How could we create and generate capital to achieve the national development we envision?

Just like any person who sets big goals, who self-develops, who must exercise sound management and financial sense and prudent thinking to achieve his or her dreams, a nation must organise itself to generate and create capital.
Bottom line is: it takes money and significant financial capital to fund society’s development, to develop communities, to further propel the living standard of Guyanese citizens.
Our nation plunged into bankruptcy within 20 years of Independence, to the point we couldn’t even feed ourselves, to pay to import flour, our basic food staple.
We had run out of capital, and we faced a debt burden of crippling crisis.
Once we had restored democracy with free and fair elections in 1992, Government set about fixing the broken financial system, and former President Bharrat Jagdeo detailed earlier this month the important changes to legislation that Government had to pass to see the economy recover from its debilitating death-bed, in his Babu John address.
One must marvel at the lack of quality discussion in this country, in realising how the national media, public commentators and Opposition leaders absolutely ignore Jagdeo’s statement that Government had completely reformed the nation’s financial system, to propel development of the housing sector, where every Guyanese could now acquire his own home, to make hire purchase legislation line up with modern realities so that Guyanese could finance home appliances and cars and other necessities, and to create a solid macro-economic foundation. Jagdeo also detailed Government’s work to eradicate the national debt burden, which before free and fair elections saw debt servicing accounting for 90+ percent of national revenue, with former Finance Minister Carl Greenidge’s Economic Reform Programme (ERP) struggling to even keep the Demerara Harbour Bridge from collapsing into the Demerara River.
Instead of focusing on this kind of national stats and important policy and legislative reform that turned Guyana into an emerging 21st century Caribbean socio-economic power, we saw national newspapers and Opposition leaders and social commentators lash out at a single phrase Jagdeo used in his speech at Babu John this month, using the “kick ass” cliche as sound bite for a national discussion lacking quality, class or value to the nation. This sort of crassness we must overcome, with a reformed media landscape, if we are to inspire our citizens to focus on what’s necessary for us to achieve our national potential.
President Donald Ramotar appointed Jagdeo as head of the National Economic Council because our nation needs to develop its economic systems to handle Guyana being an emerging 21st century Caribbean powerhouse.
Jagdeo, as a Russian-trained Marxist economist, understands the profound importance of creating and generating capital for national development. In fact, during his Presidency, he implemented creative ways, many of them generating confusion and heated controversy from Opposition forces, to garner and generate development capital.
Jagdeo generated the capital we needed to construct the Berbice Bridge, a mammoth undertaking, and he created the atmosphere for the admirable development of the Providence, East Bank Demerara corridor, including the Providence Stadium. Through the State agency, NICIL, Government generated capital for the Marriott Hotel and several other key projects.
Guyana faces unique problems in capital generation, as the country’s tax base functions on an inefficient tax-collection system, and, since we’re such a cash-based society, many citizens who are self-employed or work for cash simply don’t pay taxes. Also, many businesses, including liquor restaurants, these ubiquitous bottom-house establishments situated in every village and town across the country, avoid the tax system.
Our national budget is less than US$1 billion, and much of this goes to pay Public Servants and fund the social sectors like health and education.
It leaves very little financing to fund the big projects we need, to develop our latent potential. The Guyanese nation sits on a wealth of natural resources, including hydro power and alternative energy such as wind and solar, and mineral deposits and so on. We need capital to develop these.
Since Independence, we’ve tried to develop hydroelectric power for export to Brazil, Venezuela and Suriname. In fact, Forbes Burnham’s pet project was the Mazaruni Hydroelectric project, which he hoped would fuel Linden’s development into the world’s premier aluminum smelter plant.
However, he needed around US$4 billion for such a grand idea, and it all collapsed because he could not find creative ways to generate such capital, especially since both the United States and Soviet Russia spurned his overtures to fund such development.
Now, President Ramotar is on the verge of making real the Amaila Hydroelectric project, as the cost is way lower than the Mazaruni project. Despite the Opposition’s efforts to stymie all Government’s efforts to develop the project, stifling the keen interest of US multinational firm, Blackstone, in funding it, President Ramotar is set on making sure Guyanese achieve independence in our electricity needs.
We need developmental capital to move to the next phase of our national development. Today, our nation has come a far way, and in fact we’ve overcome the fall we took over the 28 years of dictatorship, when we plunged from a model British colonial society, to the poorest economy in the Commonwealth.
Today, we’re back up and we’ve repaired broken walls that erupted from the socio-economic collapse we experienced from 1964 to 1992.
It took us two decades for this recovery to happen. Now it’s time to accelerate the pace of our development.
One crucial necessity is to broaden the reform process we enacted in the national financial sector to other areas, especially the media landscape. We must realise the intangibles like motivating the Guyanese citizenry through the national media is just as crucially important as tangibles like Guyanese being able to garner financial capital for their home, car or appliances.
In the next decade, our biggest challenge would be in developing creative financial instruments to create and generate development capital. In developed countries, creative capital generation is a fine art, with developmental bonds and debt-swap instruments and other forms of financing constantly evolving.
First, we must create the national platform for such important, visionary and focused discussions to take place, instead of petty newspaper editorials on Jagdeo’s clichéd phrase and social commentators lambasting each other for petty small-minded stuff.
The Guyanese nation is moving into becoming a sophisticated society, and this calls for national discussions of focused thinking, such as how could we create and generate the financial capital we require to fund development projects and to bring to reality the Guyanese 21st century vision.

by Shaun Michael Samaroo