Transcript Economic Exclusion and Poverty

Economic Exclusion and
Poverty Linkages –
Concept, Consequence and
Remedies in the Asian
Context
Sukhadeo Thorat
Professor, Jawaharlal Nehru University
and Chairman University Grant
Commission, India
Purpose

Discuss Concept of Economic Exclusion,

Its consequences on poverty and growth,

Policies - Insight from theories,

Economic Discrimination - Indian Context,

Situation of the Excluded Groups,

Policies against Economic Discrimination in the Asian
context .
Conceptualising Economic Exclusion

Economic exclusion is denial of equal
opportunity in markets and non-market
exchange to individuals due to their group
identity .
 Features –



a) Exclusion imbedded in social relations,
whose out come is exclusion,
b) Outcome is denial of access to sources of
income and education,
c) It operate through market and non market
transactions.
Conceptualising Economic Exclusion continued….

Consequences of economic exclusion thus
depends on functioning of economic institutions
and degree to which they are exclusionary in
outcome .

Market discrimination –denial of access to
market and or access with differential treatment,
in prices ( wage and input price )and term of
condition of exchange- both sale and purchase
Consequences-Growth and
Poverty

Economic growth, inequality/poverty and intergroup conflict.
• On Economic Growth: Market discrimination adversely
affect resource allocation,
• Less than optimal allocation of labour and investment
among firms. Imperfect market situation.

On Poverty: denial of access to market and or
differential treatment ,leads to unemployment,
low wage earning, higher price for inputs and
lower price for products bring low income.
Caste and Economic Discrimination:

In Caste based Economy, occupation (or property
rights), are fixed hereditary, and endogamous. (Akerlof,
Scoville, Lal and Ambedkar)

Entitlement of rights across caste is unequal and
hierarchal,

Some occupations are considered socially inferior with
low social status for those engaged in them,

Caste Economy is maintained through instrument of
social ostracism
Caste and Economic Exclusion

The caste system's fundamental characteristics
of fixed economic rights for each caste, with
restrictions for change implies "forced exclusion"
of one caste from the rights of other caste, or
from undertaking the occupations of other
castes.

Economic Exclusion in occupation and
employment, is therefore, internal to the system,
and a necessary outcome of its governing
principles.
Asian context

Studies indicate identification of groups.

Facing exclusion based on religion, ethnic and
social origin, colour, race in Asia-Specific.

Countries developed equal opportunity policies,
Known example include,

Malaysia, Japan, China, Pakistan, India, New
Zealand, Nepal, Srilanka, and others
Consequence on growth

On Economic Growth:

Fixed property rights means factor immobility,

Imperfect market situation, segregate market

Economic outcome less than optimum ,

Unemployment consequences,

Disincentive for efficiency.
Consequences on poverty

Unequal assignment of rights, economic and
education and denial, lead to lower access to
income earning assets, skill, education,
employment, wage earning,

All leads to lower income and high poverty,

Civil and political rights – lack of participation
and governance.
Consequences on Poverty: Indicators (19992000)
Poverty Rates (2004/05)
ST
SC
Others All
Percentage of Poor (Rural)
47.54
36.8
22.69
28.3
Percentage of Poor (Urban)
33.92
39.81 22.59
25.5
Consequences on Poverty (99/00) continued…..
Mal-Nutrition and Under Nutrition
Infant Mortality
Child Mortality
Percentage of Children with Anameia
Under weight Children
SC ST Non SC/ST All
83 84
62 NA
39 46
22 NA
78 79
72 NA
21 26
14 NA
Consequences on Poverty (99/00) continued…..
Asset, Employment, Wages
Access to Agricultural Land and Capital Assets
Percentage of Self-Employed Cultivators
Percentage of Wage Labour
Unemployment Rate (Current Daily Status)
Non-Agricultural Wages of Rural Poor (Rs)
Percentage of Non-Agriculture Workers (Job Diversification)
SC ST Non SC/ST All
16
61
5.5
61.06
27.07
48
48.6
3.0
54.38
15.8
41
25
3.4
64.9
32.2
NA
NA
NA
NA
NA
Consequences on Poverty (2001) continued…..
Literacy Rates
Non
SC/ST
ST
SC
All
Literacy Rate
(Rural)
51.16
45.02
62.55
58.74
Literacy Rate
(Urban)
68.12
69.09
81.8
79.92
Market Discrimination (Data: 2002, 550
villages & 11 states)
Forms of Market Discrimination
(a) Labour Market
Denied work as agricultural labour
No touching when paying wages
Paid lower wages for the same work
SC not employed in house construction
(b ) Input Market
Denied access to irrigation facilities
(c) Common Properties Resources
Denied access to grazing/fishing grounds
(d) Consumer Market – Sale & Purchase
Not allowed to sell milk to cooperatives
Prevented from selling in local markets
Not allowed to buy from milk cooperatives
Percentage of
Villages where
Form is Practiced
35.5
37.1
24.5
28.7
-158
-174
-119
-152
32.6
-152
20.9
-76
46.7
35.4
27.8
-162
-165
-100
Muslims: Well Being Indicators (NSS 61st round)
Indicator of Well Being (2004/05)
Poverty (%)
Literacy Rates (2001)
MPCE (Rs)
Muslims
Urban
41.37
22.52
Rural
29.22
28.16
Urban
70.00
85.00
Rural
53.00
77.00
All India
59.10
70.80
Urban
804
1485
Rural
553
823
Muslims
Work Population Ratio (Age group 15-64
years)
Mortality (IMR)
NonMuslims
Hindus Only
Urban
51.10
53.10
Rural
57.00
70.30
All India
54.90
65.80
Urban
40
53
Rural
68
83
All India
59
77
Government Policy

Strategy of Economic, Educational and Social
Empowerment: Compensatory measures:
• Income earning assets-land and capital,
• Redistribution of surplus land from land
ceiling and government land,
• Capital, skill for entrepreneur-for business
• Educational Development,
• Housing, Social amenities etc.
Equal Opportunity Policy -Reservation




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Fair share in Employment, education, housing,
In executive and governance-public spheres,
Civil spheres: Anti-Discrimination law,
Administrative set up -ministry,
Special institutions,
Special economic plan.
Agenda for Research and Policy

Exclusion in Asia takes multiple forms
 Social origin, ethnicity, religion, colour, race
 Need to study the forms and nature of EE,
 Study consequences on economic growth and poverty
 Study present equal opportunity policies and best
practices.
 Suggest policies for market discrimination and of equal
access to discriminated groups.