Digital Guyana

Posts Tagged ‘development

One thing that has struck me since I arrived in Guyana is the low levels of visible poverty compared to other developing countries I’ve been to. Georgetown doesn’t have the seemingly endless slums of Nairobi, Mumbai or Johannesburg. There are no glue-sniffing street children, no smoldering piles of rubbish and no pot holes in the streets.

But Guyana is a poor country, isn’t it?

Looking up countries by GDP per capita (according to the IMF), I see that Guyana is in 126st place, behind war-torn countries such as Sudan, Sri Lanka and Iraq and just one ahead of India. Even adjusted for purchasing power parity (GDP based on what you can actually buy, as living on a dollar a day is very different in, for example, Sri Lanka and the United States), Guyana is only two places ahead of Congo and far behind countries such as Angola and Swaziland.

Something doesn’t seem right here. Is Guyana poorer than Sudan? Are income levels really a good poverty indicator?

To get a better idea, I decided to have a look at the United Nations’ Human Development Index (HDI). The index, which is published every year, takes into account a range of factors other than income, such as life expectancy at birth, school enrolment, literacy, access to clean water and so on.

In the most recent Human Development Index, Guyana has a higher ranking for every single other indicator than it does for GDP per capita.

In terms of Human Poverty, Guyana is in 52nd place, in terms of access to clean water 32nd place, in terms of life expectancy at birth 37nd place and in terms of school enrolment 75th place. Its got an adult litercy rate of 99.5%, which is the same as Italy and higher than Spain, Portugal and Hungary.

Compare this with Sudan who comes in 101st place in terms of Human Poverty, in 89th place on access to clean water, 144th place on life expectancy and 168th place on school enrolment. In addition, its level of adult literacy is only 39.9%.

So Guyana is clearly doing much better than countries that had a higher GDP per capita such as Sudan. But what could cause a country to have a high GDP per capita, but score badly on a range of development indicators?

A plausible explanation could be that it has a high level of inequality – a small number of people with an extremely high income and a large number of poor people with a small income. This would be the case in oil-rich Sudan which has experienced many years of devastating civil war.

To test this, I had a look at a measure of inequality called the Gini coefficient. In this, Guyana comes in 89th place, 7 places ahead of the United States and ahead of most other South American and Latin American countries.

So Guyana is doing fairly well on a range of development indicators and also has quite an equal society (well, more equal than the US, at least). But is all well?

Unfortunately not. Despite doing well, compared to some other developing countries, in areas such as literacy, school enrolment, access to clean water and life expectancy, there is a lot of poverty in the country. This is particularly true if you look at poverty as a relative measure (it’s not the same to be poor in the UK as it is to be poor in Zambia).

According to the World Bank, 47% of the population is classified as poor (having an income of less than 47,500 Guyanese dollars a month – eight times the  international poverty line of a US dollar a day) with 29% classified as ‘extremely poor’.

Most of Guyana’s poor live in rural areas, with the majority of the ‘extremely poor’ living in the interior. I guess that would be why I’ve not seen that much of it – we’ve spent most of our time in Georgetown. But  it’s also true that the 47% ofthe population living below the Guyanese poverty line of $8 a day are not as poor in absolute terms as the slum dwellers of India or East Africa living below $1 a day with no education or access to clean water.

Compared to many African countries  Guyana is far ahead. And hopefully with higher level skills projects such as the one we are doing, we can help it even further along.

Last night we watched Guyanese tv news for the first time, and a significant portion of  the programme was dedicated to Guyana’s newly launched Low Carbon Development Strategy – Transforming Guyana’s Economy While Combatting Climate Change.

As 75% of Guyana’s land is covered with pristine rain forest, the main focus of the strategy is, unsurprisingly, about conservation and the role of rain forest in combatting climate change.

It is estimated that Guyana’s forest could contribute around $580 million a year to its economy. But only if they were to cut it down.

Extensive logging would, according to the report, be economically rational for Guyana, but not  so for the rest of the world. Standing forests absorb large amounts of carbon from the atmospehere and forestry causes 17% of global greenhouse gas emissions. In addition, conservative estimates place the annual value of the Guyanese forests to the world at $40 billion, significantly more than what Guyana would benefit by exploiting it.

However, the report says:

No trading markets exist for these environmental services – and as a consequence, individuals and companies in rainforest countries face powerful incentives to deforest. In turn, national and local governments face political pressure to use the forest for economic and employment benefit. Reconciling this tension between protecting rainforests and pursuing economically rational development is the core challenge that must be addressed to make forests worth more alive than dead.

So, how is this going to be done?

Well, the report says:

With the right low-deforestation economic incentives, Guyana will avoid emissions of 1.5 gigatons of CO2e (carbon dioxide equivalent which includes other greenhouse gases) by 2020 that would have been produced by an otherwise economically rational development path. These incentives will be generated through interim forestry payments from Guyana’s partnership with the Norwegian Government and other sources.

It’s a bit unclear from the online strategy, but from the tv programme
last night, the aim is to set up an international scheme in which Guyana would be paid not to cut down its forest. The initial payments will come from Norway, but Guyana is currently in discussions with other countries with the aim of having something finalised by the climate change negotiations in Copenhagen in December.

I hope they are successful.