rediff.com: India, China growth to help boost poor economies

The World Bank on Wednesday said the high growth in India and China will provide the necessary impetus to double the income in the next 15 years in low and middle income countries.

The bank's world development report further said the period between 2003-18 offered opportunity for "inclusive growth" which benefits all sections of the society.

This would, however, require confronting the barriers to change in these countries, the report said adding institutions that could manage the social and economic transition was easier to set up in rapidly growing economies.

The decisions that would be taken in this regard in these countries in the new few years would be crucial for doubling their income, it said.

The report said that the next 50 years could see a four-fold increase in the size of the global economy and significant reductions in poverty, provided that governments act now to avert a growing risk of severe damage to the environment and profound social unrest.

The report has been released in time for World Summit on Sustainable Development in Johannesburg beginning next week to reach agreement on steps that could be taken now to ensure that poverty-reducing growth does not come at great cost to future generations.

Misguided policies and weak governance in past decades, the report says, have contributed to environmental disasters, income inequality and social upheaval in some countries, often resulting in deep deprivation, riots or refugees fleeing famine or civil wars.

The report suggests that new alliances are needed at the local, national and global levels to better address these problems.

The burden for development must be shared more widely. Rich countries must further open their markets and cut agricultural subsidies that depress incomes of third world farmers and they must increase the flow of aid, medicines and new technologies to developing countries.

Governments in the developing world, in turn, must become more accountable and transparent and ensure that poor people are able to obtain secure land tenure as well as access to education, health care and other basic services.

Low-income countries, says Ian Johnson, Vice President of the World Bank's Environmentally and Socially Sustainable Development Network, will need to grow at 3.6 per cent per capita to meet the UN Millennium Development Goal of halving poverty by 2015.

But this growth must be achieved in a manner that preserves our future, he said adding: "It would be reckless of us to successfully reach the millennium development goals in 2015 only to be confronted by dysfunctional cities dwindling water supply, more inequality and conflict, and even less crop land to sustain us than we have now."

The report said empirical evidence strongly support Nobel laureate Amartya Sen's finding that democracy -- helped by free speech -- plays a key role in eliminating famine and eliciting effective disaster relief.

Theoretical and empirical evidence also suggested that environmental commitment and related outcomes were positively correlated with democratic practices, though some countries have also done well environmentally using other channels, the report said.

Looking back to the 1950s and 1960s, the report recalled, it was feared at the time that the developing countries -- particularly China, India and Indonesia, would not be able to feed their rapidly growing populations.

Thanks to the Green Revolution, the doomsday scenarios of famine and starvation did not materialise in these, the most populous, developing countries. In the 1960s and 1970s, the Club of Rome and many other groups forecast that the Earth would rapidly run out of key natural resources.

So far this has not happened, again because changes in technology and in preferences have allowed the substitution of new resources for existing ones -- for example, fiber optics in place of copper, it said.

Global action has also led to major strides in eliminating disease scourges, and in addressing new problems (like ozone depletion). But accompanying these achievements were some negative social and environmental patterns that must not be repeated in the next 50 years for development to be sustained.

Poverty, the bank points out, is declining but still remains a challenge. Since 1993 there have been encouraging signs of renewed poverty reduction in India.




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