Human Development in South Asia (1997)

This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
Oct, 1997
(Source: Co-op Dialogue, Vol.7, No.2, May-Aug. 1997, pp.1-3)

Human Development in South Asia 1997
A review of the report by Mahbub-ul-Haq
by Allie Irvine

The Human Development in  South Asia 1997 report paints a
bleak picture of the socio-economic circumstances of people in this
region.  It is a damning indictment on the economic and political
leadership of South Asian nations over the past 30 years.

Mahbub ul Haq, President of the Human Development Centre in Pakistan,
and his research team offer reams of horrifying statistics and propose swift
action to combat South Asia's steady slide into human depravity.

Statistics on depravity: 
-	Asia is home to 22 per cent of humanity or 1.2 billion people;
	the increase in population in South Asia each year alone exceeds
	the total population of 50 smaller UN member countries.

-	South Asia's share of global real income is 6 per cent;  its per
	capita GNP is lower than any other region in the world, with over 
	500 million people surviving below the absolute poverty line where
	their basic human needs are not being met (World Bank).  With 22
	per cent of the world's population, South Asia produces 1.3 per
	cent of the world's income;  40 per cent of the world's poor live
	in South Asia.

-	The region holds 46 per cent of the world's illiterate population,
	over twice as high as its share of the world's population.
	Adult literacy is 48 per cent, lowest in the world.  There are
	more children not attending school in South Asia than anywhere
	else in the world, and two-thirds of this wasted generation is female.

-	50 per cent of the world's malnourished children live in South Asia. 
	Despite a much higher GNP growth rate and a more robust increase
	in food production, half the children in South Asia are malnourished
	as opposed to 30 per cent in Sub-Saharan Africa (UNICEF).

-	South Asia's Gender Equality Measure, prepared by United Nations
	Development Programme (UNDP), compares economic and political
	opportunities for women to men.  South Asia shows the lowest value,
	yet it is the only region in the world to have a lower female to male
	ratio (94 women for every 100 men as opposed to 106 to 100 in the
	rest of the world).  This translates into 74 million missing women.

-	People in South Asia suffer the highest depravation: 260 million
	people lack access to rudimentary health facilities, 337 million lack
	safe drinking water, 830 million have no access to basic sanitation
	facilities, and over 400 million go hungry every day.

-	The most militarised region in the world, such widespread human
	depravation contrasts sharply with large armies, modern weapons,
	and expanding military budgets in South Asian countries.  It is the
	only region where military spending in proportion to GNP has gone
	up since 1987.

The report provides a statistical analysis for each South Asian country -
India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan, and the Maldives.

Over the past three decades, South Asia slid behind all other regions in the
world in both income and human development levels.  All its economic
problems are compounded by other health and social travesties, like HIV
infection, drug abuse and child prostitution.

East Asia (excluding China) and South Asia were on relatively the same
footing in per capita income during the 1960s. 

The gap  has since widened from $200 to nearly $10,000 in 1993.  Why
has East Asia performed so much better?  The report suggests five
principals have guided East Asia's success.

1.	Investment in education - Investment in human capital and technology
	versus illiteracy and ignorance.  East Asia has spent two to three times
	more of its GNP on primary education than South Asia, emphasising
	universal, high-quality primary education, accompanied by a largely
	self-financed university education system and an emphasis on
	technical education.

2.	Outward-looking trade strategies - Liberal and open trade versus
	protectionism. East Asian markets were more open to international
	competition, imposed lower tariffs, and relied heavily on trade with
	the rest of Asia.  East Asia became competitive through low wages,
	high labour productivity and enlightened export policy contrasted with
	South Asia's failed attempts at primary export and import	substituting industrialisation.

3.	Institutional reforms - Egalitarian, merit-based competition versus
	power and patronage.  Its high-quality, merit-based economic
	technocracy, reliable and just legal framework, and long periods of
	political stability (under authoritarian rule, in some cases) enhanced
	East Asia's high and evenly distributed growth.  Land reforms and
	equitable credit system were also factors.  Feudal structures continued
	to dominate political and economic power in South Asia.  Credit, with
	a few notable exceptions like the Grameen Bank in Bangladesh, is
	unavailable to the poor in South Asia.  In East Asia, the government
	provided market-based alternatives and created innovative new
	financial institutions that could reach the poor.

4.	Mobilising savings and investment - An inflow of foreign equity
	investments versus dependence on foreign aid and loans.  High GNP
	growth rate, low inflation, confidence in financial institutions, firm but
	fair taxation and fewer dependence encouraged East Asians to save and
	invest.  These conditions have been partly or entirely absent in South

5.	Good governance - Sound government policy or inefficiency and
	corruption. State, bureaucracy and big business function together on
	the basis of merit, rule of law, competition, civilian control over the
	military, institutions of accountability and a co-operative framework
	between state and civil society.  East Asia has struck this balance
	while South Asian nations are still searching for the elements of good

Mahbub-ul-Haq argues that GNP is not the end, but merely a means to
development.  The purpose of development today is not just to enlarge
incomes, but to enlarge people's choices. That these choices extend to a
decent education, good health, political freedom, cultural identity, personal
security, community participation, environmental security and many other
areas of human well-being, he writes.  Development must deal with the
entire society, not just with the economy, and people must be put at
centre stage.  The quality and distribution of GNP growth becomes as
important as quantum growth.  A link between growth and human lives
must be created through conscious national policies

The ultimate purpose of development is to build human capabilities and to
enlarge human opportunities.  This concept is being put to critical test in
South Asia.  South Asia has tremendous development potential, but is
sinking into a quagmire of human deprivation and despair.  The Human
Development in South Asia 1997 report outlines how a human priority
agenda would:

-	invest in universal primary schooling
-	make available basic health care
-	ensure safe drinking water
-	provide adequate nutrition
-	support family planning services

At a total cost of $129 billion over 15 years, the program could be financed
by earmarking 1.6 per cent of GNP on average.  The report argues it can be
managed through a restructuring of existing budget priorities. Implemen-
tation costs would be further reduced if GDP grew by over 5 per cent,
and if non-governmental initiatives to deliver social services and
community development are promoted.

Over the next 15 years, the report says the leaders of South Asian nations
-	Agree to reduce defence spending and redirect resources to meet urgent
	social needs.

-	Arrange bold debt-equity swaps through privatization of public
	sector assets.

-	Promote civil initiatives for delivery of social services to the poor.

-	Eliminate government waste and corruption.

The report describes what it calls the "benign neglect of government" in
the social development of South Asia.  Mahbub ul Haq blames feudal
political structures that take little interest in the welfare of the people. 
Citing several examples of successful growth of NGOs throughout the
region in recent decades, he advocates allowing this sector to deliver health
and social programs. 

While favouring economic liberalization and free trade, the solutions
Mahbub ul Haq proposes in this report seem to contradict the structural
adjustment policies that have been imposed on the developing world by
organisations like the World Bank (his former employer). Instead, the
report advocates a combined government and civil human development
effort that puts people first.  The basic premise:  investment in people is
an investment in the very engine of the economy.

The report on Human Development in South Asia 1997 by Mahbub-ul
Haq is published by Oxford University Press.