Never neglect the household
Any country that has managed to transition itself from developing to developed in this hostile global geopolitical environment has done so by providing the platform to facilitate a balanced distribution of resources and support to firms as well as to households via the government.
Many developing countries, including Jamaica, subliminally believe that their countries can only grow and develop by providing resources predominantly to firms and continue to neglect the needs of the household. This is evident by the constant pursuit to improve the doing-business environment with little or no effort to reduce the cost of living and improve social and support services provided to the household. The resulting consequences have been low growth and low development, which have reduced the government’s ability to properly govern and the police’s ability to fight an escalating crime problem.
Why are household needs essential?
Income inequality has been cited by the International Monetary Fund (IMF) as a major contributor to low economic growth in a recent research publication. The results imply that a one per cent increase in the income share of the people in the top 20 percentile of the income distribution triggers a 0.08 per cent decline in GDP growth.
The IMF results also inferred that a one per cent increase in the income share of the people in the lower 20 percentile (poor people) will have a positive effect on GDP. Income inequality has been placed at the forefront as a contributor to underdevelopment and slow economic growth in many countries. Jamaica, for example, to some extent, has remained in the developing country category with low economic growth due to its disregard for income equality and the provision and availability of reasonable living and social conditions for its poor population.
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