Launch of the 2002 United Nations Development Program

Ms. Sakiko Fukuda-Parr, Lead Author and Director of the Human Development Report

Dr. Gita Sen, Professor of Economics, Indian Institute of Management, Bangalore, India

Princess Basma Bint Talal, Chair of the Jordan Hashemite Fund for Human Development

Moderator: Dr. Mahnaz Ispahani, Senior Fellow for South & West Asia at the Council on Foreign Relations

Introduction by ROBERT W. RADTKE

My name is Robert Radtke and I am vice president of Policy and Business Programs here at the Asia Society and it is my pleasure to welcome you all here this evening. The Asia Society is honored to host the launch of the UNDP's 2002 Human Development Report entitled Deepening Democracy in a Fragmented World. We are very pleased this evening to have a distinguished set of panelists for tonight's event: Her Royal Highness Princess Basma from Jordan, the chair of the Jordan Hashemite Fund for Human Development; Sakiko Fukuda-Parr, Director of the Human Development Report; Professor Gita Sen, Professor of Economics at the Indian Institute of Management in Bangalore; and Dr. Mahnaz Ispahani, the Senior Fellow for South & West Asia at the Council on Foreign Relations.

The 2002 Human Development Report is timely and of critical importance. Its contribution lies in examining the links between political participation and equitable growth and proposing a set of principles and core values by which marginalized people everywhere can engage in a democratic process in a meaningful way. So often we overlook social and economic development when we rate democracies in the world, simply concentrating on the occurrence of elections and alteration of power. Amartya Sen, Nobel prize laureate, argues in his path breaking book, Development as Freedom, "despite unprecedented increases in overall opulence, the contemporary world denies elementary freedoms to vast numbers, perhaps even the majority, of people."

Tonight's panelists will argue why we need to pay attention to the mechanisms by which the voices of the disenfranchised can be heard and that good governance means national policies that are grounded in conducive political, social and economic environment. In individual human freedom lies the capacity for political participation, economic development and social progress. Now, without further ado, let me turn to Mahnaz Ispahani from the Council on Foreign Relations who will preside and moderate at tonight's panel. Thank you very much. Mahnaz?

MAHNAZ ISPAHANI

Thank you, Robert. Can you hear me? Thank you. Let me join in extending my welcome to this New York launch of the Human Development Report 2002. It's really a privilege to be here. For those of you who've had a chance to even glance at it, it's quite an extraordinary report about a difficult subject. Its also an honor to be at the Asia Society which as you well know has been playing an increasingly important role in debating and creating a forum for dialogue on important social policy and social change issues, particularly as they pertain to that vast region we tend to call Asia.

I wanted to add to Rob Radtke's comments by saying that for many years now UNDP has really been an extraordinary innovator in both articulating the concept and helping to make real the notion of human development. This concept may have been around for centuries in different guises but it really took UNDP's work and the work of many civil society groups over years to give this sharpness and focus and make it the leading edge of a global development agenda. So now where as we seem to take this concept in many ways for granted, it really was an innovation and a very important one and UNDP deserves great credit for it. It lifted out the notion of development solely from the arena of economic growth, from the arena of technical expertise, into that of the kinds of choices human beings make, the kinds of ways in which most of us want to and are able to live lives that are of greater value, where we have access to knowledge, resources, where we can live lives of dignity. This was an extraordinary contribution and continues to be.

I think if you look at the current report Deepening Democracy in a Fragmented World, you'll see that the UNDP colleagues who put it out have both made a very important argument that really democratic systems of governance, both at the national and the global level, are probably the most likely to create environments that are conducive to human development. But on the other hand I don't think they flinch from taking on some of the complexities and challenges of creating real democratic institutions, again as I said, either at the local, national or global level. And I think we will hear from our speakers today and I hope in the discussion we can talk about how you try to realize these goals, make them real and lived in different regions which have different political trajectories and different human development capabilities today.

Our expectation is that we will have a session that goes 'til about 8 o'clock and each of our very distinguished speakers will have about 12 to 15 minutes each. That should leave us about half an hour for what I hope will be a very lively and engaging conversation. So while you have their bios, let me just say a few very brief words about each of our speakers in the order that we will be hearing them.

Sakiko Fukuda-Parr is, as you probably know, the lead author of the Human Development Report 2002, Deepening Democracy in a Fragmented World. She has been director of this UNDP publication since 1996 and has had a 25-year long career in this field where she has been an author of some very important studies. She is the editor of the Journal of Human Development and she has had work experience previously in North Africa and the Middle East.

Our second speaker will be Her Royal Highness Princess Basma Bint Talal of the Hashemite Kingdom of Jordan, who has had a 30 year career in this field, a very distinguished one, where her focus has been on human development, gender equity and the well-being and development of children, primarily. She chairs several prominent NGOs in Jordan, including the Hashemite Fund for Human Development, and she was the founder of the Jordanian National Commission for Women. Currently, Princess Basma is also Goodwill Ambassador for UNIFEM, UNFPA and Honorary Human Development Ambassador for UNDP. Thank you for being here.

And our third speaker is going to be Dr. Gita Sen who has had an extraordinary career as both an activist and an academic. I think many of you probably know her many publications and books. She is a professor of economics at the Indian Institute of Management in Bangalore, in India, and also a research coordinator on alternative development frameworks at DAWN, which is a network of women activists and researchers which she helped found and which has pioneered some new ways of thinking about research and activism. So without further ado, let me turn to Sakiko.

SAKIKO FUKUDA-PARR
Thank you very much and I am really very pleased and honored to be invited to present our 2002 Human Development Report to you this evening. Much, in fact, this whole report can be summarized by just looking at the cover design because you see these hands which symbolize the search and the victory of peoples' freedom in the world. And you see these birds flying, which shows the flourishing of that freedom. But then as is our tradition we also like to look at data and you see this curve is a graph actually of the number of countries that have become democratic. So you see this increasing number of countries becoming democratic in the world and today of course we have more countries that have democratic regimes than ever before in human history.

And yet the real challenge of our world today is in fact to deepen that democracy. That is why the title of this report is Deepening Democracy in a Fragmented World. And "deepening democracy" really means making it real for people. And why us that a challenge for everybody, not just for the people who live in non-democratic countries? It is because it is a challenge in all countries of the world, both new and old democracies, but also particularly important because we are living under this cloud of growing divides, growing political, economic, social divides and divides in which basically the anti-globalization movement, the terrorism are in fact a dominant social phenomena today. So as we are living in this very fragmented world, we absolutely desperately need a kind of political order that can make peoples' participation more meaningful.

So that is the one-minute explanation of this report. But let me go on for the next ten minutes and tell you a little bit more. I think that the real issue that we are grappling with here is this relationship between political regimes and what we think of as economic and social development. But of course first, our starting point, is that in fact as the chairperson said, the whole idea of human development was really to refocus the whole idea of economic growth and development on the ultimate purpose of people and their well being. And then recognizing that if development is about improving the well being of people and expanding peoples' choices, then how can you do that without taking account of civil and political freedoms, freedom of speech and the political regimes that you need to assure those freedoms. So human development really brings the political dimension into development, development which is conventionally thought of as economic or social processes, expansion of economic opportunities, expansion of social opportunities, but this year we are really emphasizing the fact that political freedom is an important part of human well-being and expanding the choices people have to lead the lives they wish to lead.

Now what we have today is a situation where we have lived through the 1980s and 1990s when there was this wave of democratization, people call it the Third Wave. And more than 80 countries took steps towards democratization. However this took place at the same time as when in fact there was not a consistent improvement in economic and social conditions under which people were living. And so actually people are now beginning to question whether democracy is of any use or not because it doesn't bring all of these benefits that they were really looking for. And so this is perhaps one of the biggest challenges of democracy today, particularly in the new democracies in developing countries of Latin America, of Africa, the new democracies of Eastern Central Europe, where the experience of economic and social progress of the 1990s was anything but consistently positive.

For many in the world in fact the 1990s was, of course, a great decade of leaps, of progress. I think that those of us living in New York know we are the primary beneficiaries of those leaps of progress in terms of expansion of economic markets, technological progress, even though we seem to be having difficult. Sometimes technological progress complicates our life.

But just as we have seen in the New York Times quite recently that poverty has begun to grow in the last year or so in the United States, well, for many in other parts of the world, the whole of the 1990s was not a very positive decade. In fact in the human development index, which we use to measure human progress that combines expansion of economic and social opportunities such as education and health, there was in fact a decline in 21 countries. In fact this is rather unusual because over the 1960s and 70s, we never saw such a decline. In fact there was a steady improvement in virtually all countries of the world.

Do we really realize that child immunization rates, that improved enormously in the 1980s, actually declined since the mid 1990s in Africa and South Asia - in a country like India that actually registered improvements in economic growth? Developing countries as a whole, I am sure many of you have read, have registered a very good economic expansion in that period of the 1990s, grew at a higher rate than the OECD countries. But actually more than 60 countries ended the decade poorer than its beginnings. That is to say the GDP per capita in 60 countries in 2000 was lower than what it was in 1990.

As far as the number of people living in extreme poverty was concerned, the total numbers declined quite a lot in Asia, halved in Asia, but in all other regions, Africa, Latin America, Eastern and Central Europe, former Soviet Union, Arab states, the numbers actually increased.

And this was also at a time when aid to developing countries fell and I think in the aid community, those of us who work with organizations like UNDP, UNICEF, World Bank and bilateral donors like USAID, we focus our attention on the proportion of developed country GDP that has also declined but actually in terms of the recipient countries, aid received per capita in Africa is half today than what it was in 1990. So at a time when there was increasing prosperity in the developed world and declines in many of the developing countries, not all of them, certainly not all of them, but in many of them, in fact support to these countries actually declined in a fairly dramatic way.

Let me then go on to the trends in democracy. Of the 81 that embraced democracy in the 1980s and early 90s, only 47 today are considered to be fully functioning. I think these overall global trends are extremely troubling. Globalization is forging greater interdependence and yet the world is actually much more fragmented. And I think that fragmentation is not just this sort of distance between material wealth between those who have a lot of money, wealth, assets and the poor, but also a distance between the powerful and the powerless, those who believe that the new global economy is full of wonderful opportunities for their lives and those who do not.

And that is what is really the reason why the biggest social movement of our times is the anti-globalization movement. And in many respects I think that political tensions that exist in the world have something to do with all of these divides and these political tensions… you certainly do not want to say that poverty breeds terrorism but certainly there is enough that is going on out there in terms of those who feel that the new world is really something that they can benefit from and those that feel it is something that is rejecting them and their dignity-- that actually provides an environment in which there will be sympathizers to terrorists in many countries of the world.

So this is why in the context of the global situation today, the need to widen and broaden democracy at the global community is such an important priority. The report is then trying to look at the institutions of democracy and how they are functioning today.

In fact, democracy, because of the institutions that hold those in power accountable to the public, that allow the free and fair contest of power and above all to increase popular participation, is the system that can safeguard human freedoms within all the countries of the world and dignity of all people. But for democracy to be really functioning, elections are only a very small first step. One of the challenges this report poses is to rethink the whole concept of democracy because there are really three elements that are critical to democratic political systems.

One is the contest for power, competition for power as reflected in open elections. But there are two other elements which are quite often neglected. One is public accountability of the authority and the other is participation of people.

It is that sort of participation and influence that people can have in decision-making. It's the accountability that decision-makers would have to public interest of ordinary people that is fundamental to making sure that democratization, economic and social progress all go together. Because in fact it is when you can have popular pressure through the free press, through electoral processes, through other means of wielding influence, that you can influence decisions so that they are made in the interest of people. For example, so the budget expenditures are for clean water, roads, schools in villages and slum areas rather than for roads that lead to the presidential palace.

But for that to happen it really isn't enough just to have elections. So what this report is arguing for is this deepening of democracy and that deepening of democracy cannot depend only on the spread of democratic institutions. And why is that? It is because democratic institutions actually can be very easily captured by political and economic elites. And that is a process that is as true in the United States or in Britain or in France or in Japan as it is in India or Nepal.

So what this report is arguing for is the spread of democratic politics, the democratic processes, not just for more democratic institutions and structures. These are the two kinds of reforms that the report argues for. Deepening Democracy is really all about fostering vibrant democratic processes through things like the press, civil society groups, kinds of organizations like Princess Basma leads, womens' groups, NGOs - are really the foundations of building a democratic society.

What is interesting though about the challenges and situation of today is in fact that there are all kinds of innovations taking place throughout the world in this process of stimulating democratic politics. And the role of the civil society in promoting change, in triggering change, has altered in character over the last decade. The use of new information technology has certainly stimulated it, the fact there are NGOs that are globally networked means that there is a movement. We will hear from Professor Sen about her network of researchers and this networking among people or groups across the globe is an important part of that. Activist Judiciary in India is another one. So there are many of these new processes that are taking place. I will just give you an example of two and then I'll close.

In Rajasthan, there is a citizens' group that has challenged village budgets and held hearings and realized that all kinds of money was being spent for corruption rather than for what they were supposed to be budgeted for, such as schools and roads. And what is interesting about that is not just that corruption was exposed. It is not the first time that something like that happens. But this then led to reforms in the budgeting processes so that in fact they have introduced mechanisms by which people are able to comment on the budget before it is finally approved.

Similar things have happened in Porto Alegre in Brazil for example. There is a whole movement for women to look at budgets to see that they are gender-sensitive and that they benefit women and do not neglect their needs.

So politics matters for human development, these political processes, political institutions and an important agenda for human development is political reform. Thank you.

MAHNAZ ISPAHANI

Thank you very much. Princess Basma?

PRINCESS BASMA

It really is an enormous pleasure to take part in this panel that marks the New York launch of the 2002 Human Development Report. The increased recognition of the UNDP Human Development Reports over the past years has indeed been dramatic, as we have witnessed the growing impact of the Reports and the different themes they have highlighted. Each Report in turn has been a groundbreaking and very credible and valuable tool for policy makers and practitioners. This panel graciously hosted by the Asia Society pays tribute to what the Human Development Reports have come to signify.

The themes of democracy, good governance and freedoms discussed in both the Global and the Arab Human Development Reports for 2002 compel me to touch on such themes in relation to developing countries as they pursue the human development of their people, while I focus on the Arab region in general and more specifically on my own country, Jordan.

The Human Development Report notes that the Arab region has been slower to democratize than other parts of the world. The Arab Human Development Report further attests that there is a substantial lag between Arab countries and other regions in terms of participatory governance. It states moreover that there is a freedom deficit in the Arab world which undermines human development and is one of the most painful manifestations of lagging political development.

As the Arab Human Development Report explains, one of the most pervasive obstacles to security and progress in the region in geographical, temporal and developmental terms is Israel's occupation of Arab lands. As the Report also notes, occupation is freezing growth, prosperity and freedom in the Arab world. Hence the circumstances to which these findings refer in fact lend credence to the fact that democratic processes are characterized by the specific historical, political, social and cultural conditions under which they emerge.

If one looks at the situation of Jordan since it embarked on the process of political liberalization in 1989, one finds that it vividly illustrates some of the issues to which the Global Human Development Report calls attention. The Report indicates, and I quote, that "the democracy a nation chooses to develop depends on its history and circumstances. Countries will necessarily be differently democratic." This statement largely evokes the homegrown model of Jordanian efforts to foster participation and political liberalization -- a process which has in fact been shaped by a set of significant factors which have often been beyond the country's control.

A major factor is the economic structure of Jordan which is characterized by serious resource constraints that over the years have obliged the country to depend primarily on external aid as well as remittances from expatriates working abroad. To a great extent the country's foreign policy was designed to maximize these returns. However such economic dependency could not be sustained indefinitely and in the late 1980s the government was forced to embark on a strict program of structural adjustment.

The other factor that has not only impacted Jordan's domestic and foreign policies but also the very lives of its citizens has been the volatile climate of the region. Throughout its history, Jordan has had to contend with the severe repercussions of the Arab-Israeli conflict, including taking in large numbers of Palestinian refugees at different critical junctures. More recently the First and Second Intifada and the impact of the ongoing crisis in the Palestinian occupied territories are gravely affecting the people in Jordan. While the Gulf War took a serious toll on the country, today the situation in Iraq poses a serious threat to the stability of the entire region, including Jordan.

Amidst such circumstances, the nascent liberalization process with which Jordan entered the 1990s has acted as a major buffer for state and society against the critical political and economic circumstances which governed the rest of the decade and indeed up to the present day. Jordan's process of liberalization has not necessarily replicated western democracies'. However this home-grown model of liberalization has allowed for a wider base of debate and freedom of expression, more democratic processes of legislation and a stronger belief in national institutions-- all of which has been essential to mediate the numerous global, regional and national challenges that the country has witnessed during the past 12 years.

Frequently painful economic legislation has had to be passed to ensure the country's adherence to its structural adjustment program and the requirements of economic globalization. According to the recently adopted Poverty Alleviation Strategy, poverty levels in Jordan today range between 15% to more than 30% of the population, depending on the poverty line used, and unemployment is estimated at 13.7% and may be as close to 25% if underemployment is taken into account. Clearly therefore the hardships which many poor communities in Jordan are experiencing cannot be underestimated.

On the political level, after decades of enmity, the peoples' representatives in the Jordanian Parliament approved the peace treaty with Israel in 1994. Presently this optimistic step often resurfaces as a highly contentious issue given the intolerable situation in the Palestinian occupied territories. Nevertheless Jordanians and Jordanian institutions are trying to weather these storms, affirming the notion put forward by the Human Development Report that democracies are better placed than other systems of governance to manage conflicts and sudden downturns.

At this time however, the current regional situation has obliged the government to take certain measures including the postponement of Parliamentary elections until next year and in the interim, provisional laws are passed by the Cabinet. This has naturally brought forth accusations that the country is receding from its political liberalization process. Yet as the Human Development Report notes, true democratization means more than elections. It requires the consolidation of democratic institutions and the strengthening of democratic practices, with democratic values and norms imbedded in all parts of society.

Even though Parliamentary elections have been postponed, numerous democratic mechanisms in the country are being strengthened and heightened emphasis is currently being put on issues of governance, decentralization and participation. For example, the responsibility for local developmental efforts has been devolved to local mayors and local governors. And the municipal law has been amended in fact to give local mayors a larger mandate and greater responsibilities.

Monitoring mechanisms such as the annual opinion poll on democratic practices in Jordan are being encouraged by the government to be widely published, even if recent findings are by no means always complimentary. Yet such experiences do strengthen the country's liberalization initiatives and moreover, as noted by the Human Development Report, democracy that empowers people must be built, it cannot be imported. So whatever views we in Jordan may have on the current status of democracy, the overall belief by and large is that we can make it work because we have developed it to respond to our needs and to fit our circumstances, rather than replicating a blueprint from outside.

Our country's liberalization process has opened the door for Jordanian NGOs to become more and more involved in democratization issues, as in other parts of the world where according to the Human Development Report, NGOs are taking more direct roles in local decision-making and monitoring and are developing new collaborative forms of governance.

So in this light, I would like to turn to the work of the Jordanian Hashemite Fund for Human Development, JOHUD for short, a national NGO for which I have been working closely since 1977. In many ways the challenges faced by NGOs like JOHUD are similar to those faced by the country as a whole. Confronting the external realities of globalization and regional turmoil as well as the domestic realities of political and social change has become the responsibility of all actors. Jordanian state and society alike are facing the dilemma of trying to achieve human development goals while the context of daily life is becoming increasingly difficult.

The work done by JOHUD to promote sustainable development initiatives is carried out primarily through a network established by the organization of 50 community development centers, which are spread throughout the country. At JOHUD centers, local level planning processes are bringing community people together to put forward their priority needs, to accept shared responsibility for local development and to exercise their rights as citizens. Increasingly, NGOs like JOHUD have the capacity to act as local level auditing mechanisms. However, realizing that to play such a role it needed itself to become more transparent and more accountable to local people, JOHUD has been undergoing its own process of decentralization and internal reform. Beyond demonstrating the vital role that NGOs can play in promoting democratic practices, JOHUD's ever increasing emphasis on grassroots participation is creating steady change in democratic processes at the local level.

Based on this, its direct involvement in the field and the experience it has gained in the 25 years since its establishment, JOHUD has been selected by the government in Jordan as a viable mechanism to take on the task of preparing Jordan's second National Human Development Report. And it was extremely interesting for me in this light today to be part of a judging panel for awarding national development reports' recognition through a new approach by UNDP based on awards. And certainly the whole process of assessing and evaluating other reports was a very important learning experience for me. So I hope that in years to come, Jordan's second National Development Report or third or fourth might be received by UNDP and given some consideration.

Active advocacy by JOHUD has been key to deciding the theme of our second National Human Development Report, and this centers on poverty alleviation, as many others have done, but it uses an approach based on sustainable livelihoods or the sustainable livelihoods approach. It's an approach really that provides new insights into old problems. It's a positive approach because it builds on assets and capabilities without compromising the future. It's about self-reliance and respect for autonomy at national, community and individual levels.

In particular, this approach recognizes that policies, institutions and processes condition the environment within which people operate, thus playing a major role in assisting or hindering people in overcoming their poverty. The sustainable livelihood approach places poor people at the center or at the heart of the picture, which with its strong involvement at the grassroots level is where JOHUD started.

Extensive field research has been carried out which looks in depth at the lives of the poor in Jordan. The research shows how people experience poverty as well as the coping strategies which they adopt. Focusing on their own views of how their lives can be improved, many of the messages and recommendations for action in the second NHDR will come from the poor themselves. Their stories are being built into every chapter of the report. Their accounts overlap and they interlink and they share common themes. Such stories we hope will demonstrate from the perspective of the poor and vulnerable in Jordan that there are complex factors and influences at play.

So what kind of stories do we hear and what can we learn? Above all, we learn that poor people know what they want. And that their opinions can help to formulate better policies. For example, poor Jordanians place a strong emphasis on education as a means for their children to get opportunities for a better life. Jordan's record on access to education is commendable, already meeting the targets of the Millennium Development Goals. In the field research carried out for the NHDR, people talked substantially about the benefits that education has brought them, especially education for girls.

However, poor Jordanians are not just interested in access, they are also concerned with quality outcomes. Commenting on the new municipal system established by a provision of law, poor people generally recognize that they are steadily getting better services, which are being allocated on merit, not on the basis of power or connections. They can see standards being set for new kinds of representation. The fundamentals of governance and democracy are being increasingly addressed through municipalities that are increasingly accountable, with transparent decisions that are subject to scrutiny both locally and from the national level. Local people are noting the changes and on the whole they seem to like them.

Development in Jordan today depends on our being able to draw connections, parallels and linkages in areas we haven't thought of in the past. This implies being willing and able to consider the links between macro policies and the way they can impact on individual and household lives at the micro level. Because change is taking place rapidly, it is vital to monitor them through a regular presence in the field in order to assess how positive impact can be maximized and negative impact can be reduced.

So I am going to skip some of these details because I am told I better get a move on. But what I would like to say is that, in finishing, while we hope and we can see that the 2002 Human Development Report has sought and will seek to further democracy in the world and we hope that our own second National Human Development Report will be a similar tool in addressing such processes and meeting such challenges, what I would like to end by saying is that all these issues are so connected to context, to situations, to circumstances and that more than any other region in the world, the theme of the global human development report, Deepening Democracy in a Fragmented World, is singularly relevant to depicting the situation of the Middle East, which for far too long has been fragmented due to an absence of peace and security. And it's now up to the countries of the region, with the collective backing of the international community, to work together to ensure that peace, freedom and development are the right of all groups and all individuals and all peoples of our region. Thank you very much.

DR. ISPAHANI
Thank you, Princess Basma. (Introduces Dr. Gita Sen)

DR. GITA SEN

Good evening and I'd like to join my co-panelists in expressing gratitude to the Asia Society for holding an evening like this. It is fascinating that the New York launch of the Global Human Development Report actually is happening at the Asia Society, with a focus on different parts of Asia. And I think that in many ways, and I may be a little bit of an Asia chauvinist in saying this, current directions and events in Asia, across the spectrum of Asia, probably have a great many lessons and possibly a number of pointers for the directions that the world is likely to go in, in the next few decades at least.

I'd like in the remarks I have to make today to focus on one old question and one new one about the relationship between political democracy and economic processes.

There is a traditional question here and it is a traditional question that has been much debated in Asia, particularly in the last two or three decades. The traditional question is this: is political democracy, understood as elections, the process of political parties, the give and tumble of democratic electoral politics as we usually know it, is political democracy in that sense necessary for economic growth or poverty alleviation?

I call this a traditional question because it has been around in the discussions about democracy and economics for quite some time. The Asian economic miracle appeared to give a particular answer to that question. And the answer that it gave, based on the economic experiences and the political experiences as well particularly of Southeast and East Asia during the 1970s, 80s and good part of the 90s, seemed to suggest that the answer to the question was no, that political democracy was not particularly necessary for economic growth or for poverty removal.

Countries such as mine, India, had a particular problem in this regard. Because in some debates and discussions, India was often pointed to as the counter-example that exactly proved why you didn't need political democracy if you were really interested in having high growth or reducing poverty, as compared for example, to Indonesia, Thailand, Korea under dictatorship and so on.

And in some sense those who supported or were supporters of political democracy and the importance of political democracy, were in some senses at not just something of a disadvantage but even on quite a bit of a defensive stance in relation to that support and those positions.

I think that the events of the latter half of the 90s, going on into the current decade, have changed the questions around in somewhat dramatic ways as we know. Southeast and East Asia is no longer the economic miracle that it appeared to be at that time. If anything has been striking about the consequences of the economic crisis following after 1997, one of them has been the extent to which progress made on poverty reduction and even eradication in countries such as Indonesia, how rapidly and dramatically they could be reversed.

In a sense, it's hard to think of the last 200 years, post-Industrial Revolution, where you would have seen such a dramatic reversal in such a short period of time. Poverty, once it is gone, is not supposed to come back in the ways in which it has tended to do. And it has thrown into question, obviously, the impact and the nature of the current processes of economic globalization and their implications, both in terms of economic democracy, economic inclusion, the removal of poverty and also their implications for politics and political processes.

In some senses one could say that the question of the relationship between political democracy and economic growth and poverty removal has turned around and become a somewhat different question. And the question that I think many of us are grappling with today, in the Asian context, is this: can the institutions of political democracy, as we normally have tended to understand them, manage the fallouts of economic globalization?

And those fallouts, now in our experience of the last 20 years, appear to have different dimensions. The fallouts are: volatility, that we all I think, understand well and certainly in this, the capital of global financial capital, we understand extremely well the meaning of volatility; insecurity of livelihoods - that you can be up one day and the bottom can drop off the next, if you are in a labor market that is increasingly informal and insecure; and a third, and crucial, fallout that in a country like India we are particularly having to address - the fallout of aspirations that are dramatically increased by the globalization of media and culture in the form that many in the society aspire to and know is probably unreachable within their lifetimes.

The fallout of those unreachable aspirations, combined with the volatility and the insecurity, I think, is posing entirely new sets of challenges for the institutions of political democracy as we are experiencing them in the region today.

I think countries like Indonesia and to a lesser extent, Thailand, post 1997 and 1998, showed us one kind of example, which was rather frightening and difficult to deal with. Indonesia, as we know, in the period prior to this, was hardly an example of democracy.

But Indonesia certainly had been held up as a significant and important example of poverty removal and eradication. But the volatility and the insecurity and the return of poverty that followed after 1997-1998, threw up processes of social fragmentation that were quite frightening in their effects and their implications.

It is in Indonesia that we first began seeing in the region such a dramatic increase in sectarian and intercommunity and inter-religious violence that we hadn't seen for a very long time, in fact. It is in Indonesia that we saw the incorporation of gender violence on a dramatic scale into these same forms of sectarian violence as they emerged, again in ways that we had not seen in the region before, on quite such an organized scale, for possibly a very long time-certainly not in my lifetime.

These fallouts, for a new democracy to manage, seem to be challenges that in some senses at the time one could possibly take heart by saying that well it is really the problem of an absence of institutions, that you didn't have enough democratic institutions to buffer the country against these particular expressions of social breakup and social fragmentation.

What then does one say in the Indian context today? One of the most difficult situations that we face in India at present is precisely the same kinds of fragmentation and deepening divisions within society of a type that we really have not experienced in the country, at least in the last 50 years. And in the Indian context, neither have we had a major economic crisis of the type that the Southeast Asian countries went through. In fact India is consistently held up as younger brother or sister to China in the context of economic growth, at least in the recent period. And whatever one may agree or not agree about the validity of that comparison or that example, certainly India's economic situation at this point is not one of crisis.

Nor is India a dictatorship, not in the traditional sense that we understand it and I would say not in any sense, probably, at least up unto this point. India has been held and is the world's largest democracy. Democratic institutions have pretty strong and deep roots in the country at this point. And yet it is within this same country that we are experiencing and have seen growing over the last few years and coming to some kind of climax in the last six months or so, a dramatic acceleration and breaking out of religious violence, gender violence imbedded in that religious violence, of a form we have not seen in the country for quite some time.

All these, I think, give pause to and pose the question that I asked in quite dramatic ways. And that question that I would repeat again is whether the institutions of political democracy as we understand it can manage the fallouts of economic globalization.

Why do I think that in India, some of what we've seen today in Godhra and spreading into some other parts of the country, are fallouts from economic globalization? I am not a believer in bashing economic globalization for every bad thing that happens in the world. But I do believe that one of the things that we have seen in the country is an increase in aspirations coming through the expansion of media, the expansion of unequal consumption of a type we have never seen in the country before. And at the same time, the knowledge among many people that those aspirations cannot be met for very large numbers of young people who are out on the streets, who are educated and unemployed, not possibly in their lifetimes. What happens to these young people is that they become cannon fodder for every kind of millenarial vision, very often those are visions that draw upon and create identities which have to find a significant other to blame for their own situation. And in India today I think the promotion of violence and of sectarian identities on a scale that we haven't seen for quite some time are in fact part of that fallout.

It is therefore I think time that we looked again at the question of what we mean by democracy. Yes, institutions are important and crucial and the institutions that Sakiko mentioned, in the Indian context, are absolutely critical and important: the existence of a relatively independent judiciary, the importance of a vibrant and vocal civil society movement, the importance of innovations in this regard, the right to information movement that Sakiko also mentioned which began in Rajasthan and has spread to other parts of the country, bringing accountability to the institutions of government as well as the role of civil society in raising the issue of corporate accountability and the institutions of corporate regulation as well. All of these are absolutely critical and important.

And yet they are clearly not enough. They're not enough to buffer a society as vibrant, with institutions as deep as India has, against what we are seeing today. And I don't think I am overstating the position to say that at this point in India, the situation that we face is quite different from many times in the past. Communal riots as we call them are not new to India. And yet the situation today is quite, quite different from anything we have seen in the past. Not so much in the extent of the violence and the depth of the fragmentation but in the extent to which it is spreading into middle class ideas and ethos, in the extent of state support and condoning of the violence in forms that we have not seen before. And I think therefore in the Indian context and therefore given that we are speaking about the world's largest democracy at this point, it is absolutely critical for us to ask this question in a serious way.

My own answer to this question, in a very preliminary way, is that in our thinking about political democracy, in our thinking about institutions' participation and accountability, in our thinking about the importance of elections and political parties, one of the things that we tended to leave out is the importance of an ethos of inclusion. The democracy must mean and must build an ethos of inclusion, an ethos of equity and an ethos of equality.

And if we don't have and don't build an ethos like that and build that into the institutions of democracy in a sustained and systematic way, then the capture of those democratic institutions, not just political parties and governments, but the institutions that hold society itself together is always an open thing -- that you can lose what you build over 50 years if you don't build in that ethos.

What does this say, however, to the processes of economic globalization? Because in India as elsewhere in the world, we have been celebrating, through the processes of globalization, inequality and an ethos of individual advancement. And I think therefore that the experience of Indonesia post 1997 and the experience of India as we are undergoing it at the present time exactly challenge both our notions that economic globalization will somehow deal with all these problems and our traditional understandings of political democracy. Thank you.

DR. ISPAHANI

Thank you, Gita. We have heard from all three of our speakers about the challenges posed by the different directions the two major trends in the world seem to be taking: the processes and trends of democratization, at least of formal institutional mechanisms, and the processes of economic globalization. We have also heard I think both in the report and in Princess Basma's presentation and in Gita Sen's, the complexity of promoting democratization or deeper democratization in environments of regional and personal insecurity. So those to me are the three pillars that have emerged both in the report and have really been highlighted in the presentations. I'd like to, since we only have 15 minutes or so, to turn the floor over to all of you and ask that you raise your hands and wait until the mike comes to you and identify yourself before you pose the question and please say who your question is addressed to. Thank you.

QUESTION: to Princess Basma. I was a little disturbed to hear that you appear to put a lot of the responsibility of the conditions within the Arab countries on outside forces. I have recently read the UNDP report by the representatives of Arab nations addressed to governments in the Arab world and it's a very sad report. Apparently on almost every criteria: education, gender equality, death and childbirth, connectivity, human rights, the Arab nations come lowest. I would suggest that perhaps the responsibility lies with the types of regimes in the Arab nations and with the rulers and that perhaps that is where the concentration should be.

PRINCESS BASMA: Thank you very much for your comment. First of all I think we have to bear in mind that the Arab Human Development Report was both a challenge and a courageous initiative and the fact that it is a regional human development report does not necessarily reflect in the way that it could or even should the diversity of the Arab region. So I think we have to bear in mind that yes, there are indices at the end and yes, there are statistics and figures but I think we risk, to some extent, generalizing. Having said that, I think it was very important that the Arab region honestly and frankly addresses some of the very disturbing issues that we in the region feel and know keenly as much as anybody does elsewhere. So I think that is something that we need to bear in mind. I think it is a cutting edge initiative. I think it puts us on the right road because through it we start publicly, and when I say publicly I mean publicly through an international kind of discourse, looking at our shortcomings and seeing how we need to improve and where we need to be going.

So I don't actually see it as a sad report. I see it as something very promising and something that will enable decision makers and politicians and practitioners and development activists to take on these issues. It will also open doors because if we are stating in a report that this is our reality, take the situation of women or the issue of gender, and this is an area where I have been working for many years, I can actually use the report and say well, look, here we are and we are admitting and we are saying this and we need to do this, that and the other.

So it actually facilitates in many ways a proactive approach to many of the difficult and complex issues that it tackles.

But I think it is slightly simplistic to say that it's basically the fault of all the Arab regimes and that that's what we need to do. I don't think and if I did give the impression that I was laying blame elsewhere, that was certainly not my intention in any way. I think we are very aware in our region and particularly in Jordan of many shortcomings that we have but we are also equally aware, and I can only speak for Jordan, of the need to redress some of those problems and that's what we are trying to do under extremely difficult circumstances. And when I say difficult circumstances because we haven't had natural resources or economic resources in which to rely. We have struggled for years and years in a gravely serious political context. We have been buffeted and bashed around really by the nature of regional turmoil and we have tried to withstand that. And we have tried to be, to a great extent, an island, often, of moderacy in a very unstable and very volatile area. So if I have given the impression that I am laying blame elsewhere, I certainly didn't mean to do that. And we are keenly aware of our shortcomings and we struggle to try to address them, as I say, under sometimes very challenging circumstances. But thank you so much for your comment.

QUESTION: for Gita Sen. What are they doing about the religious conflict in India and the genocide in India? What are they doing about this in India?

QUESTION: for Gita Sen. How do you address the issue of tradition and democracy because there is a lot of hierarchy when it comes to customs and tradition?

QUESTION: for all panelists: Yesterday Robert Rubin spoke on global economy and leadership. Not one of the panelists mentioned leadership directly. I was wondering their thoughts on how leadership relates to human development.

QUESTION: for Princess Basma. Please discuss the role of religion in the democratization of the Arab region and please address the fact that the 9/11 terrorists were religious fanatics produced by your region.

GITA SEN: There are many many people in India who are appalled at what happened in Godhra and are trying to build a relationship between religious groups and communities, to reestablish harmony. Our problem at this point is to figure out how to deal with this crisis we are facing.

Tradition and democracy arise most strongly in relation to gender because it is in the context of gender democracy that tradition and cultural relativism keep rising up against any notion of universal human rights as applicable to women. It is not an unaddressed question.

PRINCESS BASMA: While customs and traditions and religious interpretations do have some bearing on behavioral patterns within the society, we have to also remember there are enormous strengths within many of those customs and traditions and within religious practice as well. What I would like to highlight here is for instance, the strength of social cohesion and solidarity, societal solidarity and protection, which comes from this tradition and many of these customs and whereas we have seen a fragmentation of social cohesion in many other societies where customs and traditions have no longer, or even religious belief or practice, has no longer been so much a way of life. So yes, they do have a down side but they also have a positive impact in many ways on society itself.

Finally to end my comments, I don't think that I can go much into explaining why the frightful atrocities of 9/11 were committed by people of one region. We all know that they were. And certainly myself and my country and many people in our religion bitterly condemn these acts. And we don't believe in them and we don't support them and we don't think that this is the way to go forward or to have a human relationship with anyone. So I thank you for giving me the opportunity to put the record straight on that, just in case you are harboring any doubts. Because certainly I am very pleased to be able to do that. The only thing I can say and this certainly doesn't excuse what happened and never can but I will say and I think that this has been mentioned by all of the distinguished panelists is that not necessarily in this context but in other contexts where there is a feeling of hopelessness, where there is a feeling of loss of dignity and nothing to lose and inequity and poverty and despair, those are the breeding grounds, unfortunately, for the most awful forms of behavior. It is people who are in those kinds of situations who can fall prey to very negative influences. But I would like to end by saying that the majority of people in my region and specifically in Jordan because I can speak for Jordan certainly do not condone and we abhor this kind of act and this kind of violence. So thank you for enabling me to set that record straight.

SAKIKO FUKUDA-PARR

I think like someone said, culture is like a virus. Whenever you go to a doctor and he tells you you have a virus, when he has no idea what you really have. And he has no idea what to do about it. Well, I think tradition, leadership and religion are often raised as issues when people really don't know what the problems are or what obstacles to democracy are. In a sense, these are red herrings. I would like to quote from the Secretary General of the United Nations, Kofi Anan, from his contribution to the Human Development Report when he said "Obstacles to democracy have little to do with culture or religion and much more to do with the desire of those in power to maintain their position at any cost. This is neither a new phenomenon nor one confined to any particular part of the world. People of all cultures value their freedom of choice and feel the need to have a say in decisions affecting their lives."

As for leadership, I think this is the critical thing. A lot of people talk about leadership as the critical ingredient in successful development efforts. Well, what is important about that leadership is that it is accountable leadership. And that the public accountability of that leadership whether it is in the private or public sector means there has to be some institutional arrangements that actually curb arbitrary power and tyranny and susceptibility to tyranny and this giving into this temptation to maintain their position at any cost. So public accountability is the key to successful leadership that will deliver on human development.

Thank you.