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South Asia Rebounds

Eliana Cardoso's picture

The future is unpredictable and yet, from time to time, we must take stock of what we accomplished and where we are heading. Over the past decade, better policies and rising integration with the global economy have pushed growth in South Asia upwards. By 2007, the peak year just before the global financial crisis, the region’s GDP growth had reached nearly 9 percent a year (just slightly behind East Asia’s). This growth acceleration extended to all the countries of the region.

The global financial crisis took South Asia’s growth down by about 3 percentage points (from 8.6% in 2007 to 5.6% in 2009). This was the smallest growth decline among all regions of the world and the prospective recovery is already underway. The World Bank expects GDP growth to recover to nearly 7 percent per annum on average in 2010-2011.

Dipak Dasgupta, a Lead Economist at the World Bank, points to four key factors that have cushioned South Asia’s growth decline during the crisis and are helping in the strong recovery.

(1) Remittances held up much stronger in South Asia than in other regions. In Nepal, the reliance on remittances is the highest, and without these flows, growth in consumption would have collapsed.

(2) The resilience of some key export-oriented sectors also helped. Garments in Bangladesh and IT software exports from India, for instance, have held up relatively well.

An Inclusive Approach to Safeguarding the Basic Needs of the Poor

Mark Ellery's picture

If it were possible to separate public services into a public good aspect and a private good aspect, then government could probably ensure better outcomes for the poor by focusing primarily on the public good aspect.

A public good is both non-rival (the consumption of a unit does not reduce the units available for others) and non-excludable (it is not possible to include some while excluding others from this good). For example an illiteracy free community is a pure public good that demonstrates both non excludable and non rival qualities. It is non-excludable as it is not possible to exclude someone from the benefits of an illiteracy free jurisdiction while including others; and non-rival as one person consuming an illiteracy free jurisdiction does not reduce the stores for others. The private good have both rival and excludable characteristics (the consumption of a unit reduces the availability for others and it is possible to include some while excluding others during consumption). Alternatively a school is a private good - it is rival (there are only a certain number of children you can fit in a classroom) and excludable (you can be excluded if you do not meet certain socio-economic standards).

Assuming that all public services have rival and non-rival, excludable and non-excludable characteristics, it should be conceptually possible to separate the public good aspect and the private good aspect.

Incentives and Values in Conflict-Prone Countries

Eliana Cardoso's picture

One of the most extraordinary examples of the use of economic principles comes from the beginning of the 19th century, when England used to send a huge number of prisoners to Australia. The government originally paid the ship captain a pre-determined amount for each prisoner that boarded the ship, but half of them would die during the journey. In 1862, Edwin Chadwik, knowing that people respond to incentives, told the U.K. government to pay captains according to the number of prisoners that actually disembarked in Australia. With this adjustment, the survival rate increased from 50% to 98.5%.

This example illustrates how incentives can do wonders in some circumstances. Yet, human actions are not always guided by the same calculations made by a profit maximizing ship captain. Behavioral economists have emphasized that we respond to a deep ingrained sense of fairness. Culture and values are crucial in understanding human behavior and promoting healthy and stable societies.

How Should We Best Accelerate Growth and Job Creation in South Asia?

Ejaz Ghani's picture

“South Asia continues to grow rapidly and its largest economy, India, is close to becoming a Tiger.”

Sadiq Ahmed and I were inspired to author Accelerating Growth and Job Creation in South Asia when we were asked by the South Asia Chamber of Commerce, SAARC Business Conclave, FICCI, and a number of policy makers, local research institutes, and CEOs to come up with a strategy on what can be done by South Asian countries to accelerate growth and job creation. So we invited the world’s leading scholars to apply their talents to understanding the economies of South Asia. This gave birth to the book.

It is organized along three themes—an overview of South Asia’s growth opportunities and challenges; sources of growth and policies for the future; and the significance of regional cooperation in promoting growth. The essays combine quantitative data with analytical rigor to provide innovative suggestions in terms of policies and institutions that can propel South Asia towards higher growth, while promoting inclusiveness.

South Asia Advances on Visual Tool Comparing Development over Time

Joe Qian's picture

The World Bank released its Data Visualizer tool last week, which compares 209 countries through the lens of 49 development indicators utilizing data ranging from 1960 to 2007. Using three dimensional bubbles whose sizes are proportional to populations and are color coded to the different regions (purple represents South Asia), they move horizontally or vertically based on their achievements on a number of indicators that range from GDP per capita to the percentage of children that are inoculated against measles.

Users will find similarities with the groundbreaking Gapminder World tool that Swedish Health Professor Hans Rosling first presented to the TED Conference in 2006. He concluded that the world is converging and that old notions of contrasting developed country (generally small families and long lives) with developing country (large families and short lives) to be grossly out of date.

Ladies Specials

Darshana Patel's picture

The “Ladies Specials” are women-only commuter train recently launched in four Indian cities (New Delhi, Mumbai, Chennai and Calcutta). While not a new practice, public transport exclusively for women is becoming popular. (Mexico City introduced women-only buses in January 2008 and commuters on Japanese trains know a thing or two about this too.)

Harassment on the train or bus is not just an annoying nuisance for women. It influences whether or not a woman chooses to enter the workforce in the first place. (Or maybe whether her family or husband will allow her.)

Changes in economic landscape of a country have led to shifting roles for women, who are increasingly moving outside of the household and into the workplace. These new women workers, often of a younger generation, are now re-shaping what it means to be women in their societies.

24 Hours in the Life of Some Horizontal Learners

Mark Ellery's picture
In the face of families whose relatives have just died of arsenic poisoning advocating for institutional reform can seem a touch inane.

On the flip side, an urgent response to provide clean water or some relief to those affected is often neither sustainable nor scalable.

During a visit to Chapai Nawabganj we discovered that the Horizontal Learning Program enables rapid response - without undermining a sound policy position.

While visiting Meherpur municipality in Bangladesh last week, we learnt that 15 people had recently died in the nearby Amjhupi Union Parishad (UP) from arsenicosis. In a village meeting with the District Commissioner and UP Chairman we discovered that the citizens were drinking from both wells marked green (safe) as well as red (unsafe) because they were not confident that either of these sources had been correctly marked.

We were overwhelmed with the need for an immediate response but aware that any top-down solution could at best be partial. However, because of the Horizontal Learning Program (initiated by Union Parishads, facilitated by the Government of Bangladesh and supported by development partners) we were aware that local solutions to this problem had been developed by other Union Parishads.

At around 11 pm that night, it was resolved that a three member team from Amjhupi Union Parishad would join us to visit the nearby Ranihati Union Parishad of the neighboring Chapai Nawabganj Upazila (sub-district) to see how they had solved this problem. The solution was surprisingly simple, low cost and comprehensive.

Watch Your Wallets, Protectionism is Back!

Zahid Hussain's picture

Protectionism is BackProtectionism is on the rise all over the world, thanks or should we say “no thanks” to the global economic crisis.  Last November, G-20 leaders pledged to fight protectionism. Yet, according to the World Trade Organization (WTO), 18 out of these 20 economies have since taken measures to restrict trade. With the global economy struggling to recover, political pressures demanding protection from import competition to sustain domestic employment are intensifying. It is likely to prove right the old adage that the only thing we learn from history is that we never learn from history.  One lesson from the experience of the 1930s that is currently most relevant is that raising trade barriers deepens and prolongs recession.

Development Marketplace: My Tryst With Nutrition

Sundararajan Gopalan's picture

For more information on the Nutrition Development Marketplace, please see the accompanying Feature Story and Press Release

The year was 1975. I was a final year medical student in Pondicherry, South India. I was going for my practical test on Preventive and Social Medicine (PSM). PSM was (and probably still is) one of the least favorite subjects in the medical curriculum for most students. “Why should we prevent diseases? If we prevent all diseases what will we all do with our medical degrees? Isn’t that professional suicide?” asked one of my class-mates! But I digress. Coming back to the test, I was unusually nervous because I had not studied everything well. For some reason, one chapter that I did study the night before was nutrition. I had also volunteered for two months in a Nutrition Rehabilitation Center (NRC) which meant that it was one chapter that I was more confident about. As my luck would have it, every single question that the examiner asked me that day was on nutrition! I blasted my way through the test, and thanked my stars for that exceptional bit of good fortune. From that day, nutrition has always been close to my heart.

The NRC is a somewhat outdated concept nowadays. The idea was to have a malnourished child and mother live for a month in the NRC and learn good household behaviors that could result in better nutritional outcomes.

Of Perceptions and Reality

Maitreyi Bordia Das's picture
Reflections from the Padma. (c) Maitreyi Bordia Das

The widespread perception of Bangladesh as a mis-governed poor cousin continues and thrives in India. Stories in the media focus on fallen trade deals, undocumented migration and security hazards to India. Yet, not-so-recent articles by economist Jean Dreze and Minister of State Jairam Ramesh have pointed out that Bangladesh fares much better than India on a range of social outcomes.  But these are few and far between and don’t get the attention they deserve.

During my first visit to Bangladesh I remember being blown away by the villages. Toilets are common and in use, schools actually function and pools of dirty water don’t clog village paths. Take also the case of health. Although India spends twice as much per capita as Bangladesh on health care, it has worse outcomes in every health indicator except maternal mortality.

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