Business Page – August 11th, 2002

Business, Economics, Politics and Development

Human Development Report 2002


Readers will forgive the cumbersome title designed to pass the scrutiny of the editor who often finds it necessary with considerable justification to issue reminders that this Page is about business even though I have tried pointing out that there is so little business to write about these days. The Human Development Report 2002 launched by the United Nations Development Programme (UNDP) on July 24, 2002 confirms the link between economics, politics and human development. As the Foreword notes ‘this HDR is first and foremost about the idea that politics is as important to successful development as economics.  Sustained poverty reduction requires equitable growth - but it also requires that poor people have political power.  And the best way to achieve that in a manner consistent with human development objectives is by building strong and deep forms of democratic governance all levels of society”

This Report is truly relevant to the current circumstances of Guyana. Indeed its theme: Deepening Democracy in a Fragmented World can so easily apply to the post-1992 Guyana. It is therefore a pity that the press has shown such little interest in the Report although the fault may lie not only with the media but with the UNDP. This Report should be compulsory reading for all those with an interest in politics and development at all levels and it would have been useful for the UNDP to organise a few workshops around the country to consider its findings which though derived from countries around the world have particular resonance for Guyana. For the Government, this is an excellent blueprint as it tries to understand the turmoil in the country, but it is equally relevant to the opposition parties and civil society as they seek ways to become involved in creating good governance in the country.


 The Report notes that in the last two decades, some “81 countries took significant steps towards democracy, and today 140 of the world’s nearly 200 countries hold multi-party elections - more than ever before.  But the euphoria of the cold war’s end has given way to the somber realities of the 21st century politics”. Elections, despite their inherent virtues are not a panacea for dealing with massive poverty, societal tensions and economic difficulties. Indeed, some countries such as Pakistan and Zimbabwe have seen reversals in the democratic journey largely because of the absence of strong institutions to sustain democracy or the absence of a democratic culture. More significantly, even in those countries with strong democratic institutions and traditions citizens still feel powerless to influence national policies. The Report refers to a 1999 Gallup International’s Millennium Survey of 50,000 persons in sixty countries in which less than one third of the respondents considered that their country was governed by the will of the people and an even smaller proportion – one in ten – said that their government responded to the people’s will.  

The Report notes that while economically, politically and technologically the world was never freer, it has also never been more unjust. The Report notes that the establishment of majority rule through the ballot-box has often been at the expense of minority rights. As a result and particularly in those countries not possessed of a democratic culture, those who lose elections are either persecuted by the winners or refuse to accept legitimate electoral outcomes. It notes with telling simplicity that “democracies require not just legitimate governments but legitimate oppositions too”.

In what could perhaps reflect the “Buxton” phenomenon, the Report notes that in a number of those countries where democratic elections have failed to bring home a greater sense of participation and economic dividends, there is a tendency for the population especially the young people to feel “increasingly alienated and angry”. In the most extreme cases radical or fundamentalist groups are embracing violent solutions to their grievances, as tragically illustrated by the terrorist attacks of September 11, 2001 and their global repercussions.

Effective Governance

The main message of the Report is “that effective governance is central to human development, and lasting solutions need to go beyond such narrow issues and be firmly grounded in democratic politics in the broadest sense.  In other words, not democracy as practiced by any particular country or group of countries - but rather a set of principles and core values that allow poor people to gain power through participation while protecting them from arbitrary, unaccountable actions in their lives by governments, multi-national corporations and other forces”

The Report notes that effective governance can only be achieved if societies ensure “that institutions and power are structured and distributed in a way that gives real voice and space to poor people and create mechanisms through which the powerful - whether political leaders, corporations or other influential actors - can be held accountable for their actions”.

Noting that advancing human development requires governance that is democratic in both form and substance, the Report advances the view that democratic governance is not only valuable in its own right, but identifies three reasons why it can also advance human development. First, enjoying political freedom and participating in the decisions that shape one’s life are fundamental human rights: they are part of human development in their own right. Democracy is the only political regime that guarantees political and civil freedoms and the right to participate - making democratic rule a good in itself.

Second, democracy helps protect people from economic and political catastrophes such as famines and descents into chaos.  This is no small achievement.  Indeed, it can mean the difference between life and death.  Noble Prize-winner Amartya Sen has shown how elections and a free press give politicians in democracies much stronger incentives to avert famines.

Third, democratic governance can trigger a virtuous cycle of development - as political freedom empowers people to press for policies that expand social and economic opportunities, and as open debates help communities shape their priorities.  From Indonesia to Mexico to Poland, moves towards democratisation and political opening have helped produce this kind of virtuous cycle, with a free press and civil society activism giving people new ways to participate in policy decisions and debates. The report cites two examples of participation leading to human development. In Porto Alegre, Brazil, citizen participation in preparing municipal budgets has helped to re-allocate spending to critical human development priorities. As a result, during the first seven years of this initiative, the percentage of the population with access to sanitation almost doubled while households with access to water services increased from 80% to 98%. And in South Africa, gender-sensitive budgeting which examines the implications for gender equity of national and local budgets and which is now pursued in about forty countries, has led to the inclusion of gender sensitive analysis in policy papers and to more effective targeting of public spending. 

No Automatic Link or Imported Formula

The Report posits that the links between democracy and human development are not automatic. Indeed it could have added that neither is the link between electoral democracy and good governance. When a small elite dominates economic and political decisions, the link between democracy and equity can be broken.

The Report is clear that democracy that empowers people must be built - it cannot be imported. The specific form chosen by the nation must have regard to its history and circumstances. Having said that however, there are some critical elements to all such systems or what the Report refers to as the “key institutions of democratic governance” of which the following are identified in the Report:

§    A system of representation, with well-functioning political parties and interest associations.

§    An electoral system that guarantees free and fair elections as well as universal suffrage.

§    A system of checks and balances based on the separation of powers, with independent judicial and legislative branches.

§    A vibrant civil society, able to monitor government and private business and provide alternative forms of political participation.

§    A free, independent media.

§    Effective civilian control over the military and other security forces.

 The Report ranks some 173 countries in three groups High, in which there are five Caricom states (Barbados, Bahamas, St.Kitts & Nevis, Trinidad & Tobago and Antigua and Barbuda. Medium in which Guyana is placed 103 below Belize, Dominica, St. Lucia, Suriname, Grenada, Jamaica and St. Vincent and Low Development among which Haiti is the only Caricom country.


Next week, we will look at some of the specific measures and where Guyana places and how it has moved over the past year.