Blog #2: On poverty and prosperity, lot done, lot to do
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.
The rapid decline in India’s poverty levels in the recent decade augurs well for the country’s efforts to eradicate poverty. Though the decline was faster and more broad-based than in the preceding decades, examples from across the developing world suggest it could have been more inclusive and responsive to economic growth.
Blog #1: Five key drivers of reducing poverty in India
India is uniquely placed to drive global poverty reduction. The country is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Despite an emerging middle class, many of India’s people are still vulnerable to falling back into poverty.
Over the next few weeks, this series will look back and analyze publicly available data to better understand what has driven poverty reduction from the mid-1990s until 2012, and the potential pathways that can lead to a more prosperous India. Since it is clearly not feasible to elaborate on all the myriad pathways out of poverty available to India, we focus on a few key themes that the diagnostics show to be of particular relevance to the country. We hope this series will contribute to the ongoing discussions on how poverty can be eliminated from India.
We are thankful to the Indian Express for partnering with us in disseminating this series to its readers.
As anyone who has travelled around the country will testify, India is marked by glaring spatial disparities in well-being. On the one hand, New Delhi is relatively prosperous, and if you visit the recently renovated Connaught Place, you will find not only a bustling outdoor market, but also designer shops, upmarket restaurants and a gleaming new metro station.
However, take the Prayagraj Express train east for seven hours and you will find yourself in Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high.
Such large variations in well-being are a natural cause for concern among India’s policymakers and have generated intense interest in India’s spatial landscape of potential for economic development. Is it the case that less prosperous parts of the country lack the basic ingredients that can give rise to the high productivity that economists believe provides the key to well-being or is it the case that, while they may possess some of these ingredients, they are failing to make the most of them?
The Economic Potential Index
In an effort to provide some insights into both this and other key questions related to India’s spatial development, we have recently published a working paper that examines underlying variations in “economic potential” across Indian districts.
Our analysis is based on a composite “Economic Potential Index” ( EPI) that measures, in a single summary score, the extent to which a district possesses attributes that can be considered “universally” important to achieving a high local level of productivity, whether or not a high productivity level is currently actually observed.
When I first visited the college town of Madison, Wisconsin (USA) in 2000, what first stood out wasn’t its beautiful university campus or its famous brat and beer combo. What caught my attention was a public bus which had the equipment to lift a wheelchair. “Beep, beep, beep,” a sound would signal as the bus would lower and extend a ramp to aid people in wheelchairs to board the bus.
At that time, I had never seen anything like this bus and thought, “Wow! Why can’t we have such services back in my country?” No such buses existed in Korea where I grew up. But more than just the bus, I remembered thinking that I rarely noticed people with special needs in Korea. In hindsight, the lack of support and consideration for people with disabilities and ignorant attitudes were also reasons why people with disabilities were rarely seen in public.
Addressing needs through action
In 2014, I became the task leader for Bangladesh’s Disability and Children at Risk (DCAR) project. The difficult situation faced by persons with disabilities in the country was a reminder of the contrast I had experienced in that college town. Accessible transportation was not the only service lacking for people with disabilities. There was a lack of access to health facilities for checkups and treatment along with a short supply of therapy equipment and wheelchairs. A lack of respect towards persons with disabilities by the wider public was also a challenge. Moreover, the project was not delivering the results that it expected to achieve.
Imagine a school that teaches knowledge and provides hands-on training. A place where students express confidence in their skills, and are excited to make a difference in their future jobs. A bastion of confidence and optimism, where 100% of graduating students have jobs lined up before graduation.
Sounds too good to be true? I found this haven at the University of Moratuwa’s Department of Textile and Clothing Technology, supported by the Higher Education for the 21st Century Project (HETC), which is designed to modernize education by its increasing its quality and relevance. 24-year-old Malaka Perera, who is graduating next month, told me how the program has helped him build a foundation for his career. “The program taught me how to deal with people, along with communications and problem solving skills that I used during my internship. As a result, finding a job was quite easy.”
Sri Lankans have enjoyed the benefits of broad education access for decades, which has allowed the country to build human capital to rise and become a middle income country. However, as a country with rising aspirations in an increasingly globalized world and competitive region, the quality and relevance of its education system is key for the country to maintain its edge and reach new heights.
One year ago today, the first in a series of massive earthquakes rocked Nepal. Nearly 9 thousand people lost their lives in the disaster. Over 20 thousand people were injured – many critically. As many as 450 aftershocks have shook the country since.
In all, the earthquakes upended the lives of 8 million Nepalis – nearly a third of the population. The devastation was wide-spread: the Government of Nepal led an extensive exercise to assess the damages and losses, which a Post Disaster Needs Assessment estimated in the order of US$7.1 billion. As it turned out, the poorest and the most vulnerable communities were hit the hardest. The government estimates that the disaster pushed nearly 1 million Nepalis back into poverty.
From private homes to public infrastructure; and farms, businesses and historical monuments – hardly anything was spared in the trail of destruction. But from the government’s own assessment, rural housing stood out as one area of greatest need, in excess of US$1.2 billion. Early on, the government estimated that over half a million homes were destroyed.
In June last year, exactly two months after the first earthquake, 56 governments and international organizations came together in Kathmandu and pledged US$4.1 billion in reconstruction assistance. The World Bank Group was among them. At the International Conference on Nepal’s Reconstruction, the Bank Group offered a financial package of up to US$500 million.
Soon after the earthquakes, the Government of Nepal promised NRs. 200,000 (approximately US$1,900) in assistance to each family rendered homeless by the calamity. TheEmergency Housing Reconstruction Program, supported by the World Bank and the governments of Japan, the United States, Switzerland and Canada, is designed to make good on that promise.