Economist, Professor Clive Thomas’s suggestion that government should consider annual cash transfer of $1Million (US$5000) to poor households when oil starts pumping, has generated immense public discourse.
Adding his voice to the debate, Opposition Leader Bharrat Jagdeo said that he does not agree with this notion entirely. At a press conference hosted at this Church Street Office yesterday, Jagdeo said that he supports conditional transfers. He argued that this has worked in the past.
“…The PPP did it before. $50M was taken and (we) partnered with the Guyana Bank for Trade and Industry (GBTI) through the Women of Worth (WOW) Scheme, to ensure that women – particularly single parents – can have interest-free loans.”
While monies were directly given to women, the initiative was a form of transfer, the politician said.
Jagdeo said, “It made credit available to single mothers at zero-interest rate. The availability of credit to poor people is critical for them to start a business and get out of poverty. Governments need to do these things and not create a syndrome where people believe that because oil is coming, we will get a sum of money every year and we have to stop working.”
He added that the recently tabled Green Paper on the National Resources Fund (NRF) – which outline guidelines about the management of oil funds – entails provisions for saving some of the proceeds.
Due to the fluctuations of oil prices on the global market, the savings will serve as a stabilizer mechanism to deal with the possible shocks that can be derived from reduced oil prices, Jagdeo noted.
With that provision, and monetary flows from the NRF to the yearly budgets coupled with the management of the sector itself, will be cutting it close to the overall sum that will be received from the sale of oil.
Taking all of that into consideration, Jagdeo scoffed at Thomas’ suggestion; labeling it as an attempt to “mislead people that they will get large sums of money when it’s not true,”
“Spreading false hopes is all they are doing about oil and gas. It is not supported by facts…They are setting up people for failure. If anyone genuinely starts believing this and it doesn’t materialize, what happens to the lives of those people? I don’t have a problem with people expecting more, I have a problem with the misleading,” Jagdeo said.
Meanwhile, Dr Thomas and the Working People’s Alliance (WPA) – which forms part of the governing Coalition – today announced that they will mobilize public pressure on the government, to have them move in this direction.
The President, however, noted earlier today, that there was no formal proposal from Dr Thomas, or the WPA to the effect that there should be direct transfer of monies from the oil and gas wealth to poor households.