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Small states (SST)

How South Asia can become a free trade area

Sanjay Kathuria's picture
Women knit handicrafts for export at Everest Fashion Fair Craft in Lalitpur, Nepal
Women knit handicrafts for export at Everest Fashion Fair Craft in Lalitpur, Nepal. Photo: Peter Kapuscinski / World Bank

The South Asian Free Trade Area (SAFTA) agreement has been in effect since 2006—with little success.

This is in sharp contrast to the ASEAN free trade area (AFTA), which started in 1992 with six six countries and later added more members, completing the ASEAN ten by 1999.

Between 1992 and 2017, intraregional imports as a share of global imports in ASEAN increased from 17 to 24 percent, and exports from 21 to 27 percent.

In South Asia, these shares were largely stagnant since SAFTA came into effect, at 3 percent for intraregional imports and 6-7 percent for intraregional exports.

In fact, intraregional trade in South Asia has been the lowest among world regions for quite some time, hovering around 5 percent of its overall trade with the world.

How to remain a poverty reduction champion: Overcoming Cabo Verde’s challenges

Rob Swinkels's picture

Few countries can match Cabo Verde’s development progress over the past quarter of a century. Its Gross National Income per capita (GNI) grew six-fold. Extreme poverty fell by two-thirds from 30% in 2001 (when poverty measurement began) to 10% in 2015 (see first chart) which translates into an annual poverty reduction rate of 3.6%, outperforming any other African country during this period. Non-monetary poverty also dropped fast (see second chart). In many ways, Cabo Verde is a development star, and these achievements were made despite the disadvantage it faces as a small island economy in the middle of the Atlantic.

Scaling up innovations in agriculture: Lessons from Africa

Simeon Ehui's picture
The West Africa Agricultural Productivity Program is building a sustainable and nutritious food system in Nigeria that creates jobs for youth. Photo: Dasan Bobo/World Bank

For too long the narrative surrounding Africa’s agri-food sector has been one of limited opportunity, flat yields and small farms. It’s true that Africa is still producing too little food and value-added products despite recent efforts to increase investment, and that agricultural productivity has been broadly stagnant since the 1980s as shown in the 2018 African Agriculture Status Report.

Confronting tobacco illicit trade: a global review of country experiences

Sheila Dutta's picture



Illicit trade in tobacco products undermines global tobacco prevention and control interventions, particularly with respect to tobacco tax policy. From a public health perspective, illicit trade weakens the effect of tobacco excise taxes on tobacco consumption - and consequently on preventable morbidity and mortality - by increasing the affordability, attractiveness, and/or availability of tobacco products. Furthermore, tobacco illicit trade often depends on and can contribute to weakened governance.

The rising cost of nutritious food in South Asia

Felipe F. Dizon's picture
 World Bank
A malnourished child will face poorer outcomes as an adult. In South Asia, where malnutrition persists in multiple forms, improving nutrition in the early stages of life is critical to a child's future development and health. Credit: World Bank

A malnourished child will face poorer outcomes as an adult.
 
That’s why improving nutrition, especially in the early stages of life, is critical.
 
The path toward better nutrition includes adequate maternal and child care, access to better sanitation facilities, health services, and naturally, nutritious foods.
 
But whether an individual consumes—or not—nutritious food is contingent upon a myriad of factors, ranging from the availability of certain foods, how convenient they can be turned into meals, or simply, if they meet consumers’ tastes.
 
But above all, the high cost of food remains the most critical barrier to proper nutrition and affects the poor more than the rich.
 
And in South Asia, where malnutrition persists in multiple forms, the cost of nutritious food is prohibitive.

What’s an ambitious but realistic target for human capital progress?

Zelalem Yilma Debebe's picture

Globally, 56 percent of children live in countries with Human Capital Index (HCI) scores below 0.5. As these countries gear up to improve their human capital outcomes, it is vital to set a target that is ambitious enough to prompt action and realistic enough to be achieved. One way to get at this is to examine the historical rate of progress that countries demonstrated to be possible.

Using time-series data between 2000 and 2017, we estimated countries' progress in the health components of HCI (fraction of children not stunted, child survival and adult survival) using a non-linear regression model. [1] Our measure of progress is the fraction of gap to the frontier that is eliminated every year- the frontier being 100 percent child and adult survival, and no stunting.,[2]

We address the following two questions:

  1. What is the typical progress in the health components of HCI observed globally?

How to diversify Bhutan’s economy?

Yoichiro Ishihara's picture
Bhutan has made tremdendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.
Bhutan has made tremendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Will diversifying its economy help Bhutan address its youth unemployment, let alone its macroeconomic volatility and vulnerability?

With the right approach, yes.

And to that end, the latest World Bank Bhutan Development Report: A Path to Inclusive and Sustainable Development proposes solutions relevant to Bhutan’s context.

For more than ten years, developing the private sector through greater economic diversification has been Bhutan’s top policy as described in the 10th and 11th five-year plans.

Yet, youth unemployment, especially for educated Bhutanese, has remained high: 67 percent of bachelor’s degrees holders were jobless in 2016.

Diversifying the economy is touted as a standard prescription to cure such development ailments as joblessness, low productivity, and macroeconomic volatility.

However, international experience shows that this prescription does not always work.

Case in point: A World Bank’s analysis Diversified Development concludes that in resource-rich countries, investing in physical capital, human capital and economic institution are the best ways to sustain growth in the private sector.

Further to that, the development of specific sectors, which is often a common ingredient of diversification strategies in certain countries, is neither necessary nor sufficient for private-sector-led growth.

The main driver of Bhutan’s high growth and poverty reduction, hydropower has led the country’s development and will remain the backbone of its economy.

However, Bhutan needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Bhutan ranks 149 out of 160 countries on the 2018 Logistics Performance Index and 121 out of 176 countries on the 2017 ICT index.

Bhutan falls in the bottom half of the Human Capital Project rankings on critical indicators such as expected years of schooling.

Guaranteeing water security, a priority for Central America

Seynabou Sakho's picture
Corredor Seco, Honduras. Copyright: Angels Maso. World Bank. 

A few weeks ago, we had the opportunity to visit the "Federico Boquín" water treatment plant and dam in Tegucigalpa, one of the main sources of water supply for the Honduran capital. As we walked beside the local Mayor, "Tito" Asfura, who accompanied us during the visit, we discussed the relevance of this resource.
 

Bracing for climate change is a matter of survival for the Maldives

Hartwig Schafer's picture
The Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.
The Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.


For low-lying island states, the impacts of global warming and climate change can be a matter of survival.

The irony is that while these states have not contributed much to greenhouse emissions, as they produce very little, they may face some of the worst consequences. 
 
Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.

As one of the lowest-lying countries in the world, with all its people living a few meters above sea level and over two-thirds of its critical infrastructure lying within 100 meters of the shoreline, a sea level rise of just a few meters will put the nation further at risk, endangering its relative prosperity. 
 
Thankfully Maldives is beginning to turn the tide.

Yesterday I visited Fuvahmulah, in one of the southernmost atolls where the Mayor and the Ministry of Environment, have been working closely with local communities to manage the wetlands, critical for reducing climate change impacts.

I saw scores of young Maldivians enjoying the facilities and learning about conservation. A true win-win. Community participation has helped enhance the design and acceptability of this initiative.

Scaled up, such initiatives can have a transformational impact and it is imperative that the Government of Maldives take the lessons from this Bank supported initiative to 19 other atolls.
 
Creating a safer archipelago
 
The Indian Ocean tsunami that battered the islands in 2004 provided a glimpse of what can happen – a clear wake-up call.

The government responded by increasing its emphasis on building resilience in infrastructure and providing its people with early warnings in the event of an underwater earthquake.
 
Today, in the Greater Malé region, the reclaimed island of Hulhumalé is being developed with better sea defenses and elevated buildings from where people can be evacuated as needed. 

The government is also raising people’s understanding of the causes and effects of natural disasters, particularly those that come on suddenly, such as tsunamis and flooding.

Celebrating 40 years of engagement with Maldives

Idah Z. Pswarayi-Riddihough's picture
The World Bank Group (WBG) and Maldives have had a trusted partnership for the past 40 years, which has seen tremendous growth and development in the country.

Over this period, Maldives has transformed from being among the poorest countries in the world to having a per capita GDP of over $10,000 and boasts impressive human development achievements, with a life expectancy of over 77 years and nearly 100% literacy.

However, vulnerability to environmental sustainability and climate change are among the challenges that the country faces. 

To help respond to them, the WBG continues to work closely with Maldives to help realize the aspirations of its people through enhancing employment and economic opportunities, strengthening natural resources management and climate resilience, while improving public financial management and policy-making through strengthening institutions.

Here are five milestones of our engagement:

1. Joining the World Bank
Maldives joins World Bank
Photo Credit: World Bank Group Archives
On January 13, 1978, Maldives became the 131st member of the World Bank and the International Development Association (IDA), the fund that helps the poorest countries through interest-free credits.

The Articles of Agreements were signed by His Excellency Fathulla Jameel, Permanent Representative of the Republic of Maldives to the United Nations. At that time, Maldives had a GDP per capita of just over $200 and had achieved independence only 13 years prior.

2. First project signing
Maldives 1st Project Signing
Photo Credit: World Bank Group Archives

 Maldives signed its first project to help increase fisheries production with the World Bank on June 4, 1979.

The project helped mechanize fishing craft, established repair centers, and installed navigational aids to increase the safety of fishing operations.

Those present for the signing from left to right, Said El-Naggar, Executive Director of the World Bank for Maldives, His Excellency Ahamed Zaki, Ambassador and Permanent Representative of Maldives to the United Nations, and Robert Picciottto, Projects Director for South Asia.

How do Africans’ priorities align with the SDGs and government performance? New results from Afrobarometer



One of the challenges presented by the ambitious Sustainable Development Goals (SDGs) laid out in the UN 2030 Agenda is where to begin.

Afrobarometer, which conducts public attitude surveys in more than 30 African countries, argues that one critical place to start is by asking the people.

South Asia: A bright spot in darkening economic skies?

Hartwig Schafer's picture
South Asia is set to remain relatively insulated from some of the rising uncertainties that are looming large on the global economic horizon. The region will retain its top spot as the world’s fastest-growing region. The Siddhirganj Power Project in Bangladesh. Credit: Ismail Ferdous/World Bank

If, like me, you’re a firm believer in New Year’s resolutions, early January ushers in the prospect of renewed energy and exciting opportunities. And as tradition has it, it’s also a time to enter the prediction game.
 
Sadly, when it comes to the global economy, this year’s outlook is taking a somber turn.
 
In the aptly titled Darkening Skies, the World Bank’s new edition of its twice-a-year Global Economic Prospects report shows that risks are looming large on the economic horizon.
 
To sum up:  In emerging market and developing economies, the lingering effects of recent financial market stress on several large economies, a further deceleration in commodity exporters are likely to stall growth at a weaker-than-expected 4.2 percent this year.
 
On a positive note, South Asia is set to remain relatively insulated from some of these rising global uncertainties and will retain its top spot as the world’s fastest-growing region.
 
Bucking the global decelerating trend, growth in South Asia is expected to accelerate to 7.1 percent in 2019 from 6.9 percent in the year just ended, bolstered in part by stronger investments and robust consumption.  

Among the region’s largest economies, India is forecast to grow at 7.5 percent in fiscal year 2019-20 while Bangladesh is expected to moderate to 7 percent in fiscal year 2018-19. Sri Lanka is seen speeding up slightly to 4 percent in 2019.
 
Notably, and despite increasing conflicts and growing fragility, Afghanistan is expected to increase its growth to  2.7 percent rate this year.

In this otherwise positive outlook, Pakistan’s growth is projected to slow to 3.7 percent in fiscal year 2018-19 as the country is tightening its financial conditions to help counter rising inflation and external vulnerabilities.

However, activity is projected to rebound and average 4.6 percent over the medium term.

Across Africa, disaster risk finance is putting a resilient future within reach

Hugo Wesley's picture
The Africa Disaster Risk Financing Initiative supports agriculture insurance programs which unlock critical assess to credit for low-income farmers in Kenya, as well as in Uganda and Rwanda. Photo Credit: World Bank


Sub-Saharan Africa knows more than its fair share of disasters induced by natural hazards. The past few months alone have seen drought in the Horn of Africa, floods in Mali and Rwanda, and landslides in Ethiopia and Uganda. Between 2005 and 2015, the region experienced an average of 157 disasters per year, claiming the lives of roughly 10,000 people annually.

To build human capital, prioritize women’s empowerment

Annette Dixon's picture



Last month, I attended the International Family Planning Conference in Kigali, Rwanda, where policymakers from across the world gathered to strategize about ways to achieve a demographic dividend—the increase in gross domestic product (GDP) per capita that comes from having a young and productive labor force driving economic growth that is faster than  population growth.  I was heartened to be joined by ministers of finance and representatives of the highest levels of government, all of whom agreed that women’s empowerment–which centrally includes access to reproductive health services–-is essential for inclusive, sustainable growth.


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