This blog is based on the report The Web of Transport Corridors in South Asia -- jointly produced with the Asian Development Bank, the United Kingdom’s Department for International Development, and the Japan International Cooperation Agency
One of the oldest, the Grand Trunk Road from the Mughal era still connects East and West and in the 17th century made Delhi, Kabul and Lahore wealthy cities with impressive civic buildings, monuments, and gardens.
In India alone—and likely bolstered by the successful completion of the Golden Quadrilateral (GQ) highway system—several transport proposals extending beyond India’s borders are now under consideration.
They include the International North-South Transport Corridor (INSTC), linking India, Iran and Russia, the Asia-Africa Growth Corridor, and the Bangladesh, China, India, and Myanmar (BCIM) economic corridor.
The hope is that these transport corridors will turn into growth engines and create large economic surpluses that can spread throughout the economy and society.
These two cities are the economic hubs of China and India respectively, two emerging global powers.
The distance between them, about 5,000 kilometers, is not much greater than the distance between New York and Los Angeles.
But instead of crossing a relatively empty continent, a corridor from Shanghai to Mumbai—via Kunming, Mandalay, Dhaka, and Kolkata—would go through some of the most densely populated and most dynamic areas in the world, stoking hopes of large economic spillovers along its alignment.
“Build and they will come” seems to be the logic underlying many massive transport investments around the world.
However, the reality is that not all these investments will generate the expected returns.
Worse, they can become wasteful white elephants—that is, transport infrastructure without much traffic—that would cost trillions of dollars at taxpayers’ expense.
First, countries need to change the mindset that transport corridors are mere engineering feats designed to move along vehicles and commodities.
Second, sound economic analysis of how corridors can help spur urbanization and create local jobs while minimizing the disruptions to the natural environment, is key to developing successful investment programs.
Specifically, it is vital to ensure that local populations whose lives are disrupted by new infrastructure can reap equally the benefits from better transport connectivity.
For instance, more educated and skilled people can migrate to obtain better jobs in growing urban areas that are benefiting from corridor connectivity, while unskilled workers may be left behind in depopulated rural areas with few economic prospects.
But while corridors can create both winners and losers, well-designed investment programs can alleviate potential adverse impacts and help local people share the benefits more widely.
In that vein, India’s Golden Quadrilateral, or GQ highway system, is a cautionary tale.
No doubt, this corridor had a positive impact.
Economic activity along the corridor increased and people, especially women, found better job opportunities beyond traditional farming.
But this success came at a cost as air pollution increased in the districts near the highway.
This is a major tradeoff and one that was documented before in Japan when levels of air pollution spiked during the development of its Pacific Ocean Belt several decades ago.
Another downside is that the economic benefits generated by the GQ highway were distributed unequally in neighboring communities.
“The main driver of growth in Bhutan continues to be the hydropower sector, but electricity generation does not create job,” said a senior government officials attending the presentation of TheWorld Bank’sSouth Asia Focus onJobless Growth on June 28th in Thimphu. The report was presented by Martin Rama, World Bank South Asia Region Chief Economist and was attended by senior government officials, parliamentarians and development partners. The presentation alongside the launch of Bhutan Development Update was a great opportunity for the policy makers to better understand and synthesize Bhutan and the South Asia region’s development opportunities.
In the case of Bhutan, it seems clear that growth alone will not allow it to attain higher employment rates as enjoyed by some other developing countries.
"More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region,” said Martin Rama,. “But providing opportunities to these young entrants while attracting more women into the labor market will require generating even more jobs for every point of economic growth.”
The report informs that the fall in employment rates has been much faster in the region particularly in India, Bhutan and Sri Lanka and especially for women, risking foregoing the demographic dividend. While it is evident that the number of working age people is increasing, the proporation who are at work has declined owing to prioritization of the households to education, health and other commitments with increasing level of income.
South Asia is booming. In 2018, GDP growth for the region as a whole is expected to accelerate to 6.9 percent, making it the fastest growing region in the world. However, fast GDP growth has not translated into fast employment growth. In fact, employment rates have declined across the region, with women accounting for most of this decline.
Between 2005 and 2015, female employment rates declined by 5 percent per year in India, 3 percent per year in Bhutan, and 1 percent per year in Sri Lanka. While it is not surprising for female employment rates to decline with economic growth and then increase, in what is commonly known as the U-shaped female labor force function (a term coined by Claudia Goldin in 1995), the trends observed in South Asia stand out. Not only has female employment declined much more than could have been anticipated, it is likely to decline further as countries such as India continue to grow and urbanize.
The unusual trend for female employment rates in South Asia is clear from Figure 1. While male employment rates in South Asia are in line with those of other countries at the same income level, female employment rates are well below.
If women are choosing to exit the labor force as family incomes rise, should policymakers worry? There are at least three reasons why the drop in female employment rates may have important social costs. First, household choices may not necessarily match women’s preferences. Those preferences reflect the influence of ideas and norms about what is women’s work and men’s work as well as other gendered notions such as the idea that women should take care of the children and housework. Second, when women control a greater share of household incomes, children are healthier and do better in school. Third, when women work for pay, they have a greater voice in their households, in their communities, and in society. The economic gains from women participating equally in the labor market are sizable: A recent study estimated that the overall gain in GDP to South Asia from closing gender gaps in employment and entrepreneurship would be close to 25 percent.
To that end, a Bhutanese delegation visited Tokyo and Kyoto last year to attend the Resilient Cultural Heritage and Tourism Technical Deep Dive to learn best practices on risk preparedness and mitigation, and apply them to Bhutan’s context.
Such knowledge is critical as Bhutan’s communities live in and around great heritage sites.
Members of parliament are valuable partners for the World Bank. They enact laws, shape and review development policies, and hold governments accountable for World Bank-financed programs. This applies for the landlocked Himalayan kingdom of Bhutan. The role of its parliament has been increasing since the country’s successful transition from monarchy to constitutional monarchy in 2008. Through its engagement with these elected representatives, the World Bank effectively integrates citizen voice in its programs to achieve lasting and inclusive development results.
A joint workshop between the World Bank and National Council of Bhutan, the upper house, was a great opportunity for the World Bank to engage with the 25 newly elected National Council members.
A landlocked Himalayan kingdom tucked in a mostly rugged mountainous terrain between India and China, it measures prosperity by assessing its citizens’ level of happiness by way of a Gross National Happiness index.
Bhutan’s geography – with land rises ranging from 200 meters in the southern foothills to 7,000 meters in the high northern mountains – consists of three major agro-ecological zones that allow for a rich biodiversity and seasonal foods.
"Many families in rural Bhutan practice two meals rather than three meals a day," reports Ms. Kinley Bidha, Tarayana Foundation Field Officer in Samtse Dzongkhag. "Some for cultural reasons, others due to a shortage of food, others due to a shortage of land too farm," she adds.
Nonetheless, the lack of variety of foods in diet remains a key concern, especially for pregnant and nursing women as well as young children. And while most families feed their children complementary food, fewer than a quarter of parents provide them nutritious meals essential to their health.
In addition, 67 percent of Bhutanese adults consume less than the recommended five servings (or 400 grams) of fruits and/or vegetables per person a day [National Nutrition Survey (NNS) 2015].
When consumed, vegetables consist for the most part of two national staples, potatoes and chilies, which hardly provide essential vitamins and minerals.
Keeping regional variations in mind, between 16 and 34 percent of children under 5 are stunted—or too short for their age—seven percent of children are underweight, 35 percent of children of age 6-59 months and 44 percent of women of reproductive age are either anemic or iron deficient. Exclusive breastfeeding rates for six-month-old children remain at a low 50 percent (NNS, 2015).
Across South Asia, women represent a hugely underutilized source of growth. In fact, the South Asia region has some of the world’s lowest rates of female labor force participation - only 36%. Even where women work, they are mostly confined to less-remunerative low-skill jobs, and remain excluded from most trading activity. To make it easier for more women to work in all fields of endeavor, World Bank projects in the region have begun to look at development projects through a more gender-focused perspective.
One such area is regional trade and connectivity. After a long hiatus, the political momentum for cooperation within the eastern region is growing, especially in the Bangladesh Bhutan India Nepal (BBIN) corridor. The Indian government’s Act East Policy, combined with the new Motor Vehicles Act that allows vehicles to cross the BBIN border with ease, represent a unique opportunity to reimagine inclusive growth by enabling more of the region’s women to benefit from this corridor.
Accordingly, the South Asia Regional Trade Facilitation Program (SARTFP), an Australian government-funded program being implemented by the World Bank, seeks to improve the conditions for women to trade between these nations and to create more remunerative livelihoods.
The regional project assisted the governments in building and enhancing shared capacity and institutions to tackle illegal wildlife trade across their borders and invest in habitat and wildlife conservation of critically endangered species. It was clear from the onset that these issues would require both national leadership and regional coordination.
Launched in 2011, the project initially had a delayed start. Yet, by December 2016, when the project ended, it became clear that governments coordinated efforts successfully. The three countries participated in regular joint action planning and practice-sharing meetings, signed protocols for and cooperated in transboundary actions, as well as held consultations and public events at the local, national, and international levels.