"India, Market Economics and Poverty" -- by Dr. John Hammock

I just returned from India. The magnitude of India is staggering. Over one billion people. India’s economy is booming. Economists gloat over the fact that India’s growth rate over the last few years has been dramatic—and they say it shows that the liberalization of market forces in India has worked.

It is true that the national Indian economy is growing. Things look rosy if we just look at that overall economic indicator of success. If you look under the surface of this one dimension, however, we see that India is still a country of staggering poverty. Over one third of the world’s poor live in India. It also has a higher proportion of its population living on less than $2 per day than even sub-Saharan Africa. That is the sobering news coming out of the World Bank's latest estimates on global poverty. The fine print of the estimates also shows that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005. In other words, the pro-market reforms, which started in 1991, have failed to reduce poverty at a faster rate.

While the rich have been getting richer in India and while the middle class has expanded, the poor in India have not seen the benefits of market-led economic growth. The disparity between rich and poor is growing.

I was in India to attend the Annual Conference of the Human Development and Capability Association, HDCA. This is an Association of academics and practitioners who believe that economics should be about more that increasing Gross Domestic Product, more than just focused on growth. The goal of economics should not just be growth. The goal must be the flourishing or wellbeing of all members of the society. Growth is one tool, but it must be combined with a concern for other aspects of wellbeing—such as education, health, security, even dignity and empowerment. While we do not hear in the United States from economists who believe that economic systems can be based on the notion of building from what people value and have reason to value (that is, on the ideas of personal wellbeing and freedom), these ideas are much more common in other countries.

We can see from our own economic woes, the losses on Wall Street, the collapse of large finance and banking ventures that our economy based on a purely free market system has not worked. Our government has come to the rescue of large businesses. But this is not the solution. The solution rests with the folks that attended the conference in India—a whole new way of looking at economics that puts people first, that allows government to play a crucial role in meeting the common good while preserving the market system. Now is the time not just to focus on the Millennium Development Goals. Of course these Goals are important. But we stand poised to reconsider our whole economic framework. We can hang on to a system that clearly does not work for the poor; it is now not even working well for the richer. Or we can look for an alternative. The Human Development and Capability economists provide us with an alternative—one that puts people first.

If you want to learn more about this approach to economics and in particular its approach to poverty, go to www.ophi.org.uk I work with the Oxford Poverty and Human Development Initiative, run by another EGR Board Member, Sabina Alkire (author of What Can One Person Do?: Faith to Heal a Broken World). OPHI is a research and policy effort that is challenging traditional economics and traditional conceptions of poverty. I urge you to join our cause.

I want to end with another note on India. India has recently passed the National Rural Employment Guarantee Act. This is a unique scheme that guarantees rural workers a minimum of 100 days a year of employment at the minimum wage. Of course the details are much more complex than this simple one liner. This is not charity; it is payment for an honest day of work. Sixty per cent of India's workforce is self-employed, many of whom remain very poor. More than 90 per cent of the labor force is employed in the "unorganized sector", i.e. sectors which don't provide the social security and other benefits of employment in the "organized sector." It is in this environment that one sees the radical nature of this rural employment guarantee act—a bold initiative to help people survive with dignity, not handouts. If you want to learn more about this, go to www.righttofoodindia.org.

Dr. John Hammock is an associate professor of Public Policy at the Friedman School of Nutrition Science and Policy & The Fletcher School, Tufts University. He is also currently working with Sabina Alkire as a senior research associate at the Oxford Poverty & Human Development Initiative, John was Executive Director at Oxfam America from 1984-1995 and Executive Director at ACCION International from 1973-1980. John is the president of the EGR board.

"Economic Disparities Contribute to Social Unrest in India" -- by Lallie Lloyd

A recent news article tells of sectarian violence between Hindus and Christians in Orissa, an impoverished state in northeast India that is fueled in part by the kind of economic differences targeted by the MDGs.
Christians have been attacked by mobs with using sticks, axes, swords and knives. Sixteen people have been killed, 1,600 homes destroyed, 80 churches and small prayer houses destroyed and 13,500 are estimated to be living in refugee camps. A nun from the order founded by Mother Theresa was among those attacked. Survivors say they recognized neighbors among their attackers.

What has prompted these attacks? Local tensions have been high since the August murder of a local guru associated with a radical Hindu group. While evidence suggests a Maoist group committed the murder, some local Hindu activists blame Christians.

I looked into this story and found a blog reporting on “Christian attacks on Hinduism.” I read a reference to an employee of World Vision who, the article implied, had been arrested by police.

I’ve known and trusted World Vision’s work for decades, and I wanted to know how they were reacting to the violence and particularly to the report that one of their employees had been arrested in conjunction with the murder.

So I called Word Vision. Turns out the employee was picked up by police when he was fleeing for his life, and was released after his identity was verified. He was never a suspect in the murder.

Part of the context here is that people are not receiving the health care and educations they need from their government. Despite India’s rapid economic growth, huge segments of the population are excluded from opportunity because of geography, social prejudice, health and education among other barriers. The New York Times notes, “Orissa has long suffered from government neglect, and Christian missionaries provide services, including schooling, much better than most residents receive from the government. While that has caused friction before, the stakes are higher now that better-educated people have more of a chance of joining the economic boom.”

Another part of the context is that many – but not all – Christians are Dalits, also known as “Untouchables.” In the traditional Indian caste system Dalits’ jobs dealt with dead animals and human waste, making the Dalits ritually impure. They were frequently segregated from higher caste people to avoid contamination. Though illegal, discrimination continues. During relief efforts after the tsunami of 2004, Dalits were not allowed to drink fresh water from the same sources available to other refugees. Not by law, but by custom, enforced by local authorities.

So, is the violence in Orissa based on religion, ethnicity or social class? The answer, of course, is all three.

Just as in Jesus’ time, poverty has many dimensions. The poor are outcast economically, socially and politically.

The MDG challenges facing India are enormous and are complicated by its vast size and social complexity. At a national level, some progress has been made:

• The proportion of the population living on less than $1 a day dropped from 41.8 percent in 1993 to 34.3 percent in 2004. This represents about 82 million people.

• The mortality rate for children under five has dropped from 123 per thousand live births in 1990, to 74 in 2005.

• The ratio of girls to boys in primary education increased from 87.4 girls to every 100 boys in 2000 to 96.1 girls to every hundred boys in 2004.

But much remains to be done:

• The proportion of children immunized against measles hasn’t changed since 1990.

• The number of women dying from complications of childbirth barely moved from 570 per 100,000 live births in 1990 to 540 in 2000 (this ratio in the US is 17; in Sweden it’s 2).

But even these numbers fail to tell the whole story.

Disparities within India are enormous. The national economy is huge, exceeding over $3.5 trillion in 2005. But the population is also huge: exceeding 1.1 billion (one-sixth of the world’s population live in India). In 2005, India’s per capita income was lower than Iraq’s or Cuba’s. Meanwhile expenditures on public health per person are about one-fifth the global average. Chronic hunger and preventable disease abound.

The violence in Orissa is not caused by religious differences alone, nor is it caused by poverty. Violence is caused by criminals who take by force what they cannot gain by legitimate means.

But the MDGs are directly relevant to the situation in Orissa. A robust social fabric – with, among other things, the rule of law, open markets, health care, education and clean water (all targets of the MDGs) – is less likely to spawn the despair that harbors and supports criminal activity. When income disparities increase and economic prospects expand for some and shrink for others, a scarcity mentality takes hold and it is human nature to look for someone to blame.
Ancient religious differences are as good a way to choose an enemy as are ethnic and class differences.

Jesus knew this too. And warned us against this temptation. His call to community and mutuality ia a call to love in action, a call to turn away from demonizing. Like other faith-based NGO’s World Vision provides direct services to people in stark need, as a witness to God’s love for all and until such time as they themselves, or their governments can meet the needs themselves.