Stabroek News
June 8, 2001

World Bank Director, Orsalia Kalantzopoulos met President Bharrat Jagdeo yesterday and among the subjects for discussion was the bank's position on the sugar industry.

Kalantzopoulos arrived on Tuesday night as head of the bank's mission for meetings with President Jagdeo on the sugar industry and other issues but the meetings scheduled for Wednesday had to be put off because of the protest by Albion residents. The President spent Wednesday trying to resolve the protest which had to do with inadequate police protection in the face of mounting crime in the area.

The World Bank team is here for a joint mid-term review of the government's second-year programme with the IMF but Kalantzopoulos leaves today.

She met Jagdeo yesterday morning and official sources said that a joint meeting with the IMF was held in the afternoon.

The World Bank position report on the sugar industry's US$200 million modernisation plan is expected to command a substantial part of the discussions with the government.

Stabroek News understands that the World Bank has retained its earlier recommendation for the modernisation plan to be scaled back and for the Demerara Estates to be closed. The government was opposed to this when the first draft of the report was handed in.

However, agreement on the way forward for Guysuco is one of the pre-conditions for Guyana to secure additional debt relief under the Enhanced Heavily Indebted Poor Countries Initiative.

Jack Stein, project specialist with the Bank and the official who spearheaded the analysis on the sugar industry's modernisation plan is here with the team.

The Bank is reported to be recommending a scaled down version of the modernisation plan to be financed from Guysuco's own resources. The IMF had refused to grant a waiver for Guysuco to borrow on commercial terms and if the World Bank had agreed with the analyses in the modernisation plan, it would have helped the government secure concessional financing for it. However, the specialist claimed there are too many risks and the plan ought to be pared and financed by Guysuco, Stabroek News understands.

The IMF/World Bank teams are expected to be here for about two weeks during which other issues for discussion would include the government's commitment to completing the poverty reduction strategy paper; bringing the Guyana National Co-operative Bank to the point of sale and the performance of the economy at the macro level. A recent World Bank mission led by Norman Hicks saw World Bank official Phyllis Forbes staying on to help with the process for consultations on the poverty reduction strategy paper. The format for broad-based consultations is being worked on. She is to leave today as well. The government had set May as the deadline for this paper so as to achieve completion point for further debt relief this year.