Optimising growth to benefit the poor

The decision to withhold forest clearance to a mining project in the tribal area of Orissa is a turning point in the evolving national consensus around sustainable development, because it focuses attention on a neglected dimension of sustainability - the social dimension, or impact on the poor. It is timely, because we will be making increasing demands on natural resources as we consume vast quantities of steel, cement, aluminium, chemicals and fertilisers needed for infrastructure, urbanisation and food security essential for the eradication of poverty. Almost all the mining will take place in the tribal areas. As the finance minister pointed out to the Standing Committee leaping the 'double-digit growth barrier' and, ensuring that the growth is tempered with inclusiveness , equity and concern for the aam admi can be met only through sustained investment in infrastructure. We plan to invest. 4.1 trillion ($880 billion) in the period 2012-17, in the XII Plan, as compared with $541 billion in the current Plan. It has yet to be recognised that the stress on infrastructure, and related mining, because of the vast areas covered, requires a corresponding shift from focus on the exploitation of natural resources (the economic-environmental dimension) to the role, allocation and valuation of ecosystem services provided by these natural resources (the social dimension). Currently, the different 'environmental' clearances consider only a part of the problem, and the interests of the tribal's are invariably neglected. For example, environmental impact assessment essentially considers the technology used and environmental damage by the pollution caused directly on air, water and soil, ignoring the changes in ecosystem services that result and the consequential economic and welfare impacts on the local population. The Forest Rights Act provides detailed procedures, and safeguards, only in cases where the rights of tribals are affected in critical wildlife habitats of national parks and sanctuaries, and these provisions need to be extended to diversion of forest lands for development of infrastructure projects. A new poverty index, recently developed by the United Nations, stresses the role of services such as electricity, water and sanitation in the eradication of poverty. It shows that the numbers of poor is more than economic indicators indicate, and has important implications for defining the resettlement or alternatives package in terms of not only compensation for land, and establishment of schools and hospitals but also access to modern services. The Forest Rights Act's definition of 'community forest resource' recognises that reserve forests were created out of the traditional , or customary, boundary of villages, over which all the local inhabitants had 'unlimited' rights. Therefore, there is no need to determine the nature and extent of these historical rights based on the restrictive approach taken by colonial administrators in recording such rights. We also know that markets fail to capture most ecosystem service values. Existing price signals only reflect - at best - the share of total value that relates to provisioning services like food, fuel or water and their prices may be distorted. Even these services, where carried out as part of community management of shared resources, often bypass markets. The values of other ecosystem services are generally not reflected in markets apart from a few exceptions, such as tourism. This is mainly explained by the fact that many ecosystem services are considered 'public goods' or 'common goods' : they are often open access in character, but are really a community resource, and have now been recognised as such in the tribal areas, under the Forest Rights Act.