Can India Tackle Global Poverty?

The processes of globalisation that have improved the lives of so many in recent times have not provided the chronic poor with opportunities and have often made their lives more miserable. They remain trapped in poverty. In a lucid and thought-provoking analysis, Prof. David Hulme talks about chronic poverty that is plaguing a billion people in the bottom rung of the global pyramid, ways and means of tackling this syndrome and what role India can play internationally to help mitigate this malaise. Excerpts of the Exim Bank Commencement Day Annual Lecture 2007, delivered in Mumbai recently.

David Hulme is Leverhulme Professorial Research Fellow and Professor of Development Studies at the School of Environment and Development, University of Manchester. He was the Founder-Director of the Chronic Poverty Research Centre (CPRC) and is currently an Associate Director of the CPRC, the Global Poverty Research Group (Universities of Manchester and Oxford) and the Brooks World Poverty Institute (BWPI) at the University of Manchester. Prior to these positions, he was Director of the Institute for Development Policy and Management (IDPM) at the University of Manchester (1992-1997).
Since 2000 Professor Hulme has directed the Chronic Poverty Research Centre, a collaboration of universities, research institutes and NGOs in Europe, Africa and Asia. The focus of CPRC has been on those who are trapped in poverty and are unlikely to be able to improve their own or their children's prospects despite the growing material wealth and technical knowledge of the world. This has involved research and policy advocacy with governments and multi lateral agencies.

Monitoring and implementation mechanisms have been Set up in an attempt to achieve the Millennium Development Goals and billions of dollars in foreign aid have been mobilised - though not as much as promised.
So, this brings me to the title of my lecture-Imagining Inclusive Globalisation: India's Role in Tackling Global Poverty. I intend to explore the role that India might play in steering the process of globalisation so that it is more likely to improve the lives of the world's poorest people. I shall look at this both in India and beyond India's national boundaries.
There is much evidence that globalisation has, in aggregate, improved the human condition. But globalisation has different impacts on different people. At the risk of oversimplification it could be held to have three main effects on wealth and well-being;
• It makes the rich very rich and makes the super-rich mega-rich
It makes a large number of people in the middle of the global wealth distribution better off, or likely to become better off in the near future, and improves their lives.
For a large group - sometimes called the 'bottom billion' but it may be more than that - it has not made life better and may have made things worse, sometimes much worse.
How might we re-shape globalisation so it helps, rather than hinders, the lives of this bottom billion- those people who are the losers from globalisation in both relative and absolute terms?
My task here is to explore the possibility of a more inclusive globalisation that reaches down to the bottom of the pyramid, recognising that globalisation has both positive and negative impacts.
The Chronic Poor - Trapped in Poverty
Defining and measuring poverty is a fiercely contested issue. In recent times, there have been significant conceptual and methodological advances in terms of appreciating the multidimensionality of poverty -particularly through the work of Amartya Sen - and in assessing the depth of poverty. However, time has been neglected in these conceptualisations - indeed one can argue it is the missing dimension of poverty.
There are three distinct forms that chronic poverty can take:
• Poverty that is experienced by people for all or most of their lives
• Poverty that is inter-generationally transmitted -when the childhoods that parents can create for their children make it highly likely that those children will become poor adults
• Premature deaths - when a person dies a preventable death because of poverty.
Much of what I shall talk about today is an elite analysis, but we need to recognise that chronically poor people have their own views about their condition and have personal agenda. A group of disabled women in Uganda provided my colleague, Charles Lwanga-Ntale, with a very vivid description:
'Chronic poverty is like that poverty that is ever present and never ceases. It is like the rains of the grasshopper season that beat you consistently and for a very long time. You become completely soaked because you have no way out ... some poverty passes from one generation to another, as if the offspring sucks it from the mother's breast. They in turn pass it on to their children'.
India & Chronically Poor
We should note at least three things :
• India is the country with the largest number of chronically poor people. This is a reflection on the country's huge population but also indicates the scale of the challenge it faces.

Who are the Chronically Poor?
They include people who would be classified in a census as 'economically active' - especially casual labourers in agriculture and construction -and those who would be classed as economically inactive -older people, disabled people, young children. At times this division between working and dependent poor may be useful but we do need to note its shortcomings. Many non-economically active poor people are working long hours on the margins of the informal economy - gleaning rice or coffee after harvest, minding orphans 24/7, and many other jobs.
At the risk of over-generalising about such a diverse set of people we can identify some common characteristics. Often, chronically poor people are those who are discriminated against - marginalised ethnic/religious and cultural groups, low castes, tribal people and nomadic people; refugees and internally displaced people; migrant labourers; disabled people and those with chronic ill-health (especially with HIV/AIDS in Africa - but this disease is now doing its worst in India too). We also need to note that women and girls have increased likelihoods of being chronically poor and that households that appear non-poor can have members - daughters-in-law, domestic servants, widows - who are deeply deprived.
These structural factors are compounded by household level and life cycle factors - children and older people are more vulnerable to extended periods in poverty and households headed by older people, disabled people and children are likely to be trapped in poverty.
There are also national geographies to chronic poverty. The poorest are most likely to be living in remote areas with low agricultural potential that are not well connected to the national economy. Research in several countries reveals that chronic poverty is also an urban phenomenon and is growing rapidly, but we know little about the degree to which it is concentrated in specific areas or dispersed more generally.

Why are they Chronically Poor?
This is a big question that I can only scratch the surface of in a short time.
First amongst the maintainers comes the quantity and quality of economic growth. Countries or regions with no or slow or narrowly based economic growth are unable to provide opportunities for poor people to improve their livelihoods and so many poor households have no 'exit routes' out of poverty. The quality of growth is as important as the rate of growth for the chronically poor.
Second comes social exclusion and adverse incorporation, overlapping but distinct ideas. Social exclusion implies that people are trapped in poverty because they are discriminated against, stigmatised or invisible to other members of the society they live in.
The Narmada Dam
For example, the reduction in access to land, water, and common property resources that occurs when poor regions are incorporated into national and global economies - a classic example would be those displaced by the Narmada Dam. This makes people dependent on jobs as casual labourers, which are extremely insecure. To ensure their survival in such vulnerable circumstances, poor people have to develop relationships with patrons and to 'stay secure' they enter into contracts that ensure they 'stay poor'.

Tackling Chronic Poverty in India
So, how can chronic poverty be tackled? Rather than doing this in general terms I focus on India. The first section looks at what can be done in India. The second looks at a question that I think has been neglected - what role might India play in helping the poorest outside of India?
To explore policies for tackling chronic poverty in India I use a simple framework from the World Bank's World Development Report 2000/ 2001. It identifies three fronts on which poverty must be battled.
• Opportunity (economic growth and employment)
• Empowerment (rights and democracy)
• Security (social support, social protection, law and order)
These three elements are closely interlinked and progress with any one of them is likely to be beneficial for the others. There is the image of a three legged stool - for the stool to work you have to have all three legs! The Report says that these three elements need to be treated in a non-hierarchal way, each is as important as the other.
I have concluded that while having no hierarchy may be an effective strategy for the moderately and transitorily poor, it is not optimal for the chronic poor. To assist people trapped in poverty we need a livelihood security first approach. Why? Because before most chronically poor people can think seriously about taking the risk of seizing new opportunities - changing employment, shifting to horticulture, borrowing the money to migrate to Mumbai - they need to know that they have the security to cope if things go wrong with their new strategy. In concrete policy terms this means public investment in social protection policies so that chronically poor people can think about seizing opportunities with a reduced risk of ending up destitute or excessively indebted.

Opportunity - India's Bold Step
In recent years the Government of India has taken a bold step in this direction with the National Rural Employment Guarantee Scheme (NREGS) to help stabilise the incomes of the rural poorest and ensure they have a fall back position if their household strategies fail. This promises the rural poor up to 100 days labour on public works per annum.

Empowerment
This takes us to the next leg of our three-legged stool. The World Bank calls this empowerment - enhancing the capacity of the poorest to demand that state institutions, and the private sector deliver the services they are supposed to deliver and do not exploit the poor through corruption or sub-standard services; and, strengthening the rule of law and order.

Economic Growth
And now to the third leg - economic opportunity. Economic growth is essential for concerted poverty reduction but that does not mean that all growth is good for the poor, as Dollar and Kraay of the World Bank erroneously announced some years ago. This is especially the case for the poorest. For growth to benefit them policies are needed to match the capabilities of the chronically poor to the forms of opportunity that are opened up by globalisation induced growth.

Redistribution
A neglected aspect of the opportunity component concerns redistribution. There is both theoretical and empirical evidence that rates of economic growth and poverty reduction are higher in less unequal societies - South Korea, Taiwan and Japan are the outstanding historical examples. At the macro-level this means progressive taxation, both personal and business.
Tackling Global Poverty: What can India do?
The argument could be made that as India has so much poverty of its own, it should not engage with reducing poverty outside of India until it has virtually eradicated domestic poverty. I can sympathize with this point but I would counter it with the argument that these circumstances do not mean that India should totally abandon the idea of helping poor people beyond its border. Rather, it should place a vastly lower weighting on this goal compared to the goal of national poverty eradication.
In a small number of countries - Denmark, the Netherlands, Norway, Sweden, and very recently the UK - a moral vision now dominates development cooperation. In other countries - for example, France, Japan and the USA - such moral visions have made slower progress.
First, if one compares India with China, India is a democracy and so there is political space for its citizens to attempt to influence policy. That's a start. Second, if one compares India with the USA, it has a political culture that envisages a significant role for the state in securing the welfare of its citizens - this is a key determinant of 'moral vision'. Third, India has been and is a global intellectual leader in conceptualising poverty and poverty reduction (ranging from Mahatma Gandhi's non-materialist philosophy, to V.M. Dandekar's pioneering approach to poverty measurement, to Ravi Kanbur's influential academic and policy work on poverty reduction and, last but not least, to Amartya Sen's Nobel Prize winning work on human capabilities).
Fourth, India is full of 'social entrepreneurs', many of whom Exim Bank is starting to work with. Some are known internationally but thousands of others are quietly getting on with making their local area a better place for poor people. Fifth, India has played a pivotal role in the Non-Aligned Movement, seeking to achieve a better deal for Third World countries in relation to the Cold War superpowers and had the moral vision to take a global lead in the fight against apartheid.
India's Status & Image
Finally, India will need to think carefully about its image and status in an emerging global society. It is not difficult to identify fields where India could seek to build on its comparative advantage in this social enterprise.
Strengthening the technical capacity of African countries to collect data on poverty and analyse it.
• Offering incentives to its pharmaceutical companies to develop low cost medicines for tropical diseases.
• Establishing world class technical institutions in Africa to create a generation of African IT specialists, genetic engineers and others who can link Africa to global technical advances.
• If the NREGS 'works' India could experiment with the transfer of this model to other countries.
Can India be a 'Social Superpower'?
Globalisation has helped tens of millions to escape poverty in recent years but there are still hundreds of millions trapped in poverty who have seen no benefits. In some cases, poor people's lives have been damaged by globalisation.
Between one-third and one-half of these chronically poor people live in India. While many of the country's economic and social policies have helped reduce national poverty rates there are deep problems in reaching the poorest people in poorly-performing states and reaching disadvantaged social groups.
To conclude - it seems almost certain that India will be an economic superpower by the middle of the 21st century. Its people now have the chance to ensure it becomes a social superpower by that time - but, have they got the moral imagination to push that goal forward?