Universal subsidies
On December 9, 2013, the International Monetary Fund (IMF) concluded its most recent Article IV Consultations with Guyana. In its report, the IMF advised the government to stop using universal subsidies to achieve public policy goals and to use a more targeted or selective approach to the redistribution of resources. The allocation of pension support to the elderly or the transfer of resources to alleviate poverty among the indigenous population, for example, makes sense. Under those circumstances, equity in the tax system takes advantage of the benefits principle. Though the transfers could still be contentious, one could see the benefit to be had from it by the beneficiaries.
The government has obviously chosen to ignore the advice of the IMF in pursuit of what now seems to be very narrow political interests with the disbursement of its $10,000 grant to each child attending public school in Guyana. This conclusion was reached against the backdrop of the education objectives that the government committed itself to pursue under the Millennium Development Goals which are to be achieved by 2015. This article raises for readers the public policy concerns of redistributing the tax revenues of Guyana through the use of a universal $10,000 grant to all public school children against the backdrop of the MDGs. It also raises the concerns in the face of alternative resource transfer mechanisms which lend themselves to greater accountability and public financial management than the
