UNDP calls for re-balancing of development strategies in South AsiaJul 2, 2009
New Delhi - Cleaner economic development that does not leave out the weaker sections of society is the need of the hour as India grapples with the impact on the poor of the recent economic slowdown. This can be done through social assistance and insurance programmes aimed at groups that are left out and the most vulnerable sections of society such as women, youth and migrants.
Even though this slowdown is not of their own making and is caused mainly by the global economic meltdown and the economic recession that followed in developed countries, South Asian countries need to restructure their model of growth, by improving infrastructure, quality and access to education and public health. These are some of the recommendations made by experts at a discussion on the impact of the global financial crisis on South Asia, jointly organized by UNDP and the Indian Council for International Economic Relations (ICRIER) today
This discussion was timely in light of this year’s Economic Survey which acknowledged deceleration of 2.1 per cent in the economic growth from the average growth rate of 8.8 per cent in the previous five years (2003-04 to 2007-08).
“The economic crisis is a time to take on the big questions because in developing countries poverty consequences after growth rate reduction can be far more acute and disastrous than in developed countries for a similar growth retardation,” said Kaushik Basu, noted Development Economist from Cornell University and chair of the panel discussion.
“Countries in Asia need to expand financial and monetary coordination and create a legal infrastructure for an Asian Common Market. Asia cannot rely on an export-led model of growth any more. Fundamental rebalancing of development strategies is needed to focus on domestic spending so that over time savings rates can be changed” said Ajay Chhibber, Assistant Secretary General and Regional Director of United Nations Development Programme (UNDP).
To mitigate the adverse impacts of the global financial crisis on the poor in India, Rajiv Kumar, Director and Chief Executive of ICRIER stressed the “need for second generation structural reforms to achieve real recovery by improving implementation capacity of infrastructure and quality access to education and public health in a vigorous business environment. In this context, Mr. Chhibber pointed out that “Social protection measures such as Conditional Cash Transfers that provide much needed cash for the poor and incentivize public goods like access to girls’ education and health services and should be part of fiscal stimulus packages. This will ensure that the poor do not lose hard won development gains and are able to access critical basic services.”
Dr. Gangopadhayay, Director, India Development Foundation cautioned that intra-regional economies that are dependent on sectors such as textiles in the state of Tamil Nadu, gems and jewelry in Gujarat, leather in U.P among others will be hardest hit and so there is an urgent need to pay attention to these specific sectors within States.
These recommendations are significant as 77 percent of the total population of India in 2004-05, had per capita consumption expenditure of less than Rs. 20 per day as pointed out by the National Commission on Enterprises in the Unorganized Sector (NCUES) report.