I 0800020037-4 Approved For Release 2006 09 0'3 CENTRAL AGENCY OFFICE OF MTIONAL ESTIMATES March 1962 MEMORANDUM FOR THE DIRECTOR SUBJECT The Situation and Prospects in British Guiana ammry l The February disturbances in British Guiana cast in doubt the ability of any one of the established political parties to administer the colony successfully once the British relinquish their authority Only British military power requested by Premier Cheddi Jagan to restore order -- prevented the downfall of the government A withdrawal of British troops any time soon would probably result in a renewal of public disorders Whether or not the British hold on to Guiana the prospect there is for a long period of instability and at best labored and meager eco- nomic pregress dependent largely on financial assistance from abroad 25m DOCUMENT No Ecz N0 cal-mass IN CLASS 3 a maemssneeo CLASS CHANGED T0 T3 8@ NEXTREVIEWDATEJ AUTH HR 220-2 DATE 84 M W eewaas seas a CONFIDENTIAL Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 r 0904A000800020037-4 CONFIDENTIAL 2 'The recent upheaval was largely confined to the capital city Its immediate cause was Jagan's new budget bill which called for compulsory savings and introduced high tariffs and more and higher taxes The bill imposed particular hardship on city dwellers most of whom are Negroes The antigovernment riots and strikes were also rooted in genuine economic discontent and were indicative of growing dissatisfaction with Jagan's dominant People's Progressive Party As violence increased racial tensions were aggravated One of the principal consequences of the February disturbances is a significant increase in the potential for racial conflict 3 The most powerful indigenous political force in the colony has been the Communist oriented It has derived its strength mainly from East Indians most of whom live in the but some of whom are prosperous town businessmen In the last year however the fortunes began to slide as the party tried with- out any notahle success to set in motion an economic development program and to deliver on its promises of effective government In the August 1961 elections it won only #2 percent of the popular vote but this was sufficient to give it a narrow majority in the legislature CONFIDENTIAL Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 0 000800020037-4 h The principal opposition party -- the socialist 4 resple's National Congress PRC of L Forbes Burnhan is supported by the colony's large Negro population in the cities including most government employees and in bauxite mining areas it won #1 percent of the pOpular vote only one per cent less than the in the August 1961 elections An additional opposition party is the United Force 0F which seeks to be multiracial It is based largely on the small commercial class including the Portuguese minority which fears that Jagan would transform the country into a Communist state after independence It is clear that a slight change in electoral tactics or a coalition with the UF would have given the PNC a legislative majority Since the election many pem m have been further alienated by the Premier's failure to Obtain sizable outside financial assistance and to alleviate the enromous economic difficulties in the colony UK Position 5 A key factor in the outlook for British Guiana is the UK which is at present reviewing its policy on the colony London seems almost certain to delay British Guiana's independence by postponing the may conference which was to have CONFIDENTIAL Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For ReleaseZOO6 09 06 CONFIDENTIAL of as coming in 1 ate 1962 or 1963 Joann has alread agreed to on investi anti on of the Feb runry riots by a Go moonweolth dependence indefinitely They are not happy about prolongin eir financial burden in Guiana about $20 million a year ear that to delay very long would arouse indignation in on an parts of the world where colonialism is a sensitive issue my furthermore the British are considerably less concerned than he US about the threat of communism emerging in the colony They estimate 1 at Joann would seek after independence to assume pally the US and the Bloc They probably anticipate that 3832111 would have serious difficulty in maintaining orde indeed in - i and maintaining a government but feel that the lt -- 1 er- EQNHDENWAL Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Jagan's Problems 7 The disorders have left Jagan seriously weakened His political future is in JeOpardy His presitge is badly tarnished as a result of his call for British help and his inability to get his budget bill through the legislature intact He is in 9 poor position to maintain public order in the future without help The Negro police force probably cannot be considered reliable or adequate for Jagon's purposes Even though the British pre- vented the opposition from bringing down the government the antigovernment manifestations were a spectacular demonstration of basic instability 8 In addition Jagan's economic and financial problems are even more acute now than before the riots Whereas before the riots almost 20 percent of the labor force was out of work an even larger number are now unemployed as a result of the destruction in Georgetown Jagan's program for economic develop ment has been set back and he is now faced with a sizable bill for reconstruction in the capital city Furthermore unceru tainties about British Guiana's political stability will discourage foreign investment and assistance British forei gm investment in and GUiana amount Egifiy in sugar million both mainly in boux1 _and US investment about $30 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 09 0 - DP79R00904A000800020037-4 Approved For Releasiszoos to his budget bill proved that the cannot count on the unquesu tioning support of the East Indian middle class and business circles Indeed many East Indians merchants who had for some tine been dissatisfied with Jagan but chose to back the government in power are now inclined to leave the country rather than to stay and rebuild their businesses Strikes have already taken place among 10 On the other hand the crisis left the opposition with reduced prestige The opposition had no coordinated plan Its ize each other Organized labor actively collaborated with the opposition parties but is not committed to any party or leader Except in the case of the civil servants labor failed more fragmented than before the crisis Jagan and his party may be able to recoup some strength by taking advantage of differences within labor -6- 000800020037-4 ed For Release 2006 09 06 CIA-RDP79R00904A Approv Approved For Release 2006 09 06 11 There are no known defections from the narrow majority in the legislative assembly it has 19 out of 31 seats -- and with major concessions on Jagan's part the budget would probably have a reasonable chance of passing However the extent of Jagan's concessions are unclear and the opposition is almost certainly out to win two or three members of Jagan s party away from him If Jagan's concessions are unsatisfactory they may be able to do so 12 If the opposition managed to turn the budget issue into a vote of no confidence in Jhgan it might thereby gain the chance to form a new government Mbre probably new elections would be held either because of collapse of the present government or pursuant to a British decision to hold new elections before gran- ting independence as they did in Ghana The outcome of such new elections is unpredictable particularly if the electoral system is changed to proportional representation as desired by PRC leader Burnham Jagan night again win but if so his forces probably would have even less of a margin than in the August 1961 elections Alternatively the might win a majority under another leader perhaps Dalram Singh Rai the present Minister of Home Affairs The PNC might win a majority of the seats can Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 0 7 depending on its electoral tactics and the electoral system Its chances would improve greatly if Burnhan who has antagon- ized many non-Negroes by his racist policies were to be replaced but he is unlikely to step down The BF has no chance of winning an election or leading an electoral coalition Outlook l3 Racial tension has been so increased by the February riots that further violence seems inevitable unless the country is forcefully and effectively governed The chances are slim that genuinely indigenous political elements can provide such a govern- ment in the years immediately ahead There is little likelihood that UF standing alone will have any substantial influence on British Guiana in the foreseeable future The UP is now more isolated than ever from the country at large because of its pOpular identification as a Portuguese party with extreme conservative views The basic political choice is between the two leftist parties 15 Jagan's most serious opponent Forbes Burnhan came out of the February disorders with greatly reduced prestige He proved his skill at arousing Georgetown mobs but he also showed that 8 - Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 he is either unable or unwilling to control them He has concen trated on opposing Jagan and there is no evidence that he has any alternative pregram in view of the considerable factionalism in his party its policy once in power cannot be defined 16 There is no evidence of any organized effort to sup plent the leadership of the existing political parties Although the February crisis did not bring forth any outstanding persona ality from other political groupings business labor or other sectors of national life around when moderate elements could rally 17 Thus we cannot exclude the possibility of the develop- ment of a politically viable grouping composed of the relativehy moderate elements of the PNC and UF In view of the gen erally tense and unstable situation in British Guiana however the stability of such a solution would be highly uncertain 18 we believe that a Jagan government in the postindepenu deuce period would be likely to seek to benefit from relations with both the WEst and the Communist countries For some time Jagan has been seeking trade and aid from the West and he has expressed interest in participating in the Alliance for Progress Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 2 CIA-RDP79R00904A000800020037-4 7 r He has also been oeeking trade and aid from the Bloc and one Bloc representative has made on aid proposal in Georgetown Despite his Communist connections Jogon probably would try to avoid antagonizing US British and other western countries thereby Jeopardizing assistance to hisgovernnent London presumably would not object to trade arrangements but has indicated an inten- tion to prevent any Bloc loan 19 Should the Nost not provide the help Jagan considers necessary he almost certainly'would seek to fill the gap by working with the Bloc In any case his associations with oon munism and his ideological orientation would make him a good subject for manipulation by the Bloc Although there is no evidence that he is now under Bloc control 20 Jagan fools strong sympathy for Castro's cause His government trades with Cuba and he has placed students in Cdba for training The development of Jagan'o association with Cubc will deoend in large measure on the state of his relations with the Hoot FOR THE BOARD or NATIONAL 25 SHERMAN KENT Chairman - 10 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 2 CIA-RDP79R00904A000800020037-4 i Var i 7 CONFIDENTIAL REPRODUCTION DATA FROM 1W SUBJECT 5%44 A gm WW DISTRIBUTION Th Q uaJv wm In Supplemental Distribution - 03 g3 Syw ' 2194 116% 44 41 WW7 2 W 25Beak BILT JUSTIFICATION Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 I 5 Match 1962 Mr Eramley Smith Executive Secretary Nat-imam Swath Council Rm WG-6 The White Haas Washington 33 5 Dear Bramley 351 c ana has saga-stud that vim might want to pass a copy at the attached memorandum aiang to the President Sherman Kent assistant Director National Estimate Attachments - 2 EONFIDENTIAL Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 15 March 3%2 Mn Thorium Hughes Acting Biructar of Intelligenae and Renal-ch Departmont 9f State Washingtun 275 D C Tm Mr has asked that you pass the attachmi mamorandum to Ataxia Jahason The ether aapia-s are far yam $113 th Kass Asthma Dix-actor Hutlanal Estimates Attachments 4 Approved For Release 2006 09 06 CIA-RDP79R00904A000800020037-4 This document is from the holdings of The National Security Archive Suite 701 Gelman Library The George Washington University 2130 H Street NW Washington D C 20037 Phone 202 994-7000 Fax 202 994-7005 nsarchiv@gwu edu