Population, Poverty and Development

Understanding Development

Questions:

GDP better life? Better Health+good education rich Country +Low poverty? Social progress economic progress? Literacy low population growth? Role of political systems in social and economic growth?

Scientific measure of Measuring development? Demography and developmental economics

Poverty level and Income Inequality Literacy rate Human developmental Index Fertility rate Life expectancy Gender ratio and female literacy

Population Policy of China

1950s :famine and death of 30 million people 1980s :Initiated one child policy -to limit family size -formal permission required -family incentives for one child family

On the downside, one child policy cultural preference for boys Abortions and more female infanticide Male to female ratios are too high According to Amartya Sen ..44 to 50 million women are already missing in China in comparison of western countries Resistance in rural areas over one child policy and flexibile laws ,focus ed on elevating status of women and providing old age security

By mid 1990s Chinas fertility rate reached 1.9,fell further 1.6 by 2008 In practice many families have two children in rural areas and ethnic minorities which are exempted from one child policy Debate on Democracy vs Communism In Maos Great Leap Forward30 million people died of poor government decisions

Factors led China to the Top ?

Massive in investments in health and education Incentives in family planning lower fertility rate improved child health Greater female literacy rate Economic opportunities for women

Human development

China: earlier extensive public provision of health and education: universal education until Class X, and public services to ensure nutrition, health and sanitation. (In the 1990s, higher fees and some privatization of such services led to reduced access and worsening indicators; since 2002 revival of public spending in these areas.) India: the public provision of all of these has been extremely inadequate throughout this period and has deteriorated in per capita terms since the early 1990s. Very recently slight increase in education spending but still well below China; government health spending still very low.

Poverty reduction

China: Around 13.4 per cent. (Reflects earlier asset redistribution and basic needs provision in China under communism, plus larger mass market and recent role of agricultural prices.)

India: Official poverty ratio much higher and persistent, currently 28 per cent. Food deprivation is much higher.

Trade patterns

China: Rapid export growth involving aggressive increases on world market shares, based on relocative capital attracted by cheap labour and heavily subsidised infrastructure. India: Lower rate of export growth, with cheap labour due to low absolute wages rather than public provision and poor infrastructure development. So exports have not yet become engine of growth, except in services.

Rates of GDP growth

The Chinese economy has grown at an average annual rate of 9.8 per cent for two and a half decades, showing volatility around high trend.

Indias economy has grown at around 5-6 per cent per year over the same period, breaking from Hindu rate of 3 per cent. But very recently the average growth rate for the last four years is just above 8 per cent.

Institutional conditions

India was a mixed economy with large private sector, so essentially capitalist market economy with the associated tendency to involuntary unemployment. China was mostly a command economy, which until recently had a very small private sector; there is still substantial state control over macroeconomic processes in forms that have differed from more conventional capitalist macroeconomic policy.

Asian century?

Both China and India have large populations covering substantial and diverse geographical areas, large economies with even larger potential size. Current success stories of globalisation: two economies that have apparently benefited. Success defined by the high and sustained rates of growth of aggregate and per capita national income; the absence of major financial crises; and substantial reduction in income poverty.

Development status at Present China:

The GLF (Great Leap Forward ) campaign was initiated in 1958. It aimed at the industrialisation of the country on a very large scale. People were encouraged to set up industry in the backyard Communes were started in rural areas. Under Commune system land was collectively cultivated. In 1958, there were 26000 Communes covering almost all farmers. GLF campaign met with many problems . Severe drought caused the death of 30 million people . The conflict with Russia was also harmful for China.

In 1965, Mao introduced the Proletarian Cultural Revolution (1966-76). The revolution sent students professionals to work and learn from countryside. The reform introduce by china in 1978 resulted in fast economic growth. Reforms were introduced in phases. Dual pricing system was introduced as part of reforms. Farmers and industrial units were required to buy and sell fixed quantities of inputs and output on the basis of price fixed by the government and the rest were purchased and sold at market price. Special economic zones were set up in order to attract foreign investors.

History of Chinas Development

First Five-Year Plan (1953-1957)

A new economic order modeled on the Soviet Union

example, emphasizing the development of capital-intensive heavy industry

Great Leap Forward (1958-1960)

The break away from the Soviet model and introduction of a

new program aimed at rapidly raising industrial and agricultural production

Cultural Revolution (1966-1976)

The pursuit of Maos own development strategy of a self-

reliant economy and political struggle

Economic Reforms (1978- )

To move the economy from a planned economy to one that

is more market-oriented

Developmental Path (India and China)

Indicators
Estimated population (in millions) Annual growth of population(1990-2003) Density (per sq. Km) Sex ratio Fertility Rate Urbanisation Improved sanitation facilities

India
1103.6 1.7 358 933 3.0 27.8 30 %

China
1303.7 1.0 138 937 1.8 36.1 44 %

India: Poverty comparison of states

INDIA- Basic Facts
Population Population Density 1.1 billion(approx) 339/km2(10 times US) $3.36 trillion(4th) $3320 (122nd ) 65.4% 75% 54% 4.1% GDP

GDP GDP per capita Literacy: Men: Women: Education Spending

http://en.wikipedia.org/wiki/Poverty_in_India http://en.wikipedia.org/wiki/India

World: Extreme Poverty Level

India: GDP: $4 trillion (4th) GDP per capita(PPP): $3800 (122th) Extreme Poverty level: 23% Income Inequality Gini Index: 0.32 (moderate)

http://en.wikipedia.org/wiki/Poverty

Lessons

For more inclusive growth, the generation of good quality productive employment is the most critical variable. Need growth strategy that allows and encourages labour productivity increases overall while significantly expanding expenditure and therefore income and employment opportunities in social sectors. Major role for state intervention, through direct public investment and through fiscal, monetary and marketbased measures that alter the structure of incentives for private agents.