DEVELOPMENT AGENDA FOR NEW SOUTH ASIA

KHADIJA HAQ
(feedback@pgeconomist.com)

Sep 24 - 30, 20
12

South Asia in the 21st century is a new South Asia with its urban areas displaying benefits of economic growth in high-rise buildings, shopping malls and traffic jams, along with the modern institutions of higher learning and sophisticated healthcare facilities. The globalization of goods, finances, culture and values has changed the face of South Asia, as well as the rest of the world. But what distinguishes South Asia from the rest is the fact that this change has not benefitted the whole of South Asia and all the people in it equally.

Economic and social development in South Asia have shifted quite remarkably in the past two decades, where the low growth rates and low human development indicators of the past have been replaced by a period of robust economic growth, reduction of poverty and improvement of education and health of the population. For example,

* There has been a spectacular increase in economic growth rates of the major economies of South Asia . Over the past 20 years South Asia has experienced economic growth averaging 6 percent a year.

* Poverty has declined in most countries.

* Adult literacy and school enrolment have gone up. Infant mortality and maternal mortality rates have gone down.

* Women's educational, economic and political empowerment indicators have gone up.

Yet these facts tell only a part of the story. Firstly because they give the regional averages. The progress achieved by individual countries, and groups within each country, vary significantly. More importantly, this South Asia has left many people behind - people who live in rural areas; in poor areas/states/provinces; people of different gender, faith, and ethnicity; of lower income; and uneducated, unskilled and jobless people. Despite some reduction in poverty rates, the share of South Asia in the total number of the world's poor is still about 40 percent. Rural poverty has increased in many South Asian countries, and income inequality in urban areas is on the rise. Economic growth has mainly concentrated in the services sector in urban areas and has mostly benefitted the urban middle class that is equipped with education and skills. The contribution of services sector in terms of generating employment has been very limited with the result that open unemployment rates in many countries show a significant increase. In education, despite improvements in education indicators the region still has the highest number of illiterate adults and highest number of out-of-school children. Similarly, the health indicators of the most vulnerable groups, women and children, do not show much improvement.

DEVELOPMENT AGENDA FOR A NEW SOUTH ASIA

In view of these concerns the development agenda for a new South Asia has to be guided by the principle of inclusive growth focusing on agriculture and rural development; employment creation; capability building; closing social gaps; addressing the challenges of water, energy and climate change; and an efficiently-run system of governance. Thus the to do list of a development agenda could be:

1. Take development to where most people live and work.
2. Invest in sectors that create most employment.
3. Build the foundations of a nation by investing in education and health.
4. Close the gaps based on gender/class/location.
5. Address rising concerns: water, electricity, climate change.
6. Focus on the efficiency and effectiveness of the institutions of governance.

South Asia needs to take development where most people live, that means the rural and peri-urban areas, and develop the sector that provides livelihoods to most people, which is agriculture. Investment has to be in rural areas and for agriculture. There was a time when in South Asia surplus was created in agriculture which was then invested in industrialization and in urban areas to start the development process. Now that process needs to be reversed in order to create employment, produce more food and provide better living conditions in rural areas. It also means more and better education and health facilities in rural areas to improve people's capabilities, and more infrastructure development in rural areas to create job opportunities. It also means rural electrification by environment-friendly power generation such as, solar energy. Finally it means better governance of rural areas through delegation of more power and finance to local institutions of governance.

In this development agenda investment in infrastructure development is advocated for creating jobs, especially for those who live on the margin of society. Recently in South Asia infrastructure development projects in urban areas has got the top priority. That needs to change if one wants to employ the vast numbers of the unemployed and under-employed.

Education and health are supposedly getting a lot of policy attention of the governments. Yet if one looks at governments' financial commitments, only 3 percent of South Asian GDP and 11 percent of total government expenditure are spent on education. The financial commitment to health sector is even worse: 1.3 percent of GDP and 4 percent of government expenditure. How can one compete in this highly competitive globalized world without producing high quality skilled labour? In this competitive world South Asia's exports have to be supported by new technology and skilled labour.

A just development agenda also needs to focus on reducing social gaps based on gender, class, ethnicity etc. Every country has its deprived population who should not be shut out from development policies and actions. The philosophy of inclusive development demands that they all be brought under the umbrella of equity and equality.

The emerging energy and water crisis in some countries of South Asia has brought home the sad fact about the inability of past development policies to address these concerns. Additionally, there is the looming impact of climate change. These issues must also be brought under the development agenda.

But none of the agenda items can be implemented if the system of governance is neither efficient nor effective in delivering services. Good governance is an essential condition for implementing a development agenda that will benefit all.

However a lack of effective governance has emerged as one of the fundamental development challenges of South Asia . The success of economic growth in the region confirms that some parts of the state machinery perform their tasks efficiently. The information and communications revolution has brought an exciting transformation in the region. The ability of governments and NGOs in South Asia to take action in acute emergencies has improved appreciably.

Yet despite numerous programs and policies of reforms and reorganization, governance in most countries has failed to adequately address such issues as reducing poverty, ensuring equality of access to public services, providing security and safety to all citizens, and implementing policies framed by many committed professionals in order to empower ordinary citizens of this region. In every country, bureaucracy has become increasingly politicized so that the quality of administration has deteriorated. Transparency in governance has remained poor and accountability weak.

The policies and institutions of governance in South Asia have been analyzed from the point of view of people's empowerment in the 15th annual report of Mahbub ul Haq Centre. Here we need to ask the basic question: what is development for? Mahbub ul Haq would have said that development is for people, to empower them with knowledge, skills and opportunities to lead a life according to their belief and choice. Is that possible if the institutions of governance fail to deliver efficient and accountable public service? All the trappings of institutions of governance are in place in South Asia , yet the report on governance shows that despite the existence of a strong judiciary, the lower courts are inadequate to provide timely justice to the poor. Even in countries with a long tradition of good political governance there are the missing voices of those who are of different tribes, of different castes, and the poor. The majority of South Asians continue to live under poor economic management with over 5 percent of fiscal deficit, a public debt of around 50 to 60 percent of GDP, 12 to 14 percent of inflation, and high unemployment and under employment in the informal sector. Although women have achieved a lot in terms of political, economic and social empowerment, they are still under-represented in the decision-making role in political and economic institutions. The region has an empowerment deficit in terms of poor delivery of public services in education, health and in all other areas of empowerment.

So in conclusion I would say that it's not enough to prepare a well thought-out development agenda. South Asia's cupboards' are full with such plans. Every year Mahbub ul Haq Centre prepares such agenda to address development concerns of the region. But how many policy makers take these seriously and timely? If they did, would there be such difference in lifestyle between the rulers and the ruled? A brilliant South Asian economist did produce many blueprints for development with social justice. Where are those plans? So, let us not only focus on preparing an agenda now, but also on practical operationalization with tangible benefits that will accrue to all within a reasonable time frame. Our collective wisdom at this Summit is only a part of this process. What will matter for South Asia's development trajectory are the responsibilities, actions and final outcomes. Here implementation is the key!