Maravi

Where is the development they are bragging about?

COMMENT - Poverty is part and parcel of neoliberal economics. High unemployment is one of the main ways they suppress the cost of labour and increase their bottom lines. And they are open about it too. They even have the gall to claim that low wages are a good way of keeping inflation down.

Where is the development they are bragging about?
By The Post
Wed 25 May 2011, 04:10 CAT

MMD leaders and cadres have been sloganeering about massive development projects, economic growth and general development of the country.

But there have also been endless complaints that the benefits of the economic development the MMD leaders and cadres are bragging about are not trickling down to the masses of our people. The great majority of our people still live in abject poverty and without the necessary services required in an organised society.

Why is this so when the economy is growing and developing in such a “massive” way? The answer to this is that there appears to be serious confusion in what economic growth means and in what constitutes economic development and in how these two issues are different.

It cannot be denied that Zambia has recorded some economic growth. And this is mainly due to increased investments in the extraction industries, that is the mines. This has pushed up our Gross Domestic Product (GDP).

But by the very nature of economic growth that is driven by the extraction industries whose benefits are enjoyed elsewhere, economic development is lagging behind economic growth. While we are recording an increase in GDP due to mining activities, the benefits of this increase in GDP are enjoyed elsewhere where the bulk of the earnings from our mining activities end up.

Clearly, economic development and economic growth are two different concepts of economics. And one of the major differences between these two concepts lies in their definitions. Economic growth describes the increase of an economy on the scale of its products or services. Economic development, on the other hand, describes the development of economic wealth of an economy.

Economic growth is generally measured with the mean of percentage. For example, GDP of a country is an economic growth. The example of economic development can be social, financial, and so on and so forth, development of the country, which can be quite hard to measure. This is why economic growth is part of economic development; it helps to measure some of the whole system.

Another difference between these two concepts is the type of changes. In economic growth, it takes only quantitative changes under considerations to determine the growth of an economy.

For example, the annual income of our country is a quantitative change and can indicate an economic growth if it has increased over time. Economic development, however, takes both quantitative and qualitative changes under consideration to determine the development of an economy.

For example, with annual income of a country, it will also measure the living standard and other social economic factors to determine the status of economic development of a country. Economic growth normally deals with the underutilised resources while economic development deals with the unused resources of a country.

Therefore, at first glance, one might feel that we are talking about one and the same thing when we discuss economic growth and economic development, but in reality, these are related but different concepts used in different contexts. Sometimes people use the terms interchangeably, which is incorrect.

Economic growth of a country is a quantitative measure as there are indicators to tell the economic growth of a country. GDP is an indicator that not only tells us the size of an economy, but also tells us in numbers and percentage how much an economy has progressed compared to the previous year. On the other hand, development is an abstract concept hard to measure.

Yes, you can tell the difference as when there is a perceptible difference in the lifestyles of the people of the country but development is not just confined to income levels but encompasses many more indicators such as life expectancy, education, health and many other factors that go into improving the quality of life.

A country may be rich as when its GDP is high but if its social fabric is not developed, the country is still not considered developed. However, it is seen that in general, when there is economic development, economic growth is invariably there. One can verify this fact in the list of the countries placed according to their GDP. Even though China and India have fairly large economies with high GDP, they are still not considered developed because of their lowly ranks on other parameters such as health, education and life expectancy.

Socio-economic development automatically leads to economic growth of a country as has been the case with many countries that are included on the list of developed nations today.

And because of all such considerations, an all-together index called Human Development Index has been developed to rank countries according to their economic development and not just according to their GDP, which really is a misnomer.

This simple explanation may help explain why the economic growth recorded by our country in the past few years is said not to have benefited the great majority of our people who still wallow in abject poverty.

You cannot say a country is developed or is developing when its people are not developed or developing. There is no development in a country where poverty levels are rising by the day.

When we talk about economic development, the focus should be on the people – how their lives are affected. Economics and people’s welfare are not abstract questions to be discussed in a remote, academic manner. They are urgent, turbulent questions that impinge upon the daily life of most of our people. And the economic issue overshadows all others, since it controls their present, and will largely determine their future life.

In our discussions about the economy of our country, we should never lose sight of the individual citizen, who has to bear the brunt of economic hardships caused by mismanagement, corruption and exploitation. And since we have declared this country a Christian nation, the Bible should shed light on our approach to economic issues and instruct us on how to treat our fellow men and women; that is, how we should practice justice and fairness at all levels of economic and social interaction.

The story of the Garden of Eden shows God asking Adam and Eve to work on the land and make it productive. We see here an economic outlook. In this Garden of Eden story, which is part of the creation story, we find a model for understanding the world and its economic aspects.

God takes the initiative in creating humankind and placing Adam and Eve in the garden to till it and make it grow. Economic growth, economic management and economic well-being are part of the divine intention for the created world. The harmony of creation cannot be achieved in a state of economic under-production, mismanagement and exploitation.

God is the author and initiator of this economic outlook of reproduction. It follows that God is concerned to see that people have access to the means of production, and an adequate supply of the means of subsistence: food, healthcare and shelter. Our people must be able to find employment and to sell their labour freely in exchange for food, housing and other goods they need.

Another aspect of the creation story is worth of consideration. Adam and Eve were created in God’s image and likeness. This means that we can talk of a permanent connection between God and the people He created. In economic terms, it means that we should care for this people’s welfare. We should not mar the image of God which they bear, by participating, either directly or indirectly, in their abuse and exploitation.

We all know that our politicians have been abusing and exploiting our people in various ways: through the unfair distribution of resources, through unfair systems of employment, or simply by defrauding and stealing public funds.

To abuse and exploit God’s people is to dishonour that image. Any form of economic exploitation violates a fundamental biblical principle – that of honouring, revering and safeguarding God’s creation. Anything that undermines this divine value is an affront to God.

Any economic outlook which upholds an unfair and unequal distribution of the means of existence, and fails to see such a system as sin, can be viewed critically as a form of heresy. It is heresy because it denies the basic biblical conviction that all people are created equal by a single act of God.

Any economic system worth its name must have as its priority a search for equality for all persons in society as it seeks to distribute the national wealth. It is therefore meaningless and useless to go round bragging about economic development without taking practical steps to meaningfully improve the conditions of the less privileged citizens of our country. Appropriate avenues must be created to satisfy the demands of economic fairness and equity.

You cannot claim to be developing a country when you are not paying attention to the development of the people. Increasing GDP does not necessary mean developing the people, especially when that GDP is enjoyed elsewhere or by very few people.

Labels: GDP, MMD, NEOLIBERALISM, POVERTY

posted by MrK @ 4:55 PM