President Ali must look at what President Biden did

Jan 25, 2023 Features / Columnists, Freddie Kissoon

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Kaieteur News – Since colonialism ended with formal Independence, the US and Europe have shaped Third World (TW) economies to benefit both Europe and the US. One of the ugliest vulgarities that characterises the West’s economic domination of the TW is the West’s demand that TW governments must curtail state spending and abolish subsidies.

What is ugly about that is that the very West spends heavily on state projects and carries out widespread subsidies. These things are done not out of generosity but to weaken TW competition in the global economy. It was sickening to hear the then, President Granger tell a forum that the state cannot provide employment.

The state spends an unimaginable sum in capitalist countries. The New York subway system is owned by the city of New York. The Government of France has substantial shares in Air France. The European Union as a matter of policy practice state subsidies to its farmers. Those are only three tiny examples of state ownership under capitalism.

The US President has signed into law the Inflation Reduction Act in which prodigious subsidies will be offered to American companies. So alarmed was the EU that the Germany chancellor and the French president had a dialogue to work out ways for the EU to have similar legislation. When the EU comes up with its version of the American legislation, subsidies are going to run wild in the capitalist West.

Here in Guyana and the Third World, the IMF will be like a vulture watching the TW economies to see how the state spends money. I cannot prescribe a policy for TW countries on how to counter the West’s continuing hegemony over the TW but I can write freely about my own country.

Here is an example about something crazy that is going on in Guyana. Three identical flavours of ice-cream are on the supermarket shelves. The flavours are manufactured in Guyana, Suriname and Trinidad. The flavours from Suriname are $900 for a one litre cup at the Chinese supermarket up the road from where I live. The Guyanese version is $1800 at the same supermarket. That is double the price. The Chinese store does not carry the Trinidadian line.

At Massy across the road from me, the Surinamese varieties go at $1000 for a one litre cup. The Trinidadian ones, that is, identical varieties and same volume fetch a price tag of $1200. But the Guyanese ice cream is stable at $1800. Which ones do I buy? The ones from the Chinese supermarket that save me $900 for each cup.

Sorry, I love my country but I cannot spend $1800 for a one litre tub of ice cream when the same flavours, the very same flavours with the same amount are going for $900 less.

It is impossible for Guyana to export the same flavours because it will cost more than their local counterparts in other countries. The strategy in Guyana should be to lower drastically the cost of electricity and for state subsidies for our dairy farmers.

It is a joke to think that milk products from Suriname and Trinidad sold in Guyana cost less than our locally produced ones. Guyana is larger than Suriname and Trinidad combined. One dairy farm in Guyana can be larger than Barbados and Singapore respectively.

Guyana must follow Europe rather than have the EU and the IMF dictating to us about subsidies. I once read a lecture that former UK Prime Minister gave to a prestigious forum and he remarked that western stability was stabilised through President Obama’s rescue of corporate America.

He was referring to the US government’s multi-trillion bailout of Wall Street during the financial crisis of 2008. In contrast, millions (not hundreds of thousands but millions) lost their homes due to mortgage default.

The ghost of state subsidy is what it is – a ghost. This fiction has been used by Western countries to shape TW economies to the advantage of their own interests. In the transformation of the General Agreements on Trade and Tariffs (GATT) into the World Trade Organization (WTO), there were no financial experts from the TW that participated in the composition of the document. The WTO was the work of Western governmental bureaucrats and the leaders of corporate power in the West and it is a body that favours the economies of the West. I end on a note that is going to give you a stroke. Do you know which countries took in most refugees for last year?  None of the Western countries are among them. High on the list is Jordan and Turkey. Guyana now has oil income. It should no longer follow IMF diktats.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• EU, New York subway, President Ali, President Biden, Third World (TW)

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