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Clive Thomas urges cash payout to households from oil revenue

From right at head table are Dr David Hinds, Dr Clive Thomas, Nigel Hughes and Maricia Charles

August 6 2016

Source

Regardless of what multilateral agencies may advise, Guyanese must pressure the government to tap monetary rewards from oil revenues if this country wants to have true equity and see a real lowering of poverty, economist, Professor Clive Thomas yesterday said.

“I believe that some portion of the net cash flow from oil should be dedicated and be given as cash transfers to every single household in this country…,” Dr Thomas last evening told attendees, at an event organized by the Buxton 1st of August Movement which was held at the Friendship, East Coast Demerara Primary School.

Further, he added, “I don’t think giving cash transfers to persons are a waste of resources. If you look at the evidence, cash transfers are the single most effective means of combatting poverty.”

The audience at the event

Under the theme, ‘The Coming Oil and Gas Economy: Prospects for Empowering the Poor and Revitalizing the Village Economy’, Thomas, one of three panelists, was the most vibrant speaker and the one who had more live feedback from participants, who at times interrupted his speech with  thunderous applause, as he laid out a plan for cash transfers.

The other two panelists were Attorney at Law Nigel Hughes and Maricia Charles who appeared on behalf of Minister of Natural Resources, Raphael Trotman.

Thomas gave his overview of the sector but focused primarily on direct cash distributions, which he called on his party, the Working People’s Alliance (WPA) to support and lobby for.

‘Whether it be US$5000 per year or whatever it works out at, we can put the figure together – there must be a mechanism in place to ensure every single household and by extension every single person, sees the benefits of oil and gas in terms of cash or cheque received in their accounts,” Thomas stressed.

No better spender

I believe there can be no better spender of resources a person wants than they themselves- nobody can tell you how to spend money better than you can yourself. As an expression to that person I believe there must be developed a cash transfer programme of some significance that makes sure that when all is said and done, out of the national pie a certain permitted amount of resources are transferred to the masses. That is an absolute minimum of what I was saying, the national debate is removing that further and further from reality,” he added.

Thomas posited that his optimism was founded on facts he would have gathered from public documents, research data and his experience not only as an economist but as a citizen of this country, where he would have seen his mother run her household on a tight but prudent budget.

It is in this vein that he believes that if citizens are given cash payouts, that they would not squander it or develop a mentality of dependence or self- entitlement.

“People heard of stories of boxers who made a lot of money in fights but then end up being poor. They know stories of people who won the lotteries and ended up being poor and they try to generalize from that, that this is the experience of every oil and gas economy. If we look at the facts, while that can and does happen, in most cases people, who win lotteries end up by being in the situation where their status has improved their lives and chances. It is not as if there are no risks…I am not claiming that calling  for cash transfers means people might not spend it on consumption or wastage, but I am saying they would better conserve it than any other outside agencies-  whether you call it local or central government.

“I grew up with a mother who, if she had money, she would have spent it on the same things she spent it on then- and that is education for us, and she lived in Albouystown. Poor people know their needs. What they want is a chance and opportunity to put it to use…When I say cash transfers, what I am trying to do is to transfer to the masses the capacity to run their own lives and to see development as something that they promote and they undertake and not somebody undertakes for them. The notion of welfare is far from this concept. There might be conditionality; things they are expected to do, but I am sure when people get that sort of money, they would be thinking of businesses and ways they can sustain and improve their livelihood and life situation going forward. They are not going to just take it and sit back and consume and wait for a cheque. So it is a gamble that I am taking, but a gamble on humanity, in which I think I will win because I know that historical experience has been on my side,” he added.

Difference

But Hughes, who is the local representative for ExxonMobil’s partner Hess Corporation, does not agree with Thomas and said that such a move in Guyana could quickly turn political with each party raising the stakes in campaign promises hoping to solicit votes.

“I have a difference to professor on this. This will probably have to go to data, but my caution and hesitation is driven by a couple of things. Back in the day, the general consensus in society was that we were all struggling to get to a better place. I think across the communities, especially, the village communities, people were striving generally to get better. Unfortunately statistics are … anytime there is a big concert in Guyana, pickpockets and robberies increase dramatically leading up to that concert. We are living in a different social era with different commitments and views on development,” he said.

“My fear is that if we start to talk about giving people cash, we are opening the doors to politicians to jump up and say, ‘ I gon give you more cash than the next one’  and we end up with a ridiculous campaign of people being irresponsible about development because it becomes a competition on who can give more. In the previous administration there used to be a lot of concerts with the hope of placating parts of our society—that is going to happen at a higher level. I fully accept that in the generation that my mother and grandparents came from, that they had a different perspective on life,” he added.

Hughes said that while he might sound pessimistic, there has to be a way that this country ensures that there is a rise in the education level across the board before such a mechanism could kick in as otherwise it would mean nothing.

“We need to start having a discussion based on data rather the hot air we see in the national newspapers. What is the criteria we are going to use to assess going forward if we are making progress, what are the benchmarks that we are going to use so that we don’t reduce it to discussions …?” he questioned.

“I welcome that discussion but I think we need to drag it to data, otherwise we are going to be dazzled by the fantastic promises that are going to come from the political pulpit unrelated to reality and economics of sustainability, and that is a dangerous place. Once we hear the music and the crowd start going, we [will start] running down the road to vote for who giving us more money, without any thought of how they gon pay it.  And when they get in, they will pay themselves, we will have none and they will tell us about ethnic loyalty. I fully advocate the view but I think we have [to discuss more],” he added.

Thomas rejected Hughes’s assertions saying that experiences of long ago are still present today and that the same way people had faith in the youth of that era and encouraged and supported them, so do elders now need to give Guyana’s future leaders a fighting chance.

He believes that the direct cash disbursement could be incentivized where there are certain conditionalities that must be met before payout.

“I have confidence we can find ways around that and I recognize there is a generational change, but I think a lot of the change has been brought about through the environment in which we do things. The very act of doing that cash transfer and trying to put back responsibilities to households might be the very catalyst to return to a better way of bringing up families in Guyana. Many of the things you see today is the same then. I choose to think of a reservoir of people who want to be in different circumstances and that is the reservoir we want to tap,” he stressed.

“These transfers can be conditional. You get the educational transfer if your child improves school attendance. You get the health transfer if you prove that your nutritional intake has improved your family’s health in the period of time stipulated in the agreement. You have a child working and you bring them out and send them to school, you get it. It is not a mad science. The ingredient that is key is that you place the lives of the people in the hands of the people. I think people here will know the difference if a man comes and tells them, ‘I will give you $1M every week against someone saying realistically I will give you $1M annually. They know when they are being sold a can of goods. People are not stupid about their own lives and their  own welfare…you’d have to be an idiot to believe that somebody would come and tell you they are going to give you $1M every day and you must vote for them. Everybody is going to laugh as you are laughing now,” he added.

Replies sorted oldest to newest

get the money and spend it. and that's it.

Guyanese love to try dey hand at things. Suh, why not set up a bank to finance manufacturing ideas with close monitoring and assistance in production, marketing and transportation.

 

S

Without reading all of the article  I will think the money whenever it comes should be used for infrastructure and creating jobs for the people  

Raising the pensioners money and try to raise the salaries for the average workers and not the ministers

Amral

some portion of the net cash flow from oil should be dedicated and be given as cash

As Amral said, build roads etc., provide electricity, raise the standard of living, make sure Guyana dollar is exchanged at 300 to 1 etc. When these are accomplished and there is no thievery, share the wealth. It ain't going to happen though.

FM
seignet posted:

get the money and spend it. and that's it.

Guyanese love to try dey hand at things. Suh, why not set up a bank to finance manufacturing ideas with close monitoring and assistance in production, marketing and transportation.

 

That's too hard for Thomas,he thinks giving out dole,there will be no squander and dependency by the recipients,he needs to take a deeper look.Wan small population with abundant lands,still these folks have no idea to create an environment to uplift the poor from poverty.

Here is what he said

“I don’t think giving cash transfers to persons are a waste of resources. If you look at the evidence, cash transfers are the single most effective means of combatting poverty.”

I am correct a bunch of rejects who can't making it in first world countries,running around in the homeland touting we can do this and do that,

52 yrs since independence the country still at the bottom of the ladder,every manufacturing industry from ship building to food production that the country had was destroyed by the Politicians due to poor management.

Guyana needs a new breed of politicians,the people need to break ties from the two peas of the same pod,there genes are to fatten themselves,friends and family while destroying the nation.

Django
Amral posted:

Without reading all of the article  I will think the money whenever it comes should be used for infrastructure and creating jobs for the people  

Raising the pensioners money and try to raise the salaries for the average workers and not the ministers

With the new revenue stream,me thinks the dollar will have to be revalued,more buying power to the current salary.

Django
Django posted:
Amral posted:

Without reading all of the article  I will think the money whenever it comes should be used for infrastructure and creating jobs for the people  

Raising the pensioners money and try to raise the salaries for the average workers and not the ministers

With the new revenue stream,me thinks the dollar will have to be revalued,more buying power to the current salary.

When? After they paid their debts?

FM
Ray posted:

Thomas gotto be stupid to come up with such an idea....like others have said, invest in infrastucture, education, health, sports thus creating jobs....

Ray, ideally, yes, that's what should be done with the funds. The problem is that between incompetence, corruption and lack of know how, we haven't been able to approach anything close to improving infrastructure and doing all the things you mentioned in over 50 years. I am not ashamed to say we are incapable of governing ourselves.

I don't like giving away money, but the only way poor folks get any of the benefits of oil is to distribute directly to the people. We can't wait 30 years for Guyanese style infrastructure investment to trickle down. Look at the pictures of poor Guyanese living in zinc sheet shacks in the worst of places. I trust giving them the money directly rather than letting corrupt politicians get their hands on it.

Some people will be innovative with it and start businesses, use it for education, repair their homes, get a home or something beneficial. The drunkies and misfits will find themselves to the liquor store and social ills will increase. Gotta take the good with the bad.

FM

Django, you are in preretirement age, go voluntare some time and teach the locals about electronics . The government can built factories and create jobs in this field.

The current generation don’t wanna farm land. 

Pay the police a good wage, this will stop bribery and offer incentives in apprehending criminals. 

FM
Last edited by Former Member
Ray posted:

Iguana

AT first, I was thinking the same thing...but I am concerned about the dependency this can create. Maybe some caveat can be attached to it...

The culture now in Guyana is to throw back wait fo the lil raise to come from Overseas. With dole outs, I can't see that changing, it could get worse-more complacency.

S
Ray posted:

Iguana

AT first, I was thinking the same thing...but I am concerned about the dependency this can create. Maybe some caveat can be attached to it...

Let me be clear - I am not for handouts and a welfare state. I believe in incentivizing a business climate which produces jobs and thus lifts the economy and standard of living. I do not believe government is the answer, however, I believe in this case an exception should be made given the 4 billion barrels in the ground and the steady cash flow expected (barring oil spills etc.).

While I was up in the tree contemplating, I think the best way to get money directly to the people can be various amounts set aside in a fund for, let's say housing. No Guyanese should be living in a zinc sheet hut as I've often seen in pictures. We have large swaths of land, why not build housing schemes for these folks, using private contractors to build the homes? That way people get houses (instead of cash in their hands), and other Guyanese are employed in blue collar jobs building these homes.

Each home can have a small plot of land where people can grow their own fruits/vegetables.

Yes, I know there will be corruption in who gets the contract to build homes, how the homes are allotted to folks etc. The government's role is then limited to
a. Administering the fund with oversight from a non partisan person/group (see labba)
b. Assigning the lots to people who meet certain criteria. I think at this point, vehicles traveling around countrywide to places where people live in zinc sheet huts is a start. they are so evident.
c. Assigning the building of the homes to contractors (will be fraught with corruption), but there needs to be standards met and inspections on the homes before they are occupied.

Immediately the lives of tens of thousands of Guyanese will get better. The bastion of capitalism, the US, has used such programs in the past after the great depression (see FDR), veterans returning from WW2 were given homes in many states etc.

The above is not immune to Guyanese racism and corruption. I fully expect it. But I think the outcome will be better regardless. If we can't do this for people, then we ought to just turn the country back to the Brits.

Oh, and these are the types of people I'm talking about for the homes

FM
seignet posted:

Bricks and mortar needs maintanance, should that be the responsibiity of the state.

People must have jobs. Yuh wuk, yuh get inexpensive loans for advances in life.

 

Both true. The hope is this will spark a "boom" in construction of housing schemes and create blue collar jobs. Lift the standard of living for people living in squalor, who now OWN 4 billion barrels of oil in the ground.

Secondly, children and people living in those homes now have better opportunities. With a small piece of land even the most illiterate can grow something to feed themselves or sell at the market to fat cat rich people like you to maintain their homes.

Housing is not the only thing. I think this can spread into other areas like medical facilities in the most rural areas, medicine supply, etc. People with 4 billion barrels of oil in the ground should not be dying because there are no antibiotics.

I reiterate - Guyanese racism and corruption will be full scale during all these efforts. Hopefully to a minimum extent.

FM
Last edited by Former Member

Let  me add there is no reason why other projects like the development of a reliable source of power and improvement of our electricity situation can't take place concurrently. In fact, I think if those new housing schemes are built as I suggested, they should have solar panels.

Reliable and cheap power is the prerequisite to attract any manufacturing jobs to Guyana and should be high on the list for development.

FM
Iguana posted:

Let  me add there is no reason why other projects like the development of a reliable source of power and improvement of our electricity situation can't take place concurrently. In fact, I think if those new housing schemes are built as I suggested, they should have solar panels.

Reliable and cheap power is the prerequisite to attract any manufacturing jobs to Guyana and should be high on the list for development.

Doh is de bottom line foh true. 

FM
Dave posted:

Django, you are in preretirement age, go voluntare some time and teach the locals about electronics . The government can built factories and create jobs in this field.

The current generation don’t wanna farm land. 

Pay the police a good wage, this will stop bribery and offer incentives in apprehending criminals. 

I am thinking to teach the people how not to support the two pea of the same pod.

Periodically i received some info from an activist in the homeland,i give him the idea to teach the NDC how to manage.

Dave,

You remembered GRECO was assembling ELECTRONICS,the head [Forget his name] I know the guy,was Philips trained,the technology was great only set back they used more components than the Japanese, Taiwanese or Americans to get the same results.

When the company i was working for was getting the deal to assemble radios,we could get the import license because GRECO was in the business.Our Company was authorized seller for Zenith,Sansui and few other brands.TV was not in Guyana as yet,the company had training materials for models produce in each year from Zenith for Televisions and other Video products,those materials became good use to increase my knowledge in the Video Technology.

Django

Django, you can't assemble electronics in the dark. The power situation needs to be addressed quickly. In fact they should be in the assessment and planning stages now for Guyana's future electricity needs so when the oil money starts to flow they can move on it.

If any firm in the world is to move it's assembly / manufacturing to Guyana they need a clear demonstration of cheap, reliable power. The manpower we already have, albeit they need to be trained.

FM
Iguana posted:

Django, you can't assemble electronics in the dark. The power situation needs to be addressed quickly. In fact they should be in the assessment and planning stages now for Guyana's future electricity needs so when the oil money starts to flow they can move on it.

If any firm in the world is to move it's assembly / manufacturing to Guyana they need a clear demonstration of cheap, reliable power. The manpower we already have, albeit they need to be trained.

Re: manpower. During Burnham time brand new radios and bicycles were assembled. I bought a GRECO radio and a Caloi bicycle. Quality products.

FM
Iguana posted:

Django, you can't assemble electronics in the dark. The power situation needs to be addressed quickly. In fact they should be in the assessment and planning stages now for Guyana's future electricity needs so when the oil money starts to flow they can move on it.

If any firm in the world is to move it's assembly / manufacturing to Guyana they need a clear demonstration of cheap, reliable power. The manpower we already have, albeit they need to be trained.

Surely power need to be upgraded.

I don't think GY can compete with Mexico and the Asian countries.That assembly deal was during Kabaka days.

Django
Gilbakka posted:
Iguana posted:

Django, you can't assemble electronics in the dark. The power situation needs to be addressed quickly. In fact they should be in the assessment and planning stages now for Guyana's future electricity needs so when the oil money starts to flow they can move on it.

If any firm in the world is to move it's assembly / manufacturing to Guyana they need a clear demonstration of cheap, reliable power. The manpower we already have, albeit they need to be trained.

Re: manpower. During Burnham time brand new radios and bicycles were assembled. I bought a GRECO radio and a Caloi bicycle. Quality products.

Those products were no more after foreign exchange became scarce.

Guyana also produced refrigerators.

Django

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