Taking into account inequality, Guyana has low human development

Dear Editor,
Is Guyana a better place than it was in 1980?  There have been periods of intense despair and deprivation, strong growth and a short period of exuberant expectations when the PPP came to office in 1992.  On economic grounds, the economy grew at the remarkably lacklustre rate of 1.8 per cent annually during the last fifty years.

That said, per capita GDP, which is the total value of goods and services produced by the fictitious average person, does not convey a meaningful picture of broad progress.

This narrow GDP picture looks at monetary value only, including money spent on the military, cocaine, on getting ourselves drunk and lawless and to battle the aftermath of the crime spree, providing improved health services, as well as money used to expand the productive apparatus of the economy.  GDP is thus a mixed bag of resources spent both wisely and foolishly.

Using the Human Development Index (HDI) to gauge the Guyanese condition, how are we doing?  People are healthier and live longer, are more educated and wealthier today than ever before.

There is universal suffrage even though the electorate is manipulated, threatened, frightened, bribed and unable to hold its leaders accountable.

People have more information at their disposal today, are more aware of what is happening in the rest of the world and make more informed choices.

The country’s HDI improved from 0.500 in 1980 to 0.611 in 2010, a 22 per cent gain in thirty years.  For Trinidad and Jamaica, the gain was 12.2 and 16.8 per cent, respectively.

If you immediately jump to the conclusion that Guyana is ahead of its Caricom neighbours, wait a minute.  Guyana’s HDI grew from the smallest base so that a given increase is larger in percentage terms.  For example, the 0.111 increase in the country’s HDI during the 30-year period amounts to 22.2 per cent growth, while this same quantum of increase grows the HDI for Trinidad and Jamaica by 17 and 18.8 per cent, respectively.  This is because the base for Trinidad (0.656) and Jamaica (0.589) is larger.

Thus, although Guyana’s HDI grew faster during this period, the country’s human development still lags considerably behind that of Trinidad and Jamaica.  This point is reinforced by the 2010 HDI rankings.  Of the 169 countries for which UNDP calculated the HDI, Guyana ranks 104th (that is, 103 countries have higher rankings) compared to a ranking of 59 for Trinidad, 80 for Jamaica, 42 for Barbados and 145 for Haiti.

One serious drawback of the HDI is that it does not take inequality into account, but UNDP created a new instrument, the Inequality-Adjusted Human Development Index (IHDI), to address this issue. The IHDI adjusts each HDI dimension for inequality so it measures human development in a society characterized by inequality.

In a perfect world where there is no inequality, the HDI and the IHDI are the same.  As we move away from this ideal position to one marked by inequalities in the distribution of health, education and income, the IHDI is less than the HDI.
The greater the gap, the higher the level of inequality and the more inaccurate the HDI.

Taking into consideration inequalities in health, education and income, Guyana’s IHDI reduces to 0.497, which is 0.114 less than its HDI.  The reduction moved Guyana from medium to low human development, the only English-speaking Caricom country with this shameful distinction.  Trinidad’s IHDI is 0.621 or 0.115 lower than its HDI, while Jamaica’s IHDI s 0.574 or 0.114 less than its HDI.  Even after adjusting for inequality, these two countries remain medium-level human development countries.  For all countries with high human development, income exhibits the highest inequality; for countries with medium human development, high inequality characterises both life expectancy and income; for countries with low human development, inequality is highest in the distribution of life expectancy followed by education.

For both Trinidad and Jamaica, income inequality is higher than education and life-expectancy inequality, which is consistent for countries at their level of human development. Life expectancy in Guyana is marked by higher inequality compared to inequality in education and income, consistent with what one expects of a country with low human development.

This pattern of inequality suggests that a large number of people, who are probably deprived in many ways, die younger than what the average life expectancy suggests (69.7 years).

Most people believe that income inequality is high in Guyana – and it is – but it seems that an even greater threat to progress and stability may come from the gap in life expectancy between the rich and the desperately poor.  I believe that this is a new insight into the human condition of the country and should be taken seriously.

This sad state sheds much light on why Guyanese are so ashamed when they venture outside of the country.  Our leaders have failed us but have enriched themselves in the process.

Yours faithfully,
Ramesh Gampat


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