Growth fetishism fails to usher in social equity

Growth fetishism fails to usher in social equity
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First Published: Tue, Nov 17 2009. 09 11 PM IST

Updated: Tue, Nov 17 2009. 09 11 PM IST
Last week saw the release of one more report on a comparison of social and human development indicators. This was the release of the Gender Gap Index 2009 (GGI) by the World Economic Forum. Earlier, the United Nations Development Programme released its Human Development Report and the International Food Policy Research Institute released its Global Hunger Index (GHI).
India performed poorly in global rankings by all three reports. The country ranked 134 among the 182 countries ranked by the Human Development Index in 2009, which is the same rank as in 2006, showing no change in the last three years of the United Progressive Alliance government’s previous incarnation.
It ranked 65 among 84 countries in the hunger index with a score of 23.9. Neighbouring Bangladesh was 67 with a hunger index of 24.7. The theme of this year’s GHI was gender inequality and that is what the gender gap index measures. On GGI, India ranks 114 out of 134 countries for which this index is available. Similar to the HDI, the GGI rank of India remains unchanged between 2007 and 2009.
How does India compare with its South Asian neighbours? On GGI, Sri Lanka ranks 16, Bangladesh ranks 93 and Nepal 110. Only Pakistan ranks lower than India. What about the other Bric (Brazil, Russia, India and China) countries? Russia ranks 51, China 60 and Brazil 81.
However, the aggregate index blurs the appalling situation of women in the country. India ranks 127 on the economic participation and opportunity index and 121 on the educational attainment index, out of 134 countries ranked. On the health and survival index, India ranks the last at 134. The only saving grace is India’s rank in political empowerment, which is 24 among all countries ranked.
But wait before you can rejoice on the political empowerment of our women. A significant component of the political empowerment index of the GGI is the number of years that the country has been headed by a woman in the last 50 years. It is on that score that India should thank Indira Gandhi, who was prime minister for 16 years. But even on this count, we are way behind our South Asian neighbours Sri Lanka at six and Bangladesh at 17, both of which had powerful women leaders for several years. Of course, in all cases, the empowered leaders belonged to powerful political dynasties and it is doubtful if that can be taken as the measure of empowerment in any of these countries.
Contrast this with our strength on economic indicators. India is the second fastest growing economy in the world despite the financial crisis. It will be the third largest economy of the world in the next two decades.
Why do we perform so badly on the social and human development indicators despite such impressive economic performance? It’s partly because the growth has been highly unequal, leading to increasing inequality across households, across rural and urban areas, across states, across caste and religious groups and across gender. It’s also because we have failed to convert economic performance into social and human development. Whether it is due to state failure or lack of political will is not the matter of debate here.
The issue is not only as to why India is lying at the bottom of international comparisons on human development indicators, but why is that our growth is not able to make any dent on human development indicators. The other important issue is the relevance of using growth of gross domestic product (GDP) as a measure of economic performance as well as progress on social and human indicators. How justified is the growth fetishism in our policy circles?
The divergence between economic growth and human development indicators is now obvious. This was also made amply clear by the commission on measurement of economic performance and social progress appointed by French President Nicolas Sarkozy. Chaired by two Nobel laureates in economics, Joseph Stiglitz and Amartya Sen, the essential message of the panel’s report was to “shift emphasis from measuring economic production to measuring people’s well-being”.
Why is it that there is growing dissatisfaction with the existing measures of economic performance such as GDP growth? Part of the reason is the growing body of evidence which shows that GDP growth is not an essential condition for social and human development. Sri Lanka, which ranks high up in all the three reports, is a clear example of this. Despite decades of militancy and low to medium economic growth, it ranks high in all human development indicators.
The reasons for why the high growth fails to reach the poor or fails to improve human development indicators or eliminate hunger are no more of academic interest. Recent research has clearly shown that progress on social and human indicators is not only essential for a just and equitable society but is also a prerequisite for sustainability of economic growth.
Unfortunately, in the era of growth fetishism, these are now forgotten. Any attempt to correct the imbalance in our economic performance and social and human progress must first recognize the importance of progress on human development as an integral part of overall economic policy. It is time that we moved away from growth fetishism to other indicators of well-being as a measure of development.
Himanshu is an assistant professor at Jawaharlal Nehru University and visiting fellow at Centre de Sciences Humaines, New Delhi. Farm Truths looks at issues in agriculture and runs on alternate Wednesdays.
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First Published: Tue, Nov 17 2009. 09 11 PM IST