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Q. Poverty is an issue that has long dogged developing countries. What is the ideal way of dealing with this menace in the scenario of inevitable resource constraints?

A. Poverty is a very difficult problem that has existed for a very long time. The ideal way is to deal with it is from various, interconnected angles. First, it is important to understand and address government policies to the extent that they create an environment in which poverty is recognized and prioritized for financing.

At another level, you cannot do much about poverty unless you interact with the poor to understand their situation. More than anything else, the poor need welfare. However, they do have assets and skills, and opportunities, which may be limited. One must work with such individuals and communities to enhance the use of their assets and facilitate better access to social, human, physical, natural, and economic capital such that they can cope with situation hitherto above them.

Start by reaching out to the people; assess their livelihood opportunities and find ways to facilitate those; understand how this impacts middle-level institutions; and estimate the level to which national policies and expenditure support them, particularly in developing human and social capital and access to credit.

Q. Do you feel any model should be adopted by developing countries for eradicating poverty?

A. It is for every country to sort out its problems in the way best suited to its needs. There is a real opportunity for countries that are trying to exchange views about what works and what does not. In India, the analysis of livelihoods has worked very well. Combined with the watershed approach, this has been very powerful in rural areas. The problems of urban areas are completely different so we all have to develop relevant models and approaches.

Q. Mr P Chidambaram, India’s former Finance Minister remarked at the Delhi Sustainable Development Summit 2001 organized by TERI that human development is a prerequisite to sustainable development. Your views?

A. I would agree. I am amazed how well development happens once human and social capital is in place. If you go to India’s rural areas, particularly Gujarat and Rajasthan, you will be astonished at how these communities merge courage with a bit of money and organizational skills. Then their appetite for developing human capital increases. For instance, in a village I once visited, a child of 14 years kept records of the village. The pride that the villagers had for him was tremendous.

Q. In your opinion, what are the primary issues that the developing world must address to attain better development indicators?

A. We need better indicators because some of what we do have are not very realistic. Take the example of cash—the dollar-a-day measure does not inform you the nature of poverty; it masks the reality and the opportunity. Food security is another facet that is difficult to measure. One could measure levels of nutrition but not for different seasons!

The trend may be in favour of measuring facts and figures but often the aggregation of those can be erroneous. I am much more convinced of the authenticity of participatory assessments. People concerned can often provide a clearer indication of inherent shortcomings. They can reveal some very unique features of poverty. Ideally, what is needed is an amalgamation of both approaches.

Q. As an indication of natural resource degradation and its evaluation, do you feel that an effective evaluation system should be put in place?

A. Much debate exists in the realm of natural accounting, especially about the extent to which economic growth is offset by the degradation of the asset. We must be very careful in this aspect.

One should accept sustainable development as a balance between human, social, financial, physical, and natural capital. In order to build the first four types in countries very rich in the fifth, there has to be some trade-in with the natural capital base. Likewise, we must understand the difference between environmental change and environmental degradation. To many, they are the same! Consider a forest asset. The question is whether the forest on its own can meet the full range of economic services that people desire of it as a source of livelihood.

I think natural accounting is a valuable tool but when you aggregate it out, you get monstrous figures. In many areas, land degradation is a serious problem. Sometimes, the correction of such degradation appears as a plus, thereby creating a rather strange problem in natural accounting. The bad things appear to account for good because they seem to enhance economic activity!

Still, I think that natural accounting is a valuable concept and can be as informative as you would like it to be.

Q. What stance should countries like India adopt so that benefits of liberalization reach out to the poorest of the poor?

A. India is vast, possesses an enormous, talented human capital, and now has the opportunity. Liberalization and globalization have brought enormous benefits to the information technology industry in cities like Bangalore and Hyderabad, putting India on the global stage. When people ask where the intellectual heartland of the world is, the answer is India. Yet as a primary producer in terms of chillies, spices, even cereals, things are depressed.

For the very poor, the only asset is land. The immediate question is how they get up the first rung of the ladder. On the other hand, the garment industry has very cheap commodities coming in on demand. We cannot have such unfettered liberalization; rules must be in place. Certain amount of protection is needed for developing poor people. Liberalization is important and will happen but one must recognize it as an act of sovereign countries to protect poor people.

Q. What improvements would you suggest for the Delhi Sustainable Development Summit to achieve its objectives?

A. India has a very important role to play in global sustainable development, as it is a large and internationally respected country. The fact that TERI, in India, has created this forum gives an important signal to all concerned that they are serious about poverty. Also the fact that TERI has attracted very high-level speakers from extremely important organizations around the world says a lot about its influence.

The deliberations have been terrific but it is important to decide the extent to which working groups should be formed to discuss issues further. The DSDS has been very valuable in making people come together and share experiences. It is a great way to network and a great beginning to a serious endeavour.

Interview series