by Swinburne Lestrade

A lot of us were brought up on the concepts of economic growth and economic development. The idea was that economies had to grow and keep growing in order to satisfy the needs of their populations. By growth was meant, essentially, the increasing production of economic goods and services for the population. The way we measured such growth was through the concept of Gross Domestic Product (GDP) or GNP (Gross National Product), seen by many as the most comprehensive measurement possible. Hence the annual publication of statistics on GDP or GNP for countries, developed and developing.

The Meaning of Economic Growth

During the 1950’s and 1960’s economists began to realise that there was something incomplete about the use of GDP/GNP – developing countries were achieving growth targets but guess what: in spite of achieving fairly satisfactory levels of growth, the standard of living of the bulk of their populations did not change. The countries still suffered mass poverty, illiteracy, ill health, limited access to education. In other words, the increase in the production of goods and services did not in itself result in an increase in people’s welfare. As a measure of growth (and development) GDP was perhaps too narrow a concept. 

Economists then began to focus on the concept of economic “development”, (as opposed to “growth”). Problem here though is that economic development is “a multivariate concept”, i.e., it has no single definition. It has been variously defined, sometimes in ways that complicate its definition. 

In the 1970s questions began to be asked about the meaning of development from the perspective of the following questions, (as asserted by Dudley Seers): “what has been happening to poverty? What has been happening to unemployment? What has been happening to inequality?’ He asserted that “if one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result development even if per capita income doubled”. Some economists took this further and defined development squarely in terms of the reduction of poverty: “By economic development is meant not simply an increase in the GNP of a country but rather a decrease in poverty at an individual level”. (Singer and Ansari, 1977) 

By the early 1990s the World Bank had fallen in line with the emerging orthodoxy. In its 1991 World Development Report it stated: “The challenge of development is … to improve quality of life. Especially in the world’s poor countries, a better quality of life generally calls for higher incomes, but it involves much more. It encompasses, as ends in themselves, better education, higher standard of health and nutrition, less poverty, a clearer environment, more equality of opportunity, greater individual freedom, and a richer cultural life”. 

As Mahbub-ul Haq has asserted: “The problem of development must be defined as a selective attack on the worst forms of poverty. Development must be defined in terms of progressive and eventual elimination of malnutrition, disease, illiteracy, squalor, unemployment and inequalities. We are taught to take care of our GDP because it would take care of poverty. Let us reverse this and take care of poverty because it will take care of the GNP. In other words, let us worry about the content of GNP more than its rates of increase”. 

So we get the drift: Thus, we conclude that aggregate and per capita real incomes are not sufficient indicators of economic development. Rather economic development is concerned with economic, social and institutional mechanisms that are necessary for bringing large scale improvements in the levels of living of the masses.

This leads us to the issue of measurement:  how do we measure economic growth?  How do we measure economic and social progress of a country?

Economic development is a multivariate process, hence there is no single measure that completely captures the process. This is so especially since the process / these processes need to be measurable. In spite of its limitations, this is where the per capita income concept is so extremely attractive: it is convenient, has been used “forever”, is well known, and has become the primary indicator of a country’s economic performance, used by international institutions such as the World Bank. In fact the Bank uses per capita income as the defining criterion for categorizing countries in terms of their eligibility for the most concessionary type of development financing from the World Bank and its subsidiary institution, the International Development Association (IDA). At the very least it can be considered a “relevant starting point” for measuring development and classifying countries.


Against the foregoing background we will be proceeding in the rest of this article to take a quick look at Dominica’s performance on the following three indicators: (a) GDP per capita (per capita income), (b) the Human Development Index, (HDI), and (c) Poverty.

GDP and GDP Per Capita Performance

Table 1

Real GDP Growth

Antigua/B’da3.803.935.53.146.953.35– 18.27
Dominica4.45– 2.692.56– 6.82.303.56– 15.40
Grenada7.346.453.744.444.141.91– 12.59
St Kitts/Nevis6.281.032.83– 1.982.922.84– 15.15
St Vincent/G’nes1.211.331.901.002.160.49– 5.51

This article is not the place for a thorough-going analysis / interpretation of the growth figures for Dominica, nor a comparative analysis of growth rates across the members of the OECS, except to point out three highlights from our Table. The first is the glaring volatility of economic performance of the of the islands, a characteristic that we mentioned in a previous post on this blog. Generally fluctuating economic performance has been a constant feature of their economies, most glaringly in the case of Dominica.

A second notable feature of the performance of the islands is obvious in the figures for 2020. The spectre of Covid-19 looms large in the macro-economic performance reflected in the figures, a performance that is not very different from the global pattern, except for their magnitudes. Generally, the extent of the declines reflected in the 2020 figures correlates with the extent of the dependence of the islands on the performance of the tourism sector, a fact that ought to inform our development strategising and development planning.

The third notable feature is the fact that Dominica stands out as the only country with three years of negative growth during the seven years covered in our Table. 

Human Development Index

The Human Development Index (HDI) was developed by the United Nations Development as part of its annual Human Development Report (HDR). It seeks to compensate for some of the identified limitations of the use of per capita income as an indicator of a country’s development. It seeks to do this by coming up with a more composite index of development indicators, i.e., it is an index that combines per capita income with an indicator of a country’s health and health systems and the education level of the country’s population. In the words of the sponsors of the HDR, the HDI is reflective of their stated goal “to place people at the center of the development process”. The aim is to “shift the focus of development economics from national income accounting to people-centered policies”.

Thus, the Human Development Index (HDI) is a summary measure of achievements in three key dimensions of human development: a long and healthy life, access to knowledge and a decent standard of living. The latest Human Development Report was launched in late 2020 and covers the years up to 2019. In Table 2 (below) we present the data for 2019 as prepared by the UNDP in its latest HDR.

Table 2: Human Development Indicators

CARICOM Countries, 2019

HDI valueHDI RankLife expectancyAv. Years ofschoolingIncome  Per capita
St Kitts …0.7797474.88.725,038
Antigua …0.7787877.09.320,895
St Lucia0.7598676.28.514,616
St Vincent …0.7389772.58.812,378
Trinidad …0.7966773.511.026,231

Of the OECS countries the lowest HDI-ranked countries are St Vincent and the Grenadines, and Dominica. The top three performers are St Kitts and Nevis, and Antigua and Barbuda. Of interest from the perspective of measuring development is the relative performance of Antigua and Barbuda compared with that of Grenada using their respective HDI values, and per capita income indicators. It will be seen that in 2019 Grenada performs slightly better on HDI, in spite of Antigua and Barbuda’s much higher per capita income. Correspondingly, Dominica, with the lowest per capita income of the group, shows a higher HDI than St Vincent and the Grenadines. These comparative figures reflect the influence of the health (life expectancy) and education (years of schooling) on the (more composite) HDI value.  

In terms of HDI trends Table 3 shows data for the three years 2010, 2015 and 2019. It will be observed (a) that all six countries improved their HDI values between 2010 and 2019, and (b) that (apart from the very slight dip in the case of Antigua and Barbuda), Dominica suffered a drop in its HDI value between 2010 and 2015. While Dominica’s 2015 HDI performance corresponds with the drop in GDP and per capita income in that year, (the year of Erika), it is interesting that in the year after Maria Dominica recorded an HDI performance that was higher than that both 2015 and 2010.  \\

Table 3

Trends in HDI Values, 2015-2019

Antigua …0.7710.7700.778
St Kitts …0.7470.7690.779
St Lucia0.7300.7360.759
St Vincent …0.7110.7210.738

Digging deeper into Dominica’s HDI trends, we note in Table 4 (below) the expected volatility in per capita income and HDI values between 2000 and 2019, as against the steady progression in life expectancy and education.    

The takeaway from our discussion of both per capita income and HDI performance in Dominica is the volatility of this performance and the influence of Nature, in particular, hurricanes. 

Referring to Dominica’s performance in 2015, the highlight of the IMF’s 2016 report was Tropical Storm Erika and its effects on the economy: “The Dominican economy was hit hard by tropical storm Erika, with output estimated to have declined by 3.9 percent in 2015. While tourism activities have largely normalized following the resumption of full operations at the main 

Table 4: Dominica’s HDI trends, 2000-2019

LifeexpectancyYears of schoolingPer capita incomeHDI values

airport, other sectors will likely need more time to be fully restored. Agricultural output and manufacturing declined sharply, as the storm affected crops and access to arable land and prompted the closure of operations of the main industrial plant”. Looking ahead to 2016 the IMF projected that output growth would remain subdued in 2016 … “as the economy slowly recovers from the storm and investment in reconstruction picks up”. 

Growth did pick up in 2016. The country registered 2.56 percent growth “as the economy slowly recovered from the storm and investment in reconstruction picked up”.

Alas, then came Category 5 Hurricane Maria that hit Dominica on September 18, 2017 while the country was still recovering from Tropical Storm Erika. “While Erika had caused severe damage, estimated at 96 percent of GDP, Maria was Dominica’s worst natural disaster with damage estimated at US$1.3 billion (226 percent of GDP).” Most economic sectors sustained significant damage and losses, with public infrastructure carrying the brunt. The output collapse and costs of reconstruction resulted in large fiscal and current account deficits. Fiscal performance deteriorated sharply due to the fall in tax revenue after the hurricane, etc. etc. As a result, in 2018, output was “projected to decline by 14 percent and to take about five years to recover to pre-hurricane levels”. 

One step forward, two steps back – the enduring story of the Nature Isle. Dominica is extremely vulnerable to natural disasters: “… a natural disaster inflicting damage equivalent to more than 2 per cent of the affected country’s GDP can be expected to hit the ECCU roughly once every 2 ½ years.” Owing to the frequency and severity of natural disasters, they carry important policy implications associated with vulnerability, risk and uncertainty that affect both the Government and the private sector. Dominica’s terrain renders damage to physical infrastructure greater than in other countries of the Region, and the cost of rehabilitation higher. The economic impacts of natural disasters can be large – disruption of economic activity, loss of income, fiscal and external account imbalances and increased poverty.

Annual growth figures are one thing. Fact is that Dominica’s disaster-affected absolute GDP levels over the years have provided little scope to increase per capita income (PCI) levels, or to reduce poverty. No surprise Dominica has registered per capita income levels that are near the bottom of the OECS scale. (It was the lowest in 2019 as our Table 4, above, indicates.) The PCI performance would have served to depress the HDI performance, although as we see above, Dominica was able to eclipse St Vincent and the Grenadines on this indicator.

The Poverty Indicator 

In addition to per capita income and HDI figures, poverty indicators are important. We repeat the quote from the Pakistani economist Mahbub-ul Haq: “The problem of development must be defined as a selective attack on the worst forms of poverty. “We are taught to take care of our GDP because it would take care of poverty. Let us reverse this and take care of poverty because it will take care of the GNP. In other words, let us worry about the content of GNP more than its rates of increase”. 

Alas we have no recent figures on the poverty situation in Dominica. Our last Country Poverty Assessment (CPA) was conducted in 2008/2009. The following paragraph summarises the major findings from that assessment:

“That the poverty situation has improved is clearly brought out in the 2008/09 CPA report. The indigence rate fell from 10% in 2002/2003 to 3.1%. The poverty rate fell from 39% in 2002/2003 to 28.8%. Correspondingly unemployment was estimated at the time of the survey at 14% compared with over 20% in 2002. In 2002/03, the poor were 29 percent of households; in 2008/09, 22.8 percent. These findings are most significant for Dominica. At the time of the 2002/03 CPA, the country was in the throes of the fallout from the collapse of the banana industry and a significant element of the unemployed consisted of displaced banana farmers. The broader economic context was one of negative growth and poor fiscal health, including a public debt that was unsustainable. The numbers show that economic growth and fiscal health have been restored, and it can now be said that poverty and living conditions have improved concomitantly.”

The 2008/09 Country Poverty Assessment also reported impressive progress in a number of areas, to wit, the incidence of indigence, universal primary and secondary education for both males and females, universal access to primary health care, and increased provision of housing and improved housing conditions. 

The geographical incidence of poverty in 2008/09 was found to be the highest in the parishes of St Joseph, (47.2 percent), St. Patrick (42.7 percent) and St David (40.4 percent), while the St John parish recorded the lowest incidence of poverty at 10.23 %.

In terms of going forward the 2009 repost referred to “the ever-present threat of destructive hurricanes”. “Losses included a large part of the housing stock (David, 1979), the banana crop (Hugo, 1989), coastal infrastructure (Lenny, 1999) and agricultural output and infrastructure (Dean, 2007). The nature of the economic situation means that any hurricane occurring in the near future is likely to further stretch Government’s resources and bring additional hardship to many.”

The 2009 Assessment brought out an abundance of particularly useful micro-level information for purposes of economic and social planning, including the targeting of social protection programmes, which we will not elaborate here. Nor is it our purpose here to delve into poverty reduction strategies, something that we may return to at a later time. Our purpose at this time is to ask a question: why has there been no Country Poverty Assessment since 2009? 

Truth is that such assessments are rather elaborate and expensive exercises, which explains why they tend not be conducted at more than ten-year intervals. In fact, in the OECS countries poverty assessments have tended to be funded by the Caribbean Development Bank (CDB) and designed by external specialists. My understanding is that such funding support has been available to Dominica for the conduct of a follow-up Country Poverty Assessment through the CDB under its Enhanced Country Poverty Assessment Project (ECPA) 2016 to 2021.

The 5-year ECPA is designed to provide the Member States with relevant and comparable data on labour, poverty and living conditions, using harmonised methodologies, standards and systems.  St Lucia, (2016), St Vincent (2018) and Grenada, (2018/19), have all updated their CPA’s under the CDB-funded ECPA. Unlike previous assessments that were done by specialist consultants, this project would be training local country staff to carry out the assessment, (thus enhancing local capability in this area) once the countries were in a state of readiness to receive such training. 

It appears that Dominica is one of a few countries that have not yet placed themselves in a state of readiness, the requisite state of readiness, to access the said resources.  Surely this state of affairs cannot be allowed to continue, and action needs to be taken to conduct a country poverty assessment. The availability of the kind data that can emanate from these surveys will permit of the kind of micro-planning and strategising that the smallness of our islands permits. Given the impacts of Tropical Storm Erika, Hurricane Maria and now the COVID-19 pandemic, it is even more critical to conduct the Country Poverty Assessment in order to assess the current living conditions and welfare status of the population, with a view to identifying appropriate and targeted policies, strategies and programmes that would reduce the extent and severity of poverty, enhance social development, and improve overall quality of life in Dominica.

One of the technical enhancements of this round of CPAs, (under the CDB/ECPA), is its incorporation of the ability to measure (what the UNDP refers to as) multidimensional poverty, i.e., the ability to identify the poor, and understand the varying levels of deprivations at the household and community levels. Another enhancement is that the CPA now incorporates analysis of the impacts of climate change and weather-related events on the economy, lives, and livelihoods.

I am surmising that the impacts of first, Hurricane Maria, then the 2019 General Election, and subsequently circumstances around Covid-19, may have been used to justify Dominica’s refusal to seek access to the available CDB resources for purposes of an updated Poverty Assessment – except to note that in the throes of similar circumstances, the British Virgin Islands was able to proceed with its updated CPA.  One would want to assume, given its large investments in social protection, safety nets, housing, etc., that the Government would be keen to assess the social and economic impacts and efficacies of these various investments. 

We are shooting ourselves in the foot by not proceeding with this work. We have to get serious about dealing with social protection and poverty reduction in an informed manner. Not that nothing is being done to combat poverty. Its actions clearly indicate that this is a major focus of the Government, as its housing and other interventions demonstrate – all of which makes it even more puzzling that work has not proceeded on these surveys. 

Indeed, while making it clear that this did not constitute a basis for complacency, the 2008/09 CPA Report attributed the improved performance to actions of the Government: 

“This reduction in poverty is mainly attributable to attempts by the Government since the last study, to stabilise the economy, contain the debt, expand the social and physical infrastructure, and prioritise initiatives through targeted public expenditure.”

It is an imperative of the Government to continue to face up to the challenge of further reducing poverty and improving the targeting of its social protection measures. To do this effectively and efficaciously it needs the data that a Country Poverty Assessment can provide. Let’s get it done.


One Response

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