In the wake of the recent Budget announcement and the attendant economic analysis and debate, The Human Development in South Asia 2009 report published by Oxford University Press makes for compelling reading. It is an invaluable source of statistical information and analysis on the effect of economic policies on the people of South Asia and assessing whether these policies have had any real impact in improving the quality of peoples’ lives.
Published by the Human Development Centre founded by the late Dr. Mahbub ul Haq and his wife Khadija Haq, the work of the Centre in highlighting the efficacy of economic policy in improving the lot of the people of South Asia has been remarkable.
With the rules of international trade firmly weighted against the poor, the Report at the outset asserts that the Doha Round of trade negotiations failed to fulfill its objectives in terms of addressing the needs of developing countries:
“There is no denying the fact that international trade can bring many benefits to developing countries and the Doha Round was supposed to help realise these benefits by explicitly factoring in the developmental needs of developing countries.”
The Report reveals with forensic detail how, despite the promises of globalisation, the benefits of international trade still remain largely unrealised for developing countries. The Report states:
“Key points of contention between developed and developing countries remain unresolved from the pre-Doha Round period. Developing countries still suffer from the unfair agricultural subsidies of developed countries while the removal of industrial tariffs, imposition of intellectual property rights, and environmental and health related standards hurt the domestic manufacturer.”
The Report highlights the importance of the agriculture sector and starkly reveals how emphasis on manufacturing at the expense of agriculture has been particularly harmful for the poor in South Asia. Although agriculture’s contribution to the gross domestic product has decreased from 41% in 1965 to 19% in 2005, 55% of the labour force continues to depend on it. Moreover, South Asia has been unable to develop its manufacturing sector as fully as East Asia and the Pacific.
In the wake of the 1995 trade reforms, the condition of the rural poor only worsened – a fact largely neglected by both national and international policymakers:
“The incidence of rural poverty and hunger increased after 1995. The absolute number of rural poor in the region increased from 385 million to 407 million between 1993 and 2002.”
The Report examines how trade reforms have adversely affected poverty in South Asia and identifies the replacement of labour-intensive crop production with capital-intensive methods as a primary factor. In addition, cheap imports have crippled local industry. Also, the shift of production from food crops to cash crops and the use of food crops for bio-fuels has heightened the exposure of developing countries to volatility in international market prices. This has led to a sharp deterioration of food security for millions across South Asia.
