Lecture Development economics - Lecture 7: Economic development – basic need approach or physical quality of life approach

To measure economic development the traditional approaches are concerned with, increase in GNP, increase in per capita GNP. But with the passage of time a dissatisfaction developed against these measures. Rather these measures, it was emphasized to use the measures of Employment and Distribution. This chapter provides knowledge of economic development – basic need approach or physical quality of life approach.

2 Economic Development – Basic Need Approach or Physical Quality of Life Approach Lecture Background To measure economic development the traditional approaches are concerned with, (i) increase in GNP, (ii)increase in per capita GNP But with the passage of time a dissatisfaction developed against these measures Rather these measures, it was emphasized to use the measures of "Employment and Distribution" But so many economists are of the view that criteria of 'Increase in Employment' is not a suitable index of economic development It is so because that the unemployment which is found in UDCs is different from that unemployment which exists in DCs Therefore, it will be least attracting to measure economic development with increase in employment In the same way, to link 'Redistribution of Income' with economic development may not be accepted as it may happen that poverty is existing in a country despite equal distribution of income, or unequal income distribution is co-existing with fall in absolute poverty In such state of affairs the economic development would require the abolition of absolute poverty and adversity, which could be possible only if people get the 'Basic Needs' of life Therefore, the economists use the criterion of basic needs to measure economic development According to this approach if people are in a position to avail more amount of food, have better access to educational facilities, and have greater command over the civic amenities like water supply, water sewerage, health care and shelter etc., all such Therefore, according to this approach whether GNP and per capita GNP increase or not, whether a fairer distribution of income is made or not, the real matter lies with the 'Provision of Basic Needs or facilities to the people' This index identifies the components of the produced goods and the segments of the society which are benefited by such goods and services Therefore, if people fail to get more goods and services even GNP has gone up, it will not represent economic development Therefore, for the sake of economic development we shall have to make such a measures whereby the availability of basic needs to the masses could be made sure Accordingly, to measure economic development we will have to select those measures which are concerned with the basic needs, despite certain differences As in case of country like Pakistan the supply of doctors is increasing, but a common man fails to get medical facilities as the doctors are reluctant to go to small cities and villages, and majority of the doctors and medical services remain confine to big cities In such situation, the increase in doctors and medical services will be of least benefit to the common men Again, if the infant mortality rates are decreased in cities while such may not occur in case of rural areas Moreover, if in so many countries it is stressed upon to enhance education facilities • but the educational system is not made effective, • the defects of educational system are not removed • and the ratio of students to teachers is not improved, in such situation just expansion in educational facilities can not be accorded as an indicator of economic development Thus, in spite of lot of flaws in the indicators of increase in education, health, water supply, level of calories and shelter, this measure of economic development presents a realistic picture of economic development than, GNP, GNP per capita and GNP redistribution methods These measures represent the determination on the part of govt regarding supply of social services Thus, the basic needs approach presents a better explanation to remove poverty than the "Redistribution Theory" • Thus in the basic needs approach, the following aspects are analyzed: • (i) How much goods and services are produced? • (ii) What goods and services are being produced? • (iii) How goods and services are being produced? This shows that in this theory the 'Amount of goods and services' is of crucial importance and the increase in the quantity of goods and services will help in removing poverty The increase in GNP per capita represents the rise in standard of living But the criterion of 'Basic Needs' tells us what are the components of GNP and which segments of the society have utilized such components This approach works like social indicators of economic development We will have to define some better indicator for each basic need Important Needs Basically, the more important needs are concerned with the provision of foods, basic education, health services, water supply, water sewerage, residential facilities and infrastructure On the basis of stipulated indicators regarding Basic Needs, we can make comparison between the countries These indicators or measures will reflect the relative difference between the rich and the poor countries Moreover, with these measures we can find that which countries are serious regarding provision Thus, according to the Basic Needs approach to economic development, following indicators can become helpful to measure economic development: (i) Health Standard: Here it is considered; (a)the life expectancy of the citizens of the country, (b) the infant mortality rates (IMR) in the country (ii) Education Level: Here it is considered the 'Literacy Rate' in the country Moreover, what is the enrolment ratio at primary level (iii) Food Availability: Here it is considered that what is per capita food availability in the country (iv) Water Supply: What is the percentage of the population which is getting the facility of clean water supply (v) Water Drainage: Here it is assessed that what is the percentage of the population which is getting the facility of water drainage etc 10 (vi) Shelter And Residence: Here it is estimated that what is the The Millennium Development Goals Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 1: Eradicate extreme poverty and hunger Target  1.A:  Halve,  between  1990  and  2015,  Proportion of population below $1 (PPP) per day [i] the  proportion  of  people  whose  income  is  Poverty gap ratio  less than one dollar a day Share of poorest quintile in national consumption Target 1.B: Achieve full and productive  employment and decent work for all,  including women and young people Growth rate of GDP per person employed Employment­to­population ratio Proportion of employed people living below $1 (PPP)  per day Proportion of own­account and contributing family  workers in total employment  Target  1.C:  Halve,  between  1990  and  2015,  Prevalence of underweight children under­five years  the proportion of of age people who suffer from hunger Proportion of population below minimum level of  dietary energy consumption  For monitoring country poverty trends, indicators based on national poverty lines should be used, where available [i] 23 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 2: Achieve universal primary education Target  2.A:  Ensure  that,  by  2015,  children  everywhere, boys and girls alike, will be able  to  complete  a  full  course  of  primary  schooling Net enrolment ratio in primary education Proportion of pupils starting grade 1 who reach last  grade of  primary  Literacy rate of 15­24 year­olds, women and men Goal 3: Promote gender equality and empower women Target  3.A:  Eliminate  gender  disparity  in  primary and secondary education, preferably  by  2005,  and  in  all  levels  of  education  no  later than 2015 Ratios  of  girls  to  boys  in  primary,  secondary  and  tertiary education Proportion  of  seats  held  by  women  in  national  parliament Share  of  women  in  wage  employment  in  the  non­ agricultural sector 24 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 4: Reduce child mortality  Target 4.A: Reduce by two­thirds, between  Under­five mortality rate 1990  and  2015,  the  under­five  mortality  Infant mortality rate rate Proportion  of  1  year­old  children  immunised    against measles Goal 5: Improve maternal health  Target  5.A:  Reduce  by  three  quarters,  Maternal mortality ratio between  1990  and  2015,  the  maternal  Proportion  of  births  attended  by  skilled  health  mortality ratio personnel  Target  5.B:  Achieve,  by  2015,  universal  Contraceptive prevalence rate  access to reproductive health Adolescent birth rate Antenatal  care  coverage  (at  least  one  visit  and  at  least four visits) Unmet need for family planning  25 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 6: Combat HIV/AIDS, malaria and other diseases Target  6.A:  Have  halted  by  2015  and  begun  to reverse the spread of HIV/AIDS         HIV prevalence among population aged 15­24 years  Condom use at last high­risk sex Proportion  of  population  aged  15­24  years  with  comprehensive correct knowledge of HIV/AIDS Ratio  of  school  attendance  of  orphans  to  school  attendance of non­orphans aged 10­14 years Target  6.B:  Achieve,  by  2010,  universal  Proportion of population with advanced HIV infection  access  to  treatment  for  HIV/AIDS  for  all  with access to antiretroviral drugs those who need it Target 6.C:  Have  halted by 2015 and begun  to reverse the incidence of malaria and other  major diseases         Incidence and death rates associated with malaria Proportion  of  children  under  5  sleeping  under  insecticide­treated bednets Proportion  of  children  under  5  with  fever  who  are  treated with appropriate anti­malarial drugs Incidence,  prevalence  and  death  rates  associated  with tuberculosis Proportion  of  tuberculosis  cases  detected  and  cured  under directly observed treatment  short course  26 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 7: Ensure environmental sustainability Target  7.A:  Integrate  the  principles  of  sustainable  development  into  country  policies  and  programmes  and  reverse  the  loss of environmental resources     Target  7.B:  Reduce  biodiversity  loss,  achieving,    by  2010,  a  significant  reduction  in the rate of loss Target 7.C: Halve, by 2015, the proportion of  people  without  sustainable  access  to  safe  drinking water and basic sanitation Proportion of land area covered by forest CO2 emissions, total, per capita and per $1 GDP (PPP) Consumption of ozone­depleting substances Proportion of fish stocks within safe biological limits Proportion of total water resources used   Proportion of terrestrial and marine areas protected Proportion of species threatened with extinction Proportion  of  population  using  an  improved  drinking  water source Proportion  of  population  using  an  improved  sanitation  facility Target  7.D:  By  2020,  to  have  achieved  a  10 Proportion of urban population living in slums[i]    significant  improvement  in  the  lives  of  at  least 100 million slum dwellers  The actual proportion of people living in slums is measured by a proxy, represented by the urban population living in households with at least one of the four characteristics: (a) lack  of access to improved water supply; (b) lack of access to improved sanitation; (c) overcrowding (3 or more persons per room); and (d) dwellings made of non­durable material [i] 27 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 8: Develop a global partnership for development Target  8.A:  Develop  further  an  open,  rule­ Some  of  the  indicators  listed  below  are  monitored  based, predictable, non­discriminatory trading  separately  for  the  least  developed  countries  (LDCs),  and financial system Africa,  landlocked  developing  countries  and  small  island  Includes  a  commitment  to  good  governance,  developing States development  and  poverty  reduction  –  both  Official development assistance (ODA) nationally and internationally Target 8.B: Address the special needs of the  least developed countries Includes:  tariff  and  quota  free  access  for  the  least developed countries' exports; enhanced  programme of debt relief for heavily indebted  poor  countries  (HIPC)  and  cancellation  of  official  bilateral  debt;  and  more  generous  ODA  for  countries  committed  to  poverty  reduction Net  ODA,  total  and  to  the  least  developed  countries,  as  percentage  of  OECD/DAC  donors’  gross  national  income Proportion  of  total  bilateral,  sector­allocable  ODA  of  OECD/DAC  donors  to  basic  social  services  (basic  education,  primary  health  care,  nutrition,  safe  water  and sanitation) Proportion of bilateral official development assistance  of OECD/DAC donors that is untied ODA received in landlocked developing countries as a  proportion of their gross national incomes ODA  received  in  small  island  developing  States  as  a  proportion of their gross national incomes  28 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 8: Develop a global partnership for development  (cont.) Target  8.C:  Address  the  special  needs  of  Market access landlocked  developing  countries  and  small  Proportion  of  total  developed  country  imports  (by  island  developing  States  (through  the  value  and  excluding  arms)  from  developing  countries  and least developed countries, admitted free of duty Programme  of  Action  for  the  Sustainable  Development  of  Small  Island  Developing  Average  tariffs  imposed  by  developed  countries  on  States  and  the  outcome  of  the  twenty­second  agricultural  products  and  textiles  and  clothing  from  developing countries special session of the General Assembly) Agricultural support estimate for OECD countries as a  percentage of their gross domestic product Target  8.D:  Deal  comprehensively  with  the  Proportion  of  ODA  provided  to  help  build  trade  debt problems of developing countries through  capacity )  national and international measures in order to  Debt sustainability make debt sustainable in the long term 10 Total  number  of  countries  that  have  reached  their  HIPC  decision  points  and  number  that  have  reached  their HIPC completion points (cumulative) 11 Debt  relief  committed  under  HIPC  and  MDRI  Initiatives 12 Debt service as a percentage of exports of goods and  services 29 The Millennium Development Goals (cont.) Goals and Targets (from the Millennium Declaration) Indicators for monitoring progress Goal 8: Develop a global partnership for development  (cont.) Target  8.E:  In  cooperation  with  13 Proportion  of  population  with  access  to  affordable  pharmaceutical companies, provide access  essential drugs on a sustainable basis to  affordable  essential  drugs  in  developing  countries Target  8.F:  In  cooperation  with  the  private  14 Telephone lines per 100 population  sector,  make  available  the  benefits  of  new  15 Cellular subscribers per 100 population technologies,  especially  information  and  communications 16 Internet users per 100 population 30 PROGRESS ACHIEVED ― HALVING EXTREME POVERTY REMAINS (ED) WITHIN REACH LARGELY DUE TO EXTRAORDINARY SUCCESS IN MOST OF ASIA BUT SOME IN SOUTH ASIA AND SUBSAHARIAN AFRICA REMAINS OFF TARGETS ― GLOBAL ECONOMIC CRISIS COULD ENDANGER GAINS 31 PROGRESS ACHIEVED (CONT.) ― OTHER SOCIAL GOALS – SOME PROMISE  PRIMARY SCHOOL ENROLMENT  90% REACHED IN EIGTH OUT OF TEN REGION  GENDER PARITY 95% IN SCHOOL IN SIX OF TEN REGIONS  DEATH FROM MEASLES CUT ONE THIRD 2000-2006  VACCINATION RATE 80% FOR CHILDREN IN DEVELOPING WORLD  1.5 BILLION PEOPLE GAINED ACCESS TO CLEAN DRINKING WATER  ACCESS TO MEDICINES SPREADING  THANKS TO DEBT WRITE OFFS AND REDUCED DEBT SERVICE, SOCIAL SERVICES SPENDING UP 32 CONTINUING CHALLENGES ― SOCIAL GOALS REMAIN IN JEOPARDY ― MATERNAL MORTALITY STILL WAY HIGH (1/2 MILLION MOTHERS DIE EVERY YEAR AT CHILD BIRTH) ― ONE QUARTER OF CHILDREN IN DEVELOPING COUNTRIES UNDERNOURISHED ― HALF DEVELOPING WORLD POPULATION STILL LACK IMPROVED SANITATION ― OVER ONE THIRD LIVE IN URBAN SLUMS AND ON AND ON 33 BREAKING NEWS! ― DUE TO ECONOMIC CRISIS, “DEVELOPMENT EMERGENCY” DECLARED WHICH WILL PUT MDGs OUT OF REACH FOR MANY COUNTRIES ― WHILE EMERGING ECONOMIES WILL GROW AT 1.5 PERCENT IN 2009, ANOTHER 55-90 MILLION WILL SLIP BACK INTO POVERTY ― PER CAPITA INCOME WILL FALL IN SOME 50 POOR COUNTRIES, MOST OF THEM IN AFRICA ― DISPARITIES WILL INCREASE AND VULNERABLE POPULATIONS WILL BE MOST AT RISK 34 OF INTEREST HERE: ― ACCESS TO ESSENTIAL MEDICINES IMPROVED FOR HIV/AIDS, MALARIA & TB; NOT FOR OTHER CHRONIC DISEASES ― ACCESS TO NEW TECHNOLOGIES  TO INCREASE THE POTENTIAL OF TECHNOLOGY TO CONTRIBUTE TO DEVELOPMENT, WE NEED GREATER DIFFUSION OF APPRIATE NEW TECHNOLOGIES, INCLUDING ICT, AGRICULTURE, AND TO ADDRESS CLIMATE CHANGE 35 WHAT OF THE FUTURE? ― DEVELOPMENT LANDSCAPE COULD BE VERY DIFFERENT       MORE COMPLEX CLIMATE CHANGE ISSUES OTHER CHRONIC DISEASE (CANCER, CARDIAC) ODA REDEFINED NEW DONORS, NEW ACTORS, NEW FORMS OF COOPERATION LARGE UNFINISHED AGENDA ― FOR NEXT GENERATION OF MDGs (MDGs+), TECHNOLOGY COULD BE KEY ― ― NEW TARGETS, NEW INDICATORS COULD THIS AGENCY PLAY AN IMPORTANT ROLE? IF SO, WHAT ISSUES? 36 ISSUES FOR DISCUSSION ― GIVEN ITS UNIQUE MANDATE, IS AN MDG FRAMEWORK APPROPRIATE? NOW, AT THE NEXT STAGE? ― HOW TO ADDRESS BROADER DEVELOPMENT AGENDA   ― EFFECTIVE PARTNERSHIPS (WITHIN UN, EXTERNALLY) RESOURCE LIMITATIONS? HOW TO EXPAND   ― ACCESS TO BROADER NATIONAL COUNTERPARTS PROGRAMME APPROACH DIFFUSION OF TECHNOLOGIES ARE NUCLEAR TECHNOLOGIES FOR DEVELOLPMENT A GLOBAL PUBLIC GOOD? 37 ... indicators of economic development We will have to define some better indicator for each basic need Important Needs Basically, the more important needs are concerned with the provision of foods, basic. .. 'Basic Needs' of life Therefore, the economists use the criterion of basic needs to measure economic development According to this approach if people are in a position to avail more amount of. .. following superiority over GNP approach: 12 (i) The basic needs approach is better than income approach because most of basic needs are concerned with the supply of social services on the part of government