Two recent global research reports, though on different spheres, place India at the top of the respective blocks. However, the take away messages that the studies offer are indeed poles apart in qualitative terms and worth pondering over collectively.
On January 20, 2014, just before the World Economic Forum (WEF) at Davos in Switzerland, Oxfam International released a report warning that by 2016, the world’s wealthiest 1 percent will control almost half of the global assets. Since 2009, the world’s billionaires have seen their share of the asset pie grow from 44 percent to 48 percent.
Before that, a World Bank Report of October 2014 titled, “Addressing Inequality in South Asia”, highlighted that India has the highest billionaire wealth concentration in South Asia.
Billionaire wealth to gross domestic product ratio in India was 12 percent in 2012. This was was higher than other economies with similar development level, namely, Vietnam with its ratio at less than two percent, and China with less than five percent.
This report also clarifies that inequality in South Asia appears to be moderate when looking at standard indicators such as the Gini index, which are based on consumption expenditures per capita. But other pieces of evidence reveal enormous gaps, from extravagant wealth at one end to lack of access to the most basic services at the other.
Wealth creation by no means is bad and in fact, is essential for economic growth of any nation, if read in isolation. This is mainly because, as the Oxfam report says, some economic inequality is essential to drive growth and progress, rewarding those with talent, hard earned skills, and the ambition to innovate and take entrepreneurial risks.
Unfortunately, at the same time, as the same World Bank report highlights, the stunted growth of children under fiver years of age, due to malnutrition, has been 60 percent of the total number of children born in the poorest households of India, as compared to 50 per cent in Bangladesh and Nepal.
Moreover, According to UNICEF, every year 1 million children again below the age of five years die due to malnutrition related causes in India. This number is worrisome as it is far higher than the emergency threshold, according to W.H.O classification of the severity of malnutrition.
Highlighting stark inequality in India, the report says, “The net worth of a household that is among the top 10 per cent can support its consumption for more than 23 years, while the net worth of a household in the bottom 10 per cent can support its consumption for less than three months.”
Some poor moved above the poverty line, though grossly inadequate:
According to the same report, from 2004-05 to 2009-10 when India’s GDP registered the highest ever average growth, about 40 percent of poor households moved above the poverty line and around 11 percent of poor population even moved into the middle class. Unfortunately, during the same period around 14 percent of the non-poor population also slipped below the poverty line.
Thus, what needs to be addressed soonest is the issue of vast difference in income between the richest and the poorest leading to an equally huge difference in the access to basic human developmental needs such as, education, healthcare and nutrition.
Adverse impact on expected ‘demographic dividend’ of India:
As legendary Bill Gates said in a recent media interview, “India has got far more kids that are malnourished and whose brains are not developed, way more than any other country. That’s really the crisis.”
If this trend of inequality continues, the ‘demographic dividend’ of India that the country has factored in so intimately in its future GDP growth narrative, could well be no more than a myth.
As US Supreme Court Justice Louis Brandeis once famously said, “We may have democracy, or we may have wealth concentrated in the hands of the few, but we cannot have both.”
The Oxfam report also emphasizes, the extreme levels of wealth concentration occurring today threaten to exclude hundreds of millions of people from realizing the benefits of their talents and hard work.
Social inequality and healthcare challenges:
Health of an individual is as much an integral contituent of the socio-economic factors as it is influenced by a person’s life style and genomic configurations. Important research studies indicate that socio-economic disparities, including the educational status, lead to huge disparity in the space of healthcare.
As stated in another report, ‘About 38 million people in India (which is more than Canada’s population) fall below the poverty line every year due to healthcare expenses, of which 70 percent is on purchase of drugs’.
Thus, reduction of social inequalities ultimately helps to effectively resolve many important healthcare issues. Otherwise, mostly the minority population with adequate access to knowledge, social and monetary power will continue to have necessary resources available to address their healthcare needs, appropriately.
Regular flow of newer and path breaking medicines to cure and effectively treat many diseases has not been able to eliminate either trivial or dreaded diseases alike. Otherwise, despite having effective curative therapy for malaria, typhoid, cholera, diarrhea/dysentery and venereal diseases, why will people still suffer from such illnesses? Similarly, despite having adequate preventive therapy, like vaccines for diphtheria, tuberculosis, hepatitis and measles, our children still suffer from such diseases. All these continue to happen mainly because of socio-economic inequalities related considerations, including poor level of awareness.
A paper titled, “Healthcare and equity in India”, published in The Lancet (February, 2011) identifies key challenges to equity in service delivery, healthcare financing and financial risk protection in India.
- Imbalanced resource allocation
- Limited physical access to quality health services and inadequate human resources for health
- High out-of-pocket health expenditures
- High health spending inflation
- Behavioral factors that affect the demand for appropriate healthcare
Research studies vindicate the point:
Following are some research studies, which I am using just as examples to vindicate the above argument on inequality adversely impacting healthcare:
• HIV/AIDs initially struck people across the socio-economic divide. However, people from higher socio-economic strata responded more positively to the disease awareness campaign and at the same time more effective and expensive drugs started becoming available to treat the disease, which everybody cannot afford. As a result, HIV/AIDS are now more prevalent within the lower socio-economic strata of the society.
• Not very long ago, people across the socio-economic strata used to consume tobacco in many form. However, when tobacco smoking and chewing were medically established as causative factors for lung and oral cancers, those coming predominantly from higher/middle echelon of the society started giving up smoking and chewing of tobacco, as they accepted the medical rationale with their power of knowledge. Unfortunately the same has not happened with the poor people of lower socio-economic status. As a consequence of which, ‘Bidi’ smoking and ‘Gutka’/tobacco chewing have not come down significantly among the population belonging to such class, with more number of them falling victim of lung and oral cancers.
Thus, in future, to meet the unmet needs when more and more sophisticated and high cost disease treatment options will be available, mostly people with higher socio-economic background will be benefitted more due to their education, knowledge, social and monetary power. This widening socio-economic inequality will consequently widen the disparity in the healthcare scenario of the country.
Phelan and Link in their research study on this subject had articulated as under:
“Breakthroughs in medical science can do a lot to improve public health, but history has shown that, more often than not, information about and access to important new interventions are enjoyed primarily by people at the upper end of the socioeconomic ladder. As a result, the wealthy and powerful get healthier, and the gap widens between them and people who are poor and less powerful.”
Recent deliberations at Davos:
In the last two decades, socio-economic inequality in India has been fuelled by rapid, but unequal economic growth of the nation. Though the overall standard of living has been rising, there still remain a large number of populations living in pockets of intense deprivation and abject poverty.
One of the Davos sessions of this year deliberated on “What Future Do You Want?” The session, among others, reportedly felt the important need to ensure people’s well being and put in place effective measures such as a social safety net and universal healthcare.
At the same WEF annual meet at Davos, United Nation’s Secretary General Ban Ki-Moon also reiterated, “All policies must be people centric. We should make a world where nobody is left behind.”
Assuming the above approach as a sincere realization of the current policy makers and more importantly the powerful influencers of those policies, the key question that comes up is: In which direction would India now chart its course to address this critical issue?
One may possibly hazard a guess on the shape of the future policies to come in India from the BJP party President Amit Shah’s recent address to crème de la crème of Mumbai businessmen in a function organized by a business news channel. In this event Mr. Shah reportedly said to them that the BJP does not agree with their definition of “reforms” and will strive to build a welfare state.
Will this approach of the new political dispensation get reflected in the forthcoming union budget as well, to effectively translate the new National Health Policy of India into reality, at least this time?
I deliberated on the National Health Policy of India in my Blog Post of January 12, 2015, titled “India’s National Health Policy 2015 Needs Wings To Fly”
That said, if it really so happens, a strong signal would go to all stakeholders that India is now well poised to chart on an uncharted frontier to significantly reduce the impact of inequality, particularly in the space of healthcare.
In that process, despite the highest billionaire wealth concentration, India would set a pragmatic course to place itself at the top of the healthcare chart, not just in South Asia, but probably also within the BRIC countries, to expect the least.
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.