GEORGETOWN, Guyana—           Guyana's long-stagnant economy has gone into a tailspin, pulling many of its citizens' living standard down with it.       

          The country is suffering from a problem common to the Caribbean region: lower income from its traditional exports - in this case, sugar, rice and bauxite - and sharply higher prices for petroleum products.       

          Some international economists believe that Guyana's economic situation has been complicated by problems in production and management. Still another factor, they say, has been the Government's effort to build a system of ''cooperative socialism'' while trading almost entirely within the capitalist world.       

          Government officials acknowledge that the economic situation here is desperate. But they say they also regard it as an opportunity to hasten the end of attitudes spawned during the British colonial period. They think it is time to replace them with the lowered expectations and drive for self-sufficiency that they believe are more appropriate to an independent, developing country. 'Development Has Its Pains'       

          ''Development has its pains,'' Prime Minister Ptolemy A. Reid said in a recent interview. ''It takes a little time for acceptance.  Unless we can appreciate the pains of development, we will all go around in the old ways and will remain with ignorance and poverty.''       

          But the abruptness with which the economic crisis has overtaken day-to-day life here has left many people frustrated and fuming.  The Government has banned the importation of dozens of items that have long been a part of Guyanese life. These include preserved foods such as canned fish, fruit and split peas. Other staples, such as wheat used for flour, have simply disappeared because the Government cannot afford the foreign exchange to buy them. Net international reserves are now about $250 million in the red.       

          Long, angry lines of people form in the small hours of the morning at Government stores to purchase such scarce goods as cooking oil and powdered milk. Housewives complain that the prices of available items have soared. Black Market Grows       

          At the same time, an extensive black market has cropped up, where those who can afford the enormously inflated prices can satisfy their cravings for items now officially prohibited by or unavailable through the Government.       

          The Government is sensitive to the image these hardships are giving the country abroad. One foreign reporter, taking photographs of a throng awaiting cooking oil, was stopped and questioned by a person in civilian garb who flashed a police badge. The correspondent was ordered from the area.       

          But President Forbes Burnham and nearly every major Government official take pains to assert that people here are not going hungry.  ''You hear Guyanese say they're starving,'' said Hamilton Green, Vice President for Agriculture. ''If you've been to Bangladesh you know what starving is. What he means is he's not getting a particular item he's become used to in the past 10 years.'' Change in Consumption Habits       

          Officials hope the shortages will force people to change their consumption habits to favor locally grown and manufactured products - a move they feel is critical to the economy's long-term survival.       

          For example, the Government has been promoting the use of rice flour to replace wheat flour, even though some economists believe it would be more advantageous to sell the rice and use the proceeds to import wheat. Rice flour, people complain, crumbles when baked into bread and spoils quickly. But President Burnham said it is the ''most important'' key to nonalignment and independence.       

          ''The United States has the Soviet Union by the throat because the Soviet Union does not enjoy food self-sufficiency,'' he said in an interview.       

          Breakdowns in the electrical system have forced a daily round of blackouts around the city - some scheduled, some not - making industrial production erratic. All of this, in turn, harms export production, making foreign exchange even harder to come by. Tourism and Investment Options       

          While some Caribbean nations have tried to overcome these difficulties by promoting tourism and foreign industrial investment, Guyana has not.       

          Despite the charm of its capital and the extensive natural beauty of its interior, tourism has never been developed here, in part because President Burnham regards it as a ''parasitic'' industry that he said feeds a nation's resources without contributing to its social development. However, the President did say that he would like to try a small tourism project in one of the hinterland's better fishing areas.       

          Since the Government began nationalizing industry under its socialist plans 11 years ago, foreign investors have been discouraged from coming in. Only a handful of foreign enterprises operate here.  Most are engaged in joint efforts with the Government to exploit the nation's natural resources.       

          The Government's attitude makes it unlikely it would benefit from President Reagan's proposed Caribbean Basin Initiative, which relies heaviy on improvement through the encouragement of foreign investment.       

          ''We are not against private enterprise,'' said President Burnham, who has nationalized 80 percent of the country's industry in the past 11 years. ''Where we disagree is with the Administration's point of view that private enterprise is the only vehicle for economic development.''

http://www.nytimes.com/1982/10...a-severe-crisis.html

GEORGETOWN, Guyana—           Guyana's long-stagnant economy has gone into a tailspin, pulling many of its citizens' living standard down with it.       

          The country is suffering from a problem common to the Caribbean region: lower income from its traditional exports - in this case, sugar, rice and bauxite - and sharply higher prices for petroleum products.       

          Some international economists believe that Guyana's economic situation has been complicated by problems in production and management. Still another factor, they say, has been the Government's effort to build a system of ''cooperative socialism'' while trading almost entirely within the capitalist world.       

          Government officials acknowledge that the economic situation here is desperate. But they say they also regard it as an opportunity to hasten the end of attitudes spawned during the British colonial period. They think it is time to replace them with the lowered expectations and drive for self-sufficiency that they believe are more appropriate to an independent, developing country. 'Development Has Its Pains'       

          ''Development has its pains,'' Prime Minister Ptolemy A. Reid said in a recent interview. ''It takes a little time for acceptance.  Unless we can appreciate the pains of development, we will all go around in the old ways and will remain with ignorance and poverty.''       

          But the abruptness with which the economic crisis has overtaken day-to-day life here has left many people frustrated and fuming.  The Government has banned the importation of dozens of items that have long been a part of Guyanese life. These include preserved foods such as canned fish, fruit and split peas. Other staples, such as wheat used for flour, have simply disappeared because the Government cannot afford the foreign exchange to buy them. Net international reserves are now about $250 million in the red.       

          Long, angry lines of people form in the small hours of the morning at Government stores to purchase such scarce goods as cooking oil and powdered milk. Housewives complain that the prices of available items have soared. Black Market Grows       

          At the same time, an extensive black market has cropped up, where those who can afford the enormously inflated prices can satisfy their cravings for items now officially prohibited by or unavailable through the Government.       

          The Government is sensitive to the image these hardships are giving the country abroad. One foreign reporter, taking photographs of a throng awaiting cooking oil, was stopped and questioned by a person in civilian garb who flashed a police badge. The correspondent was ordered from the area.       

          But President Forbes Burnham and nearly every major Government official take pains to assert that people here are not going hungry.  ''You hear Guyanese say they're starving,'' said Hamilton Green, Vice President for Agriculture. ''If you've been to Bangladesh you know what starving is. What he means is he's not getting a particular item he's become used to in the past 10 years.'' Change in Consumption Habits       

          Officials hope the shortages will force people to change their consumption habits to favor locally grown and manufactured products - a move they feel is critical to the economy's long-term survival.       

          For example, the Government has been promoting the use of rice flour to replace wheat flour, even though some economists believe it would be more advantageous to sell the rice and use the proceeds to import wheat. Rice flour, people complain, crumbles when baked into bread and spoils quickly. But President Burnham said it is the ''most important'' key to nonalignment and independence.       

          ''The United States has the Soviet Union by the throat because the Soviet Union does not enjoy food self-sufficiency,'' he said in an interview.       

          Breakdowns in the electrical system have forced a daily round of blackouts around the city - some scheduled, some not - making industrial production erratic. All of this, in turn, harms export production, making foreign exchange even harder to come by. Tourism and Investment Options       

          While some Caribbean nations have tried to overcome these difficulties by promoting tourism and foreign industrial investment, Guyana has not.       

          Despite the charm of its capital and the extensive natural beauty of its interior, tourism has never been developed here, in part because President Burnham regards it as a ''parasitic'' industry that he said feeds a nation's resources without contributing to its social development. However, the President did say that he would like to try a small tourism project in one of the hinterland's better fishing areas.       

          Since the Government began nationalizing industry under its socialist plans 11 years ago, foreign investors have been discouraged from coming in. Only a handful of foreign enterprises operate here.  Most are engaged in joint efforts with the Government to exploit the nation's natural resources.       

          The Government's attitude makes it unlikely it would benefit from President Reagan's proposed Caribbean Basin Initiative, which relies heaviy on improvement through the encouragement of foreign investment.       

          ''We are not against private enterprise,'' said President Burnham, who has nationalized 80 percent of the country's industry in the past 11 years. ''Where we disagree is with the Administration's point of view that private enterprise is the only vehicle for economic development.''

http://www.nytimes.com/1982/10...a-severe-crisis.html