India poised to be a Major Player in South-South Trade, says Montek Ahluwalia, Deputy Chairman, Planning Commission

Apr 11, 2013

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New Delhi, 11 April 2013: India’s leading role as an economic power among countries of the South was highlighted today at the regional launch of the 2013 Global Human Development Report: The Rise of the South: Human Progress in a Diverse World. The launch in New Delhi was organized by the International Centre for Human Development and the United Nations Development Programme.

According to the Report, rapid human development progress in India and other South Asian nations is helping drive a historic shift in global dynamics, with hundreds of millions of people rising from poverty and billions more poised to join a new global middle class.

Describing that tectonic shift outlined in the Report, Ajay Chhibber, UNDP Regional Director for Asia and the Pacific said, “The rising economic strength of the South must be matched by a strong commitment to human development and to strategies that ensure countries can improve human development outcomes without imposing a high - ecological footprint on planet earth.”

Crediting the UNDP-commissioned Human Development Report with having spurred public debate for 20 years on the multi-dimensional aspects of development, Mr. Ahluwalia said, “India should learn from the success that countries in the South have had with improving health and education outcomes.”

Expert panelists at the launch stressed that regional successes should not obscure the huge amount of work that remains. Although South Asia has reduced the proportion of the population living on less than $1.25 a day from 61 percent in 1981 to 36 percent in 2008, more than half a billion people there remained extremely poor.

According to Rehman Sobhan, Chairman, Centre for Policy Dialogue in Bangladesh, “Countries of the South must address persistent inequalities or they would face the risk of social unrest.”

The Report’s Gender Inequality Index shows that high gender disparities persist in much of South Asia, second only to those in sub-Saharan Africa. Calling for a stronger response in India to the high maternal mortality ratio, rising anemia among pregnant women and high levels of violence against women, Bina Agarwal, Professor of Development Economics, University of Manchester said that despite the South’s economic rise many forms of gender inequality remained intact.

She highlighted the key importance of ensuring women’s economic security through productive assets and secure employment, and their physical security (in the home, in public spaces and in the work place), by focusing on some essential freedoms : freedom from domestic violence, freedom of movement and freedom from harassment and repressive social norms. She also suggested that the HDR should incorporate women in local government in its gender indices.

The Report analyses more than 40 developing countries that have made striking human development gains in recent years. It attributes their achievements to some strong national commitments: better public health and education services, innovative poverty eradication programmes and strategic engagement with the world economy.

By 2030, more than 80 percent of the world’s middle class will live in the South and account for 70 percent of total consumption expenditure. The Asia-Pacific region alone will host about two-thirds of that middle class. The combined economic output by 2020 of three leading developing countries alone—Brazil, China and India—will surpass the aggregate production of Canada, France, Germany, Italy, the United Kingdom and the United States.

The Report was launched globally by UNDP Administrator Helen Clark and President of Mexico Enrique Peña Nieto in Mexico City on March 14.

HDR Highlights

  • Two countries—the Islamic Republic of Iran and Sri Lanka are in the high human development group, three (Maldives, India and Bhutan) are in the medium and the remaining four (Bangladesh, Pakistan, Nepal and Afghanistan) are in the low human development group.

  • The average HDI value for the region is 0.558, below the world average of 0.693.

  • Between 2000 and 2012, the region registered annual growth of 1.43 percent in HDI value, which is the highest compared to other regions. Looking at individual countries in the region, Afghanistan achieved the fastest growth with 3.9 percent, followed by Pakistan with 1.7 percent and then India at 1.5 percent. The least growth was registered by Sri Lanka (0.7 percent).

  • The region’s average life expectancy at birth is 66.2 years, nearly four years below the world average of 70.1 and more than eight years below the average for Latin America and the Caribbean, which has the highest average life expectancy at birth.

  • Average years of schooling of 4.7 for the region ties with sub-Saharan Africa in the bottom position and is 2.8 years below the world average.

  • The average gross national income (GNI) per capita of $3,343 is only one-third the world average of $10,184. 

  • The region is ranked fifth out of six regions in terms of overall loss to HDI due to inequality in distribution. The loss to potential HDI value is about 6 percentage points higher than the world’s average loss of 23.3 percent. Loss due to inequality is highest in education (42 percent) followed by health (27 percent).

  • The biggest loss due to inequalities is suffered by Nepal (34.2 percent) followed by Pakistan (30.9 percent). The country suffering the least loss in the region is Sri Lanka (15.1 percent).

  • The average Gender Inequality Index value for the region is 0.568—better only than sub-Saharan Africa’s average of 0.577. It has a relatively high maternal mortality ratio; low female educational attainment; as well as low female labour force participation rate. The poorest performers in the region are Afghanistan and India.

  • Bangladesh has the highest Multidimensional Poverty Index value based on 2007 survey data followed by India. The headcount ratio, (i.e. the percentage of the population suffering over-lapping deprivation) is 57.8 percent for Bangladesh and 53.7 percent for India. These translate into 83.2 million people in Bangladesh and 612.3 million people in India who suffer overlapping deprivation.

  • India leads in the region exporting goods to the tune of $220.4 billion in 2010, representing 14.5 percent of its GDP in that year. This is followed by Islamic Republic of Iran ($83.8 billion) and then Sri Lanka ($8.3 billion) representing 25.3 percent and 18.1 percentof their respective GDPs.

  • The region’s average employment-to-population ratio is 61.2 percent, below the world average of 65.8 percent. There is wide variation across countries ranging from a low employment-to-population ratio of 46.1 percent in Islamic Republic of Iran to 86.4 percent in Nepal.

  • Child labour is relatively high in Nepal, where more than one-third of children of ages five to 14 years are economically active. The lowest is observed in India (12 percent).

  • The average overall life satisfaction based on the Gallup World Poll for the region is 4.7, making it the second most dissatisfied region after sub-Saharan Africa.

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