As Pakistan readies to celebrate its independence day, we can all feel satisfied about progress in restoring macroeconomic stability, but should also realise that the country can and should do much better. Pakistan has many assets, of which it can make better use — from its vast water and river endowment, to its coastline and cities, to its natural resources. And there are upsides: a growing middle class, a lively informal economy and a strong influx of remittances. Pakistan can also be proud of the first peaceful transfer of power between two civilian governments. But to reach its full potential, Pakistan needs to focus on two critical areas, both obvious and urgent. It needs to ensure that its people have the means to fully participate in and contribute to the economy. And it needs to integrate itself more, globally and regionally.
The first challenge is demographic. As a result of rapid population growth, 1.5 million youngsters reach the working age each year. The question is, will the private sector be able to provide the jobs they need and want? And will the youth have the skills to get good jobs? Pakistan must do far better in education. Primary school net enrollment is about 57 per cent, well below other South Asian countries. Enrollment drops by half in middle school, with much lower levels for girls and children from poor families. This is not a good foundation to build on.
It is not surprising then that Pakistan also struggles to give all its citizens the opportunity to participate in building better lives for themselves. Only 25 per cent of women participate in the labour force, compared to 50 and 80 per cent in most developing countries. Women and girls deserve better. Research shows that girls with little or no education are far more likely to be married as children, suffer domestic violence, and live in poverty. This harms not only them, but also their children, their communities and the economy. Greater gender equality can enhance productivity and improve development outcomes for the next generation. It is smart economics.
Pakistan has taken steps to empower women. The Benazir Income Support Program, supported by the World Bank, has provided millions of women with national ID cards and makes direct payments to them, strengthening their ability to take decisions and move out of poverty.
Earlier this year, we launched our eLearning course for social enterprises in January with a second installment in May. Social enterprises from across the globe – from places we didn’t even think we could reach – applied. So we began to wonder, who are these social enterprises? What are their models? What do they need most to reach the most marginalized populations? So I sat down with Charles Njemo Batumani and Arun Kumar Das, two social entrepreneurs who finished the first installment of our eLearning course in January to see what they’ve done, where they see their enterprises going and why eLearning was a way for them to improve their social enterprise. Charles is building affordable housing for low and middle income earners in Limbe, Cameroon while Arun is developing a natural plant product to combat malnutrition in Odisha, India.
It has been exactly three months since the Nepal earthquake first struck and one month since the donor conference. The humanitarian phase is nearing its end, the international presence is starting to move onto the next crisis, and high level international dignitaries have now returned to their capitals. The earthquake is no longer making headline news and the government is getting back to business as usual, albeit with the huge challenge of rebuilding.
Now is time to take stock of the events from the past three months. During a crisis, there is no time for those involved to look back at what has been accomplished. What matters is the next immediate action and challenge to overcome. Last week, in the Bank headquarters, our management and some members of the earthquake response team presented the progress achieved thus far to an overcrowded room. This was my first opportunity to reflect on the disaster and I was almost overcome with emotion. Be they senior government officials, the Bank’s country office team, first- emergency responders, or Nepalis, it is difficult to articulate just what folks have overcome in Nepal.
With the growing importance of global value chains as a conduit for trade integration, much of the recent empirical analysis and other literature has focused on the impacts of non-tariff barriers, behind-the-border measures, and other transaction costs. Traditional barriers, tariffs in particular, have generally been dismissed as less disruptive to trade and, therefore, have fallen out of the policy debate. However, evidence is surfacing from developing countries that import taxes are on the rise, increasing protection, and their disruptive tendencies are often disguised. Along with the rising tendency to subsidize domestic industries, these additional taxes tend to further augment the inherent anti-export bias, which can be particularly detrimental to trade-led development strategies and policies in developing countries.
First, we need to address “energy poverty” if we want to end poverty.
We find that energy poverty means two things: Poor people are the least likely to have access to power. And they are more likely to remain poor if they stay unconnected.
Around one in seven, or 1.1 billion people, don’t have access to electricity, and almost 3 billion still cook with polluting fuels like kerosene, wood, charcoal, and dung.
Nobody remembers an earthquake or a disaster this severe in their living memory. Aftershocks continue three months after the first earthquake, reminding survivors of their fragile, transitory existence. The scale of destruction is enormous, the remains visible even after efforts to clean, rebuild, and resettle. Gaping cracks in abandoned buildings waiting to collapse, tents in fields and pavements, parked vehicles that become shelters at night, rubble too enormous to be lifted to a landfill site, the occasional bulldozer – are all grim reminders of the tragedy. The skyline, once dominated by terracotta temples with tiered pagoda roofs, now is made up only of concrete masonry buildings.
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.
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.