Paradox: Globalised rich and the rural poor
The Indian election results have repeated the lesson of the earlier Sri Lankan outcome. In fact more so as the economic growth in India was hailed as one of the best in the world, even surpassing the Chinese growth experience. The Sri Lankan growth was only a recovery from an economic downturn under the previous government.

India's economic growth was to a higher trajectory. Yet both had the same result; the loss of power of the incumbent regimes. Once again economic success led to political failure. Why?

Recent economic growth in both countries have been urban centred. The modern sectors have grown, the rural communities that constitute the overwhelming majority of people, especially in India, have languished in poverty.

There is no denial that some rural poor have also benefited by the overall growth through better marketing of their produce, ancillary employment or by moving to the cities. Yet these have been limited impacts that did not serve the vast majority of the poor.

Besides this, the relative poverty in the country has widened and the perceptions of the poor have changed to make them feel aggrieved. Marginal poverty reduction among the rural masses in the midst of booming economic conditions in the cities can be particularly hurtful. The vote is the means of demonstrating their displeasure.

India's economy grew by 8 per cent, a rate it had not achieved for over a decade. The international business community was paying glowing tributes to the Indian economic performance, the stock market was booming, international capital flows were increasing, foreign exchange reserves were at an all time high, and the informational technology revolution was changing the face of India. The sleeping giant it appeared had awakened at last. In fact this growth and prosperity was serving only one fourth of Indians.

These gains were hardly reaching the other three fourths. The globalised 250 million were enjoying the new prosperity, the rural 750 million remained poor. It was to them that Sonia Gandhi appealed. And it was they who counted. The Human Development in South Asia 2002 Report released last year pointed these issues forcefully. It pointed out that although on average South Asian countries grew at around 5 per cent per year in the 1990s, the number in poverty increased from 485 million to 530 million during the decade.

The per capita incomes of South Asian countries rose, but poverty in rural areas remained high. This was mainly the reflection of the Indian experience. It argued that poverty, hunger, malnutrition and the poor human development indicators cannot be resolved by mere overall economic growth, as these problems are largely a rural phenomenon. It mooted a new thrust in agricultural development that places a strong emphasis on small farm agriculture and rural development as the means of reducing poverty and raising social indicators.

The election results of both countries have shown the imperative of a new growth strategy than has been adopted in recent years. The problem lies in that there is rhetoric for poverty reduction. In fact this rhetoric has grown in recent years, with international institutions and donor agencies shouting about the reduction of poverty as the prime priority, in fact the strategies adopted have hardly achieved anything.

It is once again opportune for all concerned to look at the economic strategies that are needed for poverty reduction. The starting point must be an admission that the policies that have been mooted in recent years have been a success for the globalised rich but a failure for the ruralised poor. Without such an admission it would not be possible to work out an effective strategy that would ensure that the fruits of economic growth are shared by the many rather than the few.

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