UNDP Calls for a Fundamental Re-balancing of Development Strategies in South Asia
New Delhi, 02 July 2009 - Cleaner economic development that does not leave out the weaker sections of society is the need of the hour, say experts at a discussion on the impact of the global financial crisis on South Asia, jointly organized by UNDP and the Indian Council for International Economic Relations (ICRIER).
Even thoughthisslowdown is not of their own making and is caused mainl y by the global economic meltdown and the economic recession that followedin developed countries, South Asian countries need to restructure their model of growth, by im proving infrastructure, quality and access to education and public health. These are some of the recommendations made by experts at a discussion on the impact ofthe global financial crisis on South Asia, jointly organized by UNDP and the Indian Council forInternational Economic Relations (!CRIER) todayThis discussion was timely in light of this year's Economic Surveywhich acknowledged decelerationof 2.1 per cent in the economic growth from the average growth rate of 8.8 per cent in the previous five years (2003-04 to 2007-08).
"The economic crisis is a time to take on the big questions becausein developing countries poverty consequencesafter growth rate reduction can be far more acute and disastrousthan in developedcountries for a similar growthretardation," said Kaushik Basu, noted Development Economist from Cornell University and chair of the panel discussion.
"Countries in Asia need to expand financial and monetarycoordination and create a legal infrastructure for an Asian Common Market.Asia cannot rely on an export-led model of growth anymore. Fundamental rebalancing of development strategies isneeded to focus on domestic spending so that over time savings rates can be changed" said Ajay Chhibber, Assistant Secretary General and Regional Director of United NationsDevelopment Programme (UNDP).
To mitigate the adverse impacts of the global financial crisis on the poorin India, Rajiv Kumar,Director and Chief Executive of !CRIER stressed the "need for second generation structural reformsto achieve real recovery by im proving implementation capacity of infrastructure and quality access to education and publichealth in a vigorousbusiness environment. I n this context, Mr. Chhibberpointed out that "Social protection measures such as Conditional Cash Transfers that provide much needed cash for the poor and incentivize public goods like access to girls' education and health services and should be part of fiscal stimulus packages. This will ensure that the poor do not losehard won development gains and are ableto access critical basic services."
Dr. Gangopadhayay, Director, India Development Foundation cautioned that intra-regional economies that are dependent on sectors such as textiles in the state of Tamil Nadu, gems and jewelry in Gujarat, leather in U.P amongothers will be hardesthit and so there is an urgent need to pay attention to these specific sectors within States.
These recommendations are significantas 77 percent of the total population of India in 2004-05, had per capitaconsumption expenditure of less than Rs.20per day as pointed out by the National Commission on Enterprises in the Unorganized Sector (NCUES)report.