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The Downside of Proximity

Sanjay Kathuria's picture

 

Buy a leather case for your wife’s smartphone on Amazon, select shipping from China with an estimated delivery time of 4-6 weeks, and then be pleasantly surprised when it turns up on your Virginia doorstep in 11 days.  The marvels of the modern age – of technology, globalization, and shrinking distances.

Where does South Asia stand on export delivery? Figure 1 illustrates that compared to other economic units around the globe, it is a lot more difficult to trade with(in) SAFTA (South Asia Free Trade Agreement). It also shows that bureaucratic hurdles and the time it takes to trade go hand-in-hand. While the region does relatively well on trade with Europe or East Asia, intra-South Asian trade has remained low and costly.  It costs South Asian countries more to trade with their immediate neighbors, compared to their costs to trade with distant Brazil (see below)!  In fact, it is cheaper for South Asian countries to export to anywhere else in the world than to export to each other (Figure 3).  In other words, South Asia has converted its proximity into a handicap.   

What Does Piketty’s Capital Mean for Developing Countries?

Gabriel Demombynes's picture

The economics book that has launched a thousand blog posts, Thomas Piketty’s Capital in the Twenty-First Country, tells a grand story of inequality past and present. One would expect that a book on global inequality would have much to say about development. However, the book has limited relevance for the developing world, and the empirical data he marshals for developing countries is weak.

Piketty’s central story is that convergence in the developed world and slower population growth will leave us with a permanently modest economic growth rate (g). Coupled with a constant return to wealth (r), concentration of capital ownership, and high rates of savings among the wealthy, the low g leads to rising wealth inequality over a longish run—something like the second half of the 20th century.

A low-g future for the developed world is a mostly uncontroversial assumption. (He assumes future GDP per capita growth of 1.2 percent for the U.S.) But Piketty draws conclusions for the world as a whole, and we are a long way from global convergence. As Branko Milanovic noted in his review, catch-up growth could fend off Piketty’s inequality dystopia for some time.
 

May 30, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, India, Maldives.

Can we see ‘a’ patient with tuberculosis?

Dr. Shelly Batra's picture

 World Bank Photo CollectionBack in the 1970s, I was a medical student ready to take on the world. We had a student exchange program, where students from across the world would come to India to visit and learn. One year, there was a group of young doctors from the UK who were excited to be somewhere they could observe ‘rare diseases.’ Seeing the packed hospitals on rounds, they eagerly asked the Professor of Internal Medicine, “May we see a patient with tuberculosis?” The Professor, uncertain of their excitement, replied frankly, “Of course. We don’t just have one, we have wards and wards full!” Tuberculosis (TB) – the infectious disease that primarily targets the lungs - was, and continues to be, anything but a rare disease in India.

The Case for Democracy- A New Study on India, South Africa and Brazil (shame it’s not much good – missed opportunity)

Duncan Green's picture

The ODI is a 10 minute train ride from my home, so I’m easily tempted out of my lair for the occasional lunchtime meeting. Last week it was the launch of ‘Democracy Works: The Democratic Alternative from the South’, a paper on the three ‘rapidly developing democracies’ of Brazil, India and South Africa, co-authored by the Legatum Institute and South Africa’s Centre for Development and Enterprise (not ODI, who merely hosted the launch). I was underwhelmed.

Which is a shame, because the topic is great – China’s rise and the West’s economic implosion are undermining arguments for democratic and open systems around the world. The report quotes Jacob Zuma: “the economic crisis facing countries in the West has put a question mark on the paradigm and approaches which a few years ago were celebrated as dogma to be worshipped.”
 

How to be a Great Mayor in South Asia

Jon Kher Kaw's picture


Image: Author's Illustration

Freakonomics Radio recently aired a podcast entitled “If Mayors Ruled the World”, based on Benjamin Barber’s new book of the same title, which contends that cities are a good template for governments to rule by, largely due to their mayors who are often uniquely positioned and focused on solving actual city problems. So much so, that he argues for the formation of a “Global Parliament of Mayors” to solve the world’s problems.

Even so, being a mayor of a South Asian city is no easy task. The challenges of city management in South Asia are compounded by its burgeoning urban population. In fact, according to the UN, roughly 315 million people are expected to be added to urban areas in the region by 2030. That number weighs in close to the entire population of the US today. It is no surprise that the theme of managing the challenges of urban transformation was at the top of the agenda at the recent South Asia Regional Workshop and Mayors’ Forum, hosted in Kandy, Sri Lanka.
 
The Mayors’ Forum, attended by a number of mayors and city leaders from South Asian countries and around, provided insights to what some successful mayors have done for their cities. By being visionary, and at the same time pragmatic problem solvers, mayors have seized opportunities to transform their cities, and quite often out of necessity and within highly constrained environments. Mayors took the opportunity to show how, despite significant institutional and financial limitations, they were able to take proactive initiatives to transform their cities. These were what they had to say:

May 23, 2014: This Week in #SouthAsiaDev

Mary Ongwen's picture
We've rounded up 20 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye this week. Countries included: Afghanistan, Bangladesh, India, Nepal, Pakistan, Sri

Digital Libraries for the Poor

Parmesh Shah's picture

Facilitating Bottom-Up Innovation through Video-based Learning Platform


Local villagers being trained to shoot videos

American Idol, a television show in the United States, has inspired thousands of people to make videos for stardom in music, dance, cooking and more. Can this phenomenon be applied in development? Digital Green, a non-profit, is doing exactly that by using a similar approach to improve agriculture development in South Asia and Sub-Saharan Africa. It uses participatory video as a medium to create star farmers and facilitates a rural library of digital videos providing decentralized and localized agriculture solutions to farmers, using the thrill of appearing "on video" to amplify the organization’s reach within their social networks.
 
Digital Green’s mission is to solve one of the intractable problems of the agriculture sector – lack of localized knowledge and extension services. For instance, in India alone, the agriculture extension system employs more than 100,000 people but very few access it (less than 6 percent), and only 40 percent get information from other sources. Tackling this information gap is critical to enhancing the livelihoods of small and marginal farmers in India, who have low productivity and constitute over 80 percent of India’s farmers. Digital Green is offering an innovative solution, and initial results are promising.

Quote of the Week: Arvind Kejriwal

Sina Odugbemi's picture

"I used to hate politics and politicians."

- Arvind Kejriwal, an Indian politician and former civil servant. He leads the Aam Aadmi Party (translation: Common Man Party), which he launched in 2012. He is well-known for his efforts to enact and implement the Right to Information Act (RTI) and in drafting a proposed Jan Lokpal Bill (Citizen's Ombudsman Bill) that sought the appointment of a Jan Lokpal, an independent body, to investigate corruption cases.  In the 2013 Delhi Legislative Assembly election, the Aam Aadmi Party won 28 seats, propelling him to serve as the chief minister in Delhi from December 28, 2013 to February 14, 2014.

 


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