Playing hop-scotch with poverty

Jan 20, 2023 Features / Columnists, Peeping Tom

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Kaieteur News – Based on Gross National Income per capita (GNI per capita), Guyana is now an upper middle income country. But you would not believe this if you reside in Guyana – living standards for the majority of the population are below par and the signs of poverty are everywhere.

As a country graduates up the income ladder, its poverty line shifts upwards. This is why it is being reported that Guyana’s poverty rate is now 48%. The new poverty line relates to those living below US$ 5per day, as opposed to the old line of US$2.15 per day. So, it is not a case that more people have become poor but rather that the poverty line has been shifted upwards thereby accounting for a 48% poverty rate. Using this new poverty line, Guyana’s poverty rate has actually declined from 61%.

The new poverty line is an extremely deceptive measure. Middle income countries, like Guyana, account for 75% of the world’s population of which, according to World Bank estimates, 62% live in poverty. There is therefore nothing unusual about having high levels of poverty (based on a poverty line of US$ 5 per day) in middle income countries.

Guyana, however, has always had a high incidence of poverty. In 1999, for example, one in every three Guyanese were said to be living below the poverty line, and on in every five were existing in extreme poverty. But this represented a reduction from the 1993 levels which showed a 43% poverty rate with 29% of the population living in extreme poverty. Given the high incidence of national poverty, past development strategies have always placed emphasis on poverty reduction.  One of the objectives of the National Development Strategy (NDS) for the period 2001-2010 was the elimination of poverty. But this objective became marginalized under the Jagdeo administration which pursued a neo-liberal agenda which while reducing overall inequality did so at the expense of the poor. Despite also identifying that poverty remains highest in rural and hinterland areas, Jagdeo who is trained in rural development strategy played hop-scotch with poverty reduction. Jumping on the international bandwagon, he failed to mainstream the NDS in the country’s economic development and instead, at the dictates of the IMF and World Bank, developed a Poverty Reduction Strategy Paper (PRSP). But like the NDS, the PRSP was not integrated effectively in national economic plans.

The Government then jumped on another international bandwagon; the Millennium Development Goals. But this was merely for academic and window-dressing purposes because the targets outlined were not pursued with any vigour. And later the APNU+AFC adopted the Sustainable Development Goals. While poverty-reduction was prominent in all these plans, their broad scope deflected from a stronger and concerted focus on poverty reduction.

The global pandemic, beginning in 2020, and the resulting inflation crisis have worsened the plight of the poor in Guyana. You do not need a survey to realise this but surveys conducted by international agencies have pronounced that the present global situation has worsened poverty in Guyana. The PPPC recognised the problem of poverty even before the onset of the pandemic. However, in what passes for its Manifesto in 2020, it treated poverty-reduction as a non-issue, making no mention of plans to “alleviate, attenuate or eradicate” poverty. But merely pointed to targeted cash transfers to elderly, children and the poor.

But the issue of poverty cannot be ignored. Since the onset of the pandemic the PPPC has been reminded of the increases in poverty caused by COVID-19, the rise in energy prices and the supply chain problems. As late as one month ago, the Inter-American Development Bank again reminded Governments of the effects on poverty of these developments in the global economy. It predicted that in Latin America and the Caribbean moderate poverty would increase by 1.6% and extreme poverty by 1.8% casting almost 10 million persons into poverty.

Yet the Government of Guyana continues to operate in a bubble, and has downgraded the priority which ought to have been given to poverty-reduction. The highest incidence of extreme of poverty is to be found within Guyana’s indigenous population. The government has signed a deal for the sale of carbon credits which will bring in billions of dollars to the country but has apportioned a mere 12% to Guyana’s indigenous communities who are most affected by extreme poverty.  The 2023 Budget Speech makes only a single reference to poverty. And none of the measures which are summarised in the Budget speech are framed specifically as poverty reduction measures. The adjustment to the income tax threshold and the ‘Because We Care’ cash grants are listed as part of measures to increase disposable incomes. The expansion of the part-time jobs programme and the G$5B set aside are listed as cost-of-living relief measures. So where are the poverty reduction measures in this year’s Budget? And for that matter where is the poverty reduction strategy of the Government?

(The views expressed in this article are those of the author and do not necessarily reflect the opinions and beliefs of this newspaper and its affiliates.)

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• Gross National Income, Guyana, Peeping Tom, Poverty Reduction Strategy Paper (PRSP), World Bank

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