INVESTMENT OF OIL RESERVES IN SOCIAL AND ECONOMIC DEVELOPMENT WILL ELIMINATE POVERTY AND PLACE GUYANA ON THE WAY TO FIRST WORLD STANDARDS IN 4 YEARS

Mar 12, 2023 Consumer Concerns, News

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CONSUMER CONCERNS…

PAT DIAL

Kaieteur News – In the modern world of the 21th century, a number of programmes affecting humanity have been promoted both nationally and internationally.  Such would include “Climate Change”, “Green Power” replacing fossil fuels, and “Poverty Reduction and Elimination”.  In Guyana, until recently, most of the population fatalistically felt all societies had to have poverty and that the most Governments, NGO’s and philanthropists could do was to slowly reduce it, or, to ameliorate it.  The poverty line differs in different regions of the world. In Western type societies, it is set at about US$5.60 per day per person.

The recent experience of China eliminating poverty from hundreds of millions and bringing them into the middle class in a very short time, has changed the view of most developing countries, who now feel quite confident that poverty could be eliminated from their societies in a short time if they employ the appropriate techniques.

The discovery and exploitation of oil in Guyana has led to euphoria that poverty will be instantaneously ended and the painstakingly old ways of addressing poverty could now be eschewed.

Before oil was discovered, Guyanese people had evolved their own ways of grappling with poverty. They believed in saving, which is the deferment of today’s gratification for tomorrow’s betterment.  The emancipated slaves understood this quite well when they saved very small pittances of money over several years and were able to buy abandoned sugar plantations and set up villages with thousands of houses thus becoming the biggest landowners and property holders in the colony at that time. They also ensured that their children received a good primary education and branched off into farming and in the various trades.  The immigrant groups which supplied labour on the estates after Emancipation followed a similar pattern in grappling with poverty, except they stressed more on economics than education.  All groups also made their food, clothes, housing, education and medical service go a longer way.  For example, books were lent to each other or home nursing rather than paying doctor’s fees.  By these methods, many crossed the poverty line each year.  But it seemed Guyanese, like people in all developing countries, felt that it was deterministic that all societies must have poverty and only a comparatively small number would cross the poverty line each year.

The example of China revolutionized the thinking about poverty eradication for in a very short time China was able to raise hundreds of millions out of poverty into the middle classes. India has also been getting scores of millions out of poverty and its main technique was to give everyone a cell phone and a bank account, which they would use appropriately to raise their standards of living.

In Guyana, we feel that with the exploitation of our Oil and Gas resources, poverty could be eliminated in a very short time and that the older Victorian methods of addressing poverty could be forgotten.  The competing techniques of eliminating poverty by use of Oil Revenues are two:

The first technique is by large direct cash transfers to every person in the society. This position is advocated mostly by academics.  By such transfers, poverty would be eliminated instantaneously.   Such a technique has been vigorously criticized and dismissed.  Into these criticisms, we shall not go except to point out that it could discourage the population from working and the population would have so much money that they would not know what to do with it and could end up like King Midas or the pork-knocker who got so much riches that he lit cigarettes with currency notes.  It would result in the syndrome of dependency and entitlement which is unsustainable, since when oil prices fall or reserves become depleted the population would be plunged into deeper distress than had existed before the Oil boom.

The other technique is to use the Revenues as developmental capital for the social and economic sectors and the Government, following the examples of the developed countries like Norway and Britain has established a Natural Resources Fund wherein the Revenues are deposited.  Part of the Revenues is reserved for the use of posterity; part devoted to economic development; part to social development; and the smallest part to cash transfers to specifics.

The spending on economic development would include large investments in agriculture to upgrade present agricultural industries and introducing new ones such as upgrading livestock, fish and the introduction of new crops such as wheat, millet, corn and soya.  The stimulation of industrial development will be ushered in with cheap electricity by the gas to shore pipeline and agro-industrial products. The investment in the gas to shore project is US$1B.  Together with this laying the foundations of agricultural and industrial revolutions, the ports are being developed and a network of roads and bridges are ensuring the connectivity of every part of the country.  Hundreds of millions of US dollars are being invested by local and international hotel chains to construct world-class hotels and more international airlines have started coming to Guyana.

Social spending on health, education, housing, pensions and salaries has entailed hundreds of billions of Guyana dollars.   New and modern-equipped hospitals and schools are being built in various parts of the country and pensions and salaries are gradually being increased.  Thousands of scholarships in the Arts and Sciences at various foreign institutions have been distributed and efforts are being made to strengthen and increase the training of scientists in various fields including Oil.

The smallest portion of the spending from the Fund is allocated to cash grants and such would include cash and uniform grants to every school child; school feeding; text books; and one-off grants to pensioners and to fishermen to help them to repair and re-equip their boats and return to gainful employment.

It is estimated that poverty would have declined by 6% this year and would be doing so in faster progression in the coming years and in four years’ time, the country would be approaching the first world standards in social services.  Though there would not be money to indulge in aimless splurges, the disposable incomes of the citizens would keep increasing.  This methodology of deploying the oil revenues would ensure Guyana avoids the Dutch Disease and secure economic prosperity and employment way into the future.

 

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