POVERTY & INEQUALITY ARE LINKED

By Prem Misir, Ph.D.

Life at the bottom really is the life of the poor.

Poverty-stricken situations become real when we direct attention to day-to-day behaviors and face-to-face interactions. When we begin to focus on the capacity of the poor to purchase groceries, clothing, and books for school, and examine the institution of child labor resulting in the denial of formal education, their working conditions, the hordes of beggars and paupers, underemployment, and homelessness, then we ourselves begin to encounter the world of the poor.

Who are the poor in Guyana? These are first, the Amerindians residing largely in hinterland areas, second, the East Indians living mainly in the coastal region, followed by Africans primarily found in the urban centers.

Two competing explanations generally are given for explaining causes of poverty. The first is the individual explanation which purports that some people are trapped in poverty because of inadequacies, as laziness and lack of education. This perspective blames the poor for their poverty. Over time, people develop a culture of poverty which traps the poor, encouraging resignation to poverty as having to do with a person’s destiny. Here, a lower-class subculture evolves where personal ambition and achievement take a back seat, and ‘living for the moment’ is advocated. The other school of thought is that society is the producer of poverty. Here, the focus is on the structural aspects of society, such as, employment opportunities. Society is blamed for poverty because it is the society and not the people themselves who distribute resources. Generally, it is accepted that poverty is a consequence rather than a cause of a person’s position in society.

The coming of the new political administration in 1992 brought in its wake high expectations among its people, especially after they were witnesses to nearly three decades of dictatorial rule. At that time, it was reasonable to suppose that many such expectations would have remained unfulfilled at the end of the People’s Progressive Party/Civic’s (PPP/C) first tem in office.

Clearly, even then, it was reasonable to assume that some expectations that were more personal to the individual's well being would soon start to evolve as an emerging reality. A personal expectation that cries out for realization but stays unsatisfied, continues to engulf the despair experienced among those people affected in 1992. One personal expectation has to do with the reduction of poverty. Even with the 1994 Budget Proposal declaring war on poverty, the hidden faces of poverty continue to provide some artistry to their landscape of human misery. But some poverty reduction has taken place.

A SIMAP Report indicated that in 1992, about 86 percent of Guyanese lived below the poverty line; that figure was approximately 35 percent in 2000. In the U.S., the poverty rate dropped, with some fluctuations, from 22 percent in 1959 to 13.8 percent in 1995. The poor numbered about 38 million in the U.S. in 1995. Given the continuing difficulties of considerably reducing poverty in the U.S. which has enormous resources, we may do well to appreciate the significant poverty reductions achieved in Guyana in a mere eight (8) years.

In many ways, poverty is produced from economic and inequality processes in the society. Traditionally, however, inequality and poverty were perceived as separate issues, but they really are inextricably linked. Any decisive poverty reduction may require policies that incorporate the connection between inequality and poverty itself. The non-linking of inequality with poverty in poverty reduction programs has its genesis in excluding the poor from inputting such programs.

In many parts of the world, government policies on poverty reflect the beliefs, values, and interpretations about the poor by those people who formulate policies. These beliefs, values, and interpretations mirror the policy makers’ vested interests and not the interests of the poor, according to Edelman (1977). This approach, espousing different perspectives on the causes of poverty and depictions of the poor by some policy makers, should not be surprising, as these policy makers hold different positions in the system of social inequality. Poverty elimination/reduction will be a reality only if poverty policies, programs, and projects transform the social and economic conditions of the society in question, rather than sustain the existing economic format.

Some years ago, the PPP/C Government waged war on poverty. And this war has been sustained. Recently, the Government launched its public consultations on the Interim-Poverty Reduction Strategy Paper (I-PRSP). The public consultations guarantee that the poor will not be excluded from inputting subsequent poverty reduction policies, programs, and projects. The I-PRSP represents an attempt to transform the existing social and economic arrangements of Guyana, resulting in poverty reduction. The I-PRSP also suggests that Government recognizes the connection between inequality and poverty.

Through a national poverty strategy incorporated in the I-PRSP, the Government will sustain an improved macroeconomic, trade and investment environment; enhance the business sector; improve the social services, as health, education, water and sanitation, housing, and safety nets; maintain and diversify economic infrastructures; and execute special programs in areas where there is a high incidence of poverty.

In building on the I-PRSP, the Guyana Government in its 2001 Budget has allocated about $2 billion for poverty reduction programs. These include SIMAP - $1.1 billion; the Poverty Program - $500 million; the Poor Rural Communities Program - $188.4 million; the Basic Needs Trust Fund Program - $100 million; and the President’s Youth Choice Initiative - $240 million. Clearly, these budgetary allocations are a strong testimony of the Government’s firm commitment to reducing poverty.

Although many attempts at poverty reduction have tackled the issues of adequacy, employment, and work incentives, there has been limited success with achieving stable, long-term, full employment in the private economy or where capitalism is the economic system of production.

Some have even suggested that the solution to reducing poverty is economic growth and full employment. But as Hurst (1998) points out, this can only mean higher self-sufficiency for all. But this level of self-sufficiency is achievable only at the cost of reducing economic inequality. Capitalism as an economic system of production, historically, has not measured up to the task of combating economic inequality. In fact, it creates greater economic inequality. That being the case, therefore, capitalism as manifested through the private economy, does not have the full capacity to drive poverty-reduction programs. The search for other economic systems to assist capitalism in reducing poverty, therefore, will continue.

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