Human deprivation in South Asia
IPN Opinion article
The globalisation process in South Asia has focused on integrating markets without improving the condition of the vast majority of South Asians. South Asia's integration with the trade and capital markets have expanded considerably, yet South Asia remains among the least integrated regions in the world. Globalisation has not been accompanied by reduction of poverty or improvement in human development. Economic reform programmes have failed to increase growth substantially or achieve macroeconomic balance. There is a worldwide movement for forming regional trading blocs, yet intra-regional trade within South Asia is very low compared to such trade in other regional groupings. A global economy has emerged, but the institutions of global governance are not performing either efficiently or equitably. Positive effects of globalisation on economic growth and human development depend on how the process is managed nationally and internationally.
These are quotes from Human Development in South Asia 2001, brought out by Mahbub-ul-Haq, Human Development Centre in Islamabad. Perhaps the timing was wrong. Because of the obsession with the budget, the recent release of HDSA in Delhi passed almost unnoticed. As a supplement to UNDP's Human Development Report, HDSA is not very old. There have been four earlier volumes, with themes of challenge of Human Development (1997), Education (1998), Crisis of Governance (1999) and Gender Question (2000). The 2001 theme is globalisation and human development. Hence the quotes.
I must confess I don't like this year's volume. Why bring out HDSA? HDR exists. The reason is that there is sometimes a South Asian angle. That provides the value addition. In addition, HDSA has data for all seven countries in one place, although rarely does HDSA provide data not available elsewhere. The 1997 HDSA was a general one, being the first. In my opinion, the three subsequent volumes picked themes directly relevant for South Asiaóeducation, crisis of governance and gender question. The crisis of governance document was especially good. However, if one picks a theme like globalisation and human development, the arguments (such as the ones in the first paragraph) are available all over the place. HDR itself. The South Asia Development & Cooperation Report 2001-02, recently brought out by Research and Information Systems. Where is the value addition?
Instead of quotes from HDSA, let's have some quotes from Mahbub-ul-Haq himself. Each chapter of HDSA begins with such a quote. Globalisation is no longer an option, it is a fact. Developing countries have either to learn to manage it far more skillfully, or simply drown in the global cross currents. It is simply unacceptable that while aid transfers so few resources to the developing world, several times more is taken away through trade protection, immigration barriers and an increasing debt burden. In such a situation, it is critical for poor nations to bargain for more equitable access to global market opportunities.
Economic growth is like a wild horseóit needs to be trained to serve the real interests of society. If the horse misbehaves in some societies, leading to deprivation of many human lives, then the fault is not that of the horse but the skill of the rider. Economic growth is essential in poor societiesóbut even more important is its structure and distribution. While policy makers must accept the logic of the marketplace, they must also turn around and make markets work more efficiently in the interest of all people. It is people friendly markets that are needed. South Asian Association of Regional Cooperation leaders should agree on a number of concrete measures to open up their markets to each other and to the rest of the world. And Saarc should call on the international community to assist their efforts by providing much larger access to world export markets, greater inflow of foreign private investment and larger external assistance. The Saarc leaders should offer the world their own plan for human development and poverty reduction which can then become the basis for a viable global compact.
Global markets cannot achieve justice for all nations or all people. Global institutions are needed to set rules, to monitor ëglobal goods' and ëglobal bads', to redress widening disparities. Paradoxically, the global institutions are weakening just as global interdependence is increasing. What is crucial for poor nations is an equitable access to global market opportunities, not charity. What we must insist today is a comprehensive package from rich nations for imposing immigration controls (sic) since free labour flows were supposed to be an essential component of a liberal economic system which would equalise global opportunities.
The points about protectionism (including cross border labour flows), inadequate aid flows and international financial architecture are fine and are common to both HDSA and Mahbub-ul-Haq's set of quotes. But beyond this, do you detect a not-so-subtle-difference in nuances between the two sets? I do. If I am falling behind in a race, I can't blame the horse alone. Nor can I blame riders who are outstripping me (even if they fail to stretch out helping hands) and absolve myself of the responsibility. In the last resort, fundamental problems concern me as a rider.
Globalisation may not have had desired benefits. And complaints about problems in the exogenous world are entirely valid. However, most constraints that prevent obtaining of benefits from globalisation are internal and endogenous. They are internal to South Asia. They are internal to the seven countries. And they concern domestic economic reforms, or their lack. The Mahbub-ul-Haq set of quotes explicitly recognise this. The HDSA set of quotes don't. Sometimes the recognition is not even implicit, though there are country case studies of reform experiences in five countries (India, Pakistan, Bangladesh, Nepal, Sri Lanka). Perhaps the choice of theme explains this. The themes of education, crisis of governance and the gender question focused on the endogenous. Globalisation tends to shift the blame to the exogenous. Given our obsession with Pakistan, a footnote is in order. These are 1999 figures. So measured in non-PPP per capita income, we are behind Pakistan.