Mahbub ul Haq Human Development Centre

Our global society is not a very compassionate society today. We are quite fond of describing ourselves as one world, one planet, one humanity, and one global society. But the blunt reality is that we are at least two world, two planets, two humanities, and two global societies – one embarrassingly rich and the other desperately poor, and the distance between these two worlds is widening, not narrowing.

Can we really call it a compassionate society when the richest one-fifth of the world consumes 80 per cent of the natural resources of this planet and when it commands an income 78 times higher than the poorest one-fifth of the world?

Can we really call it a compassionate society when there is so much wasted food on the table of the world’s rich at a time when 800 million people go hungry every night and 160 million children are severely malnourished?

Can we really call it a compassionate society when 1.3 billion people do not have access to even a simple necessity like safe drinking water, when about 1 billion adults grope around in the darkness of illiteracy, and when 1.3 billion people survive in absolute poverty on less than $ 1 a day?

It is certainly not a compassionate society when 134 million children in South Asia alone work for over 16 hours a day in inhuman conditions for a wage of only 8 US cents a day and when they lose their very childhood to feed the greed for higher profits by their indifferent employers, several of them the most powerful multinationals of our world.

It is certainly not a compassionate society when over one half of humanity - the women of this world – are economically marginalized and politically ignored, when their $ 11 trillion contribution to household activities is simply forgotten in national income accounts and when they command 50 per cent of the vote but they are less than 10 per cent of the parliaments of the world.

What kind of a compassionate society it is where modern jet fighters are parked on the runways while homeless people are parked on city pavements, where many desperately poor nations spend more on arms than on the education and health of their people; where the five permanent members of the Untied Nations Security Council sell 86 per cent of the total arms to poor nations, often giving handsome subsidies to their own arms exporters?

What kind of a compassionate society it is where millions of land mines are strewn all over the world, waiting for their unsuspecting victims; where it takes only $ 3 to plant a mine but over $ 1000 to remove it, and where the international treaty to ban land mines is ready but the US refuses to sign it?

What kind of a compassionate society it is where we all recognize that nuclear weapons should never be used but where world leaders are reluctant to abolish them since they are fond of playing global power games?

What kind of a compassionate society it is where a few powerful nations decide the fate of the entire world and where the supreme irony is that powerful democratic nations themselves rule out democratic governance in global institutions – such as the World Bank, the IMF, and the Untied Nations?

The truth is that we are still far from the ideal of a compassionate society. But let us be realistic. It is true that we may never be able to create a perfect society. It is true that we may never be able to eliminate all social and economic injustices or to provide equality of opportunity to all the people. But we certainly can take a few practical steps to make our global society a little more compassionate, a little more humane. Let me identify at least six of these steps which can become a reality only if all of us start a global civil society movement for their achievement.

First, in a compassionate society, no new born child should be doomed to a short life or to a miserable one merely because that child happens to be born in the "wrong country", or in the "wrong class", or to be of the "wrong sex" Universalization of life claims is the corner stone of a compassionate society Equality of opportunity is its real foundation – not only for the present generation but for future generations as well.

In order to equate the chances of every newborn child; let us take a simple step. Let us treat child immunization and primary education as a birth right of that child – a right to survive and a right to be educated. Let us persuade national governments and the international community to issue birth right vouchers to every new born child that guarantee at least these two investments in their future. The total cost will be modest – hardly three billion dollars a year – but it will provide a new social contract for our future generations, and it will certainly create a compassionate society.

Second, a global compact was reached in March 1995 in the World Social Summit in Copenhagen that the developing nations will devote 20 per cent of their existing national budgets and the donors will earmark 20 per cent of their existing aid budgets to five human priority concerns: namely, universal basic education, primary health care for all, safe drinking water for all, adequate nutrition for severely malnourished children, and family planning services for all willing couples. This was the famous 20:20 compact. It required no new resources, only shifting of priorities in existing budgets. And such a compact will remove the worst human deprivation within a decade.

Here is a global compact already made. Let us ensure that it is fully implemented. Let us get organized. Let us monitor the progress of each nation and each donor towards these goals every year and let us publicize it through NGO efforts and through all civil society initiatives so that the world does not forget the commitments it made only recently and which, if implemented, can provide a social safety net to the poorest and the most vulnerable groups is society.

Third, a practical way to empower people is to provide them with micro-credit so that they can find self-employment and self-respect – and it really empowers them and unleashes their creative energies. Access to credit should be treated as a fundamental human right, as Prof. Yunus has so brilliantly and convincingly emphasized. The experience of the Grameen Bank in Bangladesh has already demonstrated that the poor are good savers and investors and they are eminently creditworthy, so that the banking system should take a chance on the future potential of the people, not on their past wealth. Let us set up such micro-credit institutions in each and every country, and in each and every community.

Fourth, it is time to establish a new code of conduct for arms sales to poor nations. There are many punishments today for dug trafficking and for laundering of drug money but not for arms sales. And yet arms kill no less uncertainly than do drugs. Why are generous subsidies given for such arms sales in several industrial countries today? Oscar Arias, a co-chair of the State of the World Forum and former President of Costa Rica and a Nobel Peace Prize Winner, has developed a sensible code of conduct for arms sales, proposing a ban on such sales to authoritarian regions, to potential trouble spots and to the poorest nations. This code of conduct has the support of many Nobel Peace Prizewinners. Any yet Oscar Arias has not found a single UN member who is willing to sponsor such a responsible code of conduct for arms sales. Let us generate enough public pressure in our societies for sponsorship of this code. Let us go even further. Let us persuade the rich nations to discontinue their export subsidies for arms sales. This is public tax money. Why should it be spent to subsidize sale of death and destruction to poor nations? Let us at the same time persuade the poor nations to start cutting their existing military expenditure of $ 170 billion a year by at least 5 per cent each year which can yield enough of a peace dividend to finance their entire social agendas for their poor.

Fifth, let us pledge that global poverty will be abolished in the 21st century, much as slavery was abolished a few centuries ago. Poverty is not inevitable. As Prof. Yunus has so eloquently reminded us, poverty degrades human dignity, it does not belong in a civilized society; it belongs to a museum of history. But let us also recognize that poverty is not a mere flue, it is a body cancer, it will take determined policy actions to banish poverty – including redistribution of assets and credits, provision of adequate social services and generation of pro-poor growth. It will also require a new model of development which enlarges human lives, not just GNP, and whose central purpose is development of the people for the people by the people. Let us also remind all nations of this world that abolishing poverty in the 21st century must become a collective international responsibility since human life is not safe in the rich nations if human despair travels in the poor nations. Let us recognize that consequences of global poverty travel across national frontiers without a passport in the form of drugs, AIDS, pollution and terrorism.

Sixth, let us return the United Nations to the people of the world in whose name it was first created. The preamble of the UN, adopted in this very city, in the penthouse of this very hotel, started with the historic words: "We, the People." And yet the UN was hijacked by the governments and it has become entirely an intergovernmental body where the voice of the people is seldom heard. Even in international conferences and summits, many dark curtains separate NGO representatives from real decision making forums. The time has come, I believe, to raise our voices in favour of a two-chamber General Assembly in the UN, one chamber nominated by the government as at present, and the other chamber elected directly by the people and by institutions of civil society. This will ensure that the voice of the people is heard all the time on all critical issues that affect their future.

There are many more steps one can map out to make our global society more compassionate. I have mentioned only six simple steps which I believe are doable.

But let me state quite clearly: building a compassionate society is not a technocratic exercise. It requires solid ethical and moral foundations. It requires entirely a new way of thinking of ourselves as a human family, not just a collection of nation states. It requires a new concept of human security which is founded on human dignity, not on weapons of war.

In the last analysis, human security means a child who did not die, a disease that did not spread, an ethnic tension that did not explode, a dissident who was not silenced, a human spirit that was not crushed.

And the imperatives of this human security have become universal, indivisible, and truly global today.
The choice before us is simple, though stark. We can either learn to live together, or we can all die together.

Robert Frost summed up the challenge before us when he said:

"Two roads diverged in the wood, and I -

I took the one less traveled by

And that has made all the difference".

I hope that we show the courage, and the wisdom, to take the road "less traveled by" as we build up a more compassionate society in the next century.

Pakistan:

The inevitable land reforms

Comprehensive land reforms are indispensable for any basic change in Pakistan’s political and economic system. Without such reforms, the nation may remain locked in a virtual political and economic paralysis. Periodic elections will bring little change, as many of the same people will be recycled through the legislatures, whatever their party labels or affiliations. Major economic reforms will keep waiting, as the feudal system generally believes in economic patronage rather than in good governance. Any enlightened social changes will be held hostage to the inherent conservatism of a feudal society.

This does not mean that no change is possible without land reforms. Historic evolutions do not wait for particular events. But there is no question that land reforms can greatly advance the prospects for a constructive change in society – and at a much faster pace.

The recent experience of many other countries is fairly illuminating. Let’s just focus on Asia. South Korea’s spectacular economic advance in the last three decades was based on land reforms and mass education. Indian Punjab has beaten Pakistan’s Punjab by a wide margin in raising agricultural yields in the last five decades, principally because of meaningful land reforms, widespread education and agricultural research at Ludhiana University. China dismantled its agricultural commune system in 1979 – even though the communes did not exploit the cultivators the way our landlord system does – and the emergence of owner cultivation and private incentives has increased economic growth in China in the last 16 years at a pace which is the envy of the world. In most other countries as well, land reforms have been vital for economic and political change. In Pakistan, land reforms are needed not only to increase incentives for higher production by owner cultivators but also to change the political system.

Pakistan has already made two failed attempts at land reforms. In 1959, President Ayub fixed a land ownership ceiling of 500 acres of irrigated land and 1000 acres of unirrigated land. But a large number of exemptions were provided for orchards as well as for transfer of land to heirs. In actual practice, less than 2.5 million acres were acquired for distribution which benefited roughly 8% of subsistence farmers. These land reforms failed to loosen the stranglehold of the landlords on the political and economic system of Pakistan.

Another attempt was made by Zulfiqar Ali Bhutto in 1972, when the land ownership ceiling was reduced to 150 acres irrigated and 300 acres unirrigated. There were few exemptions allowed and the reforms looked very strong on paper. But their impact was totally diluted in actual implementation. Much of their land was retained by the landlords in the name of many family members and sometimes in fictious names. Less than 0.9 million acres of land was acquired for distribution – about one-third of the land acquired in the Ayub reforms. Despite high expectations, the actual results were meager.

What went wrong in each case was not the original intention but the subsequent implementation. The fatal flaw in both cases was the same: the ruling class that was supposed to implement land reforms was also the class that was going to be adversely affected by them. It was triumph of optimism over experience to think that the ruling landlord class will commit a collective suicide. This dilemma still haunts us. It is easier to articulate what needs to be done. It is almost impossible to identify a realistic way of doing it.

It is necessary today to prepare yet another blue print for comprehensive land reforms in Pakistan, learning from the experience of other countries. The heart of any such reforms must be the principle that the tiller of the soil must become the real owner of the soil. And the tiller must be supported by a liberal supply of agricultural credit, suitable fertilizer and seeds, correct price incentives, appropriate technology and adequate marketing facilities so that he can raise his agricultural yields to international levels.

If all cultivators are to acquire some land, the ceiling for ownership must be kept fairly low, considering the existing pressure of population on land. An upper ceiling of around 12.5 acres for irrigated land will be quite appropriate in this context. In fact, much lower ceilings have been adopted in several countries. For rain-fed areas, the ceiling may have to be 25 acres. These ceilings should apply to family ownership to prevent holding of large amounts of land in the name of family members. It is wrong to believe that commercial farming requires large farms. In fact, experience shows that small farms have been extremely productive in many countries because the tiller can take timely decisions, contrary to an absentee landlord, and the benefits of higher yields accrue directly to him.

At present, over 60% of the agricultural area in Pakistan is in holdings above the ceiling of 12.5 acres. Of the 47 million acres of cultivated land, 32 million acres are in holdings of over 12.5 acres. If land reforms are strictly implemented, millions of haris and mazarehs can benefit from the distribution of land. What is more, such sweeping land reforms will greatly erode the present overwhelming economic and political power of the rural elite and finally empower the poor peasantry in the countryside.

Of course, redistribution of land is only the beginning, not the end, of land reforms. Small landowners must be fully supported by government, particularly through liberal credits and technology. They must also be given the incentive of international prices, since it makes no sense to offer much higher prices to agricultural producers in foreign lands than to our own producers. No wonder we are becoming dependent on rising agricultural imports.

But a neat plan for land reforms does not guarantee its implementation. How can we persuade legislatures to enact such comprehensive land reforms if the majority of their members come from the rural elite?

There are some indicators of change. To begin with, rural-urban population balance is changing fast and there are likely to be more people in the urban areas in the next few decades that in the rural areas. The increasingly impatient urban middle class is going to demand both land reforms and agricultural taxation, to curb the disproportionate power of rural aristocracy in political and economic decision making.

To this demographic transition will be added many other forces of change: rapid industrialization, economic globalization, border-less information flows, stronger democratic institutions including a free press and a more vigorous civil society. Such changes take time but they are often inevitable and irreversible. It is also quite possible that new political parties may emerge in Pakistan to demand basic changes in the present system.

But can we rely on such historic forces? Do we have the time to wait so long in a fast changing world? There are no convincing answers to such troublesome questions. But one thing is certain. Such issues must be discussed increasingly by our media and our civil society. Ultimately, it is people, not governments, who are engineering changes all over the world.

Poverty is cancer not flu
(Introductory remarks at the Special Event on Poverty Eradication arranged by UNDP, 20 May 1997)

Let me welcome you most warmly to a discussion of the second theme this morning. The earlier session has already analyzed the nature, the character and the root causes of persistent poverty. Now we shall be discovering the mysteries of what policies and programmes really work or do not work in reducing poverty and what is the actual experience of countries which have succeeded in their anti-poverty plans.
Let me use the privilege of the Chair to make just a few preliminary observations to give some perspective to our subsequent discussion.

First, what is critical for our analysis is poverty of opportunity, not poverty of income. Poverty of income is often the result, poverty of opportunity is often the cause. Poverty of opportunity is a multi-dimensional concept, embracing lack of education and health, lack of economic assets, social exclusion and political marginalization. It is only through a full understanding of the poverty of opportunity that we can begin to sense why people remain poor. In fact, I firmly believe that World Bank’s measure of $1 a day for absolute poverty has seriously misled policy makers. It has focussed our attention on the symptoms, not the causes. To ignore the poor upstream and to count them endlessly downstream is merely an intellectual luxury. Our concepts, our measures, our analyses must deal with poverty of opportunity, not just with poverty of income. That is why I am delighted that the 1997 Human Development Report – with which I was associated as an advisor – makes a major breakthrough in defining and measuring the multidimensional nature of poverty. It is time to say a final farewell to single-dimensional measures of poverty and to adopt a more multi-dimensional view, however inadequate the measurement may be in the initial stages.

Second, poverty cannot be treated as a mere flu, it is more like body cancer. We cannot leave intact the model of development that produces persistent poverty and wistfully hope that we can take care of poverty downstream through limited income transfers or discrete poverty reduction programmes. If the poor lack critical assets (particularly land), if they lack credit since the formal credit institutions do not bank on them, if they are socially excluded and politically marginalized, then a few technocratic programmes downstream are not the answer. The answer lies in a fundamental change in the very model of development so that human capabilities are built up and human opportunities are enlarged. In other words, the real answer lies in a major transition from traditional economic growth models of human development where people become the real agents and beneficiaries of economic growth, and no longer remain an abstract residual of inhuman develop0ment processes.

Third, we can all learn a great deal from various successful country experiences for poverty reduction. Several countries have reduced the proportion of their people living in poverty quite dramatically in the last two decades – including Malaysia, China, South Korea and Colombia. There are many explanations for their successful experiences but, for busy policy makers, fervently searching for a few core strategies, it appears that six elements stand out:

- Liberal investment in basic education;

- land reforms;

- availability of credit to the poor;

- a high rate of economic growth, evenly distributed;

- people-centered development models, with at least the essential ingredients of women’s empowerment and significant decentralization of decision making powers; and

- good governance, more good governance, and still more good
governance.

Take these six core elements, shake them up vigorously, put them in a policy crucible, and it is likely – in fact, it is more than likely – that pro-poor growth will come out at the other end. We shall soon discover from our distinguished panel what combination of various policies and programmes have made the critical difference in their countries.

My fourth and last observation is about the constant debate between those who believe that free markets and good for every one, including the poor, and those who advocate judicious state intervention to protect the poor. I believe that it is time to bury this counterproductive controversy. There is no country in the world without some mix of market competition and state intervention. The real challenge is to discover that happy blend which delivers pro-poor growth. Let us face political realities. Markets are not elected by poor people, governments are. Markets can be brutal or indifferent to the needs of the poor, governments cannot be. Markets are there to promote efficiency, as they should. Equity is none of their concern. But governments cannot ignore equity since increasing inequalities can disrupt the political and social fabric of a society. So the real answer lies in finding a judicious blend between market competition and state intervention if are to ensure that, while GNP increases, human lives do not shrivel. And in the process, let us also not forget that what finally makes a difference in the lives of the poor are many civil society initiatives – neither governments nor markets.

With these few preliminary observations, let me turn to our distinguished panel who are going to present to you some practical experiences in reducing poverty.

What is real VIP culture

The easiest steps have already been taken to abolish the VIP culture: VIP rooms closed, elaborate motorcades abolished, no stoppage of traffic for important officials, travel in economy class. These are commendable gestures. But the more difficult steps remain.

The real essence of the VIP culture is to take from the poor and give to the rich, to exploit the many for the benefit of the few. Its reversal can be easily stated: take from the rich and give to the poor. This principle is already established in all civilized societies. The days of exacting a ransom from the poor are over. But Pakistan’s VIP culture continues to take from the poor for the benefit of the rich. Its abolition will take more than simple gestures. It calls for fundamental reforms.

Take, for instance, the present taxation system. The poor pay most of the indirect taxes. The rich landlords pay no income tax and the powerful urbanites evade most of their tax liability. Abolition of VIP culture means putting a hefty tax (at least Rs.25 billion a year) on the landlords and collecting at least twice as much as currently paid by the affluent urban class. These additional tax revenues can then be used to lighten the burden of indirect taxes (particularly, reduction in the presently high rate of sales tax), to provide more social services (especially education, health, safe drinking water), to make available subsidised foodgrains to the poor, and to reduce government borrowings and inflationary pressures which are crushing the fixed income groups.

Take the credit system. The banks (particularly, the nationalized banks) take their chance only on the rich and the powerful. They hardly ever lend to the poor. There are Rs.130 billion of stuck-up loans in the nationalized banks and the DFIs. The rich have exploited the system for their own benefit. There is no Grameen Bank, as in Bangladesh, which would lend small amounts to the poor for income earning activities, without giving any subsidy, and showing a recovery rate of 98 per cent. The popular myth is that the rich are creditworthy, the poor are not. But the reality is that the rich have stolen most of the money from the government-owned banks and we have never banked on the poor. The abolition of VIP culture means recovering all the stuck-up loans from the rich and the politically powerful and to start a Grameen-type Bank for the poor.

Take the allotment of urban plots. It has been the tradition of every government to allot expensive urban plots to the influential classes at far below market rates, thereby transferring substantial windfall gains to a few. Such largesse must run into billions of rupees during the last decade alone. (Some enterprising researcher should make a rough estimate). On the other hand, successive governments have done little to give urban plots to the poor, to build low-cost housing for low-income groups, to upgrade Katchi Abadies and urban slums. The abolition of VIP culture means cancelling the past allotments of urban plots to a small urban elite, to collect from them the prevailing market price of those plots (otherwise the plots should be confiscated and auctioned), and to use the billions of rupees thus collected to provide low-cost housing and subsidized plots to the poor urban dwellers.

Take even the matter of government expenditure on Haj and Umaras for top officials and influential people. It runs into vast sums every year compared to a paltry Rs.20 million given each year from the budget (author5ized since 1985) to finance Haj for low-income government servants through balloting. The abolition of VIP culture means abolishing all Haj and Umaras for the affluent class at government expense and to use the savings to finance more of such facilities for all lower-income groups.

These examples can be multiplied in every walk of life. Our VIP culture has created an affluent rentier class which pre-empts most of the patronage of the state. If we are really serious about abolishing the VIP culture, the patronage of the state should go to the poor, not the rich and government allocations should be guided by competition and merit, not by influence and contacts.

The VIP culture concerns not only allocations of government’s patronage, it is also about arrogance of feudal power, about disregard of the laws of the land, about totally arbitrary decisions by those in power. Each time the corrupt escape accountability, each time some honest officials are transferred or punished without even a formal charge sheet, each time the government adopts different rules for those in power from those out of power, each time that citizens are denied equal justice, it is a blatant abuse of power. The VIP culture is not a VIP room: it is feudal mentality, it is exercise of arbitrary power; it is a deeply-ingrained attitude.

The illustrations given above still do not touch more fundamental reforms. For example, over two-thirds of the land ownership is concentrated in the hands of a few feudal families. A non-VIP culture can be created only through sweeping land reforms which return the ownership of land to the actual cultivator. There is an embarrassing divide today between the haves and the have-nots, and the social lava may be about to burst. The VIP culture can be abolished only by improving the present distribution of income and sharing of the benefits of growth Pakistan’s politics in dominated today by the culture of money. Abolition of VIP culture requires abolition of money politics so that a new b reed of honest and committed people can emerge on the political scene.

It is the feudal power structure which is at the heart of the current VIP culture in Pakistan. It does not get reformed or abolished by abolishing VIP rooms. If the aim is to abolish the real VIP culture, we have hardly begun.

The nuclear race in South Asia
(This was the last public address of Dr. Haq at the North South Roundtable Conference in Maryland, June 27 1998)

It will come to you as no surprise that I fully endorse the thesis that there should be a genuine commitment by the existing nuclear powers to a concrete timetable for nuclear disarmament. The recent and unfortunate nuclear tests by India and Pakistan should be seen as part of this problem, not isolated from this international commitment to nuclear disarmament.

Having stated my agreement with these central propositions, what else I have to say to you in the contest of the India-Pakistan nuclear arms race may come to you as somewhat of a shock. I would like to take you into confidence about this issue, since I have been closely associated with it, and suggest a concrete strategy as to how we get out of this present mess.

Let me first state my credentials on this issue. I have passionately and firmly opposed nuclear tests by both India and Pakistan during the past two months and have written extensively on this subject. I have argued that India’s nuclear test was a blunder, not so much a threat to its neighbor's security but to the human security of its own people. I have argued that it should be a matter of no pride for the two countries that powerful nuclear weapons are parked in their bunkers while hungry, powerless people are parked on their city pavements. I have argued that nuclear explosions are not going to save these nations, but that social and economic explosions may destroy them. I have argued that defense expenditures are already large and heavy (12 billion dollars a year, twice that of Saudi Arabia’s arm procurement and with six times as many soldiers) and can get out of hand. Even a freeze of the arms race can finance a major part of the social agendas of both India and Pakistan. I have also argued, for good recourse, that we have seen this senseless blend before of "vast human deprivation combined with a vast nuclear arsenal" in the Soviet Union, with not very reassuring results.

I have written that no desperately poor nation has ever become a great superpower merely by exploding a nuclear bomb; the route to economic and political greatness is a difficult one. I do not defend the irrationality expressed on this issue; I greatly condemn it.

However, what concerns me even more today is the hysterical and hypocritical Western response to these nuclear explosions. I find this current strategy, if there is one, is totally confused, largely immoral, highly counterproductive and plainly stupid. So let me take you behind the scenes, share some candid thoughts with you and suggest a possible constructive strategy.

First, let me tell you why Pakistan reacted with nuclear test explosions, for it is an indictment of the lack of a Western strategy, not an indictment of Pakistan’s irresponsibility. After India’s nuclear tests in early May, Prime Minister Nawaz Sharif and the Pakistan army debated whether or not to conduct their own nuclear tests and I am convinced they were resolved not to test as long as they could be provided with the right security assurances. I argued at the time that Pakistan had a golden opportunity to benefit from India’s mistake by holding back from nuclear tests, but insisting on concrete security guarantees from the United States, and end to the discriminatory sanctions by which Pakistan was denied advanced US military technology since 1990, and assurances that the Kashmir dispute could be resolved by international mediation. In fact, the Pakistan government began to explore three packages in which, if it abstained from nuclear tests, it could be provided with US security guarantees to protect it from any threat of attack by a nuclear-capable India. However, after several weeks of negotiations, no viable package was ever offered by President Bill Clinton’s administration, and the best option Pakistan was presented with was merely a promise to review the Pressler amendment which had served as the basis of the US sanctions. The result was predictable: On May 28, and again on May 30, Pakistan exercised its option to test unclear arms. But for those tests, I believe, the West deserves sanctions, not Pakistan.

Second, what amazes and greatly enrages me is the hypocrisy of existing nuclear powers on this issue. The nuclear Non-Proliferation Treaty (NPT) involved a two-part commitment: one by non-nuclear states to refrain from acquiring nuclear weapons, and another by the existing five nuclear powers – the US, Russia, China, France and Britain – to eliminate gradually their own nuclear arsenals. The latter commitment, naturally, never was honored. The nuclear powers, in short, have violated their own commitments for 30 years, but they sit in indignant moral judgment on countries that have violated the same agreements for fewer than three months.

I am simply amazed by the hypocrisy of those who still control 30,000 nuclear bombs to condemn the existence of a few in the hands of India and Pakistan. I am simply outraged by the arrogance of those who believe that there is a God-given right for nuclear apartheid and that God Himself drew a line in the sand in 1967 that those who had exploded bombs before that date were the good guys and that those who were to do so later were nuclear tyrants and pariah nations destined to burn in Hell forever.

I am puzzled by the attitude of much of the international community, such as France and China, against India and Pakistan. India and Pakistan may in fact have done the international community a favour by raising the stakes in not undertaking nuclear disarmament, reminding the world that commitment remains unfulfilled, and serving a warning that more nations may take this route unless the fundamental issue of nuclear disarmament is tackled first.

Third, the current predicament illustrates the bankruptcy of the existing Western disarmament strategy of economic sanctions against nuclear violators. Why destroy a region where you must have greater stability by imposing sanctions? Why, in doing so, lose your leverage to encourage those countries now to adopt more responsible nuclear policies? Engagement with India and Pakistan need not mean endorsement of their nuclear tests. In fact, engagement in this case could help prevent these desperately poor nations from considering the sale of their nuclear technology, and would help to prevent any debt defaults arising from sanctions which could push them to carry out such sales. Also, as it is, sanctions do not bite. In Pakistan’s experience, sanctions – in the form of the Pressler amendment – could even be considered a gift, since the lack of US-supplied military technology encouraged Pakistan to develop its own facilities.

The West’s strategy is also bankrupt in its failure to recognize new countries joining the nuclear club as nuclear powers. No gate-crashing is allowed, they have made clear. But that policy has made the Western powers slow in understanding reality, as they were when Communist China first acquired unclear arms in the 1960s. They try to avoid dialogue with nuclear-capable states, but dialogue is exactly what is needed.

What could be sensible nuclear strategy for these powers? I contend that they should admit India and Pakistan as members of the nuclear club, and then compel them to comply as nuclear states with the terms of the Non-Proliferation Treaty and the Comprehensive Test Ban Treaty. The nuclear states could then begin to draw up the first timetable for nuclear disarmament. The existing five nuclear powers could also warn India and Pakistan about the risks of nuclear confrontation, and invest real political capital into trying to resolve their outstanding disputes so as to avoid that confrontation. After all, the crisis in South Asia is as grave as any in the Middle East, Northern Ireland or Bosnia-Herzegovina, just as with those crises, the United States should respond by high-level mediation and visits by the US president. What the Western powers need to do, in short, is to help South Asia move from a nuclear arms race to a human development race, involving regional bodies like SAARC.

Finally, we need to go far beyond calls for nuclear disarmament and have more practical package for global negotiations. We need a new Non-Proliferation Treaty; a new code of conduct for arms transfers; a new commitment to discourage arms spending, including less official developmental assistance and fewer export subsidies going to nations which concentrate their scarce resources on military spending.

We need more transparency including better compliance with the UN Arms Registry; more open procurement practices; monitoring of corruption in arms sales, perhaps by groups like Transparency International; and IMF and World Bank involvement in ensuring that military debts and expenditures are accurately reflected and analyzed.

Finally, we need a civil society movement for decreased arms spending in less developed economies, particularly on conventional arms, and the diversion of those funds to development purposes. Perhaps with such a strategy in place, we can stop not just the nuclear madness but the insanity of arms races in poor countries in general, and finally concentrate on the urgent task of improving peoples' lives.

System is to blame for the 22 wealthy families
(Article published in 'The London Times', March 22, 1973)

Five years ago I made a speech alleging that 22 industrial family groups had come to dominate the economic and financial life of Pakistan and that they controlled about two-thirds of industrial assets, 80 per cent of banking and 79 percent insurance.

At that time, Pakistan was still living through a period of great euphoria. President Ayub was completing his tenth term in office and the country was cheerfully celebrating his first decade of development. Pakistan had undoubtedly done extremely well economically under President Ayub’s pragmatic leadership and almost all key economic indicators pointed to a fast rate of expansion. The growth rate in the gross national product had been nearly 6 per cent a year for a decade and a healthy export performance of 8 per cent a year had defied many predictions.

However, some of us who were living closely with the economic management of the country had already begun to develop our doubts about the long-term viability of such a pattern of growth. While the world was still applauding Pakistan as a model of development – since outside donors always need some success stories for their own comfort – we were getting quite concerned that all was not well with the distribution of benefits of growth.

Some of the indices were fairly disturbing. The real disparity in the per capita incomes of East and West Pakistan had more than doubled during this decade even though we were reluctant to admit it publicly. The real wages of the industrial workers, concentrated in a few key urban areas had been reduced by about a third by a combination of inflation and weak bargaining power of the unions. Personal income inequalities had increased substantially.

It was evident that most people had remained unaffected by the forces of economic change since the development had fast become warped in favour of a privileged minority.

One can best illustrate this imbalance by looking at the distribution of certain public and private services. From 1958 to1968 Pakistan imported or domestically assembled private cars worth $300 million while spending only $20 million on buses. During the same period, about 80 per cent to 90 per cent of private construction can only be described as luxury housing.

It was in these circumstances that I tried to focus national attention on justice in the distribution of wealth in the midst of celebration over a rapid rate of growth. I say this with no desire for self-vindication because I recall how painful a decision it was. I was chief economist of the National Planning Commission and much of what I had to say was an indictment of the economic policies of the Government during a period in which I was intimately associated with planned development.

It was little surprise to me that the mention of 22 families in that atmosphere was treated as a bombshell, both by a stunned Government and by the private sector in Pakistan. It is most annoying to question success right in the midst of it. What surprises me, however, is that in the past five years there has been so little analysis of the basic issues inherent in Pakistan’s industrial and economic situation and so little action despite all the hysteria about the 22 families. This has been disappointing because references to 22 families should only be treated as symbolic of the basic problems of income distribution and social justice in Pakistan.

A myth has spread by now that the 22 families own all the wealth in Pakistan. This is simply not true. The problem must be viewed in its proper perspective. The modern industrial sector was, at most, 10 per cent of the national product of Pakistan in 1968 (including East Pakistan) and now is about 15 per cent of the national product of West Pakistan. Even if the 22 families control two-thirds of the industrial assets in the modern sector – and the word is control, not own – it still represents a rather limited control over total wealth in Pakistan.

The distinction, unfortunately, was lost in the heated discussions of the past five years. What is more, it was not so much the concentration of income and wealth in the hands of a few industrial family groups which raised fundamental questions of policy. Such a concentration was probably inevitable in the initial stages of development and to give them their due, the early entrepreneurs did an excellent job of rapid industrialization. What gave us real cause for anxiety was the growing collusion between industrial and financial interests so that a few family groups had come to acquire control over basic economic decision making.

For all practical purposes, the 22 families had become by 1968 both the planning commission and the ministry of finance for the private sector. They preempted most investment permits, import licenses, foreign credits and government patronage because they controlled or influenced most of the decision-making forums handing out such permissions. They had virtually established a stranglehold on the system and were in a position to keep out any new entrepreneurs.

The 22 families were a by-product of government policies and a primitive capitalistic system. The Government did not have the courage to change the company law of 1913 under which the industrial sector of Pakistan was still being governed in 1968. This antiquated framework of capitalism permitted the industrial sector to have managing agencies, cartels, trusts and all other anti-social practices aimed at cheating both the consumer and the Government, The latter became both a conscious and unconscious ally of the private industrialists by giving them generous protection, excessive tax concessions, explicit and hidden subsidies, and representation on many decision making forums.

If we are to evaluate properly the role of the 22 families in Pakistan, we must see it in the perspective of the capitalist system that the country has evolved over time. In blunt terms, Pakistan’s capitalist system is still one of the most primitive in the world. Under it economic feudalism prevails. A handful of people, whether landlords or industrialists or bureaucrats, make all the basic decisions and the system often works simply because there is an alliance between various vested interests.

Unfortunately, most of the criticism of the 22 families in the past five years has been directed to individual family groups rather than to the reform of the basic framework of capitalism. The present Government has introduced some limited reforms by abolishing the managing agency system and introducing a more progressive labour policy as well as by taking away management though not ownership, of certain key industries. However, these are rather small patches on a thoroughly rotten fabric of a primitive and feudal economic system. What is required is a fairly drastic surgery if a move towards a more enlightened and socially responsible capitalism is to be made.

Pakistan badly needs to broaden the base of its economic and political power to evolve a development strategy that reaches out to the bulk of the population; and to innovate a new lifestyle which is more consistent with its own poverty and its stage of development. This is not going to be easy because in the past, modernization was foisted on a basically feudal structure in which political participation was often denied, growth of responsible institutions stifled and free speech curbed, and where all economic and political power gravitated towards a small minority.

There is not much that can be done to save development from being warped in favour of a few in a system like this unless the basic premises of the system are changes. The new constituency of peasants, labour and students that President Bhutto hopes to fashion has still not taken shape. Unless there is such a new constituency, unless the existing power structure is drastically shaken, there is not much of a mandate or instrument available for radical change.

The slogan of 22 families, therefore, has been rather overdone in Pakistan and taken too literally, At times, it has become a convenient camouflage for action against a few individual industrialists rather than reforming the economic, as well as social and political institutions. This is sad because the 22 families are a symptom, not a cause. The basic problem is not the 22 families, individually or collectively, but the system that created them, And it is time that Pakistan looked to the basic causes of its problems and not merely to the symptoms.

HDC Report Launches:

Human Development in South Asia (1997 Report)
(Introductory speech at the launch of HDSA '97 in Islamabad, 9 April 1997)

We are presenting to you today the first Report on Human Development in South Asia 1997. This Report has been prepared by the Human Development Centre over the course of the last one year. The Report was prepared in close collaboration with UNDP and I do wish to express my sincere thanks to Nay Htun for his consistent support and encouragement, to Robert England for his help at every step, and to UNDP Resident Representatives in SAARC nations for their substantive support with background materials and data for this Report. I am grateful to my good friend Nay Htun for the statement he has just delivered on behalf of UNDP. And I sincerely thank Mr. Wasim Sajjad for agreeing to be our Chief Guest for this launching ceremony. Mr. Wasim Sajjad is not only a leading thinker and outstanding intellectual in our country, we are extremely proud and honored that he is a distinguished member of the National Advisory Board of the Human Development Centre.

The basic message of our Report is a profoundly disturbing one. South Asia has emerged by now as the poorest, the most illiterate, the most malnourished and the least gender-sensitive region in the world. The governments of South Asia have made very little investment in providing the basic social services of education and health to their 1.2 billion people. The region is ill prepared to enter the global competition of the 21st century. This is the blunt truth which is not yet being faced by the policy makers of the South Asia region, nor adequately recognized by members of the international community.

But the basic objective of our report is not to shock, but to persuade policy makers to take urgent steps to correct the present situation. The South Asia region has enormous development potential. If sufficient investment is made in human development, if the overall policy framework is liberalized and rationalized, if some fundamental institutional reforms are carried out, South Asia can become the East Asia of the 21st century. This will require a very solid, patient effort, spread over a long period of time. Today, the South Asia region has to face the challenge of completely restructuring its development priorities.

Let me first start with a brief outline of the scale of human deprivation in South Asia. Nearly one-half of the world’s illiterates and 40 percent of the world’s poor live in South Asia. Out of a total population of 1.2 billion, around 500 million people are in the category of absolute poor, surviving on less than one dollar a day. More than one-half of the adults are illiterate, and over one-fourth of the total population does not have access to even a simple daily necessity like clean drinking water.

The burden of this human deprivation falls heavily on children and women. About 85 million children in South Asia have never seen the inside of a school. An estimated 134 million children lose their very childhood, working long hours in inhuman conditions, many working for an average wage of only 8 U.S. cents a day. Half of the world’s malnourished children live in South Asia.

The situation of women is even more shocking. It is summed up in a disturbing comparison in the Report. South Asia is the only region where men outnumber women. While there are 106 women to 100 men in the rest of the world, since biologically women outlive men, in South Asia the ratio is exactly the reverse: only 94 women to 100 men. About 74 million women are simply ‘missing’ in South Asia – the unfortunate victims of social and economic neglect from cradle to grave. Adult female literacy is only one half of male literacy. Female literacy rate is only 36 percent in South Asia compared to an average of 55 percent in the developing world. South Asia has the lowest ratio of female administrators and managers – only 3 percent compared to 20 percent in Latin America. And such indices of gender disparity persist in a region where four out of seven countries (namely, Bangladesh, India, Pakistan and Sri Lanka) can boast of a female head of government at present or in the recent past.

The many shocking statistics and disturbing graphs given in the Report are sufficient to shatter the complacency of policy makers in South Asia and the relatively detached attitude of the international community. If South Asia slowly disintegrates, it will not only be a catastrophe for its teeming millions, it will be a global tragedy as well. The scale of this human tragedy will be far more extensive than anything witnessed in Somalia, Rwanda or Burundi in recent years.

However, the Report is not pessimistic about the future of South Asia. In fact, it offers a new vision of hope. The real wealth of this region are its people. If sufficient investment is made in these people, they can radically change the development prospects of South Asia in the 21st century.

The Report presents a blueprint for such an investment plan for basic social services over the next 15 years. If such a plan is implemented by all SAARC nations, then they will be able to provide universal primary education, basic health care for all, safe drinking water for the entire population, adequate nutrition for malnourished children, family planning services for at least 80 per cent of married couples, and new credit institutions for the poor to create self-employment opportunities.

Such a package of measures is expected to cost an average of $ 8.6 billion a year during the next 15 years, or an additional 1.6 per cent combined GNP of South Asia, assuming that GNP grows by a per cent a year. While this is a significant cost, it is certainly not unrealistic. The Report points out several ways that such a package of basic social services can be financed.

First, the SAARC leaders can agree on a compact to reduce their defence spending in line with the rest of the world and earmark the resources thus released for urgent social priority needs. If military spending is cut, for instance, by 5 per cent a year in real terms, it can generate a peace dividend of around $ 8 billion a year and can finance most of the basic social services packages. Thus, if the South Asian countries display the required statesmanship and vision, and if they find a peaceful solution to their outstanding disputes, they can radically transform the development prospects of the region.

Second, the Report recommends that South Asian countries should retire their expensive domestic debts by privatizing their public assets through international markets. The servicing of these domestic debts is now taking away 5 to 6 per cent of GNP. If this debt servicing is considerably reduced, or wiped off altogether, the current budgets for education and health can be more than doubled.

Third, tremendous dynamism and creative energy is building up by now in non-government organizations and at the grassroots level. The Report cites many examples of successful civil society initiatives in various SAARC nations. If their governments lends a supporting hand, these NGOs and private initiatives can provide social services at the grass roots level in a very cost-effective manner.

The Report recommends that the forthcoming SAARC Summit in the Maldives in early May 1997 should direct their governments to prepare a concrete plan of action for priority human investments over the next 15 years, along with a realistic financing strategy. The Report also suggests that the SAARC Summit should invite the most prominent thinkers of the region to form an unofficial commission to produce a report on a new vision for South Asia in the 21st century.

Let me conclude by saying that this is just the first report on Human Development in South Asia prepared by our Centre in a series that will be continued every year. If this Report succeeds in stimulating a major debate on human development issues in the South Asia region, it would have served its purpose.

Let us face it. We in this region are not the hapless victims of fate. We can shape our own destiny. After all, human destiny is a matter of choice, not chance. Our report outlines the choices that we all can make – and we all must make. On those choices will depend the future of South Asia.

The Education Challenge in South Asia (1998 Report)
(Introductory speech at the launch of HDSA '98 in New Delhi, 4 April 1998)

It is a great privilege for me to launch the 1998 Report on "Human Development in South Asia" in India this morning. We are very fortunate in having Honorable I.K. Gujral as our Chief Guest. Mr. Gujral is one of those rare individuals who are even more valuable outside government than inside. His clear vision, outstanding intellectual leadership, and deep commitment to human development issues make him a great asset for the entire international community.

Let me also thank Dr. Brenda McSweeny for her great help and support in our intellectual enterprise. We all get inspired by Brenda’s unabashed enthusiasm and intellectual courage. We have prepared our Report in close collaboration with UNDP, though I would like to make it clear that UNDP bears no responsibility for the views expressed in our Report. The Report is a totally independent exercise of the Human Development Centre, a regional policy think-tank based in Islamabad.

Our first Report on Human Development in South Asia 1997 was released almost a year ago here in New Delhi. The central message of our 1997 Report was simple but powerful. The key challenge for South Asia was to travel the vast distance between its performance and its promise. On the one hand, South Asia had emerged as the poorest region in the world. One the other, it had all the potential to become the most dynamic region in the twenty-first century, if there was massive investment in human development. We therefore, proposed a set of policy strategies for the countries in the region to implement a human development agenda – a concrete plan of action that would allow the region to reach its true development potential by earmarking another 1.6 per cent of its combined income to this priority task.

The response to our 1997 Repot, both in India as well as in the rest of South Asia and internationally, far exceeded our expectations. It came as a rude shock to the South Asia policy-makers and to the global community that the South Asian region had slipped behind all other regions of the world, including Sub-Saharan Africa, in its human development levels. Even more encouraging for us was the response of the civil society in South Asia, particularly the extensive coverage in the local media, which did not allow policy-makers to forget the urgent message of human development.

The 1997 Report made it clear to the world that the real challenge of human development lay in this, the most populous, region of the world. And to meet this development challenge, the Report stressed that the two most critical components would be first, basic education for all; and second, relevant technical skills. It is these themes which are now the focus of our 1998 Report. We ask, and then try to answer, how South Asia can emerge as a dynamic, egalitarian, and prosperous society in the twenty-first century, and how basic education for all and relevant technical skills can be at the forefront of such a development revolution.

Our exploration of South Asia’s bleak educational wasteland in this year’s Report turns up some extremely disturbing facts. One in two adults is illiterate. One in three primary-school age children is not attending school. Two in five children drop out of primary school before completing their studies. Only one in fifty secondary-school age children enrolls in technical or vocational programmes.

But the basic objective of our report is not merely to rattle the skeletons in South Asia’s educational closet. Our purpose is to convince people that universal primary education for all in the next five years is an achievable reality, not a utopian vision. And to ensure that politicians and policy makers realize that they not only can, but they must act immediately to end the region’s shameful neglect of basic education.

Let me start with a brief outline of the bleak education scenario in much of South Asia, except in Sri Lanka and the Maldives. South Asia has now emerged as the most illiterate region in the world, with about 400 million illiterate adults, nearly one-half of the world total. Over three out of every five illiterate adults have a woman’s face. And, despite some progress made over the last few decades, the current generation of students does not have a bright future either. There are 50 million children not attending primary school, over two-fifths of the world total. Another 60 million children drop out of primary school each year. If all children have to be placed in primary schools in the next five years, it involves an additional number exceeding the total population of the United Kingdom today.

There is yet another cause for alarm. The schools in South Asia have failed to teach the basic skills needed for a productive and useful life to even those children who do enroll. The evidence assembled in the Report indicates that many of South Asia’s multi-lingual, multi-age, multi-grade classrooms are nothing short of a multiple disaster zone. A survey in Pakistan found that over 80 per cent of primary school completers could not write a simple letter. Nine out of ten girls taking the School Leaving Certificate examination in Nepal failed the test. In fact, the time available for learning in South Asia is sometimes a quarter of the level in the educational high-achievers of East Asia: a recent UNICEF study in Dhaka revealed that the annual classroom contact time in Bangladesh in grade one was only 384 hours compared to about three times that much in China and Indonesia.

The Report clearly shows that the burden of educational deprivation falls most heavily on girls and women. With an adult female literacy rate of only 36 per cent, the lowest in the world, South Asia is entering the 21st century with 243 million illiterate women, who represent two-third of its total adult female population. The gender gap in primary enrolment is 19 percentage points in South Asia compared to only 5 percentage points in developing countries. Girls spend, on average, only one-third as much time in school as boys. Less than one-third of the teachers at primary level are females in South Asia compared to an average of one-half in the developing world.

The findings in the Report also suggest the need for drastic reform in South Asia’s technical and vocational education policies. Present vocational and technical education programmes in South Asia are often inadequate, irrelevant, and qualitatively poor. Less than 5 per cent of the total educational budgets in South Asia are devoted to technical education. Consequently, only 1.6 per cent of children at the secondary level are enrolling for technical education, compared to over six times that percentage in East Asia and fifteen times in Latin America. Not only is enrolment low, but about half of the students drop out before completing their studies. Even the fortunate few who complete their education are often not rewarded when they enter the labour market: over half fail to get a job at the end of their training. As a result, South Asia is a technical wasteland, often stuck with technologies of the past, instead of focusing on new technologies of computer software, electronics, and informatics, for which there is an expanding global demand.

The many shocking statistics and disturbing graphs in the 1998 Report are sufficient to shatter the complacency of policy-makers in South Asia and the relatively detached attitude of the international community. But the report is not pessimistic about the future of South Asia. In fact, it offers a new vision of hope. The real wealth of this region are its people. If sufficient investment is made in these people, they can radically change the development prospects of South Asia in the twenty-first century. The Report analyses the three great development waves in Asia, starting from Japan in the 1940s and 1950s, spreading to the East Asian industrializing tigers in the 1960s and 1970s, and emerging in China in the 1980s and 1990s. Each time, the development model was based on basic education for all, modern technical skills, open economies, fast growth accompanied by good distribution, and strong, accountable institutions of good governance. South Asia can emerge as the next economic frontier but only if it builds up its human capital and adopts sound policies for accelerating its economic growth, treating globalization as an opportunity not a threat.

The Report presents a concrete five-year plan for ensuring universal primary education in South Asia. This will require providing school facilities for an additional 65 million children and training 2 million additional teachers over the next five years. More importantly, the Report shows that such an ambitious educational agenda can be implemented by assigning only one billion dollars each year in recurrent expenditure – less than 0.3 per cent of the region’s annual combined GNP. Even if capital expenditure is included, the total additional cost will be less than one per cent of GNP – a real bargain for South Asia, considering the huge pay-off.

The Report points out several realistic financial strategies that can finance this education package. Almost all the required resources can be provided simply by restructuring existing budgetary priorities in South Asia. First, even a freeze on current military spending (at current prices) will release more than enough resources to attain the target of universal primary education. Current military spending levels are extremely high, particularly in India and Pakistan. If military spending levels are cut by 5 per cent a year over the next five years, it cold release about $22 billion as peace dividend – over four times what is required for the goal of universal primary education.

Second, South Asian countries can free themselves from crippling domestic debt burdens by privatizing their public assets quickly and efficiently. These domestic debts consume 5 to 6 per cent of their GNP, which can be spent instead on balancing budgets. The slowest, the most hesitant, the most bureaucratic privatization in the world is presently taking place in South Asia. It is time to speed it up.

Third, there must be a major restructuring of existing allocation priorities in the education budgets of South Asia, with the bulk of resources devoted to providing basic education, closing gender gaps in primary education, and imparting technical training. The current bias in favour of higher education must be reversed: private initiatives to provide high-quality university education should be encouraged, with liberal state scholarships and student loans, and fiscal incentives to business community to create tax-free education endowments. At least 70 per cent of education budget allocations should be earmarked for primary education compared to less than 50 per cent now. South Asia has excelled in building inverted pyramids of education in the past, concentrating state resources on higher education for a few rather than basic education for all. It is time to correct the architecture of these pyramids.

Fourth, foreign donors should be requested to allocate a higher percentage of their funds to basic education and technical training: at present, only 9 per cent of external assistance to South Asia is allocated for human priority needs. This is less than half of what needs to be done in the spirit of the 20:20 compact endorsed at the 1995 World Summit for Social Development. If South Asian governments are willing to devote more resources to the goal of basic education for all, the international community must also be willing to support these efforts.

Community participation is an integral part of the Report’s five-year plan for universalizing primary education. New and innovative partnerships between central and local government, non-governmental organizations, and local communities are vital. The Report stresses that any plan to extend universal primary education by the year 2003 will not succeed unless major reliance is placed on non-formal education. With flexible school hours, local teachers, and active parental involvement, non-formal schools succeed in meeting the needs of local communities rather than distant central planners. Non-formal education is also extremely cost-effective. For example, a non-formal school in Pakistan costs less than 2 per cent of the capital costs of a formal school, and can be built in less than a month compared to an average start-up time of two years for a formal school in a new building. The unit cost per student of running a non-formal school is generally less than one-half that of a formal school. Non-formal education is not the second-best option; often, it is the only realistic option available.

The Report also suggests a revolutionary new strategy for mainstreaming vocational training in the formal educational system. The key elements in a comprehensive programme of reform are measures to ensure the equivalency of degrees from technical stream at the secondary level; comprehensive surveys to link technical training to the requirements of the job market; the extension of technical education to neglected groups, particularly women and children in rural areas; special tax incentives to encourage the business community to provide technical skills; and the creation of tripartite councils between governments, private sector firms, and labour unions to identify technical skills and design relevant training programmes. The Report indicates that South Asia faces the promising opportunity of combining its cheap labour with modern technological skills taking over the global markets in the export of low-and medium-tech consumer goods to the expanding middle class in the world.

The Report stresses that, ultimately, the key ingredient for educational success is always political commitment. When governments have shown the political will to make an investment in basic education, the results have been spectacular. The experiences of Sri Lanka, the Maldives, Bangladesh in recent years, and the Indian Sate of Kerala clearly show how solid political resolve can lead to rapid education revolutions. The Report suggests several key steps that South Asia’s political leaders can take to express their commitment to the goal of basic education for all. These include: enacting and strictly enforcing compulsory education legislation; decentralizing the administrative structure for managing primary education; and making constitutional provision that funds for attaining the goal of universal primary education will be treated as the ‘first claim’ on budgetary resources.

However, the Report points out that political commitment is not merely a matter of a few concrete steps; it is a matter of deep convictions. When such convictions are missing, brilliant technocratic blueprints may not produce tangible results. The evidence amassed in the Report clearly indicates that the time has come for South Asian leaders to make a concerted effort to provide universal primary education. South Asia’s children cannot – and must not – be forced to wait any longer.

I have presented here only the regional picture of South Asia in the global context. In a little while, Khadija Haq will briefly summarize the conclusions of the Report about India.

Let me conclude by saying that while we intend to take the messages in our Report to all South Asian nations and all South Asian people – to the public, to NGOs and community organizations, to international donors and the national media, to teachers and students – the real challenge outlined in this report is for the politicians and policy makers of South Asia. And the challenge for policy makers is this: to devise and implement strategies that unleash the creative potential of one-quarter of humanity. Extending basic education for all and creating relevant technical skills are the keys to meeting this challenge. South Asia is fast approaching a historic watershed. It can realize the promise of a new dawn in the twenty-first century. Or it can disintegrate into anarchy and confusion, ‘Human history’, as H. G. Wells remarked a few decades ago, 'becomes more and more a race between education and catastrophe’. Our hope is that this Report forces the policy makers of South Asia to analyze this choice as objectively and honestly as possible.