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Oil revenues should be used to bridge the gap between rich and poor
DEAR EDITOR,
Poor people generally are not given enough credit for the prudent management of the relatively small income they receive. Because of the size of their income, they have no choice but to spend on basic necessities of life, such as food, clothing and housing. There is hardly anything remaining to save, much less invest, after all expenses are met.
It is an established economic fact that money spent on the poor is money well spent. That money invariably goes back to the economy in terms of consumer spending. That in turn will have an accelerator effect on the economy and help to boost economic growth.
It is that mantra of ‘earn and spend’ that is the driving force in most of the developed capitalist economies such as the United States, Canada and Western Europe.
I have a problem with any argument that suggests that money spent on the poor, whether by way of direct cash transfers or indirectly by way of subsidies is counter-productive or dysfunctional from the perspective of economic growth and human development. The propensity to earn and spend is much higher with respect to the poor when compared to the rich.
It is in the above context that I wish to disagree with the view expressed in some quarters to the effect that spending on the poor is likely to result in some unspecified form of dependency syndrome or would promote a culture of ‘laziness’ among recipients. Nothing could be further from the truth. The wheels of industry and commerce are driven by human labour. It is labour that is the main source of wealth and it is therefore only fair that labour is adequately rewarded.
In this regard, any increase in our national wealth through oil revenues must have as its ultimate objective the raising of the material and cultural well-being of ordinary people. It should not be seen as an opportunity for the rich to become richer but more fundamentally to bridge the income gap between the rich and the poor in our society.
Hydar Ally
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