Commission a study on effectiveness of grant

Feb 04, 2026 Letters

Dear Editor,

The government gave a cash grant (GY$100K) last year to every adult (18 and over) with a valid Guyanese ID. Another grant of same amount is budgeted for this year for all adults. The President said the cash grant is not sustainable; the government cannot afford it – some $65B or over US300 M. The Vice President, a smart economist, is probably in agreement with the President.

Anyone who studies economics (economic development in particular) would know that cash grants don’t sustain improving lives except possibly for those at the extreme bottom; they need the grant to get by. Cash grant, very popular with the lower income 75% of the population, has its problems besides the huge cost to the treasury. Government should rethink whether it is an effective way to spend our oil proceeds; it will not contribute towards development.

Cash grant is given in virtually every country. In USA, it is called cash transfer and takes different forms (food stamps, welfare, paying rent and utilities, aid for children, etc.) to aid the poor. It is not given to all but only on ‘a needs test’ basis; several Guyanese receive cash transfer in USA. It is called ‘transfer’ because it is not direct cash to spend on any items; it is directed for specific uses (buy food and medicine, pay rent, etc.). Some wealthy oil countries in Middle East give direct cash grant on a monthly basis. In Guyana, the grant is given to all adults irrespective if they need it. And this is separate from pension, disability grants, children grant, etc., which should continue as the recipients need it.

In USA and developed countries, cash transfers are used to alleviate poverty and provide assistance to the lower income in emergencies. It is a quick and cost-effective way to improve the lives of poor households. In Guyana, is a cash grant an effective way to aid the poor? Should every adult (the rich) get the grant? Won’t it be better to give the grant to the poor (based on needs test) to purchase food, improve shelter, and pay for medical expenses? Won’t it be better to pump some of the allocated grant towards agriculture and livestock production — to encourage people (directed to the lower class) to produce more food to bring down the cost of living? Or won’t it be better to offer a larger grant to the poor to modernise their homes (windows, flush toilets, etc.).

Cash grant tends to fuel inflation; when people have free money, they spend most of it on ‘wild’, consumption, not on basic needs. And as I learn in my studies in economics instead of helping the poor to purchase items, grant drives prices up limiting their intended benefits. It also is a disincentive to work albeit it is a one-time grant; there are adults who are constantly looking for handouts instead of working or actively seeking work.

Government should look at ways to maximise benefits to the population with those very grant allocations. Everyone will be pleased to get free money. Is it a wise way in doling out money? Instead of grants to all, government should consider regularised targeted transfer (amounts adjusted for household size) for a limited period based on needs (income threshold) directed at particular goals (to reduce poverty, improve health, pay utilities, rents, provide sustainable jobs, encourage farming and livestock production, start small businesses, etc.). The recipients must show improvement (in visits by investigators) in direct income and lifestyle and the transfer should be for a limited period to motivate families to improve their lives. In providing cash transfer, every effort must be made not to create a dependency syndrome as happens in almost every developed country.

Government should commission a (rapid survey) study to evaluate the impact of the last cash grant before rolling out the next one.

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