[Fwd: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

[Basudeb Chaudhuri]

Dear Professor Bhagwati,

thank you for your mail, its a pleasure to get a comment from you. Your
point is taken, I have not read you using the word "soft" to
characterize reforms. It has been used elsewhere in the planning
literature and by its critics.

As far as I know, Professor Sen has not criticized directly Manmohan
Singh (or you ) on the reform question , I should have detailed this
point more clearly. Recently, Professor Sen criticized the Prime
Minister directly for India's engagement with the Burmese regime, which
obviously has economic implications in terms of India's strategic and
energy interests. Having read both you and Professor Sen from student
days, as many other economists have, I think it can be said that
Professor Sen has not been negative about the post 1991 reforms.

Cordially yours
Basudeb Chaudhuri.

CUTS-TradeForum wrote:
> From: Professor Jagdish Bhagwati
>
> The terminology Stage 1 and Stage 2 does not imply that Stage 2 is
> somehow "soft"!!!! This is Mr. Chaudhuri's idea, not mine! I
> introduced this distinction (though calling the two direct and
> indirect impacts on poverty) in discussing the impact of the growth
> strategy some 2 decades ago in my Vikram Sarabhai Lecture in
> Ahmedabad; the Lecture is reprinted in one of my collections with MIT
> Press.
>
> Second, Stage 2 reforms were in fact part of our overall strategy for
> development: they are in the earliest Plans and in Programme
> Evaluations as well! What prevented them from being implemented was
> principally the revenue constraint.
>
> As for Professor Amartya Sen, I doubt that he has criticised the Prime
> Minister and me; Mr. Chaudhuri probably got it wrong. But if Sen has
> done so, he is hardly the person to throw stones at us. One can
> legitimately argue that his implicit and explicit endorsement of the
> pre-reforms policy framework contributed to the abysmal growth and
> hence the muted assault on poverty which many have now documented!
> Talking about poverty and doing something effective about it are two
> different things, I am afraid.
>
> Professor Bhagwati
>
>
> On Dec 8, 5:21 am, Basudeb Chaudhuri <basudeb.chaudh...@csh-delhi.com>
> wrote:
>
>> That poverty has diminished in India is statistically true, even if experts
>> quibble about the extent of the decrease in poverty. However, it is
>> unfortunate that an intellectual and economist of the stature of Professor
>> Jagdish Bhagwati should label education and health as second stage reforms
>> as opposed to deregulating the economy, which he calls first stage reforms.
>> The idea that education and health are the "soft" areas of development, that
>> come after the "hard " or more important areas such as industrialization or
>> physical infrastructure (building dams) - is symptomatic of the deeply
>> flawed thinking, for over 50 years, of both the Indian planning milieu and
>> the Congress Party that promoted this vision of development. In Asia, if
>> Japan, South Korea and China are all much better off than India today, it is
>> quite simply education - the depth of their creation of human capital - that
>> has driven the difference in their growth trajectories in international and
>> comparative terms. The seminal research of Robert Lucas and particularly
>> Roland Benabou clearly shows the role of human capital in development, and
>> how segregation and social stratification that denies public goods to a part
>> of society can handicap long term growth prospects. Professor Bhagwati is
>> undoubtedly aware of this. He should not hesitate to criticise his friend
>> the Prime Minister, as Professor Amartya Sen, who stresses the liberating
>> and capability enhancing role of education, often does.
>> Basudeb Chaudhuri
>> Centre de Sciences Humaines, New Deelhi
>>
>
>

--
Basudeb Chaudhuri

Directeur/Director, Centre de Sciences Humaines
UMIFRE No. 20 MAEE-CNRS
Directeur Adjoint/Adjoint Director USR (Unit� de Service et de Recherche CNRS) 3330 "Savoirs et Mondes Indiens"
(Research Unit of the French External Affairs Ministry and CNRS)
2, Aurangzeb Road
New Delhi � 110 011
Tel. : +91 11 30 41 00 70
Mobile : 00 91 98183 48246
Fax : +91 11 30 41 0079
Email : basudeb....@csh-delhi.com
Website : http://www.csh-delhi.com

De France :
c/o service de la Valise diplomatique
Minist�re des Affaires Etrang�res et Europ�ennes
Sous-direction du Courrier, de la Valise diplomatique et des Transports
13 rue Louveau
92438 Chatillon Cedex

--
Basudeb Chaudhuri

Directeur/Director, Centre de Sciences Humaines
UMIFRE No. 20 MAEE-CNRS
Directeur Adjoint/Adjoint Director USR (Unit� de Service et de Recherche CNRS) 3330 "Savoirs et Mondes Indiens"
(Research Unit of the French External Affairs Ministry and CNRS)
2, Aurangzeb Road
New Delhi � 110 011
Tel. : +91 11 30 41 00 70
Mobile : 00 91 98183 48246
Fax : +91 11 30 41 0079
Email : basudeb....@csh-delhi.com
Website : http://www.csh-delhi.com

De France :
c/o service de la Valise diplomatique
Minist�re des Affaires Etrang�res et Europ�ennes
Sous-direction du Courrier, de la Valise diplomatique et des Transports
13 rue Louveau
92438 Chatillon Cedex

[Pradeep S Mehta]

There is no disagreement on the fact that economic reforms have helped to
reduce poverty and raise the standard of living in India, though the
progress in this direction should continue before we reach the desired
levels. Professor Bhagwati has supported Indian reform process and its
outcomes based on hard facts which one can verify from available data. The
fact that the unreasonably high expectations held by some about the poverty
reducing impacts of reforms are not met does not nullify the effectiveness
of Indian reform process in addressing the issue. There are many empirical
studies that demonstrate that trade liberalization has a positive impact on
income of the poor people, and thus make significant contribution in
economic development of them. India has experienced this as asserted by
Prof. Bhagwati.

In an empirical work Trade, Growth, and Poverty (spanning 100 countries),
Dollar and Kray, using decade-over-decade changes in the volume of trade as
an imperfect proxy for changes in trade policy, presented the evidence that
trade liberalization leads to faster growth of income and that this growth
in average income in turn increases income of poor proportionately. The
study found that changes in growth rates are highly correlated with changes
in trade volumes. The authors also came up with similar results in another
study titled "Growth Is Good for the Poor," which examines the impact of
growth-enhancing policies on the income of the bottom 20 percent of the
income distribution.

The above finding is corroborated by other studies. The results of a UNCTAD
study shows that in the case of China during the 20 year period, 1981-2001,
the trade-gross domestic product (GDP) ratio registered a three fold
increase from 15 to 45 percent. During the same period, its poverty
incidence also declined at an unprecedented rate: the national poverty
headcount ratio, i.e. the proportion of population living below the poverty
line, fell from 52 to just about 7 percent.

A study by CUTS International covering 15 countries in Southern and Eastern
Africa, South and Southeast
Asia, and Europe, explored the linkages between trade, development and
poverty reduction. This study established the potential of trade on poverty
reduction and human development unequivocally and found that there are many
channels, direct and indirect, through which benefits accrue to the poor.

As far as the debate on stages of reforms is concerned, Prof. Bhagwati's
assertion was not at all about sequencing of the hard and soft areas of
development as stage 1 and 2 respectively, but simply this; the first phase
of policies for achieving accelerated growth not only helped to lift a
considerable share of poor population out of poverty, but it also has
considerably enlarged the Government's purse giving more space for
increasing budgetary outlays on soft areas like unemployment allowance,
education and health and
thereby raising the overall effectiveness of reform measures and
consequently speeding up the pace of poverty alleviation. This assertion is
also equally true and valid and in the coming years the situation of public
provision of health and education is only going to improve in proportion
with the overall economic growth.

One key factor that should be remembered
here is that spending a lot of money on health care and education itself
might not have brought in the desired impact in the absence of effective
demand
and awareness about the heath and education services in India. This is
especially so when there is lack of empowerment, due to whatever reason.
Economic empowerment gradually will (in fact it has already started) bring
about awareness about the usefulness of education amongst the lowest strata
of the society and generate real demand for health and education services
coming from the end users. Only this demand coinciding with subsidised
provisioning from the government is going to radically improve health and
education situation in India.

Pradeep S Mehta and the team at CUTS International

[Nitya Nanda]

Dear Pradeep,

Poverty reduction started happening in India since mid-1970s even though
India was not doing quite well then in terms of economic growth. This could
have been possible probably because of direct poverty reduction measures
adopted by Mrs Gandhi. Poverty has been falling since then but of course as
you also recognised, one might question if poverty reduction rates have
been high enough along with higher growth rates

It is also more or less agreed by the economists that economic growth
accelreated right in the begining of 1980s a full decade before economic
reforms started. However, in my view, India followed a growth pattern
throughout the post-Independence history (My article:“The Indian Growth
Story: Myths and Realities”, Journal of Asian and African Studies, 44 (6),
pp74-765). All along industry and services have experenced much higher
growth period compared to agriculture. Services have always seen highest
growth. Thus in 1950s when industry and services were doing well, the
overall growth could not be very high because agriculture growth was not
very high but its share in GDP was almost 60 percent. However, this uneven
growth rates ensured that the share of agriculture fell down drastically
while that of services went up. Thus now the share of services is about 55
percent and a high growth in services pulls up the overall GDP growth rate
and low gorwth in agriculture does not have a major adverse impact on GDP
growth rate.

It would also be unfair to ignore the fact that in 1950, our savings rate
was about 10 percent which has gone up to 35 percent now.

There was also some deviation from the pattern of course in 1960s and 1970s
as we went from crisis to crisis on several counts: China war in 1962, Pak
war in 1965, successive droughts, Bangladesh war in 1971, oil shocks in
1973 and 1979 and emergency and other political uncertainties.

There is also serious problem with the work of Dollar and Kraay on trade,
growth and poverty (Chapter 2 of my book: Expanding Frontiers of Global
Trade Rules: The Political Economy Dynamics of the International Trading
System, Routledge, London & New York, p224). If you look at the diagrams
provided in their paper, you will be surprised to see that "globalizers"
identified by them had LOWER trade/GDP ratio and HIGHER average tariffs
than "non-globalizers". For them, if your tariff was at 90% and you brought
it down to 70%, you will be considered a globalizer but if your tariff was
10% but you did not change it, you will be a non-globalizer! Or if your
trade/GDP ration went up from 15% to 18%, you will be a globalizer, but if
your trade/GDP ratio went down from 90% to 88%, you will be a
non-globalizer. So in actuality even their own paper shows that countries
with higher tariffs had higher growth rates!!

I of course do not have any major disagreement with the other paper by them
cited by you. Growth is, by and large, good for the poor.

This of course does not prove that there is no need for reforms as economic
policies cannot be static and they have to change over time. The question
is what kind of reforms you will need.

In economic analysis one cannot say anything with 100% certainty. This is
because we do not have counterfactuals. One can argue that reforms in 1990s
were necessary to maintain the growth momentum, there is no way we could
prove or refute this with 100% confidence. Similarly, if one argues that we
could not grow even by 3% had we not followed a planned model in 1950s, may
be she is right!

Regards,

Nitya Nanda
Fellow
Centre for Global Agreements, Legislation and Trade (GALT)
Resources, Regulation and Global Security Division
The Energy and Resources Institute (TERI)
India Habitat Centre
New Delhi 110 003
Ph: +91 11 2468 2100 Ext 2314
Fax: +91 11 2468 2144
Mobile: +91 99107 12225



"Pradeep S Mehta"
<p...@cuts.org>
Sent by: To
FunCompForum@yaho <FunCom...@yahoogroups.com>
ogroups.com cc
<cuts-tr...@googlegroups.com>
Subject
12-21-10 11:52 AM [FunCompForum] Re: [FunComp Forum]
Re: IT'S A MYTH THAT REFORMS ARE
NOT HELPING THE POOR

Subject: Re: [FunComp Forum] Re: IT'S A MYTH THAT REFORMS ARE NOT HELPING
THE POOR

Dear Professor Bhagwati,

Thank you for your mail, its a pleasure to get a comment from you. Your

point is taken, I have not read you using the word "soft" to characterize
reforms. It has been used elsewhere in the planning literature and by its
critics.

As far as I know, Professor Sen has not criticized directly Manmohan Singh
(or you ) on the reform question , I should have detailed this point more
clearly. Recently, Professor Sen criticized the Prime Minister directly for
India's engagement with the Burmese regime, which obviously has economic
implications in terms of India's strategic and energy interests. Having
read both you and Professor Sen from student days, as many other economists
have, I think it can be said that Professor Sen has not been negative about
the post 1991 reforms.

Cordially yours

Basudeb Chaudhuri

CUTS-TradeForum wrote:
From: Professor Jagdish Bhagwati

The terminology Stage 1 and Stage 2 does not imply that Stage 2 is somehow
"soft"!!!! This is Mr. Chaudhuri's idea, not mine! I introduced this
distinction (though calling the two direct and indirect impacts on poverty)
in discussing the impact of the growth strategy some 2 decades ago in my
Vikram Sarabhai Lecture in Ahmedabad; the Lecture is reprinted in one of my
collections with MIT Press.

Second, Stage 2 reforms were in fact part of our overall strategy for
development: they are in the earliest Plans and in Programme Evaluations as
well! What prevented them from being implemented was principally the
revenue constraint.

As for Professor Amartya Sen, I doubt that he has criticised the Prime
Minister and me; Mr. Chaudhuri probably got it wrong. But if Sen has done
so, he is hardly the person to throw stones at us. One can legitimately
argue that his implicit and explicit endorsement of the pre-reforms policy
framework contributed to the abysmal growth and hence the muted assault on
poverty which many have now documented! Talking about poverty and doing
something effective about it are two different things, I am afraid.

Professor Bhagwati

On Dec 8, 5:21 am, Basudeb Chaudhuri <basudeb....@csh-delhi.com>

wrote:

That poverty has diminished in India is statistically true, even if experts
quibble about the extent of the decrease in poverty.

However, it is unfortunate that an intellectual and economist of the
stature of Professor Jagdish Bhagwati should label education and health as
second stage reforms as opposed to deregulating the economy, which he calls
first stage reforms.

The idea that education and health are the "soft" areas of development,
that come after the "hard " or more important areas such as
industrialization or physical infrastructure (building dams) - is
symptomatic of the deeply flawed thinking, for over 50 years, of both the
Indian planning milieu and the Congress Party that promoted this vision of
development. In Asia, if Japan, South Korea and China are all much better
off than India today, it is quite simply education - the depth of their
creation of human capital - that has driven the difference in their growth
trajectories in international and comparative terms.

The seminal research of Robert Lucas and particularly Roland Benabou
clearly shows the role of human capital in development, and how segregation
and social stratification that denies public goods to a part of society can
handicap long term growth prospects. Professor Bhagwati is undoubtedly
aware of this. He should not hesitate to criticise his friend the Prime
Minister, as Professor Amartya Sen, who stresses the liberating and
capability enhancing role of education, often does.

Basudeb Chaudhuri

--------------------

Basudeb Chaudhuri
Directeur/Director, Centre de Sciences Humaines
UMIFRE No. 20 MAEE-CNRS

Directeur Adjoint/Adjoint Director USR (Unité de Service et de Recherche

CNRS) 3330 "Savoirs et Mondes Indiens"
(Research Unit of the French External Affairs Ministry and CNRS)

2, Aurangzeb Road, New Delhi – 110 011

Tel. : +91 11 30 41 00 70; Mobile : 00 91 98183 48246; Fax : +91 11 30 41
0079
Email : basudeb....@csh-delhi.com
Website : http://www.csh-delhi.com

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[CUTS-TradeForum]

From Vivek Agarwal:

Respected Pradeep Mehta Ji,

I have gone through your above referred article viz. It’s a Myth that
reforms are not helping the poor and wholly agree with you that
reforms have definitely helped in raising the standard of living in
India and has also helped in better earnings for majority of people.
But, it is also equally true that unlike other countries like China,
we have not been able to check inflation and corruption. These two
factors have ‘egg and chicken’ dimension in as much as corruption does
contribute towards inflation and inflammatory economic trends promote
corruption.

Truly speak the economic reforms are not contributing to reduce the
gap in as much as India still lacks to provide education to its masses
at an affordable price. Another example is the health care. It is
true that reforms have brought better health care facilities and
liberalization has helped in opening of several multi-specialty
hospitals with excellent infrastructure but the rates at which incomes
have grown, it has not been able to keep pace with growing costs of
medical care and medical care is still an illusion for many who with
nominal incomes were able to access government hospitals earlier.
Earlier government hospitals were catering to people up to middle
class, but now even they are not within the reach. These two examples
coupled with the fact that inflation has taken two basic commodities,
viz. house and food to such levels that most of the income is being
spent on these two commodities.

It is also amazing that with reforms though the incomes have gone up
but at the same time, facilities like unhindered access to electricity
and water at affordable price is still a distant dream. There cannot
be any denying that reforms have helped reduce poverty but it is also
equally true that social fabric is in disarray and the moral values
have taken a nose dive. Today, many sectors which are fundamental to
existence viz. education and health are unregulated and are in urgent
need of independent sectoral regulators. The assertion that public
provision of health and education is going to improve in proportion
with the overall economic growth appears to be contradictory in the
light of the above facts. Thus, it is submitted that there is need to
check corruption bring more transparency in everything and strengthen
the disclosure mechanisms so that each service provider discloses the
cost of service and percentage of profit earned by it, then only we
can expect reforms to really reduce poverty and if we failed to answer
this demon of corruption right now then future is brightly bleak.

With regards

Vivek Agarwal
-------------------------------
Vivek Agarwal
Advocate
Consortia Juris
HIG-10, Near Motal Shiraz, Shivaji Nagar,
Bhopal 462 016
Madhya Pradesh
Phone_R: 91-755-257 6664
Cell: 91-98932 16231
Email: vive...@yahoo.co.uk

[CUTS-TradeForum]

Dear Pradeep:

I agree with you that “economic empowerment gradually will (in fact it

has already started) bring about awareness about the usefulness of
education amongst the lowest strata of the society and generate real

demand for health and education services coming from the end users.”
But how do we accelerate the speed of economic empowerment, given the
current state of governance? I have done some work in this area
("Evaluation of Governance: A Study of the Government of India's
Outcome Budget", Journal of Development Effectiveness, Volume 2,
Number 4, December 2010) and my assessment is that the picture is not
as good as you seem to believe it is.

Anand
--------------------------
Anand P. Gupta
Director, Economic Management Institute
6020, Sector B/8
Vasant Kunj
New Delhi 110 070

Formerly Professor of Economics
Indian Institute of Management, Ahmedabad

Phone: (91 11) 2613 2204; Fax: (91 11) 2613 1562
Mobile: (91) 98111 10720; www.EconomicManagement.com
an...@EconomicManagement.com

> Email: vivek_...@yahoo.co.uk

[CUTS-TradeForum]

In the context of India, views of leading economists such as Professor
Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
whether growth alone can lead to poverty eradication or it needs to be
accompanied by entitlements and targeted aid to the poor.

A news report by the Delhi-based FT Correspondent, James Lamont
entitled "High growth fails to feed India’s hungry", published in
Financial Times on December 22, 2010, highlights difference in
opinions among academicians about the percolation of benefits of
economic growth in India. He emphasises on the inequitable
distribution of the fruits of economic growth among various states,
which have lead to the development of a dualistic economy. The
newsclip can be accessed at http://www.cuts-citee.org/High_growth_fails_to_feed_Indias_hungry.htm.

Parts of this newsreport emanates from the debate on growth and
development conducted on our e-group: CUTS-TradeForum, following
Jagdish Bhagwati's address to the Indian parliament on 2nd December.
We received wide responses.

[Arvind Panagariya]

I think the post below misrepresents what James Lamont wrote in the
FT. As far as am able to make out Lamont did NOT point to there being
a debate between those who believe that only growth matters and those
who argue that growth must be accompanied by targeted social programs.
This debate may also exist but it is not the one reported in the piece
by Lamont.

As I understand it, Lamont refers to Professor Sen as saying that
preoccupation with accelerating growth is "stupid". Seen in the light
of his other writings, Professor Sen's view is: stop worrying about
growth and focus on social programs that directly target poverty, low
nutrition etc.

Professor Bhagwati, on the other hand, is saying that targeted social
programs are important because they supplement the favorable effect
that the last two decades of reform-led high and rising growth has
demonstrably had on poverty, nutrition etc. High and rising growth has
helped poverty alleviation by (i) pulling the poor up into gainful
employment; and (ii) providing larger volume of revenues without which
social programs could not be adequately financed.

Professor Bhagwati ALSO points out that social programs are NOT a
novel idea but had always been a part of our development agenda.
However, they did not go very far principally because low incomes at
independence and slow growth subsequently meant there were simply not
enough revenues to carry out social programs on a large enough scale.

The only way to justify Professor Sen's position is to accept all of
the following (rather implausible) assumptions:

(i) Current income levels (which are themselves much higher because of
the success of our growth strategy during the last two decades) and
accompanying revenues are good enough to finance the social programs
in the depth and breadth we want;

(ii) Paying attention to policies that help sustain or accelerate the
current growth will necessarily divert us from undertaking the
necessary social programs; and

(iii) The diversion of resources to social programs will be
politically and otherwise sustainable even though growth declines or
that the social programs will themselves ensure that no decline in
growth takes place.

Arvind Panagariya
Professor of Economics
Columbia University
School of International & Public Affairs
420 West 118th Street 1129 IAB
New York NY 10027
Web page: WWW.Columbia.Edu/~ap2231/
--

[CUTS-TradeForum]

From: Martin Wolf

May I add a point.

It is not growth, but levels, of income that matter. India is still a
very poor country: GDP per head at PPP is less than 10 per cent of US
levels. There is no doubt at all that poverty could and would be lower
at much higher income levels. So the point of fast growth is TO GET
THERE AS QUICKLY AS POSSIBLE. Why not? That is obviously better than
letting the lives of generations be needlessly blighted.

Obviously, higher incomes are a necessary condition for better state-
funded welfare, better jobs and so forth. This is simply not
debatable. Indeed, only in India, do serious intellectuals dream of
debating these issues.

Martin Wolf

Financial Times
1 Southwark Bridge,
London SE1 9HL.

> Quoting CUTS-TradeForum <cutsci...@gmail.com>:
>
>
>
> > In the context of India, views of leading economists such as Professor
> > Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
> > whether growth alone can lead to poverty eradication or it needs to be
> > accompanied by entitlements and targeted aid to the poor.
>
> > A news report by the Delhi-based FT Correspondent, James Lamont
> > entitled "High growth fails to feed India’s hungry", published in
> > Financial Times on December 22, 2010, highlights difference in
> > opinions among academicians about the percolation of benefits of
> > economic growth in India. He emphasises on the inequitable
> > distribution of the fruits of economic growth among various states,
> > which have lead to the development of a dualistic economy. The
> > newsclip can be accessed at  
> >http://www.cuts-citee.org/High_growth_fails_to_feed_Indias_hungry.htm.
>
> > Parts of this newsreport emanates from the debate on growth and
> > development conducted on our e-group: CUTS-TradeForum, following
> > Jagdish Bhagwati's address to the Indian parliament on 2nd December.

> > We received wide responses.- Hide quoted text -
>
> - Show quoted text -

[CUTS-TradeForum]

From: Professor Jagdish Bhagwati

It is nonsense to suggest that I or anyone else have argued that growth is
the ONLY policy instrument that matters! Not just my Lok Sabha lecture but
also more than 20 years of my writings on Poverty and Public Policy and my
work in the Planning Commission in the early I960s and my work on CSR and
with Human Rights Watch, SA 8000 etc show an acute attention to added
instruments to have a bigger impact on poverty. These writings also include
pioneering articles in the 1970s on gender discrimination on nutrition,
education and politics & on immigration from the viewpoint of both economics
and ethics (including human rights) when the subject was considered too
esoteric to be of interest to economists.

Just read my writings including the full text of my Lok Sabha speech which
is available on the Lok Sabha website and on my website also at
www.columbia.edu/~jb38

I should add that, given the routine obfuscations by many and not just
Professor Sen, I have inserted a direct critique which I was avoiding so
far, at the end of my contribution to the Meghnad Desai festshrift which I
attach.

I also endorse the subsequent contributions of Martin Wolf and Arvind
Panagariya which show why the alleged Sen position is untenable whereas
mine, which Sen seems to have angrily rejected in James Lamont's fine FT
piece as "stupid" (!!!), is the appropriate one.

Professor Bhagwati

----- Original Message -----
From: "CUTS-TradeForum" <cuts...@gmail.com>
To: "CUTS-TradeForum" <cuts-tr...@googlegroups.com>
Sent: Tuesday, December 28, 2010 6:15 PM
Subject: Re: Professor Bhagwati on growth and poverty]

In the context of India, views of leading economists such as Professor
Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
whether growth alone can lead to poverty eradication or it needs to be
accompanied by entitlements and targeted aid to the poor.

A news report by the Delhi-based FT Correspondent, James Lamont

entitled "High growth fails to feed India�s hungry", published in

[CUTS-TradeForum]

From: Sanjay Sinha

While I agree with Arvind Panagariya's interpretation of the James
Lamont piece in the FT, I feel his scepticism of Prof Sen's position
is misplaced. There is a strong argument for the Government placing a
greater focus on health and education while facilitating growth
particularly by promoting infrastructure development. For the rest,
there is sufficient momentum in the ecoonomy to enable growth to
continue. I do not see the growth rate slowing down simply because
the focus of the government has shifted to the social sphere. India
has the dubious distinction of being home to the largest number of
"absolute poor" people in the world and improving their status would
both fuel growth and be a desirable end in itself.

Sanjay Sinha

Managing Director
Micro-Credit Ratings International Limited | 602 Pacific Square, 32nd
Milestone NH8 |
Gurgaon 122001, India
Tel: + 91 124 230 9497, 230 9707, 426 8707 | Fax:+91 124 230 9520
www.m-cril.com

On Dec 28, 10:05 pm, Arvind Panagariya <ap2...@columbia.edu> wrote:

> Quoting CUTS-TradeForum <cutsci...@gmail.com>:
>
>
>
> > In the context of India, views of leading economists such as Professor
> > Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
> > whether growth alone can lead to poverty eradication or it needs to be
> > accompanied by entitlements and targeted aid to the poor.
>
> > A news report by the Delhi-based FT Correspondent, James Lamont
> > entitled "High growth fails to feed India’s hungry", published in
> > Financial Times on December 22, 2010, highlights difference in
> > opinions among academicians about the percolation of benefits of
> > economic growth in India. He emphasises on the inequitable
> > distribution of the fruits of economic growth among various states,
> > which have lead to the development of a dualistic economy. The
> > newsclip can be accessed at  
> >http://www.cuts-citee.org/High_growth_fails_to_feed_Indias_hungry.htm.
>
> > Parts of this newsreport emanates from the debate on growth and
> > development conducted on our e-group: CUTS-TradeForum, following
> > Jagdish Bhagwati's address to the Indian parliament on 2nd December.

[CUTS-TradeForum]

From: S L Rao

There can be no arguing that growth does reduce poverty. It has also
greatly increased inequality.

It has increased the financial capability of our governments to spend
on the poor and on infrastructure. But it has also increased the
leakage, wastage, inefficiency and theft, as a result of which a good
part of such expenditures do not reach the people they are meant for.

It is I think in this background that there is argument against facile
statements that 'inflation is acceptable' if there is growth - a
statement attributed to top economic policy makers in this government
who also talk of 'inclusive' growth. They forget that inclusion is
difficult when food inflation has immediate adverse effects on the
poor.

Growth cannot be an objective by itself. It has to be accompanied by
moderate inflation, by adequate social services, nutrition, health and
education for the deprived. Services like NREGA must reach the people
they are meant for, in full. Indian growth has been lopsided, with
focus on services and not on the real economy of agriculture and
industry, volatile foreign fund inflows and stock markets, large
government debt and deficits, as well as current account deficits-
reminiscent of the American economy except for high household savings
and GDP growth, without the strength and standing of the American
economy.

We must rebalance our growth, moderate food inflation, ensure minimal
food security and services for the poor. if that means that growth
numbers are lower, we must accept them.

With best regards,

Yours sincerely

S L RAO

> > - Show quoted text -- Hide quoted text -

[CUTS-TradeForum]

From: Martin Wolf

This comment from Mr. Rao assumes there is a trade off between higher
incomes and other good things. Is this really true in India? I
strongly doubt it.

Many of the policies that would make the benefits of growth more
widely shared - elimination of regressive subsidies or of job
protections for elite workers and more spending on health, education
and infrastructure - would also accelerate growth. Thus, with a better
focus to centre and state budgets, it would be easier to raise
spending on education, health etc (on which India spends
extraordinarily little.)

Moreover, there is a very strong and understandable correlation
between income and quality of governance. High income countries are
less corrupt, because their relatively educated populations will not
tolerate it, to the same extent.

This is really not a debate Indians should still be having. The right
debate is not over compromises between growth and other goods but over
how to have growth AND other goods.

Martin Wolf

[Alok Ray]

A few more observations on reforms, growth and poverty in India. World Bank economists Ravallion and Datt (2009) argue, on the basis of consumption distribution data over a 50-year period (1956-2006), that  there has been a faster reduction in headcount poverty in the post-reform period compared to the pre-reform era (until 1991). But in terms of other measures (like poverty gap) that gives greater weight to the gains of the poorest, there is no evidence of a larger reduction in poverty in the post-reform period, despite a higher growth rate. The possible implication of these findings is that the gains from high growth in the post-reform period are going more to the officially poor, but not particularly to the miserably poor or the poorest. Interestingly, however, a recent National Council of Applied Economic Research study using 2004-05 data for the BPL (Below Poverty Line) families find 30.3 per cent of urban ‘poor' own a color TV, 24.9 per cent own a two-wheeler, 10.5 per cent a refrigerator and 55.6 per cent a pressure cooker. The corresponding figures for the rural poor are much lower — 6.3 per cent, 9 per cent, 0.9 per cent and 18.6 per cent, respectively. Such studies underline that poverty (and its manifestations in various forms) is much more concentrated in the rural areas of some specific States and regions within the States. At the same time, all the official ‘poor' in India are not necessarily the destitutes that we usually associate with the term ‘poverty'. There was no question of a ‘poor' family owing a color TV set or a refrigerator some 15 years back. Overall, though the picture is still pretty bad (especially on malnutrition and child mortality), absolute poverty (in the sense of utter destitution) is now mostly concentrated in a few pockets (like the remote tribal belts) where the benefits of growth as also the various social welfare programs  have not yet percolated. Most poor people in India are poor not because they do not do anything (many poor people work harder than many rich people) but because they are engaged in low-productivity and low-income jobs.  Higher growth has opened up many new job opportunities (think of  masons, electricians, plumbers, furniture makers, shop floor assistants, waiters in food courts,  car drivers, security personnel,  repair and maintenance people) for  people from very ordinary families (not just software engineers or English-speaking call center jobs) -  specially from construction activities in urban areas (inducing migration from rural areas). Though the average income per person may not have gone up significantly, family income has gone up at a higher rate since more members in a family (including women) are now able to find some jobs – though not necessarily  high-income jobs. (Dr.) Alok Ray (Former) Professor of Economics, IIM Calcutta   --- On Tue, 12/28/10, Arvind Panagariya <ap2...@columbia.edu> wrote:

From: Arvind Panagariya <ap2...@columbia.edu> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty] To: cuts-tr...@googlegroups.com, "CUTS-TradeForum" <cuts...@gmail.com> Cc: "CUTS-TradeForum" <cuts-tr...@googlegroups.com> Date: Tuesday, December 28, 2010, 9:05 AM

I think the post below misrepresents what James Lamont wrote in the FT.  As far as am able to make out Lamont did NOT point to there being a debate between those who believe that only growth matters and those who argue that growth must be accompanied by targeted social programs. This debate may also exist but it is not the one reported in the piece by Lamont. As I understand it, Lamont refers to Professor Sen as saying that preoccupation with accelerating growth is "stupid".  Seen in the light of his other writings, Professor Sen's view is: stop worrying about growth and focus on social programs that directly target poverty, low nutrition etc. Professor Bhagwati, on the other hand, is saying that targeted social programs are important because they supplement the favorable effect that the last two decades of reform-led high and rising growth has demonstrably had on poverty, nutrition etc. High and rising growth has helped poverty alleviation by (i) pulling the poor up into gainful employment; and (ii) providing larger volume of revenues without which social programs could not be adequately financed. Professor Bhagwati ALSO points out that social programs are NOT a novel idea but had always been a part of our development agenda. However, they did not go very far principally because low incomes at independence and slow growth subsequently meant there were simply not enough revenues to carry out social programs on a large enough scale. The only way to justify Professor Sen's position is to accept all of the following (rather implausible) assumptions: (i) Current income levels (which are themselves much higher because of the success of our growth strategy during the last two decades) and accompanying revenues are good enough to finance the social programs in the depth and breadth we want; (ii) Paying attention to policies that help sustain or accelerate the current growth will necessarily divert us from undertaking the necessary social programs; and (iii) The diversion of resources to social programs will be politically and otherwise sustainable even though growth declines or that the social programs will themselves ensure that no decline in growth takes place. Arvind Panagariya Professor of Economics Columbia University School of International & Public Affairs 420 West 118th Street 1129 IAB New York NY 10027 Web page: WWW.Columbia.Edu/~ap2231/

--Quoting CUTS-TradeForum <cuts...@gmail.com>:

[CUTS-TradeForum]

From: Arvind Panagariya

I am not sure what to make of this comment. Mr. Sinha questions my
skepticism of Professor Sen's position while saying: "There is a

strong argument for the Government placing a greater focus on health
and education while facilitating growth particularly by promoting

infrastructure development." But this is much closer to Professor
Bhagwati's position than professor Sen's so that Mr. Sinha himself
seems to be skeptical of Professor Sen's position! If Professor Sen's
position is indeed as stated in this quotation, he is not too far from
Professor Bhagwati's position and we may as well close the debate.

Arvind Panagariya

> > - Show quoted text -- Hide quoted text -

[Shukla, R K]

From: Rajesh Shukla, Director, NCAER Centre For Macro Consumer Research

 

 

Dear All,

 

It might be useful to refer matters presented below and attached paper aimed towards more objective discussion.

• As per NCAER's National Survey of Household Income and Expenditure (NSHIE, see the attached paper) the bottom 60% Indian households account for 30% of national income (NI) and about 40% of private final consumption expenditure (PFCE). However, the top 40% households in India have 72% of income and almost 90% of surplus income (NI – PFCE).
• The top 20% of India’s population has a more than 50% share of the national income in 2009-10, up from 37% in 1993-94.  According to a study, How India earns, spends and saves, the bottom three quintile, or 60% of India, has a mere 28% share in total income, down from 39% at the start of the reforms. The reforms have thrown up the opportunities that those with resources have been able to exploit better, creating the distortion in income that would suggest that the rich have benefited more from the reforms. This would seem to confirm the charge that income disparities have increased in the reform years, 1991 onwards, and the rich have got richer as a freer economy has created more opportunities.
• Using two data sets of NCAER, contrary to popular belief, income inequality has gone up, both in rural and urban India, in the last decade or so. Per-capita income-based Gini coefficient has moved up 13% for rural India — 0.38 in 1995-96 (based on NCAER’s Micro Impact of Macro Economic & Adjustment Policies, MIMAP) vis-à-vis 0.41 in 2004-05 — and as much as 15% in urban India — 0.39 vis-à-vis 0.43. At the all-India level, the Gini coefficient has moved up from 0.43 (1995-96) to 0.45 (NCAER’s National Survey of Household Income and expenditure, NSHIE, 2004-05).
  
  What should worry the policymakers is not the high income inequality per se, but that it continues to widen even today, after two decades of reforms. In the initial years of reforms an increase in income inequality was understandable as those with access to resources or equipped with skills would be in a position to make use of the opportunities better or command a better price. However, over time, a larger share of population should have been able to benefit from the near double-digit growth of the Indian economy.
  
  The problem is not that the rich have got richer but that those at the bottom have not been provided the wherewithal to improve their earning capability. And that continues to be the case even now. Access to meaningful and affordable education, for one, continues to be an issue, and lack of physical infrastructure makes it difficult for the hinterland to be integrated with the market economy.
  
  The problem, clearly, is not that rich have got richer, rather that a vast percentage of population still continues to be deprived of the means that can enable them to take a greater share of the wealth creation happening through the rapid growth.

 

Regards,

 

Rajesh Shukla

 

 

---

From: cuts-tr...@googlegroups.com on behalf of CUTS-TradeForum
Sent: Fri 12/31/2010 4:08 PM
To: CUTS-TradeForum
Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

[CUTS-TradeForum]

From: Sumit Majumdar

What is somewhat unusual, and quite surprising, in all of these
debates is that commentators have simply not paid any attention at all
to the all-important productivity question. Fortunately, the Indian
story is no longer a case of falling outputs and rising inputs. True,
India is experiencing rising outputs, but this is accompanied by
rising inputs.

Growth of output, without accompanying productivity gains, is hardly
going to lead to sustained growth in real wages and incomes. The
Indian government revenues have been substantially enhanced by
increasing collections of direct taxes, but the ever-increasing
leakages in spending have frittered these sums away. Hence, the
relative impact of social sector spending has been stagnant.

India has experienced extensive growth, to use a term once used
decades ago, rather than intensive growth. A release of pent-up
expectations of a billion persons drives demand-side growth, but there
has not been a supply-side revolution. India’s manufacturing sector
productivity story is grim, and the services sector story so far is
all about using cheap while collar staff as long as the opportunity
exists for East-West wage arbitrage.

Unless and until India’s productivity growth is also at the rate of
well over 10 percent per annum, Indian real incomes will stagnate in a
relative. Realistically, India’s productivity growth has to be at the
rate of 20 to 25 percent annum for the next decade for India’s real
income levels to reach 25 percent of US levels.


Sumit Majumdar
___________________________
Professor of Technology Strategy
School of Management
University of Texas at Dallas
800 W Campbell
Richardson, TX 75080
USA
(469) 878 1686
http://majumdar.wordpress.com/
_______________________________
One of Mahtama Gandhi's final quotes:

“I will give you a talisman. Whenever you are in doubt, or when the
self becomes too much with you, apply the following test. Recall the
face of the poorest and the weakest man whom you may have seen, and
ask yourself, if the step you contemplate is going to be of any use to
him. Will he gain anything by it? Will it restore him to a control
over his own life and destiny? In other words, will it lead to swaraj
for the hungry and spiritually starving millions? Then you will find
your doubts and your self melt away”

On Dec 30, 4:05 pm, CUTS-TradeForum <cutsci...@gmail.com> wrote:

> > - Show quoted text -- Hide quoted text -

[CUTS-TradeForum]

From: Professor Jagdish Bhagwati

Professor Majumdar is right; and I did deal with the question briefly
when discussing the role of science at the end of my FINAL draft of
the Lecture which is on the Lok Sabha website now.

The debate at CUTS Forum is however on whether growth (which must of
course reflect policies that include productivity-enhancing policies
which are within reach) matters and in what way. On that issue,
clarified best by Arvind Panagariya, it is now pretty clear that the
general consensus among the contributors to this Forum is that it does
by pulling the poor into gainful employment and also additionally by
providing the revenues with which one can finance direct programs on
health and education, which I called Stage 2 reforms.

One thing that needs to be emphasised (as I did in fact in my
Lecture), thanks to a later FT story by Amy Kazmin on health-care
which is characteristically shallow, is that such expenditures amount
to very difficult social engineering and hence are inherently more
difficult than Stage 1 conventional reforms. She quotes Sen as
decrying under-financed public sector provision of health-care and how
that is driving the poor into private medical facilities. But this
begs the question: would greater provision of funds to the public
sector health-care be then the right way to provide health-care for
the poor. Leaving aside the fact that Sen thinks that working to
improve growth is "stupid", so that one wonders where he would get the
added funds for giving to the public sector provision of health-care,
how is he sure that the additional moneys are better spent on
expanding possibly inefficient public sector facilities as against
giving, say, income transfers (as with vouchers) that can then be
spent on using private sector facilities? In short, ex cathedra
pronouncements in these critical matters do more harm than good.

Professor Bhagwati

> (469) 878 1686http://majumdar.wordpress.com/

[jb...@columbia.edu]

Mr. Shukla confuses reduction of poverty with reduction of inequality.

Even on inequality, the careful work of Professor Pravin Krishna,
using the Theil Index which is better than the Gini coefficient, does
not support Shukla's findings. It will be presented at the Columbia
conference (co-sponsored by NCAER) on Trade, Poverty, Inequality and
Democracy, along with empirical papers linking trade with poverty
reduction by Devashish Mitra and Ran Hasan, in
New Delhi at the end of March.

Professor Bhagwati

Quoting "Shukla, R K" <rksh...@ncaer.org>:

> From: Rajesh Shukla, Director, NCAER Centre For Macro Consumer Research
>
>
> Dear All,
>
> It might be useful to refer matters presented below and attached
> paper aimed towards more objective discussion.
>

> * As per NCAER's National Survey of Household Income and Expenditure

> (NSHIE, see the attached paper) the bottom 60% Indian households
> account for 30% of national income (NI) and about 40% of private
> final consumption expenditure (PFCE). However, the top 40%
> households in India have 72% of income and almost 90% of surplus

> income (NI - PFCE).
> * The top 20% of India's population has a more than 50% share of the

> national income in 2009-10, up from 37% in 1993-94. According to a
> study, How India earns, spends and saves, the bottom three
> quintile, or 60% of India, has a mere 28% share in total income,
> down from 39% at the start of the reforms. The reforms have thrown
> up the opportunities that those with resources have been able to
> exploit better, creating the distortion in income that would
> suggest that the rich have benefited more from the reforms. This
> would seem to confirm the charge that income disparities have
> increased in the reform years, 1991 onwards, and the rich have got
> richer as a freer economy has created more opportunities.

> * Using two data sets of NCAER, contrary to popular belief, income

> inequality has gone up, both in rural and urban India, in the last
> decade or so. Per-capita income-based Gini coefficient has moved up

> 13% for rural India - 0.38 in 1995-96 (based on NCAER's Micro Impact

> of Macro Economic & Adjustment Policies, MIMAP) vis-à-vis 0.41 in

> 2004-05 - and as much as 15% in urban India - 0.39 vis-à-vis 0.43.

[CUTS-TradeForum]

From: Dr. David E. Lewis

India and its "analysts" may need to look at the experience of Latin
America/Caribbean from 1950s-1970s and some countries now in this past
decade, Brazil under Cardoso and Lula for example, to get a better
sense of the need for adequate balances between growth and social
programs as the dichotomy is a delusion.

For example, do we know of any economic experience where social
programs were funded and developed sustainably without growth? Even
the so-called education/health model of Cuban socialism is now clearly
a fallacy, or even DR with double-digit growth for 5+ years now and
yet is in lowest echelons of UN HD indices and WEF competitiveness
indices and still runs an economy based on cheap oversupply of labor
and in which today's national policy debate is why government does not
dedicate 4% of budget to education as mandated by constitution? Actual
figures are closer to 1% of budget?

I see no sustainable way to achieve social programs without growth,
but you can easily have growth otherwise and not support social
programs. The causal relation is not equal, we must accept that.

Happy New Year to all!

Dr. David E. Lewis
Vice President
Manchester Trade Ltd.
International Business Advisors
1710 Rhode Island Avenue, NW - Suite 300
Washington, DC 20036
Tel 202-331-9464
Fax 202-785-0376
Email: David...@ManchesterTrade.com
Website: http://www.ManchesterTrade.com
Blog: http://manchestertradeltd.blogspot.com/



On Dec 28 2010, 10:05 pm, Arvind Panagariya <ap2...@columbia.edu>
wrote:

> Quoting CUTS-TradeForum <cutsci...@gmail.com>:
>
>
>
> > In the context of India, views of leading economists such as Professor
> > Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
> > whether growth alone can lead to poverty eradication or it needs to be
> > accompanied by entitlements and targeted aid to the poor.
>
> > A news report by the Delhi-based FT Correspondent, James Lamont
> > entitled "High growth fails to feed India’s hungry", published in
> > Financial Times on December 22, 2010, highlights difference in
> > opinions among academicians about the percolation of benefits of
> > economic growth in India. He emphasises on the inequitable
> > distribution of the fruits of economic growth among various states,
> > which have lead to the development of a dualistic economy. The
> > newsclip can be accessed at  
> >http://www.cuts-citee.org/High_growth_fails_to_feed_Indias_hungry.htm.
>
> > Parts of this newsreport emanates from the debate on growth and
> > development conducted on our e-group: CUTS-TradeForum, following
> > Jagdish Bhagwati's address to the Indian parliament on 2nd December.

[CUTS-TradeForum]

From: J. Srinivasan

Just a thought: In the Indian context, should we not be looking at the
large black/grey economy that is at once a bane but also offers a
safety net for many?

If you look at how things work in India, it is a case of largest
privatisation of health-care and education. With services at
government hospitals/schools largely dysfunctional, even the middle
and lower-middle classes are forced to go to private hospitals/
schools. How do the middle and lower-middle classes pay the huge bills/
fees? They are often paid by relatives and friends (on promise of
repayment at a future date); some thing the Western economists may
find it difficult to believe, but true all the same.

Maybe this is also how at least some of the large sums of money made
by the creamy layer trickles down. To cite a personal case, in the
last five years, with rise in my salalry levels, I have been
supporting the education of the two kids of our maid.

J. Srinivasan,
Journalist with The Hindu Business Line, Chennai.

> --Quoting CUTS-TradeForum <cutsci...@gmail.com>:

>
>
>
> > In the context of India, views of leading economists such as Professor
> > Jagdish Bhagwati and Nobel Laureate Amartya Sen are at variance on
> > whether growth alone can lead to poverty eradication or it needs to be
> > accompanied by entitlements and targeted aid to the poor.
>
> > A news report by the Delhi-based FT Correspondent, James Lamont
> > entitled "High growth fails to feed India’s hungry", published in
> > Financial Times on December 22, 2010, highlights difference in
> > opinions among academicians about the percolation of benefits of
> > economic growth in India. He emphasises on the inequitable
> > distribution of the fruits of economic growth among various states,
> > which have lead to the development of a dualistic economy. The
> > newsclip can be accessed at http://www.cuts-citee.org/High_growth_fails_to_feed_Indias_hungry.htm.
>
> > Parts of this newsreport emanates from the debate on growth and
> > development conducted on our e-group: CUTS-TradeForum, following
> > Jagdish Bhagwati's address to the Indian parliament on 2nd December.

[CUTS-TradeForum]

From: Jean-Pierre Lehmann

As an outside observer, I have to say that this correspondence is
quite stimulating. I hope I will not appear too arrogant however when
I add that it also leaves me with the bewilderment I have felt towards
India since the first time I went there, in 1965, and remains to this
day. How is it that clearly some of the world's most intelligent
people can make such a mess out of their country? I remember another
FT correspondent to India, before Lamont, Ed Luce, commenting to me
that whereas in Africa poverty is a tragedy, in India it is a scandal.
as much admiration and affection I have for India (loads and loads),
it is difficult to understand why and how it is that child
malnutrition, female illiteracy, and many other social ills should be
so high. As to how to succeed in curing these flagrant social
cataclysms one is tempted to say that it does not really matter
whether a cat is black or white; so long as it catches mice it is a
good cat. Has too much theorising got in the way of policy
implementation? If, as all seem to agree, education is important, then
why not invest in education? If revenue is needed, then why not get
the rich and the middle classes to pay taxes?

My own initial specialisation was in Japanese economic history. For
some time my studies and "area of expertise" remained in East Asia.
When I began hearing about the "East Asian miracle economies", my
reaction was: "miracle? what miracle?". It was then (80s) I started
looking more closely at India. I found myself more struck by how
Indian policy makers managed to screw things up than how East Asians
concocted an alleged miracle. so while India has achieved the status
of a major global economic power and it has recorded among the world's
highest growth rates, it is still by some distance the country in the
G20 with the worst scores in the HDI. I have no doubt, as Martin Wolf
and others have argued, that fast growth is a must, but if we see
another decade with high growth and the same proportion of children
suffering from malnourishment, then it will be very difficult to claim
"success". it seems to me there should be two targets. One is to
achieve sustained fast growth in order to raise incomes, the other
would be to, say, reduce child malnutrition by 50% by, say, 2015. This
is something Indian society, especially the rich and the middle
classes, should embrace, as it will make for a much more secure
society.

I wish you all happy new year. I shall probably be in India next month
and hope to spend much more time there in the years to come. For all
my criticism, I still find it the most exciting and stimulating place
to be on this planet!

Jean-Pierre
Jean-Pierre Lehmann, D.Phil (Oxon)
Emeritus Professor of International Political Economy
& Founding Director, The Evian Group at IMD
Box 915, 1001-Lausanne, Switzerland
tel: +41-21-618-0348, fax: +41-21-618-0619
e-mail Leh...@imd.ch
http://www.imd.org/eviangroup
See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
World Trade (Cambridge University Press)

[CUTS-TradeForum]

From: Professor V.N. Balasubramanyam

Bhagwati noted long back that growth was hardly likely to trickle down
to the poor, they had to be pulled up with growth being a prerequisite
for the pulling up process. The levers for pulling up the poor out of
poverty are many - health, education, research and development. None
of these is likely to materialise with low levels of growth. Yes, the
country needs high levels of income, but they are hardly likely to be
achieved without high levels of growth; yes, productivity is essential
for growth with development, but the resources required for R&D, human
skills development have to be generated with growth. If only all this
could be achieved with low levels of growth, we would have had a
'Hindu Miracle of Development' to be enshrined in history, alongside
the Hindu Rate of Growth"

V.N. Balasubramanyam
Professor of Development Economics
Department of Economics
Lancaster University
Lancaster, LA14YX
01524-59-4231

[CUTS-TradeForum]

From: Professor Jagdish Bhagwati

Dear Jean Pierre:

The only problem with what you write is that, if growth does occur
rapidly, the evidence is that it does help the poor and the
underprivileged contrary to those who decry its appropriateness.
Also,
if Stage 2 reforms are done well, you get a double bang with your
growth strategy.

If only we had had the high growth rates almost a quarter of a
century earlier when I and Padma wrote our famous book detailing the
bankruptcy of the old policy framework, the impact on the poor and
the underprivileged would have been that much greater.

So, if you really mean what you say, that poverty and
undernourishment
are a scandal --- and Ed Luce is only the last to have said it: many
Indians have said the same over decades! --- you should recognize
that the true scandal is that people who continue to condemn the
reforms that can help are the true scandal. But, as you well know, in
Economics, there is no accountability for the consequences of your
advice! And that is particularly so in an ascriptive society like
India: the eminent are revered and rewarded, not condemned, despite
the harm they cause!

Jagdish (Bhagwati)

> e-mail Lehm...@imd.chhttp://www.imd.org/eviangroup

[CUTS-TradeForum]

From: Abhijit Banerjee

Here is my tuppence.

One way to think about this question is that governments will in any
case continue to do a bunch of stuff, driven by their own compulsions,
some of which promote growth while others probably retard it.
Governmental capacity to do anything new is always limited (think of
Obama) and all the more so when the state is weak. Therefore there is
always a trade off. For example, suppose that the government can only
do one new thing right now. There is a case for land reforms that make
the conversion of land into industrial use less fraught; there is a
case wide-ranging educational reform which makes it easier for the
poor to access quality education; and there is a case for revamping
primary healthcare to make it much more functional. The first probably
does not do so much for poverty in the short run (at least in a
country in India where industry employs very few unskilled people) but
in the longer run the effect on poverty can be substantial as growth
turns into a demand for ancillary services. The second has a medium
term effect on both poverty and growth. The third affects the
relatively quickly but its growth effects may take time (and may be
less pronounced, that is less clear). What should it do? Reasonable
people can disagree about this.

Abhijit Banerjee

> > - Show quoted text -- Hide quoted text -

[CUTS-TradeForum]

From: Arvind Panagariya

My two paise worth in response to Abhijit Banerjee's tuppence

Abhijit has argued that when governments have limited capacity, we
have no choice but to selectively focus on one or other area of reform
(his examples: land reforms that make the conversion of land into
industrial use less fraught; revamping primary health care to make it
more functional; and increased access to the poor to quality
education). He concludes that once this is recognized, reasonable
people may differ on which is the right area to select—one that
promotes growth but helps the poor only in the long run (land reform
for the conversion of land for industrial use) or one that helps the
poor relatively quickly but may at best help growth in the long run
(revamping primary health care to make it more functional).

I find this approach to thinking about policy choices rather unhelpful
for at least three reasons.

As policy analysts, do we really want to circumscribe our thinking
regarding what the right policy mix for the eradicate poverty and
associated deprivations is by the issue of the capacity of the
government? Surely, we want to first arrive at what the right policy
mix is and then consider how best to proceed with implementation given
the limited government capacity (see point 2 below). After all, the
capacity of the government itself varies considerably over time and
space. Thus, for example, the Narasimha Rao and Atal Bihari Vajpayee
governments simultaneously implemented very substantial reform
packages during their tenures. A future government may be able to do
the same. Likewise, when we consider states, which too must undertake
reforms, government capacity varies dramatically. Surely, Nitish
Kumar, Narendra Modi and Naveen Patnaik are quite capable of
implementing reforms that help growth as well as those that target
poverty and deprivation directly.

Even if the maintained hypothesis is that the government has limited
capacity, the answer is not that reasonable people could choose to
focus on different areas of policy but that reforms should still
proceed on as many fronts as possible but take forms that make minimal
demands on the government for their execution. In the case of land
conversion, this would mean a reform that allows the buyers and
sellers to negotiate the price at which they transact, with the
government acquisition limited to truly public projects. In the area
of health, the constraint of an incapable government would point to a
reform that provides the poor (say, bottom 40 percent of the
population) insurance for in-patient care and income transfers for
outpatient care, letting private provides deliver the actual service.
I am surprised that having first stated that the government is
incapable, Abhijit proceeds to limit the available policy option for
the provision of health care for the poor to “revamping primary health-
care to make it much more functional.” Given the government failure
in this area over the last fifty plus years, is it realistic to assume
that primary health-care can be made functional in a relatively short
period? Should we not at least consider the option of moving away
from the current model of public health centers and community health
centers under which public employees have zero incentive to deliver
the services for which they are hired (see the excellent comment by
TCA S Raghavan on this issue)?

Finally, as an aside, it is not clear to me that the caricature of
land acquisition for industrialization as doing little to help the
poor in the short run, suggested by Abhijit, is itself correct. A
proper reform in this area will ensure that the seller receives the
true market value of his or her land. This could lift many tiny
farmers out of poverty overnight while industrialization helps promote
growth (this goes back to Martin Wolf’s point that many pro-growth
policies can be directly good for the poor). This is not pure
speculation: several owners of small pieces of land in Gurgaon and
Noida became moderately rich overnight when they sold their land for
industrialization.

Arvind Panagariya

[Kathyayini Chamaraj]

Here's my tuppence too in support of the arguments below:  Somewhere there seems to be the assumption that growth is separate and social sector development is separate.  What seems to be lost sight of is that growth needs to happen through social sector development.  If it does not, as is the case right now, growth will provide benefits only to the richer quintiles and widen existing disparities.  Investment in elimination of child labour for instance (which is an investment in primary education) is shown to result in 700% returns.  I wonder if investments in pure growth strategies provide such returns. The growth that will result from this increased capacity of the poor is more inclusive and sustainable than growth per se which has mostly failed to trickle down and has not resulted in human development.  One may argue that the growth through social development will take very long to manifest itself, but that is no argument as the real goal is increased human capacities and not growth for its own sake.

 

Kathyayini Chamaraj

[CUTS-TradeForum]

From: Professor Jagdish Bhagwati

If you spend only tuppence, you get what tuppence will buy: nothing!
The return to primary education is high only if a growing economy will
find new
oppotunities for gainful work. Otherwise we get the satisfaction only
of having
open minds but not of open purses which take in more incomes.

Phrases like "human development" to describe the social indicators
which we used
in our earliest Plans and PEO reports a half century ago have become a
substitute for clear thinking on the economics of the issues.

Professor Bhagwati

> > > > Web page: WWW.Columbia.Edu/~ap2231/ <http://www.columbia.edu/~ap2231/>

[CUTS-TradeForum]

From: Ashok Nag

I find this debate somewhat confusing. Everybody has stuck to his or
her initial
positions and arguments and counter-arguments have not made anybody
change their
positions. Why?

This is because no rule of the debate has been set to decide the
result of the
debate. That is why if this debate continues for another century no
winner will
emerge.

First of all, we need to know the hypothesis one is trying to test or
defend
against what. The important point is regarding alternative hypothesis.

Let us consider this

Null hypothesis:- Growth does not matter for poverty reductions

Alternative:- Growth matters for poverty reductions

I hope every body will agree that if growth is defined as any positive
number
then available evidence may not reject the null. It will be difficult
to argue
that a 3.5% growth in India for next decade will have any significant
positive
impact on poverty level, irrespective of level of social sector public
investment.

Now suppose we change the null

Null- High Growth does not matter for poverty reduction

Alternative- High growth matters for poverty reductions

Suppose one agrees on definition of high growth then it is most likely
that null
will be rejected. Suppose, India achieves 15% growth rate in next
decade, I do
not think anybody will be able to argue that it will not reduce
poverty,
absolutely and relatively.

Now suppose we change the null again.

Null- High public investment in social sector will reduce poverty
level under
all growth scenarios

Alternative - High public investment will not reduce poverty in low
growth
scenario.

One can go on. But unless one specifies the null against alternatives,
it is not
clear to me how we will be able to understand the counterfactuals that
one is
pitting against.

Ashok Nag

On Jan 6, 11:24 pm, Kathyayini Chamaraj <kchama...@gmail.com> wrote:

> > > > Web page: WWW.Columbia.Edu/~ap2231/ <http://www.columbia.edu/~ap2231/>

[bipul malakar]

Dear Kathyayini Chamaraj

development presupposes growth - however of the various strategies - strategies which attach relatively more weitage on social sector have  long term sustainability . The primacy lies in trade off  between social sector and other productive sector. Even emphasis on social sector development requires growth of material well being of affluent section of the society. What we have achieved by different ecnopolitical measures - like giving food-grain at  abnormal prices needs evaluation . It has influenced   consumption of some entertaining manufactured commodities opening up avenues for investment in this sphere . The process of trickle down is slow which has resulted in rampant growth of Non government operation . How to accelerate percolation of growth process ?

Bipul Malakar

Department of Ecoomics

Jadavpur University

---

From: Kathyayini Chamaraj <kcha...@gmail.com>
To: cuts-tr...@googlegroups.com
Sent: Thu, 6 January, 2011 11:54:40 PM

Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

[CUTS-TradeForum]

From: Alok Sheel

The issue is not just about inclusive growth; high growth in India is
taking
place; the real issue is whether investment in the social (read human
development)
and physical infrastructure would be adequate to sustain present
levels of growth,
and even more so to raise trend growth.

Alok Sheel

[vdeh...@gmail.com]

Dear all

This conversation thread in itself is a great case study of some of the principal economic policy debates in India today, elegantly articulated and argued. Whichever "side" one may be, this would be worth sharing with students and others who may be interested. That's my 25 np worth, before the coin is demonetized!

Regards

Vivek H. Dehejia

http://twitter.com/vdehejia
http://culturereflect.blogspot.com

Sent from my BlackBerry® on Reliance Mobile, India's No. 1 Network. Go for it!

---

From: Kathyayini Chamaraj <kcha...@gmail.com>

Sender: cuts-tr...@googlegroups.com

Date: Thu, 6 Jan 2011 23:54:40 +0530

To: <cuts-tr...@googlegroups.com>

ReplyTo: cuts-tr...@googlegroups.com

Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

[Pravin Sinha]

I have been religiously following debate on the Prof. Jagdish Bhagwati's
speech in the Parliament and I can't but agree to many of the reactions
relating to economic growth and development. A development has nomeaning if
it fails to touch majority, more so in a democratic country. It is painful
that one side we rejoice achieving near double digit economic growth rate
and are fighting, rather successfully, for our share of attention as also
position at the global level while on the other hand majority of the Indians
are struggling to survive at a much below minimum wage level [the finding of
the NCEUS]. It is also painful to see how political parties are passing
bucks while all of us are unable to even afford onions.

I have extremely high regards for Prof. Bhagwati but , we must understand
the environment where he was making the speech.

Pravin Sinha

[CUTS-TradeForum]

From: Joseph Massey

Amongst the many ways in which the government has found inclusive
growth model has been social sector employment schemes which can get
only as big as our strength of deficit financing can take and are not
sustainable.

Education is good if it imparts employable skills and if industry has
need for such skills in such quantum. Skills can be given as charity
by government but matching employability is often a road block.

If this model is turned on its head to leave new employment to come
from entrepreneur driven enterprise then we need market based funding
to enable scaling up of many enterprises, open all modes of market
funding by nbfc and global finance to provide low cost of capital for
affordable risk taking, Multiple listing options in India and abroad
for any unlisted company, etc.

Today we trade only 20,000 crore per day on nse and bse in cash
equities which is the instrument of raising capital whereas we trade
in speculative options and futures to the extent of Rs 2,00,000 crore
which is a zero sum game.

Only 100 companies out of 7000 trade in this Rs 20,000 crore of which
delivery is only in 4000 crore largely dominated by institutional
investors. Most of the trading is done by propritory brokers keeping
retails clients as miniscule entity.

We have no corporate bond and government bond segment in which
retails
investors who understand fixed deposits can participate for
alternative risk capital. We need more competition in exchange space
and multiple modes of capital to prop risk capital generation for
industry at least cost.

Such aggressive industrial growth backed by low cost debt or risk
capital will create new employment opportunity to absorb surplus
labour and generate new innovative ventures accross the country to
avoid metropolitisation of country.

Free markets to provide economic independence. In India despite
democracy we have 1 percent of population using capital market
whereas
in China 10 percent of population uses capital market.

Joseph Massey

-----------------------

> ...
>
> read more »- Hide quoted text -

[CUTS-TradeForum]

From: Ganesh Kumar

According to a recent WHO-UNICEF report (2010 update available at
http://www.unicef.org/media/files/JMP-2010Final.pdf) about 638 million
Indians (54% of Indians – 18% in urban India and 69% in rural India)
defecate in the open, which is 58% of all those who do so in the
world.
India stands pretty poorly on this important MDG indicator. It is a
fallacy
to consider this tragedy as separate from the acute housing problem in
the
country. Despite growth and rising incomes, skyrocketing housing
prices in
cities like Mumbai, Delhi, has rendered ownership of a house (with a
private toilet) a distant dream for many middle class Indians leave
alone
the poor (it is a shame that Mumbai competes with Tokyo and other such
cities in the developed world for the title of being the costliest
city in
terms of property prices & rentals).


It would be tempting to conclude that growth has not delivered and
argue for
public housing policies. But that is ignoring the fact that there has
not
been meaningful reform of land market in India, and also that the real
estate is the MOST OPAQUE sector of the economy. Reform of land market
would
be incomplete if it does not extend to the real estate sector too.
Prof.
Panagariya mentioned that meaningful land market reform would benefit
the
poor as sellers. To that I would add that buyers and tenants too would
benefit from the reduction in prices and rentals of both housing and
commercial property that competition in the real estate sector would
bring
about.

I see this as another example of a policy reform that would help
growth and
also directly aid developmental goals such as housing and sanitation.
Even a
strong proponent of public housing – I am not – should be supporting
these
reforms as it would bring down the costs for the government thereby
augmenting its capacity for investing in public housing.

The country still awaits many such policy reforms that would promote
both
growth and developmental goals, such as in agriculture, labor markets,
and
so on. Interesting as this debate has been, the country has to move on
from
debate to action.

Ganesh Kumar
IGIDR

> ...
>
> read more »- Hide quoted text -

[CUTS-TradeForum]

From: Govinda Rao, NIPFP.

The entire debate on the issue of primacy of growth versus poverty
reduction has not brought any new perspectives with commentators
reaffirming their own beliefs!

The views of Prof. Bhagwati are well known and he has articulated them
for several years including his paper on "Poverty and Public Policy"
in World Development in 1988. As he has reiterated in this
discussion, accelerating growth as well as public interventions to
enable the poor to participate in the market in a meaningful manner is
necessary.

Growth is important not merely to generate the resources for anti-
poverty interventions and human development but essentially, it is
growth that should provide sustainable and productive employment
opportunities to the poor. If our growth has not produced sufficient
jobs, the fault does not lie with growth but with our policies which
have anti-labour bias. Employment intensive growth requires us to
question our policies creating structural rigidities. The examples
include the need to rethink on our labour laws and equally important,
whether we should continue to prevent foreign investment in activities
such as retail trade.

Surely, it is important to have a larger focus on social sectors as
Prof. Bhagwati has argued for long, we need interventions to make the
poor participate in market activities. It is not just that the growth
can generate larger volume of resources for investment in human
capital; there must be concerted efforts at raising more resources as
well as reprioritising our public spending. The tax information
network and choosing NSDL as the technology partner to implement it
has helped the Centre to increase its income tax - GDP ratio by over
three percentage points since 2003-04. Surely, much more remains to be
done to improve tax administration.

Even more important aspect is to reprioritise our spending and the
need to phase out explicit and implicit subsidies to release resources
for human development. If we continue our present pattern
subsidising, we not only will not have resources to enhance human
development, but will distort the resource allocation with adverse
impact on both efficiency in resource allocation and sustainable use
of resources.

Finally, our focus should be on poverty and ensuring that the poor
participate in the market in a productive manner and not inequality.
Reducing the incomes of the rich will not increase the incomes of the
poor. In fact, it may reduce it further. Let us focus on how to
improve the incomes of the poor which requires policy changes to
enhance their productivity.

Govind Rao

> ...
>
> read more »- Hide quoted text -

[CUTS-TradeForum]

From: Professor Raymond Saner

Dear Colleagues and members of the CUTS Forum,

Greetings to all and all the best wishes for the New Year- may it
bring more peace and prosperity for all mankind.

It was on 8th October that I send out a request to our CUTS colleagues
in Geneva inquiring what their reaction might be in regard to Arun
Kumar’s article titled “India and Poverty” (September 2010) which
made reference to the Oxford Poverty & Human Development Initiative
and their Multidimensional Poverty Index. A new index which measures
poverty based on deprivation, and not on income alone.

Subsequent to my inquiry, Suresh P Singh, Policy Analyst at CUTS CITEE
Jaipur responded on 12th October with a very helpful and detailed
response clarifying the following:

A distinguishing feature of this index is that out of the ten
indictors used to estimate poverty, eight belong to the MDG targets.
This makes the index more useful in assessing poverty and taking
measures to address the issue. Further, the new index is expected to
replace the old one in the 20th Anniversary Report of the UNDP, as per
indications available.

As far as government action in dealing with the indicators of MPI is
concerned, many initiatives have been taken, and therefore, the index
might not lead to any immediate change at policy level. It might
however get increased attention, once the index gets its place in the
UNDP Report as indicated by some sources.

Professor Arun Kumar’s article is pointing out the glaring and growing
disparities between the very rich and still horrifically large segment
of India’s population classified as poor whether classified by the
Multidimensional Poverty Index or India’s Tendulkar Commission or
UNDPD’s HDI. India is at the bottom of the G20 in regard to the size
of population remaining in poverty but also in regard to the disparity
between the very rich and the very poor.

I have since followed with great interest the various exchanges
between various experts mostly trade economist but also some political
scientists from India as well as from Western Europe and the USA
(including Indian diaspora scholars in the USA and Western Europe).
What follows are my reactions to ideas and comments made by various
participants of the CUTS Forum.

1. Professor Bhagwati emphasizes that growth is needed for stage
2 reforms (1/1/2011)

pulling the poor into gainful employment and also additionally by
providing the revenues with which one can finance direct programs on
health and education, which I called Stage 2 reforms.

I agree that growth is needed but when do we reach this magical day
when enough growth has been achieved to afford social programmes?
Scandinavian countries did not wait for completion of a “ stage 1” to
move their populations out of poverty- and poverty they had to face
at early industrialization. Instead, they moved on all fronts:
economic growth, education, health, social programmes. The same can be
said of the Netherlands and Switzerland, my home country, which faced
poverty, famines, continuous wars, internal colonial situations
(cantons owning other cantons).

2. Dr Montek Singh Ahluwalia, Deputy Chairman of the Planning
Commission, spoke at the book vernissage of Sankar Kumar Bhaumik’s
edited book titled “Reforming Indian Agriculture”. He compared China
and India in regard to development strategy and emphasized the need
for India to find ways of moving 300-400 million farmers to urban or
semi-urban locations to increase productivity of agricultural
production. China has and continues to face the same challenge. How
does this match with “Stage 2”? or with growth in general?

3. The Indian poor will not be lifted up by growth alone. There
is urgent need to help them help themselves so that more unskilled
labourers can enter the labour market and earn decent salaries. There
is need to provide skill training, basic accident and health insurance
and organizational support to improve their bargaining power against
Indian employers’ dominant and often abusive use of power. Indian
solutions exist (http://www.labournet.in/) but are ignored by policy
makers.

As Martin Wolf stated (1/1/2011) India needs increase incomes and
less protection of elite workers. Higher incomes for low and semi-
skilled workers would increase their spending power. Policies and
concrete actions are needed to lift the millions of poor un-skilled
workers out of their current structural helplessness. Poverty also
means predominance of the informal sector. Reducing the high size of
the informal sector cannot be achieved through growth alone. Micro-
economic and social policies should go hand in hand with growth and
trade liberalization strategies.

4. While there is plenty to say about “governance failure” (term
coined by late Professor N.T. Wang, Columbia U.) of the Indian
federal , state and municipal governments, lamenting about corruption
and inefficiency does not alleviate poverty alone. As long as the
current public administration is pre-dominantly populated by Indians
of privileged social groups, there will remain a lack of compelling
commitment to move from theorizing and policy paralysis to action
based policies favouring growth coupled with hands-on policy action in
favour of poverty reduction.

Professor Raymond Saner, Ph.D.
Organisation and International Management
Sciences Po, Paris & University of Basle, Switzerland
Director CSEND
C.P. 1498 Mont Blanc
1211 Geneva 1, Switzerland
www.csend.org

[Manabendu]

From

M. Sen
Under Secretary
Department of Biotechnology
CGO Complex, Lodhi Road,
New Delhi - 110003

Income levels, growth strategy, revenue generation, public policies and underlying social programs have to be in harmony with each other ensuring healthy balance in the society.  This necessitate the people at pinnacle of each area of activities must shake hand with each other with full trust and respect for each other.  The social programs must be planned to ensure generation of full trust and respect amongst all.  Any program seemingly planned with vested interest must be discouraged all together.

 

With due respect,

Manabendu Sen

----- Original Message -----
From: CUTS-TradeForum <cuts...@gmail.com>
Date: Thursday, January 13, 2011 11:46 am
Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

 

 

M. Sen
Under Secretary
Department of Biotechnology
CGO Complex, Lodhi Road,
New Delhi - 110003

[CUTS-TradeForum]

From: Ambassador K P Fabian

I tend to agree with Sen. Panagariya is not fair to Sen.

"The only way to justify Professor Sen's position is to accept all of
the following (rather implausible) assumptions:
(i) Current income levels (which are themselves much higher because of
the success of our growth strategy during the last two decades) and
accompanying revenues are good enough to finance the social programs
in the depth and breadth we want; (ii) Paying attention to policies
that help sustain or accelerate the current growth will necessarily
divert us from undertaking the necessary social programs; and (iii)
The diversion of resources to social programs will be politically and
otherwise sustainable even though growth declines or that the social
programs will themselves ensure that no decline in growth takes
place."

My comments:1) Do compare the amount of money stolen from the
government by the corrupt and the money spent on social welfare. 2) It
is not only the money that is diverted. Government time is taken by
scams and the political clumsiness in handling them costs the nation
enormously. 3)Yes it will be sustainable. The opposite is neither
sustainable nor just.

A related thought. Aristotle in his Nichomachean Ethics made a crucial
distinction between Chresmatics and Economics. A good deal of what
goes on in the name of economic activity is really chresmatic
activity. Whenever I mentioned Chresmatics all the economists I have
come across in Delhi made it clear that they had never heard about it
and most of them also made it clear that they were not interested in
the matter. Such incurious approach evoked my curiosity.

Ambassador K P Fabian

On Jan 7, 2:22 pm, vdehe...@gmail.com wrote:
> Dear all
>
> This conversation thread in itself is a great case study of some of the principal economic policy debates in India today, elegantly articulated and argued. Whichever "side" one may be, this would be worth sharing with students and others who may be interested. That's my 25 np worth, before the coin is demonetized!
>
> Regards
>
> Vivek H. Dehejia
>

> http://twitter.com/vdehejiahttp://culturereflect.blogspot.com

> Sent from my BlackBerry® on Reliance Mobile, India's No. 1 Network. Go for it!
>
>
>
> -----Original Message-----
> From: Kathyayini Chamaraj <kchama...@gmail.com>
>
> Sender: cuts-tr...@googlegroups.com
> Date: Thu, 6 Jan 2011 23:54:40

> To: <cuts-tr...@googlegroups.com>
> Reply-To: cuts-tr...@googlegroups.com

> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>
> Here's my tuppence too in support of the arguments below:  Somewhere
> there seems to be the assumption that growth is separate and social sector
> development is separate.  What seems to be lost sight of is that growth
> needs to happen through social sector development.  If it does not, as is
> the case right now, growth will provide benefits only to the richer
> quintiles and widen existing disparities.  Investment in elimination of
> child labour for instance (which is an investment in primary education) is
> shown to result in 700% returns.  I wonder if investments in pure growth
> strategies provide such returns. The growth that will result from this
> increased capacity of the poor is more inclusive and sustainable than growth
> per se which has mostly failed to trickle down and has not resulted in human
> development.  One may argue that the growth through social development will
> take very long to manifest itself, but that is no argument as the real goal
> is increased human capacities and not growth for its own sake.
>
> Kathyayini Chamaraj
>

> > > > Web page: WWW.Columbia.Edu/~ap2231/ <http://www.columbia.edu/~ap2231/>

[CUTS-TradeForum]

From: Teepu M. Khan, Permanent Mission of Pakistan to WTO

Dear Colleagues,

I have found the contributions so far made very useful and
informative. One point that comes to my mind is that the poverty
versus growth debate is by no means new and has been going on ever
since GDP became firmly established as a standard measure of national
income accounts. On the other hand, there is substantial literature
which condemns the growth approach as badly lacking in terms of
welfare. This is largely due to its political trappings as it is the
GDP size which ushers countries into major clubs like the now-famous
G-20, OECD, etc., and also brings about the much coveted political
influence. While economists remain actively concerned about the issue
of addressing poverty, our policy makers are basically politicians who
look at even the number game from a political point-scoring
perspective. No doubt, the poor man who forms the great majority of
the electorate ultimately votes-in or votes-out a government or a
political party, he is lacking in civic knowledge to make a voting
decision on the basis of his purely welfare gains. This is the
realpolitik that we have to contend with.

On the other hand, it is indeed a great service to the humanity to
keep on exploring ways and means of addressing poverty, such as the
Multidimensional Poverty Index. Linkage with MDG targets is also very
relevant considering that eight out of ten indicators used to estimate
poverty belong to the MDG targets. However, Prof. Raymond Saner is
very right in concluding that the index might not lead to any
immediate change at the policy level. With reference to his point that
it might however get increased attention, its operational part is a
million dollar question. Attention on "stage 1" to the exclusion of
"stage 2" is an attractive option for policy makers. However, here the
prescription that 'they move on all fronts' is the only appropriate
way. Unmanaged growth also has the side effects of a ballooning
informal sector as incomes and employment opportunities increase.
Enlarging the pie must be concomitant with equitable sharing of the
pie. I am led to highlight the importance of the joint family system
as a very important social safety net in the developing countries.
Ironically, growth shifts many functions of the joint family to the
market which is measurable in GDP growth, but sadly erodes very
important social capital. Measurement of qualitative (social
development) and not just quantitative aspects of growth should emerge
as a first, and not secondary, priority.

Best regards
Teepu Khan

[Kathyayini Chamaraj]

Very compelling arguments by Professor Saner.  When growth is already at 8-9%, it is possible to spend more than tuppence for the social sector.  But is it being done?  The increased revenues from growth are being used to show generosity to the wrong sectors, like the Rs. 5 lakh crore tax exemptions given last year.  That 5 lakh crore could have been used to help every child overcome malnutrition and get a basic education and vocational skills.  It could have also helped upgrade skills of the large mass of unskilled workers who have not even completed Class VIII and cannot get jobs in the growing economy.  The large informal sector involved in 'indecent work' could have been given higher wages, decent working conditions and social security, in turn raising demand.  It is not as though education will create only open minds and empty purses.  The skilled can create their own jobs to an extent.  The 8-9% gowth has also created enough jobs and demand for skilled workers but there are none available with the required skills.   Much of the meagre amounts allocated to the social sector or those allocated for upliftment of the SCs/STs lapses and does not get spent due to lack of prioritisation and 'governance failure'.  The problem is that only tuppence is being spent when more could be spent.

 

Kathyayini Chamaraj

[CUTS-TradeForum]

From: Aradhna Aggarwal

I believe that the current debate on what comes first, growth or human
development, is of little relevance in today's context. Now that
growth rate
has accelerated, a pertinent question is how to sustain it by
generating
cumulative and circular process that can put India to a growth
trajectory
that is self reinforcing. I agree with all those who suggest that
concerted
policy efforts aiming at inclusion and human development are crucial
at this
juncture. A forward looking approach would be to discuss how to design
such
policies.

Aradhna

[jb...@columbia.edu]

Mr. Fabian does not address the issues at hand, I am afraid, nor does
Mr. Saner from Oxford.

As for Mr.Saner, indices which reduce a vector to a number without
compelling weights are meaningless. If Saner thinks his group is
advancing anything except rubbish with new such indices,he has
producer sovereignty; and who am I to tell him what he should spend
his time on?.

[While Professor Sen thinks, according to a press report, that it is
"very stupid" to ask whether the Indian growth rate will shortly
exceed that of China, I may ask him: who are you to tell me that I
should not consider this question any more than I can tell him what HE
should be interested in? Besides, aside from its intrinsic
intellectual interest, the growth-related question about India and
China is of interest from the viewpoint of Indian public policy in at
least two ways: we can learn from Chinese experience, both its
successes and its failures; and whether we do better than China
affects our respective influence in the world which affects in several
ways.]

While Mr. Saner can spend his time anyway he wants to, he should not
expect us to applaud. What matters are policies to advance our
objectives such as poverty reduction, not pseudo-indices-mongering.
So, the debate is about policies.

As for Mr. Fabian, he claims that economists in New Delhi have no
interest in his remark from Aristotle. What does that prove? Many of
us do have knowledge of philosophy, sociology, political science, law,
literature, international relations and much else that helps us think
about public policy meaningfully. Maybe he should read more
economists, not just talk to a few in Delhi over cocktails in
Chanakyapuri.

I suggest that he read my book, In Defense of Globalization, or my
much-reprinted essays on Markets and Morality and on The Critiques of
Capitalism after the Crisis; or google down Ben Friedman or Edmund
Phelps or Ronald Findlay, all of whom have written extensively on
Economics in a much broader perspective than the purely technical
Economics generally works with.

As regards his suggestion that considerable corruption moneys could be
diverted to increase social spending, how do we do this? The issue of
corruption requires us to understand how corruption began, how it
works, and how it could be contained and even reversed. I, and
doubtless others (e.g. Pratap Bhanu Mehta) have written extensively
about these matters in the Indian context; and I did address the
matter in my Lok Sabha Lecture which has touched off the debate in
this Forum.

And his suggestion that corruption moneys should be used to increase
social spending begs the question: is this form of spending a more
effective way to reduce poverty than alternative ways (such as
building infrastructure, for example)that increase growth with its
impact on poverty as well both directly and by generating revenues
that can finance more social spending?

Professor Bhagwati

Mr.

[Olatunde Oluwatola]

From: Dr Olatunde Oluwatola

Dear All,

 

The long discussions on poverty and poverty alleviation have been quite intriguing. I was not going to be drawn into it because I felt that much of it was an academic exercise. The contribution of Prof Saner from Switzerland, however, is compelling and has brought me out of my shell.

 

I challenge all to take Prof Saner's point that transformation of wealth ditribution in the Scandinavian countries, Netherlands and Switzerland could not have been if it were going through any growth stages. The economists across the world seem to me often naive on theories as means of tackling problems of poverty and national development. Thanks to the United Nations on the MDGs drive. Nations across the world must know that only genuine commitment to good governance and true human concern in policy administrations can ameliorate poverty especially in countries implicated with low HDIs.

 

While wishing discussants a happy new year, I pray the world elites would rise up to the realities of the need to curb poverty in the land, otherwise, peace would continue to elude all. Such is catasrophic for all and the restiveness around may not be unconnected.

 

Thank you for your attention.

 

 

Dr Olatunde Oluwatola FNIFST

Technical Consultant,

Consumer Protection Council, Nigeria 

---

From: CUTS-TradeForum <cuts...@gmail.com>
To: CUTS-TradeForum <cuts-tr...@googlegroups.com>
Sent: Thu, January 13, 2011 11:02:36 AM
Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

rough growth alone. Micro-
economic and social policies should go hand in hand with growth and
trade liberalization strategies.

---

---

.

[CUTS-TradeForum]

From: J.D.Agarwal, Indian Institute of Finance

Dear Colleagues,

I am glad that a very healthy and useful debate has been generated on
Professor Bhagwati's speech in Parliament of India on the subject of
Growth and Poverty alleviation.

I am enjoying reading the opinion and analysis of various prominent
economists and journalists and others who are seriously concerned with
finding and suggesting solutions from down to earth to economic
modelling.

Despite the best efforts of all including politicians, administrators,
economists, NGOs in civil society and others, poverty is not getting
reduced. The dragon face of poverty is terrifying poor and middle
class. United Nations, Governments in different countries and other
international agencies are trying their best.

Economic growth is an important means to achieve the objective of
poverty reduction. We need to adopt other non-financial, social means
to improve the quality of life of people and to reduce poverty. What
we need is social sector
reforms, Philanthropy and social concern and responsibility, on the
part of those who have been the beneficiary of the economic systems
and richer, is necessary to be simultaneously encouraged with
governmental efforts.It should be
a universal movement involving all.

With best wishes,

J.D.Agarwal

[CUTS-TradeForum]

From: Jean-Pierre Lehmann

Dear Friends, I continue to follow this fascinating exchange, arguably
one of the most intellectually stimulating online discussions I have
ever seen

May I, as an outsider and in all modesty, bring in another dimension?
Not surprisingly, since most of the discussants are economists, the
focus has tended to be very much on economic theories and policies.
But is there not an important social element here? The word "caste"
has not been mentioned (unless I missed it). Is it irrelevant? Is it
not the case that most of the poor and illiterate are from lower
castes? While there is no doubt at all that there are remarkably
compassionate and caring people among the Indian elites, the
impression gained is how uncaring many others appear to be. I have
asked most of my Indian friends whether Aravind Adiga's The White
Tiger is an accurate reflection. Most tended to respond in the
affirmative.

The comment often made to me also by Indian friends is that there is a
very large Indian population that in the eyes of the elite are
invisible, just don't exist. They are there - accomplishing multiple
very servile tasks - but not noticed. They are not said "hello" to,
asked how they are, etc. Again I want to emphasise that I am not
proposing a description of Indian society in general. And what I have
described is not confined to India, though it does seem to be more
acute in India. Is there not a need for a greater social awareness and
combating the prejudices and discriminatory practices? No society will
progress without sound and dynamic economic policies. But is that
enough? Can one argue that no matter how sound the policies are, if
they are implemented in a social context that is not conducive or
indeed inimical to social development, progress and equity, that they
are likely to fail?

Jean-Pierre

PS I read lots and lots of Indian novels, which no doubt colour my
view of Indian society. Maybe I should stick to economists.

Jean-Pierre Lehmann, D.Phil (Oxon)

Professor of International Political Economy
& Founding Director, The Evian Group at IMD
Box 915, 1001-Lausanne, Switzerland

Tel: +41-21-618-0348, fax: +41-21-618-0619
e-mail Leh...@imd.ch

http://www.imd.org/eviangroup http://www.imd.org/eviangroup

See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
World
Trade (Cambridge University Press)

http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_
GB

On Jan 13, 11:22 pm, Kathyayini Chamaraj <kchama...@gmail.com> wrote:
> Very compelling arguments by Professor Saner.  When growth is already at
> 8-9%, it is possible to spend more than tuppence for the social sector.  But
> is it being done?  The increased revenues from growth are being used to show
> generosity to the wrong sectors, like the Rs. 5 lakh crore tax exemptions
> given last year.  That 5 lakh crore could have been used to help every child
> overcome malnutrition and get a basic education and vocational skills.  It
> could have also helped upgrade skills of the large mass of unskilled workers
> who have not even completed Class VIII and cannot get jobs in the growing
> economy.  The large informal sector involved in 'indecent work' could have
> been given higher wages, decent working conditions and social security, in
> turn raising demand.  It is not as though education will create only open
> minds and empty purses.  The skilled can create their own jobs to an
> extent.  The 8-9% gowth has also created enough jobs and demand for skilled
> workers but there are none available with the required skills.   Much of the
> meagre amounts allocated to the social sector or those allocated for
> upliftment of the SCs/STs lapses and does not get spent due to lack of
> prioritisation and 'governance failure'.  The problem is that only tuppence
> is being spent when more could be spent.
>
> Kathyayini Chamaraj
>

[CUTS-TradeForum]

From: Ashima Goyal, Indira Gandhi Institute of Development Research

Some recent statistics show that 96 percent of India’s children are
now going to school. India’s development is making this debate,
enjoyable as it is, irrelevant. In a stagnant economy short-term vote
catching transfers dominated. Many types of distortions were created.
Even if the schemes gave some surface benefits to the poor the
distortions imposed large indirect costs, which fell mostly on the
poor.

But today better education, health and delivery of public services are
required to harness the opportunities available. There is a demand for
this, to which politicians are beginning to respond. They have to be
sensitive to what the electorate wants in order to survive.
Strengthening institutions and horizontal democracy are slowly pushing
for better governance. If government expenditure builds and empowers
human capacity it is good for growth and for removing poverty.

Ashima Goyal
IGIDR
--
Ashima Goyal
Professor
Indira Gandhi Inst. of Dev. Research
Gen. A.K. Vaidya Marg, Goregaon (E)
Mumbai 400 065, India.

Editor, Macroeconomics and Finance in Emerging Market Economies
www.informaworld.com/mfeme
http://mc.manuscriptcentral.com/reme
E-mail: ash...@igidr.ac.in
Ph:+91-22-2841 6524
Fax: +91-22-2840 2752
http://www.igidr.ac.in/~ashima <http://www.igidr.ac.in/%7Eashima>

On Jan 13, 11:22 pm, Kathyayini Chamaraj <kchama...@gmail.com> wrote:

> Very compelling arguments by Professor Saner.  When growth is already at
> 8-9%, it is possible to spend more than tuppence for the social sector.  But
> is it being done?  The increased revenues from growth are being used to show
> generosity to the wrong sectors, like the Rs. 5 lakh crore tax exemptions
> given last year.  That 5 lakh crore could have been used to help every child
> overcome malnutrition and get a basic education and vocational skills.  It
> could have also helped upgrade skills of the large mass of unskilled workers
> who have not even completed Class VIII and cannot get jobs in the growing
> economy.  The large informal sector involved in 'indecent work' could have
> been given higher wages, decent working conditions and social security, in
> turn raising demand.  It is not as though education will create only open
> minds and empty purses.  The skilled can create their own jobs to an
> extent.  The 8-9% gowth has also created enough jobs and demand for skilled
> workers but there are none available with the required skills.   Much of the
> meagre amounts allocated to the social sector or those allocated for
> upliftment of the SCs/STs lapses and does not get spent due to lack of
> prioritisation and 'governance failure'.  The problem is that only tuppence
> is being spent when more could be spent.
>
> Kathyayini Chamaraj
>

[Sdeva...@worldbank.org]

From: Shanta Devarajan

In this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India, about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools, the doctor is absent 40 percent of the time, the teacher 25 percent of the time. Finally, when present, qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor.
_________________________
Shantayanan Devarajan
Chief Economist, Africa Region
Tel: 202-473-7691
sdeva...@worldbank.org
http://blogs.worldbank.org/africacan

jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.

From:	jb...@columbia.edu
To:	cuts-tr...@googlegroups.com
Cc:	cuts...@gmail.com
Date:	01/16/2011 11:20 PM
Subject:

Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

Sent by:	cuts-tr...@googlegroups.com

---

[KP Fabian]

I thank Professor Bhagwati for his clarification. 

I did not  say or even imply that Professor Bhagwati does not go beyond technical economics. I do regret if I caused in any way  such an impression.I am going to read up all that he has suggested.

The economists I talked to were attending seminars at IIC- India International Centre. Let me  add  that some of them might have gone to the bar later,but not before the seminar.

Let us not forget that the cancerous growth of corruption in India has occurred owing to LPG --Liberalization, Privatization,and Globalization. Shall we call it LPGC?

As regards the question of how to spend the money, we have to spend it on both poverty alleviation programmes and for building good infrastructure. The first gives immediate relief,the second long term improvement.The two are not exclusive.

What is the use of telling a man who is drowning that we have arranged for him to learn swimming next year?

I wonder how many have died of hunger by the time I have typed out this reply?

Ambassador K P Fabian

> Date: Sat, 15 Jan 2011 07:17:54 -0500
> From: jb...@columbia.edu
> To: cuts-tr...@googlegroups.com
> CC: cuts...@gmail.com

[Krishna, AS]

From : A.S.Krishna, A concerned citizen of India.

Dear Friends,

In all this stimulating discussion, have we factored, what in my opinion,
is the most important enabling provision required if millions in India
have to have a decent living ? Which is the role of " Governance " in
this process ? Unless, a conscious effort is made to improve the standards
of Governance, none of these reforms would reach the teaming millions.

I am deliberately introducing a new dimension to the discussion. Can my
erudite friends throw some light on this aspect ?

A.S.Krishna
Director-External Affairs,
MSD India
+91 98111 18116

-----Original Message-----
From: cuts-tr...@googlegroups.com [mailto:cuts-tr...@googlegroups.com] On Behalf Of CUTS-TradeForum

From: Jean-Pierre Lehmann

Jean-Pierre

Notice: This e-mail message, together with any attachments, contains
information of Merck & Co., Inc. (One Merck Drive, Whitehouse Station,
New Jersey, USA 08889), and/or its affiliates Direct contact information
for affiliates is available at
http://www.merck.com/contact/contacts.html) that may be confidential,
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please notify us immediately by reply e-mail and then delete it from
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[CUTS-TradeForum]

From: TCA S Raghavan

Would anyone like to examine the effect of the Hindu Succession Act of
1955 on poverty and how it has actually tended to increase it? Two
generations after 1947 many middle-sized farms have become one acre
farms.

TCA S Raghavan
Senior Associate Editor
Hindu Business Line

> e-mail Lehm...@imd.ch
>
> http://www.imd.org/eviangrouphttp://www.imd.org/eviangroup

> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
> World

> Trade (Cambridge University Press)http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_

[CUTS-TradeForum]

From: Arvind Panagariya

Having returned from a two-week visit to India, I have just
reconnected with the debate. While many of the postings have strayed
away from the original subject and gone into issues such as caste
(Jean-Pierre Lehmann), alternative poverty indexes (Raymond Saner) and
productivity (Sumit Majumdar), some have raised questions requiring
response.

(1) The reforms do not explain the growth we have experienced (R.
Vaidyanathan): The argument made is that liberalization did not impact
services that have been the engine of growth during the last two to
three decades. To begin with, the premise that industry has not
helped growth is itself faulty. In aggregate terms, growth rate of
industry has risen from 4% per annum between 1965-66 and 1980-81 to
6.4% between 1981-82and 2004-05 and to 9% between 2005-06 and 2009-10.
In the same vein, the contention that reforms consisting of both
internal and external liberalization are unrelated to growth in either
industry or services also lacks basis in reality. Thus, does anyone
seriously believe that
(i) Trade in goods and services as a proportion of the GDP could have
risen from 17.2% in 1990-91 to 53.4% in 2008-09 without trade
liberalization?
(ii) Foreign investment (direct plus portfolio) could have risen from
$100 million in 1990-91 to 64.1 billion in 2009-10 without opening the
economy to foreign investment?
(iii) The automobile production could have risen from 180,000 in
1990-91 to 2.1 million in 2009-10 (with an explosion in product
variety and quality) without the end to investment licensing and
opening up to foreign investment?
(iv) The production of two-wheelers could have risen from 1.82 million
in 1990-91 to 10.5 million in 2009-10 without the end to investment
licensing and opening up to foreign investment?
(v) The telecommunications revolution consisting of an increase in the
stock of telephones from just 5 million on March 31, 1991 to 621.3
million on March 31, 2010 (alongside an explosion in the quality and
variety of services) could have happened without the reforms in this
sector first under the Narasimha Rao government and then under the
Vajpayee government?
(vi) The software industry could have grown from $800 million in
1995-96 to $50 billion in 2009-10 without the internal and external
liberalization?
(vii) The financial sector, especially banking, could have grown at
the rapid pace it has without the massive liberalizing reforms in this
sector?
(viii)The airline industry could have been revolutionized without the
reforms that included the grant of entry to private airlines? I could
go on but this list should suffice to illustrate the link of reforms
to growth in both industry and services sectors. Professor
Vaidyanathan attributes the acceleration in growth to increased
savings but does not ask what led to the increase in this rate in the
first place. Surely, increased return on investment resulting
from the opening up of the vast world market, dramatically improved
access to the latest world-class technologies and enhanced competition
domestically has had something to do with the increase in the savings
rate.

(2) Growth needs to happen only through social sector development
(Kathyayini Chamaraj).
The argument made here is twofold: one, growth via the conventional
reforms provides benefits only to the rich and two, growth via social
policies such as primary education yields ultra-high returns. Ms.
Chamaraj asserts the return on investment in primary education is as
high as 700 percent meaning that the investment of one rupee generates
seven rupees worth of income. She has obviously not studied the link
between growth and poverty alleviation either generally or in the
Indian context. By now there is ample evidence including in the
Indian case that growth powerfully brings poverty down. As for
investment in primary education, didn’t we try this route at the
independence when the directive principles of the Constitution set
the goal of universal primary education by1960? In the event, we
failed to muster the necessary fiscal resources because the 700
percent return claimed by Ms. Chamaraj never materialized, the
economy grew at dismal rates and the fiscal resources required to
rapidly expand primary education never became available. Indeed, even
after we adopted the 86th Constitutional amendment elevating the right
to education from a directive principle of state policy to fundamental
right in 2002, the implementing legislation had to be kept in the cold
storage until as recently as March 2010 due to insufficient fiscal
resources. Ultimately, it was the rapid growth delivered by the
conventional reforms that generated enough fiscal resources to give
the government necessary courage to effectively implement the Right of
Children to Free and Compulsory Education Act beginning on April 1,
2010.

(3) The diversion of resources to social programs will be sustainable
even if growth declines (K. P. Fabian). Fabian simply asserts this
and offers no substantive reasons to back up his claim. He also says
“compare the amount of money stolen from the government by the corrupt
and the money spent on social welfare”. What is this comparison
supposed to tell us and how is it supposed to make the implausible
assumptions underlying Professor Sen’s position plausible? Is Fabian
arguing that the current growth offers us all the resources we need
for the social programs only if we could eliminate corruption? If so,
there are at least two problems with his argument. First, he greatly
underestimates the resources needed for social programs if we are to
provide education and health to our citizens at levels even half of
those prevailing in the developed countries. Second, does Fabian
really have a magic wand to eliminate corruption and convert the
associated money into social expenditures? If not, further reforms
and improved growth outcomes are the only hope for generating
additional fiscal resources.

(4) “The differences between Sen and Bhagwati are less substantive
than what is popularly made out to be?? (Kaushik Basu): This will
certainly not be obvious from the fierce advocacy of pro-market and
pro-free-trade reforms by Professor Bhagwati and near-exclusive focus
on social expenditures by Professor Sen. As a litmus test, let me ask
Professor Basu the following: Will Professor Sen publicly endorse the
reform of chapter V.B of the Industrial Dispute Act such that the
management in the larger firms acquires the right to layoff workers
upon payment of appropriate severance pay as is the case in most of
the countries around the world? Professor Bhagwati surely endorses
this reform. As I have argued for nearly ten years now, such a reform
will pave the way for the emergence of the large-scale firms in and
mega expansion of the labor-intensive sectors such as apparel,
footwear, light consumer goods and processing activities as in China
and hence accelerated reduction in poverty.

Arvind Panagariya

> e-mail Lehm...@imd.ch
>
> http://www.imd.org/eviangrouphttp://www.imd.org/eviangroup

> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
> World

> Trade (Cambridge University Press)http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_

> ...
>
> read more »

[CUTS-TradeForum]

From: Prabirjit Sarkar, Jadavpur University

Dear All

Some trade is better than no trade - so we were taught. It may be
extended to: 'some growth is better than no growth' even if this means
that the rich becomes richer while the poor remains as poor as
before (not poorer) - more so if the poor becomes less poor. So if the
empirical evidence shows that NEP regime promoted growth and the poor
did not become poorer it is always welcome by many, specially with a
little bit of training in so-called neoclassical economics. Think of
another scenario where growth is accompanied by poverty reduction (the
poor becomes less poor) and the rich becomes less rich (better
distribution). The believers of economics as a 'science' are very
uncomfortable here as it requires interpersonal welfare comparison.
Some of them may suggest to look at whether the tax-cum-subsidy
mechanism can more than compensate the losers' 'loss'.

In this kind of economic theory and its policy prescription, there is
no place for the study of socio-economy and/or political economy of a
country such as India. The issues of thousands' of years of social
deprivation - caste and gender biases are only in the rhetoric of the
ministers. So Long Live India which 'shines'. 'Slumdogs' of Bharat may
wait for a miracle in a silver screen.

Prabirjit Sarkar
Jadavpur University

> e-mail Lehm...@imd.ch
>
> http://www.imd.org/eviangrouphttp://www.imd.org/eviangroup

> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
> World

> Trade (Cambridge University Press)http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_

[CUTS-TradeForum]

Dear Professor Goyal,

You are undoubtedly referring to the Annual Status of Education Report
of Pratham that was released last week. It is true that enrollment is
encouraging, and in particular Bihar again is proving to be a champion
in this regard. The ASER team has done remarkable work in testing the
quality of education, and there the situation is alarming in India -
Class V children cannot read texts meant for class II, calculating
capacities are very low ( except for Punjab, an interesting success
story in this regard). It was pointed out that to benefit from the
democratic dividend , which can fuel growth (on which there is a
majoritarian consensus here) India needs to overhaul its educational
quality drastically in a short space of time. Opinion remains sharply
divided as to whether this should be done through the private or
public educational system.

Best Regards
Basudeb Chaudhuri
Centre de Sciences Humaines, New Delhi.

On Jan 18, 10:55 am, CUTS-TradeForum <cutsci...@gmail.com> wrote:
> From: Ashima Goyal, Indira Gandhi Institute of Development Research
>
> Some recent statistics show that 96 percent of India’s children are
> now going to school. India’s development is making this debate,
> enjoyable as it is, irrelevant. In a stagnant economy short-term vote
> catching transfers dominated. Many types of distortions were created.
> Even if the schemes gave some surface benefits to the poor the
> distortions imposed large indirect costs, which fell mostly on the
> poor.
>
> But today better education, health and delivery of public services are
> required to harness the opportunities available. There is a demand for
> this, to which politicians are beginning to respond. They have to be
> sensitive to what the electorate wants in order to survive.
> Strengthening institutions and horizontal democracy are slowly pushing
> for better governance. If government expenditure builds and empowers
> human capacity it is good for growth and for removing poverty.
>
> Ashima Goyal
> IGIDR
> --
> Ashima Goyal
> Professor
> Indira Gandhi Inst. of Dev. Research
> Gen. A.K. Vaidya Marg, Goregaon (E)
> Mumbai 400 065, India.
>

> Editor, Macroeconomics and Finance in Emerging Market Economieswww.informaworld.com/mfemehttp://mc.manuscriptcentral.com/reme

> E-mail: ash...@igidr.ac.in
> Ph:+91-22-2841 6524

> Fax: +91-22-2840 2752http://www.igidr.ac.in/~ashima<http://www.igidr.ac.in/%7Eashima>

[CUTS-TradeForum]

From: KP Kannan, Centre for Development Studies

Dear Prof Lehmann,

Your observation on Indian society and its deep and often invisible
divide along caste/community lines is indeed accurate. In fact if you
measure the benefits of growth of the Indian economy it has been
divided along broad socio-religious group line. The lower your social
status the lower the benefit that one gets out of the so called high
growth. Most of those belonging to the ‘low social status’ groups have
less education, less health care, short life expectancy, low quality
of housing and sanitation, low nutrition and so on (compared to the
‘high social status’ groups) and most of them work as informal
workers. They are poor but not idle poor; they are working poor. I
am enclosing an article that might interest you. Not all economists
have forgotten about caste and the social divisions.

I have also come across interesting – though few – interventions
(Raymond Saner, Chamaraj and a few others) in this debate here arguing
for a greater and focused attention to social/human development agenda
by the state. The growth maniacs are not devoid of any knowledge of
human development. They are simply advocating the mantra of the
market for ideological reasons, so I believe. As in the Capital
Theory controversy a few decades ago, they are driven by ‘faith’.

I would urge you and other colleagues interested in understanding the
life and work of the 92 percent of India’s workers called informal
workers to read the following two reports by the National Commission
for Enterprises in the Unorganised Sector constituted by the
Government of India (2004-09). The first deals with the state of
affairs and the second deals with what could be done, even in a
limited way, to ‘level up’ the plight of India’s working poor.

Report on Conditions of Work and Promotion of livelihoods in the
Unorganised Sector published by Academic Foundation, New Delhi (2007).

The Challenge of Employment in India: An Informal Economy Perspective
published by Academic Foundation, New Delhi (2009).

With best regards,

KPKannan
Centre for Development Studies
Trivandrum (Thiruvananthapuram)
Kerala, India
www.cds.edu

> e-mail Lehm...@imd.ch
>
> http://www.imd.org/eviangrouphttp://www.imd.org/eviangroup

> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
> World

> Trade (Cambridge University Press)http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_

[Reardon, Thomas]

From: Tom Reardon

 

I would like to walk further along the path Shanta Devarajan indicates.

 

First, while perspectives on the rural areas tend to emphasize that marginal/small farmers (less than 2 ha) are very dominant in numbers, it should be noted that many areas have quite heterogeneous farm populations, and medium and larger farmers (say four to 10 ha per government definitions) are very important – not in numbers so much as in their share of the rural market. For example,  in our detailed farm surveys in western and central Uttar Pradesh and central and western Madhya Pradesh, we find the while small/marginal farmers have 70-80% of the population, they have 20-30% share of crop output (total volume in the area). The medium and larger farmers have 70-80% of the overall volume of the crop economy, but have only 20-30% of the farm population. MOREOVER, we find the  medium and larger farmers have 85% of the (subsidized) tubewells, and purchase 90% of the seed and fertilizer sold by the state and coop stores (which we often heard were “for the poor” but we found were nearly not selling to the small farmers). Only the Kisaan Credit Card scheme showed up as being accessed by many small farmers. So that subsidies, schemes, public sector actions, end up being highly skewed toward the medium/larger farmers, at least in our study areas.

 

Second, the above I think means that the small/marginal farmers are competing for inputs and urban markets with stronger actors. The theme of the “competitiveness” of the small/poor farmer – in the domestic market within the market shed of large cities (which is or will be in a short time the great majority of Indian rural areas) – will join his/her human assets of health and education and access to infrastructure, as issues central to poverty alleviation.

 

Third, to make the poor “competitive” in India’s rapidly changing domestic market will mean assessing whether small farmers can make the needed “threshold investments” to survive in particular markets. For example, as the dairy market increasingly commercializes at the smallholder level, and urban milk demand gradually shifts to a demand for safe and clean milk, it will increasingly be necessary for small dairy farmers to have cooling tanks and access to vet meds and vet services in order to be competitive in the milk market, and to access the growing urban markets, generating income to rise from poverty. Growth in the markets, growth in incomes – this growth will not translate into higher income and opportunity for small farmers unless they have the productive assets of certain levels and types to participate in those markets as the competition and requirements increase.

 

Tom Reardon, Michigan State University and IFPRI/MSU Joint Program Markets in Asia

[bipul malakar]

Dear all and Shanta Devarajan , Chief Economist, Africa Region

 

Spending and or investing on Social sector is the necessary condition , sufficiency lies in governance . Greater emphasis on  urban curative health care is a typical public policies which is followed by private investors as well . On the other hand both private (including the NGOs)  and too some extent public spending is highly concentrated towards non communicable diseases .In sufficiency of  both urban and rural health sector can easily be understood and remarkably focused at crisis situation. 

 

Accountability of health service delivery system - mainly the medical persons are also well known. Attention and friendly attitude of para medical persons are contributing  - both health awareness and preventive measures are percolating to poorer section. 

 

It is time for Indian polity to introduce some measures of governance in the field of social sector  .   

Public spending on  health related infrastructure - potable water , hygienic health practises - toilet facilities at household level etc is rewarding - for example awareness building in reproductive health and child care . 

 

 

Bipul Malakar

Department of Economics

Jadavpur University 700032 

bipul....@yahoo.com


 

---

From: "Sdeva...@worldbank.org" <Sdeva...@worldbank.org>

To: cuts-tr...@googlegroups.com
Cc: cuts-tr...@googlegroups.com; cuts...@gmail.com

Sent: Mon, 17 January, 2011 11:18:25 AM

Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

From: Shanta Devarajan

In this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India, about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools, the doctor is absent 40 percent of the time, the teacher 25 percent of the time. Finally, when present, qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor.
_________________________
Shantayanan Devarajan
Chief Economist, Africa Region
Tel: 202-473-7691
sdeva...@worldbank.org
http://blogs.worldbank.org/africacan

jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does" src="cid:1.2595...@web95502.mail.in.yahoo.com" width=16 border=0>jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.

[CUTS-TradeForum]

From: Gopal Naik, IIM Bangalore

Faster Growth has incentivized education. In the 90s rural poor
questioned the utility of educating child as they were dependent
solely on very few jobs available with the Government. Educated youths
were reluctant to do agriculture and therefore were becoming
unproductive. Today with lots of opportunities available in the
private sector, rural poor are increasingly looking for good schools
for their children. There is growing demand for English medium schools
and tuitions. One way to cater to this need is tele-education.

Gopal Naik
Professor
IIM Bangalore

On Jan 18, 10:55 am, CUTS-TradeForum <cutsci...@gmail.com> wrote:
> From: Ashima Goyal, Indira Gandhi Institute of Development Research
>
> Some recent statistics show that 96 percent of India’s children are
> now going to school. India’s development is making this debate,
> enjoyable as it is, irrelevant. In a stagnant economy short-term vote
> catching transfers dominated. Many types of distortions were created.
> Even if the schemes gave some surface benefits to the poor the
> distortions imposed large indirect costs, which fell mostly on the
> poor.
>
> But today better education, health and delivery of public services are
> required to harness the opportunities available. There is a demand for
> this, to which politicians are beginning to respond. They have to be
> sensitive to what the electorate wants in order to survive.
> Strengthening institutions and horizontal democracy are slowly pushing
> for better governance. If government expenditure builds and empowers
> human capacity it is good for growth and for removing poverty.
>
> Ashima Goyal
> IGIDR
> --
> Ashima Goyal
> Professor
> Indira Gandhi Inst. of Dev. Research
> Gen. A.K. Vaidya Marg, Goregaon (E)
> Mumbai 400 065, India.
>

> Editor, Macroeconomics and Finance in Emerging Market Economieswww.informaworld.com/mfemehttp://mc.manuscriptcentral.com/reme

> E-mail: ash...@igidr.ac.in
> Ph:+91-22-2841 6524

> Fax: +91-22-2840 2752http://www.igidr.ac.in/~ashima<http://www.igidr.ac.in/%7Eashima>

[Petersmann, Ulrich]

As a law professor and former legal adviser in GATT/WTO for 30 years, I regret that your fascinating discussions about the sequencing of growth and social policies are one-sidely focusing on utilitarian 'output legitimacy'. Just as theories of justice, from Adam Smith to John Rawls, prioritize equal freedoms as 'first principle of justice' (and as constitutional basis for open markets and growth policies) over 'difference principles' (as constitutional basis for social rights) and require constitutions to deal with both of them together through what J. Rawls calls a 'four-stage process', so does the Indian Constitution insist on 'input legitimacy' in terms of 'liberty' and 'justice, social economic and political' (Preamble of the Indian Constitution). Even if, as emphasized by Professor Bhagwati, the 'transfer branch' of democratic governments (J.Rawls) depends on government revenue, the poor man dying from hunger (mentioned by Ambassador Fabian) might save his life by holding governments more accountable for their constitutional duty of pursuing growth and social policies simultaneously .

 

Prof. Petersmann

 

________________________________________

 

Prof. Dr. Ernst-Ulrich Petersmann

Professor of International and European Law

European University Institute

Via Boccaccio 121

50133 Firenze - Italy

Phone +39.055.468.5753 / 241

Fax +39.055.468.5200

new email address: Ulrich.P...@eui.eu

personal web-page: http://www.eui.eu/DepartmentsAndCentres/Law/People/Professors/Petersmann.aspx

 

Human Rights in International Investment Law and Arbitration

Edited by Pierre-Marie Dupuy, Francesco Francioni and Ernst-Ulrich Petersmann

Available direct from Oxford University Press at: http://ukcatalogue.oup.com/product/9780199578191.do

[CUTS-TradeForum]

From: Ravi Chaudhry, CeNext Consulting & Investment Pvt. Ltd.

I am not an economist. May I humbly put across my views - as a human
being? The ongoing dialogue is very interesting, as several wise
people have shed significant new light on a host of issues. I feel
immensely enlightened.

I sense an underlying convergence of views. The question is not
whether growth will lead to poverty alleviation or poverty alleviation
per-se will lead to growth. It cannot be a "this or that "debate. We
want both - growth as well as poverty alleviation.

I wish to put forth the hypothesis that: "While growth can be achieved
with poor governance, genuine, sustainable poverty alleviation will
not be possible without good governance."

The focus of our dialogue, therefore, must shift to what needs to be
done to radically transform the quality of governance. The policy
framework in government today, not only in India, but in most
democracies, has been hijacked by business-politics nexus. The view
expressed by United States President Rutherford Hayes, in 1876, "This
is a government of the people, by the people and for the people no
longer. It is a government of corporations, by corporations, and for
corporations," crisply portrays the stark underlying reality.

As long as this unholy alliance between corrupt business and corrupt
politics is not dissolved, GDP growth and genuine poverty alleviation
will be like the two tracks of a railway line. Looking ahead from any
point, they appear to converge in the distance; in reality they never
do.

What is needed is a genuine dialogue among humans, of humans, for
humans. The only test of that is "when growth is synonym with poverty
alleviation, not merely leading to poverty alleviation".

I have covered this subject at length in my book: Quest for
Exceptional Leadership: Mirage to Reality, just released worldwide by
Sage Publishers. http://www.sagepub.in/browse/book.asp?bookid=1557&mode=1

I have outlined the emergence of a new fifth phase of human enterprise
that is redefining the criteria of success as well as re-configuring
the routes to success. I have also analyzed the changing paradigms and
provided, what I believe, is a realistic blueprint to acquire the
relevant leadership traits. Nations and corporations do not have the
option to wait; they have to re-align themselves with the new reality
¬ now. The deprived three billion people in the world, who are not a
part of the growth story, will no longer accept poverty as destiny.
Quite rightly so, as it cannot be a divine plan that they are to be
consigned to the realm of permanent destitution. Their condition is a
consequence of humankind’s deliberate actions, and the leaders of
humankind must set the imbalance right.

Life is not a matter of "having more", but "being" more - Pope John
Paul II

Ravi Chaudhry
Chairman, CeNext Consulting & Investment Pvt Ltd
2-D-4, Parkwood Estate, Rao Tularam Marg
New Delhi - 110022, India
Phone : +91.11.2616 5406 and +91.11.2616 5495
Fax : +91.11.2616 5542
E-mail : ra...@cenextconsulting.com
www.cenextconsulting.com

> ...
>
> read more »- Hide quoted text -

[KP Fabian]

Dr.Lehman is right. There are 600 policemen in reserve to take care of VIP and VVIP security in Delhi in addition to the 5500 deployed..
 
The poor don't exist in the eyes of the rich. I come from Kerala and when I was a boy, 60 years ago, we had not only the untouchables but also the unseeables. The lowest caste had to hide themselves when the high caste Brahmin passed by. Even seeing them was pollution.
 
The Indian elite,including the economists,with very exceptions, do not care for the poor as they discuss poverty over a seven course meal. The government economists cannot even agree on the number of the poor. The late Professor Arjun Sengupta calculated correctly that 77% of the Indians live on less than Rs.20 a day. That includes many on Rs.15 a day, 12 a day,and 9 a day. The Indian elite did their utmost to sideline the finding.
 
Incidentally, none has answered the question I raised with Professor Bhagwati about chresmatics. Are  not derivatives trading  and subprime lending chresmatical activities?  Let me rephrase my question: How many economics text books  mention chresmatics?
 
Ambassador K P Fabian
 
> Date: Tue, 18 Jan 2011 04:18:45 -0800
> Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
> From: cuts...@gmail.com
> To: cuts-tr...@googlegroups.com

[Shovan Ray]

I have been reading with curiosity on the positions taken by various academics on the issues that concern our larger society, but couldn’t resist any more to keep myself out of it. These are clearly old issues for academic discourses here and elsewhere, but it was interesting to see positions taken as India emerges in the world economy together with its new clout in the world at various levels.

            What I could not agree with Professor Bhagwati’s position foremost is his sequencing – first increase the size of the cake and then distribute from the larger dividend – and thus give ‘those who do not have the bread, pieces of cake’ embellished as it were with all the goodies. In my opinion this approach is both morally unacceptable and strategically questionable. There have been umpteen debates about the efficacy of the ‘trickle down’ process, not to speak of the moral issues of justice and rights on which very illuminating debates have taken place – I don’t need to inform this forum on this further. Does the trickle down process deliver?  Perhaps not enough, as the channels are narrow and get choked up in the process. That is how some societies and economies get considerably more iniquitous than others in similar growth scenarios – the so-called ‘growth elasticity’ of poverty reduction. Clearly interventions are imperative – the reason why the planners, howsoever ineffective they may have been, had sought to change this through what is now called ‘human agency’ to upgrade human resources like education and healthcare. This is not to be confused with ‘human development’, which is a much broader concept. This tangentially also addresses the issue of caste and class as there is considerable overlap in India between the lower castes and classes, and the reason why affirmative action was guaranteed through constitutional provisions.

            Getting back to the ‘human development’ interventions issue, this helps the growth process – the size of the plum cake – through its instrumental value, quite apart from the intrinsic values of education and healthcare which are desirable by their own right. If Professor Bhagwati’s sequencing is acceptable at all, it is in providing the intrinsic value of the human welfare attributes of growth, not necessarily its productive or ‘instrumental value’. But I am not sure they meet with the moral questions that all of us as social scientists should be concerned with.

            If today China is to be showcased as a mighty nation with robust growth and challenging the world economy, and with it as the only other superpower, this has not been done without massive sacrifices for raising human development for the common man, and woman, in the last half century – Chairman Mao’s commencement declaration at the Gate of Heavenly Peace  in October 1949 was the eradication of ‘poverty’ through literacy - and indeed China made rapid strides in those spheres.  This should not be mistaken for condoning other serious errors that China committed in the process – particularly its flawed Great Leap Forward and Cultural Revolution interventions.

Indeed, Professor Bhagwati more than anybody else is well aware that the Chinese currency is also snipping at the foundations to emerge as the reserve currency of the world trading system! The massive trade surplus and accumulation of reserves have not been done by mere reforms in the trading regime and accession to the WTO. Please don’t mistake me as an apologist for the China syndrome, but there is much to learn from their HD interventions – how they have wiped away illiteracy and along with that a great deal of deprivations that is epitomized by the expression ‘poverty’. Where does that put us on the posturing on growth and HD interventions.

 

Shovan Ray

Indira Gandhi Institute of Development Research

Mumbai

[CUTS-TradeForum]

From: Abel Mateus, New University of Lisbon

Dear Forum,

I have worked on development policies for about 30 years and was a
senior economist at World Bank in the 1980s working on poverty issues.

I visited India as a tourist for the first time recently, and was
struck by two issues: (i) the extent of poverty and the
ineffectiveness of Government poverty alleviation, and (ii) the
importance of vested interests and Government capture by these groups.

On the first, experience elswhere has shown food subsidies programs do
not work and are a drain in budgteray resources. Targeted programs to
the most needy are much more cost-efficient (direct food aid to
malnurished children - I remember the interesting experiences in Tamil
Nadu in the 1970s that seem to be forgotten, school lunches, food and
health services aid to pregnant women). However, I saw mountains of
grain rotting in the fields, product of inefficient official
intervention agencies, and the Minister of Economy stated in a
conference I participated in Delhi that he pretends to extend price
controls to 70% of food consumed by the poor.

On the second, I am struck by the lack of serious studies on the lack
of competition and how large economic groups have shaped trade and
investment policies in the past.
India needs to pay more attention in how to build an open market
economy, with more access by medium and small enterprises to capital,
simplifying bureaucracy, fighting corruption and introducing merger
control (opposed by the big groups).

Export of services will not do the trick on the long-run.
Industrialization with improvement in agriculture productivity,
supported by human capital and technology transfer, should not be
forgotten as the main economic policies.

---
Abel Mateus
Professor of Economics
New University of Lisbon
You can access my papers on the Social Science Research Network (SSRN)
at: http://ssrn.com/author=1223260

> e-mail Lehm...@imd.ch
>
> http://www.imd.org/eviangrouphttp://www.imd.org/eviangroup

> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through
> World

> Trade (Cambridge University Press)http://www.cambridge.org/gb/knowledge/isbn/item5645257/?site_locale=en_

[sitanon jesdapipat]

dear Friends, I felt urged to jump into the discussion. May I share my limited knowledge of Thailand. Our experience has been a derailed public policy. The 5-year majority rule government under the ex-PM now in exile for corruption charge simply destroyed the well developed health sector then. There was a good balance between role of markets and public sector. Before that if you were truly poor, you were entitled to free services (which were relatively decent, as doctors are 'forced' to provide committed services in remote hospitals after graduation). If you could afford it, you would go to private hospitals (which were quite well segmented, with excellent services and no redtape). You could also buy a health insurance, at modest premium.   That government provided close to free service, which destroyed the well development health sector. Hence, the poor end up subsidizing the rich, as the rich also get free service with much less relative tax-share of burden. Indirect taxes took higher toll on the poor than the rich. Worse yet, the current government provides free services for all. Imagine how we could finance it in the near future, when only 20% of Thais pay tax!!!   So, the question is not whether to finance or not to finance social services, and having to perhaps balance with financing growth. It is ithe question HOW to carefully craft a public policy that serves the REAL needs, and how to ensure that markets properly function so that there is a good balance between market and government interventions.   Thailand has a much deeper crisis, especially on a longer term horizon. Public sector finance is one, and health sector is one of the most critical givent the fact that Thais are aging rapidly. Politics are playing a wrong game for short-term political gains. Only tax payers are vitims of this game. Hence discussing public policy is only part of the longer term solution to development. We need to clean up politics and politicians, perhaps in that order, as a precondition to strengthening pulic policies. Sitanon JESDAPIPAT, Ph.D. Associate, SEA START Regional Center 5th Floor, Chulawich 1, Henri Dunant Road Phayathai, Bangkok 10330, Thailand Tel. 662 2189464; Facimile: 662 5836153 Mobile: 6686 7817111 (private) --- On Mon, 1/17/11, Sdeva...@worldbank.org <Sdeva...@worldbank.org> wrote:

[CUTS-TradeForum]

From: V Ranganathan, IIM Bangalore

Shantha,

Excellently put. It is the governance, not money per se. One other
point is, because of barter economy, people in rural areas are not
actually as poor as the nos. make it out; at the same time rural areas
are more impenetrable for reforms as they depend more on govt /
bureaucratic munificence.

V Ranganathan
Prof, IIM Bangalore


On Jan 17, 10:48 am, Sdevara...@worldbank.org wrote:
> From: Shanta DevarajanIn this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India,about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools,the doctor is absent 40 percent of the time, the teacher 25 percent of the time. Finally, when present,qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor._________________________

> Shantayanan Devarajan
> Chief Economist, Africa Region
> Tel: 202-473-7691

> sdevarajan@worldbank.orghttp://blogs.worldbank.org/africacanjb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.From:jb...@columbia.eduTo:cuts-tr...@googlegroups.comCc:cuts...@gmail.comDate:01/16/2011 11:20 PMSubject:Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]Sent by:cuts-tr...@googlegroups.comMr. Fabian does not address the issues at hand, I am afraid, nor does  

> > My comments:1) Do...
>
> read more »
>
>  graycol.gif
> < 1KViewDownload
>
>  ecblank.gif
> < 1KViewDownload

[Shovan Ray]

Following on my posting of 18 January, I make the following two observations for Professor Bhagwati’s attention. First, I give examples of educational expansion in East Asia and note their contribution to development and growth, mixing deliberately across the ideological spectrum – the achievements of Japan (parenthetically), China, Taiwan and South Korea as a historical perspective. Second, with the same examples, I would re-submit my earlier contention that it is flawed to believe that social sector investments may be gainfully made only at a later stage when enough surplus is generated through the growth momentum. As history of success shows, it is a concurrent process, and much of growth is attributable to social sector investment. Quite apart from the human development perspective mentioned earlier, this also underlines the more contemporary endogenous growth theory accounting for the non-neoclassical growth experience that was sustained in East Asia and elsewhere. Consider the success stories from Asia.

Illiteracy rates in China were 85 per cent among the adult population and as high as 95 per cent in rural China in 1949 when the Communist Party of China took over government, at about the same orders of magnitude as India at independence around that time. Despite many ups and downs, and disruptions such as the Cultural Revolution, China’s anti-illiteracy has been marked by considerable success. China’s anti-illiteracy efforts clearly stand out as the greatest experiment in mass education in history, of over a billion people made literate in a span of about 30 years. The imperative for the literacy campaign was succinctly put by Mao himself: “The necessary condition for establishing a new China is to sweep away illiteracy from the 80 per cent portion of China’s population.” The challenge was vast in an economy that was in a shambles, and not quite the fruits of robust growth experience. Relate that to the growth success story of China that I emphasized in my posting on 18th.

What happened in Japan, which was also to later influence its two former colonies, Taiwan and Korea? The last years of the Tokugawa Shogunate considered education seriously, but it was the Meiji restoration in 1867 that made the vast paradigm shift, including the system of education influenced by the West. The new system introduced common schools for all classes. Parents were held responsible for their children’s attendance at school, and this included education for girls as well. School attendance soared, and rose from 46 percent in 1886 to 97 percent in 1906 and then to 99 percent in 1916. At that time, a hundred years back, Japan was merely emerging as a maritime power in East Asia, but Japanese exports did not cut much ice in the world economy. It was still Pax Britannica. Put that into perspective.

Japan annexed Taiwan in 1895 and the Korean peninsula in 1910. Japan extended variants of its education system in the colonies. In Taiwan 65.7 percent of school age children were attending elementary school by 1943, when the government introduced compulsory elementary education. When Taiwan was returned to China in 1945 the government revamped the educational system. The six year compulsory education was replaced in 1968 with free compulsory education for nine years. With the Nationalist Government in power from 1949 the character of the island changed considerably and education became critical to their development model. By 1980 all 6-12 year olds were in school, 90 percent of the 12-15 age group and 26 percent of the 18-22 year olds went to senior high school or a senior vocational school. Taiwan’s literacy rate rose to 91 percent by the mid-1980s.

When Korea was divided after independence at the end of World War II and then the Korean War of 1950-53, South Korea had 21 million people predominantly in farming and fishing (with industries in the North); but it quickly became a highly industrialized country alongside high productivity in agriculture, and was termed a miracle economy with phenomenal growth in per capita income. Education in South Korea expanded at an unprecedented pace visualized unmistakably as instrument of development. From 1955 to 1970 the emphasis in South Korea was on quantitative expansion of primary schools and after 1965 greater attention was given to increasing the number of junior and senior secondary schools. At the beginning of 1980s, almost all its elementary school-age children were in school, from 5 million in 1960 to 11 million, accounting for all the children that entered the age cohort in its population. Compulsory education was extended to nine years of schooling. South Korea reached 93 percent literacy rate by 1981. That is magnificent achievement by any measure of success! Besides other factors, education has been of paramount importance to the success story of South Korea in its economic and social development. “South Korea’s remarkable economic growth that started in the early 1960s – was accompanied by, and to a considerable extent facilitated by, an expanding educational system.” I quoted that from Professor Bhagwati’s former colleague at MIT, Myron Weiner writing in his book, ‘The Child and the State in India’ (p.171).

I would like to ask Professor Bhagwati if his core contention that reforms, especially trade reforms, provided the main impetus for success stories in the historical perspective to the relative neglect of the social sector investments. If so, should we junk the endogenous growth models also, which are maintainable with the ‘instrumental role’ of education and healthcare to growth? I am not yet raising the important moral question of starving the poor and malnourished of the bread with the promise to give them cakes later.

 

Shovan Ray

Professor, IGIDR, Mumbai

 

[Siddhartha Mitra]

While it is true that growth is necessary for sustainable poverty alleviation I am not convinced that higher growth would necessarily result in higher poverty alleviation.   The impact of economic growth on poverty alleviation can be broken down into two components:   a) the poverty alleviation resulting from the redistribution of the increase in incomes resulting from growth (fiscal channels)   b) the poverty alleviation resulting from the trickle down impacts of growth -- as growth takes place there is an increase in demand for the services and other products produced by the poor   Impact b) should in general be higher if growth is higher for a given distribution of income. There might, however, be a tradeoff between impact a) and impact b) -- redistribution of the increase in income so as to favour the poor might amount to taking away resources from their most productive use (atleast in the short run) and check growth and therefore poverty alleviation occurring through impact b).  Depending on the strength of this tradeoff, poverty alleviation might increase with growth or decrease with it.   However, if the redistribution process suffers from leakages and poor targeting, there might be no tradeoff leading to an unambiguous positive relationship between growth and poverty alleviation. In other words, the lack of efficient targeting mechanisms or the high incidence of corruption might actually serve as the reason for maximising growth and banking upon the spontaneous process of trickle down to do the job of alleviating poverty.   It is only when the poverty alleviation programmes become better targeted and characterised by a certain minimal amount of cleanness that active redistribution at the expense of reduced growth  becomes a viable alternative for poverty alleviation. SM Siddhartha Mitra Professor

Department of Economics Jadavpur University

Kolkata-700032 Mobile: 91(0)9038002290 --- On Thu, 1/20/11, CUTS-TradeForum <cuts...@gmail.com> wrote:

[KP Fabian]

I could not agree more with Dr.Jesdapipat and Chief Economist  Devarajan that we all should agree that what is required is an intelligent combination of growth and spending on social justice. There should be growth in social spending too,not only in gross (how gross can it get?) domestic product.
 
The argument that spending on social justice does not result in better justice does not hold water. How about the Conditional Cash Transfer in Brazil and elsewhere?
 
Chief Economist Devarajan's mention of 40% absenteesim  on the part of doctors in India's primary health centres is well taken. But, I should add that I know of an NGO in Hyderabad that has taken over management of hundreds of such centres in the state of Andhra Pradesh. There is hardly any absenteeism in those centres.
 
Ergo, not all social spending delivers, but when it does not deliver, there is always a remedy. It will be illogical and unjust to stop social spending and divert the money to infrastructure and other areas and to be dependent on the mythical trickle-down effects. I also know of cases of NEREGA having empowered women in rural India.
 
I have checked.Even the better dictionaries do not  give the meaning of CHRESMATICS. Wonder who killed the word? Does any one want to claim responsibility?
 
 
Ambassador K P Fabian
 
 
 

 

---

Date: Wed, 19 Jan 2011 08:38:06 +0800
From: jsit...@yahoo.com

Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
To: cuts-tr...@googlegroups.com

CC: cuts-tr...@googlegroups.com; cuts...@gmail.com; natwi...@gmail.com

[CUTS-TradeForum]

From: Dr. Prabirjit Sarkar, Jadavpur University

Dear Mr. Fabian,

Thank you for bringing the term 'Chresmatics' in the discussion. I
could not locate it in oxford dictionary but google search brought me
to your blog discussion (Aristotle vs. Greenspan). It has no place in
the so-called mainstream economics (and obviously in the text books
written in that tradition). In that economics and of course in the so-
called WC (Washington Consensus) you may find serious theory - finance
matters - stock market matters - rising stock prices through buying
and selling of old shares by the speculators and inflated market
capitalisation are often shown to have positive causal connection with
growth. So no wonder that all these economists enjoyed the boom
condition because of securitisation of the sub-prime loans (as
vindication of their theory that market works in both national and
international contexts). Recall the same scenario in the wake of the
debt crisis of 1982. However in the writings of heterodox economics
you may find echos of your views -of course without using that term:
many studies are there to show that stock market does not matter for
real investment -no connection between stock market boom and real
economic development. There are some studies to show this for India.

Best
Prabirjit
----
DR PRABIRJIT SARKAR
PROFESSOR OF ECONOMICS
JADAVPUR UNIVERSITY, KOLKATA

On Jan 19, 3:40 pm, KP Fabian <kpfab...@hotmail.com> wrote:
> Dr.Lehman is right. There are 600 policemen in reserve to take care of VIP and VVIP security in Delhi in addition to the 5500 deployed..
>
> The poor don't exist in the eyes of the rich. I come from Kerala and when I was a boy, 60 years ago, we had not only the untouchables but also the unseeables. The lowest caste had to hide themselves when the high caste Brahmin passed by. Even seeing them was pollution.
>
> The Indian elite,including the economists,with very exceptions, do not care for the poor as they discuss poverty over a seven course meal. The government economists cannot even agree on the number of the poor. The late Professor Arjun Sengupta calculated correctly that 77% of the Indians live on less than Rs.20 a day. That includes many on Rs.15 a day, 12 a day,and 9 a day. The Indian elite did their utmost to sideline the finding.
>
> Incidentally, none has answered the question I raised with Professor Bhagwati about chresmatics. Are  not derivatives trading  and subprime lending chresmatical activities?  Let me rephrase my question: How many economics text books  mention chresmatics?
>
> Ambassador K P Fabian
>
>
>
> > Date: Tue, 18 Jan 2011 04:18:45 -0800
> > Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

> > From: cutsci...@gmail.com

[CUTS-TradeForum]

From: Avinash Kumar, Oxfam India

While Prof. Ranganathan's need to focus on governance is critical, the
assumptions behind the same as outlined by Prof. Shantha Devarajan,
seem to be quite misplaced. While, it is true that additional spending
on social-sector development may not lead to improved human
development outcomes, to infer from that the increase in investment in
social-sector is not needed is like throwing the baby with the bath
water.

It is now part of the general common sense that the countries with
the best human development record are the ones which have spent
really highly up to 5-6% of GDP on their health and education
portfolios and not just the OECD countries but also the middle income
countries and what we refer to as developing countries as well. Take
health for example, while the total expenditure on health in India is
to the tune of 5-6% of GDP, public spending on the same is just under
1%, which means that about 80% of the health costs come through out of
pocket expenditure and which in turn means that health is the second
largest reason behind people going
officially under below poverty line in India. Precisely because of the
highly commercialised, privatised nature of the health sector today
and also because of the high costs, very often people don't even
approach a doctor in early stages of their illness, leading to India
being a country with one of the worst health outcomes, among the
highest maternal deaths, infant and child mortality rates etc.

The issue, therefore is tricky from another perspective. Some of the
recent decisions of the Delhi High Court and the report submitted by
Justice Qureshi at the instance of the former, clearly castigate the
unaccountable, fraudulent nature of private hospital cartels, the way
they have been duping both the people (and not just the poor but also
the middle classes) and the government despite accessing huge amount
of subsidies.

So the contention that only the private docs (even if unqualified) are
'qualified' to find the solution is quite problematic. In fact,
precisely because of the complete lack of investment in the public
health care, and the growing rampant commercialisation of the private
health care, that the govt doctors are not joining the private
bandwagon. If teachers and doctors are not turning up in the health
centres and the schools, its not because public sector somehow makes
them lethargic, but because one, due to a complete and deliberate lack
of investment (both financial and political) it doesn't give them
enough stake in the system. So better overall infrastructural
facilities, a chance to improve their own lives, enough space to
design health interventions in collaboration with the local community
would be better solutions. Second, if the performance is an issue,
better systems of accountability could be designed and thats where the
focus on governance accountability is most critical.

On another note, the idea that rural poverty is actually less than
reported due to barter economy is quite surprising to me. It would
mean denying all the existing data not just of official numbers of
poor, but of hunger, deaths, farmer suicides etc. But that's a
different debate altogether.

-----
Avinash Kumar
Essential Services Lead Specialist
Oxfam India
Plot No.1, 2nd Floor, Community Centre
New Friends colony, New Delhi 110 025
Phone: +91-11-4653 8000 Ext. 137, Fax: +91-11-4653 8099, Mobile:
+91-98181 25827

> > < 1KViewDownload- Hide quoted text -

[CUTS-TradeForum]

From: A.S. Krishna, MSD India

Absolutely right!

This is how the importance of good governance comes into play, the
issue I raised earlier. Social spending, well managed and governed,
instead of, the so called mythical trikle-down effect,is key to
development and poverty reduction. How do you increase the size of
Social spending pie? It has to be the increase in the size of GDP.
They have to run parallel. If not done so, it is a sure shot recipe
for social unrest and anarchy.

A.S.Krishna
Director-External Affairs,
MSD India
+91 98111 18116

On Jan 20, 12:16 pm, KP Fabian <kpfab...@hotmail.com> wrote:
> I could not agree more with Dr.Jesdapipat and Chief Economist  Devarajan that we all should agree that what is required is an intelligent combination of growth and spending on social justice. There should be growth in social spending too,not only in gross (how gross can it get?) domestic product.
>
> The argument that spending on social justice does not result in better justice does not hold water. How about the Conditional Cash Transfer in Brazil and elsewhere?
>
> Chief Economist Devarajan's mention of 40% absenteesim  on the part of doctors in India's primary health centres is well taken. But, I should add that I know of an NGO in Hyderabad that has taken over management of hundreds of such centres in the state of Andhra Pradesh. There is hardly any absenteeism in those centres.
>
> Ergo, not all social spending delivers, but when it does not deliver, there is always a remedy. It will be illogical and unjust to stop social spending and divert the money to infrastructure and other areas and to be dependent on the mythical trickle-down effects. I also know of cases of NEREGA having empowered women in rural India.
>
> I have checked.Even the better dictionaries do not  give the meaning of CHRESMATICS. Wonder who killed the word? Does any one want to claim responsibility?
>
> Ambassador K P Fabian
>

> Date: Wed, 19 Jan 2011 08:38:06 +0800

> From: jsita...@yahoo.com

> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
> To: cuts-tr...@googlegroups.com

> CC: cuts-tr...@googlegroups.com; cutsci...@gmail.com; natwiph...@gmail.com

>
> dear Friends, I felt urged to jump into the discussion. May I share my limited knowledge of Thailand. Our experience has been a derailed public policy. The 5-year majority rule government under the ex-PM now in exile for corruption charge simply destroyed the well developed health sector then. There was a good balance between role of markets and public sector. Before that if you were truly poor, you were entitled to free services (which were relatively decent, as doctors are 'forced' to provide committed services in remote hospitals after graduation). If you could afford it, you would go to private hospitals (which were quite well segmented, with excellent services and no redtape). You could also buy a health insurance, at modest premium.
>
> That government provided close to free service, which destroyed the well development health sector. Hence, the poor end up subsidizing the rich, as the rich also get free service with much less relative tax-share of burden. Indirect taxes took higher toll on the poor than the rich. Worse yet, the current government provides free services for all. Imagine how we could finance it in the near future, when only 20% of Thais pay tax!!!
>
> So, the question is not whether to finance or not to finance social services, and having to perhaps balance with financing growth. It is ithe question HOW to carefully craft a public policy that serves the REAL needs, and how to ensure that markets properly function so that there is a good balance between market and government interventions.
>
> Thailand has a much deeper crisis, especially on a longer term horizon. Public sector finance is one, and health sector is one of the most critical givent the fact that Thais are aging rapidly. Politics are playing a wrong game for short-term political gains. Only tax payers are vitims of this game. Hence discussing public policy is only part of the longer term solution to development. We need to clean up politics and politicians, perhaps in that order, as a precondition to strengthening pulic policies.
>
> Sitanon JESDAPIPAT, Ph.D.
> Associate, SEA START Regional Center
> 5th Floor, Chulawich 1, Henri Dunant Road
> Phayathai, Bangkok 10330, Thailand
> Tel. 662 2189464; Facimile: 662 5836153
> Mobile: 6686 7817111 (private)
>

> --- On Mon, 1/17/11, Sdevara...@worldbank.org <Sdevara...@worldbank.org> wrote:

>
> From: Sdevara...@worldbank.org <Sdevara...@worldbank.org>
> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
> To: cuts-tr...@googlegroups.com
> Cc: cuts-tr...@googlegroups.com, cutsci...@gmail.com
> Date: Monday, January 17, 2011, 12:48 PM
>
> From: Shanta Devarajan
>
> In this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India, about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools, the doctor is absent 40 percent of the time, the teacher 25 percent of the time. Finally, when present, qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor.
> _________________________
> Shantayanan Devarajan
> Chief Economist, Africa Region
> Tel: 202-473-7691

> sdevara...@worldbank.orghttp://blogs.worldbank.org/africacan

>
> jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.
>

> From:
>
> j...@columbia.edu
>
> To:
>
> cuts-tr...@googlegroups.com
>
> Cc:
>
> cutsci...@gmail.com
>
> Date:
>
> 01/16/2011 11:20 PM

>
> Subject:
>
> Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>

> Sent by:
>
> cuts-tr...@googlegroups.com

> ...
>
> read more »
>
>  graycol.gif
> < 1KViewDownload
>
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> < 1KViewDownload- Hide quoted text -

[CUTS-TradeForum]

From: K. P. Kannan, Centre for Development Studies

Dear Shovan,

I couldn’t agree with you more. These are the examples I also tell my
students in the class room lectures.

Also, it might be of interest to those who are not yet convinced of
the importance of social sector expenditure without waiting for
maximizing growth rate per se, to have a look at Peter Lindert’s book,
The Growing Public wherein he quantifies the state expenditure on
social spending right from 1900 onwards in OECD countries when many of
them were yet to start full scale industrialization or high growth
rate.

Best,

K. P. Kannan

Centre for Development Studies
Trivandrum

> much ice in the world economy. It was still *Pax Britannica*. Put that into

[CUTS-TradeForum]

From: Madhav Mehra, World Council For Corporate Governance

I have no qualifications to join the debate of stalwarts. Both
Professor Bhagwati and Dr Amartya Sen are icons I profoundly admire.
Like most Indians abroad, it shames me that despite two decades of
reforms that made India one of world’s fastest growing economies, we
not only continue being a nation with world’s largest number of
hungry & malnourished but are at the bottom of G20 in regard to the
disparity between the very rich and the very poor. This is a real time
bomb that threatens the integrity of our country.

Growth to be sustainable has to be led by the bottom of the pyramid
and not other way around. Could anyone imagine that a social network
model developed by a 19 year old to get girls attracted to him will
become the biggest wealth driver making him the Time’s Person of the
year or that that a film based on his life will be such a big hitter
at the Golden Globes.

We must not fail to recognize that the incredible India story rests on
its youth – its demographic advantage. It proved itself when Haryana
youth rescued India out of the CWG mess by winning a record number of
gold medals. It is this “revolution of perceived possibilities” that
has made our entrepreneurs venture out aggressively in every corner
of the world. If Indian youth does not find jobs, it becomes an easy
prey for terror groups. Terror from within is far more lethal than
terror from outside.

Regrettable though it is, modern education has only inverse
correlation with morality or ethics. With respect to Mr Martin Wolf
high income does not necessarily remove corruption. Companies that
destroyed shareholder values were run and managed by some of the best
boards. A Mackenzie director attended every board meeting of ENRON.
LTCM board included the best Nobel laureates such as Myron Scholes,
Robert Merton. Harvard Professor Palepu was part of the Satyam
board, Dean of Stanford Business School was chairman of the audit
committee of ENRON and Henry Kissinger was a member of the Hollinger
board run by Lord Black who till recently was serving a 78 months
prison sentence in US.

Greed has no constituency. Our markets are distorted because of greed
which is fed by cosiness, concealment, conceit and corruption.
Architects of meltdown were well-bred, brainy and brilliant people.
Seven out of ten were from Harvard Business School. “Ahead of the
Curve” by Philip Delves Broughton and Liar’s Poker by Michael Lewis
illustrates the corrupting influence of quality education.

Indeed the minimal rate of defaulters among rural illiterate poor that
burst the tills of micro finance industry until their greed drove
farmers to suicide contrasts with the manner Berlusconi is thriving in
educated Italy. Graphic accounts of fraudulent expenditure claims
among British parliamentarians exposed by Daily Telegraph

The inequalities that threaten our integrity are the direct result of
poor and opaque governance. Raghuram Rajan reiterates his fears about
India’s oligarchic brand of capitalism saying “the ties that bind
India’s billionaires to the state are too close for comfort”.

The good news is that inclusive growth is achievable. All it needs is
a trigger to spark a nationwide explosion of innovation. That trigger
in India is vigorous enforcement of Competition Act 2002. Protecting
and pampering incumbents drives out radicals and starves innovation.
History tells us that no technological breakthrough was ever achieved
by industry insiders. It is always an outside job. Incumbents, having
invested in old technology always use their clout to keep radicals
out. Curbing abuse of dominance and punishing cartel conduct opens
the terrain for radical innovators to achieve the twin objective of
offering new technologies at much lower costs and leveraging bottom
of the pyramid for inclusive growth.

Systemic corruption is the biggest obstacle to all this. But it is not
a virus carried by aliens from Mars; it is within each one of us. The
only way to treat is to ensure complete transparency. Transparency
frightens wrong doers and acts as a disinfectant. It exposes the
culture of concealment, conceit, cosiness, groupthink, self delusion
and hypocrisy. Transparency can be far more effective than can be
imagined to curb corruption in these days when social media has become
our 24 hour watchdog.

Despite its messiness, our greatest advantage lies in our uniquely
vibrant democracy. It has helped us internalize the value of
pluralism, capitalising diversity, dissent and dialogue. India has the
distinction of effecting bloodless regime change overnight. Diversity
has a priceless role in creating synergistic solutions in the age of
uncertainty.

Instead of paying lip service to Mahatma Gandhi let us just remember
one of his messages about the purpose of our effort: “Every action we
contemplate should in its implementation wipe the tears of poor and
downtrodden. Only when we have wiped the tears off the eyes of all the
poor, have we truly arrived as a nation.”


Madhav Mehra

President
World Council For Corporate Governance
1 Northumberland Avenue
Trafagar Square
London WC2N 5BW
Phone 44 (0) 20 7872 5784
Fax 44 (0) 20 7224 8748
email m.m...@wcfcg.net
website www.wcfcg.net

On Jan 20, 12:16 pm, KP Fabian <kpfab...@hotmail.com> wrote:

> I could not agree more with Dr.Jesdapipat and Chief Economist  Devarajan that we all should agree that what is required is an intelligent combination of growth and spending on social justice. There should be growth in social spending too,not only in gross (how gross can it get?) domestic product.
>
> The argument that spending on social justice does not result in better justice does not hold water. How about the Conditional Cash Transfer in Brazil and elsewhere?
>
> Chief Economist Devarajan's mention of 40% absenteesim  on the part of doctors in India's primary health centres is well taken. But, I should add that I know of an NGO in Hyderabad that has taken over management of hundreds of such centres in the state of Andhra Pradesh. There is hardly any absenteeism in those centres.
>
> Ergo, not all social spending delivers, but when it does not deliver, there is always a remedy. It will be illogical and unjust to stop social spending and divert the money to infrastructure and other areas and to be dependent on the mythical trickle-down effects. I also know of cases of NEREGA having empowered women in rural India.
>
> I have checked.Even the better dictionaries do not  give the meaning of CHRESMATICS. Wonder who killed the word? Does any one want to claim responsibility?
>
> Ambassador K P Fabian
>

> Date: Wed, 19 Jan 2011 08:38:06 +0800

> From: jsita...@yahoo.com

> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
> To: cuts-tr...@googlegroups.com

> CC: cuts-tr...@googlegroups.com; cutsci...@gmail.com; natwiph...@gmail.com

>
> dear Friends, I felt urged to jump into the discussion. May I share my limited knowledge of Thailand. Our experience has been a derailed public policy. The 5-year majority rule government under the ex-PM now in exile for corruption charge simply destroyed the well developed health sector then. There was a good balance between role of markets and public sector. Before that if you were truly poor, you were entitled to free services (which were relatively decent, as doctors are 'forced' to provide committed services in remote hospitals after graduation). If you could afford it, you would go to private hospitals (which were quite well segmented, with excellent services and no redtape). You could also buy a health insurance, at modest premium.
>
> That government provided close to free service, which destroyed the well development health sector. Hence, the poor end up subsidizing the rich, as the rich also get free service with much less relative tax-share of burden. Indirect taxes took higher toll on the poor than the rich. Worse yet, the current government provides free services for all. Imagine how we could finance it in the near future, when only 20% of Thais pay tax!!!
>
> So, the question is not whether to finance or not to finance social services, and having to perhaps balance with financing growth. It is ithe question HOW to carefully craft a public policy that serves the REAL needs, and how to ensure that markets properly function so that there is a good balance between market and government interventions.
>
> Thailand has a much deeper crisis, especially on a longer term horizon. Public sector finance is one, and health sector is one of the most critical givent the fact that Thais are aging rapidly. Politics are playing a wrong game for short-term political gains. Only tax payers are vitims of this game. Hence discussing public policy is only part of the longer term solution to development. We need to clean up politics and politicians, perhaps in that order, as a precondition to strengthening pulic policies.
>
> Sitanon JESDAPIPAT, Ph.D.
> Associate, SEA START Regional Center
> 5th Floor, Chulawich 1, Henri Dunant Road
> Phayathai, Bangkok 10330, Thailand
> Tel. 662 2189464; Facimile: 662 5836153
> Mobile: 6686 7817111 (private)
>

> --- On Mon, 1/17/11, Sdevara...@worldbank.org <Sdevara...@worldbank.org> wrote:
>
> From: Sdevara...@worldbank.org <Sdevara...@worldbank.org>

> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
> To: cuts-tr...@googlegroups.com
> Cc: cuts-tr...@googlegroups.com, cutsci...@gmail.com
> Date: Monday, January 17, 2011, 12:48 PM
>
> From: Shanta Devarajan
>
> In this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India, about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools, the doctor is absent 40 percent of the time, the teacher 25 percent of the time. Finally, when present, qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor.
> _________________________
> Shantayanan Devarajan
> Chief Economist, Africa Region
> Tel: 202-473-7691

> sdevara...@worldbank.orghttp://blogs.worldbank.org/africacan

>
> jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.
>

> From:
>
> j...@columbia.edu
>
> To:
>
> cuts-tr...@googlegroups.com
>
> Cc:
>
> cutsci...@gmail.com
>
> Date:
>
> 01/16/2011 11:20 PM
>

> Subject:
>
> Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>

> Sent by:
>
> cuts-tr...@googlegroups.com

> ...
>
> read more »
>
>  graycol.gif
> < 1KViewDownload
>
>  ecblank.gif

> < 1KViewDownload- Hide quoted text -

[CUTS-TradeForum]

From: Ashok K. Nag, Financial Technologies (India) Ltd.

Going beyond the theoretical debate that is currently engaging all the
participants I would like to get answer to a practical question that
might affect a large majority of poor Indians in near future. And the
question is directly related to the topic of this debate.

We know that National Advisory Council has recommended an allegedly
diluted version of the Propsed Food Security Act.The latest
recommendation is to cover 70% of the country's population -90% in
rural areas and 50% in urban areas. There would be two groups among
thiese target groups - priority households whou would be legally
entitled to get highly subsidized 35kg of cereals per month Non-
priority households would get 25kg per month at 50% of Minimum Support
Price.

It is expected that food subsidy bill would rise at least by 16billion
US dollar.Jean Dreze, a member of the NAC has this to say" The NAC
proposals [are] a great victory for the government — they allow it to
appear to be doing something radical for food security, but it is
actually more of the same,” he said.

The final result, he says, is “a minimalist proposal that misses many
important elements of food security".

Now, what would be your recommendation?

1) Enact a bill as per NAC recommendation.
2) Enact a Universal Food Security bill as envisaged by people like
Dreze.
3) Do not at all enact such bill if it increases the Fiscal Deficit
beyond the targeted threshold level.
4) Or anything else.

Can we get a concrete answer with justification from the economists
participating in this debate.

Ashok K. Nag
Senior Vice President of Financial Technologies (India) Ltd.
blog: http://blog.ashoknag.com
email- asho...@gmail.com; ak...@yahoo.com


On Jan 18, 4:14 pm, "Petersmann, Ulrich" <Ulrich.Petersm...@EUI.eu>
wrote:

> new email address: Ulrich.Petersm...@eui.eu
> <mailto:Ulrich.Petersm...@eui.eu>
>
> personal web-page:http://www.eui.eu/DepartmentsAndCentres/Law/People/Professors/Petersmann
> .aspx
> <http://www.eui.eu/DepartmentsAndCentres/Law/People/Professors/Petersman
> n.aspx>

> > From: j...@columbia.edu
> > To: cuts-tr...@googlegroups.com
> > CC: cutsci...@gmail.com

> > >> Sent from my BlackBerry(r) on Reliance Mobile, India's No. 1

> ...
>
> read more »- Hide quoted text -

[CUTS-TradeForum]

From K.A.Badarinath, Financial Chronicle

Hi folks

I have been following with interest the debate on growth vs. poverty
alleviation debate that has entered third week now.

I have a few points to make given the arguments put forth by Prof
Jagdish Bhagwati and Prof Amatya Sen.

1. Economic theories do not necessarily offer solutions to every
problem or its manifestation. Practical experiences and our Vedic
texts may offer wholesome solutions to grass-roots problems in
remotest areas of India.

2. Prosperity in a society does not necessarily mean that a particular
economic solution has worked or otherwise.

3. Poverty may be prevelant in a system despite best policies that are
formulated and implemented.

4. Sage Chanakya's artha niti (economic engagement) may offer some
rare insights into economic governance issues bogging different strata
of Indian society.
5. Vidhur Niti (Vidur of Mahabharata fame) may provide the solutions
to coalition politics that has its bearing on economic engagement with
the population/electorate of a duly elected government.

6. Most economies including India's are run on political lines. Hence,
without examining the impact of political dispensation on economy of a
country may not be possible. This analysis may be different from pure-
play economic policies pursued by the coalition government that has
been in saddle for at least over 12 years (including NDA and UPA
governments).

7. Best of free market economic policy making has not insulated
developing countries like India from impact on its growth, macro-
economic fundamentals, poverty of people especially after the abuse
and misuse of market dynamics in US leading to this century's
depression.

8. Best of command economies led by proletariat governments in
socialist / communist governments have freed people totally from
scourge of hunger, disease, illiteracy and non-availability of two
square meals a day.

9. One solution that may be found in this maze of economic theories to
rid human race of poverty and at the same time ensure healthy growth
is to reverse the economic pyramid. I suspect that going back to gram-
swarajya (village as basis of empowerment and economic development) is
the only way out. Rural economies all over must the focus of all
thinkers, policymakers and intellectuals.

10. I also think that biggest issue here is lack of governance model
free of corruption, scandals and moral fabric that has torn into heart
of Indian society. It is not just India. Developed economies seem no
better placed. Hence, one needs to really address these issues rather
than posturing on theories.

K.A.Badarinath
Editor - Policy
Financial Chronicle
www.mydigitalfc.com
91-9810401275

[CUTS-TradeForum]

From: Krishan Khanna, i Watch

Myth or Not, let's look at the hard facts where Indians are today.

The people who are NOT poor are definitely those who are communicating
on this Group!

Most of the poor of India are still poor.

The Indian definition of poverty needs to be understood, about Rs 12
per day per person for Rural india about Rs 15 per person per day for
Urban India.

Even at this level about 320 million are poor. We are 1200 million
people today.

If we take the World Bank old definition of Poverty of US$ 1 per day
about 550 million are poor.

If we take the new definition of the WB of US$ 2 per day, about 960
million are considered poor.

If we take US$ 5 per day, you can guess where India is today!

It has been reported that 78% of all medical expenses are paid by
private sources; one can easily understand the % of poor who are
deprived of medical support in India.

If we look at the "Human Development Index" India stands lower than
many 3rd world countries at about the 123rd position.

India is probably the ONLY country in the world where "Literacy" is
defined by the fact if you can sign your name. Govt. Says 64% literacy
has been achieved. That means that 450 million cannot sign their name.
If the definition is corrected to the International meaning of
literacy which is reading, writing and arithmetic or functional
literacy; the literacy level could sink to about 35%. China is at 95%.

I have read the Media and Economic experts mentioning, and correctly
so, that India is also growing at nearly 10% like China. But what we
do not tell our people is that the Chinese economy is nearly 3X of
India and hence 10% of Chinese growth is nearly 30% of the Indian
Economy!

If you look at Skilling or Vocational Education..a direct impact on
employment, competitiveness, export worthiness, etc..China has 500,000
centres Skilling nearly 80 million or 10% of their workforce. India
has 7000 centres skilling about 3.1 million or about 0.6% of our work
force. It is estimated another 7 million get informal skilling which
increases our total skilling capacity to about 2% of our workforce. So
we have 300 million people who of employable age but cannot get
employed, inspite of huge demand.

Switzerland, with a population of 7 million people, 5000 skill centres
and where 80% of the youth go for vocational training and only 20% go
for a University degree, has a GDP of nearly 35% of India!

The "Thinkers and Planners" have not been able to put Indian
Agriculture on a world class high trajectory of high productivity. Our
yields per acre per year are really low. 70% of our population is
rural. China had put 70% of skill centres, about 350,000, in Rural
China to train nearly 60 million farmers per year, training the rural
population in forestry, agriculture, animal husbandry, horticulture
and floriculture. What a Chinese grows on 1 acre of land, our hard
working farmer needs 3 acres. He also has access now to "Microfinance"
but NOT to skills to teach him as to how to use these funds. Even
today, 40% of fruits and vegetables are destroyed in India, due to
lack of various factors. India is the 2nd largest producer of fruits
and vegetables in the world. Some experts are even recommending that
"Farming is out" and BPO in rural India is the in thing.

I confess, I am not an economist but only an ordinary Citizen.

Can we imagine how fast we could takle poverty, if we could "Just Put
our House in Order"?

The "Trickle Down" would be much faster.

Krishan Khanna
Chairman & Founder,
i Watch
www.wakeupcall.org

On Jan 20, 11:52 am, Siddhartha Mitra <mit...@yahoo.com> wrote:
> While it is true that growth is necessary for sustainable poverty alleviation I am not convinced that higher growth would necessarily result in higher poverty alleviation.
>  
> The impact of economic growth on poverty alleviation can be broken down into two components:
>  
> a) the poverty alleviation resulting from the redistribution of the increase in incomes resulting from growth (fiscal channels)
>  
> b) the poverty alleviation resulting from the trickle down impacts of growth -- as growth takes place there is an increase in demand for the services and other products produced by the poor
>  
> Impact b) should in general be higher if growth is higher for a given distribution of income. There might, however, be a tradeoff between impact a) and impact b) -- redistribution of the increase in income so as to favour the poor might amount to taking away resources from their most productive use (atleast in the short run) and check growth and therefore poverty alleviation occurring through impact b).  Depending on the strength of this tradeoff, poverty alleviation might increase with growth or decrease with it.
>  
> However, if the redistribution process suffers from leakages and poor targeting, there might be no tradeoff leading to an unambiguous positive relationship between growth and poverty alleviation. In other words, the lack of efficient targeting mechanisms or the high incidence of corruption might actually serve as the reason for maximising growth and banking upon the spontaneous process of trickle down to do the job of alleviating poverty.
>  
> It is only when the poverty alleviation programmes become better targeted and characterised by a certain minimal amount of cleanness that active redistribution at the expense of reduced growth  becomes a viable alternative for poverty alleviation. SM
>
> Siddhartha Mitra
> Professor
> Department of Economics
> Jadavpur University
> Kolkata-700032
> Mobile: 91(0)9038002290
>

> --- On Thu, 1/20/11, CUTS-TradeForum <cutsci...@gmail.com> wrote:

[CUTS-TradeForum]

From: Martin Wolf, Financial Times

Let me respond to the following comment from Mr Mehra: "With respect

to Mr Martin Wolf high income does not necessarily remove corruption."

First, I would never claim that high incomes eliminate corruption.
Nothing can eliminate corruption until all human beings become
saints. Corruption will always be with us. So it is a matter of
degree. But degrees matter. There is clear evidence of the inverse
relationship between incomes per head and indicators of corruption.

Second, lower corruption is both cause and consequence of rising
incomes. Surely, we can already see the latter in India, with voters
beginning to look for actual and prospective performance in office as
a justification for their support.

Third, corporate corruption is indeed important. But it is not, in my
view, as damaging as large-scale corruption in government. Governments
are monopoly suppliers of certain essential services. People find it
very difficult to escape the harmful effects of corrupt governments.
It is usually possible to escape the services of corrupt companies.
Corrupt companies are likely to collapse. (Think of Enron.) The life
span of a corrupt government is often far longer.

Fourth, probably the most damaging interaction between companies and
governments is the corruption of the latter by the former. One of the
arguments for eonomic liberalisation is that it reduces the incentives
for such rent-seeking activities.

Finally, I agree that the complex corporate form - necessary though it
is - is vulnerable to managerial capture. It is quite difficule to fix
this. Equally, powerful companies do seek to twist the political and
legal environment for their benefit. This challenge exists for
countries at all levels of income.

Martin Wolf
Financial Times
1 Southwark Bridge,
London SE1 9HL.

> email m.me...@wcfcg.net
> websitewww.wcfcg.net

> ...
>
> read more »- Hide quoted text -

[CUTS-TradeForum]

From : Nayanima Basu, Business Standard

Dear all,

With due respect to all, I think Mr. Badarinath is absolutely correct
in stating that absence of good governance and related problems with
it have led to an increase in poverty rather than reducing it. Words
like reforms and policy formulation looks good in books and analytical
pieces but honestly none of us have any clue on how to deal with it in
reality.

It is very easy for us to ignore little children who sit all day under
the traffic lights while their mothers run behind cars to get a Re.1
coin or the maid who washes our dirty utensils everyday and we do not
even bother to ask her whether she had a peaceful sleep the previous
night and was not beaten black and blue by her drunk jobless husband.
But we are very particular of the fact that this very maid should open
her torn sandals before entering our houses.

At best we can show sympathy to prove that we are humans. Do you
really think solving these issues needs blockbuster policy reforms or
jingoistic thesis sprinkled with jargons? Well, we all know the answer
….

We should start bringing changes in our daily lives by doing simple
things which are right there in our ancient text books on ethics and
morality but who cares? I am not being pessimist or “Leftist-minded”
but let’s for once sit and give a serious thought on this. Large-scale
thesis and theories, which a normal person cannot understand, are
meaningless. We need to instill in our everyday life simple values and
virtues of truth, honesty, empathy and love.

Why can’t people like us spend our weekends by teaching a poor child
or help our maids open bank accounts and get her children admitted in
schools? Why can’t we offer free but quality education to the children
out there right inside our colonies? Well, difficult it may sound … it
is actually very simple.

We need to come out of our parochial, regionalist and fanatic views.
And this is true not only for India but the world.

Besides lack of education and absence of good governance, poverty is
also increasing due to rise in religious dogmatism and fanatic
perspectives. We cannot carry the baggage of history and try a build a
new society. We need to read history and learn from the mistakes made
in the past.

Lastly, I apologize for sounding naïve amidst such great and revered
minds, but to me reducing poverty should not be treated as rocket
science and may be that is exactly why poverty in this country has
increased rather getting decreased. We have only been cleverly able to
hide it!

Regards,

NAYANIMA BASU
Principal Correspondent
Business Standard

[CUTS-TradeForum]

From: TCA S Raghavan, Hindu Business Line

Dear Mr. Wolf,

You are right about low incomes and corruption not being especially
correlated.

In India, at least, administrative corruption is largely because,
unlike in Britain (and I daresay in many other countries) we can do
only those things that are specifically allowed, rather than do
everything against which there is no law. This is a British colonial
legacy which we are still fighting against. In fact, reform is all
about tha -- ir the abolition of industrial licensing. The effect is
an extraordinary degree of discretion in the hands of the government
at all levels. The operating principle is you show me the man and I
will show you the rule.

Political corruption is directly linked to the cost of elections. we
have 700 million voters and at Rs 500 per voter for a general
election, it works out to a lot of money that the system has to
generate for just one national election then there are state
elections, municipal elections and local body elections.

TCA S Raghavan
Senior Associate Editor
Hindu Business Line

[CUTS-TradeForum]

From: Somasekhar Sundaresan, J. Sagar Associates I advocates &
solicitors

Re. Mr. Wolf's remarks, my tuppence of a perspective:

Like most things Indian, we have a variant to the conventional wisdom
on corruption in the private sector. One hears stories of widespread
corruption in companies too “with a number of private companies
managing infrastructure services and construction, which are
conventionally the domain of government, the level of corruption there
can indeed be high. Just as office bearers in government corrupt the
government, so do those holding office in corporations corrupt
corporate. And, indeed, corporate corruption is also a conduit for
corrupting governments funds taken out ostensibly for commercial
contracts find their way to paying off people in government. All of
this can merrily take place without the corporations collapsing, with
the Indian art of balancing and moderation, and ensuring that nothing
is taken to an extreme where something has to give way.

The real broader issue for this symptom is this: a common law suit in
India takes nothing less than 15-20 years for resolution of the first
stage of trial. Therefore, the fear of a lawsuit for claim of damages
is not a real fear within the lifetimes of directors of corporations.
Therefore, directors of private corporations do not perceive any real
fear of having to pay damages within a lifetime. The only fear they
may have is of special regulators like SEBI, but there is no real
material fear of civil courts awarding damages. This is the basic
issue with governance in India, be it governance of public
governments, or of public companies. In the US, boards are not as
scared of the SEC as they are of having to pay damages in claims made
by shareholders suing them for bad decisions.

Regards,
Somasekhar Sundaresan
Partner
J. Sagar Associates I advocates & solicitors
Vakils House, 18 Sprott Road
Ballard Estate, Mumbai 400 001. India
T: +91 22 4341 8504 (Direct) | T: +91 22 4341 8600 - Extn: 504
(Board) | F: +91 22 4341 8616 / 17

[Lehmann, Jean-Pierre]

Dear All

For those of you who do not read the FT, there is a review article in the weekend edition that is very relevant to our discussions and can be found at http://www.ft.com/cms/s/2/2ecabe4a-24e3-11e0-895d-00144feab49a.html#axzz1BgNlpEsV

I also take this occasion to say also how much I agree and applaud the views expressed by Nayanima Basu and the manner in which they were expressed. Maybe this forum will be seen as a birthplace for a revived effort for global decency and dignity. The acronym of the motto could be "It's the humanity, stupid"!

One of the lessons from the challenges facing us in India (and replicated in many ways throughout the world) is in fact how little we know and how little we understand. I am not a religious person myself (which I suppose I should hesitate admitting in an Indian forum), but the persistence of poverty, misery, hunger and loneliness, in spite of all the theories and policies, should impose a great sense of humility and awe before the complexities of our universe and its main species (ie humanoids!).

While it is imperative and urgent to have the great minds (of economists and others) develop learning and theories, ultimately, as Nayanima Basu argues, we must all try to do our bit not simply in material terms, but also in spiritual terms and in expressions of warmth and humanity.

In preaching, I do not want to give at all the impression that I see myself as a paragon in practice. One thing I have been trying, however - with only I admit very modest success - is to argue that poverty and humanity must feature prominently in the curricula of business schools, mine (IMD) included. This is way beyond CSR (which when it is studied is a bit less than a cherry on the curricular cake) but a question of fundamental ethics (as Ravi Chaudhry has eloquently argued in this forum and in his recent publication Quest for Exceptional Leadership). I tell our participants that until and unless the market economy can be seen to be reasonably (how to define?) equitable, it will risk exploding - and I am fairly sure I will be on the other side of the barricades.

Tarun Das has stated that in discussing poverty so broadly we are opening a Pandora's box, while Arvind Panagariya, if I interpreted him correctly, seemed to suggest we should not stray too much from economics by raising extraneous issues such as caste.

I hope we continue to let all sorts of flowers bloom and not restrict them to a particular discipline so long as the objective remains constant. I wonder if I am the only one in the forum who has noticed the number of postings that begin apologetically "I am not an economist, but .... ". There is no need to be apologetic about not being an economist! (They are also humanoids!)

Jean-Pierre

Jean-Pierre Lehmann, D.Phil (Oxon)
Professor of International Political Economy
& Founding Director, The Evian Group at IMD
Box 915, 1001-Lausanne, Switzerland

tel: +41-21-618-0348, fax: +41-21-618-0619
e-mail Leh...@imd.ch
http://www.imd.org/eviangroup

See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through World Trade (Cambridge University Press)

-----Original Message-----
From: cuts-tr...@googlegroups.com [mailto:cuts-tr...@googlegroups.com] On Behalf Of CUTS-TradeForum
Sent: 22 January 2011 06:11
To: CUTS-TradeForum
Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

From : Nayanima Basu, Business Standard

Dear all,

With due respect to all, I think Mr. Badarinath is absolutely correct in stating that absence of good governance and related problems with it have led to an increase in poverty rather than reducing it. Words like reforms and policy formulation looks good in books and analytical pieces but honestly none of us have any clue on how to deal with it in reality.

It is very easy for us to ignore little children who sit all day under the traffic lights while their mothers run behind cars to get a Re.1 coin or the maid who washes our dirty utensils everyday and we do not even bother to ask her whether she had a peaceful sleep the previous night and was not beaten black and blue by her drunk jobless husband.
But we are very particular of the fact that this very maid should open her torn sandals before entering our houses.

At best we can show sympathy to prove that we are humans. Do you really think solving these issues needs blockbuster policy reforms or jingoistic thesis sprinkled with jargons? Well, we all know the answer ....

We should start bringing changes in our daily lives by doing simple things which are right there in our ancient text books on ethics and morality but who cares? I am not being pessimist or "Leftist-minded"
but let's for once sit and give a serious thought on this. Large-scale thesis and theories, which a normal person cannot understand, are meaningless. We need to instill in our everyday life simple values and virtues of truth, honesty, empathy and love.

Why can't people like us spend our weekends by teaching a poor child or help our maids open bank accounts and get her children admitted in schools? Why can't we offer free but quality education to the children out there right inside our colonies? Well, difficult it may sound ... it is actually very simple.

[CUTS-TradeForum]

From: G.Sabarinathan, IIM Bangalore

At the risk of sounding antediluvian or semi-literate let me embolden
myself to challenge the virtue of growth that seems to have been taken
for granted in this debate.

The idea that high income, and therefore economic growth rates that
deliver high income as quickly as possible, improve welfare is not an
Indian notion. At least it was not for a long time. That model has
been described, somewhat derisively it would appear, as the "Hindu
rate" of growth. I am tempted to believe that this growth-centric
notion is something that has been handed down by the West to the rest
of the world; but I refrain from doing so for fear of a strong push
back to that view.

I believe that each society has its own ideas of what welfare and
happiness ought to be and those are not always measured in terms of
the goods and services that are consumed. At some point I hope the
world would start asking if that this consumption-centric model is the
universally right, one-size fits all solution for all nations and
societies. And I do not say that based on the view that there is a
moral angle to the consequences of growth, a point that Ben Friedman's
Moral Consequences of Economic Growth discusses at length. My
submission simply is that every society has its own social mores and
norms that govern its way of life. The norms and mores in some
societies may not place any premium on high standards of living or
consumption qua consumption.

It is interesting that even as many sections of western intelligentsia
is asking if it is right to consume with the rapacity that was
witnessed in the twentieth century, its economists – or at least some
economists who are brought up in that tradition – seem to be telling
the rest of the world, Look we are done with making that mistake and
now it is your turn to go ahead and make that same mistake. (There are
some riders of course such as that you cannot destroy the environment,
you cannot deplete the ozone layer and so on. Sorry, you just missed
that bus.)
But that is not my main issue here. The issue I wish to highlight is
that there is a social dimension to economic growth. It is perhaps not
relevant to this forum. But that would be like saying that this
discussion is on cardiology and so we will not discuss anything that
does not relate to cardiology even if it might in some way lead back
to the question of human health.

Rising incomes impact the way individuals and families live and
consume. These seem to influence, if not impact, the social structure,
notably the family system. An article that I read in the Businessweek
many years back described how South Korea's economic growth tore away
its family system and changed how members of the family related to
each other as income levels rose dramatically within one generation.
We seem to similar developments in India. I do not know to what extent
all these discussions of models of economic development are informed
by social research that looks at the social impact of economic
development. And that is the main concern that I wish to highlight
here.

Assuming that the notion of rising income is good from a welfare point
of view, it needs to be borne in mind that the west which is looked
upon as proof of the desirability of this philosophy had a long time,
spanning several generations, to cope socially with the impact of
rising incomes on family and social structure. It had the time to
develop social, economic, legal and administrative institutions that
were necessary to deal with the social consequences of rising incomes.
Whether they have succeeded in successfully coping with those social
consequences or not is another matter. But back here we seem to be in
a hurry to embrace that philosophy of growth to lift large swathes of
our population out of deprivation – or at least what some of us see
as deprivation.

Those institutions take time to develop. Simplistic solutions of
transplanting institutions from other social contexts do not work
easily when it comes to building institutions. It was a costly lesson
that some learned American professors of law realized to their utter
dismay when they transplanted the best features of their corporate law
code to Russia soon after perestroika. If only professors had looked
beyond their silo of legal scholarship and viewed legal systems as
something that does not function in a social vacuum and if only they
had taken the trouble to understand that the Russian society was just
coming out of years economic repression and that they did not even
understand the sanctity of the property rights they would not have
designed a corporate law code like a team of engineers designing a
hybrid fuel car!

The point I wish to make is simple: Please re-examine this fixation
with growth. There is growth and there is hypergrowth. While we choose
from these two let us keep in mind the social consequences of
development too. I get the impression from this thread – although no
one has said that in as many words - that we seem to have gladly
concluded that anything less than the growth rate in China or the East
Asian economies is not worth rooting for. If China and the Tiger
economies had established that it is possible to grow at 15% I wonder
if that would be our new benchmark.

Before I close I have to clarify that these comments do not in any way
contradict the comments I had made in an earlier posting. I had argued
that the fruits of development seem to have eluded the less privileged
sections of our society, leading to the coexistence of ostentation
with squalor. My comments here are not out of line with those
observations. They go back to the question of distribution. Lower GDP
growth rates than what we have achieved may well have been sufficient
to improve the economic conditions of a larger section of Indians, if
only we had had a mechanism of allowing more people to benefit from
that growth.

Finally, lest Professor Bhagwati should ask me again – as he did in
response to my last posting – if I have a solution to offer, my
anticipatory response is that I do not have one. The idea in bringing
these concerns up is not to challenge the intellectual firepower that
is resident in this forum, but to simply ask if we can reexamine some
of the premises that the arguments and suggestions here seem to be
based upon. If they do not find a place here I am perfectly happy for
them to dispose of as not worth even 'tuppence'.

Best,
Sabari

G.Sabarinathan, PhD
Associate Professor, Finance and Control Area, and
Chairperson, Office of International Affairs
Indian Institute of Management Bangalore
Bannerughatta Road
Bangalore 560076

[CUTS-TradeForum]

From: Ambassador K P Fabian

A comment on Martin Wolf's comments.

He says:"Fourth, probably the most damaging interaction between

companies and governments is the corruption of the latter by the

former. One of the arguments for economic liberalisation is that it

reduces the incentives for such rent-seeking activities."

The manner in which India has opened up its telecom sector has
engendered one of the biggest scams in living memory. There are many
ways in which liberalization can be effected, with a lot of
corruption, with minimum corruption and in between. But, as recent
history shows it has by and large, begotten big corruption, not only
in India. Ergo, we should stop praising liberalization per se as many
economists have been doing.

Ambassador K P Fabian

[CUTS-TradeForum]

From: C.R. Bijoy

Dear All

Some additional points that may be considered in connection with this
sober debate on the relationship between growth and poverty are:

1. Measurement of poverty: Can poverty be measured by income and
expenditure alone? The key and obvious measures would be nutrition,
asset ownership, access to education, access to secure livelihoods,
etc (income and expenditure are routes to this, not goals in
themselves). There is a fierce debate on about what is the accurate
measurement of all these indicators but there is as far as I know very
little disagreement on the fact that they have either worsened or
stagnated during the reforms period (on nutrition for instance see the
recent debate in EPW between Utsa Patnaik and Jean Dreze). For
instance, health care expenditure has increased enormously, presumably
accounting for much of the "expenditure" increase among poor
households - but is this a good thing? Self-evaluation of "better
prospects" or "better lives" is a notoriously poor way of evaluating
such gains since this depends as much on people's experience, hopes,
aspirations, changes around them, etc. Further the definition of
poverty lines in official Indian statistics is also the subject of a
huge literature.

2. When reforms have done such a wonderful job for people's lives, why
has formal, secure employment (not casual employment) registered a
practically zero percent growth for every year since 1990 (meaning
that there is a decline in the proportion fo people in these jobs)?
How do we factor in
casualisation of labour and decrease in employment as good for the
society?

3. There is also the critique that "license permit raj" was the result
of and the demand of India's capitalists - not India's poor and that
instead there should have been reforms in the opposite direction, i.e.
greater democracy, greater redistribution, people's control over
administrative institutions, etc..

4. About the need for resources first, how do we explain the
experiences of some countries (Sri Lanka, Jamaica, China, Cuba, the
Asian tigers etc) that provided basic services and amenities to their
people without galloping "growth" (the growth of China and the tigers
came later). In India, Kerala
is the standard counter example to all this.

Thanks

C.R Bijoy
Researcher-Writer-Activist
Coimbatore
Tamilnadu

On Jan 21, 2:53 pm, CUTS-TradeForum <cutsci...@gmail.com> wrote:

> email m.me...@wcfcg.net
> websitewww.wcfcg.net

> ...
>
> read more »- Hide quoted text -

[Anantha Nageswaran]

After correctly identifying the problem as the 'manner in which liberalisation has been pursued in the telecom sector', Ambassador Fabian has taken exception to libearlisation itself. That is strange.

 

The issue in India is that whenever and wherever discretionary powers resided with the government, more often than not, they have been pursued with political interests and not national interest in mind.

 

A separate strand of research needs to be conducted on the fascination many Indians continue to hold for government intervention and against liberalsiation despite decades of government sloth, corruption, wastage and lip-service to poverty.

 

There is still a lot of anger against government being pro-business. That is reasonable. Inevitably, it morphs into anger against market forces. We agree that a pro-business government is not necessarily pro-market.

 

Therefore, the thrust of our efforts should be to create perfectly competitive market conditions in sectors where market forces can operate. The thrust of our efforts and arguments should not be to provide a handle for governments to assume more discretionary powers again.

 

Regards,

Anantha Nageswaran

[CUTS-TradeForum]

From: Bernard O'Connor

Historically Poverty and Agriculture are often linked.

The great political and economic problem for the EU Common
Agricultural Policy (and its post 1850s national policy predecessors)
was always the fact that at least 80% of the farmers produced 20% of
the agricultural output while 20% of the farmers produced 80% of
output. This is what Reardon shows for India as well. The vast
majority of farmers were inefficient and poor (destitute in the 19th
Century and less poor in the 20th) while most of the minority were and
remain competitive in world terms.

This imbalance was addressed in a number of ways: a) direct
intervention in agriculture by protecting markets and subsidising
production (at the level of the most inefficient producer creating
windfalls for the efficient); b) slow absorption of farm labour into
industry by education and favouring growth of the industrial sector;
c) legal support for the cooperative movement to rebalance the
economic power of retailers and small farmers (exemptions from the
application of anti trust laws among others); d) policies, such as the
protection of Geographical Indications, to give value to small scale
production.

Some of the policies were inefficient from an economic perspective but
not, over time, from a social or a political perspective. This leads
to a much broader comment on the whole CUTS debate of growth and
poverty in India.

There is no such thing as a market without law and politics. Laws both
frame markets and sustain them. A typical 'framing' mechanism would be
bank capital adequacy rules or border protection. A typical and
essential 'sustaining' mechanism would be the law of contract and the
provision of Courts of Law to enforce them or a taxation measure
favouring one type of economic activity over another.

It is not right or proper that law and politics work to favour one
aspect society (economic growth) ahead of or at the expense of other
issues (poverty). Thus we are rightly constrained to address both (and
many others) together. Prioritising one aspect of how society
functions automatically prejudices all other aspects. We need growth,
yes. But we also need much more than mere economic growth.

Bernard O'Connor

NCTM O'Connor
European Lawyers
rue de Spa 30
B-1000 Brussels
tel: +32 2 285 46 85 fax: +32 2 285 46 90
bernard...@nctm.it
http://www.nctm.it


On Jan 18, 2:34 pm, "Reardon, Thomas" <rear...@anr.msu.edu> wrote:
> From: Tom Reardon
>
> I would like to walk further along the path Shanta Devarajan indicates.
>
> First, while perspectives on the rural areas tend to emphasize that marginal/small farmers (less than 2 ha) are very dominant in numbers, it should be noted that many areas have quite heterogeneous farm populations, and medium and larger farmers (say four to 10 ha per government definitions) are very important - not in numbers so much as in their share of the rural market. For example,  in our detailed farm surveys in western and central Uttar Pradesh and central and western Madhya Pradesh, we find the while small/marginal farmers have 70-80% of the population, they have 20-30% share of crop output (total volume in the area). The medium and larger farmers have 70-80% of the overall volume of the crop economy, but have only 20-30% of the farm population. MOREOVER, we find the  medium and larger farmers have 85% of the (subsidized) tubewells, and purchase 90% of the seed and fertilizer sold by the state and coop stores (which we often heard were "for the poor" but we found were nearly not selling to the small farmers). Only the Kisaan Credit Card scheme showed up as being accessed by many small farmers. So that subsidies, schemes, public sector actions, end up being highly skewed toward the medium/larger farmers, at least in our study areas.
>
> Second, the above I think means that the small/marginal farmers are competing for inputs and urban markets with stronger actors. The theme of the "competitiveness" of the small/poor farmer - in the domestic market within the market shed of large cities (which is or will be in a short time the great majority of Indian rural areas) - will join his/her human assets of health and education and access to infrastructure, as issues central to poverty alleviation.
>
> Third, to make the poor "competitive" in India's rapidly changing domestic market will mean assessing whether small farmers can make the needed "threshold investments" to survive in particular markets. For example, as the dairy market increasingly commercializes at the smallholder level, and urban milk demand gradually shifts to a demand for safe and clean milk, it will increasingly be necessary for small dairy farmers to have cooling tanks and access to vet meds and vet services in order to be competitive in the milk market, and to access the growing urban markets, generating income to rise from poverty. Growth in the markets, growth in incomes - this growth will not translate into higher income and opportunity for small farmers unless they have the productive assets of certain levels and types to participate in those markets as the competition and requirements increase.
>
> Tom Reardon, Michigan State University and IFPRI/MSU Joint Program Markets in Asia

>
> From: cuts-tr...@googlegroups.com [mailto:cuts-tr...@googlegroups.com] On Behalf Of Sdevara...@worldbank.org
> Sent: Monday, January 17, 2011 11:18 AM
> To: cuts-tr...@googlegroups.com
> Cc: cuts-tr...@googlegroups.com; cutsci...@gmail.com
> Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>

> From: Shanta Devarajan
>
> In this debate on growth v. social-sector spending, one point that has been insufficiently emphasized is that additional social-sector spending may not lead to better human development outcomes. The empirical evidence (across countries and over time) shows a very weak connection at best. There are at least three reasons. First, social-sector spending is often captured by the non-poor. In India, about 33 percent of public spending on health accrues to the richest 20 percent of the population, while less than 10 percent goes to the poorest quintile<http://www.ncaer.org/popuppages/PublicationDetails.aspx?ReferenceID=S...>. The reason is that the lion's share of this spending goes to hospitals (which are located in urban areas) rather than to primary clinics in rural areas (where the majority of the poor live). Second, even when spending is redirected towards primary clinics and schools, the doctor is absent 40 percent of the time, the teacher 25 percent of the time<http://www.dfid.gov.uk/R4D/PDF/Outputs/PolicyStrategy/Chaudhury_etal_...>. Finally, when present, qualified public sector doctors in Delhi have been found to provide worse service than unqualified private doctors<http://ideas.repec.org/a/eee/deveco/v83y2007i1p1-36.html>. In short, the question is not whether government should emphasize growth or social sector spending, but how overall public spending--and public policy more generally, including regulations--could be made more pro-poor.

> _________________________
> Shantayanan Devarajan
> Chief Economist, Africa Region
> Tel: 202-473-7691

> sdevara...@worldbank.org<mailto:sdevara...@worldbank.org>http://blogs.worldbank.org/africacan
>
> [Inactive hide details for jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does]jb38---01/16/2011 11:20:35 PM---Mr. Fabian does not address the issues at hand, I am afraid, nor does Mr. Saner from Oxford.
>
> From:
>
> j...@columbia.edu<mailto:j...@columbia.edu>
>
> To:
>
> cuts-tr...@googlegroups.com<mailto:cuts-tr...@googlegroups.com>
>
> Cc:
>
> cutsci...@gmail.com<mailto:cutsci...@gmail.com>

>
> Date:
>
> 01/16/2011 11:20 PM
>

> Subject:
>
> Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>

> Sent by:
>
> cuts-tr...@googlegroups.com<mailto:cuts-tr...@googlegroups.com>
>
> ________________________________
>

> > From: Ambassador K P Fabian
>

> > I tend to agree with Sen. Panagariya is not fair to Sen.
>
> > "The only way to justify Professor Sen's position is to accept all of
> > the following (rather implausible) assumptions:
> > (i) Current income levels (which are themselves much higher because of
> > the success of our growth strategy during the last two decades) and
> > accompanying revenues are good enough to finance the social programs
> > in the depth and breadth we want; (ii) Paying attention to policies
> > that help sustain or accelerate the current growth will necessarily
> > divert us from undertaking the necessary social programs; and (iii)
> > The diversion of resources to social programs will be politically and
> > otherwise sustainable even though growth declines or that the social
> > programs will themselves ensure that no decline in growth takes
> > place."
>
> > My comments:1) Do compare the amount of money stolen from the
> > government by the corrupt and the money spent on social welfare. 2) It
> > is not only the money that is diverted. Government time is taken by
> > scams and the political clumsiness in handling them costs the nation
> > enormously. 3)Yes it will be sustainable. The opposite is neither
> > sustainable nor just.
>
> > A related thought. Aristotle in his Nichomachean Ethics made a crucial
> > distinction between Chresmatics and Economics. A good deal of what
> > goes on in the name of economic activity is really chresmatic
> > activity. Whenever I mentioned Chresmatics all the economists I have
> > come across in Delhi made
>

> ...
>
> read more »
>
>  image001.gif
> < 1KViewDownload
>
>  image003.png
> < 1KViewDownload
>
>  image004.png
> < 1KViewDownload- Hide quoted text -

[KP Fabian]

There seems to be some misunderstanding.
 I amfor liberalization with no or minimum corruption. Economists who have an allergy to governmental intervention in the economic sphere have yet to come forward with good ideas on how to correct the flawed liberalization. Or is it that they have and I have missed them?

 
Ambassador K P Fabian
 

---

Date: Mon, 24 Jan 2011 16:54:02 +0800

Subject: Re: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]

From: jeev...@gmail.com
To: cuts-tr...@googlegroups.com

[CUTS-TradeForum]

From: Ashok Nag

Mr. Wolf is considering only one aspect of corruption - that is supply
side of corruprtion services. What about the demand side? Who are
demanding the corruption services? In fact I would suggest that the
high income countries have outsorced the supply of corruption services
to poorer countries to keep their own society more habitable socially
and morally. Let us ask the question what was the need for USA to
enact Foreign Corrupt Practices Act of 1977 (FCPA). It was a direct
result of SEC investigation which found that in the mid-1970s, over
400 U.S. companies had made questionable or illegal payments in excess
of $300 million to foreign government officials, politicians, and
political parties. Obviously the shareholders or managers of these
corporations were not poor. Why they demanded these corruption
services? It is nogainsaying the fact the majority of corrupt
dictators in the post second world-war era were in power at the
pleasure of developed countries. What about Switzerland's banking
sector? It is founded on the ill gotten wealth ganrnered by the
corrupt officials and politicians from the poorest of third world
countries. Despite being a very high income country, it is obvious
that Switzerland is one of the most corrupt country by any standard
because it is ready to enjoy the fruits of corruption. It is
immaterial whether inside the country there is hardly any corruption.

It is a myth that there is a diminshing marginal utility for wealth to
individuals. As one of the Gorky's character replied when asked - what
you will do with more wealth- I will acquire more wealth. So marginal
propensity to indulge in corruption has nothing to do with level of
income. If that were to be then the current financial crisis would not
have come around and there would be no clamour for new compensation
policy for financial sector exectuives.

Ashok Nag

[CUTS-TradeForum]

From: G.S.Bhalla, Jawaharlal Nehru University

I did not wish to join this debate, but I can not resist the
temptation of comparing Indian Punjab experience with that of Kerala.
Punjab chose the path of growth. It was a pioneer in the adoption of
green revolution. Its agricultural sector boomed leading to overall
growth of its economy. Soon it became the richest state in the country
with highest per capita income. It still is one of the richest states
in the country although its rank has slipped a bit to 2nd or 3rd
position. Now look at Kerala. Kerala chose the opposite model. Dr. KN.
Raj and his colleagues at the CDS advocated giving priority to
investment in social sectors like health and education.

I remember often teasing Dr. Raj about the fallacy of his theory and
telling him that soon Punjab will have huge resources and would be
able to surpass kerala in social sector investment.

But look at the results to-day. Kerala has the highest rank in Human
Sector Development in India. Girls' education has imparted a unique
dignity to women. Thanks to its investment in education and health, it
has the lowest mortality rate, and one of the highest sex ratio.

For Punjab it is just the opposite. It is indeed sad to note that
Punjab has the lowest sex ratio in the country-it has the highest rate
of infanticides. In 1991 the girls ratio in 0-6 age group was 875, it
came
down to 798 in 2001.Punjab's educational standards in primary
education are quite poor and it health sector is not in a very good
shape. I could go on ,but I am sure the readers will draw their own
conclusions.

G.S.Bhalla
Professor Emeritus
Centre for the Study of Regional Development
School of Social Sciences
Jawaharlal Nehru University
New Delhi 110 067
India

On Jan 19, 5:23 pm, Shovan Ray <sho...@igidr.ac.in> wrote:

> much ice in the world economy. It was still *Pax Britannica*. Put that into

[CUTS-TradeForum]

From: Prof. Arif Waqif, University of Hyderabad

Dear All,

In my view, the simplest Economic Litmus Test for liberalisation and
globalisation led growth is : Has it resulted in higher prices for
goods and services which the poor (as-are) produce, and lower prices
of goods and services which the poor consume? The persistent double
digit inflation of food grains and vegetable prices in India alone
would suggest an emphatic NO.

Shouldn't those interested in poverty alleviation focus on growth of
what the poor need - remunerative and stable work, food, "minimum
needs" etc (ala Malcolm Adiseshaiah, Vakil and others)? That is, focus
on the pro-poor composition of growth? For instance, the extraordinary
growth in cars compared to that in public transport, bicycles cannot
by any stretch of imagination be said to be pro-poor.

Arif Waqif
Professor and Founder-Dean (Retd)
School of Management Studies
University of Hyderabad

[CUTS-TradeForum]

From: Dr. Y Venugopal Reddy, Former Governor - Reserve Bank of India

I think Professor Waqif makes a very important point- but the problem
is that trade in food and related items has not been globalised; and
in fact even in India we have restrictions on domestic trade.

So how do we analyse food vs. non food globalisation and impact on
prices/incomes?

I am interested.

Regards,
Reddy
------------------------------------------------------------
Dr. Y Venugopal Reddy
Emeritus Professor, University of Hyderabad
Former Governor - Reserve Bank of India
Plot No. 240-B-1, Road No.18, Jubilee Hills, Hyderabad 500 033, India
Ph : +91-40-23551152

[CUTS-TradeForum]

From: Martin Wolf

In reply to Mr Fabian, I do not understand the details of the Indian
telecoms case. But it seems to be a failure of spectrum allocation.

In the case of wireless telecommunications, there is a scarce resource
- the spectrum - that government has to allocate. Everybody knows the
efficient, just and non-corrupting way to allocate such a resource:
one sells it to the highest (qualified) bidders in a properly
constructed open auction. That is what liberalisation means: market-
determined prices that result from an open, law-governed process.

Such a process is far more difficult and politicised and so more
susceptible to corruption than is operation in sectors less directly
dependent on government-controlled assets. But it has been done
elsewhere.
I see this scandal as another opportunity for progress in the right
direction.

Martin Wolf

[CUTS-TradeForum]

From: Prasenjit Bose, Research Unit, CPI (M)

With due respect to Dr. Reddy, trade in food articles and other
agricultural products have been increasingly liberalized over the past
decade. Domestic trade restrictions have been diluted. Food exports
and imports have also increased significantly over the years. The
commodity futures markets link Indian agricultural prices to global
prices. Therefore, while the extent of 'globalisation' of Indian
agriculture/food economy is debatable, the policy direction over the
past decade is not. The result has been, in sum: stagnant productivity
growth, falling per capita food availability, enhanced speculation and
profiteering on food items and as a result of all this, food price
inflation going out of control.

As far as the impact of economic growth in India on poverty reduction
is concerned, an important channel (if not the most important one)
through which the former can bring about the latter is through the
generation of gainful employment. It is indeed surprising that those
celebrating the Indian growth story are so oblivious to the jobless
nature of the Indian growth process. The latest employment/
unemployment survey by the NSS (64th round - 2007/08) brings out the
conundrum: http://www.pib.nic.in/release/release.asp?relid=62083 an
economy growing at 8% also has an unemployment rate of 8% (by current
daily status)! Any explanations forthcoming?

Prasenjit Bose

[CUTS-TradeForum]

From: Professor Jagdish Bhagwati

I thought I had written down the last word on this Forum.

But Martin Wolf's reply to Mr. Fabian, which all economists will agree
with, reminds me of what a wit once said: the problem with Economics
is that there is free entry and inadequate exit. Everyone thinks that
they can pronounce on Economics whether they have any training or not.

This is not a matter of credentials; I like to listen in particular to
students who are studying serious Economics & often ask splendid
questions or make excellent comments.

They are also the ones who are sceptical of the claims of my
colleagues such as Stiglitz whose conclusions are more obvious than
their arguments: they tell me that they (or their parents) have not
paid $50,000 a year to listen to ideological rants by professors, no
matter what their credentials. I wholly agree with them. We need that
attitude also in India where foolish and harmful pronouncements from
economists with credentials are taken at face value instead of being
debated in public fora. Thus, I once asked the Chairman of the
Planning Commission today why, when Stiglitz was invited to talk
there, I had not been asked to debate his assertions, either
simultaneously (if I was in Delhi at the time) or subsequently.

At Columbia also, the practice of some groups on campus is to invite,
at great university expense, only their friends of the same POLITICAL
persuasion, even when their PROFESSIONAL publication record is
negligible (as can now be googled down and checked). On the other
hand, when I have helped organize with and without Arvind Panagariya
Conferences and Events on India at Columbia, we have invited scholars
who are not pro-reforms or share our views since I do believe that we
must have diverse views discussed: but only if those views are not
just views but are backed by scholarly achievement. Some scholarly
opponents refuse to come; but we will keep trying! Their refusal to
come is our loss; but it is theirs also.

Jagdish Bhagwati

[CUTS-TradeForum]

From: Professor Arif Waqif

Dear All.

Dr Y V Reddy's important observation on the much lesser extent of
liberalisation and globalisation in the agricultural sector and
markets, as compared to that in the manufacturing and services
sectors, further opens up the debate. The major blame for higher food
prices lies much more with our internal policies and systems.
Perhaps better examples of growth not benefitting the poor would
have been the prices of and accessibility to education, health-care,
housing, transport for the poor.

In 1991-92, SAARC's official Independent South Asian Commission on
Poverty Alleviation recommended a strategy of "walking on two legs",
one of the market, and the other of governments and civil society
organisations, This would promote a more balanced and nuanced
approach. Otherwise, as Maslow has observed about liberalisation-
globalisation : "When the only tool left is a hammer, everything
begins to appear like a nail."

Arif Waqif
Professor and Founder Dean (Retd)

School of Management Studies
University of Hyderabad

[CUTS-TradeForum]

From: From Ravi Chaudhry, CeNext Consulting and Investment Pvt Ltd.

Five Key Themes of the Dialogue and emerging Action Points

The ongoing dialogue appears to be following a set pattern – greater
emphasis on defending stated postures and scoring debating points –
rather than addressing the key issue of fast-tracking the process of
poverty alleviation in our country. There have been several thoughtful
interventions by those unhappy with what has been achieved so far and
are unable and unwilling to accept the status-quo policies. They
deserve a serious hearing. Let us take cognizance of those ideas, even
if they are at variance with our current views and incorporate those
in the policy framework recommendations emerging from this dialogue.
I have endeavoured to summarize below the five key themes that have
emerged and the action points emanating there from.

Theme One
The question is not whether growth will lead to poverty alleviation or
poverty alleviation per-se will lead to growth. It cannot be a "this
or that "option. We want both - poverty alleviation as well as
growth.

There is virtual consensus that the quantum of poverty alleviation in
India so far has been marginal and is no cause for either celebration
or for continuing the policies adopted till now. Rajesh Shukla
testified that the top 20% of India’s population has more than 50%
share of the national income in 2009-10, up from 37% in 1993-94. The
bottom 60% of India has a mere 28% share in total income, down from
39% at the start of the reforms, confirming the charge that income
disparities have increased since 1991 and the rich have got richer.
What is most worrisome is that this gap continues to widen even today.

Professor Raymond Saner gently reminds us that India is not only at
the bottom of the G20 in regard to the size of population remaining in
poverty but also in regard to the disparity between the very rich and
the very poor. G. Sabarinathan crisply remarked that to take solace
under the narrow confines of selective economic research and to
grossly overlook the larger human problems that stare at us amounts to
deliberately missing the big picture. Shovan Ray has categorically,
and rightly so, asserted that asking the poor to wait for trickle down
process is morally unacceptable and strategically questionable. Jean-
Pierre Lehmann sums it up best by quoting Ed Luce, “whereas in Africa
poverty is a tragedy, in India it is a scandal.”

The deprived 600 million people of India, who are not a part of the
growth story, are no longer willing to accept poverty as perpetual
destiny. Their condition is a consequence of deliberate actions of
previous governments including the colonial government, and it is
incumbent upon the present government to set the imbalance right. Of
course, we all know that to get freedom from our own misrule will be
far more difficult than it was to get freedom from British rule.

Action One
The Government’s declared objectives for 2011-2015 should include two
parameters, (as also suggested by Jean-Pierre Lehmann). (a) To achieve
sustained fast growth in order to raise incomes and (b) To reduce
absolute number of poor in the country from about 26% currently to
less than 15% of population by 2015, to reduce child malnutrition from
about 45% today to less than 25% by 2015, and similar stretch targets
to improve supply of drinking water, sanitation facilities, literacy
levels and gender parity – all millennium development goals.

These targets may appear to be outrageous at first, but that is
because we have never really focused on them. If we could more than
double our GDP growth trend rates, surely we can also achieve these
specific poverty alleviation targets. For that, the focus must change
and the priority must be non-negotiable.

Theme Two
The GDP growth criteria typically pander to generating wealth for
those who are already rich. Barring a few exceptions such as telecom,
the investment is directed primarily towards products that the rich
consume and the services that the rich use.

Arif Waqif makes a telling observation that Indian growth model has
clearly resulted in higher prices of goods and services which the poor
consume and lower prices for goods and services which the poor
produce. For instance, the extraordinary growth in cars compared to
that in public transport, cannot by any stretch of imagination be said
to be pro-poor. On the other hand, the persistent double digit
inflation of food grains, pulses and vegetable prices has made a
mockery of the proposition that the poor have substantially benefited
from two decades of growth.

Prasenjit Bose has relevantly highlighted the employment conundrum by
pointing out that Indian growth model has virtually resulted in a
jobless growth. While our economy grew at 8%, the official
unemployment rate has also stubbornly remained at over 8% (on current
daily status basis).

Tom Reardon shared the outcome of research that shows that the medium
and larger farmers (with 4 to 10 ha holdings) employing 20 to 30% of
farm population, have 85% of the subsidized tubewells and purchase 90%
of the subsidized seed and fertilizers sold by the state and coop
stores. Quite clearly, the subsidies ostensibly meant for the poor
farmers (less than 2 acre holding) are mostly lapped up by the rich.

Action Two
The Government’s policies need to be re-prioritized so as to focus
more on pro-poor composition of growth, e.g. stable work, stable food
prices, affordable housing, cheaper access to finance for encouraging
village entrepreneurship, etc.

The agenda to achieve this would include (a) substantive agricultural
reform including change in subsidy regime, (b) break-through real-
estate reform – unshackling the vice-grip of what is called the land
mafia (c) creating rural financing infrastructure that ensures that
the lending rates to the poor are no more than the lending rates to
the rich (even micro-finance institutions are too high), (d)
allocating higher share to social sector spending and ensuring that
the money does not remain unspent year after year.

The government also needs to reform the tax structure by giving
incentives to those who create jobs and punishing those who are
engaged in industries that pollute, leave carbon footprints and use
excessive natural resources.

Theme Three
Education and health are indisputably the two prime movers to fast-
track poverty alleviation. There is total consensus that these two
areas cannot be neglected as something to be done at leisure.

The usual plea that the government needs economic growth first to
generate more tax revenues for such ‘poor-oriented’ activities is
neither credible nor can stand scrutiny. It is simply a matter of
priorities. There is always enough money for wasteful expenditure on
totally unessential projects (such as Commonwealth Games 2010); surely
a similar do-or-die approach to poverty alleviation tasks would ensure
that adequate state funds can be allocated. While we aim to emulate
the GDP growth rates of fast-growing emerging and emerged economies,
we cannot disregard the simultaneous emphasis placed by those
economies on citizens’ education and healthcare.

John Bryden subtly goads us to remember that in countries that do not
respect basic human rights including education and healthcare and
where the gap between political and economic democracy grows to danger
levels, social divisions and possible conflicts are assured. In fact,
such neglect has already led to our facing several flash-points in
many parts of the country.

Basudeb Chaudhuri unequivocally emphasizes that education and health
should not be treated as "soft" areas of development that would get
attention only after the "hard" or more important areas such as
industrialization or physical infrastructure have been taken care of.
That has been a deeply flawed thinking of all successive governments
for over 50 years.

Action Three
The Government needs to position the Ministry of Education and
Ministry of Health as the ones that shall be led by the most competent
‘doers’ in the cabinet.

I also wish to propose that the government should make it mandatory
for each graduate student to spend 6 months in either a rural school
or a rural hospital or a rural agricultural centre to undertake
voluntary service – before he or she is awarded the graduate degree.
The programme should initially be planned in two states of India. The
responsibility of implementing the programme should rest with the
Universities, in conjunction with state Education departments. Such an
initiative would not only bring about a much-needed ground-reality
understanding of rural India among our youth – but also temporarily
meet the trained manpower shortage.

Theme Four
While growth can be achieved with poor governance, genuine,
sustainable poverty alleviation will not be possible without good
governance. The citizens of India need and demand: “growth with
transparent governance and growth for all”.

It is wrong to say that corruption is a result of low-per capita
income in India. That is totally erroneous. The Indian corruption
phenomenon is entirely led by Indian elite and the rich Indians. There
is widespread perception that in a majority of the cases, one joins
the government not to serve the people of India - but to make loads of
money within the shortest possible time.

The system of electioneering discourages honest citizens to join
politics. The qualities required to win an election are totally
different from qualities required to govern the nation.

None of the three key themes mentioned above can be effectively
implemented, unless we develop a system of zero tolerance for
corruption at every level of government. In today’s world of 24/7
surveillance, it is a doable task. I do not also agree that corruption
is difficult to control in a multi-party coalition system. All it
needs is one determined leader willing to work with total
transparency.

Action Four
First, both the Central Government and the State Governments should
start following the practice recently introduced by Greek Government
as their country has been pushed to the brink. No government contract
or order is valid unless it has been posted on their web site, clearly
indicating the name / names of persons authorized to do so.

Second, let us follow the Turkish practice of introducing live TV
coverage of all bidding processes for public tenders. The technically
approved bidders have the option to raise their bids in an open
auction to secure the tender awards.

Third, there is need for electoral reform. If there is state funding
of elections, it would obviate the need to seek funding favours which
then need to be returned in kind – by framing government policies that
explicitly favour the funders.

Fourth, the Parliament must retract its own amendment that nullified
an earlier Election Commission ruling that barred even once-convicted
criminals from seeking election to a public office.

Fifth, the Government must urgently introduce and make functional the
Lok Pal Bill in Centre as well as States, empowering prosecution of
anybody and everybody, without exception and irrespective of the high
political, judicial or any other office one may be holding. No prior
permission from anyone should be necessary, if there is a prima-facie
corruption case against any individual. To prevent filing of frivolous
cases, there should be a deterrent punishment for those making a
complaint without a valid basis. The brilliant work done by Arvind
Kejriwal in this context is most commendable and must be supported and
encouraged.

Theme Five
It is the inexhaustible supply of corrupt money that is leading to
astronomical demand for corrupt money.

The policy framework in our government has been hijacked by business-
politics nexus. One wonders if the view expressed by United States
President Rutherford Hayes, in 1876, "this is a government of the
people, by the people and for the people no longer. It is a government
of corporations, by corporations, and for corporations," crisply
portrays the stark underlying reality in India.

In fact the danger is that if we do not stem the rot and correct the
current system, it could soon become what some people have called ‘a
government of criminals, by criminals, and for criminals’

As long as this unholy alliance between corrupt business and corrupt
politics is not dissolved, GDP growth and genuine poverty alleviation
will be like the two tracks of a railway line. Looking ahead from any
point, they appear to converge in the distance; in reality they never
do.

Action Five
Here the initiative must come from India’s corporate leaders. The mere
talk of inclusive India is meaningless – if they cannot govern their
own corporations with total transparency in their public dealings.

I invite corporate leaders to declare on their web site that their
company shall hereafter follow a strict code of conduct that includes
zero bribes. Of course the company may suffer for a while – but
without such sacrifices – it is difficult to change the direction.

I have covered this and related issues at great length in my new book
just released by Sage Publishers worldwide:
QUEST FOR EXCEPTIONAL LEADERSHIP - Mirage to Reality
http://www.sagepub.in/browse/book.asp?bookid=1557&mode=1

I would welcome comments from those who find time to go through it.

Ravi Chaudhry
Chairman, CeNext Consulting & Investment Pvt Ltd
New Delhi
e-mail: cen...@vsnl.net
Phone: +91.11.2616 5406 and +91.11.2616 5495
www.cenextconsulting.com

[CUTS-TradeForum]

From: Jean-Pierre Lehmann

Dear All

I come back to the point I made earlier which is how little we know

and how little we understand.

The idea that government intervention and corruption are
insurmountable impediments to growth would be negated, I think, in
looking at the experience of South Korea, which has seen lots of
government intrusiveness and lots of corruption and yet its record in
combining growth with raising its people out of poverty is second to
none!

I am of course not arguing that therefore there has to be government
intervention and corruption!!! I am simply reasserting that if all of
us start on the premise of humility and absence of dogmatism it is
likely we will make further progress. And progress we must. As we
correspond, children are dying!

Jean-Pierre Lehmann

[CUTS-TradeForum]

From: K.A.Badarinath, Financial Chronicle

Dear all,

This debate has been on for over three weeks. Several distinguished
economists and thinkers have put forth their views, thesis / prognosis
on this crucial issue of growth versus development. Several practical
suggestions have also come up as part of this on-going debate that has
captivated most people concerned with emerging economies like India.
You guys / women, the well read and those in know may consider the
following.

1. Let the development agenda / attacking poverty not be in
stranglehold of economic dogma, ideological positioning or straight
jacket thinking which will very much defeat the liberal thinking
process.

2. Political class has its own priorities whether it fits into one's
theory or not as proposed or articulated by Prof Amatya Sen or Prof
Bhagawati. So, carrying the liberal thinking political class that has
unsatiated hunger for vote banks is a must for success of any
economic / development strategy.

3. I am in agreement with Prof Lehmann that a portion of corporate
earnings will have to be mandatorily set aside for development
projects / poverty alleviation. It should be considered as
responsibility by the corporate world rather than doing some charity
for branding their products and services. Scores of examples are
around where corporates use the CSR projects to push their brands,
products and services to rural markets and expand their margins rather
than attacking poverty.

4. Here again, caste to my mind cannot be ignored in a society like
ours (Indian). Social and economic emancipation / going up the
economic value chain for those belonging to certain castes must be
considered as a policy priority. For instance, mandatory work
opportunities for those from socially and economically deprived
classes in corporate sector must be considered. India Inc has till now
resisted this idea and deflected making it mandatory for work
reservations / caste-based reservations. A thought on this issue may
have to be given on this issue in case one was working truly towards
economic inclusion agenda.

5. Economic model needs a drastic overhaul perhaps in India atleast
where aspirations at lowest strata and far-flung hamlets have
continued to be un-met. Village / cluster of villages as self
sustaining economic unit for development must be pursued. You may
consider Gandhian model of economic development with village as basic
unit may be take off point with modifications as per modern day
requirements.

6. At the cost of repeating my self: corporate governance / public
governance issues must top any development agenda without which the
social / economic engineering proposed may not happen at all in
nations like ours (India) that turned an independent democratic
secular republic 62 years ago (we just celebrated our republic day).

7. I agree with the view that higher profits, booming markets,
expanded wealth creation may not necessarily address basic bread and
butter issues for the poor. Policy and economic buffs will have to
keep this in mind while formulating their theories / strategies or
economic models.

K.A.Badarinath
Editor - policy
Financial Chronicle
www.mydigitalfc.com
91-9810401275

On Jan 22, 8:26 pm, "Lehmann, Jean-Pierre" <Lehm...@imd.ch> wrote:
> Dear All
>

> For those of you who do not read the FT, there is a review article in the weekend edition that is very relevant to our discussions and can be found at  http://www.ft.com/cms/s/2/2ecabe4a-24e3-11e0-895d-00144feab49a.html#a...

>
> I also take this occasion to say also how much I agree and applaud the views expressed by Nayanima Basu and the manner in which they were expressed. Maybe this forum will be seen as a birthplace for a revived effort for global decency and dignity. The acronym of the motto could be "It's the humanity, stupid"!
>
> One of the lessons from the challenges facing us in India (and replicated in many ways throughout the world) is in fact how little we know and how little we understand. I am not a religious person myself (which I suppose I should hesitate admitting in an Indian forum), but the persistence of poverty, misery, hunger and loneliness, in spite of all the theories and policies, should impose a great sense of humility and awe before the complexities of our universe and its main species (ie humanoids!).
>
> While it is imperative and urgent to have the great minds (of economists and others) develop learning and theories, ultimately, as Nayanima Basu argues, we must all try to do our bit not simply in material terms, but also in spiritual terms and in expressions of warmth and humanity.
>
> In preaching, I do not want to give at all the impression that I see myself as a paragon in practice. One thing I have been trying, however - with only I admit very modest success - is to argue that poverty and humanity must feature prominently in the curricula of business schools, mine (IMD) included. This is way beyond CSR (which when it is studied is a bit less than a cherry on the curricular cake) but a question of fundamental ethics (as Ravi Chaudhry has eloquently argued in this forum and in his recent publication Quest for Exceptional Leadership). I tell our participants that until and unless the market economy can be seen to be reasonably (how to define?) equitable, it will risk exploding - and I am fairly sure I will be on the other side of the barricades.
>
> Tarun Das has stated that in discussing poverty so broadly we are opening a Pandora's box, while Arvind Panagariya, if I interpreted him correctly, seemed to suggest we should not stray too much from economics by raising extraneous issues such as caste.
>
> I hope we continue to let all sorts of flowers bloom and not restrict them to a particular discipline so long as the objective remains constant. I wonder if I am the only one in the forum who has noticed the number of postings that begin apologetically "I am not an economist, but .... ". There is no need to be apologetic about not being an economist! (They are also humanoids!)
>
> Jean-Pierre
>
> Jean-Pierre Lehmann, D.Phil (Oxon)
> Professor of International Political Economy
> & Founding Director, The Evian Group at IMD
> Box 915, 1001-Lausanne, Switzerland
> tel: +41-21-618-0348, fax: +41-21-618-0619

> e-mail Lehm...@imd.chhttp://www.imd.org/eviangroup

>
> See Fabrice and Jean-Pierre Lehmann, Peace and Prosperity through World Trade (Cambridge University Press)
>
>
>
> -----Original Message-----
> From: cuts-tr...@googlegroups.com [mailto:cuts-tr...@googlegroups.com] On Behalf Of CUTS-TradeForum
> Sent: 22 January 2011 06:11
> To: CUTS-TradeForum
> Subject: [CUTS-TradeForum] Re: Professor Bhagwati on growth and poverty]
>
> From : Nayanima Basu, Business Standard
>
> Dear all,
>
> With due respect to all, I think Mr. Badarinath is absolutely correct in stating that absence of good governance and related problems with it have led to an increase in poverty rather than reducing it. Words like reforms and policy formulation looks good in books and analytical pieces but honestly none of us have any clue on how to deal with it in reality.
>
> It is very easy for us to ignore little children who sit all day under the traffic lights while their mothers run behind cars to get a Re.1 coin or the maid who washes our dirty utensils everyday and we do not even bother to ask her whether she had a peaceful sleep the previous night and was not beaten black and blue by her drunk jobless husband.
> But we are very particular of the fact that this very maid should open her torn sandals before entering our houses.
>
> At best we can show sympathy to prove that we are humans. Do you really think solving these issues needs blockbuster policy reforms or jingoistic thesis sprinkled with jargons? Well, we all know the answer ....
>
> We should start bringing changes in our daily lives by doing simple things which are right there in our ancient text books on ethics and morality but who cares? I am not being pessimist or "Leftist-minded"
> but let's for once sit and give a serious thought on this. Large-scale thesis and theories, which a normal person cannot understand, are meaningless. We need to instill in our everyday life simple values and virtues of truth, honesty, empathy and love.
>
> Why can't people like us spend our weekends by teaching a poor child or help our maids open bank accounts and get her children admitted in schools? Why can't we offer free but quality education to the children out there right inside our colonies? Well, difficult it may sound ... it is actually very simple.
>
> We need to come out of our parochial, regionalist and fanatic views.
> And this is true not only for India but the world.
>
> Besides lack of education and absence of good governance, poverty is also increasing due to rise in religious dogmatism and fanatic perspectives. We cannot carry the baggage of history and try a build a new society. We need to read history and learn from the mistakes made in the past.
>
> Lastly, I apologize for sounding naïve amidst such great and revered minds, but to me reducing poverty should not be treated as rocket science and may be that is exactly why poverty in this country has increased rather getting decreased. We have only been cleverly able to hide it!
>
> Regards,
>
> NAYANIMA BASU
> Principal Correspondent

> Business Standard- Hide quoted text -

[CUTS-TradeForum]

From: G.Sabarinathan, IIM Bangalore

In deference to the most recent observations from Professor Bhagwati I
wish to formally “exit” from these discussions. One of the key
reasons I wish to exit is that I am not a trained economist, not
trained in development economics at least. In doing so I hope I have
understood Professor Bhagwati’s observations correctly.

I place on record my gratitude for the numerous insights I gained by
reading the various observations posted in this forum.

I commend CUTS for providing a platform for these discussions.

Best,
Sabari

G.Sabarinathan, PhD
Associate Professor, Finance and Control Area, and
Chairperson, Office of International Affairs
Indian Institute of Management Bangalore

Bannerughatta Road, Bangalore 560076

> surveillance, it is a doable task. ...
>
> read more »

[Ashok Jhunjhunwala]

I agree that if the growth is not inclusive, we will have a serious problem. The democracy that we are, no policy can be sustainable unless it is inclusive. Rather than just saying that the government should have a target, we should do more. The government has recognized that growth has to be inclusive and have initiated a lots of programs. NREGS is one of them. There are programs in education, health and infrastructure in rural India. Let us see what the limitations of these programs are, either in conceptualisation or in implementation. Let us suggest what can e done to improve these programs or come up with new ones. Fortunately the growth and to some extent tax compliances have given the government money to spend on programs like these. The key is that the programs help in poverty alleviation and in reducing income gaps. Let us focus on these issues.

Ashok

ashok jhunjhunwala, iit madras
Sent from my iPad

> --
> This message has been scanned for viruses and
> dangerous content by MailScanner, and is
> believed to be clean.
>

[CUTS-TradeForum]

From: A V Ram Mohan

Dear Members of this discussion forum:

I write with a great deal of trepidation, for the fear of being
accused of practicing development economics without proper licence;
however, while following the numerous contribution from a variety of
participants, most of them made very politely with due deference to
‘senior academics’ in economics, I am somewhat disappointed at the
remarks of the grandees of the profession.

To reconfirm my impressions, I forced myself to re-read the several
remarks of Prof Jagdish Bhagwati sent over the past four weeks. To say
Amy Kazmin from FT writes a ‘characteristically shallow’ article, not-
so-gently putting down Jean Pierre Lehmann and Shukla, to point out
that Saner is advancing rubbish with his indices, to advise Fabian to
read more economics and not mix it with cocktails in Chanakyapuri,
directing marginally veiled invective at Amartya Sen, George Stiglitz
and Martin Wolf, the list goes on.

I did not know that development economics is such a rough and tumble
field of enquiry, till my football loving friend pointed out that if
you cannot play the ball, playing the man instead is a good strategy.
Does it advance the cause effectively, I wonder.

With best regards,

Ram

A V Ram Mohan.

Mobile: +91 91766 57512
Home: +91 44 2433 3124 Madras
Flat D2, Ceebros Apartments, 161, St Mary's Road, Madras 600 018.

> surveillance, it is a doable task. ...
>
> read more »