Financial Daily from THE HINDU group of publications
Monday, Sep 16, 2002
World Development Report 2003 Simplistic belief in institutions
IT IS ten years since the Rio de Janeiro Conference on environment, and its consequences made its famous declarations. In these ten years, environmental protection and sustainable development have become accepted parts of the agenda of most countries, except of course for the case of US, which has not yet seen it fit to endorse the Kyoto protocol on global warming.
The US is trying to argue that developed countries, like China and India, who have recently joined the ranks of the economies with high CO2 emissions, should bear more than the proportionate share of the reduction in global emissions. The Johannesburg Conference on sustainable development steered clear of any sensible debate on the relative sacrifices that developing and developed countries have to make in the pursuit of sustainable development.
World Bank issued its World Development Report (WDR) 2003 on sustainable development to coincide with the Johannesburg Conference. It is an updated version of its earlier presentations on development and environment, except for increased emphasis on institutional development. The main report focusses on the institutional aspects of the development process.
The WDR 2003 starts by noting that though the world's population increased by 2 billion people in the last 30 years, there have been significant gains for human welfare in developing countries. While the development process has led to a legacy of accumulated environmental and social problems, there have also been many gains. There was a fear in the 1950s and 1960s that developing countries, particularly China, India and Indonesia, would not be able to feed their rapidly-growing population. Thanks to the Green Revolution in agriculture, this scenario of famine and starvation did not materialise.
The Report also cites another prophecy of doom by the Club of Rome and many other groups, which forecast that the earth would rapidly run out of grey natural resources. So far, this has not happened. Technological changes have allowed the substitution of new resources for existing ones for instance, fibre optics in place of copper.
Global action has also led to major strides in eliminating diseases, such as small pox and river blindness. But challenges remain in spite of impressive progress.
The WDR notes that there has been a significant drop in the percentage of people living in extreme poverty that is, living on less than one dollar per day. Even the absolute number of poor people declined between 1980 and 1998 by at least 200 million, mainly due to impressive progress made by India and China, especially since the 1990s.
Africa, however, remains an area of concern. Its large number of poor people presents a challenge to growth strategies. Inequality in the world is, however, widening, both between countries and within countries. The quality of environment has deteriorated. Hundreds of cities in the developing countries have unhealthy levels of air pollution, and fresh water is increasingly becoming scarce. The availability of water in some regions is likely to become one of the most pressing issues in the 21st century.
One-third of the world's people live in countries that are already experiencing moderate to high water shortages. That proportion at the current population forecast could rise to half or more in the next 30 years. More than a billion people in low- and middle-income countries lack access to safe water for drinking, personal hygiene and domestic use.
Nearly two million hectares of land representing 23 per cent of crop-land has been degraded since the 1950s. These areas face sharp losses of productivity.
Deforestation is proceeding at an alarming rate. One-fifth of all tropical forests have been cleared since 1968, mainly concentrated in the developing world. Over and above all this, biodiversity representing the variations in many plants and animals has been reduced from what it was at the beginning of the last century. The extreme vulnerability of biodiversity calls for immediate action. The WDR 2003 highlights these issues in general terms and suggests solutions.
The WDR lays great stress on the development of appropriate institutions, although affected by the various transitions. A more democratic form of governance, which will ensure a voice to the currently ignored sections will, in the view of the World Bank, enable a more successful approach to change and ensure a favourable climate for reforms.
The report notes that the projected growth in the global income of 3 per cent per annum in the next 15 year would imply a fourfold increase in the global GDP. Such a large increase in income and output would naturally place a strain on the environmental and social fabrics, unless conscious efforts are not made to shift the consumption and production patterns.
The report draws comfort from the fact that investments needed to make possible this increase in income are still to be made. It is possible, given forethought, to design these investments to be environmentally and socially responsible.
The WDR 2003 also notes how the "demographic" state of the world is shaping itself to be more friendly to environmental concerns. There has been a deceleration in the overall rate of growth of population; world population is expected to stabilise by the end of 21st Century at 9-10 billion people 20-30 per cent lower than forecast earlier. A further development is that developing countries will have an age structure that shows a lower dependency ratio.
The proportion of the working population in relation to the proportion of children and the elderly is rising. While this increases the demand for jobs, it also produces a window of opportunity enabling higher savings and therefore higher investments. The deceleration in population growth is also good news for fiscally constrained Governments, struggling so long to meet peoples' needs.
The WDR 2003 emphasises the need to develop advance action against threats to sustainable development. It is important that institutions are capable of equitably and efficiently protecting all interests of society. This means that they should get everyone represented at the bargaining table. Only then, the negotiations will be facilitated. The report is frank in its emphasis on the need for an "inclusive" level of representation, which militates against sectoral domination.
While institutions are important, the WDR 2003 seems to be adopting a simplistic approach when it claims that institutions can enable a transformation of the economic and social policies. The main drivers of economic reforms are not institutions, but politics. Unless the political interests of the poor are sufficiently well-represented in the debate that goes on about sustainable development, nothing much will come out of all these discussions on what works and what does not.
A recent report in The Economist has dismissed the recent Conference at Johannesburg as a gabfest a bubble and squeak summit. "Bubble and Squeak" is a term of English menu, which is made up of remnants of past dinner. Almost everything on the menu at Johannesburg had been served up before at one Conference or another. There was nothing new to be delivered. The Economist wonders whether anything much was achieved after 10 days of talking! But, for those who attended the Summit professional seminar-goers it must have been a great occasion. While on this subject, one has to note the contradictions in the approach of the developed world towards the problems of poor countries. Development will follow, given good governance and increasing investment on productive assets, which alone will help to break the infrastructural bottlenecks to growth.
In this context, the continuing stance of the developed countries like the US against nuclear power development in the developing world contradicts its emphasis on reduction of fossil power.
With all its problems, nuclear power can be made more environmentally safe than fossil power.
Equally importantly, developed countries "encourage" non-governmental organisations (NGOs) to fight against hydro-electric projects in poorer countries. China has shown the way by going ahead on its own on Three Gorges Project. Pursuit of environmental sustainability has to be holistic.
It has to take into account the fact that there are limited alternatives, which are technologically feasible, to increase the energy availability in the world.
The attitude of developed countries, which encourage protests against appropriate projects that will enable sustainable energy development, is a mystery. Conferences at Johannesburg and Rio de Janeiro may come and go, but the problems of economic development depend crucially on the world's access to fresh sources of energy, which are environmentally friendly. These are opposed, for various reasons, by governments of developed nations.
As long as the developed world does not lend its support to tenable alternative energy options, including hydel and nuclear, sustainable development of poor countries will remain a mirage and a slogan.
In this context, I am reminded of Indira Gandhi's statement at the Stockholm Conference on environment that "the world should be more concerned with the environment of poverty than the poverty of environment". Her words ring true even today.
Send this article to Friends by E-Mail
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line