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India Rising? Revealing observations of the UNDP Report-2013

Updated: April 13, 2013 12:47 pm

Unprecedented human development progress in South Asia, particularly in India, Bangladesh and some other South Asian nations is likely to make a drastic change in world development dynamics, as hundreds of millions of people are rising from poverty and billions more are to join the fast emerging global middle class. This has been revealed by the World Human Development Report 2013, released on March 15, this year. Till few years ago it was difficult to believe that the countries that constitute the south would draw world attention by attaining unprecedented progress altering the very dynamics of world developmental pattern. Thus far, the world development trend has been dominated by the countries of the first world-mostly from Europe, America and some notable countries from Asia. Some of the developing nations from South Asia like India came into limelight during the recent Global Economic Crisis of 2008-2009, when the western economy crumbled, but the banks and the markets of these developing countries maintained to survive against the odds. And now, the World Human Development Report has made it abundantly clear how there is a marked trend towards “the rise of the south’. The report entitled—“The Rise of the South: Human Progress in a Diverse World” examines the phenomenal change in the world development pattern marked by the fast-growing newly emerged and fast emerging powers from the developing world such as India and Bangladesh. Needless to say that this newly emerged equation will have its long-term implications for human development in the days to come.

The “Human Development Report” is an independent publication commissioned by the UNDP (United Nations Development Programme). Since 1990 when it was started the Report has been a guiding force in the area of governmental and non-governmental methodological initiatives and developmental thinking. That is precisely why the approach is being increasingly adopted widely. The Report was launched with the clear cut emphasis of putting ‘people and not income’ at the core of development in the assessment of people’s long-term well-being. According to the newly released report, rise of the South is radically altering the world dynamics of the 21st century, where developing nations would be driving economic growth by lifting hundreds of millions of people from poverty, and pushing billions more into a new global middle class. This phenomenal development goes much beyond the BRICs, the middle income countries constituted by Brazil, Russia, India and China. The Report shows that in recent decades more than 40 developing countries have made greater human development gains than the normal expectation. Countries like Turkey, Mexico, Thailand, South Africa, Indonesia and many other developing nations are also fast joining the group of leading actors on the world stage. These achievements, according to the report, are largely owing to sustained investment in education, health care and social programmers, and integration with the Global Market.

The Human Development Report examines global development pattern not on the basis of pure or crude economic categories like GDP or GNP but Human Development Index (HDI) that is constituted by the progress made by the countries in the area of health, literacy, and economy. The Index was originally developed by the two noted economists from the third world—the late Mahbub-ul-Haq and Amartya Sen of respectively Pakistani and Indian origin. Defining the concept of development Haq had made it clear that “The basic purpose of development is to enlarge people’s choices. In principle, these choices can be infinite and can change over time. People often value achievements that do not show up at all, or not immediately, in income or growth figures: greater access to knowledge, better nutrition and health services, more secure livelihoods, security against crime and physical violence, satisfying leisure hours, political and cultural freedoms and sense of participation in community activities. The objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives.” Amartya Sen also expressed similar view by emphasizing that “Human development, as an approach, is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it.”

The newly emerged countries of the south are home to the vast majority of the global population. And since dozens of countries and billions of people have moved up the development ladder, it will have a direct bearing on global economy and broader human progress in all countries and regions of the world. The changed circumstances are likely to create new opportunities for less developed countries and even for the most advanced economies by new but attractive policy initiatives. As per the report, most developing countries have done well but a large number of them have done much better, thus leading to “Rise of the South”. The leaders of the south notably Brazil, China, India, Indonesia, Mexico, South Africa and Turkey have attained rapid growth. But at the same time, there has been substantial progress in smaller economies, which include Bangladesh, Chile, Ghana, Mauritius, Rwanda and Tunisia. For the first time during the last one and half century, the combined output of Brazil, China and India, the three leading economy of the south, is almost equal to the combined GDP of the longstanding industrial powers of the North which include Canada, France, Germany, Italy, United Kingdom and the United States. This is a marked changed in the global economic equation. In 1950, Brazil, China and India together had control over merely 10 per cent of the world economy, where as the six traditional economic leaders of the North represented for more than half of world economic output. According to the estimate of the recently released Report Brazil, China and India will together account for 40 per cent of global output by the end of 2050.

The middle class in the South is growing increasingly not only in size but also in terms of income and expectations (see figure). The huge number of people constituting middle class in the South is a marked development revealed by the report. This could prove a turning point in the development history of the regions constituting south. Emergence of middle class brings with it accompanying economic transformation coupled with qualitative changes in health and educational perspectives of the people and their overall standard of living and also the thinking pattern.

Particularly the countries of South Asia have attained success by integrating into global trade and initiating regenerating social programmes. India’s policy initiatives show the mixtures of these choices. India’s decision to invest in education, building human capabilities and it’s decision to open up to trade and investment proved wonderful. This enabled India to capitalize on its vast resource of skilled technical professional. According to the report by 2011–2012 these industries alone were generating about US $70 billion in export earnings. Almost the same was the trend so far as India’s pharmaceuticals, automobile, chemical and service industries are concerned.These sectors are now competing in world markets. This has led to a remarkable change in the Indian economy. In 2010, India’s trade to output ratio was 46.3 per cent, slightly more than 15.7 per cent two decades before in 1990. India’s Foreign direct investment reached it’s peak of 3.6 per cent of it’s GDP in 2008, that is up from less than 0.1 per cent in 1990. And by In 2011, eight out of the world’s biggest corporations in the Fortune 500 list were Indian. This is no mean an achievement.

No doubt India is the biggest and best-known example of progress in South Asia, other countries of this region do demonstrate impressive success. For example, Bangladesh, which has failed to attain impressive economic growth rate reflected in it’s per capita income, performs good on some and better on some other indicators. It has managed to sustain growth by multiplying public investment and resulting into greater success in textiles. According to the report, by 2010, Bangladesh’s share of world apparel exports increased to about 4.8 per cent which was merely about 0.8 per cent in 1990. However, despite this remarkable success story these countries of south Asia need to overcome other hurdles. For example India’s per capita income is still not up to the mark. It was , around $3,400 in 2012. In order to improve living standards, it will require better growth rate. The countries of South Asia are victim of acute poverty. This needs to be taken care of. But even then, their performance on human development front ought to be appreciated.

But what are the fundamental forces that have led to this metamorphic change in this area of the Globe? The Human Development Report identifies three distinct drivers accelerating this unprecedented development. These include (i) a proactive developmental state, (ii) tapping of global markets and (iii) determined social policy and innovation.

In a number of countries that constitute the progressing south, the rate of success has been phenomenal. But the real question is do theses countries also have the mechanism to sustain the pace of growth attained after lots of policy initiatives. Addressing this vital question the report identifies four important areas to meet this challenge. These are (i) enhancing equity, (II) enabling voice and participation, (iii) confronting environmental pressures and (iv) managing demographic change.

There is no doubt that Burgeoning South and South Asia in particular will enrich the global economy horizontally as well as vertically. The fast developing south is spreading its wing. The cheap Chinese goods are now available and are in greater demand in many parts of Asia and Africa. Similarly, the Indian software and medical experts are recognised and present in many parts of the developed north. The cotton products from Bangladesh are also a sought-after item all over the world. The development of south will have a positive impact in the north. At home within the south the human development is likely to follow the principles of what is known as the’ trickle down effect’. The purchasing power of the growing middle class in south will also help in the sustenance of the poor and the underprivileged. The rise of south is soothing and all encompassing. It is good news for the world community.

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