5 September 2010

A problem of communications

Hannah Richards, Christian Aid's communications officer for Latin America and the Caribbean, laments the incidence of malnutrition among the poor in Guatemala in the Guardian. I'm not going to blame her for the article header, as that will have been the work of some sub-editor. But I can blame her for the following:
This state of affairs is no accident. It is a direct result [1] of the extremely regressive tax regime in Guatemala and many other Latin American countries [2]. The poorest pay a far higher proportion of their income on the equivalent of VAT and other indirect taxes [3], whilst the business elite enjoy a very generous regime of tax incentives [4]. As a result [1], one in 20 Guatemalan children does not reach the age of five due to infectious and diarrheal diseases [5] that are easily preventable and treatable. Two-thirds of the country's children do not complete primary school on time and illiteracy levels are closer to the average for sub-Saharan Africa than to that for Latin America.
  1. Inequality of wealth in Guatemala has almost nothing to do with taxation, which hardly impacts at all on the rural poor, who subsist largely outside the cash economy. The biggest problem is the corruption that diverts tax revenues and government-to-government aid to parasitic purposes.
  2. How does the tax regime in other countries impact on the Guatemalan poor?
  3. This is true for every country in the world - indirect taxes are much easier to collect than income tax, a major consideration in countries with poorly paid government bureaucracies. However, most of Guatemala's state revenues come from customs and excise charges.
  4. With a very limited pool of skilled labour, poor infrastructure (no good ports) and no significant mineral wealth, how else is Guatemala supposed to attract investment?
  5. Diarrhea is an infectious disease. Grimly, the evidence world-wide seems to indicate that the millions of infants saved by prompt oral rehydration have worsened the problem of malnutrition.
In sum, Hannah Richards either does not know what she is talking about, or else she has knowingly written something false in detail and in general. Whichever is the case, Christian Aid should consider replacing her with someone who can be bothered to do justice to her job description.

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