Efficiency of public expenditure key to human development

It's not only increased public expenditure but the efficiency of public expenditure that is key to human development, according to a former finance minister.

"The low quality of governance coupled with lack of credibility of government institutions are the bottlenecks for overall human development despite increased public expenditure in education and health," said former finance minister Dr Ram Sharan Mahat, addressing the 'Regional Consultation on Human Development in South Asia,' co-organised by the South Asia Centre for Policy Studies (SACEPS), United Nations Development Programme, and Human Development Report Office, here today.

Similarly, economic growth is a pre-condition for development, he said, adding that without economic growth, the government cannot generate resources for other sectors like health and education that are essential for human development.

However, the human development index (HDI) should also set some directions to some of the pressing issues, said former chief secretary Dr Bimal Koirala. "Privatisation has, due to various reasons, been painted as anti-poor, though it is pro-poor as it will lessen the government's burden and it can channel and concentrate public spending on pressing issues," he said, adding that a strong state, leadership and institutions, and economic growth compliment each other but they are themselves under question.

Participants from the South Asian region — that is marred by massive poverty and deprivation despite emerging as one of the most vibrant regions with rapid growth — also suggested the Human Development Report Office to include governance that is a key indicator of development.

Similarly, former foreign secretary and executive director of SACEPS Madhu Raman Acharya suggested to synergise the various development parametres as they overlap each other.

South Asia has the second lowest regional HDI in the world. Of the seven countries in the region covered by it, only Sri Lanka belongs to high human development group leaving three — Maldives, India and Bhutan — in the medium human development group and remaining three — Nepal, Bangladesh and Pakistan — in the lowest human development group.

Greater engagement with the rest of the world, taking advantage of global markets in terms that are most favourable, promoting equity and social justice through greater equity, voice and participation, and generating employment will help promote human development in the region, said director at the Human Development Report Office Khalid Malik, adding that intra-regional trade is an unexploited source of benefit for South Asian countries.