Introduction
Earlier this week I received a copy of a wonderful book called Poor Economics written by professors Abhijit Banerjee and Esther Duflo of the renowned research university, the Massachusetts Institute of Technology. It is one of the best gifts for anyone truly interested in development models and processes to help the poor and who reject the banal notions and mindless efforts of politicians across continents. The irony of our Guyana example is that our politicians have managed, quite spectacularly, to rise over a single electoral cycle from need to affluence even as they pretend to write and implement poverty strategies that will go nowhere and help no one. Poor Economics is a book that simply cannot be praised too much, winning acclaim from across the spectrum, including from heavyweights like Nobel Laureates Amartya Sen and Robert Solow, and journalists from the pro-capitalist Financial Times, Economist and Forbes to the liberal Guardian and El País – no easy feat.
The book is no ivory tower approach to the complex issue of poverty or why a poor person needs to borrow in order to save, why the children of the poor go to school but do not learn, why they pay for drugs they do not need while missing out on easily available life-saving immunizations, why they spend so much on dowries in India and funerals in Africa, why they prefer to buy a television set rather than nutritious food or why the poor can start a business but not grow it. Banerjee and Duflo spent fifteen years on this work, among the poorest of the poor in Asia, Africa and Latin America, taking a ringside view of the lives of people who are no different from each of us, or are, as the authors say, “just like the rest of us in almost every way” – with the same desires and weaknesse, and just as rational if not more so.
In the process the authors manage to humanize the poor rather than to stereotype them with a single label as some faceless group, capable of being analysed, diagnosed and treated as one homogeneous whole. As the authors note, the poor have to be sophisticated economists just to survive, having to make more careful choices about what to have, or more often what not to have. Failure for the poor is to fall off the precipice, not only for the head of the household but the several children and their children as well.
Aliens in our world
Those of us who believe that our circumstances, our thinking and our values are the standard, forget that the poor have limited access to the things we take for granted – things like good newspapers, television and books that provide the very information that can make their lives better. The poor have the additional problem of being aliens in a world not built for them – the financial system, the Blackberry, a retirement plan and health insurance and four-lane highways are not part of their lives or lexicon. For the poor their only experience with democracy is the promises they receive every five years, and their enjoyment of human rights is being able to avoid the police. Their measure is quantity rather than quality, and achievement is gauged by survival rather than success.
Ever since Desmond Hoyte embarked on the IMF-driven Economic Recovery Programme (ERP) we have heard of the safety net without realising that many of the poor were below that net, only to fall further below. The ERP was built on a set of theories hatched in the multilateral financial institutions, embraced by development economists and promoted to unsuspecting governments by aid agencies and donors keen to be seen to be doing something about poverty. That is what makes Poor Economics different. It is the product of experiences, observations, interviews and objective analyses by two accomplished economists who worked in the trenches and communities of the poor. It is about solutions of the poor, by the poor and for the poor.
The IMF brings good news
We are now told by the IMF that the reduction of poverty is a major priority of the Government of Guyana and that the authorities are moving ahead with the revised Poverty Reduction Strategy Paper (PRSP). That is more than a bit surprising for more than one reason: the government seldom acknowledges the existence, let alone the scale of poverty and has done nothing to measure it in any of the ten administrative regions of the country. I find it hard to believe that the geniuses in Vlissengen Road and in Main Street would think that the nature of poverty in Region 8 would be the same as in coastal Guyana or that some one-size-fits-all approach would magically solve the problem.
If indeed we want to find solutions to our poverty issues we have first to understand the scale of the problems faced by the poor, including the reasons why they missed the first wave of poverty alleviation and the structural weaknesses inherent in those earlier efforts. Like in so many countries, the efforts have been the top down approach by politicians who believed they knew all and therefore did not need to speak with the patient whose poverty is the problem to be solved.
The Jagdeo syndrome
Whatever the scale or the numbers, the first challenge to our poverty problem that needs to be overcome is the Jagdeo syndrome which is to throw money at the problem and if that does not work, throw some more. If free books and uniforms do not help the dropout rate or improve our CXC scores, then maybe a more expensive laptop will do the trick. If building one over-priced medical facility does not lead to an improvement in child mortality then build another, usually with loan or grant funds. If one gimmick does not work just try another.
Under this syndrome an absolute no-no is the obvious need to examine the causes of poverty or for an evaluation of the economic, social and psychological effectiveness of aid extended so often as charity rather than an effort to make available to society the human capital locked in that huge mass. Not only would that approach be too complex for the Jagdeo administration but it has no political value, the only currency the government recognises in its transactions with the poor.
Conclusion
Expectedly, the IMF tells us that the revised PRSP is being done with donor assistance. One can expect with the certainty that night follows day that the donor community will be asked to finance the inevitable outcome: that the problem is insufficient resources. This trick produced baskets of aid funds before and the chances of doing so again are high, so why not try it?
Meanwhile no one should deny the success the political directorate has had in transforming their personal poverty reduction to wonderful capital accumulation. It is a real pity that what works for the politically powerful is not available for the powerless masses. That is as true now as it was in George Orwell’s 1984.
Following last week’s column featuring the IMF Article IV Consultation on Guyana I learnt that Mr Asgar Ally, former Senior Finance Minister in the post-1992 Cheddi Jagan government currently serves as a Senior Advisor to the IMF Executive Director for Guyana. In fact accompanying the Consultation Report was a statement issued in the name of the Executive Director Paulo Nogueira Batista, Mr Asgar Ally and Ms Nicole Leslie-Ann Des Vignes, another Senior Advisor.
If the report was one-sided, the statement read like the adulation reserved for saints and people who routinely walk on water. No wonder then that the Government of Guyana was prepared to break with the past and to permit the IMF to allow public disclosure of the report. Transparency under IMF rules it seems, depends on whether or not the subject government is pleased with the contents of the report. Indeed the rule can be so manipulated to pressure the IMF into writing favourable reports in exchange for ‘transparency.’
I cannot say this was done in this case but the statement by the three senior officers causes me sufficient concern to warrant my writing to the new Managing Director of the IMF, Ms Christine Lagarde about it. The IMF must know that its work is being critically evaluated by the public and that it can be called upon to justify what it puts on the record. I am allowing a week to pass before publicizing the letter and will also publish any response I receive. Now for this week’s column.
