ADB RECIPE TO CHECK GROWTH DISPARITIES

By M Rama Rao
New Delhi( Asian Tribune, Aug 8, 2007): The Asian Development Bank (ADB) has come up with its own recipe for checking disparities, which, it says, in its flagship annual statistical publication, ‘Key Indicators, 2077’, are ‘widening’ and can ‘threaten’ the very growth process in India and other Asian countries.

The flipside of ‘growth story’, the Manila based regional lender says, is ‘unevenness in growth in incomes’ across urban and rural areas. That is not something unexpected during growth process, according to it.

“Some unevenness in growth is to be expected during the development phase. It (the rising inequality) is not unusual during major structural change”, the study says and makes out a case for checking ‘weaknesses and imbalances’ in policy formulation and implementation.

The ADB makes two interesting observation, which should be of interest to Yojana Bhavan. “Slow growth in rural incomes has resulted from weaknesses in public investments in rural infrastructure and a policy environment that has kept private investment away. Growth in urban areas has been insufficient to absorb surplus labor from rural areas”

The Bank study holds the view that new opportunities generated by urban growth in developing Asia have favored the highly-educated, further aggravating the earnings gap between the rich and poor. This is largely because of the interplay between market-oriented reforms and globalization.

Asian Development Bank hastens to add that its observations are not a call for rollback of market-oriented reforms or international integration. And calls for ‘policy action’ on three fronts to mitigate the hardships of disadvantaged sections.

First counter negative impact of market forces through mechanisms like well designed social protection programmes and skill upgradation. Second, generate new employment ‘that do not bypass the poor’ through the public and private sector participation. Third, radically improve the quality of basic health care and education available to the disadvantaged sections

CHALLENGE: The key challenge to public policy in Asia, the report concludes, is not just increasing the quantum of public expenditures, but ensuring that these are well targeted, effective, and funded through mechanisms that do not detract from economic growth.

Another ADB report makes out a case for focus on environment clean up, saying most Asian countries are facing massive pollution of both surface and groundwater. Some two billion Asians – roughly 66% of the population in Asia – lack access to adequate sanitation, such as toilets, pit latrines, septic tanks, and sewerage systems. This accounts for nearly three-quarters of all those in the world without such facilities.

Experts from the world over are going to work on a blue print for action on sanitation at Stockholm and water issues from August 12-18. “Sanitation must get top priority from the political leadership everywhere. They need to see sanitation as paying its way and not as being either unaffordable or a luxury,” according to Arjun Thapan, who heads the ADB’s Water Committee. He adds, “Politicians must also understand that postponing action will cost a great deal more”.