In this most charitable of seasons I am returning to my contemplation of global inequality and the poor. In this article I will place the discourse in the context of President David Granger’s laudable promise that should he still be in office after the 2020 general election, Guyana’s oil wealth, which has already begun to flow, will be equitably distributed rather than end up, as such resources often do, in the pockets of the rich (SN: 20/12/2019). Unlike what happens in a normal liberal democratic country, ethnic voting has severely curtailed the influence of private wealth in the political process of Guyana. Policy is largely driven by the orientation of the political elites and as such what they promise is usually possible if it is practical and there is political will to implement. Complicating the present issue is that at election time politicians make all manner of opportunistic promises but the equitable distribution of Guyana’s resources is of sufficient importance for us to understand if there is any hope of it becoming a reality.
Firstly, we need to understand what the president meant when he said the oil wealth will not end up in the pockets of the rich, for the venture is technically possible if he meant that the resources that ultimately accrue to the government – royalties, taxes, etc. from various sources – will be used in an equitable manner. But if he means that the bulk of the profits resulting from Guyanese entrepreneurial activities in the oil industry itself will not end up in the pockets of the already rich, I believe he is very mistaken. In the very nature of things, the substantial profits that are to be made from such ventures will go to those who are now entrepreneurially positioned to take the existing opportunities. Try as the government may to help local small business with finance, training, etc., the dye will be cast long before these new businesses mature.
Secondly, if the political will exists, that aspect of the president’s promise that has to do with the equitable distribution of government resources is possible, but there is little evidence that the government has a deep commitment to equitability and the poor. For example, last week considering the Legatum Prosperity Index 2019 that compares 167 countries under a dozen broad headings I argued that the category of empowering people – defined as creating better living conditions, health and education services and a better natural environment – is the only category in which outcomes went seriously awry over the ten year period 2009 to 2019. Further, say what you like about Forbes Burnham, Cheddi Jagan and even the more capitalist-oriented Desmond Hoyte, perhaps because they were socialised in less materialistic times, they were able to keep a lid on ministerial salaries, but by my estimates over the last two decades ministerial salaries have skyrocketed compared to the public service minimum wage. The salary of a senior minister was 7 and 15 times that of the minimum wage in 1992, 2015 respectively and would be about 20 times the minimum wage in January 2020 (SN: 30/11/2016). Indeed, in its 2015 manifesto this government appeared to recognise the amorality and absurdity of giving the controllers of the public purse carte blanche to use it for their personal benefit and promised to establish an independent public service salaries review commission, as in Trinidad and Tobago, but that promise of reform went the way of many others!
Some would argue that the casual manner in which 7,000 sugar workers were thrown out of employment at the same as the president was telling foreign audiences that concerns about the welfare of the people must trump that of making profit is ample proof that this regime simply says what it believes necessary at any point of time but does not have empathy for the poor from which normally flows concerns about social equitability. It took the parliamentary no confidence motion, which signaled an imminent national election, to drag the government out of its slumber and send it scampering to fulfill the demands of its own ethnic supporters. This suggests that the regime’s business as usual approach to equability and poverty goes much deeper than ethnic concerns: it is an approach to governance which suggests that even in a divided country like ours these matters will be ultimately solved by trickledown economics!
Thirdly, all may not be lost, for if any government of Guyana could ever find the political will to act in the interest of ‘the poor and powerless’ the Malay experience suggests a way forward. Unlike Singapore, which I considered last week, Malaysia is a multiethnic country that has a population of 31.8 million, of which 62% are Malay, 20.6% Chinese, 6.2% Indians. The Malays felt severely disadvantaged, e.g. in 1970 the average monthly income of a Malay household was M$179 while that of the Chinese and Indians were M$387 and M$310 respectively, and enrollment in tertiary education, etc. were similarly skewed. This gave rise to ethnic conflict and at the time one writer opined, ‘It is difficult … to see how domestic tranquility could be attained without a massive programme of corrective equity on behalf of the Malay population which after all forms the political majority in over 60% of the constituencies.’ (https://as.ucpress.edu/content/14/2/183).
A business as usual approach would not have worked and in 1970 a New Economic Plan, with two main objectives: to eradicate poverty and to restructure society to remove the identification of race or ethnicity with economic status and/or function, was implemented. The NEP consisted of explicit targets to achieve at least 30% Malay ownership of total share capital, moving from 2% in 1970 to 30% by 1990; employment in large, modern-sector firms was to reflect the ethnic composition of the country; price discrimination in support of Malay-operated businesses in terms of subsidised loans, credit and financial and management training and quotas for ethnic groups in tertiary education were introduced, and special schemes for the poorest households, including support for petty trading, cottage industries, livestock, aquaculture and so on were planned.
The system had its critics, particularly among entrenched interests. However, an Overseas Development Institute (ODI) briefing paper claimed that the NEP made substantial progress towards its objectives. ‘Between 1970 and 2002, all ethnic groups witnessed substantial reductions in poverty. At the same time, (Malays) increased their share of total share capital to 19%, they increased their share of employment in modern, high-productivity industries, and their average household incomes rose relative to both Chinese and Indian households’
(https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/4078.pdf).
So with the requisite political unity and will, proper definition and design and patient implementation, it is possible to develop a fairer and less ethnically acrimonious society. Of course, to be successful such an effort will have to be transparent and comprehensive and cannot be implemented by underhandedly distributing government largesse to those of one’s ethnicity. On the ODI assessment of the Malaysian system, ‘The main factors underlying this success have been a clear and coherent policy framework, including a focus on ensuring gains among all groups; a strong statistical system for the monitoring of inequalities between groups; and flexibility in the implementation and enforcement of policies, particularly during economic downturns.’
Merry Christmas.
