Dear Editor,
Budget debates afford the best opportunities for citizens (should they care) to peer into the souls, hearts, and minds of their political parties. Budget 2023 was no exception. In peering, what did we learn? On one hand, we are entrapped by a government that believes in a sort of trickle-down development scheme in which the masses of everyday Guyanese must patiently await prosperity as we would ripe mangoes falling from a tree. Where in all its speechifying is the PPP’s development thrust? Moreover, during the debate, it was not hard to notice in the PPP a lack of remorse (and a lack of urgency) over the unfulfilled hopes of the destitute masses. This is a party whose self-worth and self-identity depend on people outstretching their hands to it for goodies. Indeed, one has always sensed that should prosperity be bestowed one day on all citizens by magic, the PPP would self-destruct.
On the other hand, during the debate, the Coalition parties collectively conveyed the frustration that there is not where Guyana ought to be, that its citizens could be far better off. And what Guyana therefore needed is a development model that invests overwhelmingly in people across all walks of life. The PNCR and the other opposition parties argued (especially in the presentation by Opposition Leader Aubrey Norton) that while PPP is more interested in channeling public funds to its “friends, families and favorites”, the coalition’s interest lies in lifting people out of poverty and ensuring a higher quality of life – that is, in genuine inclusive growth and shared prosperity.
Over the past year, the Coalition, in rejecting the PPP’s trickle-down economics (such as it is), has embraced what development economists now call “middle-out economics”. Joe Biden, the most passionate practitioner of this approach, often declares: “Trickle-down economics has never worked. It’s time to grow the economy from the bottom up and the middle-out.” To see what he means, look at his Build Back Better agenda, his American Rescue Plan, his Infrastructure Investment and Jobs Act, his Inflation Reduction Act, and his Student Debt Relief initiative, all aimed at lifting living standards of ordinary Americans.
The bottom-up, middle-out approach to growth and development is more than a slogan. It is, to quote one source, “a fundamentally different way of thinking about the economy that has emerged from decades of research, evidence, and theory.”
Its core philosophy lies in putting people first. It affirms that by maximizing cooperation, trust, fairness, and inclusion, market economies have a better chance of success. Therefore, (quoting again) the more people that contribute to the economy and benefit from it, in fair social contracts, the more prosperous we all are. Inclusive economic growth and development cannot therefore occur if persons are excluded by virtue of destitution, unemployment and underemployment, low income, no savings, social marginalization, and discrimination. The more people that participate as workers, producers, consumers, investors, and citizens, the better are the chances of building a vibrant and prosperous society and economy for all.
Of note, in this thinking, public expenditures in social protection programmes are seen in the same vein as expenditures in education and health: that is, the spending should be seen both as the right thing to do for people (a moral obligation) and as investments in economic growth (a financial calculation).
What the PNCR and the other opposition parties have been saying all along is totally in sync with this model of development.
All of this may seem the natural or Christian thing to do. But over the last four decades, national economic planning worldwide has been in the grip of trickle-down economic doctrine, based on the belief that governments should get out of the way to make room for the private sector and the free market to flourish, thereby spurring economic growth which will eventually trickle down to ordinary folks in the form of more jobs and higher wages. This is the model that the Hoyte government was forced to swallow under IMF conditionalities in the late 198Os. It birthed the ERP with its harsh medicine of privatization, removal of subsidies, and retrenched public servants.
In the US, which has applied it since Ronald Reagan, the promised trickle down has in fact manifested as trickle up. The top 1% of the population has gotten richer at the expense of the everyday people. It is hard now to dispute the evidence that favouring the rich at the expense of the masses leads to greater inequality, less social cohesion, more public distrust in institutions, and, critically, lost economic growth. These defects are not hard to find in Guyana where for 26 of the last 31 years, the PPP has ruled.
As such, the PNCR and the other opposition parties must continue to emphasize public investments in workers (private and public sector), producers (farmers, manufacturers, IT firms, etc), families (single-parent, nuclear, extended households, etc), and communities (irrespective of voting patterns). The Coalition must continue to emphasize expenditure in infrastructure not as a spending spree but mostly to power economic growth. It must continue to promote measures to ease the cost of doing business (small and large) in Guyana.
Further, it must continue to sell its core belief that each household must be guaranteed a minimum livable income (through a combination of wages, profits, dividends, cash transfers, subsidies, tax breaks, etc). It must continue to sell its proposals on social protection, such as on early childhood care and education and on utilities payment assistance. It must continue to examine other ideas such as rent and mortgage assistance.
Through its bottom-up, middle-out development framework, a Coalition government can lift Guyanese out of poverty, expand the middle class, and ensure all can enjoy high living standards and quality of life.
Yours faithfully,
Sherwood Lowe
