The rising tide of prosperity

Apr 12, 2014 Letters

DEAR EDITOR,
The quality of life of citizens in any country is dependent to a large extent on the size of the Gross Domestic Product (GDP). Countries with low GDP are unlikely to provide a high standard of living to their citizens whereas countries with high levels of GDP are more likely to ensure that their citizens are afforded a better quality of life.
The size of a country’s Gross Domestic Product is therefore an important determinant in measuring the quality of life. This is why any decline in the growth rate of the economy is treated with so much concern by policy-makers since it translates into a shrinking of the GDP and a consequential decline in the quality of life of citizens.
One indicator of the share of the national wealth from a distributional standpoint is what economists refer to as the per capita income which is essentially the GDP divided by the total population. The higher the per capita income, the greater the likelihood of a better quality of life, even though this is not always true, since per capita income is little more than a crude statistical construct and does not necessarily reflect a true and accurate picture of living standards.
I thought of making this observation if only to highlight a fact in our economic history when the size of our gross domestic product took a severe beating to a point where the economy instead of growing was getting smaller and smaller with each passing year. Those were the years when the country experienced what is known as ‘negative growth’ which in effect means that instead of the national pie increasing annually to compensate for an increase in population size and inflationary tendencies, it is actually getting smaller.
It does not take a trained economist to realize that in a scenario such as that alluded to above, the quality of life of the citizens as a whole declines, as there would be more mouths to feed from a shrinking cake.
And yet this was what actually took place for the greater part of the twenty-eight years when the PNC regime occupied the seat of political power. The few ‘ good’ years when there was some positive growth – especially during the mid 1970s – resulted mainly from windfall prices of bauxite and sugar on the world market and not from any real increase in production and productivity.
In fact one distinguishing characteristic of the PNC years was the downward trend in production in all the key areas of production in particular rice, bauxite and sugar. The country experienced a production crisis which emanated from a political crisis. The political crisis was due to undemocratic and authoritarian rule where all the institutions of the state were subdued by the doctrine of ‘paramountcy’ of the then ruling party.
There is a dialectical interconnection between the economic base and the political superstructure of any society. The lack of democracy stifles economic growth and expansion which in turn results in a curtailment of the cultural and creative expressions of the citizens as a whole. In other words, the whole of society is poorer when the body politic is impaired through rigged elections and the suppression of democratic rights and freedoms as happened during the former PNC regime.
This is why the PPPC administration must be commended for putting in place measures and mechanisms to strengthen our democracy and democratic institutions. What we have today is a rule-based and law-governed society where there is full separation of powers and where the Executive arm of the State does not interfere in the work of the other two arms, namely the Legislative and the Judicial, as was the case under the PNC administration.
More significantly, the current PPP/C administration has managed to grow the economy and secure the economic fundamentals for accelerated growth and development. The administration, led by President Donald Ramotar, deserves credit for being able to mobilize local and foreign investment and capital to grow the economy and create jobs at a time when several other countries are finding it difficult to do so.
There can be no doubt that there are today growing levels of prosperity in Guyana which resulted from prudent management of the economy and good governance. This rising tide of prosperity has in a sense lifted all boats and set the stage for even higher levels of modernization and growth.
Hydar Ally

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The rising tide of prosperity

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