III. POPULATION AND DEVELOPMENT POLICIES AND STRATEGIES IN THE CONTEXT OF THE RAPIDLY CHANGING MACROECONOMIC ENVIRONMENT

Pravin Visaria *

Introduction

As the end of the second millennium draws near, the world view guiding the formulation of economic policies and the role of the State in social and economic development has undergone a radical shift within the relatively short time of about a decade and a half. This shift is likely to have important implications for the national and international approaches to thinking about population and development policies, and particularly the instruments available to implement these policies and programmes. It is necessary, therefore, to examine the need and scope for a review and reconsideration of the entire underlying framework. The present paper attempts to initiate the process.

A. The demographic scene and the context of policy-making

The past half-century since the end of the Second World War has witnessed truly revolutionary changes in the demographic situation around the world, particularly in the developing countries. The average length of life lived by homo sapiens on planet Earth has risen remarkably from 46.5 years during the period 1950-1955 to 64.3 years during the period 1990-1995 in the aggregate and from 40.9 to 62.1 years in the developing world. (If China is excluded, the length of life in the developing countries during the 1990s declines to 60.1 years.)

As a result of the time-lag between mortality decline and the decline in fertility, the average annual rate of growth of the world population had risen from 1.8 per cent during the early 1950s to a peak rate of 2.0 per cent during the late 1960s. It has declined to 1.5 per cent during the early 1990s. The initial increase, as well as the subsequent decline (which is still continuing), in the rate of population growth have been larger in the developing world, where the estimated growth rates during the periods 1950-1955, 1965-1970, and 1990-1995 were 2.0, 2.5 and 1.8 per cent, respectively.

The latest available (medium) population projections by the United Nations, prepared in 1996, envisage a steady decline in the rate of growth of the world population to about 1.0 per cent a year by 2020 and to half that rate by 2045. Population growth in the more developed countries, currently (during the period 1995-2000) estimated at about one quarter per cent a year, is projected to approach zero by 2025 and then turn negative through 2050. Even the developing countries seem likely to experience a decline in their rate of population growth from about 1.6 per cent during the late 1990s to 1.0 per cent by 2025 and six-tenths of one per cent by 2050. These projections assume a likely deceleration of the rate of further improvement in the expectation of life at birth and an acceleration or continuation of the rate of decline in fertility until a replacement level of fertility is reached in a large majority of developing countries.

The projected fertility decline in the years ahead will continue a trend witnessed over the past 45 years, whereby the total fertility rate has dropped from a high of 5.0 to 3.0 in the world as a whole and from a high of 6.2 to 3.3 in the developing world (United Nations, 1996). The empirical support for this assumption is derived from the international experience relating to the processes of demographic change. While projections are not predictions or forecasts, they do represent the best professional judgement about the likely future scenario of population trends.

Admittedly, the changes in mortality and fertility over the past five decades have occurred during a time period when the basic approach of the governments of a large number of countries has undergone a sharp change.

After the end of the Second World War, several governments, in both the developing world and the developed world, were guided by an activist philosophy, and relied in varying degrees on planning to usher in a welfare state, eliminate poverty and improve the distribution of income and wealth. Governments with only a limited interest in planning also tried to emulate those preparing development plans and formulated plans for varying periods to guide the course of socio-economic development. During the past decade, the world view in most countries has changed in favour of greater reliance on the market in place of planning. Albeit, the extent to which different countries relied on planning, or centralized it, has certainly varied over time and even between different sectors of the economy. Yet, the rapid growth of information technology and the associated flows of international capital (and to some extent, and probably an increasing extent, also of labour) have led to a major shift in the macroeconomic environment and the underlying policy framework.

There may be some debate about whether and how far the word "rapidly" in the title of this paper is justified. However, the recent crises during the past year in the economic environment in the East Asian countries have limited the basis and scope for debate. If the national governments show the requisite determination, flexibility and foresight to take advantage of the opportunities for international cooperation and collaboration to tackle these problems, they will probably succeed in tackling them within a relatively short period of time. They might thereby lay the foundation for a sound second phase of development and progress.

In this context, it is necessary to examine the extent to which population and development policies and strategies need to be modified or fine-tuned to achieve the long-run goal of development in general and the objectives of the programmes articulated at the Fourth Asian and Pacific Population Conference held in Bali in 1992 and the International Conference on Population and Development held at Cairo in 1994. However, before turning to these issues, it is necessary to take due note of the wide diversity and heterogeneity of situations in the ESCAP region with respect to both population and development policies and strategies.

1. Wide diversity of demographic conditions in the ESCAP region

The ESCAP region, with its membership of 56 countries and areas, and an estimated population of 3.64 billion around 1 April 1998, accounts for about 61.6 per cent of the total population of the world (5.91 billion). It includes 7 of the 10 most populous countries of the world; but in mid-1997, 10 countries or areas had a population of less than 100,000 and another 11 of more than 100,000 but less than a million.

The countries of the ESCAP region differ a great deal also in terms of the land area, share of arable land and the rural population per square kilometre of arable land. The Russian Federation, China and Australia are among the largest countries in terms of land area, with a total land of 16.9, 9.3 and 7.6 million sq km respectively, whereas at the other end of the scale, Hong Kong, China and Singapore have less than 1,000 sq km of land. Besides, the share of arable land varies between countries, from a high of 73 per cent in Bangladesh (in a land area of 130,000 sq km) and 56 per cent in India (in a land area of over 3 million sq km) and lows of 7 per cent in Kyrgyzstan, 8 per cent in the Russian Federation, 10 per cent in China and 11 per cent in Japan. As a result, the rural density of population per sq km of arable area ranges between a high of 1,531 in Sri Lanka, 1,020 in Bangladesh, 969 in Viet Nam, 782 in Nepal, 736 in Indonesia, 404 in India and 400 in Pakistan, to lows of 6 in Australia, 23 in New Zealand, and 31 in the Russian Federation. These differences have serious consequences for the resource base available to the ESCAP members for development and the need and scope for international trade and collaboration for social and economic development and raising the level of living of the people.

Equally importantly, 13 of the 53 countries or areas having an estimate of the level of fertility have already attained or are very near the replacement level of fertility (a total fertility rate of 2.1 or less), whereas at the other end of the scale, in 10 countries or areas, the TFR was 5.0 or higher. The region includes three areas with probably the lowest observed TFR of 1.3 or 1.4 (the Russian Federation, Japan and Hong Kong, China) and three countries with a TFR of 6.7 to 6.9 (Afghanistan, the Lao People's Democratic Republic and Maldives).

The region also shows considerable diversity with respect to mortality, the other key variable that decides the rate of natural increase of a population. By 1977, five countries or areas (Australia, Hong Kong, China, Japan, Macau and New Zealand) had an estimated life expectancy at birth of 75 years or more among males and 80 years or more among females. Four countries, Afghanistan, Bhutan, Cambodia and the Lao People's Democratic Republic, had an average length of life of less than 55 years (ESCAP, 1997). There is a noteworthy coexistence of high mortality and high fertility in some of these countries. Except in some of the countries affected by recent large-scale internal civil conflicts or the countries adjusting to the situation created by the break-up of the former Union of Soviet Socialist Republics, the general trend in mortality has been downward.

2. Diversity in the extent of reliance on planning and the current economic situation

Parallel to the demographic diversity noted above is a similar variety in the extent of reliance on planning for the development and management of the economy. Eight States that were formerly part of the Union of Soviet Socialist Republics, and Mongolia, are economies in transition that are actively seeking to stabilize their economies and establish a market structure (Dieter, 1996; Kaser, 1997). Among other countries, China continues to prepare and implement development plans to maintain a rapid rate of economic growth, but the 1997 World Development Report has described both China and Viet Nam as "transition economies" of East Asia (World Bank, 1997b, p. 163). The latest press reports indicate that the Government of China has presented to the National People's Congress a plan to halve the number of civil service officials during the current year (1998) and to separate a significant part of its public enterprises from the government. The plan seems to aim at privatization or a marked reduction in the role of socialist central planning in the management and control of enterprises in order to improve their functioning and contribution to the economy (Business Standard, New Delhi, 7 March 1998). This would imply a greater role of the market in the Chinese economy. Further, the post-1978 rapid growth of the Chinese economy owes a great deal to the "responsibility" and accountability system and the incentives given to workers and producers for generating and selling surplus output in the economy.

In other East Asian economies, the State is considered effective and engaged in productive partnership with the private sector. A strong commitment of the leadership to rapid economic growth, strong administrative capability and institutionalized links with the stakeholders, such as private firms, have neutralized the manifestation of the link between authoritarian rule and economic decline (World Bank, 1997b, p.163). However, the situation has to be reassessed in the light of the experience of the past several months during which the former East Asian tigers seem to have shown a surprising vulnerability to the uncertainties of foreign investment and the resulting volatility of the exchange rates.

In India, particularly since 1991, there has been substantial progress towards liberalization of the economy from a large number of licensing regulations and controls; and the nature of economic planning has become more indicative than regulatory. The private sector (including foreign capital) has been given freedom to invest in infrastructure sectors to an extent that seemed unthinkable before 1991.

Thus, throughout the ESCAP region, governments are trying to reform the public sector and limit the extent to which the efficient production of goods and the delivery of high- quality services are hampered by unnecessary regulations and restrictions on the functioning of a market. Decentralization of administration and monitoring and evaluation, as well as implementation of planning for socio-economic development, is also being pursued in China, India and several other countries.

An exhaustive study of the extent and evolution of the shift from centralized planning to a market economy in various countries of the ESCAP region is beyond the scope of the present paper. The diversity of situations outlined above in terms of both the demographic developments and the economic policy framework suggests the possibility of experimentation with different approaches to the formulation of strategies and policies relating to population and development. However, the important task is to identify the areas in which the State must continue to safeguard the interests of the silent majority and the generations yet to be born that would be likely to lose out if the markets were to become absolute arbiters of their fate.

3. Past experience of the integration of population into development planning

In the present examination of the interrelationship of population and development strategies in the current economic environment, it is necessary to recognize at the very outset that a country with a below or near replacement level of fertility cannot necessarily ignore these issues altogether. The changes in age composition associated with fertility decline and its correlates generally raise the proportion and the number of older persons above the age of 60 or 65 to a considerable extent. These changes are often accompanied by a marked change in the size distribution of human settlements, particularly urbanization and the concentration of population in large cities. The urban environment restricts the continuation of the earlier rural or pre-urban arrangements relating to the care of older persons and poses serious problems of social support for those whose ability to contribute to economic activity has declined significantly. The experience of the developed countries suggests that these problems are likely to demand urgent attention as much in countries relying on the market mechanism as in centrally planned economies. This important issue illustrates the urgency of analysing clearly the extent to which the population and development strategies need to be modified in the new economic climate in which centralized planning is being replaced by greater reliance on the market forces.

In this perspective, it is necessary to note also that even during the heyday of planning, the population variables were taken into account to estimate the number and characteristics of consumers and producers, as well as their location or spatial distribution, and the quantum and nature of demand for various goods and services to be supplied. In addition, there was a macro-level concern that the continued growth of population made it difficult to raise the living standard of the population, not only by raising the number of persons among whom the national "cake" had to be shared but also by making it difficult for them to raise the rates of savings and investment. Therefore, policies that could help to accelerate the pace of decline in fertility and mortality were supported, but the allocation of scarce resources did not always take due account of the indirect benefits that might potentially accrue to the society in the form of a decline in fertility and therefore the size or the rate of growth of the population. In effect, the relatively short-run costs and benefits received greater priority in planning decisions than their long-run impact or their distant benefits. The goal of integrating population and development policies has, therefore, received more lip service than actual attention by planners.

One possible contributory factor was that the available resources were less than the amounts needed to attend to the immediate or the short- and medium-term goals. Little could perhaps be spared to attend to the long-term or the distant problems. However, it is also possible that the uncertainty about the distant benefits limited the ability of even the policy makers with a broad long-term perspective to influence the allocation of resources for programmes other than those aimed directly at the restriction of fertility, that is, the family planning programmes. Besides, when such programmes did not lower the rate of population growth, the rationale for the programmes and their funding also began to be questioned, because of the inability of many of the analysts and advisers to unravel the underlying reasons. It was forgotten that the success of the family planning programmes to lower infant and child mortality would in the short and the medium terms neutralize the effect of the programmes on fertility and the birth rates. The importance of a moderation of the rate of population growth or of its not rising to the levels observed in countries without any family planning programmes was also generally overlooked. An unintended consequence was the inability of those deciding the resource allocation to assign any weight to the long-run consequences of the development policies likely to contribute indirectly to slowing the rate of population growth or lowering the desired family size/fertility.

B. The nature of consensus at Bali and Cairo

The consensus at Bali and Cairo was intended to alter this situation by obtaining a commitment from the countries to pay due attention to the considerations of long-run goals or the ultimate objective of the development process rather than to the means and modalities. In both the documents that were adopted at the conferences, an attempt was made to reiterate that all population policies were a means to an end: the welfare of the people. Therefore, rather than being concerned only about the demographic goals relating to the number of persons or the size of the population, and/or the level of fertility and the rate of growth, the planners and policy makers needed to focus attention more on the manner in which family planning programmes were operated on the ground and the quality of the care or the services delivered to the people, who were indeed the ultimate beneficiaries of the plans and policies.

A strong plea was also made for a holistic perspective on the entire lifetime of people, rather than only on women in their reproductive period who had not limited their family size and continued to bear children. From this latter goal was derived the policy of attending to reproductive health over the entire lifespan of the population. It was emphasized that population policies had to focus not only on women in the reproductive ages but on women and men of all ages, including young adolescents, unmarried youth, children and even older persons, who often face serious ailments related to the reproductive system.

Population policies were to be intertwined with the health of the entire population and the quality of the services was to be paid the utmost attention on the grounds not only of equity but also efficiency or the potential value that could be added at little or no extra cost. The wider perspective was also expected to raise the credibility of the health workers trying to promote the adoption of the regulation of family size among the people by broadening the role of the workers to that of counsellors in all aspects of the health and welfare of the entire family. The health workers were therefore to be retrained and reoriented to assume the wider responsibilities envisaged for them.

In the context of the ongoing disenchantment with the role of planning, were the programmes adopted at the Fourth Asia and Pacific Population Conference and the Conference in Cairo mere utopian daydreams? If the countries are expected to relegate most of their policy-making functions to the market, what is to be the role of population and development policies? These important questions need to be evaluated in the context of the important linkages between the central concerns of social and human development and the narrowly defined economic development. Some of these key issues need due recognition.

It is certainly conceivable that the recent disillusionment with planning represents more a swing of the pendulum than an ultimate equilibrium, in which both market and planning would find distinct complementary roles to maximize the welfare of the people. The market is unable to function efficiently wherever there are strong externalities of behaviour or where "merit goods" or services need to be distributed to all sections of the population, irrespective of their capacity to pay or purchasing power. Public policy or planning might have an important role to play in influencing the preferences as well as the awareness of the people about their individual as well as collective interest. However, the past experience with planning has highlighted the importance of ensuring that the needs and welfare of those whose voices are least likely to be heard receive as much attention as the demands of the more vocal privileged. These points merit careful consideration in detail, but a brief discussion is presented here to initiate debate and discussion.

1. Emerging challenges with regard to mortality and morbidity

The problem of deciding the relative role of the market and planning is most evident in the realm of mortality and morbidity. The sharp declines in mortality after the Second World War constitute a major component of the rise in the real income of the people in the developing countries. The modern public health programmes and antibiotics and other medicines were introduced in the developing countries far ahead of their stage of economic development in terms of the level of income, through international organizations such as WHO. Planning and policies or programmes to reduce mortality and morbidity were the prime instruments of this process.

However, the welcome changes achieved so far are now threatened by the reported growing resistance of the vectors of malaria and other microbes to the widely used antibiotics and other drugs. The fortunately short-lived outbreak of possibly pneumonic plague in the city of Surat in India in September-October 1994 created worldwide panic. Such an epidemic can bring a country to a situation of being quarantined from the rest of the world with little scope for international trade in goods and services that are an important part of the process of globalization. India was indeed on the brink of a virtual quarantine from the rest of the world in 1994; it represented the failure of the civic or municipal authorities to ensure adequate sanitation and waste disposal. The obvious failure of the civic planners of the area had its roots not so much in market failure as in sheer neglect of the consequences of inaction about the social infrastructure of economic activity (Shah, 1997). While expert opinion continues to debate whether the deaths attributed to plague were really caused by the dreaded disease (Satnam Singh, The Hindustan Times, 8 March 1998, p. 12), it illustrates the urgency of continued state action to ensure adequate investment in the sanitation and health- care industry. If the market were to be the sole or even the main guiding force, the poor would not be able to look after their own needs and the infections would affect not only them but also others with higher purchasing power.

It is possible to argue that the pharmaceutical industry will anticipate the urgency of evolving new medicines to overcome the phenomenon of drug-resistance in order to maximize its profits. However, it seems an inadequate basis from which to prevent a possible catastrophe. National governments, and indeed international organizations and the scientific community, must look ahead and plan and promote pioneering research to prevent possible outbreaks of major epidemics and disasters.

The recent experience of the "bird-flu" that led to the destruction of millions of chickens in Hong Kong, China in December 1997-January 1998 (Ajello and Shepherd, 1998) or the mad-cow disease in the United Kingdom of Great Britain and Northern Ireland in March-August 1996, that led to the slaughter of thousands of cows in order to prevent the spread of the disease to European countries, also illustrates the importance of preventive action and central intervention by governments. Without such intervention, the market or the private profit motive is likely to ignore the interests of the innocent and the uninformed consumers.

The large gender difference (of the order of 14 years) in the life expectancy of men and women in the Russian Federation during the mid-1990s illustrates the large waste of production potential that States must strive to reduce and eventually eliminate. The same is true of all countries where the current levels of infant or child mortality are high and where there is potential for lowering them further. These anomalous oddities are not likely to be eliminated primarily through the market mechanism and need to be addressed by planned action and public policies. The centuries of high infant and child mortality have led to a fatalistic acceptance of the phenomenon and fail to evoke any serious concern, whereas in fact, well-planned, relatively low-cost interventions such as safe-delivery kits that can ensure aseptic delivery and immunizations of young infants and children against vaccine-preventable diseases can make a substantial contribution to lowering maternal mortality, raising child survival and reducing disability.

The experience in several developing countries has shown that the market forces are likely to encourage the substitution of potentially unhygienic but fashionable bottlefeeding for the more healthy breastfeeding of the newborn and the infants. Planned health education campaigns are necessary to counter the unnecessary waste of scarce resources, just as they are required to fight the tradition of discarding the colostrum, which tends to be rich in anti-bodies against diseases but is commonly considered difficult to digest.

All ill health involves a waste of potential production not only of the sick but also of those who must attend to the sick. While the greater reliance on the market may suggest the need for user charges to ensure that the subsidies do not go to those who can afford to pay, the poor must be subsidized because the continued health of the better-off is partly dependent on that of the poor.

There are some interesting possibilities here of drawing on the indigenous knowledge base of countries such as China or India to harness the health-promotive properties of the alternative systems of medicine that were evolved in those countries many centuries ago. Recent research has demonstrated that even the culinary use of spices in these countries had anti-fungal and anti-bacterial properties for the preservation of food. With adequate research to validate the presumed advantages of the use of various herbs, mankind might be able to solve the problem of resistance of microbes to many of the drugs available so far (Weiss, The Washington Post, 2 March 1998, p. A3). There might also be much to be learned from the empirical practices of the tribal societies resident in hilly terrain which rely on the forest wealth around them for the promotion and preservation of health.

2. Role of the State in lowering fertility and promoting contraception

The State-supported programmes to promote lower fertility and the use of contraception have narrowed the differentials by income or economic status that would have arisen in the absence of state involvement in family planning programmes. The role of the public sector in the lowering of fertility is confirmed by the surveys indicating that the public sector is the major supplier of contraceptive services for users located in remote inaccessible areas.

An excessive reliance on the market forces to widen the reach of the family planning programmes may again mean continued excess fertility among those least able to look after the well-being of their offspring. The government-sponsored interventions or family planning programmes have mitigated considerably the fear expressed in the widely used expression that "the poor shall inherit the earth". In fact, partly because of the incentives offered for the acceptance of contraceptive methods and partly because of the recognition by the poor and disadvantaged of the essential validity of the advice rendered by the health workers appointed by the governments, the differentials in fertility generally observed during the process of demographic transition have been considerably narrowed. Given the externalities of the behaviour of individual couples, continued state involvement in family planning programmes is essential for the benefit not only of the poor and the disadvantaged but of entire societies.

The market forces might in fact encourage traditional birth attendants or obstetricians and paediatricians to avoid offering contraceptive services to their clients on the grounds that the decline in deliveries or births would reduce their potential income. On the other hand, social policy makers or planners able to see beyond the immediate short-run consequences of uncontrolled childbearing can easily recognize the inexorable fact that interventions against mortality and morbidity must be matched by a corresponding restriction of births in order to prevent an imbalance between resources and population, which could even frustrate the success of the efforts to improve the health conditions. Further, an imaginative planning organization can be a more than adequate substitute for the widely cited impetus to innovation generated by population growth, particularly in the field of agriculture.

It is possible to argue that in certain countries, such as Thailand, the markets have been functioning well and have been the source of good-quality contraceptives, such as condoms supplied by pharmacies. However, the success of the market in this situation is really a function of the effectiveness or development of the transport and communications system as well as the level of literacy or the socio-economic infrastructure. The density of population or the number of potential clients to be serviced by a supply point can well determine the viability of a market-based supply system. In India, on the other hand, where about 67 per cent of the villages had a population of fewer than 1,000 persons as recently as in 1991, the market-driven supply points are much less likely to be efficient sources of contraceptives.

Many of the villages with a relatively small population tend to be located in remote inaccessible areas and are not well connected with good approach roads or even a bus service. The delivery of services in such areas tends to be difficult, although there is evidence to suggest that the private sector health-care providers actually do meet the needs of a large majority for ambulatory care (not requiring hospitalization).

Depending on the level of infrastructure development as well as awareness and the strength of motivation to regulate fertility, the market-based service points may be able to provide the services that an extension service is expected to make available almost at the doorsteps of the people in a country such as India or Pakistan. On the other hand, countries like Indonesia, the Philippines and Thailand seem to be approaching a situation in which they might be able to avoid a large public sector network of service providers. In addition, NGOs and the private sector could perhaps be partial substitutes for the public sector, but it is also likely that the areas or localities where the public sector finds it difficult to provide the services may not be able to attract the NGOs or the private sector services either.

3. Migration and urbanization

A major demographic factor that both decides and is a consequence of the development process is urbanization and associated migration. The countries of the ESCAP region represent a wide diversity of situations with respect to the level of urbanization, from a high of 100 per cent in the city State of Singapore and 84-85 per cent in Australia and New Zealand, to relatively modest levels of around 27 to 30 per cent in India and China, respectively. At another level, 8 of the 16 largest urban agglomerations of the world, with a population of 10 million or more in 1996, were located in the ESCAP region and the prospects point to a further concentration of the large urban agglomerations in the region (United Nations, 1997).

The market forces under which individuals seek to maximize their own personal welfare have led to the growth of very large urban agglomerations with a high percentage of the population resident in slums without the basic civic amenities. Planning initiatives to moderate the pace of migration to large cities have not generally been successful in the face of glaringly large differences in the level of living between urban and rural areas, not only in terms of the level of income but also the availability of important social services such as education and health. Yet, as noted earlier, to abandon all efforts at urban and regional planning seems to be not only unwise but even a threat to the continued efficient functioning of the market-led growth processes. The risks of epidemics spawned by filth or contaminated unsafe water can bring the entire process of economic development to a virtual standstill. Wisdom lies in anticipating the possible dangers and taking effective preventive action. These tasks cannot be left to the market forces alone and policy makers must attempt a judicious combination of the market-based and directive measures to ensure the health of the migrant as well as the non-migrant population.

Past experience provides little guidance on whether the process of development of rural areas accelerates or limits rural-urban migration. However, there is little doubt that the usual differences in the income-elasticities of demand for food and non-food goods and services will lead to the growth of the non-agricultural sectors of economic activities in the course of development. As a result, the locus of much of the economic activity may well move out of the land-based extractive activities such as agriculture. The well-known Chinese policy of encouraging the rural population to leave the land but not the village can, at least up to a point, help to slow the process of urban growth, even though the towns and cities may support a much larger daytime population than the resident population.

On a normative plane, the eventual goal of development must be to minimize and possibly eliminate the spatial differences in the availability of different amenities and services in habitations of different sizes (in terms of population). For such a goal to be realized, the market and planning processes will have to be integrated and coordinated to ensure the correct mix of incentives to the people to encourage them to safeguard not only their personal interests but also the interests of the larger community. Admittedly, past experience has not provided as many cases of successful state intervention as one would like, but that makes the issues in regard to urbanization and migration even more challenging.

4. Education and employment

The role of literacy and education as an important form of investment in human beings, conducive to rapid social and economic development, has increasingly been recognized, and the World Conference on Education for All: Meeting Basic Learning Needs, held at Jomtien, Thailand, in 1990, adopted the World Declaration on Education for All. However, the progress towards universal literacy has been far from satisfactory, particularly in the countries of the Indian subcontinent (excluding Sri Lanka), and the region has been called the most deprived region of the world.

As noted earlier, despite the slow progress in several countries of the ESCAP region towards universal literacy and the goal of primary education for all, mortality and fertility rates have indeed declined, but the evidence from all surveys and studies suggests that the decline would probably have been faster if the level of education had risen more rapidly, particularly among women. Educated women generally report less unwanted fertility and also a lower desired family size than their less educated or illiterate sisters. The level of infant and child mortality also tends to be lower among the offspring of educated mothers than among those of less educated or illiterate mothers. The positive links between population variables and development are seen most clearly through the process of education.

The absence of the requisite investment in literacy and education once again leads to the waste of potential production, which can and must be eliminated. Of course, the illiterates are not ignorant or stupid and do recognize their own or their children's interests, but there is little doubt that their contribution to the national output could be considerably higher with literacy and higher levels of education. The market is not a good guide to accelerating the level of human investment and state intervention to modify the behaviour of some of the most disadvantaged groups of population. These groups are not likely to recognize the need for investing in education and may not have the resources to do so. The quality of education imparted to the disadvantaged can be markedly inferior if the market is relied on for the purpose. A well-conceived programme of scholarships and financial assistance to needy students can help them to overcome the handicaps of poverty and gain access to good education. Further, efforts at providing an appropriate supportive environment in the form of hostels or residential schools can help to develop the capabilities of disadvantaged children.

To achieve these objectives, it is also necessary to minimize the need for children to take up gainful employment to support the low living standard of the family. Special schemes may need to be mounted to encourage the schooling of adolescent girls, who may otherwise be drafted for housework or the responsibility of looking after siblings to enable the mother to work. Of course, it may turn out to be futile to dissuade children from rendering unpaid help in the family enterprise on or off the farm; it might antagonize the family against the schooling of children (particularly when education cannot ensure adequate skills to earn a living). The goal must be to ensure that the workload does not hamper the pursuit of schooling and education; again, the solutions lie in social action rather than the market.

Yet, to ensure the right signals for hard work and intensive training, affirmative action in favour of the needy must be combined with stress on meritocracy rather than special arrangements to bypass quality or capacity, achievement and performance. These issues become particularly important as the expansion of educational opportunities in many countries has been accompanied by a deterioration in the quality of education or the failure of school systems to ensure certain minimum standards of learning or achievement. The poor quality of schooling and education fails to prepare the students for any skilled activity or vocation and contributes to high levels of educated unemployment, particularly among youth. Many of the latter are sometimes described as "unemployable"; and during the "waiting period", which can be quite long, they swell the ranks of the unemployed for a considerable period of time. Some of them, particularly the illiterates or the nominally educated (up to five years), can simply not afford to remain unemployed for any length of time; they somehow adjust to the labour market and find a niche in the economy, often with a low income or productivity, and become the invisibly underemployed (with lower incomes and productivity than they might be capable of reaching).

In recognition of the problems faced by the new entrants into the workforce in finding suitable work opportunities, many governments have tried to set up employment exchanges as well as unemployment relief schemes for certain groups to ensure a certain minimum level of income or subsistence for them. Unfortunately, much of the thinking on the subject has often overestimated the capacity of the State or the government to find, for all work-seekers, opportunities of the type acceptable to them in terms of the nature or location of work and/or the level of remuneration and the perquisites. The formal or the organized sector of employment has generally paid wages and salaries (as well as other benefits) far higher than would be justified by the labour market situation in terms of the demand for and the supply of persons with different qualifications. The segmented labour market has, as a result, developed considerable inflexibility with its inevitable consequences in the form of the coexistence of quasi-rents with low wages and income for many less privileged workers elsewhere in the market.

The main remedial actions lie in the area of better training of new entrants into the workforce for the acquisition of the skills and crafts that are in demand. Governments need to plan for the identification of such skills in collaboration with potential employers and build appropriate training facilities in partnership with them. The area of education and the labour market is one in which improved functioning of the market could be complementary to the programmes and policies of the planners.

5. Poverty eradication

Finally, the growing reliance on the market certainly does not mean neglect of the efforts to alleviate and eradicate poverty. Efficient functioning of the markets would facilitate the trickling down of the benefits of development, but the handicaps of the poor are unlikely to disappear. The case for social transfers for some of the most needy will remain quite strong and the challenge is to ensure effective delivery of benefits at a modest cost in an empathetic manner, without corruption or leakages. The argument is based not only on the human rights approach but also the psychological costs of differentials in levels of income and consumption and the guilt feelings that these may generate.

The importance of poverty alleviation programmes stems also from the frequent deviant or anti-social behaviour of the poor, who often see little hope of extricating themselves from the clutches of want and persistent relative deprivation. Governments often undertake to tackle the problem by supplying subsidized food and services to the poor. Whether such programmes affect the incentives to work and/or distort the production patterns is an issue for careful research, along with identification of the varied characteristics of the culture of poverty that pervade some groups of population in the developing countries of the ESCAP region. There has been surprisingly little research on the survival strategies of the poor in the countries of the region that frequently experience vagaries of the weather and seasonal fluctuations in the availability of basic needs such as food and water. Planning for social and economic development was expected to eliminate such extreme poverty; but outside of China and East Asia, progress has been rather sketchy, particularly in South Asia. Many pin greater faith on the trickle-down effect of rapid growth through the market mechanism than on direct state interventions, but perhaps it is too early to assess the extent to which this effect will actually work in remote inaccessible areas with the most disadvantaged groups of the population.

6. Market and the environment

The market-driven misdirection of resources and/or production patterns associated with the use of water resources points to the need for supplementary planning policies to steer the public behaviour in the correct direction in order to safeguard the interests of the poor as well as future generations. The use of river water for the dyeing of wool for the carpets in the Kathmandu valley in Nepal has made the river unsafe for swimming and its water unsafe for drinking. Other examples include the pollution caused by the use of river water for dyeing the handloom saris in Jetpur in Gujarat State, in India, or the demands on the water sources by the hosiery industry in Tirupur (which exports hosiery worth some 30 billion rupees, or over three quarters of a billion US dollars) near Coimbatore in Tamil Nadu State of India. In Jetpur, underground water resources have been contaminated by dyes to such an extent that the town has been forced to ban the use of river water for dyeing. In Tirupur, the township has been forced to spend several million rupees on laying a pipeline from a river some 20 miles away from the town. While the piped supply of water solves the problem of the town, the villages from which the water is drawn complain of the diversion of their sources of irrigation and drinking water.

Other examples of market-based misuse of water include the excessive mining of underground water that leads to a drop in the water table, and in coastal areas of India also leads to the ingress of sea water. The efforts to regulate the digging of private tube wells within a certain radius have not always been successful. Effective collective action to protect the resource base of the rural population requires well-coordinated planning for a region. Without such planning, agricultural activity is likely to face a severe water crisis.

Traditional societies had generally relied on collective ownership or a concept of common property of basic factors of production such as land and water. The emphasis was on sharing and ensuring sustainable sufficiency for all before achieving excess for some through competition to get ahead of the rest of the group. The change in the norms or the structure of incentives guiding the behaviour of agents of production has been the basis for both some of the innovations and progress and the over-use of the non-renewable resources. New institutional norms need to be evolved to ensure that the market-based actions do not lead eventually to a steady impoverishment of the entire group and that the interests of the future generations are adequately protected. It is possible to question this view on the grounds that it takes a relatively static view of the global wealth of resources and overlooks the dynamic forces leading to the almost unlimited substitution of different elements of nature. However, many of the poor countries of the ESCAP region do not really share the opportunities available to the resource-rich Western countries.

One of the most telling examples of the failure of the market in matters relating to the environment has been the problem of forest fires in some Asian countries that have caused smog affecting the people in their own and neighbouring countries. The responsibility for the problem seems to fall on those who try to reap high profits, partly because the fees and royalties for the timber rights are kept unduly low (The Economist, 4 October 1997, p. 16). Those seeking to clear the land plots for cultivation have created unanticipated problems not only for where they themselves are located but also for the neighbouring countries. The adverse effects of smog and haze for the health of the population in various countries have been well-documented. The problems have been attributed to the improper and often illegal logging and tree-clearance that cause the fires. The smog has reportedly been exacerbated by El Nino (the Pacific current), which has dried out the vast forest areas, leaving the forest fires to smoulder long after the flames are gone. Governments are often unable to police their vast forest areas or to enforce laws prescribing draconian penalties against damaging the environment. The smog has been termed "an avoidable man-made disaster"; but the fires that caused perhaps the most pernicious man-made smog in history have been burning almost every summer for the past 15 years. The problems illustrate the difficulties governments often face in regulating market forces.

C. Priorities for research

The preceding discussion has focused attention on some of the key areas in which the consequences of different relative roles of the market-based pursuit of self-interest and regulation by a government or a central planning agency need to be assessed and evaluated. The issues raised here are not simple and the relevant evidence has not all been collected. Careful documentation of the factors and forces influencing the observed outcomes is an obvious imperative.

More importantly, while there seems to be disillusionment with the functioning of both the market and the state planning systems, it is necessary to experiment with and document the operation of alternative mechanisms, such as NGOs, which could perhaps be watchdogs of the interests of the collective group or society as a whole. The number of well-informed and competent NGOs with the capacity to fulfil the challenging role being considered above for them is quite probably limited; furthermore, they are more likely to concentrate their efforts in areas where the governments or the bureaucrats are more enlightened and cooperative than in the really difficult areas, where the poor and the disadvantaged are often unable to safeguard their own interests. There is also the danger of the NGOs being co-opted by unscrupulous elements among the vested interests. The members of the civil society will need to exercise "eternal vigilance" or alertness to prevent the distortion of alternative mechanisms.

An important research issue relates to the extent to which the decline in the dependency ratios during the process of demographic transition bestows on the society a sort of "bonus" in the form of a rise in savings and investment and therefore the rate of economic growth. Some cross-country regressions based on the reported experience of East Asian countries seem to overlook the contrary evidence where such a bonus seems to be absent. In Kerala, India, for example, where fertility has declined to the below- replacement level and the age composition of the population has changed substantially, there is little evidence of a rise in savings rates as a result. The savings rate seems to respond more to the fiscal and monetary policies of the governments or to the remittances of out-migrants and emigrants than to the decline in the proportion of children below the age of 15 or the age of entry into economic activity. The state-level data on savings are not easy to collect, but some research on the subject might yield promising results.

Two other points merit reiteration. The interrelationship of population and development, or both the macro and micro influences of the rate of growth and characteristics of population on the nature and pace of development, will continue to need careful attention even after the near or below-replacement level of fertility has been reached in a society and/or a situation of zero population growth has been reached. The specific problems might change from those relating to the universal literacy and education to those of taking care of the growing proportion of older persons and/or consolidation and preservation of the gains in longevity and health or the delivery of social transfers to older persous.

It is necessary to recognize also that, despite the indication in much of the current literature of disillusionment with the planning process and advocacy of greater reliance on the market, a judicious balance will have to be struck. The financial crises in the South-East Asian countries have also suggested the need for effective monitoring of the activities of the banking institutions and the associated individuals by the State or its agents, such as the Central Bank or the Ministry of Finance, which can serve as custodians of the common good. The precise boundaries of the role of various bodies will need to be demarcated over the next few months in the light of the experiences of countries in which the international financial agencies have been advising on the prudent course of action. However, policy-making in these areas is perhaps somewhat of a multidisciplinary art rather than a predictable science.

D. Conclusion

The Bali and Cairo conferences and the consensus evolved there about the plan of action to be implemented to integrate population variables into development strategies were certainly not predicated on the concept of a minimalist State or a premise that the State must play only a limited role in social engineering. Yet, the widespread doubts and questions about the extent and manner of functioning of planning bodies owe much to the functioning of implementing agencies, the size of the bureaucracies and the national resources garnered by them for their own self-aggrandisement, and the validity of the assumptions about the basic motivations of individuals in dealing with the problems of the disadvantaged groups of the relevant communities or the society as a whole. A multidisciplinary study of the experiences of diverse countries and societies that have experimented with planning over the past five decades is essential to evolve a balanced judgement and to avoid an erroneous diagnosis on these important aspects.

It is important also to recognize that "globalization", or the enhanced awareness among the people of developing countries about the high levels of living (or material comforts) attained in the developed countries, can contribute towards a positive interaction between population and development policies. Such a favourable evolution would primarily require a rise in the aspirations of the people about the level of living for themselves and for their children. In the early 1960s, there was premature talk of the "revolution of rising expectations"; but such a revolution can indeed come to pass as we move towards a "global village". Of course, due care will have to be taken to ensure that the high aspirations do not lead to destructive behaviour and are channelled into constructive action to achieve a judicious balance between non-renewable resources of nations and their human resources.

Similarly, the global village should facilitate the empowerment of women and their assertion of their basic rights by broadening awareness about equitable gender relations in other parts of the world. To ensure adequate diffusion and dissemination of information and knowledge about the situation in different countries, particularly the gaps between the norms to be achieved and the reality, the mass communications channels will have to reorient their policies. Further, the governments will have to find the resources required to eliminate illiteracy and low- quality education for both men and women and to facilitate easy access to modern technology even in the generally inaccessible remote areas with a poor resource base. The people themselves will almost certainly supplement the public resources provided for these purposes; and the process of globalization will be found to be synergetic with fertility decline and accelerated progress towards the completion of the process of demographic transition.

End Notes

* Director, Institute of Economic Growth, University Enclave, New Delhi.

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