If you dig into the Greek meaning of Economics, it is classified as the “law of household management”. There is no greater economist than an ordinary householder who manages the expenses in a home. There is a piece of work by Xenophon, a great General in classical times where he relates to a conversation between Socrates and an ordinary farmer called Ischomachus.
That conversation was defined as the conversation on “Oeconomicus” and the essence of that conversation was nothing but the art and science of household management, which turned out to be the essence of essential economics. Socrates defined the meaning of wealth as a result of that conversation and identified it with usefulness and well-being of the beneficiary; not merely possessions of toys by a few. It comes back to the old aphorism “a rising tide lifts all boats”. Similarly with economic management, if only the Granger cabal multiplies their possessions during 2016-2020, then clearly the economy is going backward because less of the people will be finding themselves useful and this will translate to them doing worst not just economically, but socially and mentally.
I started this week’s Straight Talk Column with this philosophical line because too many people believe that you have to have a Masters in Finance or a Doctorate in Economics to really understand what is happening in the Guyanese economy and this is just not true. The ordinary controller of the cash in each household actually has more practical knowledge about how to run an economy that the academics. These people feel the real pain points every single moment of the day and are constantly making economics decisions.
So when friends of mine, who are ordinary head of households, says to me “Sase, this is the worst year for me in all my adult life living in Guyana”, you have to take their words seriously because you can bet your last dollar that the respective heads of household are relating to the reality of the economy. When those members of a nuclear family tell you that over the last two years they had to alter their overseas vacations from once per year to every two years, then you have to ask why? Did one of them lose they job? No! Are they working for less absolute cash? No! So what is the problem?
Then the money manager of that family blurts out “our collective income today is purchasing less that it was purchasing two years ago and we have less free money to put aside for a vacation, so we have no choice but to cut our cost before we end up losing our house”. As the conversation advanced, I garnered that their first priority is to pay down their mortgage and then provided the essential foods for their children. Then the transportation cost, lessons fees, school supplies and so on. Think of this carefully. Isn’t this how a nation’s affairs ought to be managed? Housing first while at the same time paying down the debt?
So why is the Granger regime doing the complete opposite? Running up the debt and dis-incentivising Private Sector investment in the housing sector is horrible public policy from ‘Team Granger’.
The Minister’s statement in the Half Year Finance Report for 2017 said “the CH&PA expects to commence construction in the second half of the year of … 40 duplexes at Perseverance; 40 at Onderdeeming, Essequibo Coast; 40 at Experiment, West Coast Berbice; 40 at Perseverance second phase; 20 at East Bank Demerara; 50 at Perseverance Phase 3, East Bank Demerara; 60 at Amelia’s Ward, Linden; 60 at Wisroc, Linden; and 80 at New Amsterdam”. If we include the few that were built in the first half of 2017, the total new housing units added to the national stock of housing is less than 500 housing units for all of 2017.
Under the People’s Progressive Party’s (PPP) tenure, the Private Sector was incentivised to drive this process, which saw, over 3000 homes per year being added to the national housing stock. This is the philosophical difference between the previous PPP Government and this current People’s National Congress (PNC)-led Government. One aims to incentivise and empower the Private Sector and one wants to crowd out the Private Sector and expand the Public Sector by centralising core economic activities. There is logic as to why the PPP model added six times as many new homes to the national stock of housing compared to this PNC-led Granger regime. It comes down to a deep distrust of the Private Sector by ‘Team Granger’. When will Minister Jordan get it that his model is wrong?
