Misgoverned 

An Islamabad based policy think tank points its finger at crisis of governance for most of the ills in the region  

-By A CORRESPONDENT

South Asia is the world's poorest region, the most illiterate, the most malnourished, the least sensitive to the needs of women, and at the same time, the one region where military spending in proportion to GNP has actually risen since 1987. More than 500 million people continue to live in a state of severe deprivation.

South Asia is replete with examples of poor governance that erode the capacity of communities and individuals, especially the poor, women and children, to meet their basic needs. Failure to execute timely policy and institutional reforms, for the benefit of the disadvantaged majority, increases the risk of violent revolts today.

The warning is made by a report Human Development in South Asia 1999 prepared by the Mahabub ul Haq Human Development Center -- a policy think tank based in Islamabad, Pakistan. Highlighting the different development challenges in the region, the report, that was released in the capital last week, points its finger at misgovernance in the subcontinent as the main responsible factor behind the dire straits in the region.

Presenting the report to the government, Dr. Khadija Haq, President of the Center, said that swelling non-performing loans, heavy public debt, upward floating corruption have all ganged together to quell good governance in the region. "Since only imaginative reform policies are not going to work, committed leadership with a vision is the only way out."

Dr. Haq is the widow of world renowned development expert late Mahabub ul Haq who established the center.

Having published two reports in the last two years, the center has come out with its third report singling out different development challenges as a result of crisis of governance in the region. Here are the highlights:

Widening gap between rich and poor

The richest one-fifth of SA's people earn almost 40 percent of its income while the poorest one-fifth earn less than 10 percent.

More than a sixth of the region's population, almost 200 million, are not expected to survive to age 40.

Each day as many as 100,000 children in South Asia sell their bodies simply to earn enough to survive.

South Asia is home to more than 40 percent of all those living in poverty worldwide -- even as its population comprises only 23 percent of the world's total.

Although poverty in India decreased by almost eight percent between 1988 and 1993, absolute poverty in the region as a whole has remained at 43 percent of the population.

Poverty of opportunities - defined as lack of access to education, health, employment, sanitation, and productive resources - is increasing in all countries except in India.

Poor economic governance

South Asia faces a grave economic crisis today, a crisis that has a direct bearing on industrial and agricultural performance, balance of payments position, the profile of public debt, health of the financial system and the wellbeing of the ordinary people. During the last decade, SA's budget ranged between five to eight percent of the region's GDP. This is, to a large extent, a manifestation of poor economic management.

Most South Asian countries collect their resources from those least able to pay and spend them on the most undeserving of all. Tax collection remains meager in South Asia, as illustrated by a low tax to GDP ratio of 10.4 percent. The tax base is narrow with only around one percent of the population paying income taxes.

Taxation is not only insufficient, it is also regressive: nearly three-fourths of total revenues are obtained through indirect taxes, making the poor pay relatively more than the rich. The poor segments of the populations are made to bear the bulk of the tax burden, even while the rich and well-connected continue to buy immunity from taxation.            

SA shackled with rampant corruption tentacles

The magnitude of corruption in Pakistan alone exceeds 100 billion Rupees or five percent of total GNP.

In Bangladesh, the implicit "private" taxes -- the costs of corruption -- of setting up a business come to 340 percent of the estimated initial official costs.

The report notes that 47 different approvals are required to construct a building in Mumbai, India, and that small-scale entrepreneurs have to deal with 36 different inspectors each month.  

Corruption in South Asia often distorts government decisions and priorities: it is not a "downstream" phenomenon after good decisions have been taken "upstream" in national interest. Second, corrupt money often goes abroad and is not recycled within the region to encourage investment and production. And thirdly, most important of all, no one gets punished for corruption. The sad truth is that the ruling elite of SA is often too powerful to face an honest process of accountability.  

Eroding democratic values in South Asia

Democracy in South Asia is not about people, it is about access to state power. Confidence is state system varies, with only 30 to 40 percent of voters in most countries feeling they have access to elected representatives. It seems that people trust in institutions but not the individuals who run them. "Election is the only bridge between the people and their leaders in the region," said Dr. Haq.    

In India and Pakistan, between one-third and one-half of parliamentarians are landlords. In addition, big industrialists, civil and military bureaucrats, and political dynasties remain power players to varying degrees across the region. Women and minorities are typically poorly represented in the overall state structure. While they make up half of the electorate, women hold just seven percent of the seats in South Asia's parliaments.

Lower courts have too many cases and too few judges: there are 2170 cases pending in front of every judge, and cases can last generations.     

Arms race in South Asia

India and Pakistan continue to fuel an arms race made deadlier by the two countries' nuclear tests in May 1998. Subsequent to the tests, defence budget increased by almost 14 percent for India and 8.5 percent for Pakistan in nominal terms. The two adversaries would require another 15 billion US Dollars over the next ten years to maintain their arsenals -- enough money to educate, nourish and provide health care to more than 37.5 million neglected children in South Asia.  

Effective civil societies in the region

On a positive note, the report has hailed the success of Non Governmental Organizations in the region. South Asia boasts of the most buoyant NGO sectors in the world with well over 100,000 NGOs in the region today. Advocating a wide range of issues from political freedom and basic human rights to furthering social development, these civil society groups have been successful in many cases in providing services to the people more effectively, and at a much lower cost, than governments, the report contends.