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What Can be Done About Conflict in South Asia?

Ejaz Ghani's picture

What can be done to reduce conflict in poor regions? A speech given by Indian Prime Minister, Dr Manmohan Singh on Internal Security and Law and Order in 2005, sums up the story of conflict and development: “…development, or rather the lack of it, often has a critical bearing, as do exploitation and iniquitous socio-political circumstances. Inadequate employment opportunities, lack of access to resources, under developed agriculture, artificially depressed wages, geographical isolation, lack of effective land reforms may all impinge significantly on the growth of extremism...Whatever be the cause, it’s difficult to deny that extremism has huge societal costs. Investments are unlikely to fructify, employment is not likely to grow and educational facilities may be impaired. Direct costs would include higher costs of infrastructure creation as contractors build "extortions" into their estimates, consumers may be hurt due to erratic supplies and artificial levies. In all, the society at large and people at large suffer. Delivery systems are often the first casualty. Schools do not run, dispensaries do not open and PDS shops remain closed.”

Reducing conflict and violence is a prerequisite to political stability, which, in turn, is the prerequisite for implementing pro growth policies. Even in a best-case scenario, the presence of low-level conflict constrains the policies governments can implement to promote growth. Policy makers in South Asia have tried various policies to reduce conflict.

The Poor and the Middle Class

Eliana Cardoso's picture

Start counting the poor in India and you are bound to get into controversy. In “A Comparative Perspective on Poverty Reduction in Brazil, China and India,” Martin Ravallion (October 2009) calculates that 42% of the population in India in 2005 lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005). But he finds only 20% of the population under the US$1.25 poverty line when using a different method as a sensitivity test. The difference is huge. One number is twice the other and corresponds to two hundred million people (more than the whole population of Brazil!).

Ravallion repeats the exercise and finds that in Brazil, in 2005, the population who lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005) is 8%. When using the alternative sensitivity test method, it is 10%. Compared to India, the difference is small (2% of the population) between the two measures.

I suspect that instead of trying to calculate the number of people with less than US$ 1.25 a day, policies for poverty reduction should focus on the bottom quintile of the population: the 20% poorest group in the country.

One of my reasons is that inequality matters. Think of poverty as a relationship.