Socio-Economic Challenges For South Asian Leadership

Potential of South Asian economy
Problems/challenges faced by the region
How can we cope?
How is our economy growing esp. that of India?
The investment climate here
Importance of regional integration

The South Asia, despite its enormous economic potential, could not emerge as a major economic force of the world as the political antagonism in the member states has dominated the scene since six decades. As a consequence of unresolved conflicts and mistrust among the governments almost 1.5 billion people of south Asia are left far behind in terms of human development and 40 percent of SAARC population lives below poverty line which is nearly half of the world’s poor population.

Consider some of the dramatic numbers that are similarly horrifying as day to day terrorist attacks. For example, South Asia has one of the highest infant and under-five mortality rates after Sub-Saharan Africa and one out of every three child deaths in the world occurs in South Asia and that two-thirds of the total number of malnourished children in the world live in South Asia and the number is even higher than in Sub-Saharan Africa. We have the highest percentage of underweight, stunted and wasted children under five in the world and nearly half of total numbers of maternal deaths in the world occur in South Asia and the percentage of births attended by skilled health personnel in the region is the lowest in the world.

Other indicators of human development are equally depressing. In the area of education for instance, a recent UNESCO report states that two countries, India and Pakistan, contain one of the highest number of out-of-school children in the world. Though the enrolment rates have improved over the years, dropout rates are still soaring. At the primary level almost 30 per cent of those who do enroll drop out before reaching Grade 5.Around half the total number of illiterate adults in the world lives in South Asia.

State of Economies

To understand where the tribe of South Asia lost its path we need to look closely into the current macro economic indicators of the major economies of the region. India, Pakistan and Bangladesh are the three major SAARC member countries and so are their economies. The Indian economy is the strongest and largest among the SAARC economies. It has enormous growth potential and is comparable to that of China. The economic reform program initiated by Manmohan Singh, then Finance Minister of India, in early 90s has left behind the "Nehruian Socialist growth rate" of 4 per cent of GDP achieved during post 1947 four decades in an economy dominated by the public sector. Economic growth during early 90s averages to 6 per cent of GDP. In the new millennium under the rule of BJP and than Congress India has developed a strong industrial base and comparatively well developed human resource that makes her the world's 7th industrial state with a potential to increase the pace of growth substantially. Cement, cars, car parts, motorcycles, steel, pharmaceuticals and Information and Communication Technology are performing world class. The world looks towards the Indian economy's potential as something positive for global and regional economic development. These all positives of India shining are really encouraging but what are the reasons that compelled well known Indian author Arundati Roy to write in her new book, “Listening to Grasshoppers,” While one arm of Indian society is ‘busy selling off the nation’s assets in chunks, the other to divert attention, is arranging a buying, howling and deranged chorus of cultural nationalism,’ she proclaim. She claims that the recent economic boom has merely created ‘a vast middle class punch drunk on sudden wealth and the sudden respect that comes with it — and a much, much vaster underclass.’ She is extremely concerned that unless the state steps in to correct the situation, the country may have to face a serious socio-political situation.

Pakistan's terrorism ridden economy is struggling to regain the growth rate of General Musharaf years. The country has suffered the most among the SAARC countries in the post 9/ 11 world because religious extremism, a continuous wave of terrorism and tension on its eastern and western borders. Militants and extremists have an instinctive hatred towards reducing tension between India and Pakistan. They will not accept the changes being envisaged to set pace for economic cooperation and reducing tension without serious reservations. The Mumbai terrorist attacks simply reflect their mindset. Political issues are to be resolved in case militancy and extremism are to be curbed to make regional economic cooperation workable.
Pakistani society is still struggling to establish a viable political democratic system. Repeated interventions by the establishment and lack of political institutionalization have obstructed growth of strong and stable democratic institutions and of an economic order that should have discouraged oligarchy, pursued growth of middle class and checked economic corruption which became the hallmark of state craft in recent years.

Bangladesh's economic growth rate is moderate if not strong. It has a good literacy rate, a good exportable human resource base and lower population growth rate. It has developed a sound cottage and garments industry to improve exports. But, its economy needs to expand and achieve higher economic growth rate to eliminate poverty.
The three economies, which really counter SAARC economic cooperation framework, have macro-economic indicators, which are at variance. They have some common problems also such as attracting foreign investment, expanding technological base for innovative exports, alleviating poverty, increasing per capita income and job opportunities, and reducing fiscal deficit. Equally important is the point that political culture of three countries differs substantially from each other. The Indian democracy is institutionalised, stable and delivering results. Despite a small and strong class of industrialists, India has a big middle class particularly of new generation of educated Indians whose life style is changing on the life style pattern of western countries. They are keen to spend and are setting new trends of consumerism.

It is to be appreciated that commonality of political, economic and social culture works as catalysts towards achieving greater economic cooperation and ultimately economic integration. Europe after the devastating experience of two world wars and end of Cold War was quick to get on the road of reconstruction. It was followed by economic cooperation and launching of common currency 'euro' because of homogenous political, economic and social culture. Variance in SAARC major countries' political, economic and social culture should take more time to integrate the region economically than one can visualize at present.


Several Afghan Strategies, None a Clear Choice

Published: September 30, 2009
Source New York Times

The president, vice president and an array of cabinet secretaries,

intelligence chiefs, generals, diplomats and advisers gathered in a

windowless basement room of the White House for three hours on

Wednesday to chart a new course in Afghanistan.
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Times Topics: Afghanistan

The one thing everyone could agree on: None of the choices is easy.

Just six months after President Obama adopted what he called a

“stronger, smarter and comprehensive strategy” for Afghanistan and

Pakistan, he is back at the same table starting from scratch. The

choices available to him are both disparate and not particularly


He could stick with his March strategy, but his commander wants as

many as 40,000 more troops to make it work. He could go radically

in the other direction and embrace Vice President Joseph R. Biden

Jr.’s idea of using fewer troops, focused more on hunting down

leaders of Al Qaeda, but risk the collapse of the Afghan

government. Or he could search for some middle-ground option that

avoids the risks of the other two, but potentially find himself in

a quagmire.

“He’s doing what he has to do: before you make a decision, you

better scrub all your alternative options,” said Brett H. McGurk,

who worked on Afghanistan and Iraq at the National Security Council

under President George W. Bush and briefly under Mr. Obama. “I just

suspect they’ll find, like we found with Iraq, that it’s two

imperfect choices.”

At the heart of the decision is defining America’s strategic

interest in the region. Mr. Obama has called Afghanistan a “war of

necessity” to stop it from becoming a haven again for Al Qaeda to

attack America. The question is, how much danger is there and how

many lives can be lost and dollars spent to minimize it?

Stephen Biddle, a scholar at the Council on Foreign Relations who

has advised Gen. Stanley A. McChrystal, the commander in

Afghanistan, said the chances of a new Qaeda stronghold that could

threaten American territory was relatively low but that even a

small risk was a concern.

“It’s like buying life insurance for a 50-year-old,” Mr. Biddle

said. “The odds of a 50-year-old dying in the next year in America

are substantially less than 1 percent. And yet most Americans buy

life insurance.”

The meeting on Wednesday was one of five planned as the president

rethinks his approach in response to a dire report by General

McChrystal. The session was meant to review the worsening political

and security situation, while future meetings will examine options

in detail.

General McChrystal’s preferred option builds on the strategy

outlined by Mr. Obama in March with a substantial infusion of new

troops. The counterinsurgency strategy emphasized protecting

civilians over just engaging insurgents, restricting airstrikes to

reduce civilian casualties and sharply expanding the Afghan

security forces through accelerated training.

Most counterinsurgency specialists say a larger ground force is

needed to clear Taliban-held territory and hold it while

instructors train enough competent Afghan soldiers and police

officers, and Afghan leaders build an effective government.

“Without more troops, the insurgents can continue to maneuver

around us and set I.E.D.’s, which kill our people,” said Peter

Gilchrist, a retired British major general and a former senior

commander in Afghanistan, referring to improvised explosive


“There’s no question that more forces will buy more space and time,

and that will translate into an effort to get more Afghan police

into the hinterlands and more Afghan National Army soldiers through

training,” said Gen. Dan K. McNeill, the NATO commander in

Afghanistan until June 2008.

Critics argue that foreign forces have never pacified Afghanistan

and that more troops will only increase the perception of them

being occupiers. The result would be a long, drawn-out war with

many more American casualties. They say that though the Taliban are

ruthless, they do not pose a danger to America, while Al Qaeda,

which is a threat, is located primarily in Pakistan.

Moreover, widespread allegations of fraud in Afghanistan’s

presidential election have left the country’s leadership uncertain

and underscored that America does not have a partner in Kabul with

broad public legitimacy.

At the other end of the spectrum is Mr. Biden’s approach. Rather

than try to protect the Afghan population from the Taliban,

American forces would concentrate on eliminating the Qaeda

leadership, primarily in Pakistan, using Special Operations forces,

Predator missile strikes and other surgical tactics. The Americans

would also accelerate training of Afghan forces and provide support

as they took the lead against the Taliban.

This counterterrorism strategy, as opposed to a counterinsurgency

strategy, is predicated on the theory that the real threat to

American national security lies in Pakistan, not Afghanistan. Some

call this proposal the “Pakistan First” option.

“Pakistan is the critical focus, the greatest security risk for the

United States,” said Senator John Kerry, Democrat of Massachusetts

and chairman of the Foreign Relations Committee. “And all of this

exercise, after all, is about our security.”

Administration officials lately have been pointing to what they

call great success in working with Pakistani authorities to

decapitate Al Qaeda and other extremist cells.

Yet critics note that successful drone attacks require good

intelligence on the ground, something that may be lost without

enough forces. After Mr. Bush sent more troops to Iraq in early

2007, tips about enemy locations soared, a development some

attributed to a larger American presence.

Moreover, a greater reliance on air power could mean more civilian

deaths, making enemies of the very people American commanders are

trying to sway.

In between those two approaches is a menu of options not especially

satisfying to either side of the debate. Mr. Biddle estimates there

are about a half-dozen variants in this territory, from negotiating

a power-sharing arrangement with the Taliban to paying off local


Most of these options envision roughly the same number of troops as

are in the country now or a smaller increase than General

McChrystal’s maximum request. With the reinforcements Mr. Obama

ordered earlier this year, the United States will have 68,000

troops on the ground this fall. The Pentagon still has a request

for another 10,000 that was deferred last spring.

Substantially expanding Afghan security forces would be critical.

Senator Carl Levin, a Michigan Democrat who heads the Armed

Services Committee, has said that by 2012 the Afghan Army should be

increased to 240,000 troops from 92,000 and police forces to

160,000 officers from 84,000.

General McChrystal’s troop request, said one administration

official, offers alternatives requiring fewer than 40,000 more

troops. If the goal is recalibrated to secure Afghan cities but not

the countryside, then not as many more troops would be needed. And

if the goal is scaled back even further, then the additional 10,000

troops previously requested could be enough.

These ideas, though, may not be big enough to change the trajectory

of an effort that has muddled along for eight years. Critics on

both sides said the worst of all options would be some version of

staying the course.

“The middle options,” Mr. McGurk said, “are either high risk or

they’re status quo or they’re unworkable.”