Chapter 4
Emerging and Transition Economies: Widening the Poverty Gap

An emerging economy is one that is moving from developing to developed (or industrial),while a transition economy is one evolving from a planned economy (meaning one controlled by the government, as in the former Soviet bloc countries) to a free market economy like those in North America and Europe. A country may be both emerging and transitional. Countries undergoing these economic shifts experience varying degrees of progress regarding their impoverished citizens. Generally, a great number of people are able to enter the middle class during such a transition because of increased business opportunities. At the same time, the incidence of poverty and extreme poverty can increase as the very poor have little or no access to such opportunities.

Researchers of poverty use a measurement called the Gini coefficient to discuss income equality—that is, the poverty gap. Developed by the Italian statistician Corrado Gini in 1912, the Gini coefficient is a number between zero and one, with zero representing perfect equality and one representing perfect inequality. Scholars often use the Gini coefficient to express how wide the gap is between the very poor and those with higher incomes.

ASIA

In the early years of the twenty-first century several countries—most notably China and India—that had suffered long-term extreme poverty began to experience unprecedented economic growth. Reasons include rapidly expanding economies and increasing acceptance into the global marketplace; the burgeoning fields of technology and science in both East Asia and the Indian subcontinent that have allowed for greater educational and employment opportunities; the outsourcing of jobs from developed countries to the developing world; and the relative loss in value of the U.S. dollar, which has in general increased the values of foreign currencies.

Despite near record high oil prices around the world, a disappointing agricultural harvest in Southeast Asia, and a softening electronics market, all in 2006, economic growth in the developing countries of Asia is expected to continue. In 2005 the Asian Development Bank's Asian Development Outlook 2005 Update (http://adb.org/documents/books/ado/2005/ado2005.pdf) projected the region's gross domestic product (GDP) would continue to grow at an average of 6.6% in 2006, down from 2004's 7.4%, but still a high rate. (By comparison, the U.S. GDP grew at an annual rate of 3.8% in the third quarter of 2005, according to the Bureau of Economic Analysis, October 28, 2005). High oil prices have been a mixed blessing for Asia. The countries of Central Asia (as defined by the Asian Development Bank: Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) have abundant oil supplies that make them a major region of net oil exports. In 2004 the regional GDP for the Central Asian republics grew at a remarkable 10.4%, according to the Asian Development Outlook, with a rate of 8.8% growth projected for 2006 and 9.2% projected for 2007. Turkmenistan, Kazakhstan, and Azerbaijan in particular have rapidly expanding economies and are experiencing growth in such industries as tourism, communications, and oil and natural gas. Furthermore, government investment in modern infrastructure has increased employment and exports in other industries.

In East Asia—which includes Hong Kong, Mongolia, the People's Republic of China, the Republic of Korea, and Taiwan—GDP growth has been strong since 2000 and was projected at 7% for 2006. The acceptance in 2001 of the People's Republic of China into the World Trade Organization (WTO) added to the economic expansion of East Asia, which was led largely by exports from China. In China relaxed government policies have allowed entrepreneurs to compete—many for the first time—in the global marketplace. In addition to the success of such exported products as steel, real estate in China has boomed.

The countries in South Asia (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka) have also experienced some of the strongest rates of growth, allowing many people in the region to attain relative prosperity in the early years of the twenty-first century. The resulting consumer spending in such countries as India and Pakistan has fueled the economies even further. Even war-torn Afghanistan—the least developed country in the world as of 2005—was estimated to achieve GDP growth of 7.5% in 2005, despite the massive social and political upheavals since September 11, 2001. In 2005 the Indian government announced its creation of the Building India program, which will invest $40 billion over four years in improving rural infrastructure, with the goal of moving more of India's rural population into the middle class.

However, despite Asia's unprecedented economic growth in the first few years of the twentieth-first century, extreme poverty persists in the region, and the Gini coefficient is actually rising. According to the report Enhancing the Fight against Poverty in Asia and the Pacific: The Poverty Reduction Strategy of the Asian Development Bank (December 2004, http://www.adb.org/Documents/Policies/Poverty_Reduction/2004/prs-2004.pdf), 720 million Asians lived on less than one dollar a day in 2000.

A majority of Asia's poor are concentrated in South Asia, mostly in the large economies of India, Bangladesh, and Pakistan, but the rest of the continent has many poor people as well. According to the Asian Development Bank in Poverty in Asia: Measurements, Estimates, and Prospects (2004), 1.9 billion Asians lived on less than two dollars a day in 2002, 690 million of them on less than one dollar a day.

Even with its strong economic growth, Kazakhstan maintains a high rate of poverty, at about 24% in 2002 ("Kazakhstan: Poverty Persists Despite Impressive Economic Growth," IRINnews.org, May 13, 2004). In Tajikistan, the poorest of the Central Asian republics, more than 83% of the population lives below the country's poverty line; in Kyrgyzstan 44% and in Turkmenistan 58% live in poverty. According to the United Nations, 70% of the population of Afghanistan lives below the poverty line; only 23% of Afghans have access to safe drinking water, and just 12% have access to adequate sanitation (http://www.undp.org.af/about_us/overview_undp_afg/default.htm).

In all regions of Asia the rapidly growing economies have actually increased the numbers of the working poor—that is, those who are steadily employed but still live below their country's official poverty line. Perhaps more troubling, the gap between the rich and poor has expanded dramatically, particularly in two of the most populous countries on earth: China and India.

THE PEOPLE'S REPUBLIC OF CHINA

According to the Central Intelligence Agency's World Factbook (June 2006, http://www.cia.gov/cia/publications/factbook/geos/ch.html), China is the most populous country in the world, with 1.3 billion people—20% of the earth's population—and about fifty-six different ethnic groups. The country has the second-largest economy in the world, after the United States, with a GDP of $8 trillion in 2005. In the China Human Development Report 2005 (2005, http://hdr.undp.org/docs/reports/national/CPR_China/China_2005_en.pdf), the United Nations Development Program (UNDP) reported that China ranked eighty-fifth on the United Nations human development index (HDI) in 2003—a ranking that fell about in the middle of the list of 177 countries. China's widespread poverty—as well as its contemporary status as an emerging and transitional economic power—has many causes, forged in large part by its complex political history.

From Dynasties to Communism to a Free(er) Market Economy

China is one of the oldest ongoing civilizations in the world, with organized city-states having been developed about 5,000 years ago. Early human beings are believed to have inhabited the region 65,000 years ago, and agriculture is known to have developed around 6000 bce. Two thousand years ago the region was unified for the first time under a single system of government, although over the centuries China experienced periods of political upheaval followed by reunification.

Until the early twentieth century China was governed by a series of dynasties—that is, unified governments controlled by a single leader, with leadership passed down to successive generations. This system of political elitism depended heavily on a massive rural peasant class, who provided all of China with crops for food and other purposes. This social and political organization is known as feudalism and still exists in China.

Over the centuries conflict between the ruling elite class and the poverty-stricken peasants often erupted into rebellions. The Republican Revolution of 1911 brought an end to the dynastic system. For the next several decades, China was nominally unified at best. Warlords and factions controlled various regions, sometimes supporting a national government and other times not.

Among the groups vying for power were the Communists. The Chinese Communist Party (CCP) officially formed in 1920, and quickly grew in strength. It benefited from the anger many Chinese felt towards Western nations, which were supporting Japanese control over the Chinese region of Shantung. Mao Tse-tung was one of the early members of the CCP, by the 1931 he rose to become its leader. By this time the CCP was one of the two most powerful factions in China, the other being the Nationalists, also called the Kuomintang.

When Japan invaded China in 1937, both the Communists and the Nationalists fought back, while remaining at odds with each other. Fighting with Japan continued throughout World War II (1939–45) and was marked by brutal atrocities by the Japanese. Under Mao's direction, the Communist Red Army succeeded in waging guerrilla warfare against the Japanese, gaining further support for the CCP. Mao also further developed his political theory during this time, refining his beliefs that the answers to the poverty among China's peasants lay in land reform and full participation in the social and political arenas. With the surrender of Japan at the end of World War II in 1945, China was free from occupation, but the country was soon plunged into civil war between the Communists and Nationalists. The Red Army conquered most of China by 1949, due largely to Mao's successful recruiting of peasants, and the formation of the People's Republic of China (PRC) was declared. The Nationalists remained in control of the island of Taiwan.

Mao created what was called a "democratic dictatorship," meaning that all the classes of Chinese society were represented by the centralized government; however, detractors from Mao's system were dealt with in prison camps or were simply executed. No one knows exactly how many people were killed under Mao's democratic dictatorship; he admitted to having approximately 800,000 people executed, but the number is believed to be in the millions.

Despite Mao's stated commitment to empowering the peasantry, many of contemporary China's problems with rural poverty can be traced to his economic policies. As a communist country, the government strictly controlled most aspects of the economy, and Mao directed much of its resources towards collectivization, industrialization, and modernization, regardless of the cost to average Chinese. The purges of the Cultural Revolution (1966–76) nearly bankrupted the country intellectually and economically by ridding China of anyone accused of holding "counterrevolutionary" ideas.

China was drawn back into the international community after years of isolation due to communism and the split with Taiwan when U.S. President Richard Nixon visited the country in 1972 and reestablished relations, officially recognizing the PRC as the only legitimate China. Mao died in 1976, and reforms began soon after that loosened state controls somewhat and boosted productivity. Calls for democratic reform were suppressed, however, including the massacre that ended the Tiananmen Square protests of 1989.

In 1998 the Chinese government began a program to privatize some of the economy. Diplomatic relations with the United States improved after a summit with U.S. President Bill Clinton in 1998. By November 1999 the United States and China had reached a trade agreement that loosened trade barriers and made way for China's acceptance into the WTO; China officially earned WTO membership in December 2001. Since then, China has experienced unprecedented economic growth—nearly 10% annually, according to most estimates. It has become one of the world's largest and most important manufacturing centers, much of it for export but also for its expanding domestic market.

China's Growing Middle Class

A large part of the success of China's economy since the late 1990s has been the expansive building and business boom in its cities, which has fueled the urban economy by increasing employment opportunities. With so many more people finding work in China's large cities, and massive government investment in fueling this urbanization, the urban middle class has expanded. Although China's per capita annual income was just $1,000 in 2004 ("China's Middle Class Revolution," October 11, 2004, http://news.bbc.co.uk/1/hi/world/asia-pacific/3732914.stm), People's Daily Online (English version; "Chinese Middle-Class Families Defined," June 2, 2004, http://www.sinoptic.ch/embassy/presseschau/2004/20040601-0604.htm) reports that by 2010, 100 million Chinese families are expected to be included in the middle-class category of people with assets totaling approximately $75,000. Most of those included in this group are the highly educated professionals, managers, and other white-collar employees. In September 2005 People's Daily Online reported that 11.9% of Chinese citizens could be defined as middle class, meaning they earned 5,000 Yuan per month, or about $617, had earned at least a bachelor's degree, and were employed in professional or technical occupations (http://english.people.com.cn/200509/03/eng20050903_206346.html).

This new middle class is both the result and a cause of China's evolution from an agrarian economy to an industrial one. The more people move to urban settings, the more they need items such as automobiles, which changes the way they shop and do business, which in turn increases the likelihood that they will pay for goods and services they would not have needed before, thus increasing overall consumerism. In "China through the Middle Class—Some Distortion but Real Nonetheless" (February 6, 2004, http://www.asiapacificbusiness.ca/apbn/pdfs/bulletin144.pdf), the Asia Pacific Bulletin reports that private ownership of vehicles and property—which had been anathema to Communist Party leaders throughout much of the twentieth century—was on the rise: in 2003 there were 12.4 million privately owned automobiles in China (up 24.8% from 2002), and private ownership accounted for 82% of real estate in urban areas. In addition, Asia Pacific Bulletin notes an increasing demand for improved health care and education services, as well as more personal spending on travel and eating out—formerly looked down on in the country as indulgent luxuries.

A History of Inequitable Income Distribution

Inevitably, as a large segment of a country's population moves up in social and economic status, the divide between the rich and poor becomes wider and deeper. In countries that have had a planned economy, in which the centralized government controls prices and wages, income is distributed to ensure a certain level of equality, and market competition is discouraged. In China, however, the rural communal farm system was never really equitable. While urban factories were owned and wages administered by the central government, with workers receiving a low but dependable level of health care and compulsory education, the farm communes in the countryside were operated, and wages were controlled, by provincial landlords. To guarantee the health of the urban economy so that China could compete on the world market, investment was concentrated in manufacturing centers along the coast, while the prices of crops produced in the interior were suppressed. This guaranteed that more money would be available for the country to pursue industry, but it also created inequalities between urban and rural dwellers' incomes and standards of living. According to the China Human Development Report 2005, the urban per capita income in 1978 was already 2.6 times that of the rural provinces. The World Bank reports that the disparity in the incomes between rural and urban dwellers continued to increase from 1990 through 2002. (See Table 4.1.)

Government economic reforms in the 1980s and 1990s sought to gradually privatize certain businesses; at this point even some rural farmers who took advantage of the expanding free market benefited. However, as privatization spread in China's cities, competition forced many businesses to cut wages and lay off workers, leading to a class of unemployed urban workers. Regardless, fluctuating grain prices kept most rural Chinese poor from the late 1990s to the present, and most of those living in rural provinces never attained the same kinds of opportunities that became available to urban dwellers during the economic reform period.

Poverty Decreases, Especially among Rural Peasants

Nonetheless, great advancements have been made in the country's human development indicators since government reforms began in the late 1970s. The China Human Development Report 2005 states that the number of rural citizens living in absolute poverty dropped from 250 million in 1978 to 26.1 million in 2005. A direct result of this is that between 1980 and 2001 the average life expectancy rose from sixty-seven to seventy years, while the infant mortality rate dropped from forty-two deaths per 1,000 live births to thirty-one deaths per 1,000 live births. (See Table 4.2.) Furthermore, the China Human Development Report 2005 reports that in 2002 the adult literacy rate was 85.8% and the youth literacy rate 95.4%, better than the average levels in developing countries, which were 75% and 85%, respectively. Overall, China's incidence of poverty has been steadily decreasing. In 1990 the national rate of poverty at one dollar per day of income was 23.1, and by 2000 it had dropped to 8.8. There was a similar decrease in the national rate of poverty at one dollar per day of consumption, from 32.9 in 1990 to 16.1 in 2000. (See Table 4.3.)

While the poverty rate has declined and the human development ranking has improved, the gap between the rich and poor has grown. CHINAdaily.com reports that, as of June 2004, there were 236,000 Chinese whose

assets totaled at least $1 million (http://www.chinadaily. com.cn/english/doc/2004-06/18/content_340483.htm). At the same time, China is home to hundreds of millions of peasants, most of whom live in poverty. Although the per capita income for both urban and rural citizens has risen from 1990 to 2003, the urban per capita income saw a considerable increase. (See Figure 4.1.) A 2002 study by the Chinese Academy of Social Sciences found a remarkable income discrepancy between those who reside in urban and rural centers: 93% of those in China's highest income category were urban dwellers, while 7% were rural dwellers (UNDP, China Human Development Report 2005). Income inequality between urban and rural residents fluctuated during the 1990s and then rose dramatically between 1997 and 2003. (See Figure 4.2.) Table 4.4 shows the level of dependence of poor and nonpoor Chinese households on agriculture; peasants living in rural regions are obviously most dependent.

Besides the inequality of incomes, there is also a significant difference in health. The infant mortality rate has been decreasing for both rural and urban infants since 1991. Regardless, in 2000 the rural rate was thirty-seven infant deaths per 1,000 live births, as opposed to the urban rate of twelve infant deaths per 1,000 live births. While the maternal mortality rate has likewise seen a decrease during this same period, the rural rate was still seventy deaths per 10,000 live births in 2000, compared to the urban rate of twenty-nine deaths per 10,000 live births. (See Table 4.5.)

SURVEY OF CHINESE PEASANTS

In October 2004 the German magazine Lettre International (http://www.lettre-ulysses-award.org/authors04/chen_wu.html) awarded its top prize—the Lettre Ulysses Award for the Art of Reportage—to a married couple from China's peasant class whose book, Survey of Chinese Peasants, became the country's most notorious publication in decades by exposing the true conditions of life for China's 900 million poverty-stricken peasants. The Survey's authors, Chen Guidi and Wu Chuntao, spent their life savings to travel for three years to fifty towns in the agricultural province of Anhui, living among the peasants and interviewing thousands of them as well as local and central government officials.

The study was initially published in the Chinese literary magazine Dangdai in late 2003. The issue sold

100,000 copies and went through ten printings. In January 2004 the unabridged version appeared in book form, selling an estimated seven to eight million copies despite being officially banned by China's Communist Party Propaganda Department in March 2004; it has since continued to circulate in pirated editions. Because much of the book focuses on corruption among the party officials who govern peasant villages, and exposes conditions that do not match the government's official version of poverty in China, Chen and Wu were the targets of a libel suit filed against them by one of the officials they discuss in their book. The trial, which was called China's "trial of the century" (Pepe Escobar, "Part 4: The Peasant Tiananmen Time Bomb," January 21, 2005, http://www.atimes.com/atimes/China/GA22Ad01.html), had massive implications for the future freedom of Chinese journalism. Chen and Wu were permitted to travel to Berlin, Germany, to accept the Lettre Ulysses Award, and they were allowed to grant some interviews, but they were also forced to send their young son to live elsewhere for fear of government retaliation. In March 2005 Chen and Wu were found guilty of libel and given heavy fines.

What the Survey of Chinese Peasants reports is a situation far worse than anything nonpeasants and Westerners have imagined: rural farmers and laborers sometimes earning less than $30 a year, living in mud huts, and paying exceptionally high taxes (taxes on peasants are four times higher than those on city dwellers) to support the government's urban industrialization program, without any of the health, pension, or education benefits of the cities. Furthermore, Chen and Wu assert that systematic bribery and extortion, as well as beatings, mass arrests, and murders, are commonplace in rural villages, where local officials rule without repercussions.

One phenomenon peculiar to China and its feudal socioeconomic system of peasants and elites is the mingong: the migrant peasant worker. According to Escobar, more than 200 million mingong throughout China have migrated to cities to take on jobs in construction, manufacturing, food service, and other manual labor. Ten-plus-hour workdays are common, and 97% of mingong have no medical coverage. Robert Marquand, writing in the Christian Science Monitor, reports that most of the peasants work at least twenty-eight days per month, and their pay is frequently withheld from them by managers ("China's Peasants Opt for Urban Grindstone," January 23, 2004). They live in city shelters and are required to register with the government every two months. According to David Wank of Sophia University in Tokyo, the growing Chinese economy depends heavily on the mingong. He told Marquand: "Without migrants, the whole structure would collapse. They staff the shops, restaurants, factories, construction. It all depends on migrants."

INDIA

India has one of the oldest civilizations in the world, with evidence of permanent human settlements dating back 9,000 years. It is also the world's largest democracy and is home to the greatest concentration of poor people—out of one billion people living on approximately 1.1 million square miles of land, 25% live below the country's poverty line (World Factbook, June 2006, http://www.cia.gov/cia/publications/factbook/geos/in.html). According to the World Bank's Issue Brief Poverty in India (September 2004, http://siteresources.worldbank.org/INTINDIA/Data%20and%20Reference/20283013/Poverty_India_Brief.pdf), per capita average annual income was $460 as of 2001.

Like Africa, India was colonized by outsiders from the sixteenth century until it achieved independence in 1947. Like China, India has had a class system designed to keep many people (known as "untouchables") in extreme poverty, performing the kinds of labor that wealthier citizens refuse to do. These two factors together have caused much of India's poverty. Since 1991 India has experienced economic expansion akin to China's, which has left its population even more divided between the so-called haves and have-nots.

Colonialism and the Caste System in India

India is the site of origin for four major world religions: Hinduism, Buddhism, Jainism, and Sikhism. This has made the country rich with cultural and philosophical traditions, but it has also led to violent disputes that made India vulnerable to colonial takeover, wars with neighboring countries, and the creation of Hinduism's caste (class or birth ranking) system that continues to keep many Indians in poverty, in part due to the legal entrenchment of castes during the period of British colonialism from 1757 to 1947.

According to the World Factbook, Hinduism is India's dominant religion, with 80.5% of Indians counted as followers. One tenet of Hinduism that has strongly influenced secular Indian society is that of castes—the categories into which different kinds of occupations are placed based on the labor or social class into which a person was born. Castes are believed by some to have been instituted by the conquering Indo-European (Aryan) people who invaded northwest India around 1500 bce and imposed the castes as a way to organize the conquered peoples, although other scholars dispute this theory. As in early China, early Indian government was based on a series of dynasties, which further aggravated tensions between the rich and poor.

In "The Caste System and the Stages of Life in Hinduism" (2005, http://www.friesian.com/caste.htm), Kelley L. Ross reports that there are thousands of "subcastes" throughout India—many of them regionally based—but the five traditional rankings are Brahmins (priests and teachers), Ksytrias (warriors and rulers), Vaisyas (farmers, merchants, and artisans), Sudras (laborers), and Untouchables (polluted laborers, also known as "outcastes"). Typical occupations of untouchables include anything dealing with dead bodies, such as disposing of dead animals and unclaimed human bodies, and tanning leather. Castes are not, however, based on economic factors in the same way that class is. According to the Bhagavad Gita (the main religious text of Hinduism), Brahmins, Ksytrias, and Vaisyas are "different, in harmony with the three powers of their born nature." In other words, the three top castes are inborn states of being, not based on economic status. Ross also notes that when the British created their official census for India in the mid-nineteenth century, they included their own interpretations of the castes: "Existing tribal people as well as Untouchables are also called the 'scheduled castes,' since the British drew up a 'schedule' listing the castes that they regarded as backwards, underprivileged, or oppressed."

While in Hinduism one's caste is not necessarily a fixed position (a person can advance to another caste through reincarnation by his or her actions, although movement is not possible in one lifetime), when the British instituted their census in 1872 they included questions on religion and ethnic identity, in keeping with the European preoccupation at the time with establishing a link between social status and racial purity (the British associated Indian castes with race, an association that some Indians came to share). This led to a deepening of the chasm between the classes as well as the castes, as British social policy was imposed on the Indians.

THE INDIAN APARTHEID

The result of centuries of adherence to the caste system is a social structure that still closely resembles that of South Africa's apartheid. The caste formerly called untouchables are now called Dalits, but they are nonetheless at the bottom of India's social hierarchy, especially in the rural states and villages. According to the Human Rights Watch (2006, http://www.hrw.org/campaigns/sasia/india.htm), there are at least 160 million Dalits in India, even though the concept and practice of "untouchability" was outlawed by India's constitution in 1950. The Dalits are routinely discriminated against: they typically cannot own or access land; they must work in the most undesirable occupations (as always, dealing with corpses and waste); they are abused by local police and denied rights; their living quarters and public spaces are strictly segregated; and their children do not receive equal education. Dalit children are also the ones most commonly sold into debt bondage and forced labor. Dalit workers commonly earn just $0.38 to $0.88 per day. Women of the Dalit caste suffer perhaps the most: they are routinely raped as punishment for any offenses their family members commit, and their numbers are increasing in the commercial sex trade because of poverty and lack of other financial opportunities.

Economics of Contemporary India

India is an example of a country that is both emerging and transitional: although it has been a democracy since its independence, certain elements of its economy have been planned because of efforts to encourage social equality. To make up for centuries of discrimination against the lower-caste Indians by the British rulers, the post-independence Indian government developed a mixed economy, with a certain amount of market freedom in the private sector (independent, privately owned businesses) and socialist-style control of the public sector (services such as the railroad and postal systems). With India failing to keep up with the huge growth of other Asian economies in the 1980s, the Indian government began in 1991 to open up the country's markets—including parts of the public sector—to private ownership, foreign investment, and increased trade in an effort to stimulate the economy.

According to Bloomberg.com ("India Economy Likely Grew 7.7% in Dec. Qtr on Consumer Spending," February 22, 2006), the Indian economy grew at a rate of 8.1% in 2005. By comparison, the growth rate of the United States in the same period was 3.1%, and that of the European Union countries was 1.7%. The main reason for this high rate of growth—outside of the loosening of the country's markets—is India's abundance of well-educated, English-speaking workers who are willing to accept relatively low wages for steady jobs. Western countries, therefore, began to outsource jobs and set up operations in India to save money and take advantage of the labor force's talents. At the 2005 India Economic Summit, the Indian prime minister Manmohan Singh announced that India could achieve a 10% annual growth rate within two to three years if infrastructure and agriculture were improved and the savings rates increased ("10% Growth for India Could Soon Be a Reality, Says PM Singh," November 29, 2005, http://www.weforum.org/site/homepublic.nsf/Content/10%25+growth+for+India+could+soon+be+a+reality, +says+PM+Singh).

INDIA'S NEW AFFLUENCE

Yet, as in China, the divide between those who are benefiting from India's wealth and those who are not is larger than ever. Amy Waldman reported in "Mile by Mile, India Paves a Smoother Road to Its Future," (New York Times, December 4, 2005) that in 1999 the Indian government committed more than $12 billion to update and expand India's crumbling highway system. (Indian infrastructure has been notoriously bad for decades.) The National Highways Development Project (NHDP) is a fifteen-year plan to significantly improve 40,000 miles of roadways running through thirteen of India's thirty-five official states and territories, including the major cities of Mumbai, New Delhi, Calcutta, and Zhenhai. The highway's name, the Golden Quadrilateral, points to the symbolic significance of the project, which the Indian government has promised will increase the country's competitiveness and improve the lives of India's citizens.

The Golden Quadrilateral, however, was quickly coming to highlight the growing gulf between the rich and poor. Discussing the highway's promise to unite and uplift India, Waldman stated:

But coherence may bring collision. Since 1991, India's population of poor has dropped to 26% from 36%, yet the poor seem poorer than ever. India now juxtaposes pre- and postindustrial societies: citizens who live on dirt floors without electricity and others who live like twenty-first-century Americans, only with more servants. The highway throws these two Indias into jarring proximity.

Waldman further reported ("In Today's India, Status Comes with Four Wheels," New York Times, December 5, 2005), that 250 million people have entered India's middle class since the mid-1990s and that many others have become "super-rich." For these middle- and upper-class Indians, their new wealth has opened them up to an abundance of consumer choices. In fact, one of India's most popular consumer items in the early twenty-first century has been luxury automobiles—an apparent paradox in a country where so many citizens still rely on walking and ox carts for transportation.

With a massive public roadway winding through the country, it is possible that opportunities will be brought to India's many poor rural villages. However, India is also experiencing a migration—similar to China's—to its cities, which many Indians believe hold the most promise for lifting them out of poverty. The rural poor in India are some of the most impoverished people in the world. According to statistics from the Indian government cited by Jayati Ghosh in "Income Inequality in India" (February 17, 2004, http://www.countercurrents.org/eco-ghosh170204.htm), while per capita consumption has increased 40% since 1989–90 for the richest 20% of the country's urban population, India's poorest group, the bottom 80% of rural dwellers (approximately 600 million people), has actually experienced a drop in consumption since 1989–90, signaling a significantly growing gap in income. (India measures poverty by household consumption rather than by income.) Because India's agricultural sector has seen slow and even negative growth in the first part of the twenty-first century, farming is now seen as a dead-end life for poor families, who often send a young adult member to a large city or industrial center to work and who in turn sends money back home.

… AND PERSISTENT POVERTY

There is no question that overall poverty in India has dropped since the 1980s, when 44.5% of the country lived below the poverty thresh-old. In fact, several human development indicators have improved. Life expectancy, just fifty-six years in the 1980s, rose to sixty years in the 1990s, and then increased to sixty-one years in 2000. (See Table 4.6.) According to the World Bank in "Poverty in India," primary school enrollment rose from 68% in 1992–93 to 82% in 2000, with 108 million children ages six to ten attending school. The fertility rate has dropped since the 1960s, from an average of six children per Indian woman to an average of three. Infant mortality has also improved, from 146 deaths per 1,000 live births in 1950 to sixty-eight in 2004.

Other indicators have worsened, however. The maternal mortality rate has increased from 424 deaths per 100,000 live births to 540 per 100,000, and, as of 2000, there were four million known cases of HIV—a situation that is expected to worsen as India's commercial sex industry grows along with its big cities. While the Indian government has stepped up investment in infrastructure, only 36% of Indian households had a toilet in 2000. (See Table 4.6.) In "Hazeltine Scholar Documents Problem of Illiteracy in India" (Fall-Winter 2003–04, http://www.journalism.indiana.edu/alumni/newswire/stories/hazeltine.html), Sheila B. Lalw0ani reported that India is believed to be the most illiterate country in the world, with an estimated 350 million citizens who cannot read or write. According to the Human Rights Watch 1996 report The Small Hands of Slavery: Bonded Child Labor in India (http://hrw.org/reports/1996/India3.htm), India also has the highest number of working children in the world—an estimated sixty to 115 million (more current statistics on child labor in India are difficult to come by because of the country's many levels of bureaucracy and inaccurate statistical measurements).

CASTE-BASED VIOLENCE

As poverty deepens in India's poor, rural states, tensions between the castes is on the rise. Alexander Zaitchik reported in "Bihar's Blues" (January 20, 2006, http://www.freezerbox.com/archive/article.php?id=406) that Maoist guerilla fighters claiming to represent Dalit interests were seeking revenge on the higher castes in India's poorest states, such as Bihar in the northeast, where the Dalits are routinely subjected to such horrifying violence as mass immolation (being burned alive). However, the situation is not as simple as rebels protecting the country's poorest and most vulnerable citizens. The Maoists have been known to kill anyone they believe to be sympathetic to the higher castes, with or without evidence.

According to Zaitchik, until the 1960s Bihar—where Buddha is said to have achieved enlightenment—was considered one of the most successful states in post-independence India, with many universities, abundant natural resources, and a well-educated citizenry. Bihar leaders in the 1960s, however, failed to implement needed land reforms that would have distributed land equitably among the castes. Instead, the Dalits remained landless and increasingly impoverished. As of 2006 more than half of Bihar's citizens were illiterate. The culture of corruption that arose led to a ruling body and police officials that fail to prosecute or even investigate crimes against Dalits. As the poverty gap widens in India, caste-based violence is spreading throughout the country.

In October 2005 representatives of the human rights organization Amnesty International testified before the U.S. House of Representatives' Committee on International Relations, Subcommittee on Africa, Human Rights, and International Operations, that the following abuses against Dalits are common in India:

• Socioeconomic discrimination
• Beatings, slashings, and other forms of torture
• Arson—the burning of Dalit communities
• Violence against women
• Rape, gang rape, and the parading of women through the streets naked as a form of punishment, as the right of the upper-caste male, or to punish or embarrass the woman's family
• Beating and torture of women
• Summary execution, many times by burning alive
• Bonded labor
• Denial of rights, especially land rights
• Police abuses against Dalits and custodial abuse