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By Nilanjan Banik

Although, some of the Asian economies, like, China, India and Viet Nam, are growing at a faster pace they are not doing well in terms of development of basic capabilities in terms of education, health and skill formation. This we found when we ranked countries in terms of Social Development Index and compared them with ranking in terms of GDP growth rate alone. In fact, the not so fast growing economies, like the Republic of Korea, do well in terms of distribution of resources towards its average citizen and in terms of other development criteria.

Much of the cause of inequality in Asia results from inability to absorb predominantly rural based population into urban centric manufacturing and services sector and not because of trade. In fact, trade helps to build capabilities in the region. Upon regressing Social Development Index on Input Measure Index (a constituent of Trade and Development Index as developed by UNCTAD), the coefficient on the latter came out to be positively statistically significant, indicating trade having a beneficial effect in building capabilities of a region. Capabilities are synonymous with freedom – freedom from hunger, freedom from dying prematurely, freedom from getting oppressed, freedom from ignorance, freedom from crime, and freedom from ecological disaster.

Poor people are concerned not only about lack of opportunities to earn income but also having access to quality education, health care, drinkable water, public transport system, financial intermediation, transparent bureaucracy and living in a less polluted environment. Trade helps to build capabilities in two primary ways. First, trade affects mean income positively. Rising income can be instrumental behind getting access to quality health, education and other attributes of good life. Second, trade also embodies flow of resources that can be used to set up both healthcare and education type services, and to build necessary infrastructure in the form of power, water supply, roads and ports.

By Nilanjan Banik
Although, some of the Asian economies, like, China, India and Viet Nam, are growing at a faster pace they are not doing well in terms of development of basic capabilities in terms of education, health and skill formation. This we found when we ranked countries in terms of Social Development Index and compared them with ranking in terms of GDP growth rate alone. In fact, the not so fast growing economies, like the Republic of Korea, do well in terms of distribution of resources towards its average citizen and in terms of other development criteria. Much of the cause of inequality in Asia results from inability to absorb predominantly rural based population into urban centric manufacturing and services sector and not because of trade. In fact, trade helps to build capabilities in the region. Upon regressing Social Development Index on Input Measure Index (a constituent of Trade and Development Index as developed by UNCTAD), the coefficient on the latter came out to be positively statistically significant, indicating trade having a beneficial effect in building capabilities of a region. Capabilities are synonymous with freedom – freedom from hunger, freedom from dying prematurely, freedom from getting oppressed, freedom from ignorance, freedom from crime, and freedom from ecological disaster. Poor people are concerned not only about lack of opportunities to earn income but also having access to quality education, health care, drinkable water, public transport system, financial intermediation, transparent bureaucracy and living in a less polluted environment. Trade helps to build capabilities in two primary ways. First, trade affects mean income positively. Rising income can be instrumental behind getting access to quality health, education and other attributes of good life. Second, trade also embodies flow of resources that can be used to set up both healthcare and education type services, and to build necessary infrastructure in the form of power, water supply, roads and ports.

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