Chairman of the Private Sector Commission (PSC) Komal Singh has expressed his disapproval of continuous direct cash transfers to citizens, contending that it can create a dependency mindset in the country.
He made these remarks during the online program “The Guyana Dialogue.”
“It doesn’t make sense. Look, we have an economy that is growing, that is moving at a rapid pace right now, that is creating opportunity in almost every single sector, that is creating employment opportunities also for every single level of Guyanese and non-Guyanese national. Why would you want to give cash grants continuously to your people?”
“Spend the money, like what this government is doing, spend the money in areas where you can educate your population,” he added.
While the Guyana Government has been making significant investments to improve the quality of life for citizens in areas of education, health, infrastructure and others, it is currently gearing up to distribute a $100,000 one-off cash grant to every adult Guyanese citizen across the country.
The measure is part of a series of initiatives being implemented to ease the burden of the rising cost of living.
However, members of the opposition have been calling for a more fixed structure, which will see citizens benefiting from more money on a continuous basis from the government.
But the longstanding private sector official—who is the founder of GAICO Construction and General Services—disagrees.
“If you can continuously have a handout economy, then your people are going to become very complacent. You will have an economy that is growing, but at the same time, your people are not growing in tune with the economy.:
Nevertheless, he said “the one-off cash grant situation from time to time, based on government analysis, I think that’s an excellent position where they should continue to do that on a need basis only and not continuously.”
This one-off $100,000 cash grant to every citizen aged 18 and above will see over $60 billion being injected into the economy. But the PSC Chairman does not believe this measure will trigger inflation.
“There will be no inflation effect as a result of this money being injected…you’re giving people the money. They must be free to do whatever they want to do with it. Some will go back into the system. Some will become savings. Some will be invested in the form of an asset, individual or businesses. Some will be used to pay off loans. And that is why it’s going to have a rippling effect throughout the economy. It’s not going to be one area,” he explained.
He said if the government were to add spending conditionality to the cash grants, then it could become a problem.
“Just imagine if it was given out to just buy food…or food stuff for your home; then obviously the market would have had immediate pressure on the demand and supply side. Because it’s not one specific need…It allows every single individual right now the opportunity to do whatever they want with this money. And because of that, the market shock will not be there to create an inflation position as a result of the cash grant.”
