Guyana’s Opposition Leader, Bharrat Jagdeo said on Thursday that the People’s Progressive Party Civic (PPP/C) is in favour of targeted cash payouts to Guyanese from revenue the country is set to earn from oil production. Mr. Jagdeo however cautioned that such an initiative must be carefully developed and implemented if adverse effects to the economy are to be avoided.
“In our manifesto we are going to be talking about targeted transfers to vulnerable groups right at the beginning. So, we have to help single parents, we have to help children, we have to help the older people first. As capacity grows and we get more money we constantly have to see that it’s sustainable,” he told reporters.
He said the PPP has to keep its mind open to any method that would reduce poverty, get more jobs to people, get children to school and provide the best quality education and health care.
The prospect of Guyanese receiving cash payouts from oil revenue has been at the forefront of discussions from a junior party in the David Granger-led coalition government – the Working People’s Alliance.
Economist, Professor Clive Thomas, has suggested a direct cash transfer to citizens from oil revenue is possible, noting that it should be given to “every single household in the country.” The timeline for its implementation, as proposed by Professor Thomas, is tied to a ramp-up in oil production of 1.5 million barrels per day or more, something that is not likely to occur before the end of the next decade.
Other stakeholders have also pointed out the potential dangers of making cash payments to citizens across-the-board.
Mr. Jagdeo, citing various models used in places around the world, including the US state of Alaska, said while his party will not completely rule it out, such a plan must be well thought-out and approached with caution.
“The biggest concerns for developing countries is the change in relative prices because if you spend too much US dollars in the economy, the local currency appreciates, and it kills off the productive sectors. So, that macro-economic impact a scheme of that sort will have in a smaller country, the US or Alaska doesn’t have to bear,” he pointed out.
Nevertheless, he said should the PPP win the upcoming election, the new government will be actively looking to develop a plan that would see targeted payments being made to the most vulnerable.
I believe any form of “direct” funds transfer to the people from petrol windfall should be avoided.
All economic strategies should provision access through the SWF or NRF. This would ensure adaption/transfer, streamlined changes, and the equitable distribution and efficient reallocation of the petro windfall among its prime targets outlined in Guyana’s SDGs.