Thursday 13th April, 2006

 

Poverty survey caught up in bureaucracy

‘T&T must diversify’

 
 
 
 
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It is very possible that inequality has increased and it will mean that there are some people who can spend more and spend conspicuously but...Economist Dr Ralph Henry of Kairi Consultants

Photo: Shirley Bahadur

BY ASHA JAVEED

In the face of a booming economy in the capitalist system, commentators often lament that the rich get richer while the poor get poorer.

Economists agree that poverty still exists in T&T, but point out that measuring the nation’s poor is made difficult by the fact that the statistics are either outdated or unavailable.

Hoping to redress the data gap, the Ministry of Social Development conducted a poverty survey last year, questioning hundreds of people across the country about the conditions under which they lived.

The Government had promised to start releasing data from the poverty survey four months ago.

While the data has been gathered, a consultant has yet to be identified and the material to be analysed.

There have been numerous studies conducted by independent consultants including the the United Nations Development Programme (UNDP) on poverty in T&T. But they have used different methods of gathering information—either measuring income or expenditure— which makes comparisons difficult.

Jwala Rambarran, Caribbean Money Market Brokers chief economist, explained that the last available statistics to compare poverty was from 1992, on a Survey of Living Conditions which was conducted by the Government. That was 14 years ago and the country’s economic and social landscape has changed since then.

“You can’t make meaningful comparisons and policy interventions when you have different poverty lines, different assessment of surveys and different measurements; whether it is income or expenditure,” he said.

“In the case of Trinidad you don’t have sufficient data and analysis at hand to fully support any statement on the issue. No one can say poverty has increased or say poverty has decreased because there is no data to support these assertions,” he said.

Rambarran believes the Government should be conducting surveys of living standards every three years in order to be more proactive on the issue of poverty eradication.

But he pointed to a few indicators which show that some aspects of the social dimension have not improved in T&T’s booming economy: there are more street children, increasing numbers of vagrants, more broken homes and growing levels of abuse.

“All these things give the general impression that poverty has not gone away with the generation of more wealth,” he said.

Unemployment

Three weeks ago, the Government announced that unemployment had declined from 8.2 per cent in 2004 to 6.9 per cent in 2005.

A comparison of the fourth quarter performance over the last two years also shown that the number of people holding jobs increased by 9,200 from 580,700 to 589,000.

The number of males with jobs increased by 4,400 (from 348,600 in 2004 to 353,000 in 2005), while 4,800 more females gained jobs in 2005 (from 232,100 to 236,900).

Youth unemployment continued at a high rate of 12.1 per cent recorded in the 20-24 age group.

The data collected last year by the Central Statistical Office should reflect in T&T’s favour, says economist Dr Ralph Henry of Kairi Consultants.

He said the fall in unemployment in the country can be linked to what he believes is the country’s declining rate of poverty.

“The unemployment level has come down. The poverty level which was last calculated from 97-98 data was between 23-20 per cent. Surely it should have come down by now. We (Kairi Consultants) now estimate that it is in the teens but I don’t want to speculate much more than that,” said Henry.

He said the generation of jobs in itself does not necessarily correspond to the elimination of poverty as there will be people who live in poverty when unemployment is falling.

One sector of the economy expands at the expense of another sector and people who lose their jobs in the declining sectors do not automatically get jobs in the growing sectors.

“So it is a phenomenon now in any economy that while there are sectors growing, there are sectors declining. For example, we have had the reorganisation of the sugar industry and that would have impacted on the jobs of a substantial number of workers in part of the country as employment shrunk in that area.

“That’s not to say that jobs will immediately emerge to take up the slack in that area so that while unemployment is falling generally there will still be areas in the country and groups of workers for whom unemployment is increasing,” he observed.

Two weeks ago, Prime Minister Patrick Manning noted the decline in unemployment and predicted a further reduction within the next two years as the Government begins construction of ten plants in the energy sector with an estimated total investment in excess of US$11 billion.

He said the country could actually achieve full employment by 2006.

He admitted the country was facing a serious problem with a lack of skilled workers. But, he said, with the implementation of the Caribbean Single Market there would be free movement of skilled workers among Caricom countries.

Manning said while many trainees in the Government’s Hype and Must programmes were not fully certified, they were being used as apprentices in many of the housing projects.

Photo: Edison Boodoosingh

Inequality

With T&T’s economic growth projected at about ten per cent in 2006, there should be a greater chance of long-term employment.

It also means shorter unemployment period provided that people have the skills in the jobs which become available.

And while levels of poverty may be reduced by job creation or employment and growing levels of income, the gap between the rich and the poor has been further widened, said Henry.

“It is very possible that inequality has increased and it will mean that there are some people who can spend more and spend conspicuously but I think as well that the levels of income generally have improved.

“So it means that while things have improved for the vast majority, things might have improved for people at the top even more,” Henry said.

“Take for example food prices. One year ago, there were shortages of vegetables due to adverse weather conditions which elevated prices.

“To the extent that income is growing, people are able to deal with some of those prices. I don’t think we’ll ever escape higher food prices,” he said.

But it means that low-income people and high-income people still have to pay the same prices at a grocery check-out.

Henry said the nature of the growth taking place in the oil and gas industries is capital intensive which does not necessarily generate a large number of jobs.

He noted that the Government has created a number of social programmes, some of which were directed at creating jobs and a number of job training programmes which will create some jobs in certain sectors but should not be seen as a long-term solution.

“It will help in the short term but the fundamental problem of this country is that it has to diversify and in sectors which are competitive in the international economy.

“Everything we do now is open to international competition so we still have to address those fundamental issues. How do we create a capacity among our workers such that they can move into sectors and contribute to sectors that are dynamic in the international economy.

“That essentially is about knowledge and skills and we actually need to do a lot right now in the short term to upgrade our workforce which is severely limited in the skills and knowledge required for competitive industries in the 21st century,” he explained in an interview with the Business Guardian.

Taking oil and gas throws the country to the same fate that other Caribbean islands now face a fledgling tourist industry with little diversification in other sectors, he believes.

“The fact that we have oil and gas and we are getting revenue from it might mask that fundamental problem,” he insists.

Yet the country’s escalating crime situation works against the non-oil sector.

“The security problem is cutting a hole into our growth and investment potential and that has to be dealt with,” he said.

He illustrated this by using the example of the construction sector where the job primarily consists of a daylight work shift compared to a two- or even three-shift day simply because the security situation has threatened the number of people who can be employed in productive work.

Fighting poverty

But can poverty intervention really have an impact?

The Government has 64 social programmes but statistics on enrollment and its impact is still to be determined.

Garry Tagalee, head of the European Union-sponsored Poverty Reduction Programme said that projects were in place to cater for both the urban and rural poor.

Rambarran said he also saw the need to create a national poverty reduction strategy built within the country’s economic planning framework. This, he said, will link strategy to resources with proper monitoring.

But Henry observed that creating tailor-made poverty reduction programmes isn’t always effective.

“The nature of the intervention has to change. People will cite Laventille and Cocorite and all these things as some of the poor areas of the country. There the problem is not simply one of employment and income. It’s about people’s perceptions and values and orientation and moreso with young people, we have a sort of disconnect. We may espouse certain values but a large section of our youth do not live by those by rules and the provision of employment does not solve the problem,” said Ralph Henry.

“And the kind of things they get into may bring them short-term gains but could keep their families locked into a cycle of poverty. You have a certain type of subculture that exists in part of the society that might not be inductive to long-term poverty reduction,” he added.

And the social programmes which exist may not be able to break this divide.

“The crafting of it is a far more difficult task. You need training programmes which have links with them, a kind of intervention, a kind of impact on people’s thinking, people’s intervention and people’s perception on where they can be ten to15 years down the road.

“Their expectation of their life expectancy, their notion of what is appropriate behaviour is vastly different to what we think is appropriate and we see that being played out,” said Henry.

One way to combat the poverty in rural communities was to invest in agriculture so people themselves become aware of the opportunities available.

“Agriculture is one of the most challenging industries. The Government needs to make agriculture viable so people will rationally decide that it is not worth it,” said Henry.

“We have to upgrade our workforce. The challenge is that people have to understand that they need to upgrade and must have a thirst for knowledge and wanting to upgrade themselves. That is the foundation for our building different industries or expanding industries. If we don’t do that, we are going to be just like all the other Caribbean islands with just one or two sectors and poverty for a large number of people. We are no different to the rest of the Caribbean where there is tourism but not very much else,” he said.

 

 

 

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