Guyanese Online

 Aug 12, 2018 – Eye on Guyana with Lincoln Lewis, 

Not one pint of oil has flowed from this nation but the battle lines are already drawn as to who must have control and who must benefit. Nearly every country in the developing world has seen the benefits from oil wealth disbursed among the oil companies/shareholders, politicians, their families, friends and cohorts.

For instance, last year, the President of Angola appointed his daughter, alleged to be the world’s richest African woman, to head the state-owned oil company. In Iran, a billionaire tycoon was sentenced to death for corruption in 2016, based on conviction that his role as the middleman for the government in organising oil deals, saw him evading sanctions and accumulating personal wealth in the process.    

These oil-rich countries, given the exploitation of the resource, are considered middle-income, but this wealth has not reached the masses who remain poor, living in conditions of squalor, deprived of access to basic services such as potable water, quality public education and health care. It has been the ugly tale of two cities.

The scenario, though distant in experience, is not beyond happening in Guyana if mechanisms are not put in place to ensure transparency, corruption is dealt with condignly, and the masses benefit from a resource that is equally theirs. It is important the benefit that flows from the oil wells be direct and indirect.

As government prevaricates and quietly makes decisions behind closed doors as to how the oil wealth will be treated, it needs to be reminded this resource is not theirs, it is ours.  Workers/citizens would like to see the money from oil being wisely spent. We desire the building and equipping of hospitals and research facilities to realise modern and affordable health services. We want money put into schools, creating modern facilities to make education better and accessible to all. Workers want better pay and improved conditions of work.

Areas such as agriculture and manufacturing must see modernisation supported by the appropriate research and development, and providing goods and services in a healthy environment. The physical infrastructure of roads, wharves, ports and waterways, supported by appropriate airports, in each administrative region, could make transportation accessible throughout our 83,000 square miles. We need a vision and development plan, built from the widest of consultation, in determining how the wealth will be effectively managed and disbursed.

Looking at the structural and developmental path needed to travel to realise the aforesaid, experience has taught us that politicians, when not held to account, will only make promises to get into office; their stewardship won’t be about honouring commitment to embrace development for all.

And as it is said, ‘easy lesson good for dunce,’ citizens will not be waiting for the politicians to only address structural development, which is considered an indirect benefit, they also want direct development, and a disbursement plan is not outside such realm/reach.

The proposal by Professor Clive Thomas that money from oil should go directly to households or citizens has merit, and must be examined. A Sovereign Wealth Fund (SWF) will not realise this, for those who control it are the only ones to directly benefit from it. Looking at the Consolidated Fund, which is the people’s money, it is controlled by a specific group who decides on and presides over benefit/disbursement, and in many instances, it matters not what the people desire or need. Management of the SWF is likely to see similar treatment.

The Green Paper on Natural Resources placed in the National Assembly, last Wednesday that seeks to give control to politicians, confirms Nigel Hughes’ reservation that should oil money be given to the people it can be used as a political tool. This Bill before the House is not about protecting oil and oil wealth and getting it to the people; it is about a few having control and determining who must get what, when, where and how. It is about a devious politics whose time has come to be gotten rid of.

Our politicians are failing to take seriously the spirit and intent of the Constitution, they have sworn to uphold, as it relates to the governance of this country. Though the political system (Article 13) mandates inclusion in the management and decision-making processes of the State on matters impacting stakeholders’ well-being, the coalition sees it fitting to present a Bill that ascribes to the Minister of Finance and Leader of the Opposition, responsibility to make appointments for the management of our national resources.

To seek to abuse privileged positions to make laws where other stakeholders are excluded, ignores when such privilege is no longer held, you can be at the receiving end of the very abuse you inflicted on society.

Debunking Clive’s proposal by saying such will create parasites is offensive, but moreso highlights how some politicians see the masses. You cannot be a parasite benefiting from what belongs to you. The counter argument that direct payment will cause inflation ignores that even with its absence inflation is present. This issue is not only about the economics, it is about the history of oil, where, over the years, few have had control, and by their actions have rend asunder nation and people. The only way for citizens to have direct benefit is through some disbursement plan.

Of course, it’s expected reasonable conditionality will be set. And yes, what Thomas is speaking of is not new. The concept finds international appeal, including from USA billionaire George Soros, as a mechanism to ensure oil wealth is widely disbursed among the people, reducing income/wealth disparity, corruption and internal strife that have flown from it. Residents of Alaska, USA, receive a yearly dividend from that state’s oil wealth. Studying how this and similar projects work could aid in developing an indigenous model built on best practices.

Our neighbour, Venezuela, marks a century as an oil-producing country, accompanied by a plethora of laws to ensure its management, yet the wealth has not filtered to the masses. Efforts by the Hugo Chavez government to remove control from the elite and privileged was met with visceral reaction, internal and external, to undermine a programme geared to benefit the small man.

Guyana can learn numerous lessons and put systems in place to safeguard our sovereignty, protect our citizens, and ensure our resources are sustainably exploited for the benefit of all. Don’t shoot down Thomas’ idea without examining the motive behind his thinking, requesting clarity if the need arises, learning from others’ experiences, and seeking to avoid oil’s curse and pitfalls.

By Kaieteur News Columnist Lincoln Lewis

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I support cash transfers to Guyanese households; it works all over the world

Aug 12, 2018  Features / Columnists,- Hinds’ Sight with Dr. David Hinds

The news-cycle this past week started with Professor Thomas, WPA co-leader and noted political-economist, proposing that government uses revenues from oil and gas to give cash transfers to every household in Guyana.

Thomas was speaking at the Eusi Kwayana Emancipation Symposium in Buxton organized by the Buxton First of August Movement on the topic, “The Coming Oil and Gas economy: Prospects for Empowering the Poor and revitalizing the Village Economy.” Thus, he and the other panelists were responding to a specific question—how will poor people benefit from the imminent wealth?        

Thomas’ answer was simple and straightforward, give people a small portion of the oil revenue in the form of direct money in their pockets. We know that poverty has plagued Guyana—it is at the heart of all our woes. Some of us, courtesy of the limited opportunities available, have been able to crawl our way above the poverty line. But most Guyanese are left behind—they stare at poverty daily. So what Thomas and the WPA are saying is that with the coming oil revenue, we have the best chance to tackle this scourge that has been holding back our people and our country.

Cash transfer alone will not end poverty. It must go hand in hand with improvement of our social infrastructure– Government must invest more in education, in health care, in child care. So, Minister Jordan’s frowning on cash transfers and instead relying on spending on social programmes represent a minimalist approach. It should not be one or the other; it must be both. Poverty must be tackled from all angles. We need a maximalist approach.

Those who are ruling out cash transfers are ignoring current data, which show that these programmes have been a resounding success across the world as far as poverty reduction is concerned. Many countries across the world–in Africa, Latin America, Asia, and even in Europe– have found that when cash is put into citizens’ hands it has helped in poverty alleviation. These programmes originated in Latin America and the Caribbean in the 1990s. The data shows that cash transfers have had positive impacts on nutrition and school attendance, which in turn has helped to reduce poverty.

According to an 2016 IDB study of cash transfer programmes in 17 Latin American and Caribbean countries over a 20-year period, “Multiple evaluations have proven that these programmes have made a significant difference in the lives of the families living in poverty. They help families put more food on the table and enjoy a more varied diet, allow more children and youth (particularly girls) to attend school, and encourage families to regularly receive basic health services.”

”In 2013, approximately 137 million people in 17 Latin American countries received transfers that represented, on average, between 20% and 25% of their household income and an average of 0.3% to 0.4% of their respective country’s gross domestic product”

The study went on to conclude that, “CCTs have been unquestionably effective at increasing the consumption of beneficiary households, as well as at reducing the incidence and, especially, the intensity of poverty and inequality. Not only have CCTs increased household consumption, but they have also improved its composition in terms of the quality and variety of food consumption.

One very consistent finding is that CCTs have reduced child labor and boosted school enrollment and attendance in many countries…At the same time; these programmes have also helped to improve school progression. In Mexico, after three to five years of exposure, years of schooling increased by six months to one year; similarly, in Nicaragua, after three years of exposure, beneficiary children progressed almost half a grade more than non-beneficiaries.“

It is simply amazing that with all this data available and with so many countries across the world using this mechanism, so many of our public leaders and commentators were quick to dismiss it or at best express caution. They simply didn’t do their homework. The president is reported as saying that he has not seen any precedent.

The Opposition leader sees it as a political gimmick. Mr. Nandlall says it will create a country of parasites. I challenge this gentleman to show me one country of parasites in Latin America or beyond that is using this mechanism. Kudos to young Ramson for immediately putting that “big man” in his place.

Many persons have parroted the Nandlall line that if you give people money, they will spend it on rum and dope, and that we would create a dependency syndrome. We now know the deep-seated social bigotry that exists just below the surface among many Guyanese. All these defenders of poor people, some of whom are happy to give personal handouts to poor people, now show us what they really think about the masses. When they argue for transfer of money to rich people, they never question their capacity to spend it wisely. But for them, poor people are inferior in this regard —”Don’t give them money, let us spend it for them; we know better than them. We ought to be ashamed of ourselves.”
The other piece of high-class ignorance we heard is that by giving two to four percent of our oil revenues as cash to people, we will be creating a Welfare State. I was forced to ask: What do they know of Welfare States?

Here is the most used definition of a Welfare State—” The welfare state is a concept of government in which the state plays a key role in the protection and promotion of the social and economic well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life….The welfare state involves a transfer of funds from the state to the services provided (i.e. healthcare, education, etc.) as well as directly to individuals (“benefits”)…”

Almost all European countries are so-called Welfare states. Canada and China and Russia are. The Caribbean country that many Guyanese run to—Barbados—has been the most successful and enduring welfare state in our region. When the last government attempted to dismantle that welfare state, the Bajans did not give them one seat at the last election. Many States in the USA have the actual word “welfare” in their constitutions.

Now, we propose a little cheque for poor people in Guyana to supplement their earnings, and those of us who are well-to-do are searching every corner to find ways why they should not get it. By the way, the word “welfare” as used in the USA and which we repeat in this discussion has racist connotations, yet we Guyanese use it as if its high science.

More of Dr. Hinds’ writings and commentaries can be found on his YouTube Channel Hinds’ Sight: Dr. David Hinds’ Guyana-Caribbean Politics and on his website http://www.guyanacaribbeanpolitics.news. Send comments to dhinds6106@aol.com