Foreign Minister cautious about direct transfers of ‘oil money’ to very poor

Last Updated on Sunday, 30 September 2018, 22:33 by Denis Chabrol

Foreign Affairs Minister, Carl Greenidge seemed less than enthusiastic about the idea of conditional direct cash transfers of oil revenues to very poor Guyanese.

Speaking with Guyanese in New York at the weekend, he said already many people, who get financial support from their overseas-based relatives and friends, are not inclined to seek employment and engage in annoying activities that may be illegal or not in keeping with widely acceptable customs . “I want you to know that it is widely believed… that a number of persons who receive income from relatives abroad, they deliberately don’t work and it serves as a means whereby they develop a lifestyle that can be antisocial,” he said.

The Foreign Minister said Cabinet discussed the idea in passing and decided that  “it has to be properly examined”. “The government is still looking at it and…it is a matter of some controversy,” he said.

Two parties that form part of the governing coalition- Working People’s Alliance (WPA) and the Alliance For Change (AFC) – are expected to engage experts in public consultations on the best model of cash transfers to poor households. The WPA’s executive member, Distinguished Economics Professor Clive Thomas first floated the idea at a public forum in Buxton.

Saying that Professor Thomas’ idea has “attracted a lot of attention”  and “generated a lot of interest”, Greenidge said one of the considerations is the impact that cash grants could have on the economy. “You have to look at how you inject cash into an economy to avoid inflationary consequences…but the other also has to do with incentives,” said Greenidge, a former Finance Minister in the then People’s National Congress (PNC)-led administration under the  Desmond Hoyte presidency.

The Foreign Minister said the disbursement of cash grants was “not impossible” but the Cabinet and those responsible “recognise that there are a number of considerations here”.

President David Granger, after saying he had not seen a proposal on direct cash transfers and he was not aware that it had been done before, has since indicated that questions on that and other oil sector matters be posed to the Ministry of the Presidency’s Department of Energy.

United States-based Guyanese Economics Professor, Tarron Khemraj does not oppose direct cash disbursements to poverty-stricken households but urges that funds be invested in training and education to equip Guyanese to take up job opportunities in the emerging oil economy.

Guyanese Financial Analyst Sasenarine Singh recommends that the cash disbursements be pegged at US$90 million annually and given to those on the National Insurance Scheme and Income Tax registers.

Professor Thomas says conditions such as removing children from child labour, sending children to school and improving one’s health can be attached to each household receiving US$5,000 annually.

Commercial oil production is expected to begin in early 2020 at a rate of about 120,000 barrels per day from Liza Phase One. So far the nine wells account for more than four billion barrels of oil equivalent that can see daily production increasing to as much as 750,000 barrels per day by 2025.