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Chairperson's Remarks at the South Asia Economic Summit Conference

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Chairperson's Remarks at the South Asia Economic Summit Conference

22 October 2011.
Fourth South Asia Economic Summit,
Current Phase of the Recovery and Implications for South Asia,
Speech delivered by Sir Fazle Hasan Abed, Guest of Honour.

"It seems that South Asia weathered the fall outs of the global economic and financial crisis relatively well, though the impact of the recent euro crisis on exports and growth in South Asia is still uncertain. These aggregate level perspectives of the macroeconomic adjustments however do not fully reveal the new set of risks that are emerging along with the traditional structural problems and the prevalent widespread poverty and vulnerability. It is these human dimensions of the crisis that I want to focus on in my brief remarks.

The poor are hit the hardest by any economic downturn. The poor take much longer to recover, as recovery in real wages and employment take much longer than recovery in GDP. Poorer people are affected more than others because they have fewer buffers, and because the range and effectiveness of their buffers are inadequate. The poor lack assets and predominantly possess unskilled-labour and engage in the informal sector. This restricts their ability to cope by switching jobs, and expose them to unregulated labour markets. In addition, economic downturns push poor households into a vicious cycle of poverty. They are often forced to respond with measures that keep them poor: reducing the number and quality of meals, postponing health-related expenditure and withdrawing children from school. These actions lead to lower future income-earning potential for current and future generations, resulting in a trap of persistent poverty.  And the women and children bear the greatest brunt of these damaging fluctuations and adjustments.

The immediate and the longer term, perhaps even inter generational impact of the global food crisis, fallout of the economic and financial crisis, has been dire and the term ‘recovery’ is perhaps too premature to be used in describing its current phase. Let’s put the trend in some perspective. In 2007 alone, the prices of principle food staples—rice, corn, soybeans and wheat, effectively doubled throughout the world. This was an unprecedented rise and it revered the more than 50 years of declining prices. We know the results which were immediate and devastating. By the most conservative estimates, globally, the number of hungry or chronically malnourished rose by at least 100 million, to nearly one billion people—that is almost one seventh of the world’s population.  Though the grain prices have declined substantially since 2008, experts agree that they are poised to rise again.

Recent evidence from developing country settings confirms that increases in food prices cause maternal and child under nutrition levels to rise rapidly.  And the negative impact starts with the unborn child in the womb—it is quality and not just the quantity of the diet during pregnancy that is important for successful birth outcomes. The consumption of more expensive micronutrient rich food (milk, green leafy vegetables and fruits) during pregnancy is found to be positively associated with the size of the infant at birth. Rapidly increasing food prices are also likely to cause nutritional insults very early in pregnancy, which will influence later fetal and infant growth. The full human cost of the food crisis may thus well be intergenerational and very expensive for the society and the economy.

The crisis has a number of drivers which include the diversion of grains in North America and Western Europe to bio fuel production; higher energy costs which translate into more expensive chemical fertilizers; and financial speculation over staple crops, which cause price fluctuations. The situation is further aggravated by underlying trends such as rapid population growth. Climate change is also threatening to lower crop yields at precisely the time when staple foods urgently need to be produced.

What needs to be done? Issues of both production and distribution are important here and should be approach in an integrated way. In my view, we should focus on two strategic priorities that lie at the centre of both the production and distribution aspects of the problem—getting elimination of hunger and malnutrition at the centre of our politics and reenergizing the women’s economic empowerment agenda.

We know that food, hunger and politics are inextricably linked. When governments have been committed, progress has been very rapid, as the examples of China, Thailand, Vietnam, Mexico and most brilliantly Brazil have demonstrated conclusively over the last three decades. In contrast,  the prevalence of underweight children in the South Asian countries barring the shining example of Sri Lanka, is among the highest in the world, and is nearly double that of Sub-Saharan Africa with dire consequences for mobility, mortality, productivity and economic growth. Unless governments are made to care for its citizens going hungry and are fully committed to reducing the number of hungry and chronically malnourished people, no solutions will have the political teeth to make the real dent.

We need to turn this agenda as a central part of our political process and one of the non negotiable KPIs of any regime. Concrete targets and action plan in reducing the number of citizens who are hungry and are chronically malnourished should be a critical part of every electoral manifesto and this has to be made a popular topic of public debates. The targets have to be broken down by local constituencies to reflect regional differences and also to decentralize and amplify citizen monitoring and voice. A compact between the different development actors will be forged at every political constituency to deliver on the local target plan. In the final analysis, food security is an issue of citizenship and a matter of fundamental citizenship rights. We need to centre our politics around this fundamental element of the social contract between a citizen and her state.

Let me now turn to the other strategic priority— eliminating the gender gap. There are two very influential global reports—the Global Hunger Index (GHI) report and Gender Gap Report (GGR). IFPRI researchers examined the relationship between these two indices and found gender inequality and hunger go hand in hand--- an important step to ending world hunger is thus empowering women and eradicating gender disparities in education, health, economic participation, and political opportunities.

What type of gender gap matters more for hunger? Is it different in different parts of the world? The Gender Gap Index is divided into four sub components—economic participation and opportunity, educational attainment, health and survival and political empowerment. The researchers find that while in Sub Saharan Africa, the gender gap in educational attainment is the primary driver, in case of South Asia; it is the gender inequality in the health and survival domain, i.e. the inequality between men and women in healthy life expectancy and sex ratio at child birth, which is the main driver of hunger. Here's a statistic to digest - 49 percent of children under five in South Asia are underweight. In sub-Saharan Africa, a region many associate with images of starving children, the figure is 28 percent. India, Bangladesh and Pakistan together account for half the world's underweight children. This is directly related to women’s status in south Asia.

To address this, it is important that we invest in women’s and girls’ nutrition over the life cycle and build support for women’s empowerment in communities. I would like to underline the focus on taking a ‘life cycle’ approach to nutrition and the importance of empowering the women beyond the household—in public life and in her community. Ultimately, the structural cause of the gender gap is the inequality that exists in economic and political participation—narrowing this gap is fundamental to sustaining any progress that is made in addressing the gender gaps in the more practical needs domain. Working at the policy and advocacy level to strengthen women’s property rights and creating pressure from below by improving women’s legal awareness are keys to addressing the structural constraints.

As citizens of a part of the world that is successfully tackling the complex challenges of economic management and delivering on solid growth in an uncertain world, we cannot accept the political irresponsibility of our governments failing to ensure that no one suffers the indignity of going hungry and the denial of an opportunity to realize the full potential of our children because of being malnourished. This is doable-- one of the greatest accomplishments of the 20th century was to make famine which seemed inevitable, a rarity. Today, famine is almost invariably the product of evil governments or no governments. So with right politics as global humanity we have been able to consign to the museums the hunger that kills. The 21st century challenge is to do that for the hunger that stunt and wastes our potential. "


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