Dear Editor,
When I read the President’s statement that “This year alone in addition to the shortfall which we have in generating capacity we are projecting another energy demand of 35 megawatts so that will take total demand by the end of this year to 220 MW that is on the system right now,” I was immediately reminded of Lord Keynes’ famous aphorism, “In the long run we are all dead.” Contrary to popular opinion, which has it that Keynes was advocating short-termism, Keynes was countering the classical view that systems correct themselves in the long run. But in calling attention to the necessity of short-term interventions, Keynes did not mean that the long term doesn’t matter. In economic policy-making we face a sort of dynamic programming problem, in which achieving some end state in the long run will require making the right decisions at every stage along the path to the end state, starting with “today.”
When it comes to our power needs, it would appear that ‘today’ only has nuisance value, while we rush to achieve an end-state of economic transformation, One Guyana, and some notion of being a little Dubai, perhaps by 2025. The whopping increase in demand for electricity, clearly an afterthought to those who felt that the electricity sector would take care of itself in the short term, somehow became a matter that we could address in the (admittedly near) future. Hence, we focussed all our energies and resources, including our human resources, on a fanciful and uncertain silver bullet. Fanciful, in particular because we cannot even find the engineers, linesmen and technicians to run our existing system, much less the far more complex and much larger GTE project.
And as we are talking Keynes, we might as well remind ourselves that the Dutch Disease has two elements to it: the resource movement effect and the spending effect. The former tells us that the higher wages in the expanding oil and gas sector will continue to siphon off human resources from other sectors in the economy, unless real wages in these sectors were to also increase. This economic logic is relentless. So whether we train more people or we import them, we will always be playing catch-up as they migrate either locally to other sectors, or abroad as with our nurses and teachers.
No one is suggesting that the task facing the policy maker is easy. Yet, it seems, we must trust that the policy maker is making the right decisions at all times for all of us in every sector. Meanwhile other persons (Alfred Bhulai, Rajesh Singh) have suggested that our oil revenues be used to finance solar power in each household. In a previous letter to SN, I had pointed out that what Guyana does with its oil revenues is ultimately being done by the government, that the choices made by (any) government may not be the choices that we’d make for ourselves, with the result that angst is building up in the society. Clearly, this recent experience we collectively face with power is a case in point. Perhaps consideration might be given to offering a subsidy to households that want to go “solar,” as the State’s contribution to alleviating our energy woes.
On a slightly different note, I hope that the Prime Minister, whose recent letter “The remarkable successes by GPL and claimed by Patterson were initiatives undertaken by previous PPP/C governments,” was both defensive and in very poor taste, might take his cue from the Vice President, who was reported as saying, ““The situation is bad, there is no sugarcoating this …We are not going to say people are not justified in the harsh comments they make.”
Sincerely,
Thomas B. Singh
Director
University of Guyana GREEN Institute
& Senior Lecturer
Department of Economics
University of Guyana
