…Jagdeo maintains US$5000 per household unrealistic
As the conversation and debates continue in relation to how the revenues from oil should be spent, Opposition Leader Bharrat Jagdeo has opined that Guyanese are being fed false hopes.
Warning citizens not to be fooled by the proposal being touted that every household would get US$5,000 annually, he has described this as far from becoming a reality.
A former President himself, Jagdeo noted that the debate has now shifted from whether there are enough resources to fund such a proposal to how much should be given out.
“I am so unhappy that we have shifted…the debate to how much we are giving out, rather than whether we have money to give out from 2020,” Jagdeo stated.
Warning that this is just another false hope being peddled with the probable intention of garnering political support, Jagdeo has said that monies accumulated from oil alone cannot deliver on that promise.
He explained that if 200,000 households were to benefit from US$5,000 annually, that totals some US$1 billion, but Guyana will receive less than that.
“That is over 300 percent of what we are collecting.
How could US$1 billion be 2 to 5 percent of total revenue? And that is in the newspaper and nobody challenges it,” he declared.
“It is just like people are just saying these weird things and (they pass) off for analysis and good economics; and there is a whole debate surrounding it. Just look at the numbers!” he admonished.
Jagdeo reminded that, given the expenses to be repaid to ExxonMobil for oil production, along with the need to service the Natural Resource Fund, there will be no money to give out.
He noted that it could take as much as five years before Guyana starts to see major earnings when oil production starts in 2020. This is based on projections that 75 percent of revenues would cover most of the cost of production, including a US$460 million pre-contract cost.
“That’s why most people believe we are not getting big bucks until 2025. That’s when you start getting more money, not 2020! I pointed this out already,” he stated.
Jagdeo noted also that, in the early years, Guyana is projected to collect some US$300 million.
He is in favour of conditional cash transfers as a means of improving the livelihoods of Guyanese, as opposed to simply distributing money when oil revenues begin to flow. “I support conditional transfers. We’ve done that before, and we need to help poor people,” he said.
Asked to elaborate on the Opposition’s utilisation of conditional cash transfers while in Government, Jagdeo referred to a G$50 million partnership with the Guyana Bank for Trade and Industry Limited (GBTI) on the Women of Worth (WoW) programme. This, he said, was an initiative through which single-parent women could receive interest-free loans.
He suggested that as a means of introducing concessional transfers, pensioners could also be given a tiny amount every month, to enable them to get tested for diabetes, hypertension, and other non-communicable diseases, to reduce the cost burden on the health sector.
The Opposition Leader has put forward other issues he had with the idea of cash transfers, and recommended that portions of the oil revenue be injected into education and job creation.
He said, “What about the years when oil prices sink so low…for long periods, like it has happened in some countries, and people….think they’ll get this money all the time? We have to help them create jobs, we have to help them with education.”
He continued: “So why not put the money into paying for scholarships? We take G$100 million or G$50 million and we put it to help our kids who do well go to the best universities around the world; and upgrade our university to a topnotch university with a global standard by bringing in new lecturers. That sort of thing would help us in the long run.”
Jagdeo’s comments have resulted directly from the proposal made by Working People’s Alliance (WPA) executive member Professor Clive Thomas that the Government should make annual cash transfers to every household when it begins to receive its net inflow of revenue from oil production.
Alliance for Change (AFC) Leader Raphael Trotman has not out rightly rejected the proposal, but has said it is possible for such a plan to be structured so that Guyanese receive benefits.
“We want to ensure that our young people have educational grants. We want to ensure the people who receive cash transfers are registered in our tax system and have paid taxes; and not (now) turning up (to) say, ‘I am here to collect’,” Trotman suggested.
Finance Minister Winston Jordan has also stated that the monies could be used to improve various sectors in education, health, youth, and small business development.
“I would rather hear more debate about using our resources to create opportunities for people, so that they themselves could have lasting incomes as opposed to short-term incomes,” he said.
