Notwithstanding the kind and flattering comments of introduction by the gracious Chairman; I still find it overwhelming whenever I am asked to address such complex issues as the one intended for the occupation of our minds over the next two days. The beauty of this occasion, though, is that I am required to be brief and so it is my hope that I am protected against embarrassing myself.

The subject seems to suggest that there is a global crisis and there is urgency for us to look at the role of statistics possibly to build statistical constructs that will permit us to measure, monitor and direct Caribbean Development more reliably and in more diverse ways. The subject is signalling the possible existence of an underlying requirement (rider) for development, that is, “The systematic and structured management of development is only possible when it can be measured by tools and constructs that are consistently reliable and endowed with the capacity to report on that which is internally critical and germane”.

But, is there something about the genesis and the continued march of the current global crisis that has evoked that new sense of urgency in the power of statistics in the management of development? Is the global crisis signalling to us the need for less faith in the ‘invisible hand’ in the economic affairs of man and more effort in the creation of tools that would improve our capacity to measure, predict and massage our economy so it behaves more in conformity with our objectives?

I shall not attempt to discuss the genesis of the beast nor would I attempt to describe the nature of the beast but I shall obediently accept that when the beast seemingly halted the march of global capitalism in the summer of 2007; it was evident that we, in these parts, would be affected in a profoundly negative manner.

We heard and continue to hear much concern being expressed in the international space about the threat of the global and economic crisis on the world’s ability to satisfy the Millennium Development Goals. This concern is real to the extent that the crisis itself has caused significant disruptions to our economic development plans and our growth aspirations.

In Grenada, like other CARICOM States, we have, over the last thirteen months seen and experienced the manifestations of that type of disruptions alluded to in the form of:

• Significant and lingering reductions in the level of economic activities in the formal sector
• Simultaneously, we have seen a noticeable upsurge in survival activities in the informal sector;
• Increased notifications from foreign investors regarding their inability to raise investment funds on the international markets;
• Increased layoffs, especially in the tourism sub-sector;
• A downward cascading effect in sections of the economy affected by the downturn in business within the offshore universities like the St. George’s University in Grenada; and,
• Decline in the buoyancy of migrant transfers; among others.

But, what does statistics have to do with this seemingly long list of complaints and economic woes? If we accept the earlier rider that “The systematic and structured management of development is only possible when it can be measured by tools and constructs that are consistently reliable and endowed with the capacity to report on that which is internally critical and germane” then, statistics has everything to do with the global crisis and our development, now and in the future.

Within the System of National Accounts, the Gross Domestic Product (GDP) remains the most commonly used measure of our economic activities and the behaviour of many of the economic variables that impact on our economic development. It should be noted that in Grenada it is still an annual based measure. I suspect it is so in the other CARICOM Countries. The crisis has heightened the need for, at least, two innovations within the current national accounts system. At the level of improving our monitoring capabilities, we need to graduate to the stage of generating quarterly Gross Domestic Product Measures. By so doing, we may just be able to have earlier warnings of impending economic dangers and better positioned to adopt corrective measures.

At the same time, there is definitely a need for us to determine ways in which we can better refine the mix of variables and how they are measured in order to achieve a more realistic measure of GDP.

This observation is of tremendous import in our current financial and economic environment from a policy perspective. Could you imagine formulating and ultimately implementing a development policy that is premised on poorly informed statistical data only to find out five years later that today’s choice was totally incorrect and counter developmental? This Forum must address these two related aspects of the GDP Measure.

Theoretically and realistically in jurisdictions where it the GDP measure is well developed with a high reliability profile, it has been and will continue to be a useful measure of economic activities at the macro level. However, development has an equally important human welfare aspect to it, which the traditional economic measures of income fail to capture.

For example, have we in Grenada been able to identify and measure the impact of the crisis on the poor and vulnerable? In the very heart of this question lies a series of even more fundamental ones – Has the crisis caused a substantial distributional change in national wealth? If yes, in whose favour has it shifted? As we move forward to correct the social and financial damages, which population segments warrant immediate attention? In which sub-sectors should development investments be channeled to achieve this end? This realm requires a new kind of statistics.

Simon Kuznets writing during the Great Depression penned, “The welfare of a nation can scarcely be inferred from a measure of national income. If the GDP is up, why is America down? Distinctions must be kept in mind between quantity and quality of growth… Goals for more growth should specify more growth of what and for what.”

We are not advocating the discarding of the good old measure of GDP. Instead, we advocate a further refinement with the simultaneous development of a series of reliable measures of human well-being.

Thank you

contact piu@caricom.org