Islamabad: Who wants Kashmir, we want `taleem (education), said Jalaluddin, a young Pakistani from the north-west frontier province, sitting on a coir cot in the middle of a make-shift bazaar. Among his interlocutors were Richard Jolly, Special Advisor to the UNDP Administrator and principal author of the UNDPs Human Development Report, and John Williamson, The World Banks chief economist for South Asia.
We are here as delegates to a conference on Human Development in South Asia, organised by Pakistans distinguished political economist Mahbub-ul-Haq. At the end of a day of deliberations, discussing Haqs new book Human Development in South Asia (Oxford University Press, 1997) we were snooping around a make-shift bazaar where rural handicrafts from Pakistan and Central Asia were on sale. Jalaluddin and his friends invited Jolly and Williamson to join them on a coir cot for a cup of tea, enquiring what they were doing in Islamabad.
Jolly said he was a guest of Mahbub-ul-Haq. Jalaluddin had heard the name, He is the man who wants Pakistan to spend more money on education and less on military. We agree with him, he said. Jolly explained Haqs key argument: that South Asia is fast emerging as the poorest, the most illiterate, the most malnourished, the least gender-sensitive indeed, the most deprived region in the world. Who wants submarines and guns, we want schools and hospitals said Jalaluddin. His friends nodded enthusiastically in agreement.
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After producing seven global Human Development Reports for the UNDP, Haq returned to Pakistan to produce a report on human development in South Asia. I had to face the sad reality that the real challenge of human development lay back home says Haq, adding: The South Asia region has been sinking fast into a quagmire of human deprivation and despair, emerging as the most deprived region in the world. This reality is still not adequately recognised by national planners or international policy-makers.
What should shock South Asian policy makers, including Indias self-centred politicians and self-indulgent elite, is the fact that South Asia, including India, remains behind Sub-Saharan Africa on most human development indicators like literacy, health and status of women.
The statistics are damning. The HDSA has constructed a new index of poverty and deprivation called the Human Deprivation Measure (HDM). The HDM is a variation on the `Human Development Index (HDI), which is now annually published by the UNDP in its Human Development Reports. While the HDI measures access to human development indicators like health, education and income, the HDM measures the extent of their deprivation. The HDM measures the extent to which people are denied access to good health, measured by access to safe drinking water and the number of malnourished, the extent of illiteracy, and the number of those denied access to a basic level of income that would keep them out of poverty.
The HDM is a wider concept than the standard poverty line notion of deprivation which is based only on income and does not capture educational and health deprivation. South Asia emerges as the region with the highest human deprivation in the world.
Where has South Asia gone wrong? The most important failure, in Haqs view, is the inadequate investment in education and health and the extreme inequality in the distribution of income and assets, including land. Drawing inspiration from the East Asian growth and human development experience, Haq urges South Asian governments to do more for human development, pursuing a more egalitarian growth process that enlarges peoples choices and capabilities.
Haqs report draws up an agenda of action for Saarc leaders which he hopes they will adopt when they meet for the Saarc Summit in the Maldives this May. He calculates the additional cost, for the Saarc region, of ensuring universal primary education, basic health services, including access to safe drinking water and child nutrition programmes, and family planning services at $129 billion for the 15-year period 1995-2010, or $8.6 billion per year. Assuming a 5 per cent annual growth in GDP for the Saarc region, this sum works out to 1.6 per cent of GDP. Mobilising this sum is the first challenge for the Saarc governments. Spending it effectively and honestly is the second challenge.
Haq believes South Asian governments can achieve a lot if they can get together and help each other out rather than continue to live in a frustrating state of mutual suspicion and insecurity. Haq urges South Asian governments to divert resources away from defence to development. This advise is more relevant for Pakistan where the defence expenditure to GDP ratio is a high 7.0 per cent (in 1994) compared to Indias 3.6 per cent and the developing world average of 3.6 per cent. Chinas military expenditure to GDP ratio is 5.6 per cent. India has actually been able to reduce this share during the 1990s, a fact that Haq does not recognise.
Haq also fails to make the point that South Asian has among the lowest tax to GDP ratios in the world. If Saarc governments have to spend more on human development and catch up with Sub-Saharan Africa, not to mention East Asia, then they can hardly afford to pursue populist fiscal policies like those of Indian finance minister, P Chidambaram, and Pakistans Sartaj Aziz, both of whom have made excessively generous cuts in tax rates. Indeed, if the fiscal gap for human development is a mere 1.6 per cent of GDP, this can easily be bridged if South Asias tax/GDP ratio catches up with that of East Asia and other developed economies.