RICH MAN, POOR MAN!

May 02, 2010 Features / Columnists, Peeping Tom

When Guyana was the second poorest nation in the western hemisphere, large acreages of agricultural land were given out to individuals by the then People’s National Congress government.
This is an extremely risky practice in poor countries. It skews the already distorted wealth distribution in favour not just of the rich but of a small group of persons who can then use this advantage to gobble up further wealth.
There are two major dangers to this concentration of wealth. The first is that in the specific sector involved, it can lead to situations where a small group dominates the economic activity and consequently the fortunes of a sector, thereby obtaining the influence to push out small competitors.
For example, if a small group of farmers control tens of thousands of acres of land, they can use this to undercut small farmers and then eventually have such control of the sector that their competition would be forced to go under or be unable to compete. In small internal markets, this is a real problem.
The second danger of concentrating wealth in the hands of a small group is that eventually, this group can become so rich that they are able to expand into other sectors. Given their relative wealth they can undermine the efforts of others. Thus what we can eventually have is an oligarchic social structure in which there is a small, stinking rich elite sitting on top of a large mass of dog-poor citizens.
These issues of wealth concentration have come to the fore following the shocking revelations about the amount of land that one Mr. Odinga Lumumba was able to obtain from the PNC regime. By his own admission, Mr. Lumumba obtained some 10,000 acres of land at Mamarbisi on the right bank of the Canje River. He also obtained another 10,000 acres at Akiwini in the Pomeroon. Mr. Lumumba also claims that he had to give up lands which presently comprise the Joint Services Housing Scheme. So this means he got those lands as well.
When the PPP came, he was asked to give up the lands at Akiwini and he gave up four thousand acres of his lands at Manarabisi. In return, he asked for a plot of land to be given to him. Initially, a plot of land was identified next to the North Ruimveldt Secondary School but the sale was challenged by a religious group. They were subsequently asked to pay $10M for the plot.
Mr. Lumumba was then awarded a ¾ acre plot aback of the Botanic Gardens for a price of $1. 5 M. This land is smaller than that the plot next to the North Ruimveldt Secondary School but is located in a much more high-end area and thus ought to attract a higher price per acre. Mr. Lumumba, it is said, sold the said plot a few years later for $38M.
In market economies we should not begrudge people making profits, but profits must not be obscene. Also, when it comes to the sale of State lands, a fair price must be obtained. Given the profit margin involved in this sale, one has to question whether those who sold the land to Mr. Lumumba ensured that a fair price was obtained for the sale of State land.
One and half million dollars was paid for prime real estate in the city. In contrast, persons purchasing lands in the Diamond Housing Scheme are asked to pay $1. 2M. Diamond is a far distance from the city and what adds to the contrast is that the lands at Diamond are not for commercial purposes.
In the case of the Diamond Housing Scheme, lands which were acquired for $1.2 M each, the owner cannot resell within ten years. This is no doubt a well- intentioned policy aimed at preventing State lands to be used for speculative purposes. The government does not wish to have someone acquire a house lot and without any developmental works sell it back at a profit. To avoid this form of speculation, the government insists that construction commences within a specific period or else the lands may be subject to repossession. It also insists that the house lot cannot be sold within ten years.
No such stipulations seem to have been imposed as regards the sale of the land at the back of the Botanic Gardens. Mr. Lumumba was able to sell it without any construction being undertaken and was also able to sell it at a huge profit. Lucky for him! But unlucky for the poor house lot owner at Diamond! It’s a rich man’s world. And to think we keep hearing about working class governments!

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RICH MAN, POOR MAN!

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RICH MAN, POOR MAN!

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