The Sustainable Development Goals

the elimination of poverty. Though the determinants of poverty are much wider than income, the international community relies on the income to determine progress in reducing poverty. At the start of the MDGs period, the international community made use of the World Bank’s dollar-value income measure of poverty. Initially, this figure was given as US$1.25 per day per person. Any person earning or having access to income below that threshold was considered to be in extreme poverty. The World Bank has since adjusted this figure to US$1.90 to take account of price changes and other economic factors. Today, therefore, a person who earns less than US$1.90 would be thought of as living in extreme poverty.

The premise for making a comparison would be the minimum wage paid in Guyana. The minimum wage today in Guyana is $55,000. This translates into US$1.92 each for a family of four or US$1.54 for a family of five persons. A family with more than four persons in Guyana whose income does not exceed the minimum is in economic trouble. There is need to ascertain how many persons are in such a situation. When Guyana started its push to reduce poverty as part of its obligations to achieve the Millennium Development Goals (MDGs), the government of the day reported that 35 per cent of the population was living in poverty. It further reported that 19 per cent of the population was living in extreme poverty. According to the 2002 population census, cases of poverty or extreme poverty could be found in 78 per cent of the Neighbourhood Democratic Councils (NDCs) of the country. Though all regions of the country were affected, the highest incidence of poverty was reported to be in the rural and hinterland areas.

Causes of poverty

Poverty in Guyana is linked to several factors. A major observation is that poverty is connected to unemployment and in cases where people work to the type of work a person does. The Poverty Reduction Strategy Paper prepared in the previous decade indicated that people who were unemployed were likely to be poor. The conclusion was reached too that persons involved in certain types of agricultural activities and those performing manual labour in Guyana were likely to be poor. The agricultural producers were not necessarily persons without assets. It simply meant that the assets that they had were either inadequate or insufficient to generate enough money to exclude them from poverty. Without access to financing, their cash flow would always be lacking.

So, even though persons were employed, their income from agriculture and manual labour was not enough to take them over the poverty line. They possessed income-generating assets which were insufficient to prevent them from being labelled as poor. Part of the problem was linked to the amount of output they could produce and the prices that they could receive for their produce. Their economic circumstances were worsened by the size of the economic household that depended on the meagre income that farmers generated.

Poverty in Guyana was also linked to geographic location. The highest incidence of poverty was observed in hinterland communities. This condition was attributed to isolation from significant economic activities. Economic size, distance and inaccessibility combined to limit the amount of meaningful economic activity that could occur in many hinterland communities. The lack of good education was also seen as a factor giving

rise to poverty in Guyana. According to the PRSP, less than 15 per cent of the heads of poor households had completed a secondary or higher level of education at the time. Educational attainment in rural areas, where many of the poor are located, was reported to be low. In the rural coastal regions, less than 14 per cent of household heads had achieved a secondary or higher level of education as compared to 23 per cent in Georgetown. The situation was worse in interior regions where less than 13 per cent of poor households had any kind of secondary education.

Low income limits the access of people to goods and basic services unless government sees the need to ensure that every citizen has access to important education, health, water and sanitation services. When one considers what it takes to install a power generating plant to serve a small population scattered over a large area of land, conventional approaches to remedying the situation might not work. Access to electricity is important for many economic and social activities. Many hinterland communities do not have electricity-generating plants simply because it would be uneconomical to place assets that require large capital expenditures in sparsely populated communities. As a result, the use of alternative energy technology becomes important in the strategy to eliminate poverty. Such technology could play an important part in facilitating education and increasing the number of persons who possess enough skills to earn a liveable wage.

Addressing the issue of nutrition is important as is providing access to good drinking water and sanitation services. These are issues that the government is required to address. The fundamental basis for doing so is the production structure. The market with its price mechanism or invisible hand often excludes many people with insufficient income from meeting their basic needs. But the exclusion is not only based on market forces. It also includes discrimination on the basis of race, gender and other social factors. This issue, along with that of the production structure and the supporting activities, will be discussed in the final part of this article.

(To be continued)