OPINION: Kangaroo economic science

Last Updated on Sunday, 11 February 2024, 7:01 by Denis Chabrol

By Dr Randy Persaud, Professor Emeritus

I once was assigned the unbelievably fortunate task of accompanying Ngugi Wa Thiong΄o around American University (Washington DC), where I was a faculty member. I took the opportunity to ask him a simple question – how do you go about writing? He told me he had asked VS Naipaul the same question years back, and that Naipaul gave him a direct and powerful answer. For Naipaul, and by implication Wa Thiong΄o, skillful writing is built around a single good idea.

Yes, a single good idea, very much unlike the ramblings of Dr Gary Best whose writing is like a kangaroo jumping and sniffing one bad idea after another, with the result being what is well below expectations at this level. This much is clear in his so-called analysis of Budget 2024 in five parts. Allow me to point out what is so wrong with Dr Best’s writing, savaged as it were by endless contradictions, inaccuracies, and elementary errors. My response is presented in five points.

Firstly, Best states that “it is the duty of the PPP government to build a better life for all Guyanese irrespective of any past indiscretions of previous governments.” Fair enough. But the same Gary Best does not want the PPP administration to draw on the NRF. Nor does he want any borrowing, from anywhere! I am, therefore, compelled to ask Best and his Shadow Minister, Juretha V. Fernandes a simple question – where will the money come from? Or if I am allowed, where the hell will the money come from? We need an answer.

Secondly, Dr Best does not seem to understand the difference between capital and recurrent expenditures, or how they work. Here is our Milton Friedman – “Health costs will never be finite and non-recurrent, simply because the Guyanese population is not static and new cases will always come up.” Sir, even Houdini cannot get you out of this bit of nonsense. Best’s kangaroo economic science was offered as a push-back against VP Jagdeo who stated that up-front capital costs for the 12 new hospitals do not have to be repeated in every budget cycle. Why? You guessed it – the hospitals would have already been built and accounted for in infrastructure spending of Budget 2024. In other words, Dr. Best, you don’t have to build 12 new hospitals every year. Sir, for a quick look at the differences between capital and recurrent expenditures click Here.

Thirdly, Best quotes Juretha V. Fernandes as if that MP is some world-renowned economist. The truth is Ms. Fernandes’ economics would bankrupt Guyana in one year if she were allowed near the national budget. In her contribution to the debates in the National Assembly around Budget 2024, she proposed giving families $9.5 million, yes, close to $10 million per family. When MP Sanjeev Datadin called her out on this ridiculous proposal she objected on a ‘point of order.’ But Datadin was right. Here is Dr. Best’s economic adviser in her own words – “It doesn’t take anyone with a university degree to understand how life changing $9.5 million would be to the ordinary Guyanese man and woman, and more particularly, Sir to the most vulnerable persons in society, some of which (sic) have to live and suffer the indignity of being in poverty.”

Fourthly, as we know, Best and his APNU-AFC ‘folks’ tend to view the private sector with scorn. The word most associated with the private sector by APNU-AFC is corruption. Every project for them done by the private sector is suspicious. Contractor is a dirty word for them. They even produced a new ‘sign,’ namely, ‘contractor class.’ Yet, Gary Best wants the private sector to absorb the costs for any government project that might not work out!

Thinking that he must have landed a Ken Norton punch on the PPP, Best rhetorically asks – “Which government plans a mega project on the basis that it might fail.” Well Sir (in the Ashni Singh use of the word Sir), we have an answer. The PNC greatest project – Feed, Clothes, and House the nation (FCH) by 1976 did not simply fail. All the projects in this gambit failed. Despite the super-high prices for sugar and bauxite on the world market, all the projects in the PNC’s plans failed. By 1980 the Guyanese population started to experience hunger, backed up by oppression.

In the period 28-year period 1964-1992, Guyanese saw a dismal average annual increase in per capita income of US$7.08. By contrast, in the 19-year period 1993-2011, under the PPP, per capita income increased by an average of US$113.13 annually. This is despite the billions in debt the PNC had bequeathed the nation.

Fifth, and finally, the Gary Best piece under consideration here makes some noise about Dutch disease, but the ‘analysis’ is shallow. For instance, he quotes Fernandes, who in her budget speech talked about the economic performance in the non-oil sectors. One case was gold. But neither Best nor Fernandes took notice of the fact that gold only declined among small miners. This can be easily explained by the effects of El Niño. Small miners depend on river flow to ‘process’ their findings. Gold production for large mining operations increased. There were other cyclical factors that affected the non-oil sector. Finally, not one word is mentioned about the new crops that have come on board.

I couldn’t find a single promising idea in the piece under consideration. Instead, the article is indicative of the mainstreaming of nonsense as analysis.

Dr. Randy Persaud, Adviser – International Affairs, Office of the President.