Reform, Perform and Transform Budgets

Following the Budget Debate over the last week, I was reminded of a cautionary tale recounted by the writer David Foster Wallace: “There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says, “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, “What the hell is water?” The point, of course, is that most of us accept the dominant world view in which we live as “common sense”, and few think to question its premises.
For our parliamentarians, neoliberalism – which has been our guiding economic paradigm since 1989, when the Desmond Hoyte PNC Government accepted the IMF’s “conditionalities” in its “Structural Adjustment Program” – framed within the neoliberal premises of the “Washington Consensus” was like “water”.
Neoliberalism rejected the interventionary role of governments into the economy and society, which had been introduced by FDR to pull the US out of its Great Depression, and given academic credibility by Keynes after WWII. The contra central tenets of neoliberalism, which privilege free markets and minimal Government intervention in the economy, were also circulating, but only rose to the fore when Reagan in the US and Thatcher in the UK applied its principles to turn around their moribund economies in 1979/80. It is generally associated with policies of economic liberalisation, including privatisation, deregulation, stabilisation, globalisation, free trade, austerity, and reductions in Government spending in order to increase the role of the Private Sector in the economy and society. From a developmental perspective, it prioritises a “growing economy” ideology in which the “rising tide would raise all boats”. It is ironic that the IMF, World Bank, and the WTO, launched by Keynes and company at Bretton Woods, now use the neoliberal paradigm to evaluate our practices.
The interventionary distributive and allocative functions that were performed by Governments up to then were now held to be better discharged by private enterprises – prompted by the profit motive to supply goods and services. Take, for instance, the distributive functions to reduce poverty. These would now be executed through budgets to facilitate the Private Sector, which would create jobs (“boats”) to lift everyone. It is from this perspective that one must look at the PPP Government’s focus on infrastructure and stimuli to businesses, such as with the gas-to-shore initiative.
While the Opposition’s criticism, that more of the oil funds could have been used for direct cash transfers, were noted, they miss the point that this is not in consonance with the neoliberal exhortation that the hungry must be taught to fish, rather than be provided with fishes for a meal. The latter premise is that giving out too many fishes dulls the urge for meritocratic advancement in the recipients. It is accepted that while the fish pond is being stocked (businesses being created) there might be some unattended hungry poor who could receive temporary grants. The moral question will be addressed by the market.
It was interesting that in Opposition Leader Aubrey Norton’s summation of his presentation, he proposed measures that would use oil funds to alleviate poverty; cost of living; inflation; unemployment; climate change; social problems; develop human resource capabilities by stressing institutional changes. In effect, he accepted the neoliberal premises of the PPP’s Budget on stabilisation, allocation and distribution, while only differing on the quantum of funding. Unlike his flank critics from his erstwhile coalition partners in the WPA, following neoliberal orthodoxy, he avoided “race” as a criterion for interventions. He avoided calls for direct spending to alleviate problems in, say, the African-Guyanese community, but merely signalled this by recommending a “50% increase for Public Servants”.
While the neoliberal paradigm has swept the world, from the US to China, and even the Nordic countries, we note that each has adapted its core tenets in varying proportions to their local circumstances and history – capitalism, communism and social democracy respectively. So, while all may have produced billionaires, inequalities in the US are most extreme, China had moved the largest number of people out of poverty in history, and the Nordic countries have fought to retain their welfare programmes and high tax rates.
In Guyana, while we notice the increased health, education and security businesses, the Government has commendably retained and extended its role in providing these services to all Guyanese, and in regulating swathes of business practices. We have to ensure they perform to reform and transform.