Introduction
In response to the Tricontinental Institute of Social Research’s circular call for assistance for crafting a new development theory and practice that seeks to release the poor from their persistent poverty, I ventured a response based on this long-running series on Guyana as the “newest and fastest rising petrostate in the Americas.” In the two columns preceding this, I had focused on advancing the development theory aspect of the call. Going forward starting today, I shall focus on the “taking the poor out of poverty” aspect, of the Tricontinental Institute’s circular call.
At this juncture I should remind readers that this column series has advanced the following theses 1] poverty eradication is the leading growth/development priority at this stage of Guyana’s windfall crude oil discoveries 2] this thesis conforms to Guyana’s national commitments as a signatory to the seventeen [17] United Nations Sustainable Development Goals, UN, SDGs, 2015-2030; and 3] cash transfers play a central role in poverty eradication policy. Additionally, I have elaborated a cash transfer proposal for Guyana; the Buxton Proposal last reviewed in this series of columns over the period.
Based on the above, I use the opportunity presented here to elaborate on poverty in Guyana and the role of cash transfers in its eradication.
Snapshot of Guyana’s poor
Although long recognized as a colonial extractive location, that is “well endowed with natural resources, fertile agricultural land, diversified mineral deposits, and a large acreage of tropical forests “, the Guyana economy has been traditionally natural resource-based, [mainly bauxite, sand, gold, diamonds and other minerals] with agriculture (mainly sugar, rice, and a variety of tree crops), along with timber, accounting for most of the output in the dominant commodity producing sectors.
Very recently, December 2019, offshore oil and gas have added dramatic new dimensions to Guyana’s natural resource based productive profile, while keeping poverty a persistent widespread condition of far too much of its population.
However, more than two decades ago, back in 2000, the Authorities adopted the humongous task of constructing, what was then innovatively termed a Poverty Reduction Strategy, PRS. This led to a Poverty Reduction Strategy Paper PRSP in 2002. The PRSP was directed at placing sustained emphasis on policies and programmes that would markedly reduce poverty. As noted in the document, there were excellent reasons for doing this; chief of which was the availability of the 1992 Living Standards Measurement Survey, LSMS. Strikingly, the LSMS revealed that about 43 percent of the population was found to live below the poverty line. And although within a very short span of 8 years, absolute poverty levels had fallen by over a third, the Authorities found it wise to develop a comprehensive strategy that would further reduce poverty by 50 percent by 2015.
Guyana and Headcount Poverty Measures
Headcount measures of poverty in Guyana, as indeed elsewhere, have done a lot to raise the centrality of poverty both in development theorizing and policy prescriptions for its eradication. With this awareness the Authorities stressed the avoidance of trivial use of the survey data. They highlighted the importance of: Measurement and Trends of Poverty in Guyana.
Thus, the PRSP indicates that there are at least four different ways of measuring poverty. And to quote:
Poverty Measures
“There is the headcount approach generally used by the World Bank where standards of living are measured by household expenditures per capita. The second methodology, the Human Development Indicator, calculated by the United Nations Development Program, is a composite measure of human development containing indicators representing three equally weighted dimensions of human development: longevity, knowledge, and income. The third methodology, the Integrated Poverty Index, the Basic Needs Index, and the Global Indicator of Access to Cumulative Social Development Index, calculated by the Pan American Health Organization, is derived from a twofold classification of countries: five income class groups based on Gross National Product (GNP), adjusted for purchasing power parity and degree of access by the population to five aspects of social development: health, education, nutrients, sanitation, and economic resources. Of the data available, only the consumption-based measures currently provide sufficient information for analysis in Guyana.”
Indeed, it has been widely observed that, there have been several efforts in the 2000s aimed at quantifying poverty levels in Guyana. Thus, PAHO has estimated that at least 50 percent of the population earned less than 55 percent of the mean income in 1971. And, given this income distribution, it was further estimated that approximately 38 percent of the population in 1971 fell below the poverty line.
Dr Boyd projected that the Guyana poverty level had risen to include 65 percent of the population in 1988. Considering rising inflation by 1989, the estimate reached 75 percent of the population had incomes below the poverty line.
The Ramprakash study 1991, estimated that, if receiving official nutritional requirements was the underlying criterion, an estimated 86 percent of the population would fall under the poverty line. Furthermore, as noted above the 1993 and 1999 poverty surveys in Guyana used the headcount approach, which as noted has serious limitations. To account for the inherent weakness in using either consumption or income data as the sole measure of welfare, the PRSP also discussed other indicators of well-being, such as nutrition, life expectancy, and mortality.
Conclusion
While the first decade and a half of the 2000s clothed much of Guyana’s poverty theorizing and policy prescription around headcount and related survey methodology, the evolution of the UN’s Human Development Report HDR, and its 2015-2030 Global Sustainable Development Goals, SDGs saw a shift to a more multi-dimensional approach. I take this situation into consideration going forward.
