Finance Minister should reassess his thinking on the distribution of Oil wealth revenue surplus

Aug 12, 2018 Letters

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Dear Editor,
I believe the Honourable Finance Minister may want to reassess his thinking on the distribution of oil wealth revenue surpluses.
It’s obvious that a percentage has to be invested for future needs, a good percentage has to go towards social programmes, community development, skills training, capital expenditure such as better access roads to remote communities and yes direct payments to the sovereigns (the People of Guyana) who collectively own the oil as well as all natural resources.
It is total ignorance from an astute economist to say to the people, no direct payments! When there are a multifaceted approaches available.
No one in this country expects total hand over of all royalties and profits to be distributed to this generation alone.
However, this generation who have been living under the Hoyte’s IMF induced Economic Recovery Programme for decades needs immediate economic relief. If as a stimulus, 3% of surpluses from oil profits goes directly to the people that should not damage our economy. It’s the people who know where their house is leaking and they themselves can fix it.
After all no direct payments were made from our Gold boom, except a political gimmick of $10,000 school voucher pre 2015 Elections and an indirect inequitable benefit to some seniors, through utility subsidies.
These subsidies have now been replaced with increased old age pension rates to all seniors, a pension that is further subsidized by remittances from the diaspora.
What about those who are not so fortunate to receive such a subsidy? What about those who cannot afford the cost of land or those that can afford cost of land and cannot afford the cost to build? What about the low wage earners who are unprotected from unscrupulous business owners who do not pay a living wage? What about those who are forced to squat because they can’t afford to pay exorbitant rents, What about the nurses who receive GYD$70,000. and has to choose between rent and food on the table. What about a single parent with 3 or four children huddled in one room with a wage of GYD$50.000. What about the Police or public servant who gets a ‘subsidy’ from the man in the street because he can’t afford the lifestyle of his pre- Independence peers, These are the people you are telling, “I will teach you to fish”.
Pensioners are the ones who were the pioneers of sacrifice are being told the nonsense “give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime” While this is a noble proverb it cannot be used in the context of the diversity of our current needs. It’s not an analogy this generation, who continue to live below a living wage, wants to hear. We have not been liberated from the ERP. We have not seen the translation of the sacrifices in our bank balances.
We have made the sacrifices of low wages, low standards of living, low infrastructure maintenance, low funding for education, low Security expenditure, rape of treasury, and poor investment decisions by our representatives.
We should never accept governments paternalistic approach to our finances. If a percentage of surpluses are directly distributed to people, people may be able to start business, do needed repairs, purchase farm equipment, invest in equipment for value added products, pay for an education negated by the ERP, Purchase a Lorry, a dredge to mine minerals, invest in stocks and bonds, livestock or Invest that money in our own economy and to repatriate earned foreign exchange.
If the Finance Minister thinks the people would sit down and drink their lives away and sit at home waiting for a cheque, he is wrong. This view is myopic.
No they have not waited since Independence and I don’t see that occurring. If he thinks that they will have more vagrants on the street, that will not happen. That direct payments will help people have a Good life, free to make an investment in our own economy rather than another.
This is not ‘free money’. Its money that belongs to the Sovereigns, the people of Guyana, lest we forget! In fact the People of Guyana have been carrying the brunt of the Economic Recovery Program (ERP) for decades now.
The savings being squandered by the same people who are preaching no direct payments to the people. Billions were sunken into unprofitable national industries such as Guysuco. The bauxite industry and its profitability was handed over to foreign entities that do not benefit locals, we get the crumbs from the Gold Industry. We are now on the verge of shifting the pendulum with new revenue streams and offloading the dead weight of Guysuco, the attention then must be direct investment in people.
Now there is an opportunity for a new paradigm shift in our economy. These so called ‘economist’ are short sighted in their approach to building up their people and giving them a ‘good life’.
A good life must include direct payments to the Sovereigns. Cash in their hands, period. How much should be the only query. The people of the interior should be able to take their money invest in their local economies, ship products to the North, East and West. The absence of cash will always encourage the begging bowl syndrome. If there is equitable distribution and savings we will begin the construct of a good life.
The distribution of our national wealth must have a multifaceted approach of Savings for future generations such as the proposed Sovereign Wealth Fund (SWF) or Natural Resources Fund (NRF)
I suggest
30% of surpluses go to the SWF.
5% go to social programmes,
15% to New Infrastructure, e.g. Roads, Ports, Transportation Links and Assets,
10% Educational and skills training,
5% Health Care and badly needed upgrades,
3% DIRECT PAYMENTS to the people.
3% Drainage and Irrigation
5% Maritime Investment and
1% to cohesion,
1% to Tourism and connectivity,
1% to Sports,
4% to Agriculture and Value Added Industrial upgrades,
3% National Security,
1% Natural Resources,

4% housing,
2% Emergency Preparedness,
3% DIRECT Transfer to Municipalities, NDCs, RDCs and 10 regional development bodies
1% Old age Pension
.5% Prison upgrades
.5% Youth Innovation
1% Judicial Systems Upgrades and Reform
1% Arts and Culture
The list above is a template for a solvent Guyanese economy!
A point to ponder is, the man who encouraged the “fishing lessons” did more with less, for example, Educate a nation no charge, from Nursery to University, encouraged the feed, clothes and house self drive, Self help projects, carved the unpaved road to Lethem, built the Demerara Harbour Bridge, fostered National Service, kept sugar and bauxite afloat, and now benefactors of the foregone sacrifices are telling us, “we will teach you to fish”.
I say give us 3% of the money per Annum, 67% under management by our elected representatives as I outlined above. We will teach the generation to come how to fish with their 30% per annum multiply by 30 plus years of production we bequeathed them in the SWF, in addition to enhanced infrastructure and other investments. Those to come will have enough to last 25+ generations. We have only tipped the iceberg of our Oil reserves.
Louis Nestor

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