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The income of half a billion South Asians has declined in the era of globalisation

A summary of the Human Development Report for South Asia, 2001

Human Development in South Asia 2001
Globalisation and Human Development
By the Mahbub ul Haq Human Development Centre Oxford University Press, Pakistan, 2002

Human Development in South Asia 2001 (HDRSA), published by the Mahbub ul Haq Human Development Centre, examines the impact of globalisation on economic growth and human development in India, Bangladesh, Nepal and Sri Lanka. It assesses globalisation in South Asia from the point of view of human development and poverty reduction.

By the early-1990s all the countries in South Asia had embarked on the process of globalisation by liberalising their economies, opening up their markets and implementing reforms to improve economic management.

The report raises the following questions:

  • Have economic reform programmes actually boosted growth and improved human development?
  • What is the social impact of the globalisation process?
  • Are free markets open to South Asia's poor and unskilled?
  • To what extent have South Asia's trade and markets been globalised?
  • Do South Asian nations have full access to the opportunities of expanded trade?

The report, however, finds that globalisation notwithstanding, there has not been much improvement in high population growth rates, high levels of illiteracy, poor health attainments, pervasive poverty and inequitable distribution of income and assets.

The levels of human development, though improved since the 1960s, have started to stagnate or even decline. Most South Asian countries failed to maintain a balance between economic and social development policies during globalisation.

The benefits of economic growth as a result of globalisation have been restricted to a minority of the educated urban population. The main beneficiaries of globalisation in the region have been skilled labour, especially workers in the information/communication technology sector.

South Asia's average growth rate, which was 5.8 per cent during 1980-89, fell to 5.4 per cent during 1990-98.

The opening up of markets has domestic industries facing a highly competitive world, resulting in the closure of many industries. Trade barriers erected by developed countries have hampered the growth of exports of labour-intensive goods from South Asia.

Provision of social safety nets in the region has been weakened, as the governments' ability to help the victims of globalisation has been eroded.

Poverty and inequality

In South Asia the absolute number of people in poverty has increased, despite the fact that the largest country in the region (India) has had a growth rate of over 6.5 per cent during globalisation.

In South Asia, the imbalance between social and economic development in the 1990s has led to insignificant improvement in the poverty levels. The poor are being increasingly marginalised.

Inter and intra-regional disparities have persisted. Income distribution has been skewed in favour of higher-income groups.

In India there has been an even greater increase in rural poverty during the 1990s.

Although the incidence of income poverty had declined in the region, inequalities have increased within each country. About half a billion people have experienced a decline in their incomes.

Poverty alleviation programmes

South Asian countries have been implementing several poverty alleviation programmes over the past decades. However with the onset of globalisation resource allocations to these programmes in real terms have been declining. In India, there has been an overall decline in the coverage of the different poverty alleviation programmes in the globalisation era.

Employment

The magnitude of unemployment and underemployment, always high in South Asia, has been worsened by recent policy initiatives. Employment expansion has not been significant in any of the countries.

Due to the prevalence of high illiteracy rates and low levels of educational attainment, the quality of the labour force has continued to remain relatively poor.

Education

In 1999 about half the total population in the region was illiterate. There are also large differences between countries and within each country.

In the 1990s, over 40 per cent of children did not reach grade five.

In 1998, the region continued to have mean years of schooling as low as 2.4 years, indicating less than primary-level education. Sri Lanka was an exception to this, with mean years of schooling at 7.2 years.

A sharp gender disparity exists in the mean years of schooling attained by male and female students. In 1998, mean years of schooling for boys in Bangladesh, India, Pakistan and Nepal ranged between 2.9-3.5 years, while those for girls ranged between 0.9-1.2 years. Thus while boys came closer to completing primary education, girls failed to complete even two years of schooling.

There has been a trend of rising proportion of drop-out rates at the primary education level.

While the globalisation process demands better educated and skilled labour, the overall levels of education and skill-training continued to remain low.

Health

Over one-fifth of the population in the region did not have access to health care services in 1995. Overall health expenditure was reduced to levels that were lower than those in the pre-reform periods in most countries.

There are major inadequacies in public provisioning of basic services such as health, sanitation and child nutrition, in the form of poor coverage and utilisation in the region.

In 1999, the percentage of population not expected to survive to 40 years was 37 in India, 35 in Pakistan, 41 in Bangladesh, 42 in Nepal and 26 in Sri Lanka.

In 1990-98, 51 per cent of children under five were malnourished. This number remained stagnant in Bangladesh, India and Pakistan. The survival and development of children continues to be a daunting problem in the era of globalisation.

Maternal mortality rates per 100,000 live births in India between 1990-98 shows an increase.

Old diseases like tuberculosis and malaria continue to remain prevalent, despite government and private sector efforts to improve the overall health status of the population.

Rapid proliferation of HIV/AIDS in the region has been attributed to the globalisation process. In 1997, total AIDS cases, aged 0-49 years, were 4.1 million in South Asia, of which 97 per cent of cases were reported in India.

There have been improvements in the provisioning of safe drinking water in most South Asian countries from 77 per cent coverage in 1995 to 89 per cent in 2000.

Women

For the poor, uneducated women of South Asia in the informal and agricultural sector, globalisation has been associated with rising prices, loss of job security, lack of health care and rising social tension.

Social sector expenditure

Social services expenditure in the post-globalisation period remained stagnant at prevailing pre-reform levels, reducing the coverage and effectiveness of service delivery.

Governments in South Asia are finding it increasingly difficult to allocate adequate resources for social sector programmes, as a result of diminished revenue and increased costs of debt servicing.

In the context of India and Pakistan social sector expenditure is funded mostly out of state/provincial budgets, and thus is not fully reflected in central budgets.

In the globalisation phase most South Asian countries continued to either reduce or maintain the already low levels of education expenditure. In the health sector, the already negligible proportionate share of health expenditure in GDP has decelerated in South Asia over the past three decades. In India, the proportion of health expenditure in GDP had been fluctuating at extremely low levels of less than one per cent over the past three decades.

High defence and security expenditure has often squeezed development expenditure.

Demography

In the 1990s demographic transition was faster, with improved life expectancies and declining deathrates. The composition of the population indicated persistent gender disparities, with females constituting less than 50 per cent of the total population. Such disparities were particularly sharp in countries low in human development and persisted in terms of education, health, nutrition and employment opportunities.

Agriculture

Agriculture has performed badly during globalisation. There has been a poor off-take of foodgrain from the public distribution system.

Results of globalisation effort

Despite the rhetoric of free trade the terms and rules guiding globalisation are loaded against the developing countries.

The challenge facing South Asia is to use the forces unleashed by globalisation to improve human development. The region needs to make sustained efforts in the areas of education, improve economic management and enhance regional and global integration, the report adds.