Some of the South Asian countries may have achieved encouraging rates of economic growth, for example, India, which is moving along at well over a 5 per cent annual growth rate. But high growth does not necessarily ensure a similar increase in the human development index of a country. It may not have trickled down to the masses. A recent report, Human Development in South Asia 2003: The Employment Challenge, prepared by the Pakistan-based Mahbub-ul-Haq Human Development Centre, finds that donor-driven economic reforms may have pushed up growth in South Asia but it has failed to boost employment and to reduce poverty. The findings are sad but significant as the region accounts for nearly a quarter of the world population. According to it, the region registered an average growth rate of 5.5 per cent in 1990-2001, but employment increased by just 1.5 per cent, a fall from higher growth rates of employment in earlier years. Obviously, the report has found that the SAARC countries — Nepal, India, Pakistan, Bangladesh, Sri Lanka, Bhutan and the Maldives — are still unable to meet the basic needs of a sizable chunk of their population. The numbers of those without minimum food supply, basic education, health services, and access to safe drinking water, for example, provide an alarming picture. On an average, 23.9 percent of the urban dwellers and 31.6 per cent of the villagers of the region remained below the poverty line during 1995-2000. Even by this South Asian standard, Nepal fares poorly as its present official absolute poverty rate hovers at 38 per cent. South Asia’s GDP at US$448 in 2001, compared with the average of $1,160 for the developing countries, needs no explanation. For Nepal, the picture is even bleaker, as its per capita GDP stands far below even the South Asian average.

The report sees the main challenge facing the SAARC countries is the fact that its formal sector employs only 10 per cent of the labour force, while 90 per cent have to find work in the informal sector. And this, it says, calls for special attention of the policy makers. Similarly, the employment of the labour force in agriculture and its contribution to GDP is disproportionate — 64.2 per cent of the work force accounts for a mere 24.9 per cent value to GDP. Other economic figures are not much different. A number of factors, some common and some peculiar, have been responsible for the present state of SAARC countries in human development index. For Nepal, growth itself has been severely affected by the eight-year-old Maoist insurgency, apart from other traditional factors. The question of fair distribution looks even more distant. This brings the question back to the pressing need to restore peace in the country. And again to politics.