Dear Editor,
I am deeply honoured that two distinguished professors, Tarron Khemraj (TK) and Randy Persaud (RD), were motivated to jointly pen a response (SN, 05/02/2026) to my essay (SN, 04/02/2026, “essay,” hereafter). I fully agree with their point that Guyana’s economy is undergoing a structural transformation, thanks to the inflow of some oil revenue into the non-oil economy, mainly via drawdowns from the NRF to fund Central Government expenditure, growing linkages between the oil and non-oil (domestic) economies, and the dynamism of local entrepreneurs to capitalize on opportunities. NRF drawdowns ($495.048 million) in 2026 will supply 29.5 percent of expenditure and 32.8 percent of revenue.
Prior to getting into the core of my response to TK and RP, I would like to correct an omission in my essay, which is that I failed to cite the source for my claim about poverty in Guyana. The source is IDB 2024. Jillie Chang, David K. Evans, and Carolina Rivas Herrera (2024) used data from that report to write an IDB working paper. Here are two sentences from their paper: “The countries with highest poverty rates are Venezuela, Honduras, Guatemala, and Guyana, each with more than half of the population in poverty and more than 30 percent in extreme poverty.”
The main argument of TK and RD is that “the country has undergone a radical shift in human welfare over a very short period,” from 2017 to 2023, a period of 6 years, and that there is a mathematical truth between the Human Development Index (HDI) and the Multidimensional Poverty Index (MPI).
First, the HDI: for each of the three basic HDI dimensions, an index is computed with its value ranging from zero (0) to 1. TK and RD could have obtained better results had they chosen an earlier year than 2017, say 2010. From 2017 to 2023, the value of the HDI rose by 0.080 compared to 0.129 from 2010 to 2023, for example. Yet that would not have made a difference because it is necessary to separate the pre- and post-oil periods to understand the “radical shift.” Changes in the value of the HDI pre-oil were tepid compared to post-oil. The three years prior to 2020 witnessed an average addition to the HDI of 0.006 compared to 0.025 in the post-oil years, which is more than four times as large as the pre-oil years. I excluded 2021 because the HDI fell by 0.009, from 0.722 to 0.713, due to the COVID-19 pandemic, which cut life expectancy by 3.43 years from the previous year.
What explains the rapid growth of the HDI from 2020? While the answer is obvious, let’s examine the indices of the three basic HDI dimensions. The education index rose by 0.003 from 2020 to 2023, the health index by 0.037, and the income index by 0.141. That is, the education index was basically the same, the health index moved up slightly, but the income index went up precipitously. Indeed, the value of the income index was 0.929 in 2023, which means that increases in per capita income (PCI) will not grow the HDI by much. Additions to the HDI will have to come from increases in life expectancy and education, especially the latter which has the largest deficit (1 - value of index).
Importantly, the standard of living dimension of the HDI is based on the income of the overall economy, not the oil economy. The larger GDP, and thus larger PCI, exaggerate the “radical shift” of the HDI. But that’s an illusion, since the size of non-oil economy fell from 84.2 percent of the overall economy in 2020 to 43.2 percent in 2023. Correcting for the distortion means using the lower PCI of the non-oil economy; the health and education data do not need any adjustment because they are the same whether we are talking about the overall or domestic economy. With income correction in place, Guyana’s HDI was 0.714 in 2020, which was 0.008 smaller than the HDI based on the PCI of the overall economy. The difference more than doubled to 0.018 in 2021, then doubled again in the following year, and expanded more modestly the next year. Non-oil HDI was 0.739 compared to 0.766 for the overall economy in 2023 so that correcting for the lower non-oil PCI erased 0.037 from the HDI of the overall economy. Using PCI of the non-oil economy to calculate the HDI would downgrade the ranking of Guyana’s state of human development in 2023 from 89 to 107 among the 193 countries and territories for which the HDI was computed. Even so, Guyana would still rank as a high human development country.
The illusion: it is the explosive growth of PCI (in 2021 PPP $) by “299.074%” that mainly explains the rise of the HDI of overall economy (oil + non-oil) by 0.054 from 2020 to 2023. The truth: PCI of the non-oil economy expanded by 30.8 percent in the same four-year period, and this correction (PCI of the non-oil instead of the overall economy) resulted in an HDI expansion of 0.026 instead of 0.054.
One final point about the HDI. The education index is arguably the weakest of the three basic HDI dimensions. It measures the quantity of education (expected and mean years of school); it does not measure the quality of education. To illustrate, two countries may have the same expected and mean years of school, but the quality of education in one could be higher than the other. It is for this reason that Harmonized Test Scores (HTS), which combines information on both the quantity and quality of education is a more powerful indicator. Based on a sample of eighteen countries around the world (Gampat, R. and Mahabir, M 2026, Paper III), Guyana had the third lowest HTS score in 2020; at 346, this was also the lowest in the CARICOM sub-region (the HTS score ranges from 300 to 625).
Now let’s switch the lens to the Multidimensional Poverty Index (MPI). The MPI identifies multiple deprivations at the household level in education, health and standard of living, the same three HDI basic dimensions. The fundamental difference is that the MPI indicators are different from those of the HDI, both in terms of number (10 vs. 4) and what the indicators measure. As Dr. Terrence M. Yhip (SN, 06/02/2026) pointed out, high human development and structural poverty are not “generally mutually exclusive,” (TP and RP, SN 05/02/2026). The mathematics of the HDI and MPI are considerably different and the two do not map pari passu, move on equal footing.
Per the latest Human Development Report (2025), deprivation is highest in the standard of living dimension (47.2 percent), followed by health (30.4 percent), and education (22.4 percent). Income deprivations in Guyana are larger than the average for the Latin America and Caribbean group of countries (36.2 percent); Jamaica (26.9 percent); Suriname (35.8 percent); and Trinidad and Tobago (12.1 percent). Income deficits reinforced the point that skyrocketing PCI, while it boosts the HDI, still leaves “pockets of deprivation” (TK and RP), pointing to the issue of distribution raised by Dr. Yhip in his contribution to the debate.
Finally, I used official government data to argue that the wellbeing of Guyanese is much lower than that of CARICOM countries, all of which have lower income than Guyana. On the other hand, TK and RP resort to the MPI, which, in the case of Guyana, is based on estimates, not actual data. Unlike several other countries, Guyana does not have microdata derived from surveys. It is the absence of such data that explains why there is no figure for the national poverty line and the percent of people living below PPP $2.15 a day (UNDP 2025).
And so my response to TK and RP boils down to this: their resort to estimated data from an international organization does not change my arguments about the wretched state of human wellbeing in Guyana. My arguments are based on actual, official data. The key implication is the need for actual, official data on poverty and inequality. One reads this in B26: the BoS will be “conducting several key surveys to inform decision making in government and private sector” (p. 81). One hopes that the data – the entire data set of each survey – will be made available to the public and not buried in the bowels of the BoS.