Debunking the myths

Jun 06, 2023 Letters

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Dear Editor,

Kaieteur News – A recent letter in SN, “Inappropriate statement on incarnation,” by C. Persaud attracted a few interesting comments. One of the commentators, Colonel 1232, made an unwarranted and inappropriate observation: “BTW…good deeds are considered Godly, and Burnham did a lot of good stuff fuhalyou who ended up owning 80 % of the economy with his help, and without alyou getting the government jobs too!”

Aside from the induced amnesia, it is pure jiggery-pokery to proclaim that the Forbes Burnham dictatorship not only benefitted Indian tremendously but benefitted them more than any other group. No evidence was offered for the “great assertion.”  It appears that dishonesty and distorted beliefs have colonized the minds of this commentator and people of his “kith and kin.” Otherwise, how does one explain the ethnic purchase of the idea that Indians own 80 percent of the economy?  A few years ago, the claim was that that Indian Guyanese own of 90-95 percent of the economy.  In a letter to SN, dated 26 March 2019, I endeavoured to debunk this myth.

It appears that a transmutation of some sort has been performed by those who peddle misinformation and disinformation.  In 1993, Clive Thomas wrote that the “commanding heights” of the economy firmly rested in the hands of the PNC government by the early 1980s: it owned and controlled about 80 percent of the economy.  He said: “The Government then boasted of its ‘80 percent ownership and control of the economy.’”  That “80-percent” fact has been transmuted into – to attach a label to it – the great 80-percent myth and pinned upon Indians.  One of the major conclusions of the letter referred to above was that: “If one optimistically assumes that Indians completely own and control these seven sectors, their mean contribution to GDP was 22.9 percent during 2006-2017.  Consequently, “Even with the most optimistic assumptions, the belief that Indians own and control 90-95 percent of the economy – GDP – is a myth.” Pure and simple.

One simple fact dispels the great 80-percent myth: total central government expenditure accounted for 27.9 percent of non-oil GDP from 2009 to 2022, rising from a fifth to more than a half of GDP from the beginning to the ending of the period.  How, then, can Indians own 80 percent of the economy?  The arithmetic simply does not add up. Spending of this magnitude, more than a third of non-oil GDP during 2020 to 2022, can have a huge impact on the economy.  Further, it is likely that recent growth would have been more subdued or even negative if Central Government spending followed its trend from 2010.  The sheer size of the Central Government means fiscal policy – fiscal dominance in this case – is an important instrument of government policy, which it can use to influence economic growth, the sectoral composition of the economy and, more importantly, the just distribution of the fruits of economic progress across regions and ethnic groups.  The Central Government is simply the single largest economic agent in Guyana’s economy, more so that the 300,000 plus Indians put together.

Besides, the mysterious and concocted statistic, there is a fundamental underlying issue with the claim: what does its peddlers mean by the “economy?”  There are at least four possible answers to that question.  First, the “economy” usually means the annual flow of GDP, and Indians are directly responsible for little over a fifth of the “economy.”  Second, consumption could be contorted to mean the economy.  Studies have shown that annual mean consumption by Indians and Africans are about the same.  The most recent data lies buried in the bowels of the Bureau of Statistics.  Here I refer to the Household Budget Survey (HBS 2018), the results of which were supposed to be published towards the end of 2019.  If I am not mistaken, it is now June 2023.  Funded by the IDB, which has used the survey results to compute consumption/income Gini coefficient, Guyana’s ethnic/political entrepreneurs are apparently afraid to publish the data because of – and I am guessing – its ethnic ugliness.

The third possible interpretation of the “economy” refers to the annual flow of income.  To the best of my knowledge, data on income distribution by ethnicity do not exist.  It is considerably harder to estimate income than consumption, let alone its ethnic distribution.  Reasons for the difficulty include the great reluctance of people to share data on income or to underestimate their income, tax implications, and undisclosed income, such as remittance and income from self-employment.  The fourth and final point of view of the “economy” refers to wealth, which is buried in an even larger data blackhole, rendering it even more difficult to estimate wealth than income.  Readers interested in income/wealth distribution may wish to read articles written by Dr. Collin Constantine as well as my 2022 book, which is called “Essays,” especially Part I.

While Indians directly generate a little over 22 percent of non-oil GDP and both major ethnic groups spend about the same dollar amount on consumption, it is probable that they command a larger share of the income and wealth generated by the “economy.”  But whatever the definition of the “economy” adopted by whatever ethnic group; Indians do not own 80 percent of it.  Peddling such a myth amounts to gross distortion and mischief-making.  Alas, there is a saying in politics that goes like this: if you are explaining, you are losing!

Yours truly,
Ramesh Gampat

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