South’s development debacle compounded by SAARC’s inner paralysis

From a development point of view, it’s ‘the worst of times’ for the global South. The view of some of the most renowned development organizations is that the woes brought upon the hemisphere by the Covid-19 pandemic have probably stalled its development by decades. The inference is inescapable that the South would need to start from scratch as it were in its efforts to ease its material burdens, once the present health crisis shows signs of lifting.

A recent Jakarta Post/ANN news feature published in this newspaper on January 14th, detailing some of the dire economic fallout from the pandemic on the South said: ‘Between March and December 2020, the equivalent of 147 million full time jobs were lost in the Asia Pacific region. In 2020, the World Bank estimated that between 140 million people in Asia were pushed into poverty and in 2021 another 8 million became poor…..Vulnerable groups such as women, ethnic and religious minorities and migrant workers were worst affected. Across Asia, informal and migrant workers suffered an estimated 21.6 percent fall in their income in the first four months of the pandemic.’

Needless to say, being one of the least developed regions of the South and its most populous one, it is South Asia that is likely to be worst affected in the current global crunch. A phenomenon that should not go unnoticed in this connection, is the rising number of the ‘new poor’ in the South. This refers in the main to those sections of the middle class that are sliding into the lower middle class and the ranks of the poverty-stricken as a result of the ill-effects of the present crisis. Job loss and decreasing income are some of the causes behind this rising tide of pauperization.

Referring to this and connected processes the Institute of Policy Studies of Sri Lanka states in its ‘Sri Lanka State of the Economy 2021’report: ‘Estimates at the USD 3.20 poverty line are forecasted to be at least 228 million, with a larger share of the population emerging from South Asia yet again. Initial projections for 2021 estimate the number of individuals in extreme poverty to be between 143 and 163 million.’ The stark and widespread poverty emerging in Afghanistan since mid-August 2021, ought to push up these figures quite a bit.

Considering that the South is way behind the North in developmental terms, the unfolding global economic crisis could be expected to widen the chasm in material wellbeing between the hemispheres in the days ahead. However, ‘the overwhelming question’ for the South would be how it could fend for itself in the absence of those Southern-centred organizations that could take up its cause in the forums of the world and bring the region together in an effort to work towards its collective wellbeing. The importance of this question is strongly underscored by the fact that SAARC is more or less dysfunctional or paralyzed at present.

The immense magnitude of the poverty question is yet to be realized by the ruling elites of the South. It is as if the chimerical growth spurt in some sections of the South over the past 30 or so years has rendered them numb and insensitive to poverty-related issues, including the ever-yawning gulf within their countries between the obscenely wealthy and the desperately poor. As is known, while the so-called ordinary people of the South have been wilting in dire want over the past two years, the hemisphere has been producing billionaires in disconcertingly high numbers. This could be true of Sri Lanka as well and the Pandora Papers gave us the cue a few months back.

By burying their heads in the sands as it were in this manner, Southern political elites could very well be setting the stage for bloody upheavals within their states. The need for substantial ‘bread’ has always been a driver of socio-political change over the centuries. They are bound to find their problems compounded by the accentuation of ethnicity and religion related questions, considering that such issues are taking a turn for the worse amid the current economic debacle. Vulnerable groups would need to be cared for and looked after by rulers and these include women and ethnic minorities. An aggravation of their lot could compound the worries of Southern rulers.

The phenomenal increase of billionaires ought to be researched more intently and thoroughly by Southern think tanks, R and D organizations and the like. Among other things, does not this disquieting emergence of billionaires prove that classical economics was wrong in assuming that wealth would easily ‘trickle-down’ to the masses from wealth creators, such as businessmen and other owners of capital? After all, we now have clear evidence that mountainous wealth could exist amid vast wastes of poverty and powerlessness.

However, the view of some commentators that ‘neoliberal policies of privatization’ and connected issues should now be reassessed and even eschewed ought to strike the observer as worthy of consideration. These policies that enthrone free market economics should be viewed as badly in need of revision and correction in view of the inherently unstable economic systems that they have given rise to over the past three decades. Their serious flaws are thrown into strong relief by the present Southern economic crisis which has resulted in some isolated, formidable towers of wealth and opulence sprouting in a sea of hardship and economic want.

Hopefully, we would see a renewed wide-ranging discussion on development models from now on. Ideally, growth needs to go hand-in-hand with equity if development is to be achieved to a degree. There is no getting away from the need for central planning to some extent in our efforts to reach these ends. Capital and Labour would need to come together in a meeting of minds in these endeavours. Development thrusts would need to be launched on pragmatic considerations as well.

However, a regional approach to resolving these issues facing South Asia needs to be renewed and persisted with as well. As long as SAARC remains paralyzed such efforts are unlikely to bear full fruit. Accordingly, India and Pakistan, the regional heavyweights, need to negotiate an end to their differences and help rejuvenate SAARC; South Asia’s key collective body that could usher in a measure of regional development.