COMMENT

Indicting report

It is a damning report on the state and situation of South Asia. The subcontinent, home of more than one fifth of the world’s population, has been called by the latest Human Development Report on South Asia as “reeling under crisis of governance”. The Report prepared by the Mahbub ul Haq Human Development Centre has focussed on the ‘Good Governance’ aspect and it has dubbed South Asia as the worst governed region in the world. As a result, the report says the region is the world’s poorest, most illiterate, the most malnourished, the least sensitive to the cause of women and other underprivileged sections of the population. What may be worse is that the Report, pessimistically, says the systems of governance in the region are increasingly becoming unresponsive and irrelevant to the needs and concerns of the vast majority of the region’s population. This is a tragic indictment to the region which can boast about so many things including some of the oldest civilisations and, ironically, also having given the world tips on good governance in Chayanakyaniti by the great Indian scholar Chanakya and in Arthasashtra (economics) by another great economist Kautilya. South Asia also has epics like Ramayana and Mahabharata, which deal with the art of statecraft. There are also illustrations galore on the pages of the South Asian history books about what should be done and what should not be done. However, the present day rulers and politicians of the regions have failed to take any cue from the past and also from the present examples of other countries. In Nepal also, politicians have failed to live by wise words expressed by late Prithvi Narayan Shah some two hundred years ago, when he said “the country becomes stronger only when the people are strong”. But the inequitable distribution of wealth is so glaring that more than 500 million people, almost forty percent of the total population in South Asia, live in absolute poverty. The Report also says in South Asia today one fifth of the people enjoy forty per cent of the income, and the bottom one fifth has to do with less than 10 per cent.

The other anomalies pointed out by the Report are the rising corruption, huge budget deficit, growing militarisation and narrow tax base, where the people on the bottom strata of the economy pay most of the tax. The Report also raps the system of governance in South Asia saying democracy in the region is not for the people, but to gain access to power, and when in power it is a thing to cling on to by any means. The governmental instabilities in Nepal and also in India during the last several years are the direct fall out of this nefarious intention. Democracy in the region, thus, has failed to make equitable distribution of authority and wealth to make the life of all the people a little better, but instead it has created a new class of the rulers and the ruled ones. Those of the ruling class or who are near them enjoy all the privileges while the ruled ones are being left out and are debarred from all their rightful rights. The Report is only the latest addition to what has already been written, talked about and discussed more than once, but in a more comprehensive form and in a more indicting tone. So, unless the governments of the region listen and work toward making the life the millions people here better, this report like many others will only be of academic interest and that will not auger well for the future of the region. It is not that there are no prescriptions for what should be done, and they also are not impossible. But what is lacking is the urge and the will on the part of the politicians and the governments to initiate such people oriented programmes.

Cutting pollution in developing world

-By Eric Green

With 5.5 million people in the developing world dying annually because of environmental degradation, the World Bank is promoting a novel approach to attract increased civic interest in the problem.

This approach, as detailed in a new World Bank report, will benefit the world’s poorest people, and allows local industrial pollution to be held within acceptable bounds without hindering economic growth, Bank officials said in releasing the 150-page report at a November 22 briefing.

The report, called “Greening Industry: New Roles for Communities, Markets, and Governments,” evaluated the community-based approach to tackling pollution in seven developing nations - Brazil, China, Colombia, Indonesia, India, Mexico, and the Philippines. These countries represent two-thirds of the developing world’s industrial output and industrial pollution.

The report’s conclusion was that traditional pollution measures are inappropriate for many developing countries. National regulatory institutions are often unable to enforce conventional discharge standards at the factory level and many regulators also recognize that such standards are not cost-effective because they require all polluting factories “to toe the same line, regardless of abatement costs and local environmental conditions.”

To break out of “this one-size-fits-all approach,” the report says developing country regulators are opting for more flexible and efficient systems that provide strong incentives for polluters to clean up. The report recommends that market-based incentives be combined with a public information campaign to encourage factory managers to improve their environmental performance while they are pursuing profits.

“With the new model, government, communities, and markets all have important roles to play in reducing pollution,” the bank said.

As an example of how media accounts of good or bad environmental performance can affect profits, the report pointed to the Philippines, where share prices for the beer-maker San Miguel shot up nearly 60 percent when environmental regulators highlighted the firms’ “green” (meaning clean) record and the installation of new pollution-control equipment. Colombia and the Philippines recently achieved success in cleaning up rivers and lakes with publicity that charges were imposed on factories that pollute. Meanwhile, in Mexico, share prices on a paper manufacturer fell nearly 50 percent after word spread that the government levied substantial fines on the company for violating water pollution regulations.

The report’s author, senior economist David Wheeler, said factory managers don’t pollute “because they enjoy it. They pollute because cleaning up pollution costs money and they’re usually constrained by market pressure or the stockholders to try to minimize costs.” Factory managers, he said, “are not really villains in this drama. They’re simply people trying to make a living in a context where there may be many difficulties in operating a plant. So one must be sensitive to that.”

Wheeler said the bank has not “abandoned” the idea that government has an important role to play in fighting pollution, because “it certainly” does. “But we have realized that two other components - community participation and markets - are equally important,” he added.

If citizens “are in the game,” he said, they will support regulations and environmental objectives. Their participation is especially important in developing countries, he noted, because in the developing world poor people are forced to live near highly polluting factories. Therefore, their participation in environmental issues and the release of public information serves as a “countervailing force” against the polluters.

National government policies should be focused, Wheeler said, on trying to make it cheaper for factories to clean up pollution: by such measures as providing them with direct technical assistance and by enacting economic reforms.

The report said greater openness to trade on the part of a nation’s government can spur commercial access to cleaner technology, while cutting subsidies for raw materials can encourage companies to reduce waste. State-owned enterprises are often heavy polluters, the bank concluded, so privatization might serve as the stimulus of cleaner production.