Not “Free money”: Think economic development and equity.

Oct 11, 2024 Letters

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Dear Editor

The author of “Free Money … and mo’ money!” in the Guyana Times dated September 15, 2024, understands very little about the “Buxton Proposal”. It is not anti-capitalist, Marxist, or a ploy intended to win votes. The proposal is a genuine attempt to address the poverty dilemma of Guyanese working people in a structured rather than haphazard way “the Government has already rolled out” that provides “several grant programmes to several categories of needy citizens”.

The Buxton Proposal is not free money but a poverty intervention measure “to support households’ accumulation of human, financial and productive assets and b) to protect households from low and fluctuating incomes/consumption”. It views the “lack of such “support” along with “low and fluctuating incomes/consumption” as “the leading drivers of income poverty in Guyana”.

The author does not know how to analyze the Buxton Proposal although its methodology is meticulously outlined at every step of the way. There is nothing about Marxism in the Buxton Proposal. “The reasoning in support of cash transfers to households as a poverty intervention policy relies on empirical evaluations of such schemes, rather than, as some naively believe, a new set of poverty prevention and alleviation theories”. It is not based on Marxism or any other -isms. The list of references for the Buxton Proposal covers Noble Laurates and “studies conducted under the aegis of leading Development Agencies and Authorities” that “attest to the efficacy of oil revenues to citizens cash transfers as a poverty policy intervention tool”.

To ensure that the Guyana-government can afford to pay the cash transfer, the total annual budget for the Buxton Proposal is subject to the externally imposed binding constraint or cap of a maximum of 10 percent of government Take that is how much money the government receives in oil production. Intricate objective calculations are undertaken to arrive at the amount of money the government will receive from oil production and how much it can pay as a cash transfer.

The article is out to make cheap propaganda against the WPA and personalise disparaging references to the individual who wrote the Buxton Proposal. The article tries to use the fear arousal technique to push people away from the WPA and the Buxton Proposal by raising the Marxist bogyman in the same way that former President Trump did against Vice President Harris when he claimed in their Presidential debate that Harris’ father is a Marxist who taught her very well. But those scare techniques do not work nowadays because the capitalist versus communist ideological Cold War is over. People can see through the propaganda.

The article dishonestly insinuates that Marxist ideas are the cause for the current situation in Venezuela, while failing to acknowledge that Venezuelans are not the ones that place themselves in the situation they are forced to endure. The article claims that the Buxton Proposal was overlooked by a previous government administration but now it is embraced by the political opposition to win votes at the national elections in 2025. But the Buxton Proposal as stated above has a completely different objective than to “‘big up’ spending on people to get their votes”.  The economic success of China is mentioned without acknowledgement that the World Bank applauded the state-led China model for lifting approximately 800 million people out of poverty.

The inaccurate arithmetic in the article shows no appreciation for the complexities in the determination of the expected government’s “take” from Guyana’s oil and gas sector. These intricacies concern “the fiscal rules of the Production Sharing Agreement (PSA); oil and gas discoveries; existential threats that could strand Guyana’s petroleum assets; the capabilities of the oil blocks’ Contractors; crude oil and gas prices; and the profitability of the enterprises involved in the sector.”

The article’s arrival at a careless statement like: “Now, even if oil steadies at US$80/barrel, we’re earning some US$2.5 billion at the 14.5% Exxon contract rate but will be dishing out US$1+billion to the present 200,000 families – which are expected to increase!!” is the result of a lack of knowledge of the ingredients necessary to undertake such calculations.

Finally, there are other advantages in implementation of the Buxton Proposal ignored by the article whose author is clearly unfamiliar with its design elements: the conduct of a feasibility study to fine tune the initiative, and its universality as the cash transfer is for every household. Comparatively, the current government’s “transfer for this and that” is very politicized. The cash transfer in the Buxton Proposal can only be paid to recipient whose identity is known, while households have the right to decline if the payment increases their liability for additional tax payment greater than the transfer, and lastly the transfer coincides with the attainment of a daily rate of production of 1.5 million b/d. This gave government more than seven years to utilize all the oil revenues for development, and after the start of the cash transfer scheme 90 percent of oil revenues will be available to government.

Regards
Working People’s Alliance

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• anti-capitalist, calculations, Guyana, Guyana Government, Marxist, programmes

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