predecessors. US officials believe that
there is a possibility that he may adopt a more na-
tionalistic line t:1an heretofore seen in Jamaica.
31. In recent years Burnham has been edging
closer and closer toward the embrace of nonalignment,
a policy he has long claimed to follow. He places
great importance on Guyana's independence and sov-
ereignty and takes pains to avoid giving the im-
pression that he is a puppet of the US or any other
nation. He continues, however, to main'Cain close
ties with both the US and Great Britain.
32. In 1969, Burnham established diplomatic
:relations with Yugoslavia and entertained a Czech
trade mission; in 1970 he established non-resident
diplomatic relations with the Soviet Union. In
recent years he has expressed a desire for closer
relations with the developing nations of Africa.
He feels a strong cultural tie-with Africa and
admires the way the newly independent countries
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have dealt with the colonial powers. During his
visit to the non-aligned nations conference in
Lusaka last September, Burnham agreed to establish
relations with a number of the African nations and
promised that he would add others when Guyana's
economy could bear the cost.
33. Jamaica has increased its diplomatic
presence in the United Kingdom, and consular
offices are to be opened in Toronto and Miami.
Embassies are to be established in Addis Ababa
and Bonn, and nonresident ambassadors have been
accredited to Haiti and the Dominican Republic,
bringing to 35 the total of nations with which
Jamaica has diplomatic relations. Shearer is
expected to extend diplomatic relations to addi-
tional African countries and several Latin Amer-
ican countries as soon as the economy will allow.
Although there are a large number of Jamaicans
living in Cuba, Shearer has no plans to'establish
a consulate in Cuba soon, but Cuba does retain a
consulate in Kingston.
34. Jamaica has been particularly opposed
to cooperation within the Commonwealth Caribbean.
Shearer has privately stated: "We are not in-
terested in Federation under various guises. We
do not believe in Caribbean regionalism. We want
nothing to do with those ministates." Publicly,
he has been scarcely less forthright. The antip-
athy of Jamaica toward the rest of the Caribbean
grew measurably after a debate over the location
of the headquarters of the proposed Caribbean
Development Bank (CDB) at the 1967 Conference of
Heads of Government of the Commonwealth Caribbean.
As in the dispute over the Federation of the West
Indies,-Jamaica contended it was being asked to
contribute too much to the venture for the benefits
it could earn. In 11069, however, Jamaica changed
its mind, joined the CDB and agreed to its being
headquartered in Bridgetown, Barbados. Moreover,
the country has begun to reap the benefits of the
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Caribbean Free Trade Area (CARIFTA). Shearer may
be trying to reduce Jamaica's image of "Caribbean
spoiler," a term coined by Burnham at the 1967
conference. Jamaica has apparently abandoned a
long-range review of its participation in the
University of the West Indies, whose main campus
is currently located just outside Kingston, and
has agreed that the university will continue.
35. Burnham sees himself as the leader of
a federation of Caribbean nations and he has
scored some success in his efforts to advance
Caribbean integration. Guyana was instrumental
in the formation of the Caribbean Free Trade Area
in 1968, and in 1969 CARIFTA established its
Secretariat in Georgetown.
Outlook
36. It is clear that th
e social adlii
n potcal
stresses now at work in the Caribbean are growing
at an accelerated pace. The gains from independence
have not lived up to popular expectations, and the
question that faces most of the governments of the
region is whether they should turn to something
akin to the populist nationalism of Burnham or stick
to the more traditionalist conservatism that has
been Shearer's way in Jamaica.
37. It seems possible that Burnham will be suc-
cessful in the short run in taking some of the steam
out of social and economic unrest in Guyana, but
there is much in his approach that is inevitably dis-
ruptive. His "solutions," in some cases hastily con-
trived and inadequately thought out, could in the
long run produce more problems than already exist.
The lack of competent administrators in Guyana is a
serious handicap. Shearer, on the other hand, is
convinced that it would be ruinous for Jamaica ab-
ruptly to endanger its economic and social stability,
and he will most likely try to keep the lid on while
he works within his country's inherited democratic
system gradually to bring about needed reforms. He,
too, will face the prospect, however, that popular
pressures. for change will present a severe challenge
to the government.
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