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South Asia

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.   

Eliminating Customs of Corruption: New Approaches in Cameroon & Afghanistan

Gerard McLinden's picture

Corruption continues to plague customs administrations around the world regardless of their level of development and despite intense public attention.

Recent high profile cases in many first world countries reinforce what we always knew—that no country is immune, and that there are no quick fix solutions available. The very nature of customs work makes it vulnerable to many forms of corruption, from the payment of informal facilitation fees to large scale fraud and other serious criminal activities.

But this blanket generalization belies some genuine progress in countries where reforms are making a measurable impact on operational effectiveness and integrity. 
 

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.
 

Social Media Doesn't Bite!

Sandya Salgado's picture



My eighty five year old uncle is the most avid technophile I know. He plays with all forms of digital media, including social media platforms such as the Facebook and LinkedIn. I find his mindset to be in total contrast to a majority of mid- to end- career colleagues I work with, who seem to be unbelievably social media phobic! I can’t help but compare the two and wonder why.

Last week I had the privilege of being a participant at a regional workshop where some thirty plus colleagues were asked to share their views on using social media. Needless to say, the responses were quite interesting. The fear of the unknown seemed to loom large among participants who I felt gave various other reasons to cover up this fear.

“I don’t have time”, “it’s a complete waste of time”, “what’s this big deal about using social media”, “it can be counterproductive”, “I am not interested in other people’s things” and “I don’t know how to use it for my professional development” were some of the key concerns I heard being aired as barriers to entry into the world of social media.

Being a very active social media user I thought I should share my experiences candidly…

Can political stability hurt economic growth?

Zahid Hussain's picture

Mumbai traffic, India. Simone D. McCourtie / World Bank
The standard definition of political instability is the propensity of a government collapse either because of conflicts or rampant competition between various political parties. Also, the occurrence of a government change increases the likelihood of subsequent changes. Political instability tends to be persistent.
 
Economic growth and political stability are deeply interconnected. On the one hand, the uncertainty associated with an unstable political environment may reduce investment and the pace of economic development. On the other hand, poor economic performance may lead to government collapse and political unrest. However, political stability can be achieved through oppression or through having a political party in place that does not have to compete to be re-elected. In these cases, political stability is a double edged sword. While the peaceful environment that political stability may offer is a desideratum, it could easily become a breeding ground for cronyism with impunity. Such is the dilemma that many countries with a fragile political order have to face.  
 
Political stability is by no means the norm in human history. Democratic regimes, like all political regimes, are fragile. Irrespective of political regimes, if a country does not need to worry about conflicts and radical changes of regimes, the people can concentrate on working, saving, and investing. The recent empirical literature on corruption has identified a long list of variables that correlate significantly with corruption. Among the factors found to reduce corruption are decades-long tradition of democracy and political stability. In today’s world, however, there are many countries that combine one of these two robust determinants of corruption with the opposite of the other: politically stable autocracies or newly formed and unstable democracies.

Some see political stability as a condition that not only precludes any form of change, but also demoralizes the public.  Innovation and ingenuity take a backseat. Many seek change in all sectors of life--politics, business, culture--in order to have a brighter future through better opportunities. Of course change is always risky. Yet it is necessary. Political stability can take the form of complacency and stagnation that does not allow competition.  The principles of competition do not only apply to business. Competition can be applied in everything – political systems, education, business, innovation, even arts. Political stability in this case refers to the lack of real competition for the governing elite. The ‘politically stable’ system enforces stringent barriers to personal freedoms. Similarly, other freedoms such as freedom of press, freedom of religion, access to the internet, and political dissent are also truncated. This breeds abuse of power and corruption.

Vietnam, for example, is controlled entirely by the ruling party. The economy is one of the most volatile in Asia.  What once was thought of being a promising economy has recently been in distress. Vietnam’s macro economy was relatively stable in the 1997-2006 period, with low inflation, a 7 to 9 percent total output expansion annually and a moderate level of trade deficit. But Vietnam could not weather the adverse impact from the 1997-98 Asian financial turmoil, which partly curbed the FDI flow into its economy. Starting in late 2006, both public and private sector firms began to experience structural problems, rising inefficiency, and waste of resources. The daunting problem of inflation recurred, peaking at an annualized 23 percent level for that year.

Maafushi Island Shows the Way for Inclusive Wealth Creation through Tourism

Sandya Salgado's picture



The success story of Maafushi, an island in the Kaafu Atoll in the Maldives, dates back to 2009 when the government liberalized its policy on local tourism. A visionary entrepreneur, Ahmed Naseer, lost no time in starting a four roomed guest house in 2010, to kick start the concept of local tourism in his home island Maafushi. And the rest is history!

Maafushi’s expansion from one guest house in 2010 to thirty guest houses to date is a remarkable success story which I was privileged to witness firsthand last week. 

An island with 2000 locals had welcomed 600 tourists last year. They were coming in search of an affordable, simple holiday, just for the sun and sea experience, living amongst the islanders while experiencing theiruniqueculture and lifestyle. Maafushi’s model of attracting local tourists has provided an alternative to the high end tourism that Maldives is known world over for. 

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.

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:


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