Be wary of accepting cheap handouts from multinational companies- Economist, Dr. Hosein

Sep 05, 2017 News

– Says government should insist on CSRs that transform
Some may want to say that his warning may have come a little too late. Nevertheless, Trinidadian

Trinidadian Economist, Dr. Roger Hosein

Economist, Dr Roger Hosein, has warned the government to cut its eye on the “bright and shiny” treats that may be offered by multi-national corporations as their Corporate Social Responsibility (CSR.)
Already, Guyana has witnessed the government asking an oil giant like ExxonMobil to erect a fountain in the Botanical Gardens. The government was quite content with this initiative.
However, Dr. Hosein is advocating for Guyana to demand more meaningful forms of CSRs that will bode well for Guyana’s developmental trajectory.
The economist, at a recent lecture facilitated by the Guyana Oil and Gas Association (GOGA), lamented the fact that CSR fail in many petroleum based countries as firms tend to emphasize quick fixes.
He said that politicians and influential persons in civil society should not be suaded by token handouts from multi-national companies.
He said, “Do not practise taking hampers for Christmas as a substitute for school bags for kids. Do not practise taking funding for a carnival pageant or a carnival costume at the sacrifice of school books or funding libraries.”
Dr. Hosein stressed, “Do not engage those easy quick win practices as they do not give long- term sustainable benefits.”
He said that the true acid test of a production function maintaining long term viability is when “you change one of the factor inputs in the production function, in this case natural resource capital but replace it by another form of capital, for example human capital.”
He said that oil is a non-reproducible capital and in order for the output from the production to remain the same you have to replace it with reproducible capital. “So replace the oil with human capital”
Dr. Hosein said that this is where many oil rich countries have gone wrong all over the world “they take quick win, low hanging fruits.”
Dr. Hosein stressed that quick wins are not the type of interventions that will aid development.
He said, “It will not help rural schools in Guyana produce students with five ‘O’ levels and to move on to different skills.” He said that Guyana will do well to aim for sound, solid intervention from a human capital perspective.
Dr. Hosein said that human capital should be emphasized at every stage of Guyana’s development as it is the engine for economic transformation in small economies.
Recently, Guyana benefitted from several arches erected by private companies upon the request of government. Little is known about any requests by the government for those companies to put their monies towards initiatives that will realize long term developmental gains.

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