Model Country Of Asia For Rural Development 2

Comparative Study of South Asian Countries for Rural Development

Submitted to: Mr. Fazal-ur-Rehman

Submitted by: Mr. Faheem Akbar Mr. Sher Afzal Mr. Zaibullah Khan

International Institute of Islamic Economics International Islamic University Islamabad

Table of contents

AKNOWLEDGEMENT

04

PREFACE

05

Chapter I •

Introduction

06

• •

Problem statement Purpose statement

06 06

• Methodology Chapter II

06

•

Brief Introduction of South Asian Countries

07

•

Afghanistan

07

•

Bhutan

08

•

Bangladesh

08

•

India

09

•

Maldives

10

• • •

Nepal Pakistan Sri Lanka

11 12 13

Chapter III • •

Basic Facts Agricultural Performance in the South Asian Countries

13 15

•

Improvement in Health Sector

16

•

Adult Mortality Rate

17

• •

Trends in Rural Urban Disparity in Child mortality rate Access to safe Drinking water

18 19

•

Improvement in Education Sector

20

•

Status of Poverty Reduction

23

•

Selected Country (Sri Lanka)

25

Comparative Study of South Asian Countries for Rural Development

2

Chapter IV Successful Rural Development Programmes of Sri Lanka •

Development of Rural Agriculture & Productivity

26

•

Colonization Schemes

26

•

Green Revolutionary Intervention

26

•

Social Welfare Strategy

27

•

DDC Strategy in Two Legged Development Process (1970-77)

28

• •

Private Sector Dominated Market Economy Strategy Janasaviya Programme -

(People’s Strength Programme)

30 31

•

Samurdhi Programme - prosperity through poverty alleviation 32

•

Income Transfer Component 33

•

Social Security/Insurance Component

34

•

Social Animation and Credit

35

•

Samurdhi Bank System and Micro Finance

35

•

Community Infrastructure Development Component

37

•

Current Poverty Position in Sri Lanka

38

Conclusion

40

Bibliography

41

Comparative Study of South Asian Countries for Rural Development

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List of Tables • •

Table 1: Table 2:

Basic Facts about South Asian Countries Growth in per Capita Income, Share of Agriculture

18 20

in GDP, and Agricultural Workforce •

Table 3:

Agricultural Output and Productivity in

20

SAARC Countries •

Table 4:

Access to Safe Drinking Water:

24

•

Table 5:

Improvement in Education Sector

25

•

Table 6:

Adult literacy rate 15 and above)

26

•

Table 7:

Trends in Educational Indicators 1995-2005

27

•

Table 8:

Improvement in Poverty in South Asian Countries

28

•

Table 9:

Community Infrastructure Development Component

41

•

Table 10:

Public Expenditure on Rural Development and Social

42

Service List of Figures •

Figure 1:

Improvements in Health Sector

22

•

Figure 2:

Adult Mortality Rate:

22

•

Figure 3: Trends in Rural Urban Disparity in Child

23

•

Figure 4: Expenditure of Social Services in South Asia

43

Comparative Study of South Asian Countries for Rural Development

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AKNOWLEDGEMENT In the name of ALLAH the praise worthy, the passionate whose blessing made it possible to complete this task. We are highly indebted to our research supervisor Sir Fazal- ur- Rahman whose sage counseling, appropriate guidelines, expert advice and timely suggestions enabled us to materialize this time stretched research project. We are highly thankful to Mr Amir Mustafa Research Officer SAARC Human Resource Development Center for his technical cooperation and for supplying useful data. We are highly thankful to all those who guide us and provide us every possible help. We also thankful to all our colleagues and friend for their frequent encouraging words.

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PREFACE In south Asia about seventy percent population lives in rural areas where the incidence of poverty is high. Agricultural wage earners, small and marginal farmers and casual workers engaged in non-agricultural activities constitute the bulk of the rural poor. The high incidence of poverty is a matter of great concern. South Asian economies are mainly agricultural dependent, therefore, survival of the majority of rural population is on farm and non-farm activities. Realizing the importance of rural areas in socio-economic development and poverty reduction, South Asian countries, in the last few year have given foremost attention to its development by intervening in the farm and non-farm development activities such as development of rural infrastructure (physical and social), market for land, agricultural labor and inputs to raise agricultural productivity. In this study we will try to comparatively analyze the South Asian countries with respect to rural development. The first section provides profile of South Asian counties. In the next section South Asian countries excluding Afghanistan are critically analyzed regarding their in agriculture, education, health and poverty elevation, access to safe drinking water, and trends in rural urban disparity in child mortality rate. This analysis is based on data for the last ten year on above mentioned indicators. In the last section the most developed country regarding rural development will be highlighted on the basis of education, health, poverty alleviation and rural development. The programs and policies implemented by the model country through which the country was able to achieve the high rate of rural development will explain in detail.

Chapter 1 Introduction: Comparative Study of South Asian Countries for Rural Development

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In South Asia 70 percent of the population are lives in rural areas with high incidence of poverty. Agriculture wages earners, small and marginal farmers and casual workers engaged in non-agricultural activities constitute the bulk of the rural poor. Low skills small land holdings, unemployment/underemployment and low productivity are main hurdles in Rural Development. Particularly, poor education base and lack of vocational skill perpetuate poverty and regular income of the majority of poor household. This study will try to find successful Rural. The successful program will be discussed in later section.

2) Problem statement To explore the model country in respect of rural development in South Asia 3) Purpose statement The basic need is to explore the model country in south Asian regarding rural development and to explain the measure taken by that particular country for rural development and other countries may fallow these measures to speed up rural development in their own country. 4) Methodology For this study secondary data is collected from different sources including world development report, SAARC poverty profile and government publications.

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Chapter 2 Brief Introduction of South Asian Countries South Asia The current resurgence of interest in rural development in South Asia clearly stems from its close connection with rural poverty, which is perceived as the region’s overarching development issue. The region accounts for over 43 per cent of the world’s poverty in income terms. Despite the progress achieved in reducing the prevalence of income poverty in South Asian countries, the proportion of people still living in poverty and their absolute numbers remain exceedingly high. About one third to almost one half of the rural population is poor in all except Maldives (22 per cent). Based on national estimates in 1993/1994, about 80 per cent of India’s 300 million poor reside in rural areas. In Maldives, a country comprised of 1200 islands, the outer atolls account for 85 per cent of the income poor. In Nepal, the poverty rate in rural areas (44 per cent) in 1995/1996 was almost double the rate in urban areas (23 per cent). As is well known, income poverty tells only a part of the story. Other indicators paint a grimmer picture. For example, the UNDP Human Development Index (HDI) rates South Asia lower than all regions other than sub-Saharan Africa in terms of average achievements in basic human development. In addition, the poor in many parts of South Asia are subject to acute vulnerable to disease, crop failures, labour market fluctuations, domestic violence, natural disasters, floods and cyclones. These natural and man-made hazards exacerbate their sense of insecurity and, singly or together, can extend the tentacles of poverty to larger numbers of people or push those already poor deeper into the quagmire of poverty.

1. Afghanistan. Afghanistan is bordered to the west by Iran, to the north by Turkmenistan, Uzbekistan and Tajikistan and to the east and south by China and Pakistan. Its topography is dominated by a complex of irregular highlands which increases in height from the west to the east (where peaks over 22,965 feet or 7000 metres are found) and form part of the Hindu Kush. Almost half of the country lies at about 2,000 metres or more above sea level. Afghanistan constitutes a major watershed with Comparative Study of South Asian Countries for Rural Development

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the Oxus (Amu-Darya) rising on the north side of the Hindu Kush and flowing into central Asia, whereas on the south side several rivers form tributaries of the Indus. The climate is of an arid steppe type with dry summers and cold winters. Water supplies vary widely within Afghanistan. Although some areas regularly receive heavy snowfall in winter, there has been widespread drought in recent years. Country in Brief Area: 251,740 square miles (652,000 sq km) Population: estimated to be 28.7 million (UN) with an estimated total of 2 million refugees in Pakistan and 800,000 in Iran (UNHCR) Capital City: Kabul, population estimated to be 4 million (Deputy Mayor of Kabul December 2002). Other main cities are Herat, Jalalabad, Kandahar and Mazar-e Sharif. People: The population comprises numerous ethnic groups, the major ones being Pashtuns, Tajiks, Hazaras, Uzbeks, Chahar Aimaks and Turkmen. Language: Dari (related to Farsi) and Pashto Religion: Islam, 84% of whom are Sunni Muslim Currency Afghani Basic Economic Facts GDP: US$6.3 billion in 2007/8. Per capita GDP has increased from US$200 to US$348 since 2002. (UNAMA, June 2008) Growth Rate: Real GDP growth has averaged 14.8% in the last six years. The inflation rate was 4.8% in 2006/7. Despite ongoing security problems, Afghanistan has been able to sustain a strong economic growth rate, ranging from 26% in 2002/3 to 14% in 2005/6. The growth rate slowed in 2006/7 due to drought, but is expected to pick up pace again this year, remaining above the average for post-conflict, landlocked countries. (UNAMA, June 2008) Principal industries: Textiles, fruit and nuts, furniture, shoes, fertiliser, hand woven carpets, cement, natural gas, coal and copper Major trading partners: Exports to Pakistan, the EU, India, Russia and the United Arab Emirates; imports from Pakistan, Japan, Kenya, South Korea, India and Turkmenistan Exchange rate: 70 Afghanis = 1GBP (xe.com January 2009) Comparative Study of South Asian Countries for Rural Development

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2. Bhutan Geography Bhutan is a landlocked country situated in the Himalayas between China and India. The terrain is mostly mountainous with some fertile valleys. The southern border with India is at an elevation of a few hundred feet. The northern border with China (Tibet) is at heights of over twenty thousand feet. The climate varies between tropical in the southern plains to cool winters and hot summers in the central valleys with severe winters and cool summers in the high Himalayas. Country in Brief Area: 38,394 sq km (2008) Population: 658,888 (UN sponsored census in May 2007). 33.1% of the population are under the age of 15yrs. 69.1% of the population live in rural areas and 30.9% in urban areas (2005) Capital City: Thimphu People: Three main ethnic groups: Tibeto-Mongoloid mainly in the North and West, Burmo-Mongoloid mainly in the East and Indo-Aryan (Nepalese) in the South. Language(s): Dzongkha is the official language. There are some 14 other languages spoken including Nepalese dialects. English is very widely spoken and is the language of education. Religion(s): Mahayana Buddhist 75%, Indian- and Nepalese-influenced Hinduism 25% Currency: ngultrum (BTN). The Ngultrum is at par with the Indian Rupee. Major political parties: People’s Democratic Party, Druk Phuensum Tshogpa (National Harmony Party). Since the election in March 2008 the DPT forms the Government. Government: Constitutional Monarchy with bicameral Parliament consisting of the National Council (25 members) and the National Assembly (47 members) elected by universal suffrage from 47 constituencies. Parliamentary elections are held every 5 Comparative Study of South Asian Countries for Rural Development

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years. Basic Economic Facts GDP:Nu.41,443Million=approxUSD900,935,000(2006) GDPGrowth:8.5%(NationalStatisticalBureau2006) GDI Growth: 23.6% (2006) (due mainly to increased hydropower production) Major Industries: Hydroelectricity generation, Agriculture, Forestry, Tourism Major trading partners: Exports - India and Bangladesh; Imports – India, Thailand, Japan, China, US, UK Aid & development: The Government of India finances nearly three-fifths of Bhutan's budget expenditures. Bilateral aid programmes are operated by Denmark, Japan, Switzerland, the Netherlands, Austria, and the European Union, and the United Nations Development Programme (UNDP) maintains an in-country office. Exchange rate: £1 Pound Sterling (GBP) = Nu71.27 Bhutanese ngultrum (BTN). The value of the ngultrum is pegged at 1 Indian rupee. (March 2009)

3. Bangladesh Bangladesh has roughly the same land area as England and Wales. It is enclosed by Indian territory except for a short south-eastern frontier with Burma and borders the Bay of Bengal in the south. The alluvial plain of the Ganges-Brahmaputra river system - the largest delta in the world, forms most of the country; water flow is second only to that of the Amazon. To the east of the delta lie the Chittagong Hill Tracts. Flooding is normal and life has adapted to take account of this but occasionally excessive flooding, as in 1988, 1998, and 2004 caused widespread destruction and loss of life. Bangladesh remains vulnerable to natural disasters and to the impact of climate change. Arable land is extremely fertile. Bangladesh's principal natural resource is natural gas. Country in Brief Area: 144,000 sq km (55,599 sq miles) Population: 135 million (2003 estimate) Capital City: Dhaka, 11 million (2005 estimate) People: Bengalis (98%), and small numbers of tribes people. Comparative Study of South Asian Countries for Rural Development

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Languages: Bangla, and some tribal languages. English quite widely spoken by those with education. Religion(s): Islam (89%), Hinduism (10%). Buddhists and Christians make up about 1% of the population Currency: Taka Basic Economic Facts GDP:US$50,929million(BangladeshBank2003) GDPperhead:US$381 GDPGrowth:5.3% for 2003(forecast for 2005 is 5%) ConsumerPriceInflation: 6.1 %( 2004) Principal Exports: Garments account for 80% of Bangladesh’s exports to the UK. Seafood is also a significant Bangladesh export. Almost 10% of Bangladesh’s worldwide exports go to the UK. Aid & development: The Department for International Development (DFID) has one of its largest programmes in Bangladesh. On current plans, the UK expects to spend £114 million in the year to 31 March 2008.

4. India India forms a natural sub-continent with the Himalayas to the north. The Arabian Sea and the Bay of Bengal, which are sections of the Indian Ocean, lie to the west and east respectively. India's neighbours are China (Tibet), Bhutan and Nepal to the north, Pakistan to the north-west, and Burma to the north-east. To the east, almost surrounded by India, is Bangladesh. Near India's southern tip, across the Palk Strait, is Sri Lanka. India has 28 states with constitutionally defined powers of government. The states vary greatly in size, population and development. Each state has a Governor appointed by the President for 5 years, a legislature elected for 5 years, and a Council of Ministers headed by a Chief Minister. Each state has its own legislative, executive and judicial machinery, corresponding to that of the Indian Union. Country in Brief Comparative Study of South Asian Countries for Rural Development

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Area: 3,287,623msq km (1,269,219 sq miles) Population:1,136,000,000(Sept2007est) CapitalCity:NewDelhi Languages: The official language of India is Hindi, written in the Devanagari script and spoken by some 30% of the population as a first language. Since 1965 English has been recognised as an 'associated language'. In addition there are 18 main and regional languages recognised for adoption as official state languages. Religions: India is a secular state and freedom of religion is protected under the Constitution. The main religious groups are Hindus (81.3%), Muslims (12%), Christians (2.3%), Sikhs (1.9%). Currency: Rupee Basic Economic Facts GDP: : $1,090 billion (2007) GDP per head: $714 per head (2006) Annual Growth: 8.4% (2005-2006) Inflation: 5.6% (2006 est.) Major Industries: Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, gems and jewellery, leather manufactures.

5. Maldives The Republic of Maldives, lying about 420 miles south west of Sri Lanka, consists of a chain of 26 natural coral atolls comprising some 1,190 islands. 200 of these islands are inhabited, 87 are designated tourist islands, and 20 are industrial islands. The islands are small: the capital Malé is an area of under 2 square kilometres, and the highest point above sea level in the Maldives is 2.4m. Maldives was seriously affected by the tsunami on 26 December which killed 83 people and virtually destroyed 14 inhabited islands, three of which have been permanently abandoned. 5% of the population lost their homes, 12,000 people were displaced, 8% of the fishing fleet sustained damaged, and a quarter of the resort islands closed for repairs. The International Monetary Fund, which recently approved Comparative Study of South Asian Countries for Rural Development

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US$6.3 million in emergency assistance for the Maldives, estimates that net losses to the balance of payments will be US$160 million in 2005, and that total reconstruction costs will be almost 50% of the GDP. Country in Brief Area: 90,000 sq km (only 1% land) Population: 400,000 (2004 estimate) Capital City: Malé (population approx 80,000 ) People:Ethnically homogenous, Maldivians have South Indian, Sinhalese and Arab roots. Languages: Dhivehi, though English is widely spoken on resort islands and in Malé Religion(s):100% Islam (Sunni Muslims). It is illegal to publicly practice any other religion. Currency: Rufiyaa, divided into 100 larees Basic Economic Facts GDP: US$715 Million (2004) GDP per head: US$2,509 (2004) GDP growth: Prior to the tsunami this was predicted to be 6%, following the tsunami the 2005 forecast is 1%. Average Inflation: 6.8% (2005 forecast) Major Industries: Tourism (32.6% of GDP) and Transport & Communications (16.4% of GDP) Major trading partners: USA, Sri Lanka, Thailand, Japan, UK, Singapore, United Arab Emirates, India, and Malaysia. Total exports: US$152 million (2003) Total imports: US$470 million (2003) Exchange rate: 12.8 Rufiyaa = 1 US$, 24.6 Rufiyaa = £1 Sterling (March 2005)

6. Nepal Nepal covers approximately 147,000 sq km, stretching 800km from east to west and 90 to 230km from north to south. Nepal is land-locked between China (including the Chinese autonomous region of Tibet) and India. Nepal has three geographic regions; Comparative Study of South Asian Countries for Rural Development

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the mountainous Himalayan belt (including 8 of the 10 highest mountain peaks in the world), the hill region and the plains region. Nepal contains the greatest altitude variation on earth, from the lowland Terai, at almost sea-level to Mount Everest at 8848 metres. Nepal is divided into five development regions and seventy-five districts. Country in Brief Area: Approximately 147,000 sq km, stretching 800km from east to west and from 90 to 230km north to south. Population: An estimated 29.5 million (July 2008 est.). Annual rate of growth of 2.5% Capital city: Kathmandu. Population of about 800,000 in the city itself. Believed to be approximately 1.5m in the fertile Kathmandu valley Peoples: Indigenous peoples include Gurung, Limbu, Newar, Rai, Sherpa, Tamang and Tharu with diverse smaller groups. Major caste groups are the Brahmans and Chhetris. Large numbers of Indians and some Tibetans make their home in the country. Language(s): Nepali 58% (official language), Newari 3%, mainly in Kathmandu. Tibeto- Burman languages (20%) mainly in the hill areas, and Indian languages (20%) mainly in the Terai areas bordering India. Nepal has over 30 Languages and dozens of dialects. Religion(s): Officially 90% Hindu, 8% Buddhist and 2% Muslim – but these figures are thought misleading. Hinduism and Buddhism overlap considerably in Nepal. Other estimates also suggest that there are some 400,000 Christians in the country. Currency: Nepalese Rupee (NPR) which is pegged to the Indian Rupee.

Economy GDP: US$12.62 billion (2007-08) (Economic Survey 2008). GDP per head: US$470 (Economic Survey 2008) 3 out of 10 people live on less than a $1 a day. Annual growth: 5.56% (2007-08) - (Economic Survey 2008). Inflation: 14.5% in Mid November 2008 (Nepal Rastra Bank). Major industries: Tourism, carpet, textile, small rice, jute, sugar and oilseed mills, Comparative Study of South Asian Countries for Rural Development

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cigarettes, cement and brick production. Major trading partners: India 63%, US, China and Germany.

7. Pakistan Pakistan is about three-and-a-half times the size of the UK. It shares borders with 4 countries: India to the east, China to the north east, Iran to the south west and Afghanistan along the western and northern boundaries. Pakistan's coastline on the Arabian Sea is 1,064 km long. The climate can be roughly split into 3 seasons: cool (October through February), hot (March through June), and wet (July through September). There are, however, significant regional variations. Pakistan is divided into 4 provinces: Balochistan, North West Frontier Province (NWFP), Punjab and Sindh. Pakistan-administered Kashmir is known in Pakistan as Azad Jammu and Kashmir (AJK). Country Facts Area:803,940sqkm(499,545sqmiles) CapitalCity:Islamabad Population:162.4million Populationbelowpovertyline:40%(2000estimate) Literacy rate: Male: 61.7% / Female: 35.2% / Total: 48.7% Official languages: English and Urdu Languages spoken: Punjabi, Sindhi, Pashtun, Urdu, Balochi, English and many other local languages Religions: Islam (97%), Hinduism, Christianity and others (3%) Currency: Rupee Basic Economic Information: GNP (FY 2007 - 2008): Rs.5822.1 billion GDP (FY 2007 - 2008): Rs.5926.0 billion GDP Growth Rate (FY 2007 - 2008) 5.8% Inflation (July 2007 – June 2008) 10.3% Major Industries: Cotton yarn and thread, raw cotton, cotton fabrics, rice (EIU data) Comparative Study of South Asian Countries for Rural Development

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Major Trading Partners: USA, Japan, Germany, UK, Italy Major Foreign Investors: USA, UK, UAE and Norway Average Exchange rate (14 January 2009): £1 = 116.02 PKR (Pakistan Rupee) US$1 = 79.14

2.8

Sri Lanka The Democratic Socialist Republic of Sri-Lanka, the most picturesque tropical Island

in the Asian region has a total area of about 25,300 sq. miles (66,000 sq. km.) with an estimated population of around 20 million. The population has been growing at a moderate rate of 1.2% per annum. Three quarter of the population lives in rural areas with the influx to urban metropolitan areas being relatively modest. Ethnically 72% are Sinhala, 18% are Tamils by birth Sri-Lankan and Indian origin and 7% are moors. Nearly 70% are still engaged in agricultural and labour intensive plural income earning activities. Based on rainfall pattern, the Island can be divided into two major zones: the wet zone (average annual rain fall of 75-100 inches) in the southwest quadrant, and the Dry Zone (average annual rainfall of 35-75 inches) covering the rest of the Island and 64% of the area. A narrow transitional band between the dry and wet zone is sometimes referred to as the Intermediate zone. About three quarters of the population resides in the wet zone.

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Chapter III Basic Facts about South Asian Countries Most of the South Asian Countries are suffering from acute poverty. In most countries, poverty is predominantly a rural phenomenon and a large population lives in the rural areas. Limited employment opportunities poor skill and educational level are the macro-factors underlying low economic performance. Macro-economic stability and economic growth received priority along with targeted programmes for poverty alleviation. As an issue, poverty alleviation remained a part of rural development and gradually occupied the central place in the development agenda.

Table 1: Country

Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

Land area

Population

Population below national poverty line (%,

(’000 sq.

(millions) 2007 Total(% Rural)

latest year) Rural Urban

140.7.37(73) 0.6 1112.67(71) .3004(69) 27.06 (84) 156.8 (70) 19.09 (76)

53.0

km) 144 3288 147 796 66

30.2 .195 44.0 35.9 27.0

36.6 … 24.7 … 23.0 24.2 15.0

Total 49.8 27.1 28.6 15.5 42.0 32.6 25.0

In terms of adult literacy, the South Asian counties are much behind than rest of the world even from South East and East Asian. This is also true in relation to net secondary enrollment, children reaching grade five, and the proportion of tertiary students in science and technology. Health sector remains largely neglected, which generally receives between one and two per cent of GDP. Some countries have done very well in terms of access to improved sanitation, while others (i.e. Nepal, and Bangladesh) have done rather poorly. These countries have generally done quite well ranging from 73 per cent to 95 per cent in relation to sustainable access of the population to an improved water source. However, in respect of both water and sanitation, there are problems in most countries, arising as a result of increase in population, pollution caused by Comparative Study of South Asian Countries for Rural Development

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industrialisation, overuse of some of the water sources including aquifers, and continuing exclusion of segments of population from equitable access to these facilities. About 60 per cent of the total population of these counties is rural. On the other hand, the urban expansion in many of the countries has not been so much as a result of planned urbanization. A major reason for the urban expansion has been rural to urban migration, inspired by both push and pulls factors. In fact, the urban expansion has often been rather unplanned giving size to severe stresses on urban services such as electricity, transportation, education, health, water supply, etc. Rural development is, therefore, essential in order to enable the rural population to improve their living conditions, which will also discourage rural to urban migration, thereby facilitating planned urban development. 3.1Agricultural Performance in the South Asian Countries In the World Bank classification, the South Asian Countries are counted as low-income or lower-middle income economies. The per capita income growth rate from 1992 to 2001 was mixed in the South Asian Countries. Nepal made small progress (1.6% per annum). Bangladesh, India and Sri Lanka registered per capita income growth rate between 3 and 6 per cent per annum. Faster growth in the overall GDP and per capita income was generally associated with declining proportions of income in agriculture. Similar tendencies could be observed in the share of the workforce employed in agriculture, which declined in most cases, more prominently in the more dynamic economies. For the South Asian countries agriculture has remained significant and is likely to continue to be so in the coming years in terms of contribution to GDP and as a source of employment.

Table 2:

Growth in per Capita Income, Share of Agriculture in GDP, and

Agricultural Workforce Comparative Study of South Asian Countries for Rural Development

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Country

Share of agriculture in GDP

Economically active

1990

population in agriculture (%) 1990 Latest year, as

1995

2007

available Bangladesh 38.3 26.38 22.1 68.5 63 (1996) Bhutan -47 India 31.6 28.24 19 66.5 67 (1995) Maldives --11(1998) Nepal 62.4 40.48 40 91.7 79 (1999) Pakistan 25.7 26.14 17.0 49.5 47 (1999) Sri Lanka 21.4 23.01 17.5 39.9 42 (1998) Source: CIRDAP, Rural Development Report, and SAARC Statistical Data Book for Agricultural Research and Development (2007) 3.2Agricultural Output and Productivity in SAARC countries Table 3: Countries

Bangladesh

Crop

Food

Livestock

Production

Production

Production

value added

Index

Index

Index

per worker

Cereal Yield

Agricultural

1992

2002- 1992

2002- 1992

2002- 1993

2003

(1995)$ 1992 2002-

-94 74.

04 -94 104.7 74.0

04 -94 104.6 80.2

04 -95 103.2 2572

-05 3533

-94 251

04 309

8 Bhutan India 84.5 100.0 80.8 102.5 74.5 110.5 2,104 2,391 362 Maldives Nepal 75.2 111.2 77.2 109.4 82.4 107.3 1,841 2,284 191 Pakistan 80.3 102.5 77.3 106.0 75.6 109.1 1,946 2,438 603 Srilanka 89.4 98.8 94.4 100.0 107.5 109.9 2,993 3,428 713 Source: SAARC Statistical Data Book for Agricultural Research and Development

391 208 688 743

(2007) From the about table we can see that the agricultural valued added per worker is more in Sri Lank followed by Pakistan and India..

3.2 Improvements in Health Sector Over the past ten year, South Asia has made some progress in improving certain areas of health. The overall life expectancy has increased and adult mortality Comparative Study of South Asian Countries for Rural Development

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as well as child mortality rate has declined. Access to safe water has also improved considerable the progress however has been slow and uneven across geographical areas. Moreover in some of the critical areas such as malnutrition, particularly among children, the progress has not been satisfactory. The life expectancy at birth varies from Sri Lanka is 74 to Nepal 62. The superior performance of Sri Lanka in terms of health is inevitably the result of the strong and continued political commitment of successive government to improving the welfare of the people studies have identified four major factors contributing to the impressive performance of Sri Lanka in terms of health. First the people of Sri Lanka have universal access to free public health care through an extensive network of state hospitals, health facilities and health services; secondly there is the presence of a parallel private health sector which the eased congestion and resource constraints in the public health sector; third educational attainment has been high among population and fourth extensive poverty alleviation and social welfare programs have served reduce the depth and severity of poverty. Sri Lank has given special emphasis to health and poverty reduction in the rural areas.

Figure.1

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Source: Human Development in South Asia (2007) 3.2.1 Adult Mortality Rate: South Asia has one of the highest adult mortality rate in the world after Sub_Saharan Africa. Over the past ten year however, South Asia has made some progress in reducing its adult mortality from 232 in 1995 to 194 per 1000 in 2005. The adult mortally of Nepal is the highest of 235 and lowest of Sri Lanka 103. Figure. 2

Source: Human Development in South Asia(2007)

3.2.2 Trends in Rural Urban Disparity in Child Mortality Rate in South Asia: Comparative Study of South Asian Countries for Rural Development

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Infant and child mortality rates in South Asia are typically higher amongst low income groups, particularly these residing in rural areas and among female children. It is important to look at trends in these disparities to see how South Asia has progressed in terms of narrowing them down. Rural/urban disparity in infant and child mortality is particularly high in Nepal followed by India and Pakistan. These differences have however narrowed down over the past ten years with the highest absolute reduction observed in Bangladesh. Figure. 3

Source: Human Development in South Asia (2007)

3.2.3 Access to safe Drinking water: South Asia's sanitation coverage is among the lowest in the world at 37 per cent, about the same as the Sub-Saharan Africa, but with twice as many people without the facility as in Sub-Saharan Africa. About 929 million South Asians who live without any toilet facilities represent more than a third of the world's total. Although the growth rate of providing improved sanitation is among the highest in the world and the coverage has been more than doubled, from 18 per cent in 1990 to 37 per cent in 2004, it started from such low levels that the pace will have to be accelerated. In this sector too Sri Lanka is leading from the front with Bhutan at second number. Comparative Study of South Asian Countries for Rural Development

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Table 4:

3.4

Improvement in Education Sector

South Asia has performed well in term of improving many educational indicators over the past ten years.: Adult literacy rate has increased from 49 per cent in 1995 to 58 per cent in 2004, net primary enrolment has gone up from61 per cent in 1995 to 87 per cent in 2005, pupil teacher ration has come down from 60 in 1995 to 41 in 2004; out of school children has been reduced from 50 million in 1995 to 13 million in 2004; and drop out rate from primary schools have come down from 43 per cent in 19910 -1995 to 14 per cent in 2004.

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Despite the progress achieved in these important indicators, South Asia continues to be stuck at the lowest round in terms of education among all other regions including Sub – Saharan Africa. It continues to be the most illiterate region in the world containing around 379million illiterate adults – the highest absolute number amongst all regions in the world. Its adult literacy rate of 58 per cent is even lower than of Sub Table 5:

Source: A Review of South Asia's Performance over a Ten-year period (2007)

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– Saharan Africa. And despite achieving a seemingly remarkable performance in ter5ms of reducing the total number of out of school children over the pas ten years, two South Asian countries; India and Pakistan enjoy there distinction of containing one of the highest number of out off school children in the world (with 6.5 million in Pakistan and 45 m million in India ) In terms of the performance of individual countries over the past ten year figure 2.11 shows that all South Asian Countries have progressed towards increasing their literacy rates. Compared to other countries the performance of Nepal in terms of increasing its literacy rate has been the most impressive. Starting from the lowest literacy rate of 28 pr cent tin 1995, Nepal has bee bale to increase its literacy rate to 49 per cent at present achieving an annual percentage cane of 6.3 per cent over the past tern years. In terms of gross enrolment ratios the performance of South Asian countries has been mixed with some countries such with some countries such a s India and Bangladesh showing a discernible increase whereas other countries reflecting a stagnation or even a downward slide. Table 6: Adult Literacy Rate (%age 15 and above)

Year

India

Pakistan Bangladesh Nepal

2000 57 43 41 2001 58 44 41 2002 61 42 41 2003 61 49 41 2004 61 59 41 Source: Human Development in South Asia 2007

42 43 44 49 49

Sri Lanka

Bhutan

Maldevs

92 92 92 90 91

47 47 47 47 47

97 97 97 97 96

The above table shows that Maldives has the highest adult literacy rate and Sri Lanka has 91 apart from these two countries the rest of the countries have less then 70% of adult literacy rate.

Trends in Educational Indicators 1995-2005. Table 7: Country Adult Combined PupilIlliterate Comparative Study of South Asian Countries for Rural Development

Drop Out 26

Literacy

gross

teacher

enrolment

ration

adults

ratio 1995 2004 1995 2004 1995 2004 1995 61 55 62 64 40 291

India

rate

2004 292

1995 2004 41 22

52 Pakistan 38 50 41 38 38 38 19 50 52 30 Bandladesh 38 41 37 57 71 51 45 54 53 35 Sri Lanka 28 49 56 57 39 40 9 9 48 24 Bhutan 42 47 31 33 31 31 0.60 0.43 17 2 Maldives 93 96 71 69 31 20 0.010 0.007 7 8 Source MHHDC, 1997, 1998, and 2007a: UNDP 1998a and 2006; UNESCO 2004, 2005 and 2006; UNICEF 1997 and World Bank 2006 f and 2007

3.5

Improvement in Poverty in South Asian Countries

Poverty is of very high concern for all the South Asian Countries the overall level of poverty specially is rural areas is very as show in bellow given table 27% of the population of South Asian Counties is living under poverty the poverty level in Bangladesh is the highest for the year 20005. Sri Lanka has made a tremendous development by reducing the poverty level from 32 in 1996 to 14 in the year 2005. pepal has also reduced the poverty level to 28 from 52, Pakistan has also shown some improvements by reducing the poverty from 41% in 1995 to 25% in the year 2005.

Table 8: Country

Population in

Population in

Poverty

Poverty

(Total) 1995 Bangladesh 25.1 Bhutan 36.3(2000

2006 19.5 31.7(04

(Rural) 1995 2006 24.6 17.9 17.0 4.2

Gini Coficient

1995 0.43 0.34

2006 0.47 0.42

) ) Comparative Study of South Asian Countries for Rural Development

27

India 35.0 27.5 35.0 28.3 Maldives 43.0 21.0 50.0 Nepal 42.0 30.8 44.0 34.6 Pakistan 29.8 30.9 33.1 28.1 Sri Lanka 25.0 25.0 27.0 24.7 Source: Human Development in South Asia 2007 P. 25

0.24

0.37

0.37 0.40 0.48

0.48(2002)

Modal Country (Sri Lanka): On the basis of above analysis we can select Sri Lanka as the best example country for rural development in South Asia because Sri Lanka has made a great deal of progress in rural development sectors. We can declare this country as the model country for Rural Development in South Asia. Some the steps taken by Sri Lanka for the improvement of rural development are discussed in the next chapter.

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28

Chapter 4 In Asia 70 percent population lives in rural areas where the incidence of poverty is high. Rural development is the approach to increase the degree of participation of the rural people in the development process to improve their leaving standard. South Asian countries have made some progress in rural development and have designed rural development programs but unfortunately they cannot implement these programs Sri Lanka is the county which is able to properly implement rural development programs some of these programs are listed bellow. Development of Rural Agriculture & Productivity 1. Colonization Schemes With the purpose of improving rural agriculture, policy makers together with planners thought that rehabilitation of ancient tank network is an urgent need. Accordingly priority was given to supply waters in two hundreds of abandoned tanks and cultivate every possible peace of land hitherto neglected due to lack of water. In addition to the provision of water to the dry zone peasantry and new lands to the farmers who irrigated from wet zone, they were provided with a package of supporting services such as credit subsidized inputs, health and educational facilities. Rural reservoirs namely Gal Oya, Minneriya, Thabbowa, Kaudulla are few striking examples to be cited in this regard. The families who migrated from both Dry and Wet zones had settled under new colonization schemes and were said to have enjoyed multiple benefits and increased incomes through paddy cultivation. But in course of time second generation in such colonization scheme was confronted with problems such as fragmentation of lands and low income by uneconomical farm units. In consequence, most farmers were trapped by middlemen and moneylenders. 2. Green Revolutionary Intervention During late sixties and seventies, policy makers together with relevant professionals further conceived that the objective of rural development could be achieved largely through river valley development schemes and increase of agricultural productivity. But the strategy used was different from that of previous period. In order to realize the task, huge river diversion schemes (eg. Mahaweli) were Comparative Study of South Asian Countries for Rural Development 29

implemented. At the same time a technical package comprised of High Yielding Varieties, Fertilizer, Pesticides, Insecticides and Farm Mechanization were introduced under popular movement called “Green Revolution”. Then Sri Lanka has been called as a typical Asian paragon where the prescribed package was extensively adopted. The living standard of the poor, particularly of indigent farmers has expected to be advanced as the resultant benefits are gradually trickled down to them. But in course of time it was ascertained that with the increase of crop production multiple challenges unforeseen have come forefront in the national discussion agenda of Poverty and Agriculture. Few striking among those challenges are given below. • High cost of production, particularly incurred in paddy/rice cultivation • Cost related farmer indebtedness • Deterioration of natural soil condition and micro ecosystems • Disappearance of indigenous traditional knowledge Even in the midst of such problems, paddy production has increased from an annual average of 1415 M. Tons in 1970-1977 to 2109 M. Tons in 1977-1984. This production increase was accompanied by not only the increased acreage cultivated but also by increased yield of 2397 Kgs. per hectare to 2968 Kgs per hectare during the respective periods. Social Welfare Strategy The concept of welfare state and re-distributive justice fashioned the political thinking of all prominent political parties at the time Ceylon (Sri Lanka) emerged as an independent nation. The welfare oriented social policies were driven by electoral policies. Programmes thus implemented included free food subsidy scheme, free Education scheme and free Medical care services. During the early years of independence, when resource availability was abundant the governments provided social welfare benefits universally. However, as the population increased, successive governments were compelled to curtail the universally targeted provision of free and rationed food. But free education and free medical facilities further continued in universal manner. Sri-Lanka recognized food as an essential entry point to poverty alleviation as far back as 1942 when the food subsidy scheme was introduced to cover the whole Comparative Study of South Asian Countries for Rural Development

30

country. Initially only rice was subsidized. Gradually, subsidies were extended to other food items except sugar. The objective of subsidizing the cost of food was to control inflation by keeping the cost of living down. Due to the scarcity of budgetary allocation the policy of providing subsidized food commodities to the population as a whole underwent significant change in 1972. when an income criterion was introduced to determine eligibility to benefit from the policy. Accordingly, those families whose monthly income does not exceed SLR. 700 were the target group. The beneficiary family received a maximum subsidy of about SLR 250 per month. In addition those who do not have access to electricity were also entitled to monthly kerosene stamps worth of SLR. 28. In 1978 this exercise resulted in continuing the food subsidy to about 50% of the total population who were declared themselves as poor. However, the food stamp scheme is disadvantageous to the beneficiaries as the real value of this income supplement gets eroded with rising food prices. DDC Strategy in Two Legged Development Process (1970-77) Looking back to 1970-77 was one of the most difficult periods in the post independence history in Sri Lanka. The United Front Government, which came into power in 1970, had to deal with crisis emanating from both domestic and external factors. There were on the one hand the youth (JVP) insurgency of 1971, increasing state intervention in the economy culminating in the land reforms of 1972 and 75 and the political crisis leading to the break-up of the United Front in 1975. On the other hand, there was the global economic crisis triggered by the petroleum price hike of 1973 and commodity shortages, which led to severe foreign exchange controls and rationing. Moreover, in the 70’s unemployment and underemployment had reached serious proportions that ca1led for a reappraisal of the country’s development policies. It was basically in the above background of shortage of foreign exchange and capital and scarcities of commodities in general on the one hand and serious problem of unemployment and underemployment on the other hand, that the need for a dual or a two-legged development process was conceived. Two legged development model is a process in which the modern large scale projects at macro-level is accompanied by small-scale local projects at micro levels. Comparative Study of South Asian Countries for Rural Development

31

The Five Year Plan (1972-76) included this dual development process in its planning strategy. While supporting a macro investment plan based on modern, largescale projects, the plan needed to improve the production and productivity of the small producer, the rural sector and the informal sector. In general that is to upgrade the hitherto neglected strata of the society, the unemployed, the urban and rural poor, the landless labourers, the wage earner and the small peasant and to correct the serious gap which has arisen between the needs of the people and exploited resources. The principal instrument used in the five-year plan for promoting the second leg of development in the dual strategy was the Divisional Development Councils (DDC) which were conceived as decentralized units of planning at local levels. The membership of a DDC had a dual character, having consisted of government officials engaged in development work at regional level as well as representatives of people’s organizations such as Cooperative Societies, Agricultural Productivity Committee and Rural Development Societies. By September 1976 about 150 DDCs were in operation (one in each electoral district) and they had formulated nearly 1700 small scale development projects covering agriculture, light industry, fisheries, livestock and infrastructure. All of them were in operation employment over 25,000 persons. All projects were cooperative enterprises managed by members themselves. While the government provided most of the fixed capital, banks loaned the working capital. In the original DDC plan there was an intention to increase the number of projects up to 2800 investing Rs. 1,882 million and generating 81,000 employment opportunities. Calculated average capitallabour ratio was around Rs. 2000. In practice, however, the DDC experiment did not prove a. success as a viable development strategy, although there were many success stories in the array of thousands projects. Amidst variety of reasons, mostly affected for the lacks of success is related to two key areas. • Methods used in organization and implementation • Change of government policies Most of the Small-Scale Projects that came under the DDC Prograrnmes were import substitution types, which had a ready market under the import contract regime. In the post ‘77 import liberalization regime, most of the projects lacked its ability to face the enhanced flow of competitive imported goods. There were some Comparative Study of South Asian Countries for Rural Development

32

projects which were badly conceived and designed: some were badly located and implemented.

Managerial

weaknesses,

constraints

formed

in

cooperative

organization and politicization of decision making and other problems were responsible for such failure. In the post ‘77 situation no attempt was made to carry out a hard evaluation and to draw lessons to improve on and build on the DDC programmes. Instead, the experiment was totally abandoned as being of little relevance to liberalized market economy. A concept of second leg of development practice in the mainstream development thinking and practice, in the first ten years, followed by the ‘77 economic reforms, was neglected. Private Sector Dominated Market Economy Strategy World Bank — IMF supported economic reform package and Structural Adjustment Policies [SAP] as internationally known, dominated the mainstream development scene during three years. The main focus of development policy was to transform the economy from a state controlled and dominated one to a private sector dominated market economy with a strong outwards (export) orientation. In the first budget of the UNP government in 1977 the above said reform programme was announced. It consisted of a package of fundamental policy changes, designed to facilitate the long term transformation of the economy. The most important of these are, • Unification of the change rate • Liberalization of imports • Abolition of price controls on most commodities • Elimination of public sector import monopoLy • Reduction of poor relief subsidies and income transfers • Shift resources from consumption to investment through saving investment friendly tax reforms. It is now well known that the momentum generated by the economic reforms were more or less confined to the initial few years of economic liberalization and the momentum not only failed sustain in the later years but also that by later eighties social and economic crisis of serious proportions emerged in the country.

Comparative Study of South Asian Countries for Rural Development

33

The rate of economic growth had declined unemployment, which had declined in the early 80’s had started escalating. It was evidence of growing income inequalities and income concentration in a few hands. As already mentioned, high inflation had eroded the purchasing power of food stamps. It was against the above socio-economic background that special measures began to be considered for purpose of ‘Poverty Alleviation’ and ‘Safety nets’ for the poor and vulnerable to be able to go through the structural adjustments in the mainstream market economy. Janasaviya Programme - JP (People’s Strength Programme) The well-known Janasaviya Programme was offered to the electorate as the central item of the poverty redressed package. During 1989-94, JP became the lead programme in the second leg of the development strategies of the government. JP is considered undoubtedly as an outstanding innovative landmark in the history of poverty alleviation in Sri-Lanka. It was said to be largely inspired by many excellent empirical exercises executed in the second leg development strategy in both local and abroad contexts, but far outside mainstream development at that time, that it is relatively unknown and unfamiliar. Among the innovative cases of bottom-up and ‘putting the last first’ style taken into consideration in formulating Janasaviya. The objective of the JP was to cover all poor households enrolled in the food stamp programme that had seen their benefits eroded in real terms over the years due to inflation. Under the programme each poor family received a monthly grant of SLR. 2,500 for 24 months. The grant was in two parts: • SLR 1,458 for the purchase of a specific basket of consumer items, mainly food stuffs, of which SLR 458 would be saved in a state bank in accordance with the household wish. • The balance of SLR 1,042 was to be deposited with a State bank until it had accumulated to the sum of SLR 25,000 within a two year period. This saving should be made available as capital or as collateral for a loan to be invested in an income generating activity.

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In addition to the above consumption plus saving subsidy element support services were made available to assist the families concerned to improve the livelihood through self-sufficient efforts. Therefore, JP was directly linked to training cum production programme where beneficiaries were required to work 20 days in a month in their own production activities or attend in a place of training to qualify to receive the benefits. The activities, thus, would be asset creation and improving the human capital through training activities. Those who did not participate in such activities on a regular basis were removed from the JP. More than 421,000 families were benefited from JP in its 4 round operation from 1989 to 1993. The implementation of the JSP was ultimately aimed at achieving selfsustaining development among the poor that was initiated and supported through their own efforts. However, a number of evaluations of the first and second round operations revealed despite huge outlay and involvement of the entire state machinery, the implementation of the JP strategy still kept 90% of the beneficiaries in poverty with very little chance of what they get out of it and in addition left them more exploited than before. Based on that experience, the JP was replaced by the Samurdhi Programme in 1995. Samurdhi Programme - SP (The prosperity through poverty alleviation) With the introduction of SP, a number of auxiliary welfare programmes which were in operation for sometime (e.g. Janasaviya Programme, Food Stamp Programme and School mid-day Programme) have been discontinued. SP is the new national endeavorer for poverty alleviation within an open/free economic policy framework. Though the SP was initiated by the previous Peoples Alliance Government in 1995, the successive UNP government which came into power in 2002 was also in consensus for the continuation of the same. The SP covers 1.8 million poor families dispersed in the entire country instead of stage-by-stage operation manner by JP except few Districts in the Northern Province due to civil unrest. The main thrust of the poverty reduction strategy as embodied in the SP is to ensure the participation of the poor in the production process. The main objectives of the SP are to, (a) Expand opportunities for income enhancement and self-employment. (b) Organize youth, women and other disadvantaged people into groups and Comparative Study of South Asian Countries for Rural Development

35

encourage them to participate in decision making in the development process at the grass-root level. (c) Assist persons to develop their talents and strengthen their asset bases through productive employment. (d) Establish and maintain productive assets to create additional wage employment opportunities at the rural level. (e) Safe guards the poor providing social welfare assistance. The breaking of the vicious circle of poverty is believed not to be done in fragmented piece meal manner and required a holistic approach. Inter related priority areas of action in the SP are elaborated below: 01. 02. 03.

Income transfer through consumption support Social security/Insurance Social animation and credit

04. Infrastructure development 05. Shelter for the poor 06. 01.

Market intervention

Income Transfer Component This component provides consumption support to 52% of the entire population

of the country consisting of 1.8 million families estimated to he at the bottom of the income scale. The beneficiaries are eligible to receive a monthly income transfer payment of SLR. 1,000 at the highest to SLR.140 at the lowest, depending on household income and number of members in the family. The hard-core poor families consisted of 5 or more members and earn about SLR 700 per month are eligible to have a direct income transfer of SLR. 1,000 per month. The single number family is entitled to monthly payment of SL Rs. 140. Thus, the immediate intention of this programme is to raise income of the poorest families to about SLR. 1,700 per month and with the additional income that could arise from the self employment activities. The stamps or coupons received by the poor family are categorized into different purposes. For instance, the family consisting of 4 members with a monthly income of SLR. 1,000 is entitled to enjoy SLR. 700 income transfer payment in the following manner. Purpose •

Purchase of food stuffs

Worth in SL Rs. 300

Comparative Study of South Asian Countries for Rural Development

36

•

For encashment

260

•

Compulsory saving

100

•

Social security premium

30

•

Housing Lottery fund

10

Thus, it is to be seen that the direct income transfer scheme in the SP was designed to achieve multiple purposes, which are very useful to the indigents as follows: a)

Increase purchasing power for consumption

b)

Materialize capital formation for investment and anti-indebtedness

c)

Increase coping capacity at calamities

d)

Improve housing conditions

The current annual outlay incurred for the direct income transfer scheme by the government is around SLR. 12 Billion. With the substitution of SP for JP, the programme has become more impressive mix of new development activities of welfare and more participatory. The main device, which has used to make welfare objective was the forcible diversion of a part of income transfer/supplement into two collective development funds, namely social security fund, housing development lottery fund and into household based saving reserves under the scheme of individual compulsory savings. The diversion technique’ thus adopted has considerably affected to bring changes in the minds of beneficiaries to relieve them from welfare subsidy dependence syndrome into the culture of collective values and saving habits. 02.Social Security/Insurance Component The social security scheme operating under Samurdhi Social Security Trust Fund, established in 1997, provide social insurance coverage to the poor. It aimed at providing wide range of benefits to subscribe poor families in the events of social calamity, distress arid crisis. At present 1.4 million poor families are reported to have had membership in the fund. The poor households contributed SLR. 30 per month against which they can claim insurance compensations for death of a family member (SLR. 5,000) once per year, marriage of household (SLR. 3,000) and family member (SLR. 1,000) once per year, birth of a first child (SLR. 2,000) and second child (SLR. Comparative Study of South Asian Countries for Rural Development

37

1,000) and for sicknesses (up to SLR. 1,500 at the rate of SLR. 50 per day for hospitalization per year). The surplus accumulated in the fund is used firstly for multiple welfare programmes aimed at female headed family development and secondly educational scholarships for poor children etc. 03.Social Animation and Credit The main strategy used in the second leg of development that emerged in the late 80’s has been labeled as ‘social animation’, which is a central element in the methodology of participatory development. Social animation is basically a process of assisting the poor to improve their livelihood through organized initiatives undertaken by the poor themselves. In other words it is a methodology of preparing people for a process of self-reliant development. The general experience is that people will begin to take initiatives when they become more aware and conscious, see opportunities of change, develop confidence in their abilities to create change and could gain access to the necessary resources. Initiation of a social animation programme in a given community requires the services of trained field workers who will interact with people to stimulate them, help raise their development consciousness, and facilitate those development initiatives. As in the absence of so called trained personnel the government had decided to recruit 25,000 unemployed youths as Samurdhi Development Officers (community animators) and 2000 University graduates as Managers to overview the process. The general nature of the development process that has unfolded through the intervention of such development catalysts could be summarized under following headings. (a)

Development Consciousness

(b)

Group Formation

(c)

Mobilizing own resources (Funds)

(d)

Accessing resources from outside

(e)

Graduation to micro enterprise development.

Under the SP organized groups of members have mobilized their own resources as first step in a process of building a resource base to support their development Comparative Study of South Asian Countries for Rural Development

38

actions. As the fund crows in size, members will have access to a resource pool from which they could borrow to finance some of their credit needs such as illness in the family, meet consumption gaps in the face of income short falls, school requisites for children and purchase of inputs etc.. A group fund often serves as a buffer to protect consumption needs in the face of crises and as an instrument to meet contingencies. The second larger organization next to five-member group is Samurdhi Society, which is funded, in small villages. The village is a geographical unit where various socio-economic forces are in operation and an easy meeting place for the poor. Samurdhi Society meets every fortnight. All Samurdhi groups in the village are organized in the society. This allows space for fortnightly discussions on the programme of work of the small group. Further, loan applications submitted to the hank union have to he openly discussed and approved by the society. Third larger organization next to Samuurdhi Society is ‘Samurdhi Bank Union’. It forms a network of finance institutions reserved for the poor. One bank union is instituted for about 30 villages. Membership in a bank is around l,500 - 2,500. According to present experience after 5 or 6 years, this membership will be sufficient to maintain a stall of 6 members in the bank. With the bank union system getting stronger, the poor will be able to free itself from the disadvantageous links with the money lender and other conventional finance institutions. Instead of the conventional assets and personal guarantee system, Sarnurdhi bank unions release loans on the trust of the group of five people. Here, action is guided by the vision from small loan to big loan and continuous loans. This method helps to the poor community to shift from a relief culture to a credit culture. Samurdhi Bank System and Micro Finance In the process of family empowerment programme capital formation with and Comparative Study of South Asian Countries for Rural Development

39

for the poor is given an utmost priority. Network of banks aimed at provision of capital for enlarging investment capacity of poor is envisaged to he evolved. Considering the immediacy and decisiveness of capital investment, Samurdhi movement has given highest priority to this micro finance strategy. The Samurdhi Bank Programme or the long-term credit programme that relies on the innovative technique developed by alternative micro finance institutions both local and abroad 04.

Community Infrastructure Development Component This component consists of a series of efforts aimed at community development

through investments in economic and social infrastructure projects such as small-scale Drinking water wells, roads, culverts, Bank buildings, Marketing stalls, Fisheries auction centers, tanks bunds, Sluices and water supply Schemes. This intervention is expected to create an environment conducive to sustained and improved income generating activities in the villages where the poor people are thickly concentrated. Statistics related to above component are explicated below. Table 9:

Year

2000 2001 2002 2003 2004 2005 (Expected) Total

Total No of

Total No.

Investment

of Projects

(Rs. Mn)

Completed

428.03 171.76 16.02 182.27 295.83

Total Value of Community

Total value (Rs. Mn)

No of Beneficiaries

6,069 2,243 197 3,531 13,190

Contribution 100.20 45.00 4.01 139.59 71.87

528.23 216.76 20.03 321.86 367.70

1,526,556 636,444 69,745 946,172 1,538,390

517.20

13,875

182.50

699.70

1,608,393

1,611.11

39,105

543.17

2,154.28

6,325,700

Conclusion Comparison of the South Asian Countries shows that rural development in the courtiers is still not in better condition. South Asian countries are still facing the problems of poverty, low literacy and poor health conditions. Efforts made by these Comparative Study of South Asian Countries for Rural Development

40

countries have been failed because they where not able to implement the rural development schemes properly. Sri Lanka is the country which has made a reasonable development in most of these areas. Sri Lanka is spending 17 percent of its GDP on rural development and agriculture while Bangladesh and Pakistan are spending less than 10 percent of its GDP on rural development. Sri Lanka has succeeded in achieving more 90 percent adult literacy due to more emphasis on this area and by spending 24.99 percent of GDP on education while the Pakistan and India the adult literacy rate around 60 percent, the reason for this is giving less importance to these sectors Pakistan is spending 10.15 and Bangladesh is spending 9.87 on education. Similarly Adult mortality rate Sri Lanka is 104 lowest in South Asia and life expectance 74 highest in South Asia. Sri Lanka was able to achieve these because of spending more on health; they spend 13.69 percent of its GDP on health. This sector was almost abandoned by other South Asian countries Bangladesh spend 1.95 on held and Pakistan spends 2.71 on health.

These figures reveal that Sri Lanka has developed its rural by spending more on rural development, education, health and poverty alleviations and if the other countries want same results they have to follow Sri Lanka and most increase the share of health, education, poverty alleviation and rural development.

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Mahbub-Ul-Haq Human Development Centre (2007). Human Development in South Asia 2007. Oxford University Press, Karachi, Pakistan. 327p.

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The World Bank (2008). World Development Report 2008. The World Bank, Washington, USA. 271p.

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SAARC (2007). Database Profile on Macroeconomic and HRD Indicators in the SAARC Region (1990-2006). SHRDC, Islamabad, Pakistan. 89p.

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