The last chance

Karachi: South Indian-style prawns cooked in spices and coconut milk next to a Lucknavi specialty, galouti kebabs and an array of mouth-watering dishes, signified a celebration of the cuisines of South Asia. And bringing the leadership of the SAARC countries together for his swearing-in was a skilful manoeuvre from Indian Prime Minister Narendra Modi. It signified a celebration of South Asian democracy; all eight SAARC leaders are democratically elected.

The last time India and Europe stood at similar stages of historical development was in the 16th century. As Mughal Emperor Akbar expanded his empire across North India, Europe was experiencing plague deaths as well as terrible massacres and conquests. But at another level, a renaissance of learning and ideas was spreading fast across the continent. Thus began the rise of the Western civilisation. Thereafter, their paths diverged.

Today, South Asia faces the monumental challenge of meeting the basic need of its inhabitants for food, water, energy, healthcare, education and access to justice. In its essence the agenda facing all SAARC countries is the twin challenge of human development and economic betterment of its people: How to get incomes to rise, how to raise revenues for the state, how to build quality institutions and government capacity that can address this agenda. In 1980, China’s per capita income stood at $300, in line with SAARC countries.

Deng Xiaoping’s reforms had only just begun, premised as they were on de-collectivisation of agriculture, opening up to foreign direct investment and enforcement of a one-child policy. These measures were followed up by privatisation and allowing private enterprise.

Today China’s demographic dividend may be running out, but the average Chinese enjoys a per capita income nearly five times that of their South Asian counterpart. So where next for South Asia? Demographers and development specialists may differ whether South Asia’s demographic dividend would last another two decades or four. At any rate, without jobs this dividend becomes a liability. But these decades may represent South Asia’s last chance.

Modi’s challenges are domestic — slowing growth, rising inflation, an economy that is not creating enough jobs and where government finances are a mess. The expectations from him are huge, as is his burden of responsibility. The fact that India is riddled with corruption and crony capitalism further complicates matters. Economic engagement with Pakistan is probably peripheral, if at all visible on his radar at this stage.

Can Modi deliver? After all, what he did in Gujarat, can it not be scaled up, replicated in the rest of India? Some regard this sceptically; a “provincial” solution to a national problem. True, Modi made Gujarat India’s most favoured investment destination and in 2013 Gujarat bagged nearly a quarter of the country’s industrial investment proposals. Most of that success can be put down to the favourable incentives Modi’s Gujarat would offer to cut itself a larger slice of India’s cake — and this is not the same thing as India getting a bigger cake.

A case in point would be Tata’s decision to move the location of its automobile assembly plant for the Nano from West Bengal to Gujarat. From the left pocket to the right pocket. Similarly for FDI, once the decision to invest in India had been made in Tokyo, Seoul, London or Rotterdam the next step would be to select the site location. And Gujarat was where land acquisition was the fastest.

Granted, this may be a rather harsh evaluation of Modi’s performance in Gujarat; still the question is, can the South Asian governments in power today (and their successors) deliver in the next couple of decades what has eluded their predecessors in the last six? After all Deng Xiaoping did it in China. But unlike the Communist Party whose party structure was organised from the ground up, from the village commune to the politburo, South Asian governments have to depend on decaying colonial-era state structures for implementation, on bureaucracies and “babus”, who themselves represent a force of the status quo.

Beyond this organisational and institutional incapability it is the politics, prejudice, mistrust and territorial issues among states that keep things gridlocked. Yet there are successful examples of “bottom up” development initiatives in South Asia which include India’s Amul dairy farmers’ cooperative model, Pakistan’s Orangi Pilot Project and Bangladesh’s Grameen Bank and these ought to be replicated across South Asia.

The coming decades cannot afford to be squandered. The consequence of that would be catastrophic and would condemn too much of humanity to permanent backwardness and misery.

The writer was DG, Punjab Board of Investment & Trade, and has assisted the Planning Commission in developing Pakistan Vision 2025 and the 11th Five-Year Plan

By arrangement with Dawn