Sadiq Ahmed's blog

The smaller economies of Bangladesh, Nepal, and Sri Lanka continue to show optimism for their economies based on good remittance inflows and export indicators that demonstrate strong growth in 2008. Policymakers have used these statistics as evidence to believe that they have been relatively unaffected by the current global downturn. 

The global financial crisis hit South Asia at a time when it was barely recovering from a severe terms of trade shock resulting from the global food and fuel price crisis.The food and fuel price shocks had badly affected South Asia, with cumulative income loss ranging from 34 percent of 2002 GDP for Maldives to 8 percent for Bangladesh. Current account and fiscal balances worsened sharply and inflation surged to unprecedented levels.

South Asia has the highest rates of malnutrition and the largest numbers of undernourished children in the world! Poverty is often the underlying cause of child malnutrition, and while South Asia has recently experienced impressive economic growth and reduced poverty, this has not translated into improved nutrition. The region fares worse than any other developing region including Sub-Saharan Africa (45% vs. 28%, respectively).