Guyana Loan Is Vetoed by U.S.

The U.S. vetoed a $20 million Inter-American Development Bank (IDB) loan to Guyana in August-the first time the U.S. has formally blocked an IDB loan: The veto may signal a policy of closer supervision by the U.S. of how multinational development assistance funds are allocated.

According to U.S. Deputy Assistant Secretary of the Treasury R.T. McNamar, the U.S. vetoed the rice-production assistance loan because Guyana's system of food price controls, intended to benefit consumers, acts to discourage domestic rice production. "The indications were that (the IDB loan) would amount to little more than a subsidy," NcNamar said, adding that Guyana's progress toward a free-market economy has been disappointingly slow.

Mentioned as a secondary reason for the U.S. veto was a concern that IDB monitoring of the loan's disbursement might be ineffective. The administration of Guyanese prime minister Forbes Burnham has been criticized both within and outside of the country for being corrupt. One Guyanese opposition party asserted that, "Even the U.S.A., which brought [Burnham] to power, is aware that there is no audit or control of public funds-that corruption is a way of life from top to bottom."