Poverty in South Asia

▪ 1998

by H.Y. Sharada Prasad

      The South Asian region, which comprises India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan, and Maldives, in 1997 accounted for one-fifth of the world's population, two-thirds of its absolute poor, and one-half of its illiterate adults. According to a well-researched study by Mahbub ul-Haq published in 1997, "South Asia is fast emerging as the poorest, most-illiterate, the most malnourished, the least gender-sensitive—indeed, the most deprived region in the world." Of the region's 1,191,000,000 inhabitants (mid-1993 estimate), 527 million earned less than $1 per day, 337 million had no access to safe drinking water, and half of the children were underweight. South Asia's annual per capita income of $309 was less than even that of sub-Saharan Africa, which stood at $551.

      The region was not always so abysmally poor. Until 200 years ago, India (which also included the present Pakistan and Bangladesh) was a byword for wealth, the home of much-sought-after goods like cotton textiles, spices, sugar, and precious stones. Its affluence, however, paved the way for its poverty by attracting adventurers and invaders from the rest of Asia and from Europe. When European powers overran and colonized the region, they systematically drained its resources, a feature of colonialism. The rulers did introduce new technology and enlarge the area that was under irrigation, but their overall economic policies were not conducive to capital formation and access to the industrial know-how essential for industrialization and the modernization of agriculture. When Great Britain withdrew from the Indian subcontinent in 1947, the percentage of people deriving their livelihoods from industry was lower than it had been in the second half of the 18th century. Even during the centuries of affluence, however, Indian society was marred by extreme disparities, with the low-caste "untouchables" condemned to dire poverty.

      The South Asian countries cannot blame colonialism for all their misfortunes. By 1997 they had been free for 50 years, and the policies they adopted are no less responsible for their plight. Several countries in the neighbouring region of East and Southeast Asia had also been colonized. Per capita incomes in both regions were roughly similar in 1968, but in the 30 years since that time, many of the East and Southeast Asian countries have made spectacular economic progress. According to Mahbub, "East Asia (excluding China) now enjoys 27 times the per capita income of South Asia."

      The main reasons for East Asia's success include a move toward adoption of export-led growth, improvement of human capital through adult literacy and technical education, increased provision of health facilities, and land reforms. Another factor is the comparative stability of its governments, although many are authoritarian.

      In contrast, the South Asian countries pursued government-led growth with extensive bureaucratic controls. India, for example, adopted centralized planning in 1952, which in the following three decades resulted in what was dubbed the "Hindu rate of growth" of 2-3% per year. While India is proud of its democracy, the system has led to a multiplicity of subsidies. Pakistan, which alternated between civilian and military rule, nevertheless achieved an annual growth rate of 6% for nearly four decades but with little impact on income disparities among its population. It has lagged behind its neighbours in literacy, health care, and population control. Sri Lanka has a creditable record of literacy and health services—the levels being comparable to those in many advanced countries—but has remained unable to accelerate its growth rate because of ethnic strife that has necessitated a defense outlay of 4.7% of gross domestic product (GDP). India and Pakistan also spend a high proportion of GDP on defense (3.6% in India and 7% in Pakistan).

      Whatever else does or does not grow in South Asia, population does. During the last 50 years, its population has almost tripled; it grew from 563 million in 1960 to the present 1,191,000,000. Because of modern drugs and national campaigns against epidemics, the mortality rate was easier to control than the birthrate. To be effective, birth control requires education, particularly of women, and well-organized public health services. Even though the percentage of people living below the poverty line in India was falling, there were more poor in India in 1997 than at the time of independence. In 1993 the number of poor people was estimated at 416 million, compared with a total population of only 361 million in the 1951 census. The region's average annual population growth rates between 1990 and 1995 were: India 1.8%, Pakistan 2.9%, Bangladesh 1.6%, Nepal 2.5%, and Sri Lanka 1.2%.

      It is not as though there are no success stories in the region. India has achieved self-sufficiency in food production and has an array of technologically advanced industries. Pakistan has maintained a high economic growth rate. Bangladesh has brought down its population growth rate from 2.4% in 1980-90 to 1.6% in 1990-95 and has vibrant nongovernmental organizations working to develop the nation's economy. Sri Lanka has effective health services.

      Mohandas Gandhi once described the essence of freedom as "wiping every tear from every eye." After 50 years of freedom, the percentage of those suffering hardship in South Asia is higher than in any other region of the world. The countries of the region have in recent months relaxed their rigid economic controls and begun giving the private sector a greater role in growth. By maintaining economic liberalization; allocating greater resources to literacy, technical education, and health services; and pursuing population-control measures with greater vigour, South Asia can within a generation cease to be the sick region of the world.

H.Y. Sharada Prasad is the former information adviser to the prime minister of India.

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