GDP is great in what it reveals, greater at what it masks

Apr 10, 2022 Editorial

Kaieteur News – GDP has long been bandied about worldwide as a good measurement of how a country is doing. All things equal, GDP has earned a solid reputation for what it reports about a country. On the other hand, GDP is also recognised for where it does not go, what it does it not touch and, hence, which remains largely out of big conversations about the big things that matter to the small people in a society. As we prepare for a closer look at both sides of GDP, we present a little primer on what GDP represents, in its simplest form.
Gross Domestic Product is the spelt-out name of ‘GDP.’ It represents the total goods and services produced by a country in a year. It is the total (gross), of domestic (within a country’s borders) production (activities by its peoples and entities, public and private). In Guyana’s instance, GDP would be the measurement in dollars of what Guyanese produced in any given year, as converted into a percentage of how it grew or stood still.
Recently, the air has been filled with excited chatter over Guyana’s GDP prospects. The ongoing discovery of fabulous quantities of oil offshore has skyrocketed Guyana into becoming the GDP buzz of the world. International experts and Wall Street analysts are in a foot race to outdo each other with sizzling forecasts of how Guyana’s GDP is poised to outstrip that of most other countries this year. When globally recognised institutions, such as the World Bank and the IMF, are glowing with reports of how spectacularly Guyana will do in 2022 (and beyond) with its GDP, it means something.
The good news is that those high double-digit percentage (47 percent) forecasts have some teeth behind them, as is confirmed by what is occurring here with breathtaking swiftness. Guyanese who are awake and alert cannot help but notice the bustle and spiral of business activity here. Many from foreign shores are coming here, with new entities from America and elsewhere setting up shop to reap the treasure trove that is Guyana. Guyanese citizens are in the mix, either as workers, or as business partners, to assure a passable local content contribution by the foreign operators. Wholly owned local businesses serve as subcontractors to the outsiders, and by any reckoning, they are doing well. All of this translates to results of which makes its way to the local treasury, and from where they count as part of this nation’s economic performance (GDP). We must emphasise that it is only some of the results, some Guyanese aspects of the flurry of activity that is handled by locals, which reaches official local books.
We look at this more closely. Guyanese businesses (the small subset of alpha commercial tycoons), are the ones finding gold in Guyana’s streets by the wheelbarrow full. The mouthwatering GDP numbers and statistics predicted for Guyana are to a material degree limited to the enterprises of this tiny subgroup of Guyanese. These are the Guyanese who own or control shore-based holdings. They are the Guyanese who are well-positioned to feed off rich foreign business arrangements. And they are the handful of Guyanese who are also well-connected to a government (widely perceived to be corrupt) that doles out multimillion dollar awards of land, projects, and other state assets through which the wealth is confined to a profiteering cabal of insiders.
GDP conveys their numbers mainly, and then only partially, as submitted. GDP is quantitative and bloodless, and on paper, the numbers look good. The downside is that the bulk of Guyanese are neither touching nor tasting nor feeling the enriching effects of all those great GDP numbers. Their failing standard of living, their losing race with rising prices, their losing ground in life’s daily race to survive locally is nowhere represented in thrilling GDP numbers cranked out by men in suits in high towers. On paper, and using these GDP forecasts, Guyanese are among the richest people, if not the richest per person, in the world. The sad fact is that, despite lovely GDP numbers, the Guyanese masses are poor and struggling, and those grand GDP numbers mean nothing to them, make little difference in their bruised and battered lives.

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