Dr. Stephen Harewood is one of my very few heroes. He will discover this, as you all did through this article. One look at him and you’d know that this slim but quite muscular and vascular “red man” was the embodiment of walking it as he talked it. This is why I took what he had to say very seriously, especially when we met once again in my third-year Operations Research class at UWI Cave Hill. My favourite topic was Linear Programming, together with all the advances on the subject.
There and then, I learnt the importance of seeing problems from two varying perspectives. The first is called the Primal Problem. In this mode of thought, you may choose to view a problem as one that requires the largest possible outcome—a maximisation problem, if you will, where you may be looking, for example, at maximising the profitability of your small business, provided that there are constraints on resources available. The second perspective is one known as the Dual Problem. Every primal has a dual, so such a problem would likely be the decision to minimise an outcome. To the earlier example, you may say that the desire to maximise profitability could be coupled with the minimisation of the production costs of your same small firm—subject to resource availability constraints, of course.
His teachings have afforded me a semi-aloof point of view where I am not likely to stand firm on any solution. This is apparent when answers are in chase of problems to decipher. I would go as far as to say that, in the Caribbean, this tends to be a central premise. Political answers to economic problems tend to result in the wrong problems being solved. Let me use a very simple example before we continue on to where this currently concerns Guyana. The dual problems of maximising the growth of the Barbadian economy while minimising the dependence on government in their role of incentivising that same growth. All of the solutions we have seen since the introduction of the first Barbados Economic Recovery and Transformation (BERT) Plan point towards solving these two problems. However, I figure it would be more efficient and “stickable” if the dual problems were instead focused on maximising the growth of the local economy while minimising the total costs of development. The solutions would not just make sense; you would not need that many for each pillar of development.
Guyana is my favourite country in the entire world that is not called Brazil nor Barbados. You’d know this if you followed my musings over the years. As a land full of promise and a breadbasket, a few minutes driving from any of the country’s two international airports eases even the layman’s eyes and mind into the possibilities that existed before 2015. I loved what it could be from the time Dr. Cecil Rambarat made it possible for my first visit there in 2009. It was clear that the major downside was in its institutions.
Beyond the dreaded “c word”, Guyana lacks the human resource capacity to consistently drive the needed institutional development to handle their explosive growth. I also blame the surface-level cohesion of its culture. Even though everyone seems to get along, a substantial part of the deep-seated mistrust—that fuels the prominence of the main political parties there—undermines continual social and economic development. As one party leaves office, one can easily see that the new government will do whatever it can not to add to the former’s good legacy.
Elections are in the air in our southern sister. Due early next year in March 2025, the belief is that they’ll be called before the year is done. I am likely to believe this to be the case given some of the early promises being made by those two political parties. All concern a share of the windfall from their oil industry’s royalty payments to the Government of Guyana. I am so torn by what I see whetting the appetite of voters. On one side, the President of Guyana has promised a slew of well-deserved amazing perks. The fact that he wishes to distribute the near equivalent of $2,400 Barbados Dollars as a one-time cash payment is my principal worry out of all of those.
It speaks to a government mindset that is frowned upon historically. The much-maligned “Resource Curse”, where governments have the capability to greatly abuse and misuse the profits from a promising and healthy natural resource, is very likely with Guyana’s weak institutions that I mentioned earlier. And through the lens of duality, it becomes even more pronounced. The government is clearly seeking to solve the dual problems of maximising spend by its citizens in the local economy while trying to minimise the likelihood they’d lose an election. Within the same spirit of duality, let’s hope that there may be a set of problems they’re attempting to solve that I just can’t see.
I figure that by attempting to solve those aforementioned issues, the government is actually creating a dire circumstance. Though it has been the kind recipient of efforts to resuscitate some and strengthen many of its civil and social institutions, Guyana has not done the requisite work just yet to permit absolute confidence in its future management of the windfall. Similarly, there is a lack of a level of sophistication in its financial markets. The bond market needs more liquidity and variety. Transactions take longer than anywhere in CARICOM to close in its stock market. Stock prices are mostly stagnant, but a few seem to promote a greater sense of speculation than anywhere else other than Jamaica. In other words, it isn’t logical to have such heavy speculation when transactions take forever. The economy is heavily cash-driven in terms of expenditure on common items and assets. Most watchdogs and regulators are significantly well-trained but are underfunded. They therefore lack the ability to enforce legislation. I could go on.
My issue with this intent to divert the windfall from investing in the development of their institutions in the short run while giving it to be spent, mainly in the form of exports, is akin to extracting immense value from the economy. Guyana is going to become more import-dependent as it continues to grow its stake as a now High-Income Economy from a global point of view. If this intent remains a habit going forward, then it is clear that the economy will remain severely underdeveloped relative to its potential. The dual problem that should be solved at this point is one where they wish to maximise the growth of the economy while minimising the deadweight losses that are likely to stem from this growth—so achieved through institutional strengthening and the trust that comes with that.
The main opposition coalition (APNU) has promised that they would raise the tax threshold to the equivalent of $4,000 Barbados Dollars a month. I fear that this would lead to similar issues for the similar reasons I discussed earlier. And this is not unique at all to Guyana. But then again, in the spirit of duality, I hope to be wrong for their sake.