I NEARLY burst out laughing when I read our Attorney-General mention the Gini coefficient had, according to a World Bank study, narrowed for Fiji suggesting inequality had dropped in this nation.
This is simply a politician going from the awe-inspiring talk from one end of the scale to the other end — ridiculous. What is he going to tell our poor, marginalised and those sleeping on the streets or begging daily with the aid of a letter supposedly given by some authority?
Come the election in 2018 are we going to hear that “we have made huge strides in poverty and inequality alleviation in Fiji as the Gini coefficient shows clearly”.
What is that sir? asks a layman. Is he going to reply that the Gini coefficient is a measure of statistical dispersion intended to represent the income distribution of a nation’s population and is the most commonly used measure of inequality?
Talk of our politicians getting really out of touch. This statement would, without a doubt, take the cake. Politicians need to be humble and get down from their high horses to the ground level and talk in laymen or women’s terms instead.
Consumer Council of Fiji chief executive officer Premila Kumar was more grounded in her choice of words at the third Speaker’s Debate at the Grand Pacific Hotel (GPH) in Suva on Monday night which was attended by over 500 people including government ministers, backbenchers and Opposition MPs (FS 2/08/16).
“In all this, where is the private sector? Private sector growth is widely acknowledged as an essential component in poverty alleviation and for providing economic opportunities in any society,” she said.
She is spot on and I can assure Fijians that the private sector is not going to do anything about the inequality in Fiji as the prime motivation of the private sector in a market economy is profit.
The focus is on volume sales, lowering of costs, increase of profits and at the end of the day “minting money”. The private sector was never a charitable social service with its function to narrow the gap between the rich and the poor.
In fact, this sector magnifies the inequality gap depending on how efficient this sector is at getting money from the less fortunate.
In laymen’s simple terms, it is by and large, a one way transaction — the poor giving to the rich as consumers and the rich hoarding all these or using it to create more wealth and thus more inequality in our society.
Competition pushes businesses to be efficient, keeping costs down and while increasing production. This continues the vicious cycle.
“Every country is struggling to narrow the gap between the rich and the poor,” remarked Mrs Kumar. At this I was reminded of the world-famous quote or rather a misquote by Bob Hawke when he was the PM of Australia.
By 1990 no child will live in poverty comment became folklore especially in Australia, as this promise was impossible to keep.
“We set ourselves this first goal: by 1990 no Australian child will be living in poverty,” Mr Hawke said on June 23, 1987 at an election campaign launch.
Hawke regrets the child poverty comment, as he misquoted what was on the printed text. The printed version had it as: “By 1990 no Australian child need live in poverty.”
Thus no country is sitting on its laurels not trying to address the issues of inequality. In Fiji the A-G highlighted that one needed right sustainable policies and the passing of economic growth, which he said they were doing.
And now to the Gini coefficient!
The Gini index, according to Investopedia, is a measurement of the income distribution of a country’s residents. This number, which ranges between 0 and 1, and is based on residents’ net income helps define the gap between the rich and the poor, with 0 representing perfect equality and 1 representing perfect inequality.
The index is named after its developer, Corrado Gini, an Italian statistician of the early 20th century. It is typically expressed as a percentage, so a 0.2 coefficient would be shown as 20 per cent.
Investopedia warns thus: “Don’t mistake the measurement of income distribution with the measurement of wealth. A wealthy country and a poor country can have the same Gini coefficient, even if the wealthy country has a relatively equal distribution of affluent residents and the poor country has a relatively equal distribution of cash-strapped residents.”
The document further suggests: “The Gini index is only as accurate as the gross domestic product (GDP) and income data that a country produces. Many developing nations do not produce accurate or trusted economic data, so the index becomes more of an estimate.
“There is also a generally negative correlation between Gini coefficients and per-capita GDP, because poorer nations tend to have higher index figures.”
Thus the A-G’s comments for a small nation like Fiji, where income disparity is not as large as in some countries where they have super-rich billionaires and millionaires on one end and paupers in ghettos like in America, on the other end, the Gini coefficient will give a much lower value for Fiji which by no means is an indication that we are more prosperous than America or have a quality of life or standard of living better than America.
Personally, what is decisive is not what someone says or how well they say it, but what they do, what it gets them to do, and how successful they are at the end of all the long-winded and wordy presentation that appear to go over the tops of the heads of many, who could not care less, but wait for the cocktails to be served.
* Dr Sushil K Sharma BA MA MEng PhD is an associate professor of meteorology at the Fiji National University. The views are his and do not reflect the views of his employers nor that of this newspaper.
