India's farmer suicides focus on growth vs equity debate

SUICIDES: Around 600 farmer suicides in some cotton-growing parts of Western India over the past year beg the question: economic liberalization bane or blessing?

Apparently, the farmers were forced to take their lives on account of repeated crop failures and increasing debt burdens. These problems are compounded by a drop in world cotton prices and a flooding of the Indian market with subsidized cotton imports from the West.

Clearly, the free play of market forces is worsening the condition of a substantial section of India's poor even while the country is being trumpeted in some quarters as an emerging success story among Third World economies. In fact, it is some time since India was projected as a number one regional power, not only on account of its growing military clout but also because its increasing economic dynamism is seen as trend-setting and exemplary.

Nevertheless, some sections of India's poor are being driven to the wall on account of growing economic pressures and all this despite a perceived boom in economic activity countrywide. So desperate is the condition of Western India's cotton-growers that Prime Minister Manmohan Singh was prompted to tour the region concerned recently and announce a US$ 815 million aid package for the affected farming population in a bid to bail them out of their severe debt crisis.

Only time will reveal the effectiveness of such relief efforts but it is amply clear that not all sections in India are experiencing "boom times" in the wake of India's economic liberalization drive. Certainly, some are growing rich on the basis of this new economic development paradigm but a substantial number among particularly the economic underclass are finding themselves sinking deeper into economic deprivation.

Perhaps, Third World countries need to focus sharply on increasing economic inequalities in the wake of economic globalization, although poverty alleviation too must remain one of their main concerns.

It is possible that poverty levels worldwide have dropped marginally since the resurgence of market principles in the management of economies, but growing economic inequalities among population segments are assuming the proportions of a growing new concern among global development organisations and multilateral bodies engaging poverty issues. The UNDP is one such development institution and the World Bank another.

The out going World Bank Country Director in Sri Lanka, Peter Harrold was quoted recently as saying that growing income inequalities was a major problem in Sri Lanka, as well. His observation should have reminded observers that it just would not do to remain complacent over flattering economic growth figures.

The problem of income inequalities has to be addressed and resolved, if we are to defuse the threat of social instability. Among other things, Harrold, pointed to the lop-sided prosperity of the Western Province of Sri Lanka in comparison to the rest of the country. Essentially, then, the point made was that economic growth does not necessarily translate into economic equity and the latter needs to be balanced with the former if development in the real sense is to be ushered.

There are crucial lessons here for the developing world. To begin with, "development" is not all about economic growth. There could be a spurt in the production of goods and services in a country but such trends do not necessarily denote equalities in income distribution and the alleviation of poverty, which plays a crucial role in the defusing of socio-political tensions.

All in all, economic globalization should be handled judiciously by states with a view to combining growth with equity.