I AM writing this on the first day of the new millennium overlooking the Indian Ocean, which stretches out to the horizon A few yards away, it cascades onto a golden beach in an endless series of rolling breakers.

The last ten days have passed very quickly on a spectacular beach in a village called Mirisa on the southern-most tip of Sri Lanka. I have done very little but swim, read, play bridge, eat and drink and talk to close friends. But in the midst of this idyllic vacation, I have been thinking about the problems of poverty that face the countries of the subcontinent.

When Bernard Tavernier, the sixteenth century French explorer, travelled across India, he was struck by the prosperity of the people he saw around him when compared to Europe. In his account of his voyage, he talks admiringly of the thriving urban centres and the security provided by the state. He could not have foreseen that within the space of two centuries, the situation would be radically reversed and riding on the crest of the Industrial Revolution, Europeans would master the world.

On the first day of the 21st century, it is pertinent to ask why over a billion South Asians remain among the most backward in the world. The countries they inhabit have been richly endowed with resources and a basically talented population. Why then do we continue to wallow in poverty while the rest of the world strides further and further ahead?

Much of the answer lies in the conflicts and divisions that afflict the region. A country like Sri Lanka, blessed with a superb climate, rich soil and plentiful rainfall, should have been doing far better than it is. With a literate population and an adequate infrastructure, one would have thought that it would be on an Asian tiger growth curve. But largely because of its unending civil war, foreign investment has not flowed in to the extent one would have expected.

India and Pakistan remain locked in a mindless conflict over Kashmir. This dispute has brutalized the people of Kashmir over whose wellbeing this quarrel is supposed to be about. It has drained the exchequers of both countries, warped their political development to varying degrees and has contributed to Pakistan's isolation. Pakistan, being the smaller and less stable state, has suffered far more grievously.Owing to this conflict, regional trade has received a huge setback as the South Asian grouping, SAARC, has been paralyzed into irrelevance. Whereas such regional arrangements have brought prosperity to other parts of the world, we deny ourselves the benefits of cooperation due to the self-defeating rivalries and disputes that have sharpened over time instead of dying down as they have in many other regions.

In the Fifties and Sixties, there was a belief that the problems of poverty could be solved with money. Experience has shown that this tenet of faith is demonstrably false. After 50 years and 40 billion dollars in loans, Pakistan remains at the bottom of all social indicator tables, and its economy teeters on the brink of collapse. So clearly, money by itself is not the answer to our woes.

To varying degrees, the people of South Asia are victims of a rapacious and shortsighted ruling class. In the early days of Pakistan, politicians in West Pakistan blocked a constitution based on the universal principle of 'one-man, one-vote' as this would have transferred power to the eastern wing; this selfish approach led inexorably to the creation of Bangladesh and the traumatic events of 1971.

In India, the grip the Nehru family had on political power proved to be ultimately harmful. And partly due to the fact that the Nehrus themselves were of Kashmiri pandit stock, the resolution of the festering Kashmir issue has remained elusive. For their part, Pakistani politicians and generals have raised the stakes over this quarrel to such an extent that it is difficult to see how we can ever restore peace to the subcontinent.

And we need to be very clear that without peace there can be no prosperity. Untold billions have been sunk into sterile bickering while the real problems of the people remain relegated to the back burner. Despite the many advantages South Asia enjoyed on independence when compared with other backward regions (a relatively developed infrastructure; an efficient bureaucracy; and familiarity with the English language with all this implies in terms of access to the rest of the world), we have frittered away our heritage. In Pakistan, we have tried to establish our legitimacy by manipulating religious sentiment and trying to pretend that we are not of South Asian stock. This has resulted in an identity crisis that has produced a succession of lost generations.

While sections of Indian society are making rapid progress now that the heavy hand of the state is gradually being lifted from the private sector, far too many people are condemned to live below the poverty line. The caste system remains a blot on Indian democracy. Bangladesh has made significant progress since its bloody birth in 1971, but it remains a hostage to a high population and a predatory elite.

All these problems are man-made and we can resolve them all, given common sense and resolve. But we choose instead to invent useless, time-wasting, energy-sapping issues and conjure up conspiracies to explain our own failings. Most of our politicians are too immature and too devoid of vision and ideas to seriously tackle the vast problems that beset us; instead, they waste their time and our resources, brandishing weapons at the enemies they have themselves created. By keeping the region in a constant state of turmoil, they have diverted attention from the real issues of poverty, and prevented the people from demanding decent governance and a measure of prosperity.

If there is indeed a conspiracy, it has been hatched jointly by the politicians and the ruling elites of South Asia in an effort to conceal their incompetence and venality. For instance, the World Bank or the IMF has not decreed that the police in the region should be so brutal and yet ineffective. The Americans do not urge our rulers to be devoid of integrity and intelligence. The ISI has not produced the rise of Hindu nationalism in India, just as RAW has not instigated the fundamentalists in Pakistan to drag the country back to the medieval era. All these problems have been created and condoned by our rulers.

But in the ultimate analysis, it is the people of South Asia who have given the power to the ruling elite to misgovern us, and if things are to change, we will have to reject them once and for all.