A governance system of inequality over 50 years

Jun 08, 2016 News

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THE VOICE OF THE LIBERAL DEMOCRATS… 

By Sase Singh
 

INTRODUCTION
Over the last 50 years, the majority of politicians clearly lost their moral compass on more occasions than not. This situation has caused the leaders to singly and collectively not deliver on the dream of equality of opportunity for all. The divide between the ”haves and the have nots” is at an all-time crisis level because of poor political executive decisions for sustained periods between 1966 and 2016.
Over the last 50 years, our chance at the “good life” was always under severe pressure, mainly because the political class recklessly squandered the wealth of the nation. There is enough evidence that the financial wastage has not stopped, even after the 2015 elections. Once such conditions exist, we remain entrapped and enslaved in a broken system created by the former colonial masters, and is still in use today as some misguided politicians seek to get ahead.
But who really is getting ahead and at whose expense?  I will attempt to answer that question.

WHO REALLY “PUN TOP”?
The portion of the population (90 percent) that is considered as the poor, the working class or the middle class (the masses) is certainly not “pun top”.  For emphasis, the latest dataset I have seen out of the World Bank illustrates that the wealthiest 10 percent of the population owns half the wealth generated in Guyana.
If one looks at the dataset from 1980 to 2014, it has been mixed. There was a period of serious decline in wealth for this 90 percent at the bottom between 1980 and 1990, and then a mixed recovery since then to 2014.  After that, the official dataset went dead.
While I was in Guyana earlier this year, I conducted a mini-survey and it clearly confirmed that another period of expansion in income inequality has been in play since 2011 to February 2016, when I did the second set of interviews. The PPP lost the 2015 elections principally because of this issue; too many in that 90 percent lost too much wealth to the 10 percent in that period.
However what is most shocking today, is that many of these attitudes that contributed to the PPP electoral defeat in 2015 are alive and well in 2016, and are being exercised by people who ought to know better.  To what end? Today, less than 500 persons, (most old men), are the reapers of most of the wealth of the nation, while the youths and the women in their hundreds of thousands, have to settle for the crumbs. But, even the crumbs are not forthcoming in a timely manner, if you observe the lethargic attitudes towards the cries by the workers’ unions with respect to the collective bargaining process.

STIFLING THE 90% TO PROTECT THE 10%
This situation did not start in May 2015 but has been with us for most of our independent life.  Remember the empty promise of “yuh want hydro or $14 a day?” Remember the period when many people were suffering from “white mouth” but according to Father Morrison’s book, the rulers then were using valuable foreign currency to buy booze rather than medicine, as they commandeered the now defunct Guyana Airways and made wild demands for a long list of luxury liquors including Rémy Martin Grande Fine Cognac and Dom Pérignon Brut Imperial Champagne?
Then remember how a small cabal diverted billions of dollars of the people’s money into a parallel treasury totally circumventing the Parliament, between 2005 and 2015 like “dem poopa and mooma” granted them legal rights over the people’s cash.
Today in 2016, we have the same situation emerging. Hundreds of millions – of the people’s money – were recklessly diverted and wasted on D’Urban Park, which we were originally told was an exclusive private donation project only.  What was done at D’Urban Park could have easily be done much better at the National Park or the National Stadium, with the savings being used to financially empower the youths.
This thoughtless waste of taxpayers’ funds over the last 50 years by successive governments has directly caused a situation where today, some 40 percent of our people live in abject poverty and some 45 percent of the youths are on the breadline.
What better gift to have bequeathed to Guyana on its 50th anniversary than to have announced that 5,000 youths were taken out of the breadline permanently, because the government spent G$600 million on capacity building programmes for them with a stipend?  Instead, those sorts of cash were redirected to “jump-up, jubilee, and J’ouvert” over the last year.
Do not get me wrong, I love my “parade, party and palance”; but not when 40 percent of our people are living in poverty and on the financial edge.

MACRO-ECONOMIC CONSEQUENCES
When you think about it, the 90 percent of the population at the bottom, carries more than a fair share of the tax burden. The poor and middle-class people pay more taxes per dollar earned, simply because they have to spend in most cases all of their incomes just to cover their costs.
To compound this skewed act of financial oppression, our inequality is already high because of the low minimum wage, the weakness of the trade unions. and very high levels of compensation at the top for the chosen few.  Remember “50 percent for me, but you got to wait for your 5 percent when I feel like giving it”.
So there are few incentives for the 90 percent to work harder.  It is unfortunate that the Granger administration has not acted with more alacrity on the workers’ compensation issue.  The time for infantile excuses is over; pay the workers and reap the economic benefits from their private consumption and enhanced productivity.  If anyone is advising otherwise, they have to be at best an national development dummy, and clearly do not have a clue on how to grow an economy.
As another example, the enforcement of property tax is extremely lax in Guyana. Who owns most of the properties and lands, if not the 10 percent?  But property tax collected in 2015 was $3.2 billion vs. PAYE from the workers being $19.9 billion. So if we want more taxes, why are we not more effectively taxing the “landed class”? You see, after 50 years, the system is still rigged.
The biggest macroeconomic consequence of this policy anomaly translates to the fact that the growth in the tax revenue (in real terms) will be constrained, because the workers are not incentivized to become more productive and thus does not produce more value per capita.

CONCLUSION
It is imperative that we accelerate the timetable at executing tax reforms to generate the right balance so that we can pay for the essential projects that are directly related to enhancing the productivity and wealth-growth of our people.  We cannot allow the nation to drift for much longer.

Please feel free to share your feedback at sasesin1@yahoo.com.

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