Blame it on the political turmoil and the subsequent violence, Jammu and Kashmir serves a typical example of any conflict-ravaged country. There is corruption and lack of accountability here. Policies are wrong and institutions either non-existent or week. And to cap it all, everyone is as if on a looting spree because the vested interests are very strong in more or less every sphere of human activity. Notwithstanding political assertions of governments in the state and at the centre as well as the opposition parties in the mainstream camp and for that matter even the separatists, it goes without saying that there is massive appetite and need for reform everywhere. Indeed the successive governments too have, at least in theory, missed no opportunity to talk of initiating reforms both in economic as well as social spheres; although it is a different question whether they have practically done anything to affect any change!
Couple of decades back, the World Bank developed what it called the low-income countries under stress (LICUS) approach and gave a slew of dos and don’ts for reforms in conflict-ridden contexts. The situations faced by Jammu and Kashmir make it a fit case for the LICUS because the essence of this approach is that even though many policies are wrong and institutions week, the capacity for reform is limited by the institutional incapacities than by the appetite for reform. But at the same time, given that the political situation has calmed down considerably in comparison to what it was during the nineties, this is the time which should be relatively easy for reform. Although it is hard to say if the old vested interests have weakened, but people nevertheless expect change and this change could be brought about only through the rapid pace of reforms.
But as the LICUS warns, attempting reform from across a broad front is not sensible. Reform efforts should, as such, focus on two or three policies that are politically as easy as possible and yield rapid payoffs. The rationale for this approach is to build a consistency for reform in contexts in which the demand for reform is largely latent. Interestingly, there is empirical evidence suggesting that after a decade of reforms in contexts like Jammu and Kashmir, the Country Policy and Institutional Assessment (CPIA) score could be slightly above the developing country average. This should indeed by a very big incentive for reforms and the governments missing on it would have none but themselves to blame. However, the big question still remains: which are the important areas to initiate reform process from?
In the normal LICUS setting, the conventional sequence is that the top priority is to correct macroeconomic imbalances. But in the settings like Jammu and Kashmir, priorities should be broader as is recommended by similar environments elsewhere in the world. Evidence suggests that social policy is relatively more important and macroeconomic policy relatively less important in these settings than in normal situations. Although this is not to imply that macroeconomic balance is unimportant, or that it’s less important than social policies. The available evidence only suggests that relative to the strategies normally adopted, social policy should be given somewhat more weight. This should partly explain why there is dire need of initiatives that are socially oriented. Be it in education sector or on the job front or in health, or for that matter even in social security sector, there is both abject need and huge scope for reform, for all these sectors have common people are the receiving end in more pronounced manner than in other areas and spheres of public activity and governance initiatives. Any initiatives that accords more importance to the ‘social’ than the economic and other aspects of the policy is welcome at this juncture and yield far greater benefits than what are expected, provided there is sincerity of purpose in both formulation and execution of these initiatives.