Saturday, November 28, 2009

Dookeran presents new economic formula to fight poverty

Congress of the People Leader Winston Dookeran on Saturday commended Curacao's opposition Partido Pueblo Emansipa (PPE) for its efforts to find a way to fight poverty.

He called the PPE's effort "
an arduous journey" and urged the party to never lose its sense of direction and risk being blown off course.

"Set your compass in the right direction and move on – full steam ahead," he said.

Dookeran was the guest speaker at the party's convention on the theme of
emancipation from poverty.

Dookeran reminded his audience that to be free means more that casting off the symbols of oppression. He said It also means respect for the freedom of others.

He invoked Bob Marley's memory to define freedom. "Emancipate your mind from mental slavery, none but ourselves can free our mind", he said, quoting the Jamaican icon's redemption song.

He spoke of humankind's innate desire for freedom where the human spirit prevails and human dignity reigns. "This year, 2009, the issue of freedom has again surfaced in our public conversation," he said in reference to Trinidad and Tobago. "Clearly, as a society, we have to guard constantly that freedom," he said.

Addressing the goal of the party Dookeran called it "noble" but also reminded decision makers that the the global economic meltdown is redefining how a country seeks to measure its assets.

He told the politicians of French President Nicolas Sarkozy's initiative to contribute to a new debate on measuring economic performance and social progress by inviting Nobel Laureates Professor Joseph E. Stiglitz and Professor Amartya Sen to share their considerable wisdom on the issue.

The commission’s report, he said, argued that the way nations measure economic performance is flawed since its focus is primarily on a country's Gross Domestic Product (GDP).

He said such a measurement of citizens’ well-being is flawed because GDP does not include resource depletion and environmental degradation.

He quoted Professor Stiglitz from a lecture he gave last week at the University of the West Indies: "If equality increases enough, relative to the increase in average per capita GDP, most people can be worse off, even though their average income might be increasing".

He agreed that raising per capita income is a distorted measure of well-being of citizens, calling it the source of an incorrect approach in dealing with poverty and inequality.

The former T&T Central Bank Governor noted that one of the conclusions of the commission’s report is that there must be a shift from measuring economic production to measuring the well-being of citizens and that well-being should be placed in the context of sustainability.

"This argument underlines the faulty approach that emerges when policy makers use GDP, which really measures market activity, when what we should be doing is measuring the sustainability of the well-being of citizens," he said.

Dookeran said if citizens' welfare were to become the central tenet of governments' policy, it would cause nations to redefine development. He referred to Prof. Sen's thesis that development is building capability in people.

"Capability is a measurement of people’s health, education, personal activities, environmental condition and life’s satisfaction... Freedom, in this sense, refers to the enhancement of "people’s capability", which includes the process of decision-making and the opportunity to achieve outcomes which people have reason to value," he said.

"This will allow them to lead a life where they have the real choices to make," he added.

Speaking specifically about poverty, Dookeran said the orthodox approach is the creation of an adjusted framework to include two issues - building capability in people and sustainability of people’s well-being.

Dookeran said according to the policy brief of the Inter-American Dialogue, there has been a decrease in poverty and inequality in Latin America due to strategic economic growth and innovative social programmes.

However he said in spite of that one in every three Latin American is poor and one in every eight is extremely poor and unable to meet their basic nutritional requirements.

"Poverty rates range from 75% of the population in Haiti to 13.9% in Barbados. In Trinidad and Tobago, the rate has been estimated to be between 16.5% and 27.3%, based on different studies," he said.

"We in Latin America and the Caribbean have not yet found an effective strategy for reducing poverty and inequality," he said and suggested that social policy be significantly revamped and strengthened in the region.

He said it is a fallacy to expect that when the current global economic crisis is over things will be back to "good times" because there will continue to be a persistent rise in poverty and inequality.

"Let’s not fool ourselves. The challenge ahead is enormous. It requires a fundamental shift in the paradigm for development and in the design and engineering of new instruments that can address the vexing and burning issues of poverty and inequality.

"In the old orthodoxy, it was recognised that the market system promoted inequality and that the state involvement would correct that failure. It is now recognised that state’s involvement is indeed ineffective," he said.

Dookeran proposed a new agenda for dealing with the issues of poverty and inequality comprising:
  • Finding new ways and means to produce social goods within the market framework
  • The need to search for smart decisions in the provision of public services
  • A more open political process to allow the voices of the poor and dispossessed to be heard and to be loud
  • Special institutional changes in the system of accountability to provide a special place for the voice of the poor and underdeveloped in the councils of government
Related: Dr Selwyn Ryan on Prof Stiglitz's lecture:

"The giggles and twitters coming from the packed auditorium indicated that the audience wished that the Prime Minister and his technocrats were there to get the message, which was that the concept of what is glibly deemed ’developed nation status’ had to be rethought in the context of what is happening to planet earth and our own immediate natural environment.

"Stiglitz made the telling point that if newly developing countries all sought to use the US development model to achieve their 20-20 visions, the planet was doomed."

Read Ryan column in the Sunday Express

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Jai & Sero

Jai & Sero

Our family at home in Toronto 2008

Our family at home in Toronto 2008
Amit, Heather, Fuzz, Aj, Jiv, Shiva, Rampa, Sero, Jai