Development Starts with People and Ends with People: Prof. Ahsan Iqbal
Posted On September 2, 2013
Pakistan’s Federal Minister for Planning, Development, and Reforms, Prof. Ahsan Iqbal is currently visiting Sri Lanka to attend 6th South Asia Economic Summit (SAES) in Colombo. The 3 days long Summit is organized by Sri Lanka’s economic policy think tank, the Institute of Policy Studies, under the theme of ‘Towards a Stronger, Dynamic and Inclusive South Asia’, from 2nd – 4th of September 2013.
The SAES, inaugurated in 2008 in Colombo, is a premier platform to debate and discuss the socio-economic challenges faced by South Asia, currently one of the fastest growing regions in the world.
This year’s summit has brought together over 120 renowned socio-economic experts to debate and discuss, pressing concerns to sustainable and inclusive growth in the region.
Prof. Ahsan Iqbal delivered the Keynote Address at the Inaugural of session of the summit which is produced in the following lines:
I feel extremely privileged to be speaking here at the 6th South Asia Economic Summit and extend my profound thanks to the Institute of Policy Studies in Sri Lanka and Sustainable Development Policy Institute (SDPI) in Pakistan for inviting me as a Keynote Speaker.
I would also like to acknowledge at the outset that forums such as these have made a significant contribution in bringing together the eight SAARC member states to jointly discuss, debate, and address emerging challenges in the economic and development domain.
It is very welcoming to take note of the key areas being covered in this Summit, “The Big Four” as they have been termed. We believe that these areas are relevant to each of the eight member states individually, and yet will also be extremely contributive in terms of regional economic integration and cooperation. In fact the merger of track I and track II dialogues in this Summit has great potential for bridging policy research gap across and within the region.
Today we stand at a point where South Asia collectively is looking for ways to revive and sustain economic growth, in a manner that is inclusive, sustainable and has the potential to remove inter country and intra country economic disparities. While there are national solutions all of us experiment, there is a substantial opportunity we are all missing out. This is the currently stifled potential of regional economic cooperation. We need to synergies our potential.
Having said it, let us acknowledge that we are in a constant struggle in prioritizing between urgent and important issues facing the region. While regional cooperation is important, many a times addressing urgent domestic issues becomes priority for all of us. However, at regional level too, there are certain urgent and pressing development challenges that South Asia faces today. It is important for us to give quality time and attention in deciding on the potential measures from the existing and emerging development discourse to address these challenges.
As a region, South Asia was able to buffer the immediate shocks of the global financial crises and became one of the fastest growing regions over the last one decade. However, the social impact of these growth trends, particularly in terms of development indicators such as poverty headcount, income inequality, food insecurity, climate risk reduction, and female labour force participation, among others remains questionable. Today, there still remains immense poverty in the region, child undernourishment is high, conflict continues to be ripe, and there has been slow progress towards the achievement of Millennium Development Goals (MDGs).
This distinction in the accruing benefits from the region’s growth has not just been prevalent within member states but also amongst them. This has given some countries in the region a lead, while others continue to lag behind, consequently exacerbating the incidence of poverty as well as of income inequality across the region. Despite achieving increasing growth rates, South Asian economies continue to ignore the basic norms of sustainable production and consumption patterns, thus leading to a Shining South Asia and a suffering South Asia. The sufferings gets further aggravated due to the restricted access to basic services in most, if not all, South Asian economies. These inequalities are not just confined to income levels, but have a wider social and human rights connotation, including gender equality, and minority rights. Moreover, due to lower levels of literacy and even lesser exposure and access, demand-side accountability remains weak, leading to poor social service delivery and further exacerbating rent-seeking activities in the economy that carry negative long-term implications. This has made the growth process in South Asia less inclusive.
The excluded one, when gets a collective identity be it creed, ethnic, national, or any other identity immediately find a group or a country who is usurping their rights and that is what leads to a conflict between have and have not at societal level, and transboundry natural resources conflicts at the regional level. We can never overcome the challenge of exclusion through a win-lose situation where victory of one group would be at the cost of loss of the second group rather we have to adapt a win-win situation. Everyone wins, when the growth would be treated as more of an all-rounded inclusive process in each of these countries. That is what the new development discourse dictates, and that is what has now become the need of the hour: treating growth as a dimension of sustainable development that can extract masses from misery.
I will now refer to some recent research by SDPI in Pakistan, an institute where I have the honor of being on the Board of Governors since last two years. There are 3 key development challenges that this region collectively faces today: rebalancing macroeconomic developments in favour of welfare impacts, thinking beyond MDGs, and working for a regional political stability to divert more resources on social development. We should also take stock of some of the emerging mega-trends across the region, which need to be treated with caution in order to capitalize for development across the region at large.
South Asia seems to have experienced enhanced individual empowerment that has largely resulted from a rising middle-class, increased access to ICT, a vibrant civil society, and a relatively more independent media. One can attribute the anti-monarch movement in Nepal, the independence of judiciary in Pakistan, and the Anna Hazarey movement in India to this individual empowerment that has led to popular mass movements such as these.
There is also higher incidence of urbanization in South Asia that continues to lead to increased internal as well as external migration. Research shows that the increased migration flows have led to not only an increase in the flow of foreign remittances but also in the transfer and diffusion of knowledge from advanced countries.
One also needs to take count of a reshuffling in the traditional power structures, such as experienced in Bangladesh: the Grameen Bank, for one, influences millions of lives across the country today. Similarly, in Pakistan the power centre has moved from military to parliament, provincial governments, superior judiciary, and independent media. One observes similar examples in other countries in South Asia. There is also a rise of popular culture across the region that has resulted, again from improved access to ICT and higher literacy rates. South Asia as a whole continues to be vulnerable to adverse climate change effects that increases sea level, erode cultivable land, suppress returns for farmers and exacerbate food insecurities in the region.
Having said that, it is important to qualify at this point that there are important dimensions to South Asian regional development that need to be carefully borne to turn the above mentioned trends in our favour. South Asian governments have lagged in terms of investment in human capital that has exacerbated not just the poor state of social service delivery but also the state of social justice across most South Asian countries. Going forward, such exclusions carry the potential of rising conflicts across these countries.
Secondly, the region continues to be extremely vulnerable to natural and human made disasters, and there is less that has been done so far in terms of disaster management and minimization of adverse after-effects. Thirdly, given their track record in governing structures, South Asian nations have to be careful about how openness and transparency facilitate favourable democracies that should be more inclusive and less vulnerable to dictatorial tendencies within nations. The tendencies of conflict in South Asian economies continue to pose development challenges for the region. And finally the region is thirsty for affordable and clean energy. Above mentioned trends and game changers would affect the development, whether regional or at the country-level in all South Asian economies.
Our government has a track record of open heartedly inviting all regional governments to work for collective solutions to turn some of the above mentioned game changers in our favour. We are a peace loving nation and quite mindful of the fact that a stable Afghanistan is a must for a stable Pakistan, which in turn is a must for stable India, and the chain reaction goes on. Our stabilities are interdependent and this is what we need to understand in order to have a strong, resilient and prosperous South Asia which still has the potential to be hub of global growth in the years to come.
Regional peace and resolving political differences through negotiations would let us divert scarce resource on building human capital. It would help us in implementing a regional disaster risk reduction strategy where upper and lower riverine countries would coordinate better and work together to avoid disasters like floods and water scarcity. This would minimize the use of intra-regional hostilities in the domestic politics and in turn strengthen the democracies. On top of it, and inclusive and economically integrated South Asia is the answer to growing energy scarcity. We need to think of energy corridors within this region to meet each other’s energy needs. At macro level, such integration is a must to cope with negative impacts of financial crisis and recession which is hitting our traditional trade partners, Europe and the USA,
Besides fostering peace in the region, we also need to think of new ways of making SAARC an effective forum. We did agree on SAARC Development Goals. However, the fate of SDG was not much different than MDGs. We often say that lack of political ownership of MDGs in member states led to slow progress on achieving them. However, SDGs were our indigenous and home grown solutions, yet due to our lack of cooperation we failed more than 70 percent of South Asians who live below $2/- a day.
We need to learn lessons from the fate of MDGs and SDGs and make collaborative efforts to meaningfully implemet some of the agreed decisions such as SAARC Development Fund, SAARC Food Bank and SAARC disaster reduction strategy.
Given the South Asian context, governments need to take a more rigorous approach in developing social capital and expanding the resultant knowledge base. This would not only flourish democratic norms in these countries but also significantly contribute towards long-term and inclusive economic growth. There is also a persistent need for investing in and promoting social innovations, such as modern tools in social accountability and micro-financing. Forums such as the South Asia Economic Summit provide an excellent platform for such purposes.
One should also not discount the role of the private sector, in so far as growth is concerned. While the private sector is pivotal in accelerating growth and should be allowed to take lead in doing so, it is time for governments to reassess their own role so as to balance spending in favour of human development. With well thought-out policies, economic growth resulting from increased private sector led activity can generate fiscal space for development spending.
These common challenges and trends across South Asia call for a renewed resolve on part of SAARC member states to get their own economies in order, while committing collectively to address regional issues for common good. There is need for a more robust role of the SAARC Secretariat in order to strengthen efforts to address these challenges at the regional level. We hope that going forward, member states will take a more responsible and proactive approach towards regional cooperation that facilitates sustainable and inclusive growth for the common good of the region at large.
Having talked about South Asia as a whole, I would now like to take this opportunity to brief you about Pakistan’s own role as a country, as envisioned by the current government. Our vision is to make strengthen human capital in Pakistan and turn it a knowledge-based economy which would steer its agriculture, industry and services by the year 2025, appropriately titled as “Vision 2025”. To achieve this, our policy focus would aim at: exploring indigenous resources strengthen human capital, and facilitating private sector as engines of growth; an efficient, competent, responsive, engaging and collaborative, and accountable public sector; adoption of global practices for corporate governance; and working for an inclusive growth that is sustained by macroeconomic stability, and maintenance of political stability and peace in the country.
The vision 2025 aims to provide citizens of Pakistan with a higher standard of living that is compatible with that of contemporary emerging economies. We have set a target of an average annual growth rate of 7 to 8 percent till 2025 by bringing about structural changes that can help yield higher productivity in all sectors of the economy.
Moreover, the vision intends to build and further enhance institutional capacities, besides establishing a lead for the private sector as drivers of growth. And yet, the social component has been given just as much importance through provision of energy, food and water security for the citizens of Pakistan. Developing social capital is at its heart. We plan to have inclusive debate through Development Communication Programme and Inclusive Governance through Reform and Innovation Programme, which are fundament pillars for inclusive growth.
The vision resides on key economic pillars to achieve its expected outcomes. These include: energy security, sustained and inclusive higher growth led by the private sector, modernization of existing infrastructure, increased competitiveness in industry and trade, inclusive tax, institutional, and governance reforms, and building of social capital that can help in getting the most out of the tremendous demographic dividend that the country has from its huge youth population. If achieved, these measures would reap multi-fold and economy-wide benefits. Collectively, they can help inflate the size of the economy from the current Rs. 22.9 trillion to an impressive Rs. 130 trillion by the year 2025. This would in turn imply an increase of per capita income to $5000, a higher investment to GDP ratio, higher national savings, higher exports for the country, higher remittance flows, better infrastructure and balancing of growth towards local resources rather than external inflows.
I am joining this summit to request the luminaries, excellencies, private sector, academia, and think-tank community present at this venue to come up with a South Asian Vision 2025, 2030, or 2050 whatever milestone you choose be establishing “South Asia Inclusive Growth Commission”. We also need to address the issue of conflict within our societies, whether ethnic,, linguistic, or religious. Conflicts marginalize vulnerable groups and a Commission for social and inter faith harmony in South Asia should also be established. My belief is that only a vision of a region where the gap between the haves and have-not could be narrowed, where there is a sense of shared destination, a common resolve to opportunity and fairness, and where we deliver on securing economic, social, cultural and political rights, can help us in achieving an inclusive economic growth, a growth which would be much higher than what we can achieve if our region remains divided.
I expect that this Summit will bring out key policy messages that can substantially help in bringing together SAARC member states to harness and implement progressive ideas for regional integration and cooperation. The South Asia Economic Summit has had a history of brining policy makers and implementers to a singular platform to discuss policy issues for South Asian regional cooperation. It is time that the 6th Summit, beginning today, plays a historic and pivotal role in implementation of policy recommendations presented in earlier Summits and those that will come of this one. These policy recommendations ought to be more realistic for all member states to adopt, and today, there is need to actualize the demand that this forum generates from regional Track 1, Track 2, and Track 3 partners. I would also like to restate and emphasize the responsibility that each of the member states has to take individually on its own and this is what the message of this Summit offers: to take your own charge and yet contribute for regional cooperation in issues of mutual concern and interest.
We have seen Washington consensus failing to trickle down effects of growth. There is need for a new development contract. Let this conference make Colombo Consensus and declare that economic growth whose fruits are not shared by people across society, growth which doesn’t provide equal opportunities to its people, growth which is insensitive to growing inequality and poverty in societies, growth which doesn’t produce political stability and social harmony, may be growth in numbers but can’t be called growth of societies, it can’t be called development. Development starts with people and ends with people.
I hope that this Summit will go a long way in not only creating demand-driven agendas for South Asian regional cooperation but also in implementing these agendas. I sincerely hope that the 6th South Asia Economic Summit, with all its objectives, will bring these nations together and strengthen their collective resolve. My individual and official support is with you for this regional cause.
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