Despite the promises of globalization, about half a billion people in South Asia experienced a decline in their incomes during the '90s, compared to only a small minority of the educated urban population that benefited from the region's economic growth, according to a new United Nations report on development in the area.
"The principle message that emerges from this report is the need to undertake economic reforms with a human face and that requires a rethinking of the whole process of globalization," said Khadija Haq at today's launch of the Report on Human Development in South Asia 2001 at a press conference at UN Headquarters in New York.
The report - which focuses on the theme "Globalization and Human Development" and covers Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka - argues that at the initial stage of opening up the economies to a competitive global market, income inequality will rise, but that eventually "everyone will benefit." Continuing reforms will also boost productivity and efficiency, increasing a country's shares in global trade, finance and services.
According to the report, South Asia remains home to the largest number of poor people in the world - some 515 million. Over 40 per cent of children did not reach fifth grade in the 1990s, and over one fifth of the region's population did not have access to health care services. In addition, the region has experienced increasing cases of infectious diseases, such as tuberculosis, malaria and HIV/AIDS.
Among its recommendations, the report points to the need to pursue economic growth and human development concurrently, which will require more investment in basic and higher education and training for skills.
Regional economic cooperation mechanisms that already exist should be reinvigorated, the report says, while South Asia must also be more integrated into the world market. Poverty reduction must be pursued, and income distribution should be more equitable.
Meanwhile, at the global level, the institutions of global governance - such as the International Monetary Fund, World Bank and World Trade Organization - must be reformed. While they were created to serve as global institutions for maintaining financial stability and promoting development and trade, "the impact of policy conditions of these institutions falls disproportionately on poor people and poor nations," Mrs. Haq said.
For globalization to succeed, the report argues, activist governments are needed to protect the interests of the vast majority of South Asians, along with the support of civil society and the private sector.