External Affairs

South Asia Is Losing the War Against Inequality

According to an index developed by Oxfam and Development Finance International, six South Asian countries rank in the bottom 20 in terms of addressing inequalities.

A homeless girl asks for alms outside a coffee shop in Mumbai, India, June 24, 2016. Credit: Reuters/Danish Siddiqui/Files

A homeless girl asks for money outside a coffee shop in Mumbai, India, June 24, 2016. Credit: Reuters/Danish Siddiqui/Files

Is South Asia fast emerging as the area with the most inequalities in the world? It’s possible this has already happened, judging from the ranking of South Asian countries in the Commitment to Reduce Inequality index (CRI index).

The CRI index has been prepared by Development Finance International and Oxfam to obtain a measure on how various countries are faring in terms of their policies targeting inequalities, including social spending, taxation and labour rights. A total of 152 countries have been ranked on the basis of their CRI. Unfortunately, most South Asian countries appear somewhere near the bottom of this ranking, as is evident from the table given below.

Country  Rank
Nepal 81
Maldives 91
India 132
Sri Lanka 138
Pakistan 139
Bangladesh 141
Bhutan 143
Afghanistan 146

Six out of the eight South Asia countries are in the bottom 20 of these 152 countries in terms of the CRI index. This is extremely unfortunate, especially as nearly one out of every five people in the world live in South Asia and the struggle against poverty is very acute in this region. As pointed out in this report and emphasised earlier in several other studies, the reduction of inequalities is a must for reducing poverty and achieving sustainable development goals.

India is listed in this report as a country which has performed very badly in terms of reducing inequality. Their is potential for big gains if inequality is reduced in India, the report says. Calculations made by Oxfam reveal that if India were to reduce inequalities by just one-third, more than 170 million people would no longer be poor.

Pointing out the weaknesses of India’s development efforts at the policy and implementation levels, the CRI report says that government spending on health, education and social protection is woefully low. About the tax structure in India, this report says that it looks reasonably progressive on paper, but in practice much of the progressive tax is not collected. In the context of labour, the report notes much of the labour is in agriculture and the informal sector, and here labour organisation is low.

In terms of all three of the factors taken while calculating the CRI index, India scores poorly and hence gets the low rank of 132 among 152 countries. All the other countries in the South Asian region, except Nepal and Maldives, fare even worse. Nepal is the only country in the region which has able to get a reasonably good rank in this index.

The CRI index has been endorsed by several highly respected academics. Among them is Jayati Ghosh, professor of economics at Jawaharlal Nehru University, who has been quoted in the report as saying that the CRI index provides an important wake-up call to governments about what can be done in terms of taxation, spending and labour policies.

While no one will deny that these factors are important in the context of reducing inequalities, questions can be raised about confining analysis to only three factors. What about land reform policy, which can be very important in all countries where agriculture is a major source of livelihood? The CRI index can be made a more comprehensive measure by adding more policy issues to it.

Nevertheless, despite some possible limitations, such efforts to draw attention to inequalities as a major source of poverty and distress are welcome. As an overview of the emerging situation relating to inequalities and as a warning against the perpetuation or accentuation of inequalities, such an index can play an important role. In the context of climate change and related challenges, the case for greater equality has become much stronger as protective policies for vulnerable people are now needed on a much higher scale than before.

Perhaps nowhere is this challenge as acute and faced by as many people as in South Asia. Unfortunately, as the CRI report reveals, the importance of this issue is still not adequately recognised by the region’s governments and policy makers. This is very unfortunate, and remedial steps are urgently needed.

Bharat Dogra is a freelance journalist who has been involved with several social movements and initiatives.