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Bhutan

The Poor and the Middle Class

Eliana Cardoso's picture

Start counting the poor in India and you are bound to get into controversy. In “A Comparative Perspective on Poverty Reduction in Brazil, China and India,” Martin Ravallion (October 2009) calculates that 42% of the population in India in 2005 lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005). But he finds only 20% of the population under the US$1.25 poverty line when using a different method as a sensitivity test. The difference is huge. One number is twice the other and corresponds to two hundred million people (more than the whole population of Brazil!).

Ravallion repeats the exercise and finds that in Brazil, in 2005, the population who lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005) is 8%. When using the alternative sensitivity test method, it is 10%. Compared to India, the difference is small (2% of the population) between the two measures.

I suspect that instead of trying to calculate the number of people with less than US$ 1.25 a day, policies for poverty reduction should focus on the bottom quintile of the population: the 20% poorest group in the country.

One of my reasons is that inequality matters. Think of poverty as a relationship.

Integrating the Two South Asias

Ejaz Ghani's picture

Regional Cooperation can be the key instrument to promote increased market integration in South Asia through greater flow of goods, services, capital, and ideas. This is appropriate for a region which is the least integrated region in the world, although many countries share analogous cultures and histories, as well as a passion for cricket and curry.

It is also very timely given the global downturn and the slowdown in global trade. Increased regional trade could more than compensate for the potential loss in global trade. It is estimated that increased intra-regional trade could add two percentage points to South Asia's GDP growth. This could raise South Asia's real GDP growth from 6% to 8% in 2010. Unlike fiscal stimulus, increased market integration and regional trade could add to GDP growth, without increasing public debt. It is the most efficient and cost effective instrument for South Asia to cope with the global downturn.

Bang for the Buck, Changing Attitudes Toward People with Disabilities

Susan Hirshberg's picture

"Just like the Other Kids" could reach 300,000 first and second graders this year.

We like to think that our value added is our strong intellect and analytical skills combined with the ability to provide additional resources to tackle development issues. But for South Asia’s efforts in disability, it has sometimes been the smallest amounts of money and the least ‘Bank-like’ activities that have been creating the greatest awareness on the subject. I wanted to highlight some of the very exciting initiatives that we have been working on marking the International Day of Persons with Disabilities today. Three such activities have been the development of a children’s book on inclusion in Pakistan, coverage by an Indian newspaper of a one-page analysis of Bollywood’s depiction of disability in films in the report Disability in India: from Commitment to Actions, and a Small Grants Award Ceremony in Sri Lanka.

“Just like the Other Kids” is a book by young people between the ages of 12 to 18 with and without disabilities financed for $22,000 by the South Asia Youth Innovation Fund and the Pakistan Small Grants Program. Its intent is to introduce first and second graders to characters with disabilities in a friendly, inclusive way. Three out of five of the characters have a disability, but all the characters have strong abilities (and some weaknesses).

Life and Death in South Asia

Eliana Cardoso's picture

In the film, Venus, an old and frail Peter O’Toole discovers the Greek goddess in the guise of his best friend’s niece. The ironic and good humored story explores the theme of the games played in a mutual seduction between the older man with experience, money and a nostalgic yearning for carnal desire and the young woman who soon finds out the power she wields and negotiates three kisses in return for a pair of earrings. In the final scene, wearing only one of his boots on a cold beach, O’Toole feels the caress of the sea’s salty foam with the sole of his foot and smiles. His face expresses the happiness of someone who knows the joys of being alive.

It is impossible to weigh up Peter O’Toole’s smile, measuring the degree of his happiness or comparing it to what you would feel if walking barefoot in the sand. But, the idea that his feelings can be measured as a metric has become fashionable, ever since the King of Bhutan decided that GDP fails to portray the well-being of his subjects and summoned a team to create the Gross National Happiness index.

How Will Changes in Globalization Impact South Asia?

Ejaz Ghani's picture

Globalization has accelerated global growth and global poverty reduction. But it has also raised concerns. The current global crisis may change globalization itself, as both developed and developing countries adjust to global imbalances that contributed to the crisis. Will these changes help or hinder economic recovery and growth in South Asia?

There are three models of globalization. These include (a) trade flows (exchange of goods), (b) capital flows (exchange of money), and (c) macroeconomic management. These three models of globalization may not be the same in the future. Changes in globalization could change the composition of trade flows, capital flows, and economic management, which in turn, could accelerate or restrain growth. So how will changes in these three models of globalization impact economic recovery and growth in South Asia?

South Asia as a region is peculiar. Its trade, capital flows, and economic management differ from other regions in how the region has globalized, although it must be mentioned that there is a lot of diversity within the region.

First Month on the Job in Bhutan: Trial by Earthquake

Mark LaPrairie's picture

As the newly appointed (and first) World Bank Representative to Bhutan, my first month on the job has been challenging. A magnitude 6.3 earthquake with an epicenter in eastern Bhutan struck on September 21. There were 12 fatalities, including a mother breast-feeding her infant daughter by the hearth in their stone-walled kitchen. While there was fortunately relatively little loss of life, there was considerable damage to houses, schools, health clinics, temples, religious monuments and roads. In Bhutan's mountainous terrain, many affected villages are several hours walk away, so the provision of relief supplies and carrying out reconstruction is difficult.

In collaboration with the Office of the UN Resident Coordinator in Bhutan, Claire Van der Vaeren, who took up her assignment in Bhutan in June, the World Bank fielded a team of disaster experts. Claire and I accompanied the team of six (four from the UN, two from the Bank) to the eastern districts ("dzongkhags") of Mongar and Tashigang. The drive from Thimphu -- Bhutan's capital city of 100,000 people -- to the affected villages in Mongar takes two days.

First Month on the Job in Bhutan: Trial by Fire

Mark LaPrairie's picture

After our rest at the Home Minister, Lyonpo Minjur’s rural ancestral home, the team embarked on the long journey back to Thimphu the next day -- only a couple hundred miles as the crow flies (if even that), yet a two day adventure across high mountain passes and along narrow endlessly winding roads with precipitous drops below. We reached the Swiss Guest House in Bumthang around 7pm, looking forward to hot showers and a meal.

Upon pulling up to the lodge, I received a call on my mobile from my friend Tashi, who was recently appointed by His Majesty to serve on the National Council (senate). Tashi was in eastern Bhutan to support earthquake relief efforts on the part of the National Council. Tashi called to inform me that, Wamrong, the town I lived in 21 years ago when I first came to Bhutan as a volunteer teacher, had mostly burned to the ground that afternoon.

Gross Domestic Product Not Sole Indicator of Progress

Joe Qian's picture

What is Happiness? Many of us equate it with money. However, since 1972, the kingdom of Bhutan under the leadership of its former King, Jigme Singye Wangchuck has measured its developmental success not solely through the economic lens of Gross Domestic Product (GDP) but also through a more complete approach known as Gross National Happiness (GNH). Its laurels were based upon the original four pillars of sustainable development, preservation and promotion of cultural values, conservation of the natural environment, and good governance.

These indicators have become increasingly important over the last three decades as it became apparent that blindly pursuing economic expansion has created growing pains in a number of countries. GNH has appeared to be very successful in Bhutan, a nation the size of Switzerland with a population of around 700,000. With initiatives such as maintaining at least 60% (currently 72%) of the land for forests and conservation, while maintaining 165 indigenous mammal species such as the rare snow leopard, Bhutan also has a fast growing economy.

Government spending on health and education is the highest in the region at 18% and Bhutan boasts a GDP growth rate of 21.4% and a per capita income level that is almost twice as much as much as India’s, although it was much poorer as recently as the 1980’s. Independent sources also seem to echo these sentiments as Business Week magazine rated Bhutan the world’s 8th happiest country.

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.

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