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By Mark DaCosta- Observers of the People’s Progressive Party (PPP) administration often have much difficulty understanding the logic that informs the government’s plans, policies, and programmes. Many cannot fathom these and think they make no sense.
One of the policy areas is the PPP regime’s approach to development. More than 40 percent of Guyanese survive in poverty and 12 percent cannot find a job. At the same time, the regime appears focused on borrowing money in huge amounts, and spending it lavishly on grand, questionable infrastructural projects that may or may not benefit the masses of ordinary Guyanese.
The PPP’s record regarding the grand projects is ill-advised is the view of both experts and ordinary Guyanese. Issues like the US$200 plus million Skeldon sugar factory, the more G$1 billion fiber-optic project, the more than US$840 million Amaila Falls Project, among other; and now the estimated US$1.8 billion gas-to-shore project which is absent of details have given rise to concerns about government’s management of the economy.
The contracts for the regime’s grand projects invariably go to friends and allies of the PPP elite whose bank accounts are overflowing in as much as they are demonstrably unqualified. The process of awarding contracts is opaque and secretive, without exception. The recent award of a contract worth more than $8 million to a company affiliated with a social media PPP propagandist known as Guyanese Critic, is one such.
The government has provided no rationale behind any of the programmes and based on its action they are committed to the idea that benefits will trickle down to ordinary Guyanese. With heavy involvement of what the Opposition refers to as “friends, family and favourites” it appears that the government is practising some corrupt form of trickle-down economics.
It must be noted this publication can only infer what the regime’s motives may be, based on observations, because no one in the PPP government bothers to explain to the people what the government is doing, and why.
Younger people may never have even heard the term before now because trickle-down economics is a discredited theory. In fact, the theory is so much despised that respected economists want nothing to do with it. Respectable economists say that it is a political idea, not a viable economic theory.
According to the New York based financial media website, Investopedia, “While there is no single comprehensive economic policy identified as trickle-down economics, a policy is considered “trickle-down” if it disproportionately benefits wealthy businesses and individuals in the short run but is designed to boost standards of living for all individuals in the long run.” It is left to individual Guyanese to decide if the activities of the PPP government align with that definition.
Former United States Secretary of Labour and Professor of Social and Public Policy, Robert Reich, wrote the following:
“[The idea] that economic growth requires the rich to become even richer is rubbish. Economist John Kenneth Galbraith once dubbed it the ‘horse and sparrow’ theory. According to the theory, if you feed a horse enough oats, some will pass through to the road for the sparrows. We know it as trickle-down economics.”
Regarding the “horse and sparrow” analogy, several commentators have asked the question: If you want to feed the sparrow, why not feed the sparrow directly? Why would you feed the horse and hope that some of the food will trickle down to the sparrow?
Robert Reich wrote the following:
“In a new study, David Hope of the London School of Economics and Julian Limberg of King’s College London lay waste to the theory. They reviewed data over the last half-century in advanced economies and found that tax cuts and other benefits for the rich widened inequality without having any significant effect on jobs or growth. Nothing trickled down. Meanwhile, the rich have become far richer.”
