THE season for wage/salary hike requests is upon us!
Trade union leaders with some measure of social responsibility must be cognizant of the whipping blows inflicted on the economy by the pointless post-elections violence this year. Therefore, wage/salary hike proposals must be placed in synchrony with the current state of the economy.

The year 2001 political violence against innocent Guyanese really started on Elections Day, March 19, and continued well into six weeks after the elections. Clearly, the economy would have been messed up and was messed up as a result of this senseless violence.

The Assistance Assessment Committee, created by the Government, awarded G$56.5 million to victims of the post-elections violence.

Clearly, the economic loss arising from the street violence amounted to a few billion dollars. One way of estimating the loss is by counting the number of businesses damaged, bridges destroyed, roads not travelable, and buildings burnt. And, of course, these were many. The economy was certainly damaged by these absurd incidents.

During this civil unrest and its aftermath, damage to bridges and non-drivable roads created considerable economic hardships for both passengers going to and from work, and owners/drivers eking out their daily living on the roads. Therefore, absenteeism from work increased, resulting in lower productivity levels, and reduced incomes for owners/drivers. Also, educational services, such as, class activities, were severely disrupted through bomb scares and damage to school buildings. The economy, indeed, was negatively impacted by the enormity of the physical loss.

Invariably, when physical loss negatively influences the economy, minimal attention is given to the psychological impact on workers, resulting in lower productivity. Physical loss tells very little about unemployment effect, and fails to consider opportunity costs in terms of lost output. The impact on living standards also is not factored into the hardship equation created by the familiar street violence in the aftermath of an election.

In order to determine the economic impact on per capita income, we have to calculate Guyana's Gross Domestic Product (GDP) per head, assuming that there was no civil unrest. And so the difference between actual and estimated average incomes will provide us with an approximate measure of the cost of the post-elections violence.

Undoubtedly, this civil unrest attracted fewer investments, especially foreign investments. This enduring conflict, indeed, has reduced the country's capacity to respond to external shocks, such as, debt burden and IMF austerity measures, etc. The economic impact of this year's post-elections violence, certainly, cannot withstand the wage/salary hike requests presented at this time by various trade unions.

The increased violence and destruction have produced a massive economic burden on society, particularly, in the utilisation of scarce medical resources, and the diversion of law enforcement resources, which, instead, could have been used to enhance quality health care, and prevent and fight crime.

The post-elections violence and its resultant political instability contributed to a negative economic growth. The results are not only the loss of jobs, but also businesses experienced some economic hardships. And a further sustained political violence may induce people to withdraw funds from banks, since they may feel insecure about their savings in these financial institutions.

Any fall in economic growth will widen the scope of poverty. For the first seven years of the PPP/C Administration, we have seen the GDP increased cumulatively by 37 percent and extreme poverty declined by 10 percent. Decreased growth rates, however, do not help the poor, especially in a society where a structured safety net is not the norm. However, the Poverty Reduction Strategy consultations and the measures proposed may hasten poverty reduction in the society at large.

The 2001 Budget experienced acute surgical incisions, due to a decline in economic growth and an increased unemployment rate, of course, induced by the unabated post-elections violence. Any continued political instability will additionally reduce the value of the Guyana currency, and can only lead to the elimination of several economic advances made by the Guyanese people since 1992.

The content of wage/salary hikes must be conditioned and shaped by the state of the economy, an economy considerably battered by the senseless post-elections violence this year.