Abstract
Poverty, as it has been described, has many forms. The author of the book under review, Rehman Sobhan, departs from the traditional income deprivation measure of poverty and redefines poverty as a process which ‘excludes significant segments of the population from opportunities to participate on equitable terms in the opportunities for development and decision making in society,’ (p. 2). Several studies were commissioned (as shown in Annexures 3A and 3B) and dialogues were held across the region (as shown in Annexures 3C and 3D) to obtain inputs for the book on the South Asian country specific poverty situations. This book presents factual information to make readers understand in a clear manner the phenomenon of poverty in South Asia and the scope for eradicating its structural sources of injustice through collective action.
The inequitable distribution of opportunities across society between rich and the excluded (poor) is termed as ‘structural injustice’ which implicates that exclusion does not derive from the play of market forces, but its roots can be traced to the prevailing institutional arrangements. By drawing on cross-country experiences from five South Asian countries, Bangladesh, India, Nepal, Pakistan and Sri Lanka, the book elaborates on four sources of structural injustice—(1) unequal access to productive assets; (2) unequal participation in the market; (3) unequal access to human development services; and (4) unjust governance. This review will discuss the issues presented in the book in relation to the aforesaid four sources of structural injustice.
According to Sobhan, ‘an agenda for agrarian reform in South Asia remains necessary if we are serious about eradicating poverty,’ (p. 69). Chapter 3 elaborates on the relationship between rural poverty and access to productive assets. Land poverty remains a significant source of income poverty and suffices to mention that prevailing cropping arrangements have made landless/land-poor farmers insecure in their tenancy. This has led to a situation where agents (tenants) have little incentive to protect the principals (land owners) interest, which has adverse impact for land use. In all countries of South Asia, there are also significant amounts of state-owned lands which remain to be distributed to the landless/land-poor.
The author’s recommendation that the five countries establish a National Commission for Agrarian Reform (NCAR) tailored to meet their specific needs identified in the book is commendable. In general, the NCAR’s mandate would be to implement existing land reforms, promote tenancy reforms, distribute state-owned lands to the landless/land-poor and, most pertinently, legitimise agrarian reforms through collective action by including organisations of the excluded.
On the context of unequal participation in the market, the book highlights many success stories of collective action in India—SEWA, SERP, AMUL, Lijjat, etc. In Chapter 4, some successful cases of self-help groups (SHGs) in Andhra Pradesh in India are provided to depict how the poor, working in the informal sector and earning meagre amounts, have been able to organise themselves into groups and thereby improve their social status through organisation of collectives (Lijjat and SEWA). It is clear that collective action is needed to facilitate value addition through creating an institutional facility, which is sufficiently strong to access the higher tiers of the market. The Indian experience suggests that macroeconomic growth and poverty reduction can be best served by investing small producers with ownership rights in large corporate ventures, which empower them to share in the value addition process of the market.
Sobhan devotes two chapters (8 and 9) to describe how the workers in the informal sector can be empowered through collective action. These two chapters discuss in great detail how the collective action model can be replicated to organise the poor and enable them to add value to their labour. Chapter 8 takes a close look at the competitive limitation of micro-entrepreneurs which prevents them from adding value to their primary product. Seven areas are identified having opportunities for collective action—(1) service providers such as rickshaw drivers, street cleaners, retail enterprise; (2) slum dweller, displaced or homeless groups of people; (3) equity ownership for small displaced farmers; (4) equity ownership in major infrastructure development project; (5) ownership rights to customers/consumers; (6) ownership of labour exporting enterprises; and (7) collectives of the executive to acquire shares in private corporate enterprises or divested state-owned enterprises (SOEs). In all these cases, the instrument of collective action is to be deployed as an institutional mechanism for enabling the excluded to participate in the more dynamic sectors of the economy.
In Chapter 9, the author provides a policy agenda for establishing institutions in order to promote collective action in South Asia. Across most countries of South Asia, cooperatives have not been a great success. In contrast to AMUL as well as organisations such as Grameen Bank and BRAC in Bangladesh, both Lijjat and SEWA, led by women micro-entrepreneurs, have remained much more committed to a participatory style of management involving their members. He refers to the Employee Stock Ownership Plans (ESOPs) in the US and draws attention to the experience of Mondragon Corporation, a workers cooperative located in Spain. The author rightly argues that if workers could be turned into principals, this would discourage ‘free rider problems because workers within the enterprise have a collective interest to get all workers to pull their weight’ (p. 369).
Chapters 5, 6 and 7 on education, budgetary policies and micro-finance policies, respectively, discuss the third type of structural injustice—nature of unequal access to human development services. In Chapter 7, it is argued that micro-credit has succeeded in terms of financially empowering the poor but it remains targeted to the household, in spite of its emphasis on group responsibility. It is the borrower who assumes fiduciary responsibility for repayment and consequently, in the case of Bangladesh’s rural poor, ‘the micro-credit experience fragmented its small scale borrowers into millions of micro-entrepreneurs, many competing against each other, each operating within an unfavourable market regime’ (p. 321). The author suggests making use of specialised funding institutions, such as the PKSF in Bangladesh, PPAF in Pakistan and NABARD in India, to mobilise capital from international financial institutions and on-lend these to other MFIs.
What is evident from Chapter 6 is that augmentation of public expenditure has not led to significant poverty reduction, since ‘little has been done to oversee the actual design of projects to ensure that resources actually reach the poor’ (p. 234). Barring India, the quality of statistics in other South Asian countries leaves much to be desired and reflects the low priority given by the governments to the evaluation of the outcomes of public expenditures. The author’s suggestion that evaluation of public policies and programmes and their implications for social protection should be incorporated as an integrated part of the governance of such programme is relevant for all countries of South Asia. The author suggests institutionalising the budgetary consultation process by including the excluded who are to be consulted when designing social protection policies.
By drawing on two case studies on Bangladesh and Sri Lanka, the author concludes that sizeable differences in the quality of education, accessed by children from lower income and better off families remain, notwithstanding the mix of private and public education (p. 187). From the social justice perspective, the author rightly affirms that ‘denying quality education to millions of citizens is not only unjust but inefficient and has reduced the development potential of every South Asian country’ (p. 196). In view of the different education systems in operation across South Asia, the need to democratise educational opportunities across the region remains an important objective. India has recently introduced the Right to Education bill but as the author points out, the critical question to be addressed will revolve around how effectively this legislation will be implemented in India, both in terms of its governance as well as in the provision of the necessary budget support.
On the final source of structural injustice, from the discussion presented throughout the book, readers may conclude that the institutions of democracy have remained unresponsive to the needs of the excluded at least in the design of their policy agendas. Despite the fact that majority of the voters in South Asia are drawn from the ranks of the excluded, governments neither consult with their principal constituents on what they want nor do they design policies which may be sensitive to their specific concerns. This reflects a form of institutional failure whereby the excluded have remained, as in the economic market place, unable to get themselves heard. The author aptly points out the political economy problem and affirms that the ‘incapacity of the excluded to share in the value addition process derives from institutional failure’ (p. 6).
I must commend Sobhan’s way of underscoring all the institutional and market factors in presenting a comprehensive understanding of the how the poor are excluded in South Asia. Overall, his book suggests commercial ventures ran by NGOs to be restructured into microenterprises jointly owned by the workers themselves. In democratising opportunities to enable the poor to have an access to assets and markets, such a reform must be backed by equitable access to education and health care. Democratisation of access to quality education and health care is both integral to the empowerment of the excluded and instrumental in their elevation from agents to principals. This view remains the significant point of departure to poverty eradication which envisages turning agents into principals through collective action. This structural transformation will take place through democratising opportunities for equal participation by all citizens of South Asia in the opportunities for development and decision-making in society.