Crony capitalism will lead to caste system in Guyana- Ramjattan

Last Updated on Tuesday, 23 January 2024, 14:38 by Denis Chabrol

Mr. Khemraj Ramjattan

Leader of the Alliance For Change (AFC), Khemraj Ramjattan on Tuesday warned the government that if does not pay public servants and pensioners more, government risked enriching a small group of contractors with billions of dollars which would widen the gap between the rich and the poor.

“We are going to create a caste system in this country whereby the inequality is going to be so vast to the extent whereby they are going to literally control this economy,” he told the National Assembly on day 3 of debate of the GY$1.3 trillion budget for 2024.

By his reckoning, GY$121 billion have been set aside for 54,000 public servants and 76,000 old age pensioners while an estimated 1,000 contractors would draw down at least 20 percent from each government contract amounting to GY$133 billion.

He described the 1,000 contractors as “crony capitalists” who would be receiving a huge chunk of the national budget. “Indeed times are hard in the 10th richest country in the world per capita,” he said, adding that “everyone of them (contractors) is going to purchase friendships.” He noted that kind of relationship will increase the PPP’s “treasure chest” for the 2025 elections.

Rebutting, Home Affairs Minister Robeson Benn defended government’s decision to invest heavily in infrastructure rather that on direct funds into the hands of ordinary people. “Even if you give a person money and they can’t get to the hospital and they can’t get to the school, there is no way that you can take the country forward and so the investment in infrastructure is a sine qua non for the development of our country here and now,” he said.

Mr Benn referred to the spin-off positive impact of infrastructure projects such as in employment of different categories of workers who also pay taxes.

Mr Ramjattan also cautioned that One Guyana and cohesion that the PPPC government wants would lead to “disenchantment” especially among a “certain demographic”. He predicted that cost of living, including locally-produced vegetables, would continue to spiral while segments of the non-oil sector would decline.

With GY$662 billion allocation for infrastructure, Mr Ramjattan, a former executive member of the then centre-left People’s Progressive Party (PPP), recommended that another GY$100 billion be set aside in the 2024 package of expenditures for the working poor.

He said many of the contractors and self-employed persons are “tax dodgers” and that was why his government had introduced a “withholding tax” that was repealed when the PPP returned to office in 2015. “They still got it in the constitution in their party that they are the vanguard of the working class. You can state that but at the concrete level you are but a cement and sand government… You’re not working class at all,” he said.

The AFC Leader, who is a former Public Security Minister in the then APNU+AFC coalition administration, questioned how could government spend so much on infrastructure which would increase inequalities and political elites. “A set of oligarchs in combination with a set of control freaks. That combination is going to be disastrous for this country,” quipped Mr Ramjattan who had been a fierce advocate for the removal of references to Marxism-Leninism from the PPP’s constitution.

Vice President Bharrat Jagdeo had been recently unabashed about the creation of petite bourgeoisie, historically regarded by his party as one of the three enemies of socialism.

President Irfaan Ali earlier this month promised that steps would be taken to bridge the wealth gap. “In doing so, the government has the added responsibility of ensuring that the distribution of wealth is done in such a manner that it bolsters the income level of the disadvantaged and those who we need to support so that we do not build an inequitable society or we do not build inequality or disparity and that is a big mistake that wealth creation can have,” he had said.

The 2023 Budget contains GY$121.4 billion for wages and salaries for central government employees, including a salary increase that will be announced later this year. The Income Tax threshold has been hiked to GY$100,000 monthly.

Old Age Pensioners and Public Assistance recipients are each getting a GY$3,000 increase. Provisions have also been made for a GY$3,000 voucher to every child to meet the cost of eye test for over 205,000 schoolchildren and GY$ 76,000, pensioners at a cost of over GY$100 million dollars. A GY$15,000 voucher will be provided to assist with the cost of spectacles. Also in the area of health, the Finance Minister announced that in order to encourage testing for cervical cancer, government will provide a voucher of $8,000 for women between the ages of 21 and 65. The current minimum National Insurance Scheme (NIS) pension is increased from GY$35,000 to GY$43,075 which will result in a GY$2.6 billion disposal for the benefit of 27,000 persons. The new minimum invalidity pension is now $43,075.  Persons with NIS contributions ranging from 700 to 749 will be asked to consider a full and final settlement which could benefit over 3,800 persons at a cost of $550 million. The ‘Because We Care’ cash grant is increased from GY$35,00 to GY$40,000 per child  for 205,000 school children in the public and private school system. That is in addition to the uniform voucher allowance of GY$5,000