A decisive blow against poverty was struck when Indias new Finance Minister Palaniappan Chidambaram tabled the 2004/2005 budget, argues Jeffrey D Sachs, director of the Earth Institute at Columbia University, in The Nation (Thailand).
– At the heart of the budget is the realization that reducing poverty requires both rapid economic growth and targeted investments aimed at the poorest of the poor. Rapid economic growth is to be based on the private sector, including foreign direct investment, Sachs writes and continues:
– Thus, the budget supports critical areas of market reform and growth promotion, including measures aimed at deepening the financial sector, promoting exports and liberalizing foreign direct investment. The key is that the budget does not rely simply on “trickle-down” economics to raise living standards. The second pillar of poverty reduction is targeted investments for the poor, particularly for the rural poor.
– This approach commits Indias national government and state governments to ensuring that all Indians, including the poorest, have access to basic social investments, including health, nutrition and schooling, and to basic infrastructure, including electricity, information and communications technology, safe drinking water and inputs for modern agriculture.
– Every village is to be lifted up in the next few years, empowered with the basic tools to become economically productive.
– The lesson for other developing countries is that spending on the poor for health, education, safe drinking water, electricity and the like is not simply pandering; it is a serious and productive investment.
– It may be expensive to educate a child, but it is far more expensive to a society to leave a child without education. Uneducated children will be burdens on their societies for decades to come.
– It is far more rational to spend a little extra income now for a few years of schooling than face decades of social costs resulting from masses of uneducated adult workers!
– But even India, with its growing economy, cannot afford to make these investments out of national resources. India will need some help, at least temporarily, from richer countries and international institutions like the World Bank and the Asian Development Bank, Sachs writes.
Kilde: www.worldbank.org
