Is South Asia emerging?
By Shahid Javed Burki
Tuesday, 02 Jun, 2009
IF by ‘emerging’ we mean a geographic entity — a state or a region — that has achieved political and social stability and economic dynamism then the term cannot be applied to South Asia. It can only be used for India.
Over the last five years, specifically from 2004 to 2007, the Indian economy finally shook off a sluggish past when the country did not run but lumbered on.
GDP grew at an average rate of close to nine per cent a year compared to just 3.5 per cent in the 40-year period after independence. Income per head of the population grew by more than seven per cent per annum and the incidence of poverty has declined. Some of the cities and states in the country are showing signs of prosperity. The size of the middle class increased significantly; some 200 million people perhaps fall in this category.
The middle class exerts its influence on many aspects of Indian life, with a taste for consumption creating a large market for luxury goods. Indian movies and writers have developed audiences and readers outside the country’s boundaries.
Foreign investors began to take notice of the country, looking at it as a market they could move into and also as a supplier of trained human resource in a world experiencing demographic declines in several places. Large quantities of foreign capital arrived in the country; some of these went into reserves which increased to an impressive level. In 1991 then Finance Minister Manmohan Singh had taken a load of gold with him to London and Tokyo to borrow money to keep the country afloat and save it from bankruptcy. That is now a distant nightmare.
The IT sector continues to show great strength, making a significant contribution to exports. Some other sectors of the economy have also developed remarkably well, among them the health services and pharmaceutical industry. India has become an important destination of what has come to be called “health tourism”.
But can this progress be sustained? The country faces many problems which will have to be faced and overcome before it achieves the status of an economic superpower.
In an issue giving significant space to the Indian elections recently, The Economist provided a revealing summary of some of the problems that remain. “India is a land of bright promise. It is also extremely poor,” it was stated in the lead article. “About 27 million Indians will be born this year. Unless things improve, almost two million of them will die before the next general election. Of the children who survive, more than 40 per cent will be physically stunted by malnutrition. Most will enrol in a school, but they cannot count on their teacher showing up. After five years of classes, less than 60 per cent will be able to read a short story and more than 60 per cent will be stumped by simple arithmetic.”
Nonetheless, the term “emerging” can be easily applied to India. It cannot be to the rest of South Asia. India at this time has a very troubled neighborhood. The most troubled country in the neighborhood is, of course, Pakistan. Its economy is in a freefall. The Economist in the issue cited above estimated a GDP growth rate of only 0.6 per cent for 2009 compared to five per cent for India. Pakistan’s political system is showing signs of life but has a long way to go before it can become stable. Most important, the country is faced with what its senior officials have called an “existential threat”.
Until recently, the leaders of Pakistan showed
a lack of resolve in terms of dealing with the threat Islamic extremists were posing to the country’s integrity as a state. Islamabad first endorsed an agreement entered into by the NWFP government with a group operating in Swat and then, when it became clear that the group had no intention of abiding by the terms of the agreement that called for its disarming, the political leadership ordered the military to launch an all-out offensive against the militants. In contrast to the Indian society’s outlook on its country’s future is the total loss of confidence by the people of Pakistan in their future
Let’s look at Sri Lanka. The government there celebrated in mid-May the triumph of its military over the Liberation Tigers of Tamil Eelam. The rebel leader Velupillai Prabhakaran was killed in the operation. His fight against the Sri Lankan state and his quest for an independent country for the Tamils took the lives of some 100,000 people. The victory scored by the military after nearly 30 years of struggle can bring stability but the administration of President Mahinda Rajapaksa remains controversial.
At a recent meeting of parliament in which he declared victory over the rebels, 20 opposition chairs in the 225-seat chamber remained empty. They belonged to the Tamil National Alliance, the largest group of parties representing the Tamil minority, elected in the north and east of the island. Without full reconciliation with those members of the Tamil community that are prepared to operate within the political system, Sri Lankans will achieve neither political stability nor sustained economic progress.
Proceeding northeast from Sri Lanka along the Indian border and arriving at Bangladesh, we get to a county that is also struggling to find its feet. There are prospects of positive change after the country was returned to the elected representatives of the people in last December’s elections. For two years Bangladesh had been governed by a caretaker administration that first attempted to factor out established mainstream parties from the political system only to work out an arrangement with them for the transfer of power. This was achieved in January when Sheikh Hasina Wajed returned as prime minister as the head of a coalition dominated by the Awami League.
Nepal is also struggling mightily to define itself after having shed the monarchial system of governance that had gone awry. However, it is finding the road ahead a rocky one. Reconciling various disparate elements in the country is proving to be a more difficult task than was originally anticipated.All this raises an important issue. Can India afford to keep aloof from the rest of South Asia or does it have to help the countries around its periphery to become stable? My strong belief is that the Indians would do well to pause and reflect on how South Asia in peace and stability would help India achieve the big-power status. Without that the country could stumble.