Financial Daily from THE HINDU group of publications
Monday, Aug 05, 2002
UN Human Development Report 2002 Why India still languishes
IT HAS been a season for human development reports. We reviewed only recently the National Human Development Report issued by the Central Planning Commission. Here comes the mother of all human development reports, the UNDP's own Human Development Report (HDR) for 2002.
The latest HDR published by the UNDP keeps up the excellent traditions of its predecessors. It presents a disappointing picture of India's position in the global arena. It shows, in particular, that India ranks 124 in the world. India's Human Development Index a statistic that is compiled on the basis of life expectancy, literacy and GDP is estimated at 0.577. This compares with higher HDI of 0.942, which is held by Norway, 0.939 of USA, 0.933 of Japan, and 0.928 of UK. In countries nearer home, Hong Kong has a HDI of 0.888 and Singapore 0.885.
The low HDI of India is primarily the result of a combination of three factors low per capita income, low life expectancy and low literacy achievement. Even compared to other developing countries, which have an average HDI of 0.654, India stands lower.
India's per capita GDP being only $3,546 in purchasing power parity terms as compared to the developing countries' average of $3,783 (also in purchasing power parity terms) is one of the main reasons for the low index. In addition, life expectancy at birth in India is 63.3 years as compared to the marginally higher figure of 64.7 years in developing nations as a whole.
The fact that India has remained low in the rank of developing nations in respect of human development is clear enough a reflection of the considerable distance that we have to go before we can claim a rank amongst the better-off nations in the world from the point of view of indicators of human development. The trend in the HDI over the years 1975 to 2000 has also been presented in the report. It shows that there has been some progress India's HDI has moved up from 0.407 in 1975 to the present 0.577 in 2000.
It is worthwhile comparing India's experience with that of China. China's HDI, which was at 0.523 in 1975, has risen to 0.726 in 2000 a creditable record indeed! Pakistan stands marginally lower with a HDI of 0.499, rising from 0.345 in 1975.
The HDR also produces what it calls a Human Poverty Index (HPI), which sums up an index of the total deprivation of the human conditions. It gives a summary index of the probability of a citizen not surviving up to the age of 40, adult literacy rate, the percentage of population not using improved water sources, the percentage of underweight children under age 5, and finally the ratio of population below income poverty line.
Taking all these into account, India ranks 55 amongst those for whom the HPI has been calculated. China ranks higher with a rank of 24 and Pakistan a rank of 68. The poorer we are, obviously the lower we rank in the HPI. Hence, China's better rank. The latest HDR has turned out to be more a treatise on the politics of development than the process of human development per se. It states that this HDR is first and foremost about the idea that politics is as important to successful development as economics. Sustained poverty reduction requires that the poor people have political power.
The HDR devotes considerable attention to the importance of ensuring democratic processes and what is more significant is the development of proper institutions of governance to give an effective voice to the people. It draws support for this emphasis from the Nobel Laureate Amartya Kumar Sen's observation that democratic governance has helped countries, like India, avoid catastrophic occurrences such as is evidenced by the comparative absence of deaths due to drought and famine in post-independent India, compared to the millions who died in China as a result of food shortage. It was the presence of a free Press and a democratic polity that made India's experience differ from that of others.
The HDR points out that democracy and development are not inconsistent. Actually, the democratic form of governance and its right implementation enable better growth and facilitate the further development of human potential. The report cites a number of research studies to show that the view that autocracy goes with faster development is fallacious. In the HDR's view, many studies have shown that democratisation is, in fact, a better enabling condition for human development.
The HDR 2002 emphasises, however, that democracy should be "true" and well-founded in adequate popular participation. The UNDP's HDR 2002, however, notes the fragility of democracy in many countries. The fact is that a functioning democracy does not by itself ensure that it will continue to be so. Society has to work hard at maintaining and preserving the democratic traditions and for protecting human rights.
Turning to the role of non-governmental organisations (NGOs), the HDR emphasises how there has been a rapid increase in the number of NGOs in the world as a whole. Civil society has tried to evolve NGOs as an avenue for intervention in the exercise of powers by Governments and multilateral organisations.
The HDR recognises that there is still a great deal to be done to instil a sense of responsibility among NGOs. But NGOs are a fact of life, as the recent experience in Seattle demonstrated. NGOs have become a powerful tool for influencing national and international public opinion. The latest success is that of the NGO Jubilee 2000 in persuading the powerful nations to agree to debt relief of highly indebted poor countries. The HDR makes the usual remarks on the increasing inequality between nations. It points out that the world has become more unequal between 1970 and 1990. The most important factors responsible for this were the rapid economic growth of North America and Europe.
Fortunately, this trend is reversing, with increasing growth rates in India, China and South Europe. Still, the facts of global inequality present a challenge. The richest 10 per cent of the US population has an income equal to that of the poorest 43 per cent of the world. The income of the world's richest is 114 times that of the poorest 6 per cent.
The Report also suggests setting up an Economic Security Council in the UN to consider economic matters to help tackle this grave disequilibrium with the same urgency as the Security Council devotes to political issues. Whether the suggestion will be accepted by the existing multilateral institutions may be interesting to watch, especially when it has suggested that the voting system in the proposed Security Council should not include a veto. The proposed Economic Security Council is expected to act as a watchdog over the policy directions of all international regional financial institutions. To implement its decisions effectively, the Council should have access to a global Human Security Fund. The HDR takes comfort from the recent development in regard to assistance for HIV/AIDs as an indication that such a Fund will be set up. But it is admittedly a long haul.
The HDR is characterised by a number of preachy paragraphs, especially on political matters. While its recommendations are in the right direction, their practicality is doubtful. For instance, it recommends that the WTO function more democratically. The HDR hopes that this may be possible, mainly due to the intervention of a number of NGOs in the matter. But, so long as the political reality is that WTO remains dominated by a few major industrialised countries, the outlook for greater democracy in the WTO's functions is not very bright.
Whatever be the merits and demerits of the particular recommendations of the HDR 2002, its emphasis is on the right lines. It tackles difficult problems as to how to sustain a democratic society with commitment to economic progress. Its emphasis on proper governance and innovative forms of involving the beneficiaries in issues such as budgeting is refreshing.
Most importantly, the UN HDR 2002 has pointed out how we in India have been sliding in the ranks of developing nations. This warning should serve as an alarm call to speed up our process of economic development with special emphasis on such indicators as education, public health and gender equality. We have a long way to go even judged by the progress achieved by other developing countries, leave alone China and South East Asia.
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