Free At Fifty, But Seeking Aid
IDF participants will also be given for their reading pleasure a balance-sheet of the state of human development in India prepared for the first time by the United Nations Development Programme resident mission in New Delhi. The Bank and UNDP will expectedly complement each other in reviewing Indias record and will also compliment the government for pursuing policies that have enabled an acceleration of growth in the 1990s. Both of them will offer a positive assessment of the impact of economic policies pursued since 1991, drawing attention to increased private investment, domestic and foreign, lower inflation, higher foreign exchange reserves, and so on.
The point of departure where perceptions will differ between the two documents will be on priorities for the future. The Bank will emphasise fiscal adjustment, more liberalisation and privatisation of the economy, while the UNDP will underscore the importance of public expenditure for improved human development and poverty reduction.
To be sure, the Bank and the Fund have also lately emphasised the importance of public investment in the social sectors. To this end they have urged improved cost recovery from public provisioning of social and economic infrastructural services, for the withdrawal of government from certain spheres, like manufacturing and non-essential services, and the diversion of public funds to the social sector. However, where the UNDP differs from the Bank and the Fund is in placing human development at the centre of public policy.
Taking a cue from its annual Human Development Reports, the UNDPs report to IDF will emphasise the importance of a direct attack on poverty through increased public investment in the social sectors, the political empowerment of the poor and decentralisation of development administration. Fiscal adjustment and deficit management cannot be at the expense of investment in health, education and poverty reduction. Drawing from lessons directly learnt in over a dozen research projects funded by it, the UNDP will alert donors to the importance of improving social sector spending, both quantitatively and qualitatively.
The global community of bilateral and multilateral donors and financiers seem to be veering round to the view that now that they have succeeded in impressing upon Indian policy makers the importance of economic liberalisation, attention should shift to a more hard-nosed and critical assessment of the record of democratic governance and the distribution of the gains of growth. While multilateral financial institutions are not overly concerned about this, both they and bilateral donors are being forced by non-governmental organisations, protectionist lobbies and an assortment of do-gooders in the developed countries, mainly the United States, Germany, Britain and the Nordic countries, to link trade and economic relations to Indias record of governance. Not surprisingly, an increasingly critical view is being taken in many western quarters of the record of political democracy in India.
It was always convenient for friends of India in multilateral organisations and western capitals to commend Indias case drawing attention to its record as the worlds largest democracy and the most successful case of democratic governance in the developing world. However, more recently even this record of democratic governance is being scrutinised and questioned. The revelations on the rising degree of corruption in the national, state and local governments, the persistence of mass poverty, increasing economic inequalities and Indias low human development status, in terms of the health and educational status of the people, have all become grist for the increasingly active mills of India-baiters abroad.
When comparing our poorer record on growth and human development against Chinas superior achievements, India-enthusiasts abroad have always sought solace from her track record as a democracy respecting the rule of law. However, more recently Indias democratic credentials have come to be questioned. US-based India-watchers argued recently at a seminar celebrating 50 years of Independence in South Asia, at the Woodrow Wilson Centre in Washington DC, that democratic India has merely assured Freedom To (freedom to speak, to organise, to protest, to publish, etc.) but has not ensured Freedom From (freedom from hunger, from unemployment, from ill-health, from illiteracy, etc.)
For years we have used democracy as an alibi for our weaker economic performance compared to China and the East Asian tigers. If our democratic credentials are so mercilessly questioned and the record of governance is found to be wanting in terms of the standard of living of ordinary Indians, what have we to show for 50 years of Independence?
Such questions embarrassed Indian officials participating in meetings with bilateral donor governments and multilateral financial institutions have often come away hoping India will free itself of aid-dependency and will one day be able to dictate terms like China does when it gets what it wants without having to apologise for not being a democracy. On the other hand, if India can improve on Chinas record of human development, ensuring more equitable development within a genuinely democratic society, it need not go to a donors meeting with trepidation. It can demand its just share in an unjust world. Thats a big If!