Dear Editor,
Mike Persaud has authored a thoughtful letter (‘Forget social cohesion; grow the economy’ SN, September 14) and I agree with several things he said, especially his penultimate paragraph. But I disagree with the central thrust of the letter.
First, Mr Persaud cites the positive experience of Singapore to substantiate his argument about growing the economy and not paying attention to social cohesion. Aside from the fact that a single swallow does not a summer make, Guyana is not Singapore. Even in the 1960s, Singapore’s economy (and its rate of growth) dwarfed Guyana’s; its working age population averaged 56 per cent of total population, which means a relatively low dependency ratio (the number of people one working person supports), higher savings and higher investment; its level of scientific and technological development bore no comparison to ours; and the country had a leader with the vision, wisdom and will to make it a rich, prosperous and clean country.
Second, the exclusive focus on growth is a fine example of trickle-down economics: produce the goods and services and prosperity will reach all people. Indeed, some degree of prosperity (benefits of growth) does trickle down, but that takes a long time, and in the long-run we are all dead. The slow and uneven spread of the benefits of economic progress aggravates existing, systemic and structural mechanisms that generate and perpetuate inequality. The end result is that growing inequality undermines economic growth, which means that economic progress becomes a more fragile thing.
Third, growing inequality leads to social discontent and instability. Take China, for example. The country has grown by 10 per cent annually between 1978 and 2011 and has lifted over 500 million people above the poverty line, but huge rural-urban inequality remains. Even in the cities where hundreds of millions of rural folk have migrated to labour in factories under atrocious conditions, migrants are not classified as urban residents and are denied all benefits to which urban residents are entitled. The result is that exclusion and inequality are threatening political and social stability. But China is not any other country; it has its own way of silencing dissent and social unrest. More generally, however, the Global Risk Report 2015 makes it clear that widening gaps between the richest and poorest citizens threaten social and political stability and undermine economic development.
Fourth, the unbound pursuit of growth comes with huge environmental consequences. Again China is a good example of how blind growth harms the environment and imposes a huge health burden. China has sixteen of the world’s twenty most polluted cities. Life expectancy in the north has decreased by 5.5 years due to air pollution, and severe water contamination and scarcity have compounded land deterioration problems. Environmental degradation cost the country roughly 9 per cent of its GDP in 2008, according to the World Bank, threatening to undermine the country’s growth and exhausting public patience with the government’s pace of reform.
Earlier (1950s-ʼ60s) Japan encountered same growth-environmental problems. Rapid growth consumed many kinds of chemicals, including mercury, which drained into rivers. Methylmercury accumulated in fish and shellfish and those who ate them were poisoned with organic mercury. These cases of poisoning with organic mercury were the first known ones in the world to happen through the food-chain transfer of environmental pollution. Because the disease was discovered in the Japanese city of Minamata, mercury poisoning was called Minamata Disease. And on January 19, 2013, over 140 countries, including Guyana, adopted the text of the Minamata Convention, which imposes stringent limits on the use of mercury.
Fifth, unlike Singapore, but like Fiji, Guyana has a more long-standing and troubling problem of racial discrimination. Malaysia broke out of its racial deadlock by imposing laws and by fairly and justly implementing them. That calls for courage, which the leaders of both Malaysia and Singapore – which used to be one country for a short period of time – had in abundance. But riots and racial discrimination are not confined to underdeveloped – poor – countries. These have existed and will continue to exist in rich and prosperous countries as well. The US offers an excellent example. Ultimately and regardless of country, these twin evils are mostly incited by politicians and their lobbies or by people who have personal agendas or the wrecking combination of ideology and interests. What does Guyana have in its arsenal to counter these grave ills?
Finally, Mr Persaud seems to suggest that politics is irrelevant to growth. Perhaps it is, but not in Guyana where ethnic politics is deeply entrenched. All experience since Independence shows that a huge majority of the population is marginalized and discriminated against by whatever political party is in power. In these circumstances, growth will be accompanied by widening inequality, which will produce all the ills that Mr Persaud spoke about. Politics, economics, growth, inequality and marginalization are all intertwined in Guyana.
The above does not imply that Guyana is frozen indefinitely in its present status quo. Racially troubled countries can break out of underdevelopment if they focus on representative political arrangements, enact and implement laws that do away with marginalization and discrimination, provide adequate security for all, and foster both growth and shared prosperity. Indeed, growth is an outcome of fair politics, appropriate policies and just laws – and perhaps luck, as the last 23 years of the PPP demonstrate. In essence, my argument is that a singular focus on economic growth in Guyana will not deliver shared prosperity. Instead, it will strengthen inequality with a more pronounced racial overtone, and lead to a higher degree of marginalization and discrimination. If this happens, the likelihood of both riots and racial discrimination increases. So, too, will the public health consequences of unbridled growth. Gold mining is already an environmental tragedy in the country and will soon be a public health problem (because of the use of mercury by all but the big gold mining companies).
Yours faithfully,
Ramesh Gampat
