New Delhi, May 27 : With cheap labour being one of the key ingredients needed to propel developing countries to a high-growth trajectory, the Commission on Growth and Development — a think tank comprising 21 leading practitioners from Government and business — has said that “getting the labour market right is vital to both the economics and the politics of growth”. In a report The Growth Report: Strategies for Sustained Growth and Inclusive Development released here today, the Commission — which describes India and Vietnam as two countries that may join the group of 13 “miracle economies” — clearly spells out that it is vital to ensure that the benefits of economic growth reach the entire population. Failing this, it will be the same labour which will not lend “support” to any “growth strategy”, the study warns.
The Commission, which is headed by Nobel Laureate and economist Michael Spence and has another Nobel Laureate Robert Solow and Planning Commission deputy chairman Montek Singh Ahluwalia as members, points out that “in too many developing countries, a portion of the population has not enjoyed the benefits of economic advance and does not anticipate enjoying them in the future”.
“If they are forever blocked from employment,” it adds, “the economy will miss out on their labour and any growth strategy will lose their support.” Commenting on capital controls as an element of growth strategy, the report observes that “policies that actively discourage speculative, short-term capital inflows have proven useful in turbulent times”. It conceding that such controls may be “leaky and imperfect” but states emphatically that this does not imply that they should be abandoned altogether. Rather, notes the Commission on Growth and Development report, they should be implemented more efficiently.
Commenting on the critical issues of Inflation and macroeconomic stability, the report points out that “bringing inflation down is also very costly in terms of lost output and employment” but goes on to ask, “how high is very high?”
