Economic Development - an Imperative for Peace in Manipur (Dec 16)
By Dr. E Bijoy Kumar Singh

The process of economic development can be seen as a process of expanding the capabilities of people. In the words of Nobel laureate Prof. AK Sen "... the process of economic development has to be concerned with what people can or cannot do e.g. whether they can live long, escape avoidable morbidity, be well nourished, be able to read and write and communicate, take part in literary and scientific pursuits and so forth. It has to do in Marx's words, with replacing the domination of circumstances and chance over individuals by the domination of individuals over chance and circumstances."

Development is both a physical reality and a state of mind in which society has, through some combination of social, economic and institutional process, secured the means for obtaining a better life. The specific components of such a better life may vary over time and space. Today development is still a pressing problem with 1/5 of the world's population living on a standard of living that the U.S. and Europe attained two centuries ago. It is also an urgent priority both for poor and rich countries. The poor countries find it difficult to contain the surge of expectations of the people who can see for themselves the difference in their standard of living. 
The rich countries need markets for their ever-expanding industries. Both these challenges can be met by a developing world. Economic development has at least three objectives:
i) To increase the availability and widen the distribution of basic life sustaining goods such as food, shelter, health and protection of all members of society.
ii) To raise levels of living including, in addition to higher incomes, the provision of more jobs, better education and more attention to cultural and humanistic values. These all serve not only to enhance material well being but also to generate greater individual and national self esteem.
iii) To expand the range of economic and social choice to individuals and nations by freeing them from servitude and dependence not only in relation to other people and nation-states but also to the forces of ignorance and human misery.

Three broad facts of experience have emerged from the recent lessons of development. Firstly, Peace is a pre requisite to successful development. Secondly, poor domestic policies more than an unfavorable environment is usually to blame for development failure. Thirdly, the proper blend of state and markets in the economy is a decisive factor. Globalization and liberalization have added another distinctive dimension to the process of development.

People all over the world have become more intensively linked due to shrinking space, shrinking time and disappearing borders. Globalization is no longer an option and it integrates the economy, culture, technology and governance.. Global markets, global technology, global ideas and global solidarity can be robust foundations for launching an effective and sustained assault on poverty in the 21st century.

Peace may be interpreted in various ways and not every interpretation may be relevant for development. Peace of the forest may have little to show in terms of development due to the preponderance of the natural state. In my opinion, the type of peace, which is imperative for economic development, is associated with an environment where every factor of production contributes optimally to a process of sustainable changes. No factor of production should be used to the extent where the very process of production is endangered rendering the process of change unsustainable. It is generally said that development should be based on optimum utilization of resources, particularly the local resources including human resources. If unemployment and underemployment are minimized and workers are paid adequate compensations for their labor, it helps in neutralizing a major source of social unrest. 

However the technology available and the pattern of demand may not be compatible with the objective of optimum utilization of local resource endowments. The persistent underutilization of resources, particularly human resources manifested in terms of army of jobless, educated youth can put unimaginable strain on the social fabric. Owners of resources lying unutilized suffer equally. When someone suffers, that suffering is transmitted in all directions in the form of social unrest. Social unrest is manifested in the general inability to perform at the level one is capable of.

This is a symptom of lack of peace and hardship in terms of future prosperity and well-being. The future may not necessarily belong to us. What is important is the belief that it will benefit someone we can identify with. If it is so, no sacrifice has any meaning or any cost justified. Such a situation arises when there is lack of peace, which is best, represented by pervasive uncertainty. The behavior of economic agents under certainty are not the same as that under the uncertainty. Instead of real returns, expected returns occupy center stage. The formation of expectation is also a complex process. Asymmetric access to information modifies such formation quite unpredictably. 

Needless to say, expectations based on adequate, timely and relevant information will be closer to the unknown reality than expectations based on anything else. Given the iniquitous distribution of wealth, a glaring characteristic of modern economic growth, inefficient expectation is the rule. Such inefficiency clouds the vision, affecting adversely the process of development. In concrete terms, no one would like to commit oneself to an investment, which is erroneously expected to yield exceedingly low returns. In reality had the expectation been near correct, the yield would have been much higher. An investment with high-expected rate of return may also collapse due to social unrest and uncertainty, which essentially are manifestation of lack of peace. In other words when there is uncertainly due to lack of peace, expectations become highly inefficient and this inefficiency has a telling effect on the dynamics of development.

Coming to Manipur, the state could have done better in a more peaceful environment. Ever since our merger into the Indian Union, there has been no decade free from cyclic outburst of unrest. No doubt, such unrest is capable of awakening the people to our weaknesses. It can also weaken us in many ways. Decades of experience have taught us to distinguish 'right conduct' from 'wrong conduct'. Such conduct may contradict the very essence of development - the expansion of the capabilities of people. Even the state of our education, a decrepit system immune to any policy intervention, may have a lot to do with the attitude of compromise. This attitude is a by-product of lack of peace in the following way. Inefficient expectation places more premium on the present and the optimization exercises become geared to the present at the cost of future. When our calculations have no future, there is no development.

One can discuss this with reference to the human development index, which measures since 1990 the average achievements in basic human development in one simple composite index. It reflects longevity, knowledge and decent standard of living. These are measured by life expectancy at birth, adult literacy rate, combined enrolment ration and adjusted per capita income. All these are positively associated with peace. When there is lack of peace, all components are adversely affected. When there is unrest, people due young, education at the levels become non-functional and the axis of the economy is followed by falling per capita income. These will manifest as exceedingly low human development index. Today Manipur suffers from fundamental backwardness.

The emerging pattern of growth is not capable of using optimally locally available natural resources and human resources. This failure is reflected in the growing compartmentalization of the society with every group trying to acquire as much as possible the meager developmental cake. Now the process has started threatening the integrity of the state. Though the people have risen to the challenge, containing the threat in the civil society for the time being, it
keeps on trying to resurrect itself. Needless to say, its remedy lies in development and equitable sharing of the benefits among all groups in the society. 

What is the use of fighting over a fast disappearing cake? Peace guarantees a bigger cake and strengthens our steps towards an even bigger cake. The people can also enjoy the benefits of development. In this period of challenge, peace will turn out to be the greatest enabling factor of development. It need not be confined to a particular state. As the people and states of India are now more interlinked than over before for their development, and atmosphere of pervasive peace is necessary. It is necessary to enable the people direct their energies fully to the development process. It remains the best vantage point for having a positive view of the future.

(The writer is an associate professor in the department of economics, Manipur University)

(Courtesy: The Imphal Free Press)

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