South Asia has been one of the world’s success stories in terms of rapid economic growth. With India leading the way, South Asia’s poverty rate has fallen from 60 percent in 1981 to 40 percent in 2005. However, during the same period, the number of poor people—those living on less than $1.25 per day—actually increased from 549 million to 595 million over the same period.
Culture and Development
This is the third in a series of blogs where we take a look at the issues and the countries that will be at the forefront of the development agenda, not now, not next year, but over the next 2 to 5 years—thus, “after tomorrow”1.
There is now a budding consensus on what reduces poverty: it is
The World Bank estimates that there are more than 1.4 billion people in the world who live below the poverty line of $1.25 per day. It will be interesting to see what happens to children born in poverty: to follow them from womb to tomb, the entire life cycle. We now have several countries with detailed information in the form of living standard measurement and other surveys. There is a lot of country-by-country variation but the trends are unmistakable.
We took advantage of the recent ABCDE conference in Stockholm during May 31-June 2, 2010 to hold side discussions with 15 high-profile academics and researchers. We were expecting that they would tell us that economic development thinking should be revisited in the light of the crisis, but surprisingly, the responses were that likely no.
Notre Dame Cathedral in Paris, France
We economists tend to see well-being, and poverty in particular, as a matter of finances and income. But fortunately, at least in the Bank, we have come a long way from that simplistic view. Reducing poverty is not only about increasing productivity and income. It is about enabling people to have a broad sense of well-being and opportunities to express and make choices about their lives.
As the famous Bank series “Voices of the Poor” and the follow up “Moving Out of Poverty” have shown us, poverty is much more than lacking a steady or sufficient source of income. Being poor is being vulnerable: to crime and violence, to the lack of justice and access to services. Being poor means inability to negotiate, bargain, and get paid. Poverty, in a nutshell, is a kind of decline in social connectedness. So that’s why social solidarity and cultural identity are so relevant to poverty reduction.
One aspect of cultural identity is cultural heritage, an issue that was widely discussed at the 13th Annual International Symposium: Economic Benefits, Social Opportunities, and Challenges of Supporting Cultural Heritage for Sustainable Development, held May 20 – 22 at Word Bank headquarters in Washington DC. The conference, organized jointly with the U.S. National Committee of the International Council on Monuments and Sites, explored fascinating topics –from the contribution of cultural heritage to the development of sustainable communities, to the looting and illicit traffic of cultural treasures.
Do you remember The Bottom Billion, Paul Collier’s 2007 book which became a classic? If you do, you will certainly like his latest work, The Plundered Planet. He came to launch his new book to the Bank this week, and I found it both fascinating and provocative. Let me give some examples of why.
Professor Collier, now the Director of the Centre for the Study of African Economies at Oxford University, declares a two-front war on economists and environmentalists at the same time. He is against what he calls “utilitarian economists,” because if left on their own, they would end up plundering the planet. But Collier also takes on “romantic environmentalists,” who would be unable to eradicate hunger in case they’re given the chance to rule the world. So as you can see, the book’s premises don’t really fit into the script of the blockbuster, Oscar-winning movie Avatar.
For Collier, who also worked as the Bank’s Research Director some years ago, Nature is the lifeline for the countries of the bottom billion – and thus cannot remain untouched. With a strong faith in the power of well-informed ordinary citizens, Collier proposes a series of international standards that would help poor countries rich in natural assets better manage those resources. Technology, which enlarges the capacity of ordinary citizens, is also necessary to turn Nature into assets. But of course, in order to be effective and benefit the bottom billion instead of just the few at the top, regulation, which requires governance, is another seminal element of the equation to create prosperity. If you leave regulation out of the equation, as some Libertarians do, the result is nature plundered. But if you end up with too much regulation – curbing the use of Nature – and thus preventing technology, then the result is hunger. And I’m certainly not one of those radical, romantic environmentalists who can imagine a bottom billion who is hungry but happy.