The rise of the private class economy
Whenever the state fails to provide services, citizens look to other means.
Poor healthcare? Go to a private hospital. Lack of adequate policing? Hire a guard service, live in a gated community or, in extremis, organise a vigilante group. A non-existent public transportation system? Take a minibus, taxi or buy a private car. Poorly funded national insurance or pension schemes? Invest in an individual retirement fund. Inadequate and undrinkable water? A black tank in every yard and five-gallon bottles. Unreliable electricity? A generator or solar. No garbage pickup? Call a private contractor.
Of course a Guyanese filling these deficits on a personal level is understandable but they cost his or her household considerable money which could be better deployed, are not available to all, and in general they undermine the very government services they replace, thereby creating a vicious cycle towards an ever larger private class economy.
In well established, well funded societies, even millionaires take public transportation- NY Mayor Bloomberg used to take the #4 train to City Hall. Wealthy citizens use their country’s excellent public health system and buy into their social security schemes. They don’t have grills on their windows or a guard outside. They have confidence in their governments to protect them and provide the services for which they pay taxes. And because so many rely on these services, the society as a whole focuses intently on them. The National Health Service in the UK is considered by many British to be a near-sacred institution, with waiting times in emergency rooms or for surgeries carefully monitored as barometers of its own health. The only “institution” here that comes close is the Guyana Power and Light Inc which merely causes a collective mix of anger and derision.
There are only muted discussions about government services because many in the middle class who might have influence within the private media have long opted out. A mother dying giving birth at the GPHC is just a sad story for page 12 of the newspapers, not a spark to bring people onto the streets. There are no debates about public transportation because it does not even exist in Guyana, save for a few ferries. The NIS being in a perpetual funding crisis is of no importance to the many who have never contributed.
However there are issues which the Private Class gets upset about. The most notable in recent years was the 2017 installation of parking meters in Georgetown. Widely deployed for decades in almost all major cities, parking meters are a valuable source of funds for local administrations and can be considered a reasonable tax for the privilege of owning a motor vehicle, as well as encouraging the use of public transportation. Furthermore many cities now have congestion charges to actively discourage private vehicle use.
But parking meters in the Garden City were beyond the pale for the four-wheeled humans of Georgetown and they swarmed on to Robb St each Friday to protest (or they sent their employees into the hot sun on their behalf). City Hall soon retreated and the protestors’ inalienable right to free parking prevailed.
The other issue was the application of Value Added Tax on private schools, also in early 2017, that engendered much gnashing of teeth in the media and demonstrated the power of the private class to influence public policy. Several good reasons could be argued for the VAT: Many of the private schools were not paying proper corporation taxes and VAT would provide a window into their finances. Also the VAT system turns businesses into tax collectors and since many businesses have been less than reliable at passing those taxes on, private schools were seen as reliable since it is simple to see how many pupils were enrolled. That was also the rationale behind the VAT on water and electricity so that eventually the VAT rate could be lowered further. Finally on a more fundamental level if you, as a citizen, can afford to send your child to a private school should you not also contribute to the maintenance of the public education system? But as with the parking meters, the government failed to make the argument and after the uproar and a 14,000 signature petition, the VAT was removed in November. And it could be argued that these two very issues had larger consequences for the coalition and created the climate for the 2018 No Confidence Motion.
The rise of private education is perhaps the most troubling aspect of citizens looking to fill the services gap. Its effects on the education sector and the society as a whole have been pernicious and it has exacerbated a class divide that will be felt for generations to come. Here the deficits are manifold but the shortage of places at the top secondary schools is an annual headline topic.
Like their counterpart private hospitals which have lured away the best doctors and nurses, so the private schools have long poached the best teachers through better pay and working conditions actually adding to the deficit of teachers in the public school system. They have also attracted the children of parents with means who often send their children to private primaries in order to get a spot at a top secondary. Over 50% of the spots at top secondaries now go to students educated privately. In 2016, 102 of the 158 students who made up the top 1% at the NGSA exams were educated at private schools. That was 102 children from public schools denied access to a top school. It need not be a calamity in terms of the individual child’s prospects but it can be a tremendous discouragement to go to a school in Region Nine with failure rates at CSEC well over 70%.
Minister Manickchand partly alluded to the issues in May saying the current system is something she never liked and while she walked back some of her comments it appears she is sympathetic. In an ideal world there would be no terrifying exams to take and children would simply move on to the secondary school in their catchment area. That’s not going to happen here. However a possible remedy would be to allocate/reserve a large proportion of the places at the top secondaries only for public school students.
The focus going forward on this public/private debate should be on the government’s approach. In this regard the signs are not encouraging. Its recent gift of tax-free status for private hospitals and schools goes against all principles of creating a more egalitarian society.
And this comes at a time when the potential oil revenues means there is no excuse for the government investing heavily in services. For example in the area of transportation a light rail system along the East Bank would do wonders for commuters and travellers to and from the airport. It is disheartening therefore to see this not included in the revised plans. One can envisage a highly motorised and highly congested American-style society with car-less pedestrians left to fend for themselves.
That will be only one of the challenges for a voiceless “underclass” that already receives substandard healthcare, education and other services while the private class prospers. It is not a recipe for political stability.
