VZCZCXRO6180
RR RUEHLMC
DE RUEHGE #0818/01 2431919
ZNY CCCCC ZZH
R 311919Z AUG 07
FM AMEMBASSY GEORGETOWN
TO RUEHC/SECSTATE WASHDC 5729
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 GEORGETOWN 000818 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/31/2017 
TAGS: EAID EFIN PGOV PREL GY
SUBJECT: MCC SIGNING CEREMONY'S REVEALING INSIGHTS 
 
Classified By: CHARGE D'AFFAIRES MICHAEL THOMAS FOR REASONS 1.4(B) AND 
(D) 
 
¶1. (C) SUMMARY: On August 23rd, Millennium Challenge 
Corporation (MCC) Deputy Chairman Rodney Bent participated in 
a signing ceremony for the US$6.7 million two-year Guyana 
Threshold Program contract.  The event was covered by all 
television and radio news programs and reported in each of 
the three main newspapers that day and several days 
following.  The Threshold program seeks to help Guyana reduce 
its fiscal deficit by improving its ability to collect 
revenue and better manage its budget.  Bent reassured chiefs 
of bi- and multi-lateral donor missions that the MCC 
understands the prospect of a multi-million dollar MCC 
Compact agreement is about the only incentive available to 
the donor community to encourage necessary governance reforms 
and arrest the slide towards democratically sanctioned 
autocracy.  At events throughout the day, President Bharrat 
Jagdeo revealed interesting insights into his thinking on 
economic issues, as well as his personality and leadership 
style.  His themes included: more bureaucracy is better and 
public (and parliamentary) opinion are irrelevant.  A key 
measure of success for the Threshold Program will be whether 
Jagdeo's perspective changes over the coming months. 
Throughout the day, Bent successfully delivered messages on 
the U.S. perspective on fiscal reform.  END SUMMARY. 
 
¶2. (U) Before the signing ceremony, a seventy minute meeting 
between Jagdeo, the Charge d'Affaires Michael Thomas and 
USAID Mission Director Dr. Fenton Sands took place in the 
Office of the President.  After the signing ceremony, a press 
conference was held where President Jagdeo fielded a few 
questions, then lunch with MCC representatives and the donor 
community followed.  Wrapping up events were a meeting with 
the Minister of Finance, Dr. Ashni Singh, and a three-hour 
dinner at the State House with President Jagdeo and key 
cabinet members in attendance.  The CDA, USAID Director and 
Bent attended all events (except CDA was unable to attend the 
Finance Ministry meeting). 
 
¶3. (C) During a pre-signing morning meeting in his office, 
President Jagdeo told Bent and CDA that his number one 
priority was to rebuild the entrepreneurial class.  Jagdeo 
praised USAID/GTIS's efforts to provide direct assistance to 
farmers and entrepreneurs who need help rather than simply 
studying issues and funding elite business associations.  He 
blamed the small remaining entreprenurial class for the 
negative business climate in Guyana, saying that after 28 
years of PNC state socialism, they want government to do 
everything for them.  He went on to say that this small group 
deliberately chases away potential foreign investors by 
telling supposedly untrue tales of the difficulties of doing 
business in Guyana. 
 
¶4. (C) As Jagdeo, Bent and CDA were reviewing MCC indicators 
for Guyana, Jagdeo pointed out the "days to start business" 
indicator and remarked that he could easily reduce the number 
from 46 days to 5, but that he intentionally kept the 
bureaucracy in place to protect "the little guy" who could be 
victimized if a lack of government vetting allowed 
unscrupulous people to start businesses.  Jagdeo also 
complained about the Control of Corruption indicator  noting 
that it measured perceptions of corruption rather than actual 
corruption.  When Bent suggested that transparency and a 
reduction in regulation were common methods other developing 
nations used to combat corruption, Jagdeo countered that more 
and stronger bureaucracy and regulation were appropriate for 
Guyana.  Jagdeo gave the example of a "deliberate decision" 
he had made to add layers of bureaucracy to the customs 
processes in order to increase the cost of bribery, which he 
believes will reduce corruption.  Jagdeo also informed Bent 
that the GOG has an Auditor General whose function is to 
investigate and report any corruption that may occur in the 
GOG. (Note: Jagdeo neglected to mention that the last Auditor 
General, Anand Goolsarran, had been forced out of office in 
2004 when he was investigating a Presidential Advisor who was 
illegally exporting endangered dolphins.  The Auditor General 
position has been vacant ever since. End Note.) 
 
¶5. (C) Also during the office meeting, Jagdeo highlighted a 
section of the Threshold contract which called for "public 
opinion polls on the fairness to society as a whole of the 
GOG's public investment and procurement actions."  Jagdeo 
acknowledged the language, but said "I hope you are not 
really going to do that," explaining that since the public 
does not understand fiscal policy and government budget 
processes, with such a poll "you will only get opinions" 
rather than facts.  He volunteered that even polling members 
of Parliament would be futile, in his opinion, as most MPs 
also do not understand fiscal policy and government budget 
processes.  Jagdeo also volunteered to the group that his 
 
GEORGETOWN 00000818  002 OF 002 
 
 
management style is that of "micromanaging and firefighting, 
because that is the only way to get things done." 
 
¶6. (U) The official signing ceremony, during which the USAID 
Mission Director and the Minister of Finance signed the 
Threshold contract with Bent and Jagdeo officiating, and the 
subsequent press conference dominated the press that day and 
the following day.  The press clearly understood the purpose 
of the MCC funds, with headlines such as "... funds to help 
strengthen tax administration, improve VAT implementation and 
create Intelligence Unit within GRA" (Guyana Revenue 
Authority) and "... programme to overhaul fiscal polices 
(sic) and create a more business-friendly environment." 
 
¶7. (C) At the MCC-hosted lunch, the Chiefs of Guyana's 
traditional bilateral and multilateral donors gave Bent a 
significanly different view of Guyana and the difficulties 
the Threshold Program will have in engendering reforms.  Bent 
reassured all in attendance that the MCC seeks strong 
partnerships with both donors and Guyanese civil society, and 
that the MCC understands that the potential of a 
multi-million dollar compact is just about the only incentive 
available to prod Guyana's government to move forward with 
goverance reforms which it has been resisting. 
 
¶8. (C) That evening at a State House dinner in Bent's honor, 
Jagdeo spoke effusively about his experiences in the United 
States: New York diners open at 3:00 a.m., hitching a ride 
with a couple of African immigrants in Baltimore when an 
Amtrak derailment stranded him on the way to an IMF meeting, 
sittng on the floor in D.C. bookstores looking through their 
wares, and his dream of taking a week-long driving vacation 
through the farmlands of the American Midwest. 
 
¶9. (C) COMMENT: The day's event provided a first-hand view of 
the President's leadership and personality traits that the 
business community, government officials, and PPP leaders are 
complaining about with increasing volume: Jagdeo blames 
others for all of Guyana's ills, does not value the opinions 
of the public, the business community or the political 
leaders, and believes he personally is the only person with 
the ability and aptitude to solve Guyana's problems.  The 
single most difficult challenge of the Threshold Program will 
be to change Jagdeo's thinking, or, failing that, to convince 
Jagdeo that the potential of an MCC Compact is incentive 
enough to implement policy reforms he does not believe in. 
 
¶10. (U) MCC Deputy CEO Rodney Bent did not clear this 
telegram. 
THOMAS