Friday, April 29, 2016

Lies, Damned Lies and Statistics?

Pn11. Note from Croz:  I've had a tumultuous three months which included moving house.  During this time the blog has been much neglected.  My re-think on the future of the blog is that I will publish once a week, usually between Friday and Monday, with articles, comments and analyses focusing on major issues in the hope that this focus on aspects of the "bigger picture" will inform and promote thoughtful robust responses from readers.

Starting today....
with Fr Barr's article which questions official statistics showing a decline in poverty.

My guess is that Fiji, along with other liberal-driven economies,  will also have experienced a widening gap between rich and poor, which adds to the societal costs of poverty.

What do you think of:
  1. The official statistics and Fr Barr's argument?
  2. Government actions and policy? Have they helped or worsened the situation?  What can it do differently? 
  3. What are the policies of the parliamentary opposition on poverty, wages and related issues?
"Lies, damned lies and statistics." This was the phrase used by Benjamin Disraeli when he cautioned against the persuasive power of numbers that do not necessarily tally with reality. Pn11
         Has Poverty in Fiji Really Declined?

                                                            Fr Kevin Barr
It was interesting to read in The Fiji Times (April 22nd) the announcement of Kelera Nokelevu from the Bureau of Statistics that the incidence of poverty in Fiji has decreased enormously – from 35% in the 2003-4 Housing Income and Expenditure Survey (HIES) to 31% in the 2008-9 HIES to 28.1% in the 2013-14 HIES.

This would be wonderful if it were true but, as I pointed out in a previous article, because the World Bank analysed the data from the 2013-14 HIES, we need to serious question the credibility of the results.  They will find what they want to find because they and the IMF have been persuading our government to follow their neo-liberal, free market economic policies which have recently been criticised for creating greater poverty and inequality all around the world.

The credibility of the recent results would need to be seriously questioned in view of the following facts. If poverty stood at 31% in the 2008-9 HIES then it surely must have worsened because:
·       The devaluation of the Fiji dollar by 20% in April 2009 meant (according to the Bureau of Statistics) that the Consumer Price Index for food increased by 38% and for building materials by 29%;
·       In January 2011 VAT was increased by 2.5% and, as everyone knows, VAT is a regressive tax;
·       Electricity increased by 30% and water costs also increased;
·       Wages during this period did not increase significantly so the high increase in the cost of living had serious repercussions for the 60% of those in full-time employment whose wages were already below the poverty line;
·       There have also been other indicators which are related to an increase in poverty:
-        Dramatic increase in domestic violence;
-        Increase in crime rates especially involving robbery;
-        Dramatic increase in the numbers of people in squatter settlements because decent affordable housing was not available;
-        Increase in child labour.

For many years the IMF, the World Bank and the World Trade Organisation (WTO) have been pushing the policies of Neo-Liberal Free-Market Capitalism which underpins globalisation and have caused increasing poverty and inequality around the world. Pascal Lamy (former Director of the WTO) said recently: “Our world is sick and the cause of the sickness is the neo-liberal policies we have been following.”  Christine Lagarde (Director of the IMF) confessed at Davos last year that IMF policies have probably increased inequality around the world.

Over the years Fiji (like many other countries) has been following (advised/or forced to follow) the policy directives of the World Bank, the IMF, and the ADB despite the fact that these policies have created greater poverty and inequality in other countries (as so many scholars and economists have pointed out).  The findings of the Melzer Commission of the US Congress (2000) are still worth repeating:

“ Neither the World Bank nor the regional banks are pursuing the
set of activities that could best help the world move rapidly toward
a world without poverty or even the lesser, but more fully
achievable goal of raising living standards and the quality of life,
particularly in the poorest nations of the world.”

Also Oxfam based Duncan Green (2008: 296ff) states:

            “For much of the last 25 years the IMF and the World Bank have
            been pursuing nothing less than a radical overhaul of the way that
            developing countries run their economies.  That role has been
            controversial and, in many eyes, profoundly destructive ..... “

The credibility of the analysis of our Housing Income and Expenditure data by the World Bank must be seriously questioned. As I remarked some time ago, it is like the United States bringing in the Mafia to analyse the crime statistics in the US.  They will find what they want to find.

The separation of poverty statistics for urban and rural areas can be useful but what is missing is any recognition of the depth of poverty in these regions.  Usually poverty is deeper in urban areas than in rural areas.

Also what about all those (35%?) who are living just above the poverty line and the extent of inequality?

As Mr Lal remarked at the recent Dialogue Fiji Conference, even if we accept that 28.1% of Fiji’s population are living in poverty, this is still a matter of grave concern and quite unacceptable in view of the much taunted levels of increased economic growth.  The economy of a country must benefit all its people – not just the few.

Not only do we need an independent analysis of data from the Bureau of Statistics, we need something of that “economic revolution” which Bernie Sanders is promoting in the US which is attracting the attention of so many people – especially the youth. This “revolution” aims to “pull down the mighty from their thrones and lift up the lowly” (to use biblical terminology) so that we have a more just, compassionate and inclusive society.