The system condemns Guyana to the status of a donkey-cart economy

Dear Editor,
I agree with much of what Ms Gay McDougall said in your report (SN 22.3.2009).  The problem is not necessarily explicit racism and blatant discrimination, although I do not doubt that these exist today and in the pre-1992 period.  Rather, the marginalization emerges because of the predominance of intra-group social networking that is not truly multi-ethnic.  If Indian Guyanese dominate the PPP, as they do, then they are likely to dominate in the government.  And given the pervasiveness of the intra-group social networking, a class of Indians would win most of the state contracts and emerge in many of the top jobs. This outcome is further deepened given the tendency for Indians to also dominate (relatively) in the private sector.

Intra-ethnic networking also played a significant role in the marginalization of the Indian Guyanese population during the PNC days.  The PNC enhanced this relationship by building up the army, the civil service and the police through primarily one ethnic group.  Therefore, what you saw in those days was the pattern of African Guyanese predominance in the PNC being projected at the national level.

Furthermore, the recent court proceedings in the Roger Khan trial have indicated that these problematic intra-group/ethnic mobilizations have put in motion self-defeating path dependence (this means outcomes today based on policy choices in the past – the 1970s and 1980s) and this will continue to occur until a totally new unit of the army is created.  This new unit must never ever be influenced by the existing unit.  Furthermore, this self-defeating path dependence would require that the PPP find its next group of dubious characters when the next wave of violence starts because – as recent events demonstrate – the Guyanese military and police were more capable of dismantling Roger Khan than the political criminals and masterminds.  Of course, a new round of self-defeating path dependence was put in motion by the harmful relationship between the PPP and the dubious characters.

Should the AFC win the election and Indians stick with the PPP, we will have a reversal of roles and nothing substantial will change, although I believe there will be some improvement over what you have today (as I do believe the AFC leaders are decent people).
Addressing this perverse and adverse outcome would require a movement from the so-called multi-ethnic party to a genuine multi-ethnic government via a power-sharing constitution.  This can never be done within the context of the tinkered 1980 Burnham constitution.  In addition, law-makers have to be elected via a first-past-the-post system and not be chosen by the top guys in the PPP, PNC or any other political party for that matter.  At the end of the day – given the present structure – the party leader will select party representatives (for Parliament) who have an established track record of sycophancy and obedience to the leader and the party.  Let the people elect their representatives in each party.

Also, a first-past-the-post system allows for independent regional politicians to emerge.  An independent politician would not need to work through the PPP and PNC.  We know that by the time one becomes a parliamentarian of these two parties one is brain lazy.   These parties naturally produce brain lazy people because of the warped incentive structure for promotion to parliamentarian, whereby one is promoted not because of ideas and accomplishments but for being able to group think and be loyal to the leader first and country second.  Both of these parties are suffering from the group-think syndrome.  The leaders choose their sycophants in such a manner that no one is available to second guess them.  As a result, Guyana has suffered from bad policies since May 26, 1966.

Another outcome of the current political structure where group think and intra-group networking predominate is that significant inefficiencies in the system are engendered.  Such inefficiencies retard the aggregate productivity of the economy (economists measure this aggregate productivity by something known as total factor productivity) and economic resources are used in sub-optimal ways.  For instance, they spent US$200M to make a sugar factory in Skeldon that would just maintain the current growth and living standards of the sugar workers.

By building a sugar factory they have specialized in being poor by producing a product that is at the very low end of the global hierarchy of products.  Moreover, the income elasticity of demand for sugar is low.  Meaning as the income level in the export market increases (primarily Caricom as the EU market wanes) there will not be a concomitant increase in income growth from producing just sugar.  However, we all know as we get richer we desire a car and we consume more energy.  Therefore, the rate of return on the US$200M would have been higher had it been used to convert the sugar-base to a bio energy-based industrial complex. Thus it is clear US$200M is very high for a donkey cart economy such as ours.

There was no one to second guess the policy makers as they all thought alike.  In the end, US$200M will add nothing to the aggregate productivity growth of the nation; rather it would maintain the current penury living standards of the masses.

The point is, the political system engenders inefficiencies as does the group think syndrome, as party interests are promoted above the country’s interest. Moreover, these two perverse outcomes emerge because of the destructive nature of intra-ethnic networking that has condemned Guyana to the status of a perennial donkey-cart economy and third world basket case since May 26, 1966!
Yours faithfully,
Tarron Khemraj