WPA to lobby gov’t for cash payouts from oil revenues

-Jordan, Trotman say proper structure crucial for successful implementation

Professor Clive Thomas

Following the suggestion by Working People’s Alliance (WPA) executive member Professor Clive Thomas that Guyana should commit a percentage of its oil revenue to direct cash transfers to citizens in order to combat poverty, the party has vowed to lobby government to adopt and implement the policy.

“…WPA fully endorses the call by Professor Clive Thomas to make Guyana’s petroleum money directly available to its poor and powerless households. Further, we dedicate our political efforts as a party to pursue this programme within the APNU, within the APNU+AFC coalition and among the broad masses of Guyanese people,” WPA Executive Tabitha Sarbaro told a press conference on Thursday at the party’s headquarters in New Garden Street, Queenstown.

WPA is part of APNU.

“We expect, logically—and I think that’s the best route to go—if we take the matter to the people and the people show enough concern, the parties won’t have an option but to discuss that. I am expecting that the pressure coming from the electorate would make sure that these matters are discussed,” Thomas, who was also present, would later add.

On Sunday, to the resounding applause of attendees at a forum organized by the Buxton First of August Movement, Thomas declared that regardless of what multilateral agencies may advise, Guyanese must pressure the government to tap monetary rewards from oil revenues if this country wants to have true equity and see a real lowering of poverty.

‘Properly structured’

Already, Minister of Finance Winston Jordan has not ruled out the idea but says it will be up to Cabinet to decide and even then there has to be a clear structure of how it could be implemented.

Jordan welcomed the debate ignited by Thomas’ suggestion. “I think we will have to assemble all these ideas that are coming out. On the positive side, it has done us a favor in that it has started a debate, which we were calling for, rather than some of the negativity we have been enduring over the last two years. Finally, there is some debate and there are its proponents and opponents,” the minister said.

“Conditional cash transfer is not new to Guyana. We did it in several places, even when I was small. There may be things to it. On the other side, I must admit to you I would have a difficulty if Cabinet were to agree to it and in the implementation it wasn’t properly structured. For example, rather than just giving people US$5,000 a year, why not look at issues such as education, health, youth programs, small businesses… teaching a man to fish and then he could do it for a lifetime, rather than giving him a fish when he could only feed himself for a short while. I would rather hear more debate talking about using our resources to create opportunities for people so that they themselves can have lasting incomes. Because money that you are giving out will soon end and you would have pitched your lifestyle to the level of the money you receiving, and when you can no longer give that money, then what is going to happen?” he questioned.

While underscoring that whatever policy is selected would need to be strictly monitored, Jordan explained that shortly after government made a $50,000 payout to public servants in 2016, he was in conversation with someone on what they thought of the money and the idea and realised that the money was squandered. “I remember when we gave out the first $50,000 in 2015, I jokingly asked a person about the funds and the person said, ‘$50,000 can’t do because it can only buy one pack of hair,’” he said.  “The monitoring of it alone requires a slew of staff and secretariat–you are talking about every household. [The word] household is ill-defined. Who is a household? Every house is a household and what about household sizes? I can’t rule anything in or out, simply because it has to be decided at Cabinet. Nothing has reached Cabinet and all I am doing is contributing to the debate [Vis-a-vis] advantages and disadvantages,” he added.

For the AFC’s part, it also welcomed the discussion that has been started among the masses about the benefits of oil revenues even as party leader Raphael Trotman indicated that Thomas’ proposal could work.

“It is possible if it is structured. You want to ensure that people who receive transfers serve their country and so we may look at it by added value in the pensions. We want to ensure that our people have educational grants, we want to ensure the people who receive cash transfers are registered in our tax system and have paid taxes and not turning up and saying, ‘I am here to collect,’” he said.

“I do believe this and future governments have a responsibility to spread that wealth in a responsible way to as many Guyanese as possible… the AFC supports any initiative that spreads the wealth transparently and equally, not just for some but to ensure that every citizen in all ten regions get an equal say in how this money is spent and they get a share of it,” he added.

‘Limited amount’

And for critics who have said that such a move would cause inflation, Thomas explained that real economists would know that there would be no need to worry about inflation if sound fiscal mechanisms are put in place beforehand. “The amount of assets that you are going to transfer is a limited amount of the petroleum revenues; I would say in this case, not more than five percent of all of the revenues. I do not know if we will reach the five but I would say that is where we could start and set a pre-determinant maximum. Inflation would depend on the responsiveness of the economy. Some people do not believe that we have any absorptive capacity but there is, it is, but very limited. However, we have to use the revenues, build up the infrastructure—financial, physical and human—and then,” he explained.

In response to suggestions that the implementation of his proposal would create a dependency syndrome, Thomas said the majority of Guyanese just want to get out of poverty and will use the revenues in a prudent manner.  “We’ll find some people who’ll do that but in the generality, most poor people want to get out of poverty and they know best the means in which they can try to do that,” he said.

Political scientist and WPA executive David Hinds also weighed in on the discourse, saying that government should not adopt an either or position to direct cash transfers and improving social and other services, but must commit to both. “It’s not one or the other. It’s all of them and so cash transfer is just part of it. Our view is that if we solve the problem of poverty, that will be a big way in terms of solving a lot of the national problems because poverty is holding back countries like Guyana and so we feel that poverty alleviation must be a priority,” he stressed.

‘Best opportunity’

In a statement read at the news conference, it was noted that the WPA believes that the forecasted revenues from oil and gas provide the country with the best opportunity to break out of the cycle of underdevelopment that has plagued it since independence. “For us the central question is how the expected wealth would help lift the poor and the powerless out of the depths of poverty,” it said.

It noted that cash transfer schemes are not perfect nor free of risks but they demonstrate the best practical results for combating poverty, which has increased from 36% in 2006 (World Bank, 2008) to 40.1 % (IDB, 2018). “WPA sees cash transfer as a direct attack on income poverty and financial stress among the poor and powerless,” it said, while noting that the core design problems for cash transfers from a literature review for 2000 to 2013 are the size, duration and form of transfers. “The key results to be obtained are: improved school attendance, health status, nutritional intake, female choices cum decision-making and reduced child labor,” it, however, added.

In addition to cash transfers to the poor and powerless, whom the party says know their “needs” better than any government, and want to control their own development rather than become dependent on political-state patronage, the WPA is also advocating for the integration of natural gas into the national power grid as it would complement green economy initiatives; the establishment of a Ministry of Renewable Energy to frame policy, garner resources and coordinate actions to improve energy efficiency, reduce energy costs, and uptake of achieving non-carbon energy technologies; and no spending on an oil refinery or promises of transfers/subsidies to any privately-built one.

The WPA said it intends to use whatever resources it has at its disposal to advocate and fight for its positions. “We will take the discussion of our proposals into the communities, among stakeholders and civil society organizations and directly to the halls of government. While we recognize that we do not have a monopoly on ideas regarding this issue, we feel that history and available data are on our side. For us, it is not only about political economic correctness, but more importantly it is about the humanity of our people, especially the poor and powerless. We are determined to ensure that policies are enacted to uplift the least among us who for too long have had to endure the scourge of poverty and want,” it declared.

The party said it expects some negative reactions to its proposals and welcomed the concourse of ideas, while urging Guyanese to resist temptations to use stereotypes of the poor and foreign concepts as the basis for discussion.

It said the term “welfare state” has been thrown around and warned Guyanese to beware of such borrowed concepts being used to scare them away from demanding their fair share of the imminent wealth. The primary function of any state, regardless of ideological orientation, is to look after the welfare of its people, it pointed out.

“WPA fully supports the use of common wealth to invest in our physical and social infrastructures. We will fight for these approaches. But we feel that government must also invest directly in citizens’ ability to engage in self-activity as a means of self-emancipation. This concept which was popularized by our own Walter Rodney and has long been a guiding principle of the WPA is at the heart of our proposal for cash transfers as one item in the menu of proposals. Direct investment in people is critical if we intend to use oil and gas wealth as a tool of emancipation and liberation,” it said, while adding that despite the risks involved, it is optimistic about the country’s future and the capacity of its people to seize the moment and turn the tide of history in their favor.

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