Jagdeo and improving neo-liberalism

Nov 24, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – Wikileaks has also released the contents of a diplomatic cable, dated 7^th December 2005, detailing an informal meeting held a few days earlier between then President Bharrat Jagdeo, the then Charge de Affairs of the United States Embassy and its Political Affairs Officer.

In the cable, Jagdeo is reported as admitting that “neo-liberalism has not worked in the region”.  By region Jagdeo was referring to Latin America. However, according to the embassy officials Jagdeo went on to state that he and other Latin American Leaders, with Chavez as an exception, accept that a model based on the private sector is the only solution for achieving economic development.

While admitting that lots of ordinary people feel that neo-liberalism was causing greater poverty in society, Jagdeo nonetheless concluded that the neo-liberal model can be improved. The contents of that meeting between Jagdeo and US embassy officials should put to rest the debate as to whether Jagdeo is a neo-liberalist and that a private sector-dominated economy is the one that he has chosen for Guyana. The contents of that meeting should equally dispel the idea that the PPPC is wedded to the working class.

Neoliberalism is an economic and political ideology that emerged in the mid-20th century. It advocates for free-market capitalism, deregulation of the economy, trade liberalization such as the reduction of tariffs, open foreign exchange markets and privatization of government enterprises. Neo-liberalism is premised on the idea that as the economy improves the benefits will trickle down to the poor. However, the experience in Latin America and Sub-Sahara Africa is that inequality increased under neoliberalism.

Jagdeo’s model of neo-liberalism is based on the idea that if you take care of the rich, the benefits will flow down eventually to the poor and that the government can attenuate the social effects of rising inequality by investing more in social services – such as education, health, housing, and water. Such an approach to “improving’ neo-liberalism has not worked anywhere in the world, and it certainly has not worked in Guyana. Jagdeo’s attempt at reforming neo-liberalism has led to the widening in Guyana of the gap between a small, powerful oligarchic bourgeois class and the middle class. While the middle class has expanded under the PPPC, it was bound to do so given the migration of the bulk of this class during the late 1970’s and 1980s. But while the middle class has expanded, the gap between it and the bourgeois class has also widened.

Jagdeo was the architect of the creation of a new oligarchic class. He was prepared to create this new class at the expense of then economic elites. Speaking at the GDF’s annual officers conference in 2007, he is reported to have said, “I would help the new emerging private sector, not the fossils who grew up in the past and want to live off government patronage. I am not helping them.”

The gap between the middle class and the poorer classes or the proletariat also widened. Indeed, while poverty was reduced, more than half of the population are still deemed to be poor based on a new income line for high-income countries. The mandate of improving neo-liberalism is not limited to social programmes for the poor. As we have seen, it also involved support to the emerging oligarchic class. The poor therefore should disabuse themselves of the notion that improving neo-liberalism only means helping the poor. The wages of neo-liberalism is poverty. Jagdeo understood clearly the effects of neo-liberalism in Latin America. Yet, he believes that the system can be ‘improved’ to deliver benefits to the working class.

Under neo-liberalism, crumbs are thrown at the working class while the bourgeois class and the middle class hog the bulk of economic benefits. Rising inequality is conspicuous today because of Jagdeo’s neo-liberal policies. As a result, the country is a ticking time bomb – open class conflict is going to erupt eventually because of this rising inequality.  The PPP once subscribed to a working-class ideology and economic philosophy because its founders understood that you cannot suck cane and whistle at the same time. You cannot be a government of the bourgeois class and yet claim to be aligned with the working class.  Guyanese are presently worried about the external threat posed by Venezuela. But they should be more worried about the internal threat which is being posed by Jagdeo’s neo-liberal policies which is allowing the rich to cream off and hogg the benefits of the petrostate economy, leaving the poor to grovel for crumbs and hope that somehow the nectar of oil riches will trickle down to them.

(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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• Charge de Affairs, Jagdeo, Peeping Tom, United States Embassy, Wikileaks

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