"with a per capita income estimated by various surveys to be between $298 and $350 a year, about one-seventieth the American average...
Demographically, in other words, Kerala mirrors the United States on about one-seventieth the cash."
How has Kerala been able to achieve so much with the little it has? Nobel Prize winning economist Amartya Sen explains*:
"The explanation of Kerala's success in the important space of basic capabilities has to be sought in the history of public policy involving education (including female literacy) and health services (including communal medical care, and to some extent, food distribution, in contrast with the rest of India.
There are also other factors involved, including a more favourable position of women in property rights and in inheritance among a substantial and influential section of Kerala's population, and the greater public activism connected with educational campaigns as well as politics in general. The history of public action in Kerala goes back a long time, with remarkable literacy campaigns in the native states of Travancore and Cochin in the nineteenth century" [Emphasis mine]
Why do i bring up the Kerala experience? There is always a chance that any industrial policy may fail, simply because the wrong industry has been targetted, deficiencies in execution or simply bad luck. There is also the very real possiblity that our present deadbeat Philippine elite won't be up to the historic task unlike their counterparts in East Asia and India. We may have to bide our time while we let the process of replacing the current elite with a more functional one (from the ranks of the poor and middle class) takes place. In the meantime, the welfare of the rest has to be looked after. The policies implemented in Kerala is one which a future Philippine government can consider emulating.**
A Kerala experience by R. Krishnakumar - Kerala honors Amartya Sen, and worth reading for his quotes on education, democracy, globalization and inequality.
Tyler Cowen's blog post over at marginalrevolution regarding Questions about Sen which got me started on this entry. He provides a fair summary on Sen's contributions. Especially relevant to the discussion is his point #5 i.e. "If there any shortcoming of Sen’s thought or his theory, what would it be?"
An article in Salon about Open Source Software and Kerala's Socialist government.
*Inequality Reexamined by Amartya Sen
**I also wouldn't rule out the possibility of industrialization policies being implemented side by side with Kerala's social welfare oriented policies. After all, India was able to pursue this track.
Update (04-25-2007): Abe Margallo provides his analysis and critique on the above here. The message i get from his post is that the strategy of expanding human capital without developing local industry is, ultimately, a limited one. As he explains:
"So after a successful capacity expansion, Kerala, I believe, must take the next sequence - which is opportunity expansion. This is where Kerala, Inc. as in my proposed Philippine, Inc., must be pursued. Without opportunity expansion, the human capital they have produced, just as Philippines’ best and brightest, will emigrate to where there are opportunities."