Saint Lucia
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Wanted: A true People-First Agenda

An English economist named William Perry, in an effort to attack landlords against unfair taxation during warfare between the Dutch and English between 1654 and 1676, developed a basic concept of Gross Domestic Product. It was further developed by Charles Davenant in 1695. GDP, as we know it today, was created by Simon Kuznets for a U.S. Congress report in 1934, but was not introduced on the floor of the U.S. Congress until four years later.  

GDP is defined as the total market value of all final goods and services produced in a geographic area within a specific period, usually one year. It is a key measure of a country’s economic wealth. Its value is also used to determine the size of an economy. In short, it’s a measure of the level of economic activity in a country periodically. While business, policy makers, and investors use it to assist in their strategic decision making, it must be noted that GDP has its limitations.

The author, flanked by former prime ministers Allen Chastanet and Stephenson King (L-R), is a development economist. He has served in both Labour and United Workers Party administrations under Kenny Anthony and Allen Chastanet.

As a measure of outputs produced in a country, it does not account for the of people’s living standards. It is not a well-being measure. For instance, people could be adversely affected by the degradation of the environment through the process of economic activity. Such degradation could lead to serious public health issues which in turn could lead to immense financial pressure on the public’s purse.

The process of economic output could also be done in an environment of poor physical working conditions. GDP does not indicate whether workers have sufficient occupational safety and health standards, proper wages, and proper work hours.

Further, a country could have massive output, but the distribution of income from such output might be skewed towards a minority. Heavily concentrated sectors could lead to this phenomenon. The Gini Coefficient is the statistic   commonly used to measure the level of income distribution—a statistic that is lacking in the work programs of the statistics departments of many Caribbean governments.  

The brief limitations outlined above are in no way to undermine the importance of GDP. As stated above, it is strictly an economic measure—not a measure of people’s well-being. Unfortunately, the focal point in most parliamentary debates highlights the performance of their respective economies using GDP figures. Parliamentarians tend to use it as an all-encompassing indicator, while failing to highlight indicators that speak to the social development of their people.

There are alternative measures that focus mainly on people’s happiness rather than on the traditional output of goods and services. For instance, guided by Buddhism and mindfulness principles in 1972, King Jigme Singye Wangchuck declared that he would focus on growing the Gross National Happiness (GNH). The index therefore looks at variables such as: living standards, health, good governance, ecological diversity, resilience, time use, psychological well-being, cultural diversity, and community vitality.

Another is the Thriving Places Index (TPI) developed in 2016 by U.K. charity, Happy City. The main purpose for this index is to provide local organizers and public policy makers a snapshot of the welfare of their people. Its primary pillars are: sustainability, equality, and local conditions.

New Zealand now refers to its fiscal budget as a Well-being Budget. Its 2020 budget, has priorities such as ensuring improving child well-being, at the same time reducing child poverty. Other budget priorities include improving the health outcomes for all New Zealanders; supporting New Zealanders to benefit from technological innovation; and the lifting of their incomes, skills and opportunities.

The above GDP alternatives, among others, do have their own shortcomings like the traditional GDP, however, the driving force behind the alternative GDP methods are people centric. In other words, economic activity should not be an end to itself but a means to achieving increased happiness and improved well-being.

Failure to meet these ideals is a dereliction of duty by any elected policymaker. It is very easy for policy makers to hide behind economic indicators, and to use them as their performance certificate. But while good economic indicators have their purpose, the actual the development of a people must be a priority for any government concerned with its people’s standard of living. 

Public officials like to point to public, private, and especially foreign investment, to highlight their performance. But while these may be important economic initiatives, they are futile if they do not redound to the general improvement in the people’s standard of living.  

While private sector investment is profit-driven, policy makers must ensure its citizens are not worst off in terms of public health, environmental degradation, loss of patrimony, and social restrictions. Likewise, public investment programs should be implemented to achieve maximum value for money, given the limits on government’s revenue.

One of the administrative structures for achieving value for money from public sector investment programs is to ensure  the procurement or tender process is efficient and effective.  Alas elected officials tend to bypass or totally ignore this important structure, in favor of hand-selecting or assigning direct awards to selected contractors. Such practices tend to open floodgates for corruption and wastage.  

A 2020 study by Kwabena Gyimah-Brempong on African countries reveals corruption has negative effects on income growth and income equality. Moreover, that corruption adversely affects the poor more than the rich. So, while the proverbial elephants keep getting fatter through this abused means, the insects and the grass below them (the people, that is) are being crushed and starved.

It is no wonder that while elected officials brag nonstop about construction or investments, even about economic growth, the general public tends not to feel its positive impact. Any public policy or public program that is not people-driven is person-driven. It becomes all about the policymaker and not people they are to represent. Putting the people first must be a demonstrated policy, not mere words spoken for selfish purpose. Otherwise, we are doomed.

The quality of our elected officials should be judged by the living standard of the people they represent. Government   policy should have the interest of the people as its foundation. Poverty alleviation, affordable and quality healthcare and education, preservation of history and culture, the protection of the environment, income and gender equality, should be the guiding force of any people-first agenda.