(Karen Abrams holds an MBA from UC San Francisco. She is a Marketing and Small Business Consultant in the US and Caribbean. Karen is also a partner in a party rental
business in Decatur, GA.)
The anti-prosperity model?
Recently, I read the transcript of a speech given by former speaker of the house and famous Republican strategist, Newt Gingrich. To be clear, I am not a Republican, not a Newt supporter and it is well known that Newt Gingrich has been historically reviled by many Democratic communities in the US. After reading Newt Gingrich’s text however, I was excited and galvanized.
Gingrich spoke honestly and directly, to problems and solutions for minority and disenfranchised communities; an act so many non-Black politicians are reticent to engage in, and his assessment while not a revelation, was pretty amazing. Gingrich’s comments on culture and prosperity are worthy of further discussion and to that end, I believe there is value in sharing verbatim the texts of several of his thought provoking paragraphs.
“ if your ethnic group is poor, the number one thing you want them to do is to go into business because that’s where they’ll create wealth. And when they create wealth they’ll hire their relatives, and they’ll hire their neighbours. And a generation of entrepreneurs can mop up poverty at a rate no bureaucracy can imagine.
And yet, nowhere among current left-wing critiques of America, and nowhere among those who most publicly spend time worrying about the poor, do you hear a constant drumbeat that says: Let’s try to turn every young person into an entrepreneur. Let’s try to teach them how to create a business. Let’s try to help them grow as rapidly as possible. Let’s see if they can’t bring wealth into the community by earning it, and in the process they will mop up the poverty by the act of hiring everybody they went to school with.
This has worked for every ethnic group that has risen in American history, including, by the way, genuine African-Americans who come from Africa, or Caribbean-Ameri-cans who come from the Caribbean. As long as you focus on earning a living in America, and you focus on being prudent, you rise. People have risen whether they were Jewish, Irish, Italian, Greek, Turkish, Chinese, Korean, Vietna-mese, Indian, Pakistani. It’s astonishing in America how many groups rise. But they rise by learning the rules of rising. And the first rule is to make business and the development of wealth and the creation of economic opportunity more important than politics and to focus resources on encouraging people to go into business, not bureaucracy.
The second great ground rule is simple. In a healthy society, you want the smallest possible tax rate because you want the maximum resources with people who know how to create jobs. And the choice is simple: do you make the politician or the bureaucrat more powerful by giving them more money, or do you make the job creator more effective by letting them have the money. But does anyone seriously want to argue that the bureaucrat is more likely to create the next million jobs than the entrepreneur? Very few Americans believe this. And yet it’s the base of much of our current politics.
So this question about the critique is important. And I would suggest to you, by the way, that there are plenty of factual bases for this. If you go back and look, in 1960, South Korea and Ghana had the same per capita income. Today, South Korea is the eleventh wealthiest nation in the world, with a high tech base of its industrial sector in the world market. Forty years ago, the leading export of Ireland was its children because they had no jobs. Ireland adopted a low tax 12 and a half percent corporate rate, very rigorous rule of law, investment in education and infrastructure, and today Ireland has a higher per capita income than Ger-many, although they’re in danger of messing it up by raising taxes and creating new work rules.
Today, they are 50,000 guest workers from Eastern Europe working in Ireland because they have a labour shortage. Something that was literally inconceivable, yet who on the left is prepared to study South Korea and Ireland? Who is prepared to study success? It’s as though, if politics were sports, the primary pattern of the left would be to study the losing team.”
I don’t personally agree with Gingrich’s attack on the “left” or Democratic Party. In fact, while he shares valuable insight, like a good politician, he predictably infuses rotten politics into the discourse which does have an alienating effect on some. So as most reasonable individuals know, when listening to politicians, one has to absorb what is usable and discard the rest.
The lessons for Guyana are painted in the paragraphs above in vivid colour. Is there value in lowering the corporate tax rate from 45% to anything lower?, would companies then be able to expand their businesses and hire more citizens? Has there been sufficient discourse on true value of a 16% VAT rate? Is there room for any discussion on a reduction? If we encourage the next generation to become entrepreneurs, provide them with training and support them with micro-loans, could we exponentially drag thousands of family out of poverty? Would that reduce crime? In a country where government bureaucracy and distrust are rampant, can we improve systems if we limit government’s involvement and encourage the private sector to provide more solutions to the nation’s problems? Would we be able to reduce corruption if we brought standardization and technology; and I don’t mean just computers, to the workings of public and private sector organizations. Implement-ing technological solutions means complete systems implemented based on a logical process, on stable telecommunication networks, with hourly or nightly data backups in a secure data centre environment, with rehearsed disaster recovery and business continuity plans. Improvements in technology will require a new sector of employees to support, manage and administrate these systems.
Redundant employees should be re-trained and/or encouraged to enter entrepreneurship programmes. Successful implementation of such systems requires expertise from people with track records of success, a strong political will and a willingness to change priorities and redirect resources.
Honestly, one should not have to go looking for a “friend” for help to conduct business transactions in any organization in Guyana. New service, bill payment, record changes, probably account for 75% of daily transactions in these organizations. We should have conquered these activities by now. The technology to reduce processing time in any of these organizations to under 5 minutes per person is now more than 20 years old. Guyana’s population is not that large, and to be able to speed up processing to under 5 minutes per transaction at Customs, GPL, GRA, Commercial Banks, GTT and other public and private institutions would massively increase the nation’s productivity and reduce corruption. Is there any value to having these discussions?
Guyanese citizenry need to know that the government cannot solve the problems of the nation and to the extent that government can affect positive, long-term change, they surely cannot do it on their own. Top down government solutions do little more than provide opportunity for mileage. These programmes are not sustainable in developed countries with solid economies and are less so sustainable in developing countries like Guyana. An expectation that government will somehow “save” Guy-ana is naïve. In fact, government will do more for Guyana by getting out of the way, empowering entrepreneurs and the private sector and focusing on solving potential disaster creating issues like flood and drain management, strengthening the judicial system, encouraging alternate energy programme implementation, focusing on improvement of poor roads, running water, electrification of rural communities and improved crime management.
Oil prices today hit $130 a gallon. Demand for oil continues to rise as Ameri-cans drive their big SUVs, as more Chinese, Indians and Brazilians raise their standards of living and demand the middle class lifestyles afforded to many in developed countries and who could blame them. The supply of oil is in question as oil rich nations exhaust their supply and new supply field discoveries are rare, cost prohibitive and many years away from production.
So a solution to high cost of living, lack of opportunities and crime is not going to very quickly appear here in Guyana, the Caribbean and anywhere else around the world. Clearly Guyanese citizens must take personal responsibility and look for ways to empower themselves with or without government intervention. Com-munities can and must become food independent as the cost of transporting food will only continue to rise. Kids should be encouraged to read more, must be exposed to computers and must be encouraged to be creative. Adults must be consumed by ideas and solutions. Ideas of wealth creation and less of consumption, ideas to reduce crime in your neighbourhood, ideas for the engagement of neighbourhood young people, ideas to help each other and ideas for keeping our communities clean. These are Guyanese traditions which we must revive. Technology must be embraced as those without computers and internet access will be left behind and without valuable information as the world rapidly moves towards globalization. Creativity and brilliance should be allowed to rise to the top, the troubled times we will face ahead will require the best and the brightest to come up with solutions. The time to act is now, the place to act is here. Albert Einstein once said “The definition of insanity is doing the same thing over and over again and expecting different results”. Are we Guyanese insane?
