VIEWPOINT:
POST-ELECTIONS
VIOLENCE BATTERED THE ECONOMY
By Prem Misir Ph.D.
The season for wage/salary hike requests
is upon us!
Trade union leaders with some measure of
social responsibility must be cognizant of the whipping blows
inflicted on the economy by the pointless post-elections violence
this year. Therefore, wage/salary hike proposals must be placed
in synchrony with the current state of the economy.
In the year 2001, political violence against
innocent Guyanese really started on Elections Day, March 19,
and continued well into six weeks after the elections. Clearly,
the economy would have been messed up and was messed up as
a result of this senseless violence.
The Assistance Assessment Committee, created
by the Government, awarded G$56.5 million to victims of the
post-elections violence.
Clearly, the economic loss arising from the
street violence amounted to a few billion dollars. One way
of estimating the loss is by counting the number of businesses
damaged, bridges destroyed, roads not travelable, and buildings
burnt. And, of course, these were many. The economy was certainly
damaged by these absurd incidents.
During this civil unrest and its aftermath,
damage to bridges and non-drivable roads created considerable
economic hardships for both passengers going to and from work,
and owners/drivers eking out their daily living on the roads.
Therefore, absenteeism from work increased, resulting in lower
productivity levels, and reduced incomes for owners/drivers.
Also, educational services, such as, class activities, were
severely disrupted through bomb scares and damage to school
buildings. The economy, indeed, was negatively impacted by
the enormity of the physical loss..
Invariably, when physical loss negatively
influences the economy, minimal attention is given to the
psychological impact on workers, resulting in lower productivity.
Physical loss tells very little about unemployment effect,
and fails to consider opportunity costs in terms of lost output.
The impact on living standards also is not factored into the
hardship equation created by the familiar street violence
in the aftermath of an election.
In order to determine the economic impact
on per capita income, we have to calculate Guyana’s
Gross Domestic Product (GDP) per head, assuming that there
was no civil unrest. And so the difference between actual
and estimated average incomes will provide us with an approximate
measure of the cost of the post-elections violence.
Undoubtedly, this civil unrest attracted
fewer investments, especially foreign investments. This enduring
conflict, indeed, has reduced the country’s capacity
to respond to external shocks, such as, debt burden and IMF
austerity measures, etc. The economic impact of this year’s
post-elections violence, certainly, cannot withstand the wage/salary
hike requests presented at this time by various trade unions.
The increased violence and destruction have
produced a massive economic burden on society, particularly,
in the utilization of scarce medical resources, and the diversion
of law enforcement resources, which, instead, could have been
used to enhance quality health care, and prevent and fight
crime.
The post-elections violence and its resultant
political instability contributed to a negative economic growth.
The results are not only the loss of jobs, but also businesses
experienced some economic hardships. And a further sustained
political violence may induce people to withdraw funds from
banks, since they may feel insecure about their savings in
these financial institutions.
Any fall in economic growth will widen the
scope of poverty. For the first seven years of the PPP/C Administration,
we have seen the GDP increased cumulatively by 37 percent
and extreme poverty declined by 10 percent. Decreased growth
rates, however, do not help the poor, especially in a society
where a structured safety net is not the norm. However, the
Poverty Reduction Strategy consultations and the measures
proposed may hasten poverty reduction in the society at large.
The 2001 Budget experienced acute surgical
incisions, due to a decline in economic growth and an increased
unemployment rate, of course, induced by the unabated post-elctions
violence. Any continued political instability will additionally
reduce the value of the Guyana currency, and can only lead
to the elimination of several economic advances made by the
Guyanese people since 1992.
The content of wage/salary hikes must be
conditioned and shaped by the state of the economy, an economy
considerably battered by the senseless post-elections violence
this year.
TOP
|
