SOP Ideology, Plan And Policy For Economic Development in Guyana

SOP Ideology, Plan And Policy For Economic Development in Guyana

My fellow Guyanese this is not the time for us to be mealy-mouthed towards those who are at fault and in the wrong. We must stop the silence towards that which had cause, has causes and will continue to cause the suffering brought upon you by those who were entrusted with the constitution of this country. Nonintervention has been destroying us, and your country. 

For the past 56+ years since the Guyana has gained its independence spear headed by Mr. Linden Forbes Sampson Burnham and others visionary leaders, the present leaders has illustrated that they have no appetite for the policies that should have been put into practice, to form the base of government that will foster economic growth and development for the citizens of the Cooperative Republic of Guyana.

A number of policy and ideas, which were often accused of being impractical by some leaders whether in opposition or in government, when they were first put forward, are now universally accepted and will be implemented by the SOP government when elected to office.

Although the recommendations SOP proposes are for policies in Guyana, the principles that underlie these policies are universally proven where they has been adapted and implemented by the respective government.

To the past and present government, I must remind you that “sought policies that worked with the grain of human nature must reflect the desire for the achievement of self-betterment that motivates not only Guyanese living in Guyana, but also Guyanese living in the diaspora”.

We must first work collectively towards the conditions in which the private sector – free enterprise – can realize its full potential for the benefit of all. Only then can it create the well-being which alone will buttress its political standing and preclude further assaults of such kind. There is no good reason why this country, our country should continue to fail.

This may not be easy because for the past 56+ years the economic life of our country industry in a tatterdemalion state and our society in a Socialistic fashions. Such obscured vision and weakness has only further inroad disappointments. All of our past government has failed only because they took half measures. The reality here that needs to be pointed out is that for 56+ years the private sector of our economy has been forced to work with one hand tied behind its back by the government.

My people by now, it should be obvious and clear that “when the state owns, nobody owns; and when nobody owns, nobody cares”. Hence the underlying belief of SOP is the alternative of property-owning democracy through state monitoring and a free-market economy under the rule of law. SOP believed that ownership gives people a stake in society and a sense of control not only over their own lives, but also in the development in their community and country. It is standard wisdom that more home ownership will lift millions into the middle class.

We must react strongly and exposed the dangers of those participants with their proposals that will turn Guyanese into a nation of lame ducks.

The question we must all ask ourselves as Guyanese with this generation of experience is how could we expect that the idea of “more of the same” which has kept us on our knees in the 20^th century be seriously entertained in the first quarter of the 21^st century? It is insanity to be doing the same thing over and over again and expect different results.

We must find a satisfactory answer to the question of prosperity if this country is to survive as one prosperous nation. Of course, there is more than one answer. But the best answer is what is significant and important as the solution.

When compared with others, we have the longest working hours and the lowest pay. We have higher taxes but lowest investment. We have the least prosperity but a wealthy country, the most poor and the lowest pension’s package compared to the wealth of our country.

Our education, our social services, our health services, and our cultivated barbarisms all gives cause for concern. We find it more difficult than our neighbor’s to give the right treatment to the disabled, psychiatric, old age and good rewards to such groups as teachers, nurses, doctors, sugar workers, rice farmers and other farm workers, fisher men, miners, etc. etc.

Moreover, unlike our neighbor’s we have been a disinvesting nation. In real terms, Guyana has been consuming its capital stock faster than it can replace it. The past and present government has failed to build up and transmit physical and moral capital values over three generations. They have been eating the grains, which sow the seeds to neglect the fields.

These are the lean kind which, as in Pharaoh’s dream, are eating the healthy cows which is the productive sector of the economy, but yet remain as hungry as ever. For 56 years we have tried to buy social peace at the expense of economic efficiency; predictably, we have got the worst of all worlds, inefficiency, hence poor performance and hence social discontents through race inequality.

Has it been wise, for instance, to devote taxpayers’ money to tourism, putting hotels before homes? Isn’t it wise to pour money and skilled people into growth firms which is needed desperately in our cities and not into new towns? There are many other forms of expenditure which this governments, the PPP Government, needs to re-examined; “that placed burdens on free enterprise” the only creators of the resources we need for general prosperity.

Profits are the source of economic progress and through their linkage with investment, will increased earnings and social services. To the present government “Low profits today mean low earnings and low pensions tomorrow”. Profits earned within the law and in competition are thorough and must be welcomed. But this has not been the present and past government attitude over the years. A cricket team could not perform at its best if it were treated in the way that Government has treated Guyanese.

It will be pointless to argue about the level of investment when existing investment cannot be used properly because of poor government relations, inflation, unpredictability created by continually changing government expedients for the benefits of the few. It is the quality and direction of investment that counts. The present government has destroyed or is destroying the market criteria for true investment, production, productivity.

We at SOP feels the present Governments does not fully understand to a greater degree the value of thriving private enterprise so as to provide a more sympathetic and workable climate in which they can operate. If so they would have already learn: that poverty is not ended by leveling down, or great prosperity has no link with public ownership and that high earnings are bred by cooperation not by conflict. The only practicable basis for prosperity is a healthy, competitive free enterprise. A market economy, that is within a framework of humane laws and institutions.

SOP will embark on the task of opening the public’s eyes to what is practicable and do the practicable, because all Governments are only free to act within the constraints set by the public and public opinion. It will be our job to set up and also show you the people, what can be done, to what has been done, in 56years after the gaining of our independence and the governance of past governments.

If firms cannot meet their investment needs out of their own resources and in many cases not even their working capital needs, where will they find their capital? When money loses its value at the rate of 10, 12, 15 or 20 per cent per year, when banks pay 12 per cent interest and charge 15, only the PPP government will lend money?

Some of the causes that have brought industry nearly to its knees are; a) Inflation, the arch-destroyer, will inexorably sapped the vitality of industry, forcing up the scale of working capital required, squeezing profit between price control and soaring costs, undermining the one area of certainty and stability on which business and most other plans depend. b) Taxes required to finance increased government expenditure will placed additional costs on industry. Profits of industry are not only to help finance the social services, and defense and much else, but also help support loss-making nationalized industries and industries receiving subsidies. c) Another cause of debilitation is dear money.

The rate of Interest must be raised spectacularly, partly to offset the decline in the value of money, partly because central and local government must take a large share of the savings available. Local authorities have to take up a substantial proportion of short, medium and long-term credit available through some means of money market or banks. They can always find the money needed to pay going interest rates– however high, they adjust income to meet expenditure. This will both forces up interest rates for industry and leaves fewer credits. So, in effect, town halls, community centre’s and public facility are built at the expense of industrial development. d) Wage increases beyond productivity increases. Increases in wages are in themselves good, provided they do not cause price increases. But if there has been a widespread lack increasing productivity due to the use of new machinery and techniques this would be bad. So wage increases must be below productivity increases. e) Incessant policy changes by governments, though undertaken with the best intentions, may undermine industry’s ability to plan ahead, so as to improve its efficiency as much as it would have desired, and even to meet commitments. Example a “Stop-go” can make good management difficult. Such burdens and uncertainties can prevent proper forward planning, and forced industry to live increasingly from hand to mouth. You can insure against acts of God, but not against acts of government. f) Price controls, formal and informal. g) While prices and profit margins can be constrained, the costs may be remorselessly raised, by government action. h) Lastly, the seventh lean cow that can eat up our wealth is if the dollar been overvalued, as a result to keeps the economy running at a high level by over-expanding demand. This will make it harder for industry to export and even to compete with imports into a country. All these difficulties for industry were created as a result of economic policies which were well-intentioned, but harmful in their effects.

Inflation is threatening to destroy our society. It is threatening to destroy not just the relative prosperity to which most of us have become accustomed, but the savings and plans of each person and family and the working capital of each business and other organization. The distress and unemployment that will follow unless the trend is stopped will be catastrophic. There is a risk moreover that political parties which preside with well-intentioned ineffectiveness over such a universal frustration of expectations will pave the way for those who will offer solutions at the cost of freedoms. This has happened elsewhere and could happen here in Guyana. Our fate lies in our own hands. If we recognize the nightmares which galloping inflation brings, we can abate it by the question of priorities.

SOP Party will commence by accepting its full share of the collective responsibility. It is not right for any government to claim credit for what goes well unless they accept their share of the blame for what goes wrong. For the past 56 + years the governments in this country have had unprecedented power over economic life and it is only fair that they should accept correspondingly heightened responsibility for what has gone wrong.

If the present government does not have the wisdom of foresight, they should at least have the wisdom of hindsight. Any effective incomes policy must be based on sustaining the overall balance between demand and supply. Among the first signs and symptoms of economic failure is relative economy sluggishness. The second sign and symptom of failure will be the declining birth rate of new enterprises.

The ability to distinguish between economic reality and economic make-believe must be clearly defined by all government. In a failing economy there will be an experience of accelerated worsening of job prospects and a growing flight of those with professional skills, talent and ability to other countries, and an increase in the shabbiness and squalor of everyday lives. That is why, by itself, the strict and unflinching control of money supply though essential will not be enough. There must be substantial cuts in tax and public spending and incentives that will encourage the creators of wealth, without renewed efforts both the country and the people shall all grow poorer.

Stay tune for the SOP Party (3 x 4 + 1) (13) Point. Economic Development Plan

Dr. Martin C. Blair

Co-leader/Co-founder SOP