Minister Mullings' fuzzy math

CLIVE MULLINGS, minister of mining and energy, alleges that "if Rev Dick took the time to refer to the official record of Hansard, he would see that what I said was 'after almost two decades of DECLINE' ... I NEVER said NO GROWTH"; and then adds, "What this clearly shows is that the reporting on the debates in Parliament is below par, and for Rev Dick's information, I also read economics, as well as law, so I am not beyond my ken, and logic and economic formulae are not the preserve of portfolio holders." (Oct 30). It is not clear whether the minister understood what I wrote, so I will try one more time.

The Hansard has him saying, "In 1989, where my friend shows that there was 7.0 per cent growth, in the succeeding year of 1990, growth was 6.3 per cent. Therefore, if you are going to establish if there is growth or decline, you simply take the year 1990 from 1989 and you will find is a 0.7 per cent decline." This statement shows that he offered two alternatives, either "growth or decline", and he stated that there was decline, meaning that there was no growth. If you claim that there is economic decline it means that there was no growth!

Not economic decline

To illustrate his point the minister said, according to the Hansard, "you have a business and you earn $100,000 this year. The following year you earn $50,000, are you saying that your business is improving or declining? ... If those profits are going down, then you are in decline." Not so, minister. The business is not in decline; in fact, for the two-year period the business has made a profit of $150,000. What has happened is that the rate of profit making has declined, but it does not mean the business has declined. So if a Jamaican bank made $40 billion one year and the next year it made $39 billion it does not mean the bank is declining. It has made $79 billion in two years, which is excellent!

Therefore, minister, assuming a base of 100 points then the economy having grown by 7.7 per cent would have increased to 107.7 points, and if there was further growth by 6.3 per cent in the following year then you are at 114 points. That is not economic decline.

In addition, the minister claimed the converse, that consecutive negative economic growth is indicative of positive growth, once the later one was smaller. That is to say, if in year one we experienced growth of -4 and year two comes with -2, then the -2 is a sign of economic growth. I consulted a leading economist at the University of the West Indies who confirmed that year two would have been a worse performance than year one, meaning less goods and services were produced in year two. It is like a man who is drowning and is four feet under the water at a point in time and he goes down another two feet; it means that he is now six feet under and worse off.

The main problem of the minister's assertions is that the majority of the ruled are claiming that the country is going in the wrong direction with poverty, unemployment and income inequalities on the increase, while the rulers apparently believe negative economic growth can be positive growth.

And if we cannot analyse the economic problems correctly and are seeing economic growth as economic decline and economic decline as economic growth, then how are we going to design the right plan, implement it efficiently and effectively, and then to evaluate what has been accomplished so that Jamaica can prosper?

Devon Dick is pastor of the Boulevard Baptist Church in St Andrew.