Under the leadership of the late Mahbub-ul Haq, the United Nations Development Program (UNDP) has been producing annual Human Development Reports since 1990.

While consistently measuring performance on several human development indicators, it has also elaborated on various themes related to human development. These reports have generally taken a fairly liberal approach to contemporary development debates, though there have been some recent criticisms that the reports have recently become more orthodox.

A great deal of important research underlies each report and the UNDP HDR office now publishes background papers in its new journal. The theme of the 2002 Human Development Report (HDR) is 'Deepening Democracy in a Fragmented World'.

In his preface, the UNDP's Administrator, Mark Malloch Brown notes that the 2002 HDR shows that 'building strong and deep forms of democratic governance at all levels of society' 'is as important to successful development as economics'.

More importantly, the Report debunks the oft-made claim about the trade-off between development and democracy, i.e. that the latter needs to be sacrificed in favour of the former.

The HDR 2002 notes, "Authoritarian leaders promise better outcomes and argue that democracy must be sacrificed for economic growth and social progress. But there is no evidence of such a trade-off".

Democracies no worse

The HDR takes on the usual arguments head on: "Many detractors suggest democracy tends to be too messy, uncontrolled and prone to manipulation and abuse to provide the stability and continuity needed for sustained social and economic reform. Such arguments are wrong on two grounds.

"First, democracies are on balance no worse than other forms of government in boosting economic performance. Democracies are notably better in meeting the most pressing social needs of citizens, particularly at moments of crisis or displacement that most affect poor people.

"Second, democratic participation is a critical end of human development, not just a means of achieving it".

The Report notes the significant progress towards democracy in the last two decades, with the military retreating to the barracks in some countries in the 1980s and the end of many one party states in the 1990s. Unfortunately, progress has not been unidirectional.

"A growing number of democratic governments have slipped back into increasingly undemocratic practices, with leaders altering constitutions, bullying weak legislatures and judiciaries, and openly manipulating elections, often with a devastating effect on human development."

"Several developing countries have since returned to more authoritarian rule: either military, as in Pakistan since 1999, or pseudo-democratic, as in Zimbabwe in recent years. Many others have limited political freedoms and closed or dysfunctional politics."

These observations should be familiar to Malaysians, as should the following that emphasize the considerable gap that may exist between having regular elections and participatory democracy: "Of the 140 countries that hold multiparty elections, only 80 are fully democratic. 106 countries still limit important civil and political freedoms."

"Where majority rule through the ballot-box is established, it is often at the expense of minority rights; too often the absence of a democratic culture means that those who lose elections are either persecuted by the winners or refuse to accept legitimate election outcomes. Democracies require not just legitimate governments but legitimate oppositions too".

Participate in decisions

Echoing the spirit of 1998 Economics Nobel Laureate Amartya Sen's Development As Freedom , the HDR 2002 notes, "People everywhere want to be free to determine their destinies, express their views and participate in the decisions that shape their lives."

"Democracy means ensuring that institutions and power are structured and distributed in a way that gives real voice and space to poor people and creates mechanisms through which the powerful whether political leaders, corporations or other influential actors can be held accountable for their actions.

"Citizens often feel powerless to influence national policies. In a 1999 Gallup International's Millennium Survey of more than 50,000 people in 60 countries, only one in 10 said that their government responded to the people's will.'

"Democratic governance is valuable in its own right. But it can also advance human development, for three reasons. First, political freedom and participating in the decisions that shape one's life are fundamental human rights. Second, democracy helps protect people from economic and political catastrophes. Third, democratic governance can trigger a virtuous cycle of development".

"Effective democratic governance is not yet a reality. While there are some exceptions, in many countries governments have failed to provide the jobs, services and personal security their citizens so badly need and want."

The HDR 2002 identifies several key institutions necessary for democratic governance:

  • Elected and accountable representation;
  • Free and fair elections as well as universal suffrage;
  • Checks and balances based on the separation of powers, with independent judicial and legislative branches;
  • Vibrant civil society, able to monitor government and private business and participate politically;
  • Free and independent media;
  • Basic rights to free expression, assembly and information;
  • Effective civilian control over accountable security including police forces.

    • The HDR is aware that formal democracy alone does not guarantee justice. "The links between democracy and human development are not automatic: when a small elite dominates economic and political decisions, the link between democracy and equity can be broken".

    Widespread phenomenon

    "One critical problem is money in politics, which subverts democratic institutions when it exerts undue influence on who gets elected and what legislators vote for".

    While Malaysians will be quick to recognize this, the phenomenon is widespread, having infected long-established democracies as the economist Paul Krugman has so vividly reminded readers in his recent New York Times columns.

    Noting the rise of authoritarian populism, fascism and contemporary racism against 'foreigners', the HDR warns that democratic regimes risk democracy itself if they fail to protect the public interest, especially the interest of the poor.

    "When democratic governments do not respond to the needs of poor people, the public becomes more inclined to support authoritarian or populist leaders who claim that limiting civil liberties and political freedoms will accelerate economic growth and promote social progress and stability".

    The HDR is also aware of the difficulties of building democracy, especially in post-colonial societies where constitutional and institutional arrangements have tended to be strongly influenced by the colonial experience. After all, 'democracy that empowers people must be built it cannot be imported".

    Very importantly, the HDR also addresses the difficult and often avoided challenges of trying to democratize international governance. "Citizens often feel subject to international forces that they have little capacity to control".

    "International trade rules have worked against the economic interests of developing countries and failed to restrain protectionism in industrial countries, especially through anti-dumping rules and other non-tariff barriers".

    Under heavy influence

    The HDR 2002 notes that though "actual decision-making [in the WTO, or World Trade Organization] occurs by consensus", the entire process is "heavily influenced by the largest and richest countries".

    The Third World Network has done much to shed light on these biased processes, but there is still no effective strategy to resist, let alone roll back all that has been lost through trade and trade-related negotiations under the auspices of the WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT).

    After September 11, the post-Seattle resistance to further trade liberalization was reversed in Doha by the cruel irony of calling the new round of trade negotiations a 'Development Round' and the compromise of cheaper drugs to combat HIV/AIDS.

    The HDR correctly notes the 'unrepresentative decision-making' processes in the crucial international economic institutions: "Influence of the United States over institutions such as the IMF and WTO has little to do with formal voting power".

    However, it should be noted that the voting structure of both Bretton Woods institutions are closer to the principle of 'one dollar one vote' rather than 'one government one vote' or 'one person one vote', allowing the US and developing countries collectively effective veto powers.

    The significantly different governance structure of the Inter-American Development Bank (IDB) suggests that this Bretton Woods status quo is not the only possible option for an international financial institution.

    Despite Joseph Stiglitz's promise of a 'post-Washington Consensus', the Consensus still rules, and prospects of significant reform are more remote than ever. The ideological and policy hegemony of the consensus is being strengthened and extended by the continuing spread of American neo-classical economic orthodoxy through post-graduate education and training on a global scale despite the considerable heterodoxy and dissent that prevails among most outstanding economic analysts.

    Social safety nets

    The HDR 2002 does not quite seem to have taken account of the nature of the Bush regime's increasingly unilateralist approach to international affairs as clearly evident by the new US stances on a whole host of international agreements such as the Kyoto Protocol on Climate Change.

    For example, while worthy of serious consideration and debate, it is interesting that Anne Krueger, the Deputy Managing Director of the IMF, announced her debt work-out proposals without first consulting the IMF's governing board.

    However, the report does warn of possible dire consequences of ignoring those currently marginalized from serious policy consideration except in terms of providing 'social safety nets' for an economic system that systemically integrates, only to exclude with dire consequences, in a cruel contemporary version of social Darwinism.

    "A widespread sense of exclusion and powerlessness in developing countries can threaten economic growth and security in industrial as well as developing countries".

    Quite correctly, it also warns of the "strong possibility that the September 11 terrorist attacks and their aftermath will further weaken global institutions, undermine human rights and exacerbate social and economic fragmentation".

    JOMO KS is an economist. The above was a speech he gave at the launch of the UNDP 2002 human development report on Aug 1

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