Economic Democracy Through Pro-poor Growth

Asia has been the cradle of many of the world's oldest civilizations. It was, in times past, in the forefront not only of philosophy and religion, but of science and mathematics, astronomy and medicine, arts and engineering. India, in particular, has made a contribution to good governance. The Indian philosopher poet Kambar, in his translation of the Ramayana, extolled Ramrajya, the Indian governance vision of those times as follows: ‘There was no one who did not have enough, there was no one who had more than enough.’ Attainment of Independence cleared the way for political democracy, which was a prerequisite for economic regeneration. But mere independence and a movement towards political democracy was not enough; economic democracy was also a critical requirement and an integral part of a holistic approach. New development strategies, vigorous intent and determination were necessary to eradicate poverty, which afflicted the majority of the populations of South Asian countries in particular.

This balanced civilization rhythm and the shared prosperity of yore, however, gave way to sharpening contradictions and impoverishment of large numbers of people in most poor countries, primarily as a result of a long spell of colonial rule and alienating values, which dominated the existing culture. The vast masses became emaciated in spirit and body and poverty became endemic. It was this reality that Mahatma Gandhi revisioned for the Independence struggle: ‘There should be enough for everyone's needs, but not for everyone's greed.’ This was not only Gandhianism at its best, but it also reflects what the new social movements in India and elsewhere are advocating.

In his speech ‘Tryst with Destiny’ delivered on 14 August 1947, Jawaharlal Nehru expressed the interrelationship between independence, political democracy and development with equity when he said that the task ahead was:

The Directive Principles of State Policy embodied in the Indian constitution reflect these fundamental values and correspond to the guiding principles in the UN Charter, ‘We the people…’. As India matured into a vibrant democracy, rapidly growing economy and pluralistic society, the innate creativity of its people began to be released. This set in motion transformative processes and identified the priorities and concerns of peoples of all independent countries and of governments in each of the SAARC countries. The latest SAPNA study recognizes that we are witnessing a process of globalization, which in some ways is an irreversible process, but in the midst of that, we have still a large backlog of poverty and deprivation, of illiteracy and malnutrition. Much remains to be done to meet the basic requirements of the poor of South Asia. Although official statistics indicate that poverty levels are below 30 per cent, scholarly evidence now indicates that the figure could be between 50 and 60 per cent, depending on the methodology of calculation.

While governments are formulating and implementing programmes to meet this challenge, there have also been parallel efforts by individual South Asian scholars and groups of activists in these countries, who began evaluating the mainstream development strategies being followed on the basis of received wisdom and Cartesian approaches. The SAPNA network established in 1984 was one of the first to start looking at lessons from the ground in South Asia and search for culturally-rooted alternatives that ensured the rights and capacity of the poor. They found the mainstream strategies to be inadequate. They have suggested viable alternative paradigms and complementary strategies that show that growth, political democracy and economic democracy need not be trade-offs in our cultures with their holistic visions.

I recall, it was at the Asia Project Seminar on ‘Culture, Democracy and Development’ in 2000 at India International Centre that Dr Ponna Wignaraja, in his keynote address, reminded us that development takes place in a cultural milieu and deals with issues far beyond quantifiable economic phenomena. He emphasized that the social and political phenomena that affect human behaviour also have to be analyzed if rational policy is to be formulated. Over the past quarter century he and his colleagues in the SAPNA network began [Page xii]systematically to learn new lessons from the ground, with the methodology of social praxis and participatory development. These lessons showed that with such large numbers of efficient poor in South Asia, they could also be a valuable resource and contribute to growth if they were participants in the process, instead of passive objects of development. Let me illustrate Dr Wignaraja's point in relation to the recent Panchayat legislation in India. The decentralization reforms at the local level which resulted from this legislation can be linked effectively to the new social movements to bring about transitional change at the micro level.

Through a series of eight studies, each one leading to the next, they have been able to give coherence to critical elements in an alternative development paradigm, with sustainable macro–micro policy options for sustainable development with growth and equity in South Asia. Their seventh study is on Pro-poor Growth and Governance in South Asia. SAPNA has deepened their understanding of new challenges of globalization, the poverty crisis, the related issues of national and regional security and a rights based approach to development. The initial unlearning from received wisdom, the constructive dissent and new learning was a precondition and provided further new sustainable directions. They have raised methodological issues in relation to culture, measurement of poverty, inter-disciplinarity, the values for monitoring people-to-people and people-to-nature relationships, as well as knowledge management, in the broadest sense.

It is to be hoped that not only will this new study linking political democracy with economic democracy and security be widely read, but that it will also be translated into local languages and help raise awareness on how to bring about socially responsible and transformative social change through a transitional strategy. A sustainable base in the political economy then permits poor countries greater options in responding to the challenges of globalization.

Since decolonization after World War II, nearly six decades ago, some South Asian policy makers, scholars and social activists have been attempting to give coherence to the unfinished agenda for governance, democracy and sustainable development with equity in the region. The vision that the South Asian Perspectives Network Association (SAPNA) articulated and the process to be led by the people was also rooted in the fundamental lessons learned from the South Asian experience. This has wider implications for policy, good governance and conflict transformation for most regions emerging in the South after decolonization who are still poor, despite having suffi-cient human and natural resources.

The guidelines for good governance, democracy and pro-poor growth, which emerged through seven SAPNA studies since the mid-1970s, have been further elaborated in this study. Some of these guidelines had also been enunciated in the UN Charter of 1948 to which many of these countries had subscribed. Thereafter, they were further elaborated in the subsequent covenants of the UN and Geneva Conventions and are now incorporated in the report of the UN High Level Committee presided over by former President of Brazil, Fernando Henrique Cardoso, linking development with equity, security and human rights.

In all cultures in poor countries, the rights of individuals and communities are being incorporated into legal constitutional frameworks and constitutions. These guiding principles also draw on the countries' common law and are being related to interpretations of international law even in the International Court of Justice. Though the debate on In Larger Freedom (United Nations 2005)1 catalyzed by these recent reports and interpretations is still in its initial stages, it is already having an impact. In the lessons from experiential learning from ‘success cases’ of sustainable transitions through linking political democracy and economic democracy which are analyzed in this study, policy options can be identified and these guidelines can also be refined.

From the 1970s, as the contradictions within South Asian countries and societies began to sharpen and globalization processes began to move away from the visions of ‘One World’, along with the erosion of the Keynesian consensus of political economy, the alternative [Page xiv]paradigm proposed by the SAPNA group assumed greater relevance. From its small early beginning in the mid-1970s, this group of South Asians have expanded through the formation of SAPNA, to over a hundred like-minded identifiable individuals and institutions, with several thousands of less visible participants on the ground and in the academic community at large and from among the enlightened political leadership. Their support is greatly appreciated because it permitted SAPNA to persist in an uninterrupted independent intellectual quest.

The contribution of this network started with constructive and imaginative dissent from received wisdom and a priori theorizing. After three decades, their intellectual quest has provided an indispensable contribution to the discourse, strategic thinking and action on governance, democracy and sustainable development with equity in response to the globalization phenomenon. SAPNA's intellectual quest has helped to clarify the transition to political democracy with economic democracy and growth. The generalizations for macro–micro policy are supported by ‘success cases’ on the ground. It is also a tribute to some of the persons who were there at the beginning and who did not give up. This study constitutes a current state of the art handbook/guidebook for implementers, trainers and facilitators and should be read in conjunction with the other seven SAPNA publications, particularly the more recent study entitled Pro-poor Growth and Governance in South Asia: Decentralization and Participatory Development (Sage Publications, 2004).

The key attributes of pro-poorness or a pro-poor perspective, which is also a working definition, can be summarized as follows:

First, it is a key word in the vocabulary of participatory development. Second, it is value-based and value-led, where the poorest and the less poor, constituting the poor, occupy the centre of their own development process, demonstrating both the creativity and efficiency inherent in them. A vital implication here is that in partnership formation with the poor, it is the support system (including the state) that should ally with the poor instead of inviting the poor to join the support system. Third, this calls for a political approach—not party politics—to the poverty question and not a technocratic one. It is such an approach which will make the perceptual shift of recognizing that the poor form a ‘Third Sector’ or a ‘People's Sector’ that is independent of the private and public sectors. Fourth, the overall approach demands the use of rigorous social mobilization to mobilize, conscientize and organize the poor, during the process of which they transform themselves to become [Page xv]the subjects of development from having been its objects all this while. Fifth, the poor have their own accumulation process with a capacity to save, invest and directly contribute to national growth. Sixth, from the perspective of macro-economic policy, there must be a net transfer of resources to the poor. Last, it is the process of developing a separate pro-poor plan that is a part of the national development plan, in which practically speaking, all these diverse attributes will be negotiated in a nationwide process of praxis.

SAPNA's intellectual quest had a clear beginning and has over the years, at many levels of interaction, provided and continued to provide many unquantifiable, but measurable results and inputs into a new school of thought. There is a great deal more work to be done by the committed individuals and institutions, including organizations of the poor, who sustained the initial process and are now deepening it, as well as, helping to mainstream the lessons, both intellectually and in practice.

As the title suggested, economic democracy is a key concept used in this book with a core of particular meaning. It is not used vaguely or ambiguously. The core meaning is used by SAPNA within the paradigm of participatory development. This differs in essence from its rhetorical and general use or attempts to incorporate this concept and practice into conventional neo-classical or Marxist development framework in delivery-type development. After 60 years of Independence from colonial rule, holistic thinking has not penetrated into the mainstream of development of governing elites in poor countries. This phenomenon had led to the deep systemic crisis and delinking of processes of political and economic democracy. This working definition of economic democracy and attributes are clarified below.

First is the attribute of choice. Economic democracy has to offer choices to the person making a decision in his or her development situation. The several choices are drawn from an incremental continuum of options, invariably corresponding to the hierarchy or variety of needs. To correspond to felt needs, they also have to be affordable. The second attribute is the scale of access to the choices. The access has to be available to all and not just a few. Third is the feature of responding to (the needs of) the people's sector or the sector of poor in civil society. This sector is at the base of society, and it is made up of thousands of small interrelated communities. These communities at the base are of two types—the mobilized and the non-mobilized. The people's sector we are talking about is ideally made up of conscientized communities whose level of mass [Page xvi]consciousness has been raised through the action of rigorous social mobilization. Once conscientized, these communities are in possession of a value-led social ethics. They are no longer mere numbers of isolated and impersonal consumers. Fourth is the feature of distributive equity. The participants in the process of economic democracy are also members of an efficient and meritocratic process that can contribute to savings and growth, along with the public and private sector processes. That is, they must be able to overcome the limitations—especially exclusion—of the market. Fifth and last is the attribute relating to leadership of the process of creating and widening the spaces of economic democracy. It is best led by the poor or the people themselves whose mass consciousness has been raised in alliance with partners from new social movements and independent activists.

Over the years, SAPNA's work has been supported in a variety of small ways by several concerned departments in UN Agencies such as the United Nations University, United Nations Development Programme (UNDP), United Nations Research Institute for Social Development (UNRISD), United Nations Educational, Scientific and Cultural Organisation (UNESCO), the World Bank, International Fund for Agricultural Development (IFAD) and by sensitive national and international foundations, as well as encouraged by individuals at the highest policy making levels, particularly in South Asia and in the more sensitive parts of the international academic community at large. This support at the right time and in a sensitive manner permitted SAPNA to persist in an uninterrupted independent intellectual quest. This is greatly appreciated and acknowledged.