South Asia: poverty reduction through social inclusion.

Muhammad, Ayaz ; Sheikh, Sajjad Ahmed

Introduction

The fight against poverty is a collaborative challenge, requiring a close partnership among the state, civil society and the private sector institutions and actors. It is international phenomena and can be overwhelmed by international efforts. Consequently, regional and global, governmental and non governmental political and economics, religious and cultural organizations are working to minimize it and its side effects. Various ideologies emerged along with conceptual and operational mechanisms to confront this issue. It is an unavoidable fact that in this global village economic, politics and culture are interdependent. Fast communication system enables people to fix the responsibility of their backwardness at governmental, non-governmental, state, non-state, national, international economic, political and cultural actors. This phenomenon gave birth to national as well as international reactions. International community realized this and launched programmes to address this issue. However, these efforts are hampered by the national interest paradigm. Hence, powerful states are ready to provide charity to weaker states and eager to readjust their internal systems as suitable to their interest, but perhaps they are not prepared to ensure democratic international bodies/institutions, social inclusion and redistribution of resources at international platform, which are pre-requisite of international social justice. National and international social injustice and social exclusion are breeding violence, terror and fear. This issue is also under question that the capital system, which strengthens the economic elites as its end result, how much will be help to lift up downtrodden and bridge a gap between the poor and the rich. This article discusses South Asian condition and suggests that poverty can be alleviated by removing social exclusion and inequality from the society.

South Asia

The region with a population of 1.42 billion, (22.36 percent of the world population) has made a significant progress in the reduction of income/consumption poverty during 1980s and 1990s. In South Asia the number of the extremely poor fell from 475 million in 1981 to 462 million in 1990 and then to 428 million in 2001 (Table 1). However, unequal distributions of the gains of growth now constitute an emerging challenge, undermining progress in poverty reduction. The situation is understandable from GINI index factor, in Bangladesh it was 0.39 in 1981-82 and moved up 0.45 in 2004, in Bhutan it was 0.37 in 2000 and went up to 0.42 in 2004, India in 1990 0.28 and more or less remain the same 0.28 in 2000, in the Maldives in 1997 0.42 and in 2004 0.41, in Nepal in 1995-96 0.34 and in 2003-4, 0.41. In case of Pakistan in 1988 it was 0.35 and in 2002 went up to 0.41, in Sri Lanka in 1995-96 it was 0.34 and went down to 0.33 in 2002 (see Table 2 for poor rich consumption ratio). All this indicates that a gap between the poor and the rich has widened. The latest increase in food prices adversely affects the weaker section of the society particularly in developing nations. Despite the fact that South Asia is rich in food resources, people are starving and suffering from malnutrition. Because of mismanagement and mishandling of resources by capital-oriented leadership, the absence of weaker section of the society in decision making process and the hike in agricultural input in the international market, there is an international pressure to cut the subsidies on agriculture.

It is evident that during the period in Pakistan, India and Bangladesh growth rate remained satisfactory, per capita income increased, size of economy enlarged. All Macro and Micro Economic indicators are showing healthy signs. It is relevant to mention that this progress is a fruit of cheap labour and cheaper raw material normally provided by agriculture sector and foreign remittances send by workers, etc.

There is no need to argue that these sections are strengthened by the weaker section of the society but unfortunately they are not getting proper share from this development. The upper-upper class managed to grasp the fruit of progress. Because they are overwhelmingly dominating the decision making bodies in these countries and have a potential to use media and other opinion making institutions in favour of them. This left the poor at destitute end. It is deliberate finding that poverty can be alleviated by engulfing the gap between the rich and the poor. This target can be achieved by ensuring the participation and inclusion of marginalised section of the society. The leadership could not manage to share the fruit of economic as well as political development with the marginalised section of the society. Resultantly, the region has been experiencing rising inequality, despite making progress in poverty reduction. It is urgent need to find some mechanism to address this problem. Intellectual community is struggling to highlight the issue and its expected repercussions on the society. They also presented ideological, theoretical and operational solutions to eradicate poverty and to promote social justice in the society.

Views to Reduce inequality

There are four dominant views to reduce income inequality:

(i) The redistributionist view: According to redistribution view, to which communists and leftists give weight, poverty and income inequality in society can be reduced through redistribution of resources. This redistribution of resources can be realized by using coercive power of the state. They mostly stress economic rights while other civil rights get less importance. People of this ideology got opportunity to operate this view in USSR, the countries of Eastern Europe and China. But as a net result the system could not deliver positively. It strengthened the class system by replacing the old bourgeois with new ruling bourgeois class. Resultantly, the communist and socialist countries compelled to modify their systems. "When Marx evolved the concept of dialectic materialism, he treated man as economic force' of history characterised by class struggle. He attempted to establish the uniformity of ideas in a society that contain bundle of conflicting views. He imagined a class less society to be established through the end of inherent contradictions of capitalism. He claims society moves from capitalism to socialism, leading ultimately to communism. However, history is a witness that the communist countries that claimed to have followed scientific communism could not transform unto communism as envisaged by Marx. The fault line in Marx's theory is that it simply undermines the permanent nature of dialecticism in any society. When the element of change is inspirational force for the dialecticism, it will be a futile exercise to hastily establish the hypothesis of uniformity and idealised society. However, it will be not justice to put whole blame on Marx for the failure of communist society. Marx just developed his scientific philosophy of socialism based on political, economic and intellectual developments of 19th century Europe. It was followers and executers of Marxism who should take the blame for the debacles of communism. They miserably failed to minutely to read the nature of dialecticism and made artificial attempts to forcefully bring an end to inherent contradictions of given society. As a result they turned dogmatic, despotic and less dynamic. The irate masses threw them from power and changed regime through velvet revolutions. When the communist countries faced their disaster in early 90s, the fallen leaders might have realised that society always contains element of dialectic and should be responded by addressing people's desire for change. It was too late for them to make the correction. However in other part of the globe, some attempted to revive moribund communist movement by taking a lesson from ex Soviet Union and East Europe (Subedi 2008: 4)"

(ii) The moral underclass view: According to this view supported by some neo-liberals, see poverty and exclusion as a result of the behaviours of the individuals themselves and their sub culture.

(iii) The social integrationist view: The inequality in society can be minimized by mainstreaming the poor and marginalized ones into the development process and by providing equal opportunity to all for their advancement. In general an inclusive society will reduce inequality and enhance development by providing equal opportunities to all, especially, poor and marginalized, in the socio economic and cultural development, and in the government of the country.

(iv) Islam by ensuring flow of money from the rich to the poor by introducing the system of Zakat and Interest free society: At the same time Islam preaches that all men irrespective of colour, creed, race, region and etc. are equal. No one is superiour to other. It also ensures social justice and social inclusion by fixing the rights of various segments of society (women, men, children, young and old). If some one investigate, he will come to know that five Fraiz (Bondage duties) (Towheed, Resalat, Assalat, Haj and Zakat)l are to ensure social justice.

Technically speaking in the present era the third view is more popular, which advocates removing the social exclusion from the society to surmount the inequality as well as poverty. The operators of this view introduced layer of techniques to surmount the problem; poverty reduction through economic growth is one of them. However, concept of poverty reduction through economic growth is getting more complicated and entangled as factor endowments. Obviously, in capitalist system overall economic growth is reliant on capital operator (investors, money holders and traders). To attract this class governments provide various incentives for them which enable them to maximise their profits, normally at the cost of general public. Resultantly, physical assets, social assets and access to public services have become more differentiated and skewed in favour of the non-poor. Market forces that are good at ensuring efficient allocation of resources reward those who own assets. In this situation the state and a compassionate civil society has to play role to compensate those who are socially excluded and not so well-off in improving their capabilities that the goal of poverty reduction can be achieved. High economic growth, improved social indicators, and strong governance systems and institutions that are accountable and work closely with the civil society, are all linked to poverty reduction and vice-versa. Targeted and pro-poor investments are needed to build human capital, institutional capacities and social safety nets.

Social Exclusion

Exclusion is a cumulative and multi-dimensional process which, through successive ruptures, distances individuals, groups, communities and territories from the centres of power and prevailing resources and values, gradually placing them in an inferior position. In a socially inclusive state therefore, the individual's identity as a citizen trumps all other identities (e.g. gender, ethnicity, caste or religion) as a basis for claims for state services and commitments (e.g. justice, social service provision, investment in public infrastructure, police protection) through the constitution and legal system. A sense of belonging comes through civic, economic, social and interpersonal integration into a society, which is promoted by (i) democratic and legal system (ii) the labour market (iii) the welfare-state system (iv) the family and community system consecutively. Hence, social exclusion can be defined in terms of the failure of one or more of the four systems.

Exclusion has multi-dimensional causes and consequences, affecting individuals, families and the society as a whole. Exclusion includes poverty and low income, unemployment and poor skills, discrimination and barring from social and support services such as health, drinking water and basic infrastructure. The problems create a vicious cycle between social and economic exclusion, a process with consequences stretching across generations.

The following Table 3 describes the various dimensions of social exclusion and illustrates the inter-relatedness between social and economic exclusion. For instance, a minority or ethnic group may not be suffering from material deprivation, but they may not be able to gain access to adequate employment due to poor education or poor health. It is therefore, necessary that in order to comprehend the factors influencing the economic exclusion it may be necessary to pore over the various dimensions of social exclusion, and vice-versa.

Right to non-discrimination on the basis of national or ethnic origin, religion, race, caste, colour, descent, tribe or ideological conviction or any other ground is the most important fundamental human rights and is assured in constitutions of almost all the countries. But, discrimination persists everywhere, which results in social exclusion and results in inequity.

Social Inclusion

Social inclusion means mainstreaming of socially excluded marginalized and poor individuals, groups and communities, including women, in the development process and in the governance of the country. In the case of South Asia women who make up more or less 50 percent of the total population in all the countries. Untouchables and certain other ethnic minorities especially downtrodden in other countries of South Asia have been historically excluded or marginalized in the development process and in the governance of the country. The process of social inclusion will bring these individuals, groups and communities in the national mainstream reducing inequality between them and the rest of the society and increasing their self-esteem. It will create a development-oriented society based on the principles of equality, social justice and human rights. It is pertinent to mention here that in the historic Constituent Assembly Election in Nepal in 2008 the marginalised groups especially women emerged as power and they scored more than 33 percent seats in the constituent assembly under the semi-proportional election under a set formula. With the result of proportional and first-past-the-post (FPTP) electoral system lots out, the share of women members in the Constituent Assembly (CA) is 33.22 percent (3). In Pakistan women also enjoy more than 25 percent representation in parliament. However, there is need to include marginalised people in decision making process by strengthening political parties and by evolving a system in which poor should have opportunity to contest elections, because, in present system the contesting of election is very expensive game. The South Asian countries can decrease the current inequalities by involving the poor segment of the society in the development process. There could be different ways to involve the marginalised.

Social Mobilization and social intermediation

The poor are not organized, nor do they have any voice. Therefore, social mobilisation models, aimed at promoting collective action should be evolved. However, such model should be (a) compatible to the local institutional history (b) follow local preferences for organisational forms (c) infused with democratic participatory norms (d) renewed with new organisational knowledge (4) backed by broad-based public support (3) equipped with sufficient financial resources and political power.

Political Parties

Modern democratic political parties are pre-requisite of inclusive democracy. The function of political awareness, political socialization, political mobilization, political training and political recruitment are essential for inclusive democracy. These functions can be performed by political parties in democratic system. These political parties must organize on modern democratic grounds. It is hard fact that well organized, principle-oriented and parties having democratic norms are not available in South Asian Countries. In these countries political parties are plagued with idiosyncratic behaviour; they don't have proper membership procedure, party leaders are not inclined to introduce fair transparent elections within the party. In most of the cases they have neither ideology nor any programme. There is absence of tolerance for other political parties, and leaders don't hesitate to use foreign countries' support as vehicles to enter the government. Parties in power adopt authoritarian style, some time it seems that they are more dependent on the support of civil and military bureaucracy and foreign forces rather than people. This entire scenario weakened them. The re-organization and re-modernization of political parties is challenge for political leadership of these countries as civil societies or never substitute of this institution. Political parties provide opportunity of effective participation to marginalized people, promote inclusiveness, reduce inequality and help to alleviate poverty, as political parties formulate policies by involving gross-root level worker.

Far Flung Areas Need Targeted Intervention

Far flung areas are suffering from acute type of social exclusion as well as well as vicious circle of poverty. Here it must be kept in mind that such areas can and do benefit from non-targeted mainstream poverty reduction approaches (such as interventions aimed at improving physical infrastructure, agricultural extension services, etc. However, poverty reduction programmes aimed at harnessing the productive capacity of poor alone cannot address the complex issue of poverty. Poverty exists in many forms "chronically poor, women and children, excluded groups, poorest people" and these forms need to be distinguished from others and should be addressed through a combination of productive and social protection measures.

Vulnerability remains an important challenge for even graduating households in such areas owing to the fragility of geographic environment, greater dependence on meagre natural resources, heavy dependence on limited human resources, and volatility of off-farm sector within such areas, Safety nets and continued mainstream packages remain important areas of intervention for such households. Social transfers from the government for such communities are necessary and perfectly justifiable as they cannot support and sustain themselves at times of crisis.

Gender Equality and Female Education

Investment in female education and their participation in labour force have the highest pay off both in economic and social terms. Promotion of gender equality interests in culturally sensitive areas requires frequent dialogue with the religious and cultural opinion leaders with an objective of building pro-equality constituencies. Further, organisations pursuing gender interest should base their policies on the ground realities and respect local sensitivities rather than ignore them. The process of internalisation and broad acceptance of gender equality and other innovative programmes are not always easy but local elders can play an important" role in the success of family planning programmes. Gender agenda can be pursued more effectively when practical and beneficial considerations e.g. tangible programmes are included in the projects.

Micro Finance

Micro finance can be an important instrument to promote economic and social inclusiveness, it helps to build social capital assets and provides a ready answer to the basic question of how to lend to asset-less people. Micro finance programmes need to follow a flexible approach must be compatible to the requirements of local communities. It should be provided on nominal interest rate. There should be some incentive schemes for early return. Many schemes are launched in public as well as private sector in Bangladesh, Pakistan, India and Nepal. However, a counter productive phenomenon in most of the available micro finance schemes is high interest rate. To achieve the result of social inclusion interest free or schemes with minimum interest rate should be introduced. In Pakistan government scheme to provide interest free loans to students is the best example. However, this needs some positive restructuring to make it more effective and productive. In Pakistan a new organization, Akhuwat Interest Free Micro Finance (AIFMF), is launched by a group of friends (3). Although presently its operation is very limited this step is the example for those who are interested to uplift the marginalized. Local storage scheme managed by local government can be used for small financing (for details see Muhammad 2008: 65-86).

Civil Society Organization

It is already mentioned that civil societies are not substitute of political parties. However, it has its own importance and plays an important role in creation of inclusive society in the prevailing system. Civil Society Organizations and NGOs have to work with the government as partner and not as the rival of the government. If the scaling up is feasible from the experiments carried out by the Community and Civil Society Organizations. Lessons learnt are of wider applicability for the government to be involved in more than one way. Financial, administrative, human and political resources at the disposal of the government are so enormous that no other organization can match them. Most of the time, these resources are not always utilized properly or targeted at the poor segments of the population. An active and collaborative rather than adversarial and confrontational relationship between the government and civil society organizations can be a win-win situation for all parties concerned as the civil society can leverage the government resources for the larger benefits the poor. Limitations of resources on their part can never allow them to extend their outreach to the large segments of the poor.

The problem is that, unlike the state and private sectors, there is no obvious mechanism to organize civil society as a capable and cohesive partner in development. How do we address this issue? How do we create strong and capable development partners especially in rural areas that act as receiving mechanisms at the grass-roots level for effective internalisation of development inputs and services available with the state sector institutions?

Good Governance

The concept of governance is not new. It is as old as human civilization. Governance means the process of decision making and the process by which decision are implemented. Good governance creates an inclusive participatory environment that helps remove barriers and promotes the build-up of assets as well as organisational capabilities of the disadvantaged group, thereby strengthening the demand side of empowerment (Robinson 1996).Good governance means a rule-based, corruptionless, equitable, transparent, accountable, responsive and efficient government system in which all the individuals groups and communities including women, the poor and the marginalized ones are fully integrated in the decision making process and development activities. The basic objective of such government is to safeguard the civil, political, social, economic and cultural rights of the people. The government should also provide economic services through the development of infrastructure-rural roads, micro and small irrigation systems, micro hydro projects, protect the environment and create a good atmosphere for the generation on income and productive employment, especially for the poor, women and marginalized communities by following a pro-poor growth approach.

Strengthen Local Government

Local government is the best device to ensure participation at grass-roots level. These little governments create a sense of ownership for poor people. Small level election process provides opportunity to the poor to participate in the election process because small amount is needed to handle election affairs in small constituency. Local government should be strengthened through political, administrative and fiscal decentralization, and capacity of these institutions should be developed in important areas, such as pro poor growth, good governance, human rights and social inclusion so that they will be able to deliver the basic social, economic and cultural services to the people, beside providing opportunity to all, especially the poor and marginalized. If these local governments are provided with sufficient financial resources and technical know-how to implement social, economic and cultural development programmers in the local area, these institutions will be able to contribute to the objective of providing social, economic and cultural rights to the people and creating an inclusive, harmonious and just society. Since the local governments are closer to the people, their immediate activity, following the principle of good governance, should be provided the basic social services, such as health, education, drinking water and sanitation to the people, and work for their cultural development. Accountability through public is a corner stone of social inclusion and good governance. This lessens the corruption and decreases the poverty from society. This can be made effective through local government institution. Hence, local governments are not only accountable to local people they are also accountable to higher tier of the governments. This concept of double accountability and their closeness to the people help to set them right and ensure inclusiveness to the marginalised.

References

Akhuwat Micro Finance with A Difference. 2007. Fighting Against Poverty. Friends of Akhuwat, Lahore.

Devarajan, Shantayanan and Ijaz Nabi. 2006. Economic Growth in South Asia: Promising, Unequalizing, and Sustainable?

Human Development in South Asia, 1997, UNDP.

Muhammad, Ayaz, 2006, "Management of Agriculture Sector by Local Government, Suggestion and Domino Effect "A Case Study of Pakistan" Journal of Political science, Vol. IX, Tribhuvan University, pp. 65-86

Robinson, Mark. 1996. "Governance." In Aden Kaper & Jesrica Kuper (eds.) the Social Science Encyclopedia. London: Rutledge.

SAARC Regional Poverty Profile (RPP) 2005. SAARC Secretariat. Nepal.

Subedi, Ritu Raj. "Heraclitus Dialectic and Communism" 2008. The Rising Nepal, May 11, p.4

World Development Report, 2006. The World Bank.

Notes

(1.) Zakat is an obligatory duty of rich Muslim to pay 2.5 percent of his money to the poor per annum. Towhead believe in sovereignty of God, Resalat, Believe in the Prophet hood of Muhammad peace be upon him who is the last prophet, Assalat, Five time prayers, especially offered in the mosque collectively, this gives concept that all men are equal, Hajj, Muslims get together in Makah for pilgrimage every year, a big religious and social activity. These all activities promote social inclusion.

(2.) A Future Within Reach: ADB, UNDP, And UNESCAP (2)) SAARC Regional Poverty Profile (RPP) 2005 (3) Human Development in South Asia 1997, UNDP (4) Economic Growth in South Asia: Promising, Un-equalizing, and Sustainable? (5) Shantayanan Devarajan and Ijaz Nabi, June, 2006 (6) Dr. Ishrat Hussain 2004 (7) Centre fore Analysis of Social Exclusion (CASE) CAS Ebrief October 2004 Few concepts are taken from these reports and Books.

(3.) Akhuwat Interest Free Micro Finance (AIFMF) non governmental orgnization in Pakistan launched by a group of friends. This organization provides interest free loan to small farmers and unemployed youth to enable them to establish small business. Initial amount was collected through donation. It is interesting that its recovery percentage is 100 percent.

Table 1: Change in Number of poor in South Asia and World

Regions Number of poor (million)

 1981 1990 2001

South Asia 474.8 462.3 428.4
World 1481.8 1218.5 1092.7

Regions Annual change (%)

 1981-90 1990-01

South Asia -0.30 -0.69
World -2.15 0.99

Source: SAARC Regional Poverty Profile 2005

Table 2: Income/Consumption Inequality by Quintile Groups and
GNI Index: South Asia

 Share of income or consumption in South Asia

Country Poorest 20% Richest 20%

 Earlier Latest Earlier Latest
 Year Year Year Year

Bangladesh 6.6 4.7 45.3 52.0
 (1981-82) (2004) (1981-82) (2004)

Bhutan -- 6.5 -- 48.7
 (2004) (2004)

India 9.46 9.52 37.58 38.5
 (1990) (2000) (1990) (2000)

The Maldives 10.0 11.0 -- --
 (1997) (2004)

Nepal 7.6 6.2 44.9 53.4
 (1995/96) (2003/04) (1995/96) (2003/04)

Pakistan 8.0 7.0 43.7 47.6
 (1988) (2002) (1988) (2002)

Sri Lanka

1. Share of HH 5.4 4.8 50.3 52.8
Income (1995/96) (2002) (1995/96 (2002)

2. Share of HH 7.2 6.2 44.5 48.5
Consumption (1995/96) (2002) (1995/96) (2002)

 Share of income or Gini Index
 consumption in
 South Asia

Country Ratio of chest to
 poorest

 Earlier Latest Earlier Latest
 Year Year Year Year

Bangladesh 6.9 11.1 0.39 0.45
 1981-82 (2004) (1981-82) (2004)

Bhutan -- 7.6 0.37 0.42
 (2004) (2000) (2004)

India 4.0 4.0 0.28 0.28
 1990 (2000) (1990) 2000

The Maldives -- -- 0.42 0.41
 (1997) (2004)

Nepal 5.9 8.6 0.34 0.41
 (1995/96) (2003/04) (1995/96) (2003/04)

Pakistan 5.5 6.8 0.35 0.41
 (1988) (2002) (1988) (2002)

Sri Lanka

1. Share of HH 9.3 11.0 0.46 0.47
Income (1995/96) 2002 (1995/96) (2002)

2. Share of HH 6.2 7.8 0.34 * 0.33 **
Consumption (1995/96) (2002)

Source: (i) SAARC Regional Poverty Profile 2005 (ii) The World Bank,
World Development Report 2006; (iii) UNDP, Human Development Report,
2005.

Table 3: South Asia in the Global Context: Population,
Urbanisation and Gross National Income

Region/ Population
Country
 In % of Annual Percent
 million world growth urban
 2004 population rate 2003
 2004 (%)
 2000-04

Bangladesh 143.8 2.21 1.7 24.3
Bhutan 0.753 0.01 2.7 8.5
India 1079.7 17.02 1.5 28.3
The Maldives 0.3 0.005 2.2 28.8
Nepal 24.8 0.40 2.2 15.0
Pakistan 149.7 2.40 2.0 34.1
Sri Lanka 19.5 0.31 1.3 21.1
South Asia 1418.5 22.36 1.7@ 29.8@
World 6345.1 100.00 1.2 48.3

Region/ Gross national income (GNI) Per
Country capita
 In billion % of Per GNI In
 US$ world capita PPP $
 2004 GNI GNI in 2004
 2004 US$
 2004

Bangladesh 61.2 0.15 440 1980
Bhutan 0.7 0.002 760 1969 # (2003)
India 674.6 1.69 620 3347
The Maldives 0.8 0.002 2510 4083.0 + (1998)
Nepal 6.5 0.02 260 1470
Pakistan 90.7 0.23 736 2160
Sri Lanka 19.3 * 0.05 1025 4000 * *
South Asia 854.1 2.14 590 @ 2830
World 39833.6 100.00 6280 8760

Source: SAARC Regional Poverty Profile 2005

Table 4: Various Forms of Social Exclusion (2)

Human Capital Physical Productive Social
 Capital Roles Cohesion

Health Housing and Employment Conflict and
Difficult land Higher rates of crime
access to Poorer housing unemployment; Inter-ethnic
basic health conditions; casual conflict;
services; overcrowding; employment victimization
higher infant weaker contracts; by police;
mortality access to discriminatory higher
rates, lower credit for employment incarceration
life buying houses; practices; rates.
expectancy insecure poorer
rates, higher property promotion
prevalence of rights; prospects;
disease and displacement lower wages.
malnutrition. by development
 projects.

Education Infrastructure Production Participation
Lower access to Physical Traditional Non-recognition
schools, lower remoteness; livelihoods, as minorities
enrolment worse access traditional or indigenous
rates, lower to roads, forms of peoples; no
educational sanitation, agriculture representation,
attainments; safe water, and land use. or under-
lack of electricity and representation
minority or communications. on decision-
indigenous making bodies.
language
in schools.
Dominance of
foreign
language