PRESS BRIEFING BY UN DEVELOPMENT PROGRAMME

Press Briefing

PRESS BRIEFING BY UN DEVELOPMENT PROGRAMME

Government in South Asia was characterized by inefficiency and corruption at the highest level according to the 1999 South Asia Human Development Report launched today by the United Nations Development Programme (UNDP). Introducing the report's key findings at today's noon briefing were Richard Jolly, Special Adviser to the UNDP Administrator; and Nadija Haq, Director of the Mahbub Ul Haq Human Development Center in Islamabad, Pakistan.

Based on the theme of “crisis in government” the report was the third of the South Asian Centre, Mr. Jolly said. While 120 countries produced national human development reports, only the Pacific and the South Asian regions produced regional reports. He drew attention to Chapter 5, entitled "The Corruption Menace" which contained frank analysis and tough recommendations.

South Asia was the world's most corrupt region, Ms. Haq said. It was characterized by the politics of exclusion and a great divide between rich and poor. Earlier human development reports had documented the magnitude of the region's human deprivation. The current report focused on the reasons for such colossal misery in a region rich with culture and with the potential for much higher economic growth and social justice. The report's concept of humane governance put people at the centre of governance, policies, strategies and actions. The humane governance concept asserted that the key to promoting human development was government for people and owned by people.

South Asia was home to nearly one fourth of all humanity, she continued. It was characterized by governments that were elected by the poor but aided the rich, by taxation that was insufficient and regressive, and by expenditures that were misdirected and ineffective. Governance there had become unresponsive and irrelevant to the needs of the majority. Income disparities in South Asia were among the largest in the world. The richest 20 per cent earned almost 40 per cent of income and the poorest 20 per cent earned less than 10 per cent of income. Extreme deprivation and polarization had led to increased crime and violence. In many countries, democracy was becoming an empty ritual. People felt increasingly excluded from the political process by which decisions affecting their lives were made.

The concentration and personalization of State power had coincided with the erosion of institutions, she said. Institutional decay was evident in parliaments that did not protect people’s interest, in a heavily politicized civil service and a judiciary that failed to deliver social justice. Governments were large in size, but low in efficiency. They collected taxes from the poor and middle class, while the rich were further enriched through government

UNDP Briefing - 2 - 1 November 1999

contracts, concessions and loans from public sector banks. Only 1 per cent of South Asians paid income tax, while nearly 70 per cent of the region's tax revenue was collected through regressive, indirect taxes. Public debt as a percentage of gross domestic product (GDP) was over 6 per cent in Pakistan, Nepal, Sri Lanka and India, although most of India’s debt was domestic rather than external.

There was a growing perception that corruption had floated upwards, from petty-level corruption in the 1950s to mid-level corruption in the 1960s and 1970s to the highest levels of the State in the 1980s and 1990s, she said. In addition to providing a concrete plan to combat corruption, the report outlined a reform agenda to redirect the priorities of the State towards human development and humane governance, revitalize State institutions and establish partnerships between the State, civil society and the private sector.

A correspondent asked whether the military coup in Pakistan was addressed in the report. Ms. Haq said it had been too late to include that information. However, the report did address high military expenditures in South Asia -– especially related to the confrontation between India and Pakistan –- which exacerbated human deprivation.

What were the steps involved in the plan to combat corruption? a correspondent asked. Ms Haq said the report contained recommendations for short-term action and for longer-term steps, such as legislation. The recommendations included: requiring public officials to declare their assets; providing immunity to informers; implementing transparent procurement laws; passing a right to information bill; setting up national corruption commissions; ending unnecessary discretionary laws; and using independent private sector auditors. One of the most important measures was to make all bribes illegal. Corruption often involved the private sector and government in different countries. Both the bribe giver and the taker must be held accountable.

One of the most important steps in tackling corruption was for developed country banks to refuse to offer safe haven for illegal money, she stressed. One of the differences between corruption in developed areas and in South Asia was that in the latter, corrupt money did not stay within the region to grease the wheels of development. It flew to other countries. That meant that when corrupt politicians were removed, the money could not be returned. In Pakistan, the government had fallen due to corruption, but not a penny had been returned.

Had the report been presented to governments in the region? a correspondent asked. It had been presented to Sri Lanka, Bangladesh and Pakistan, while India and Nepal were next, Ms. Haq said. The report analyzed actions over a period of time. Most governments had reacted positively to it and said they were involved in addressing the issues. She expected that the new government in Pakistan would use the report to justify its taking power.

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