Jonathan Rigg, For The Straits Times

When growth outpaces development

A Thai villager told researchers working on the Where The Rain Falls study: "In the past, our life was hard but we lived in peace. Today we live comfortably but we suffer." The households in this study were struggling with growing environmental stres
A Thai villager told researchers working on the Where The Rain Falls study: "In the past, our life was hard but we lived in peace. Today we live comfortably but we suffer." The households in this study were struggling with growing environmental stresses, rising commodity prices, declining incomes from farming, and the unsettling effects of migration. Villagers felt that life had become increasingly uncertain.PHOTO: BLOOMBERG

South-east Asia is now, largely, a middle-income region. Only Cambodia and Myanmar remain in the World Bank's low-income country grouping, defined as those countries with per capita annual incomes of less than US$1,035 (S$1,306).

This sense that the region is rapidly outgrowing - or growing out of - its developing region status is seen in recent data from the Asian Development Bank (ADB).

On the basis of the ADB's new "extreme" line of US$1.51 per person per day, the number of extreme poor in South-east Asia is expected to shrink by four-fifths by 2025, to just 17 million, or 1.5 per cent of the region's population. If these projections are realised, poverty - at least of the extreme form as defined by the ADB - will be close to being eradicated in a decade's time.

Do figures and trajectories like these mean that South-east Asian countries can be happy with the texture of development and direction of change in the region?

There is an alternative development story to recount, one where we see an explanatory gap opening up between economic growth and social well-being.

This reflects a wider trend.

Globally, while gross domestic product growth and progress tracked each other quite closely for much of the 1960s and 1970s, since 1978, welfare measured using the Genuine Progress Indicator (GPI) has flat-lined even while income per capita has continued to grow.

GPI is an attempt to grapple with the thorny issue of developing a multi-faceted measure of progress and human well-being - charting "genuine" rather than just material progress. It is a version of a sustainable economic welfare index introduced in 1989, and has been used in Finland and Canada to track progress.

The reason for this widening gap between the achievement of growth and the achievement of development is a two-pronged development "trap" into which it is all too easy for governments, policymakers and observers to fall.

In essence, economic growth and rising incomes are treated as development ends when they are the means to achieve development, while other components of development - such as education or environmental regulation - are regarded either as means or as barriers to development, when they should also be viewed as ends.

To be sure, it's important to continue to assess countries' development success on the basis of their income levels, economic growth rates and levels of income poverty. Income, after all, is often used as a proxy for development because the two seem to correlate quite closely.

The countries of South-east Asia, generally speaking, have put in place market-oriented policies to generate growth with the understanding that such growth is the best means to deliver development. This was not caprice. Until quite recently, growth did deliver development.

This happy marriage, however, has broken down. As a villager in Don Moon in the northern Thai province of Lamphun told researchers working on the Where The Rain Falls study by Care International and United Nations University: "In the past, our life was hard but we lived in peace. Today, we live comfortably but we suffer."

How can we make sense of this paradoxical statement? The households in this study were struggling with growing environmental stresses, rising commodity prices, declining incomes from farming and the unsettling effects of migration. Villagers felt that life had become increasingly uncertain.

Policies that generate economic growth shape the texture of that growth and its developmental outcomes, seen in microcosm in Don Moon.

The Indian state of Kerala famously shows a longer life expectancy, better health profile, greater gender equality and higher educational achievement than many other richer Indian states. Cuba has also long been lauded as a country displaying a human development profile far better than its income would suggest. Closer to home, Vietnam's per capita income is about half the level of Indonesia's and yet it has a lower poverty rate and a longer life expectancy.

These differences are not statistical and historical accidents. They have not just "happened". They are associated with policy decisions that have been made over many years.

We also need to be careful about what we read into the raw data of growth. Take inequality. South-east Asia has a growing problem of inequality, widely viewed to be one of the key challenges facing the region. But there are three complicating factors that make such data, in themselves, potentially problematic.

First, inequality is measured in terms of income differentials, but such differentials may not be the most important measure of inequality. Access to health and education, for example, may be more important than income in measuring development and therefore, in tracking inequality.

Second, many of the lowest-paid are not included in the income data in the first place. The hundreds of thousands of Myanmar migrants working in the low-wage factories along the Thai-Myanmar border, for instance are statistically invisible in national surveys and yet micro-level studies show that they are paid far less than Thailand's mandatory minimum wage. A study by the MAP Foundation in 2012 found that Myanmar factory workers without documentation in Mae Sot were being paid less than half of the minimum wage, under $5 a day. And third, we should be most concerned with what the anthropologist James Ferguson calls "asocial inequality".

This is inequality which highlights a social divide between rich and poor. Inequality among a population who still share a covenant - a sense of belonging to a common society - is different from inequality where no such covenant is present or is substantially frayed.

Millions of upland minorities dispossessed of their land, rural people displaced by dam construction and mine development, factory workers living increasingly precarious lives, as well as migrant labourers - these groups constitute an expanding population lying at the margins of the morally-binding social economy.

Policymakers and political leaders in the region need to re-imagine what development is, how it might best be measured and tracked, and what policies will support development as well as generate growth.

stopinion@sph.com.sg

The writer is a professor at the National University of Singapore's geography department.

S.E.A. View is a weekly column on South-east Asian affairs.

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