May 16, 2021 Letters
The World Bank, in its 2020 report “A Pivotal Moment for Guyana: Realising the Opportunities” (written with Guyana’s oil wealth in mind), counsels that Guyana must establish as a priority a “comprehensive social protection system.” The current system, the Bank tells us, in case we did not notice, requires major reforms to expand coverage and enhance its impact. Such talk normally evokes the more complex idea of the social welfare state. A more complex idea, if as here we understand “social welfare” not to simply mean social assistance (as in the US), but to mean the ideology or the philosophy that all citizens should be guaranteed as a right an acceptable minimum livelihood regardless of how they fare in the market place. So understood, the social welfare state ensures that, for instance, single mothers can upkeep their families, malnourishment of children must not result from low household income and the young in rural Guyana can afford to leave home and attend college.
The Guyana social welfare state therefore should be set up to ultimately achieve several goals: (i) elimination of the causes and consequences of poverty, (ii) fostering of social inclusion and social cohesion (all must be able to participate in society and economy), (iii) the building of national identity and pride (derived from the collective self-worth that we care for all in our land), and (iv) leveraging the social welfare system as investment in promoting sustained national economic growth (to illustrate: a well-nourished child is likely to develop into a more productive adult than a malnourished child).
So, what would it take to convert Guyana into such a social welfare state (similar to other resource-rich countries such as Norway, Denmark, and Kuwait)? Several factors are required to various extents, such as: (i) a national consensus and political culture that embrace the idea that—whether as a moral obligation, a core right of citizens, a constitutional duty, or compliance with international human rights conventions—every citizen must be guaranteed three things (to borrow from the English historian, Asa Briggs): a socially-acceptable minimum standard of living, inclusive of a minimum income; social protection to help overcome emergencies and adversities (such as a job loss); and the provision of welfare at the best level possible. This commitment must be ingrained into the psyche of the nation and must be sacrosanct regardless of changes of government; (ii) Lots of money. A social welfare state is expensive, but our oil wealth now makes it possible. In this regard, it must be embedded into our national consciousness that, one, oil and the wealth it creates belong to the people and not to the government of the day. Two, an oil-funded social welfare state is a distributive process: i.e., from oil companies through government to the people. It therefore avoids the political and economic obstacles inherent in a redistributive process, one that taxes well-off citizens to give to poor; and (iii) mechanisms to buffer against revenue fluctuations and to save for future generations (a nod here to our Natural Resources Fund).
What should be the key features of our social welfare state? (a) It must include both targeted and universal coverage. Because oil revenues belong to all citizens, social welfare should be extended to all, even to high-earners. Universal provision is morally and politically justified. For more effectiveness, however, the plight of particular groups deserves targeted interventions. The obvious groups include the poor, children, the elderly, hinterland residents, and single mothers. According to the World Bank, the current system is badly targeted. The nation will have to balance universalism and effective directed coverage.
(b) It must include both conditional and unconditional provision. This issue was hotly debated two years ago when the WPA floated its cash transfer to households proposal. Should the government restrict citizens, especially the poor, to use their cash and other social provision in specified ways? Much empirical evidence has accumulated across the globe to provide guidance.
(c) The system must be built on a range of policies, laws, institutions, and instruments. The policies and laws are essential to codify a nationally agreed commitment to the goal of creating a social welfare state. Institutions would have to be purpose-built. Instruments should include social security (such as more care for the elderly and the disabled), social insurance (such as an expanded NIS), social assistance (such as cash to low-income families, and school-feeding programmes), social protection (for adversities such as job loss, or the death of a breadwinner), subsidies (in several oil-rich countries, the price of fuel is slashed), tax breaks, and free to affordable social services (such as access to training and to recreational facilities).
In conclusion, it bears repeating that a social welfare state is not merely about assistance for the poor (or for those unwilling to work). It is informed by a philosophy that says all citizens must share in the national patrimony and prosperity, no citizen must be excluded or left behind, and the ultimate goal of national development is a guaranteed good life for all now and into the future.
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