The Telegraph
Since 1st March, 1999
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- The report on world development focuses on broad strategies

The author is former governor, Reserve Bank of India

The recent conference at Johannesburg on sustainable development revisited most of the issues, which had been addressed in Rio de Janeiro. A large number of participants, including heads of states and the secretary general of the United Nations, Kofi Annan, attended this conference. By all accounts, the enthusiasm of the participants was great, but governments did not deliver on promises.

In an attempt to focus the attention of the world on the issues of sustainable development, the World Bank issued a special report — World Development Report 2003. WDR 2003 maintains its tradition of excellence. However, by its own admission, the report does not attempt specific sectorwise solutions, but limits itself to broad strategies. It focuses mainly on the institutional aspects of the development process, pointing out that development of institutions is a key to the successful implementation.

WDR 2003 revisits some of the earlier controversies on the limits to growth. In particular, the Malthusian fears stressed in the Fifties and Sixties that the world will not be able to feed the rapidly growing population have turned out to be untrue, thanks mainly to the Green Revolution in agriculture. The predicted scenario of famine and starvation, especially in China and India, did not materialize.

In this context, there is hope that the genetically-modified crops can give us much higher increases in productivity of grains needed by the increased population in the coming years. Unfortunately, resistance to genetically-modified crops is still fomented by many environmental activists, who fear grave danger in such crops. It is not the people in the developed countries who need to further productivity that would come from genetically modified crops. It is precisely for poor countries, like those in famine-affected Africa, who need substantial additions to production, which the genetically modified crops can bring. This issue was not addressed frontally by the Johannesburg conference.

The WDR 2003 recalls the prophecy of doom, earlier made by the Club of Rome, which had predicted that the increased demands of development would lead to the earth running out of its natural resources. So far, this prophecy has not been fulfilled. Technological changes have increased the availability of resources to replace the existing ones, such as, for instance, fibre optics in place of copper. The report also highlights the success of the world in eliminating diseases, such small pox and river blindness.

The development strategies have still to come face to face with the sharp growth in inequality in the world as a whole. While there has been a significant drop in the percentage of people living in extreme poverty — thanks to the growth of economies, like India and China — inequality between countries and inside countries has worsened. Further, hundreds of cities in developing nations have reached the limits of air pollution; struggles over water are becoming increasingly frequent. The WDR 2003 predicts that availability of water is likely to become one of the most pressing issues of the current century. One-third of the world’s people live in countries that are already facing moderate to high water shortage. In the next 30 years, this proportion could rise to half.

Another striking statistic disclosed by the WDR is that one billion people in low and middle income countries do not have access to safe water for drinking, personal hygiene and domestic use. In addition, land has been progressively degraded. Since the Fifties, nearly two billion hectares of land, representing 23 per cent of the cropland of the world has been degraded. These areas naturally yield much less than before the degradation. The WDR 2003 also highlights a sharp increase in deforestation. One-fifth of all tropical forests has been cleared since 1968 and most of these are in the developing world. There is also the worsening position of bio-diversity. These persistent gaps in sustainability of environment call for immediate action both on the part of national as well as global authorities. The report admits that market forces cannot answer all environmental problems. It will be necessary for the state to intervene and compensate for market imperfections.

While the WDR 2003 is strong on facts and analysis of causes, it is weak on specific remedies. It seems to focus mainly on the strength of institutions to undertake the task of development. While, no doubt, institutions are important, right policies are equally vital. But, given this caveat, it is important to note that the WDR is strongly in favour of a more democratic form of government, which will be “inclusive” to accommodate the currently-ignored sections of the society. This alone will help to achieve success in the strategy of development.

One important aspect of global development, to which the WDR draws attention, is the projected growth of global income at 3 per cent per annum over the next 15 years, which implies a fourfold rise in global output. Such a large increase in output would inevitably place a strain on environmental and social fabrics. This would highlight the need to shift patterns of production and consumption, both for developing and developed countries. Particularly is it important to ensure that new investments for increased production should, as far as possible, use environmentally responsible technologies.

The WDR also draws attention to the fact that the demographic transition in the developing world is likely to prove more friendly to environmental concerns. First, there has been a welcome deceleration in the overall rate of growth of population. Indeed, the global population is expected to stabilize at the end of the 21st century at 9 to 10 billion people — about 30 per cent lower than the earlier forecast. The nature of demographic transition has also led to a lower dependency ratio. That is, the proportion of working population in relation to that of children and elderly is rising. While, no doubt, this could increase the demand for school places and jobs, it also opens out a possible opportunity for higher savings and therefore higher investment.

The WDR 2003 is not definitive in its recommendations on what strategies the world should adopt for overcoming the threats to sustainable development. While it emphasizes the need for institutional development, it has not concentrated on the provision of infrastructure, particularly in respect of energy, which is the bottleneck for most poor countries. In this respect, the attitude of environmentalists to possible alternative options to fossil waste energy continues to be intriguing. Environmentalists of the world are united in opposing larger dams, hydro-electric projects and nuclear power, all of which can be the best options for energy-starved countries in search of alternatives to fossil fuels. The developed countries, with their linkages to local non-governmental organizations, do their best to stop development of hydel options, even when displaced people are offered suitable rehabilitation measures. The investment by China in the mega project of Three Gorges invited protests by NGOs around the world. Environmentalists protested against large displacement of population and submersion of large tracts of land. Fortunately, the Chinese authorities stood their ground and went ahead with the project, which contributes to substantially lessen China’s dependence on fossil fuel. It will also lead to a reduction of the threat of floods.

What is “sustainable development”' Following the 1987 Brundtland commission, WDR 2003 defines it as “progress that meets the needs of the present without compromising the ability of future generations to meet their own needs”. It is on this dilemma that the debate on sustainable development rests. In this context, options, such as hydro-electric projects and nuclear power, which can be made environment-friendly, should not be abjured if the threat of emissions from fossil fuel-based power is to be met. Unfortunately, well-endowed NGOs supported by funds abroad oppose projects of this nature in poor countries, although their need is great. Neither the Rio de Janeiro conference nor the Johannesburg conference focussed adequately on these issues of alternatives.

Some critics have pointed out that these conferences are a waste of time because they are in effect a rehash of older gatherings. But, I suppose the nature of the subject “sustainable development” is such that no definitive solution, which will be acceptable to all, is easily attainable. The effort of finding a solution is necessarily hard and will take long. The conference, such as the one at Johannesburg, is an essential stepping stone to the final solution. But, the organizers of the conference should not forget the basic truth which Indira Gandhi emphasized in her statement at the Stockholm conference in the Sixties. She had then said that “while the poverty of environment has to be addressed, the world should not forget that it is more important to tackle the environment of poverty”, a sensible warning to single-minded enthusiasts for environmental sustainability.

It must, however, be granted the WDR 2003 attaches due importance to the issue of poverty alleviation and the strategic importance of global cooperation for the task. Hopefully, the warriors against environmental degradation will now turn their attention to the fight against poverty on the broad basis of strategies, including those that the WDR 2003 emphasizes.

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