Thu, 08 May 2003

Rethinking development - pain or gain?

Yanuar Nugroho, Director, The Business Watch Indonesia, Surakarta,

Over the past 30 years, 2 billion people were added to the world's population, mostly in developing countries registering substantial gains in human welfare that accompanied their growth. There was a halving of the infant mortality rate in low and middle income countries, from 11 percent of live births to 6 percent, as well as a drop in illiteracy among adults from 47 to 25 percent, and for women in particular, from 57 to 32 percent. Real per capita income (in population-weighted 1995 U.S. dollars) rose from $989 in 1980 to $1,354 in 2000.

But, some social and environmental trends associated with past development strategies in most countries are not sustainable. There are still 1.2 billion people living on less than $1 a day; despite the success in reducing this number by at least 200 million in the past two decades, this population grew dramatically.

The average income in the richest 20 countries is 37 times that in the poorest 20, a ratio that has doubled in the past 40 years, mainly because of lack of growth in the poorest countries. According to the World Bank report in 2002, more than 1 billion people in low- and middle-income countries lack access to safe water, and 2 billion are without adequate sanitation, subjecting them to avoidable disease and premature death.

After globalization, development is the word that may be used as a common denominator for the world's growth and progress. Yet, in Indonesia, it is indeed difficult to gain a perspective on development, particularly when the nation is grappling with so many complications in its transition from a centralized, authoritarian government to a democratic and decentralized administration.

Many are fixated on the daily turmoil of events, rallies and emotionally charged political debates. Thus, while development has been focused to achieve some progress in reducing poverty, the inching forward has been painfully slow and uneven.

Surely overall policies in development would have an end objective -- people. But, to what extent do the people benefit from such policies?

The above table shows ironically that while fuel prices have increased from 114 percent (kerosene) to 244 percent (diesel) since the crisis to 2002, the price of rice only rose 31 percent. The consequences are easily predictable -- life becomes more difficult, especially for most of those who are remote from the centrum and depend more for their livelihood on agriculture.

People must be at the center of development, not only in the traditional view that people are the engine of change, but also in the less-traditional sense of development that puts people first.

People are the critical factor in development, first in terms of their numbers and the social, health, economic and environmental consequences of their actions; and secondly in terms of the decisions they make on domestic issues and the way they live their lives. People-centered development also means full community participation at both decision-making and implementation levels.

Poverty remains intractable despite economic growth in many countries. This partly reflects the problem of income inequality within countries. Income inequality in turn reflects inequality of opportunity.

What is the cause? At least in part, the still tragically unmet need for equitable and inclusive investment in human capital -- e.g. investment in people through better education and heath care-and for wider access to the infrastructure and capital needed to broaden the basis of opportunity.

Here lies a two-way relationship between poverty and growth. Growth might be a necessary, but not a sufficient condition for poverty reduction, but persistent poverty and inequality can reduce growth rates.

The writer is also a lecturer of the Sahid University in Surakarta and a researcher at Uni Sosial Demokrat, Jakarta.