Posts Tagged ‘Montek’

On the Real Poverty in South Asia

November 14, 2011

By Anjum Altaf

Reflecting on the official pronouncements of poverty in South Asia reminds me of the Marx Brothers saying: ‘Who are you going to believe, me or your lying eyes.’

There are two kinds of poverty: monetary poverty and intellectual poverty. Together, I will argue, they make for a lethal combination.

The monetary and physical poverty in South Asia is undeniable; the controversies relate only to the few percentage points it might be above or below what is clearly an unacceptably high base level. The intellectual poverty is a more subtle phenomenon that, in my view, comes in the way of appropriately addressing the physical poverty.

Let me illustrate the existence of intellectual poverty in South Asia via an analogy that might help set up the discussion. People rush into places that have something rich to offer; if they can, people rush out of places that are impoverished. What do outsiders come to savor and learn in South Asia? Among other things, its aesthetics (music and dance), its spiritualism (yoga and sufism), and its cuisine. No one comes to South Asia to learn the theory or the methodology of any of the social sciences.

Why is that the case? It is because South Asian aesthetics, spiritualism and cuisine are unbroken indigenous traditions that remain alive today. In the social sciences, all that is left are great names, unfamiliar to most, from a history that is dead; the traditions that existed were swept aside or under by the interregnum of colonization.

The theories and methodologies of social science that are alive today were developed and are refined outside South Asia. Smart South Asians, and there are many, either leave South Asia to learn them abroad or learn them second-hand in India.

Consider just one example: the Nobel laureate, Amartya Sen, is justly famous for his theory of justice and although he speaks of niti and nyaya, he places himself squarely in the line of thinkers that stretches from Adam Smith via Bentham, Marx and John Stuart Mill to Sen. His theory challenges an alternative formulation that derives from Hobbes via Locke, Rousseau and Kant to John Rawls. Surely there are indigenous South Asian theories of justice but they are not part of a tradition that is alive in academia.

Is that a problem? Yes, in my view, because thinking is different from producing. All the high-tech things are designed in the West and manufactured in the South but that works because most products are shipped back to be consumed in the West as well. But just as pharmaceutical companies have little incentive to invest in drugs that are needed by people without purchasing power in the South, so social scientists have little incentive producing theories that are rooted in the traditions of the South.

Theories emerge from the experience of the West; most of those we work with are products of the European Enlightenment and their subsequent modifications. These theories are then universalized and applied in other places. But a theory determines what data we look for in the application; it is not the raw data from the locale of the application that yields the theory.

Take Marxism and feudalism as examples. How much effort has been devoted to identifying kulaks, middle-peasants, and feudals in the South Asian countryside and with what results?

This brings us back to poverty. The prevalent approach to poverty alleviation – identifying the poor with a poverty line, targeting them through means-testing, and distributing welfare support through agents of the state, is relevant in places where the poor are a small proportion of the total population, where most transactions are negotiated through the market, where the agents of the state are not themselves poor, and where the institutions of the state are credible and robust.

This approach is ill-suited for places where the conditions are quite the opposite: the majority of the population is poor, there are many non-market transactions, state agents themselves are poor, and the institutions of the state are weak. Identifying the poor, means-testing them, and getting public support to them results in about Rs. 15 reaching the poor out of every Rs. 100 intended for them.

Asides from the vast corruption engendered by this approach, it creates social tensions by dividing the poor and the almost-poor, sets up perverse incentives for households and groups to be identified as poor, and is financially untenable. Seriously addressing poverty on this scale via welfare payments would surely bankrupt the economy.

Once again, an analogy might help. The treatment for an incipient cancer is not the same as that for one that has spread throughout the body. It has to be radically different. This is obvious to all. Why is not so in the case of poverty alleviation? The one answer I can think of is because we have been blinded by borrowed remedies, have not thought of them ourselves, and have marginalized those who do have indigenous wisdom to offer.

When Montek Singh Ahluwalia defends the Indian poverty lines of Rs. 26 and Rs. 32 per capita per day, he is technically correct. The universally employed poverty line is $1.50 per capita per day; converted at purchasing power parity it would yield the figures offered by the Indian Planning Commission. But these lines are good only to track, if one so desires, the number of individuals or the percentage of the population below them. They have no bearing on the appropriateness of a poverty alleviation strategy. For the latter, the percentage of the population that is poor, much like the spread of cancerous cells in a body, is of much more relevance.

If one thinks about it, even the simple counting could be problematic. If the number of individuals below these poverty lines are decreasing over time what is the assurance that they have been lifted out of poverty? Many might simply be dying early at this level of bare sustenance. Unless someone can provide data for income-specific life expectancies and rates of mortality, I would be justified in remaining skeptical of the official claims.

How have we arrived at the point where a man of Mr. Singh’s qualifications and credentials is seriously suggesting a survival proposition that any illiterate child would tell him cannot be true? Is it because the illiterate child is looking at India through his own eyes while Mr. Singh is looking at it through the eyes of others?

Therein might lie the real story of South Asian poverty.

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