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Five lessons of regional integration from Asia, America, and Africa

Sanjay Kathuria's picture
More than 50% of today’s international trade goes through regional trading arrangements.  While trade is a critical component of regional integration, integration has several other dimensions including energy cooperation and intra-regional investment, to name a few.  After carefully examining cases of regional integration in Southeast Asia, the Americas and Africa, we present five lessons for South Asia.

Lesson 1: Facilitate trade in goods and services

Despite falling tariffs, there is still a large gap between the price of the exported good and the price paid by the importer, largely arising from high costs of moving goods, especially in South and Central Asia. On a percentage basis, the potential gains to trade facilitation in South and Central Asia, at 8 percent of GDP, are almost twice as large as the global average. High trade costs have contributed to South Asia being the least integrated region in the world.

FIGURE 1: Intra-regional trade share (percent of total trade), 2012

In the ASEAN region, most countries have established either Trade Information Portals or Single Windows that have enhanced trade facilitation, reduced trade costs and enhanced intra-regional trade. A Trade Information Portal allows traders to electronically access all the documents they need to obtain approvals from the government. A Single Window (a system that enables international traders to submit regulatory documents at a single location and/or single entity) allows for the electronic submission of such documents. These single windows, using international open communication standards, facilitate trade both within the region and with other countries using similar standards.

In services, one barrier to trade involves the movement of skilled workers, accountants, engineers and consultants who may move from one country to another on a temporary basis. The Southern Common Market (Mercosur)’s Residence Agreement allows workers to reside and work for up to two years in a host country. This residence permit can be made permanent if the worker proves that they can support themselves and their family.

Global Financing Facility and a new era for development finance

Tim Evans's picture



This week at the Third International Financing for Development Conference in Addis Ababa, we’ve seen the birth of a new era in global health financing.
 
The World Bank Group, together with our partners in the United Nations, Canada, Norway, and the United States, just launched the Global Financing Facility in support of Every Woman Every Child.  It’s hard to believe it’s been less than 10 months since the GFF was first announced at the 2014 UN General Assembly by World Bank Group President Jim Yong Kim, UN Secretary-General Ban Ki-moon, Prime Minister Stephen Harper of Canada and Prime Minister Erna Solberg of Norway.  We’re grateful to the hundreds of representatives from developing countries, UN agencies, bilateral and multilateral development partners, civil society and the private sector who have contributed their time, ideas, and expertise to inform and shape the design of the GFF to get it ready to become operational.   

What happens when the playground is also the potty?

Emily C. Rand's picture

Imagine you are a busy mother scrubbing your laundry next to the public water stand near your yard. You realize your two year old — who is playing in the dirt — has to go to the toilet. What do you do? Chances are good you might just let them go on the ground somewhere nearby.

According to a recent analysis by the United Nations Children Fund (UNICEF) and the World Bank Global Water Practice's Water and Sanitation Program (WSP) in key countries, over 50 percent of households with children under age three reported that the feces of their children were unsafely disposed of the last time they defecated. What this really means is that children are literally pooping where they are and their feces are left there, in the open. Meanwhile, the feces of other children in the neighborhood are put or rinsed in a ditch or drain, or buried or thrown into solid waste streams that keep the feces near the household environment.

 

Rise of informality in the tradable sector-- evidence from India

Ejaz Ghani's picture
The slow growth of Indian manufacturing is a concern for many observers of the Indian economy, and India’s manufacturers have long performed below their potential. Although the country’s manufacturing exports are growing, its manufacturing sector generates just 16% of India’s Gross Domestic Product (GDP), much less than the 55% from services. Since its liberalization, India has undertaken many trade reforms to increase its global integration, and the country has invested in domestic infrastructure projects to improve its regional connectivity.

Global Financing Facility ushers in new era for every woman, every child

Melanie Mayhew's picture
A New Era for Every Woman, Every Child


This week in Addis Ababa, Ethiopia, during the Third International Financing for Development Conference, the United Nations, along with the World Bank Group, and the governments of Canada, Norway and the United States, joined country and global health leaders to launch the Global Financing Facility (GFF) in support of Every Woman Every Child. Partners announced that $12 billion in domestic and international, private and public funding had already been aligned to country-led five-year investment plans for women’s, children’s and adolescents’ health in the four GFF front-runner countries: Democratic Republic of the Congo, Ethiopia, Kenya and Tanzania.

Innovative financing: the case of India Infrastructure Finance Company

Anna Roy's picture


Editor's note: this essay was the Overall Winner in the 2015 PPIAF Short Story Competition.


India needs large investments in infrastructure for accelerating inclusive growth aimed at poverty alleviation and improvement in quality of life. Given the fiscal constraints that leave little room for expanding public investment at the scale required, Public-Private Partnership (PPP) has emerged as the principal vehicle for attracting private investment in infrastructure.

However, much of the private capital required for PPP projects has to be raised from domestic financial institutions that do not have the capacity or instruments to provide long-tenure debt for projects having a long payback period. While financial sector reform is a long-drawn process, this essay demonstrates how a well-designed intervention can help in bypassing the extant constraints without compromising on the integrity and prudence associated with debt financing.

By setting up a government-owned financial institution with a mandate to provide about 30 percent of the project debt, a large volume of long-term debt was mobilised while leaving the remaining 70 percent to be financed by the normal banking system. This was perhaps, a first-of-its-kind financial institution which not only lent long-term funds, but also gave a strong signal to the banking system to participate proactively in the financing of infrastructure projects. 

As a result, private investments aggregating about US$114 billion have been facilitated without any dilution in the prudential norms of banking. This essay explains the evolution and success of this initiative.

Results-based financing for higher education reforms in Madhya Pradesh, India

Kavita Watsa's picture
 
Students in Madyha Pradesh, India.
Students in Madyha Pradesh, India.

A couple of months ago, I visited Chandra Shekhar Azad College in Sehore, about an hour’s drive from Bhopal, the capital of the state of Madhya Pradesh, India. It was a short visit, but long enough to see that college students the world over have similar dreams and see higher education as a way to realize them.

If we don’t assess, how will we learn? Assessments are critical to learning, accountability and school improvement

Suvojit Chattopadhyay's picture

Young boys studying in IndiaAre assessments and standardized tests critical to measuring the effectiveness of educational systems?  How can communities demand accountability from local schools? Suvojit Chattopadhyay argues that assesments can serve as a lever to improving education.

This is a response to a recent livemint column by Azim Premji Foundation’s Anurag Behar in which he argues that assessments are not a primary systemic lever for improvement in education and that assessments should remain tools that provide feedback to teachers in the classroom. Interestingly, Behar does not make any reference to India’s Annual Status of Education Report (ASER). ASER has been around for a decade, riding on a simple and powerful idea: parents, communities, the wider civil society and policymakers just did not have sufficient information on the levels of learning our public schools deliver.
 
Unsurprisingly, in an age where social spending by governments is under tremendous scrutiny and aid flows are under pressure, testing and assessments have found currency in many countries across the developing world. It has also helped civil society put pressure on education systems (whether public or private) to focus on learning outcomes, moving beyond a highly limiting obsession with inputs— classrooms, teachers, textbooks, uniforms, etc. To be clear, the argument is not that one can ignore the need for high quality inputs. Indeed, that would be foolish. However, there is now substantial evidence that on its own, investing in inputs will not yield improved schooling outcomes.

Six steps to a successful sanitation campaign

Suvojit Chattopadhyay's picture

new latrineInadequate sanitation costs India $54 billion a year. To that, add the challenge of juggling our nationalistic aspirations of superpowerdom with the ignominy of housing the largest share of human population that defecates in the open.  In light of this, here are six steps to a success sanitation campaign.

Amid many reports that the Swachh Bharat Abhiyan (SBA) is failing, we need a dose of optimism. While SBA might be failing, it certainly isn’t the first, nor will it be the last state-led sanitation programme to fail in India. Our large schemes to tackle this challenge have, more often than not, ended up as models of just what one should avoid doing if they are serious about bringing about total sanitation.
 
It is now widely acknowledged that conventional approaches are not working: those that set up a false dichotomy between construction and behaviour change; those that are content with pit latrines as opposed to functional toilets; those that use reductionist conceptions such as communities being open defecation free rather than focusing on personal and environmental sanitation and hygiene as a whole; and those that settle for incremental coverage instead of full coverage from the start.
 
However, it’s not that there are no success stories within India or in our immediate neighbourhood. For one, the experiences of locally-embedded NGOs that have taken their interventions to scale can be highly instructive. There have also been state-led successes in Maharashtra and Himachal Pradesh that can offer valuable lessons. So what could some key design elements in a sanitation programme be?
 

Procurement data for better development outcomes

Joel Turkewitz's picture


Even marginal improvements in procurement efficiency can mean big savings. And that’s just a start.
 
The use of data and technology in procurement make it possible for governments to make informed decisions to maximize development impact. At the World Bank, the Public Integrity and Openness Practice is developing a set of Transformational Engagements, one of which focuses on Data Analytics, to catalyze better outcomes from procurement processes.
 
The engagement will use data analytics to solve pressing developmental problems. The plan is to combine work on addressing common data problems (how to digitize paper records, how to link different data records, how to present data findings in ways that are accessible and influential) with efforts at the country level. Powered by advanced data analysis, countries can undertake empirical-based examinations of when best value is achieved via procurement, or in which cases and sectors government contracting is promoting the development of competitive and dynamic private sectors.
 
Work undertaken within the Bank will be informed by the concurrent efforts of others who are exploring different approaches and different techniques to using data and data analytics to drive improved performance. The World Bank seeks to play a constructive role within a community of initiatives to harness the power of information to change how governments function, the relationship between government and non-governmental actors, and the lives of people. Committed to an inclusive process of learning-by-doing, the World Bank is dedicated to building partnerships with researchers, government officials, the private sector, and civil society.


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