THERE are varied strands of thought related to underdevelopment and its reasons. For some, which includes the ruling elite, the issue is one of GDP growth rate, industrial growth rate, fiscal deficits, trade deficits, export earnings, and foreign exchange reserves.

If these indicators improve, the elites see the economy to be looking up too, even if the multitude are caught up in a struggle to satisfy only their basic needs.

For the ruling class, the issues of unemployment and poverty will get taken care of in due course of time as they are sanguine for as long as the earlier stated indicators improve. The issue of escalating prices— especially those of essential food items and other necessities— do not feature on the agenda. Perhaps, the assumption is that if the GDP growth rate is well above average and the per capita income rising, why must rising prices be a burden?

Ignored in this line of thought is the distribution of incomes. If the distribution of assets is skewed, higher national income will accrue disproportionately more to those who own the assets disproportionately more. So, higher per capita income being just an average does not reflect the extent to which the incomes have improved for the multitude unless weighted average is taken that alone would show the extent to which the lower income groups have gained or not from GDP growth.

So, GDP growth and per capita income growth are no reasons for being complacent unless growth is shared equitably. So, inequitable distribution of incomes and assets should feature significantly in our universe of underdevelopment. Along with inequity, poverty and unemployment, price pressures also appear prominently in this universe of underdevelopment. If poverty and unemployment grow with GDP growth, the issue is twice as complicated. For, poverty and unemployment cannot be tackled by just “working with” the data. Rather, it is the situation on the ground that must visibly change and data compiled realistically.

A second line of thought that has sold well also with the wealthy and ruling classes alike is the micro enterprise. While micro loans will help people to get by and only some of them due to its limited outreach, the ones getting by will still be surviving only on the fringes of the society and will not be integrated into the mainstream unless the development outlook changes to root out the dualistic structures of the society. For, micro solutions will only reinforce dualism when development is about integration.

So, microfinance is symptomatic and may supplement or complement that development strategy that has yet to be put into the works in the country’s policy corridors. That is, a development outlook through which all become first-rate citizens in the eyes of all and sundry—-an outlook that is still a distant goal as it is still power and wealth that determines a citizen’s rating in the country.

Another strand of thought in the country tries to find cure in treating some other painful symptoms of underdevelopment that glare us all in the face. These include low levels of literacy and education, poor healthcare, low availability of water and sanitation facilities, high rates of population growth, inadequate housing, and environmental degradation. While these are all a part of our universe of underdevelopment, important question is whether solution to any one or a few of these ills would tantamount to development? While partial solutions too are least likely to commence meaningfully, the components of the universe of underdevelopment are much too interlinked to allow overall relief, if one or two are even addressed, if at all.

A human body suffering from more than one ailment will continue to remain sick if the ailments are dealt with only partially. So, the usual apology of “let us begin somewhere” is least likely to achieve the much sought after global optimum in an environment where even local maximums are a remote possibility given the interrelatedness of the factors that impinge upon underdevelopment and a lack of will even towards partial resolution of intricate issues.

Much of the weakness of the three strands of thought lies in their faith in single-factor deterministic models. That is, focus on one factor and the rest will be taken care of when actually the situation involves a number of variables all of which are not linearly related to development and some of them even interact amongst each other before they impact development favourably.

The ruling classes have unflinching faith in the GDP and its growth rate despite historical experience to the contrary in third world countries in general and in our own country in particular. The other upper strata elite are enthusiastic about education and health only thinking that these benefits too will flow wide and far in the society which is least likely unless employment opportunities are created commensurately with the growth in the physical and intellectual capabilities of the workforce.

If supply of capable workforce increases with the demand for such a workforce not being able to keep pace, the demand-supply gap will result in far too many redundant workers whom the economy will not be able to absorb for simple reasons. These include a capital- and technology-intense labour-saving industry that too operates below capacity in most cases due to a paucity of demand for industrial goods.

The reasons also include the inability of the agricultural sector to absorb the labour force concentrated there due to a host of social, economic, and political structures whose rigidity marginalizes the vast majority, many of whom then seek refuge in the slums and shanties of urban centres that present a classic and a chronic case of dualism with wealth and slums growing in sync. The urban wealthy elite who would much rather not have the status quo touched and some others who have a burning desire to help the underprivileged somewhat then advocate micro financing.

Against this backdrop, it is clear that micro finance will not only not help the disadvantaged become a part of the mainstream any time soon but is symptomatic and would, therefore, leave the sources and cause untouched. If the sources and cause are left intact, the system will generate even more marginalized. Should the solution then be sought in treating the marginalized disadvantaged or does the solution lie in arresting this tide so that the majority are absorbed in and comprise the formal system with a bare minimum or preferably none left for being tackled by microfinance?

Obviously, it is the former solution that ought to be sought but one that calls for a realignment of the socio-economic power structures that inhibit the flow and dispersal of the fruits of growth. This is where the pipeline is clogged in a convoluted manner whose cleaning up is nowhere near the agenda. Why is that the case? Are we responsible or the donor agencies or both?

This scenario is the long and the short of the new growth or endogenous growth theory that emphasizes growth through capital and technology but leaves room for government’s role in the sectors of health and education. That is, it focuses on physical capital, human capital, and technology but fails to account for all other structural, institutional, and attitudinal variables that hinder growth despite the presence of these other variables of capital and technology. The new growth theory also fails to account for the coordination failures and absence of social capital so common in our country.

However, the new growth theory was a part of the recipe we received from the international financial institutions (IFIs) in recent decades since the end of the Cold War. The underlying premise was to get the market structures right when we were stuck with what is known as institutional sclerosis. There was thus a fundamental lack of compatibility between what was exported to us and our ground realities. On whom does the onus lie?

Many might pass the buck on to the IFIs for selling us something that did not quite suit us. But, should the “buyer not beware”? Could the buyers from within our country not talk it out with the IFIs on the extent of the theoretical package we could possibly accept? Technical knowledge we did not lack. The technical experts may, however, be caught in a web of relationships both external as well as internal that may have kept them from being candid.

For, a grief in our part of the world is that the technical experts, the highly educated are quick to get co-opted to promote not what they believe in but to promote what their benefactors—internal and external— would most benefit from? As for the external stakeholders, they harmonize their own interests with that of the people in the part of the world they come from. Are they also expected to guard the interest of those in the third world whose interest should first and foremost be guarded by the powers-that-be in own countries but who do it the least as they remain more interested in getting a bigger and bigger share of all pies?

With this zero-sum game rampant within and a win-win situation externally, the interest of the multitude feature nowhere in crucial calculations. With the interest of the internal powers maximized regardless of the development model deployed; the development theory, model, package remains a non-issue. With domestic minds indifferent towards crucial questions, underdevelopment will perpetuate. Will external actors heed that internal actors keep ignoring?