In the near future, inclusivity seems to be the only option left for Assam, to reach its development goals.
If one has to jot down the basic features of the Assam Economy, one must include low per-capita income, low output yielding primary occupational patterns, high levels of unemployment as well as underemployment, heavy population pressure, unequal distribution of resources and income, low standard of living and most importantly, poor quality of human capital.
We have some of the most precious resources in the state, only to be historically and systematically extracted ever since the colonial era, currently legitimized by the government, under a distorted notion of national development. The Education Ministry released the latest edition of the Performance Grading Index in June this year, putting Assam at the 31st rank with 738 points.
According to the 2011 census of India, Assam has an overall literacy rate of 73.19%, including males 78.81% and females 67.27%. The literacy rate is comparatively lower than the overall national average of 74.04%. Also, Assam stands at second position with the highest share of male staff with 81% and 19% of females.
The agenda for growth as propagated by the ruling elites are conditioned on the prospects of improved productivity. However productivity alone cannot be the determinant for economic development. The idea of development has been flawed in many ways, as it has, over the years, been narrowly defined under the ambit of output based indices such as higher GDP growth.
It is known that higher GDP does not translate to better development. In fact, data from the last 20 years clearly shows how the rapid increase has only had a negative impact on achieving economic equality. Numerous studies show how disadvantaged groups benefit the least from free market economics, as against prevalent notions on the same.
Wealth based economic growth also seems to have a negative impact on gender equality. As Esther Duflo suggests in the Journal of Economic Literature 2012, 50(4), 1051–1079, “Economic development, however, is not enough to bring about complete equality between men and women. Policy action is still necessary to achieve equality between genders. Such policy action would be unambiguously justified if empowerment of women also stimulates further development, starting a virtuous cycle”.
We know that economic growth is inherently exclusionary because it gets primarily driven by trickle down measures. Further coupled with government meddling, this results in crony capitalism. Every recession in the world till date has been a product of hastily planned economic growth, be it the oil boom of the 20th century or the housing market crisis of 2008.
In recent times, the reduction of government intervention in the economic system has further exacerbated a dangerous road ahead, a path that would feature further ghettoisation of marginalized communities and minorities, since wealth would increasingly get concentrated in the hands of a few ruling elites. The already growing economic inequality in the state stands testimony to this impending disaster.
To better understand our economy, one has to acknowledge how society and economy are interlinked, that is the concept of embeddedness. For instance, reducing women to mere objects for marriage discards their personal freedom to work independently in a formal setup. Or making healthcare, education and employment structurally inaccessible to a community increases crimes against women and perpetuates radical thought.
When lack of access becomes systemic, marginalized communities get ostracized from being a part of the mainstream knowledge-oriented economy, creating a parallel economy within that community that thrives on crimes in the black market. The lack of capital, be it social, economic or cultural, generates criminal tendencies.
While talking about how drug abuse is increasing in Assam, It is equally important to first understand the cause effect relationship. The reason we don’t talk about it, is because we hate listening to bitter truths about our vertically stratified society, masquerading under religious norms and dogmas. Morally preaching what is right and wrong help us create bubbles that ignore and delegitimize concepts such as social stratification and caste hierarchies.
The bitter truths often include lack of economic incentives for our youth, the lack of jobs, education, better healthcare among others. In a study conducted in the United States, between 1990 and 2010, it was found that alcoholism, smoking, and drug abuse are far more prevalent among the unemployed, thereby establishing a direct correlation between drug abuse and unemployment. This creates a vicious cycle that cripples families and societies into never-ending poverty.
In their Nobel Prize winning book, “Poor Economics”, Abhijit Banerjee and Esther Duflo put forward a new set of ideas to evaluate and solve the complicated choices that the poor make. It is a strive to better understand how the poor behave in certain situations, and more importantly, a test to see what choices would make them come out of such vicious poverty traps.
It is an experiment, one of the most expensive forms of empirical studies, famously called Randomised Controlled Trials (RCTs). The results and the arguments provided in the book could very well be considered as a bible for poverty alleviation policies.
They write that “the ladders to get out of the poverty trap exist but are not always in the right place, and people do not seem to know how to step onto them or even want to do so”. The state has the tools as well the resources to mend policy in a way that can reduce the mismatch. Here we look at two key areas where proper policy can make a change: education and health.
Yes, prevention is better than cure but it must not just be an adage based on moralities. It really must be a policy mantra for setting up a sound healthcare system as well. Average households spend much larger amounts on health issues than their per capita income, which could easily be prevented if precautionary preventive measures are taken in the first place.
Some of the most fatal diseases in the region include diarrhea, malaria, dengue, among others. Diarrhea can be eradicated with chlorine content in water. Malaria could simply be prevented through mosquito nets. The poor are inclined to pay more for the cure than for preventive measures.
If the most advanced countries in the world like that of the US, which has one of the most tech savvy, highly advanced healthcare systems, has people running around organizing anti-vaccination movements or by propagating other conservative ideas about healthcare, then imagine the difficulties that the poor might have in believing scientific evidences regarding health, given their poor access to information.
Think about the current scientific temperament in the country where a self proclaimed baba can be a billionaire yoga instructor just by demonising modern medicine. Basic health education should start with schooling.
Most of the primary health education is imparted through high school biology. Now imagine this. I passed out from an English medium private school supposed to be one of the best in the district, and we were told to skip the chapter on sexual reproduction simply because it might be embarrassing in front of 40 odd students.
While we go on preaching minorities to reduce their birth rates, we often miss these historical mistakes that we commit as a thriving upper middle class society. Contraceptives and sex education is still a taboo while our patriarchal teachings never stop.
Before preaching, it is important we learn. A megalomaniac culture that subordinates women and perpetuates casteism doesn’t deserve a moral high ground to preach rationality to minorities. The current situation erupts in a clear division, rather polarization of the population.
While repeatedly pinning the problem of population growth, increased crimes against women, and drug abuse onto a ghettoized community, the real policy actions that should be taken into consideration are, as usual, neglected.
Beliefs and material incentives often form a dichotomy. This is important considering the fact that the poor have strong belief systems that arise out of caste conditions. For example, new born babies till they are 2 years of age, are often told to stay indoors and to not come in contact with evil eyes of strangers, which often becomes a big barrier on the path of full immunization.
Indians have many other societal pressures, mostly from social institutions that compel them to spend more on ritualistic practices than on basic necessities like food and health. In RCTs conducted with the Seva Mandir by Abhijit and Esther, it was found that the poor, when incentivised with rations such as Dal, voluntarily show up with their babies for immunization. The poverty among the poor has a direct relationship in regards to their positions in the caste hierarchy.
For instance, poor people in developing countries often tend to spend more on social customs and rituals, weddings, dowries as a means to keep their social positions intact (Abhijeet And Esther Duflo 2019).
Free market gives cheaper consumer goods like single stick cigarettes, candies, toys etc. which become a way for the poor to grab on to pleasure at the cost of more basic things like food and preventive healthcare, which remains expensive. Today, the free market has turned unemployed youth into PUBG addicts while the state mechanism itself has failed to incentivise the youth to get employed.
On the issue of decontaminating water, we know how chlorine is a game-changer. Michael Kremer, Professor in Economics And Public Policy at the University of Chicago, devised a strategy to chlorinate water, by setting up a chlorine dispenser called “one turn“ near a village well .
Every time a villager comes to draw water, the dispenser provides the adequate amount of chlorine on one turn of a knob. This probably becomes one of the cheapest ways to prevent diarrhea which happens to be one of the most fatal conditions for children in third world countries such as ours. We are surrounded by invisible nudges, which often are directed to make our lives better.
The same way, nudges become the easiest tools through which policy action can be implemented in poor regions for the purpose of better public health delivery. The poor evidently are more concerned about their status quo rather than the idea of investing in the future, simply because they need to survive through the present in order to think about the future.
They would rather fill their stomachs in the present than to worry about a disease that they might contract in the future. Rather than letting the poor work on the current problem, or the near future problem, it becomes imperative for them to invest in the far future.
Preventive care needs to be pushed in policy action, be it by providing chlorine dispensers, incentivising parents for getting their children inoculated, compulsory immunization drives in schools, compulsory sex education in middle school, providing nutrient packets, de-worming medicines in schools, providing free contraceptives among young adult women, etc. as these nudges can become the foundation of a good public health policy.
Studies have also shown evidence about how social and economic returns increase manifold from better nutrition programs during childhood and pregnancy. Empirical studies were conducted by WISE (Work and Iron Status Evaluation) in rural Indonesia, in which randomly chosen men and women were given iron supplements, along with a comparison group who were given a placebo.
The results clearly showed that people who received real iron supplements could work harder and had way better yields in terms of income. 24% of men and 56% of women in India are anemic, primarily caused due to iron deficiency. Dr. David Barker’s Barker Hypothesis showed that the conditions of the baby in the utero had a long term effect on the overall physical growth of the child.
Hence, the nutrition levels of the pregnant lady also indirectly plays an important role in the overall development of the baby. Empirical studies also show that on average, adults with better nourishment during their childhood, are both taller and smarter.
These instances give us enough reasons to work on better nourishment programs in schools, where students could be aided with multi nutrient packets, and could be mandatorily asked to get vaccinated. When the Emergency happened, Sanjay Gandhi’s use of coercive sterilization methods had already caused a trauma in people’s minds. There are many instances where people in slums and villages often refuse pulse polio drops because they believe it is a way to secretly sterilize people.
There is a serious mismatch in demand and supply. Better incentives in health have a direct relation in increasing school enrollment rates, and in decreasing dropout and absence rates. Most of these indices show a grotesque picture in Assam.
In education, simply investing in better infrastructure as well as teachers will not solve the problem, if the schooling conditions and its quality is not improved for the students. A better demand for education has to be created. The demand for education would require the creation of a scientific temperament.
It would also require the government to experiment with new nudges such as economic incentives for poor families, in order to discourage their children from dropping out of school. However, the status quo seems far more grotesque, where science and reason somehow find itself in the backseats as electioneering has perpetuated a whole new phenomena of polarized fundamentalist perspectives.
In terms of gross enrollment ratio, we are doing fairly well. However, the problem is primarily with higher dropout ratios as well as lower high school and college enrollment ratios.
A key study was made by Robert Jensen of Chicago University in 2002, when he teamed with BPO centres outsourcing call center jobs in india. They tried recruiting women workers from places where discrimination against women were extremely high and recruiters couldn’t possibly get there.
Randomised Controlled Trials (RCTs) were conducted here. It was seen that in these places, there was a 5% increase in the number of girls between 5 to 11 years of age who would get enrolled in schools. It was well established that better economic outcomes drive parents to get their girl child educated. They saw the economic value of education and were hence happy to invest in it.
In Latin America and now in most of the developing states around the world, conditional cash transfers (CCTs) have become a new venture to incentivise school enrollment. Households started receiving cash benefits if their children attend classes regularly. Such trials have not only successfully increased primary enrollment rates but also increased secondary enrollment.
More than conditional transfers, simple cash benefits, or increase in income for households resulted in much better enrollment rate with much lesser school dropout rates. This meant that parents, once a little better off, were much more inspired to invest in their children’s schooling, and were starting to make rational decisions about having fewer children so that per-capita expenditure on each child decreased over time.
Simply put, implementing strict birth control measures including two child policies would be redundant if it isn’t complemented by better income for the poor, coupled with better incentives for them to get educated.
Without intervention into the supply side and the demand side specifically would mean letting the future of our children, whose backgrounds are way stratified given their parents’ position in the social and economic scales, would be engulfed by the supposedly free and invisible hand of the free market.
Another isolated result was that in the survey in Malawi, it was found that the girls who did not drop out of school due to the conditional cash transfer offer, were also much less likely to get pregnant than their peers.
The studies mentioned here are simply the tip of the iceberg that “Poor Economics” unravels. Having said that, consider the myriad set of policy based nudges we could introduce in a diverse state such as ours. Our state’s economy thrives on unequal opportunities and avenues of growth.
Countries where initial inequality is higher, show a slower decline in poverty (Ravallion 2009). This, if coupled with urbanization, simply exacerbates the problem. Fiscal and monetary policies cannot be confined as mere methods of inflation and interest rate adjustments. It needs to play a crucial role as the facilitators for achieving full employment and in aiding incentives to the marginalized.
Growth in Assam needs to have a higher elasticity of poverty reduction. Increase in profits through investments needs to equally be supplemented by increase in wages of workers and employees. Increase in growth in traditional terms, that is through GDP growth, results in a shift of workers from primary agricultural sectors to secondary and tertiary sectors.
Inadvertently, the parity between the ones who are left out in the primary sector and the ones who have moved up increases. Development is incomplete without betting on equity, and hence, poverty alleviation becomes a central theme in this regard. While the nation currently ranks 131st with an HDI value of 0.645, our government continues to thump its chest with synthesized notions of growth.
The idea of aiding the poor through the free market is flawed and doesn’t work in a structurally layered society like Assam. The first and the foremost plan should be policy. Populist movements do not arise out of nowhere.
It erupts only when the state fails structurally in its duties to provide employment, healthcare, education among other basic necessities. Without a state sponsored push, recovery becomes impossible. Science and reason cannot be nullified when the greater cause of development and change is at stake. The future belongs to rationality, not religion.