It is doubtful whether anyone had expected a reduction in the cost of transfers and subsidies during an election year, or even maintenance of the status quo. The most recent estimate for 2014 is $33,875 billion or 60 per cent of recurrent expenditure and 19 per cent of GDP. 2015 is estimated at $38,489 billion, which is nine per cent over 2014. The cost of core welfare support is ten per cent of GDP.
In principle, social welfare policy is inherently a good strategy to alleviate poverty. As is the case with every tool mankind has developed over the millions of years of his existence, its effectiveness is dependent on the design and how well it serves the intended purpose. Are the Government's myriad welfare programmes–more than 100–serving the purpose intended?
These programmes are meant to alleviate poverty by injecting income into needy households, create temporary skills-based, work support progammes from which people will be transitioned to the private sector or to self-employment, so they can take responsibility for their lives. Social welfare assistance is, therefore, not charity, but a viable economic tool if used efficiently.
The Government has announced its intention to engage the World Bank in evaluating its social programmes. This is a welcomed development, but with $8 billion invested annually on education, topped up by $650 million in tertiary education through Gate, and considering the country has four universities and several professional institutions, why the World Bank? Is this testimony to the depth of the dependency disease?
Be that as it may, it is hardly likely that the results of such an exercise will reverse the perverse behaviour of government administrations of using social welfare benefits as voter inducements. Every election, successive administrations have competed to expand welfare programmes, and there is every reason to believe this behaviour will continue–and so, too, mismanagement and cronyism. The quest to survive at the polls is central to the problem of social welfare cost, as it is much else.
How to get political parties to subordinate their partisan interests to the national good is a job for the electorate. After all, the economy is vulnerable to external shocks, the most obvious of which is energy prices, more so given trends of the country's declining production of crude and natural gas. So while social welfare is an essential economic tool, there is sufficient reason why able-bodied people should be weaned from their dependence on government's largesse.
The Community Environmental Protection and Enhancement Programme (Cepep) is usually the first target in any debate on the reduction of welfare expenditure. It was designed as a transitory work programme to build entrepreneurial and technical skills in the maintenance and enhancement of public spaces. The shorter workday was to facilitate parents–single mothers in particular–to be available for their children after school and also to enable participants to pursue an education while earning an income.
This excellent programme is not managed as intended. Some workers in Cepep exploit the short workday and perform other jobs in the private sector or run their own trades–vending, hairdressing, upholstering, plumbing, sewing, driving taxis, to name a few.
Many of these people are more enterprising than the Government thinks. But the problem is not Cepep. The real problem is inefficient Local Government whose work Cepep does. The Cepep model is reason to either transform or dismantle Local Government.
What about Gate? This is another laudable programme, which should be targeted to areas of national need–especially where there are structural employment problems. Examples are in the Police Service, health, education, and other areas of the Public Service.
These institutions have abundant manpower, but inadequate managerial and specialist skills for efficient management and delivery of essential services. Giving tertiary level scholarships carte blanche has unintended consequences in a small island state: under-employment, and consequently, migration of good talent. This is exactly where we are.
To what extent has the Government crowded out labour from the private sector, and also supplanted private sector initiative in the development of their employees? While many companies invest in training their workforces to develop specific work-related skillsets, Gate now absorbs a large part of the cost of knowledge acquisition for a wide range of corporate functions.
The country's boast should not be primary to tertiary education freeness; rather, it should be individual and corporate resourcefulness and resilience.
To what extent has the Government's largesse (or other policies) weakened once-enterprising civil society organisations–like sporting bodies that gave us gold and silver medallists, Carnival entrepreneurs who created magnificent shows and promoted indigenous art forms in compelling ways, and professional associations that upheld standards among their fraternity such as nursing and teaching?
To what extent is its freeness stifling resourcefulness?It is time to shift the paradigm from the distribution of income to able-bodied people, to their earning of income and paying their share of taxes. It is time to foster inventiveness and build resilience.