This blog is based on the report The Web of Transport Corridors in South Asia -- jointly produced with the Asian Development Bank, the United Kingdom’s Department for International Development, and the Japan International Cooperation Agency
One of the oldest, the Grand Trunk Road from the Mughal era still connects East and West and in the 17th century made Delhi, Kabul and Lahore wealthy cities with impressive civic buildings, monuments, and gardens.
In India alone—and likely bolstered by the successful completion of the Golden Quadrilateral (GQ) highway system—several transport proposals extending beyond India’s borders are now under consideration.
They include the International North-South Transport Corridor (INSTC), linking India, Iran and Russia, the Asia-Africa Growth Corridor, and the Bangladesh, China, India, and Myanmar (BCIM) economic corridor.
The hope is that these transport corridors will turn into growth engines and create large economic surpluses that can spread throughout the economy and society.
These two cities are the economic hubs of China and India respectively, two emerging global powers.
The distance between them, about 5,000 kilometers, is not much greater than the distance between New York and Los Angeles.
But instead of crossing a relatively empty continent, a corridor from Shanghai to Mumbai—via Kunming, Mandalay, Dhaka, and Kolkata—would go through some of the most densely populated and most dynamic areas in the world, stoking hopes of large economic spillovers along its alignment.
“Build and they will come” seems to be the logic underlying many massive transport investments around the world.
However, the reality is that not all these investments will generate the expected returns.
Worse, they can become wasteful white elephants—that is, transport infrastructure without much traffic—that would cost trillions of dollars at taxpayers’ expense.
First, countries need to change the mindset that transport corridors are mere engineering feats designed to move along vehicles and commodities.
Second, sound economic analysis of how corridors can help spur urbanization and create local jobs while minimizing the disruptions to the natural environment, is key to developing successful investment programs.
Specifically, it is vital to ensure that local populations whose lives are disrupted by new infrastructure can reap equally the benefits from better transport connectivity.
For instance, more educated and skilled people can migrate to obtain better jobs in growing urban areas that are benefiting from corridor connectivity, while unskilled workers may be left behind in depopulated rural areas with few economic prospects.
But while corridors can create both winners and losers, well-designed investment programs can alleviate potential adverse impacts and help local people share the benefits more widely.
In that vein, India’s Golden Quadrilateral, or GQ highway system, is a cautionary tale.
No doubt, this corridor had a positive impact.
Economic activity along the corridor increased and people, especially women, found better job opportunities beyond traditional farming.
But this success came at a cost as air pollution increased in the districts near the highway.
This is a major tradeoff and one that was documented before in Japan when levels of air pollution spiked during the development of its Pacific Ocean Belt several decades ago.
Another downside is that the economic benefits generated by the GQ highway were distributed unequally in neighboring communities.
South Asia is booming. In 2018, GDP growth for the region as a whole is expected to accelerate to 6.9 percent, making it the fastest growing region in the world. However, fast GDP growth has not translated into fast employment growth. In fact, employment rates have declined across the region, with women accounting for most of this decline.
Between 2005 and 2015, female employment rates declined by 5 percent per year in India, 3 percent per year in Bhutan, and 1 percent per year in Sri Lanka. While it is not surprising for female employment rates to decline with economic growth and then increase, in what is commonly known as the U-shaped female labor force function (a term coined by Claudia Goldin in 1995), the trends observed in South Asia stand out. Not only has female employment declined much more than could have been anticipated, it is likely to decline further as countries such as India continue to grow and urbanize.
The unusual trend for female employment rates in South Asia is clear from Figure 1. While male employment rates in South Asia are in line with those of other countries at the same income level, female employment rates are well below.
If women are choosing to exit the labor force as family incomes rise, should policymakers worry? There are at least three reasons why the drop in female employment rates may have important social costs. First, household choices may not necessarily match women’s preferences. Those preferences reflect the influence of ideas and norms about what is women’s work and men’s work as well as other gendered notions such as the idea that women should take care of the children and housework. Second, when women control a greater share of household incomes, children are healthier and do better in school. Third, when women work for pay, they have a greater voice in their households, in their communities, and in society. The economic gains from women participating equally in the labor market are sizable: A recent study estimated that the overall gain in GDP to South Asia from closing gender gaps in employment and entrepreneurship would be close to 25 percent.
جنوب آسیا شاهد رشد اقتصادی ٦ در صدی طی ٢٠ سال گذشته بوده، که این امر در نتیجه سبب کاهش فقر و بهبود در عرصه صحت و تعلیم و تربیه گردیده است. ما در حالیکه از این پیشرفتها در روز جهانی زن تجلیل می کنیم، بهتر میبود اگر زنان بیشتر با دریافت مزد کافی شامل نیروی کار میبودند. زنان در جنوب آسیا فقط ٢٨ درصد نیرو کار و یا انعده شان که در جستجوی کار هستند، را تشکیل میدهند. در مقایسه با حوزه خاورمیانه و شمال آفریقا که در انجان ٢١ درصد نیرو کار را مردان تشکیل میدهند در حوزه جنوب اسیا مردان ٧٩ درصد نیرو کار هستند، که این دومین کمترین میزان در جهان است.
نیروی بالقوه انکشاف جنوب آسیا با بزرگترین جمعیت کار در حال رشد، در طبقه متوسط قرار دارد؛ اما کمبود زنان در مشاغل و مشارکت اقتصادی، منعکس دهنده فرصت های از دست رفته است. ده ها میلیون زن در هند و سریلانکا، در طول بیست سال گذشته از نیروی کار کنار رفته اند.
از جمله بسیاری از عوامل باز دارنده، یکی هم بیسوادی است که تقریبا نیمی از زنان بالغ در جنوب آسیا را دربر میگیرد که دخترانشان از بالاترین میزان سوء تغذی در جهان رنج می برند. میزان خشونت علیه زنان و مرگ و میر مادران در بالاترین میزان در جهان باقی مانده است. همه این عوامل مشارکت کم، بیکاری بیش از حد و تفاوت های مزد مستمر برای زنان است، که در بازار کار را نشان می دهد.
چه کاری می توانیم انجام دهیم تا به وجه احسن، زنان را تشویق کنیم تا در نیروی کار شرکت کنند؟ این کار، با شروع ارزش قایل شدن به ارزشهای دختران برابر فرزندان است - دسترسی آنها به غذاهای مغذی و سرمایه گذاری در آموزش و پرورش آنها برای دستیابی به توانایی هایشان فراهم می شود. بیایید علاقۀ دختران جوان را در موضوعاتی مثل علم و ریاضیات جلب کنیم و آنها را متقاعد سازیم که آنها به همان اندازه پسران توانایی دارند و میتوانند در مهندسی، تحقیقات علمی، فناوری اطلاعات و دیگر زمینه هایی که توسط کارفرمایان تقاضا می شود، شغل ایجاد کنند. ما همچنین باید توجه فرزندانمان را به احترام دختران و زنان افزایش دهیم و روشن کنیم که برای خشونت مبتنی بر جنسیت، هیچ مجال باقی نمانده است.
With the largest working-age population and growing middle class, South Asia’s development potential is vast. But the lack of women in employment and economic participation reflects lost potential. In India and Sri Lanka, tens of millions of women have dropped out of the work force over the last twenty years.
Many factors are holding them back. Almost half of South Asia’s adult women are illiterate and its girls suffer from the highest malnutrition rates in the world. Rates of violence against women and maternal mortality remain among the highest in the world. All these factors translate into a labor market characterized by low participation, high unemployment and persistent wage gaps for women.
Sri Lanka and Maldives share much more than the tag of tourism hot spots, beautiful beaches, and similar cultural traits. Both island nations have a range of unique environments that are rich in biodiversity and serve a myriad of ecosystems functions.
Both countries are home to rich wetlands with a variety of fauna and flora that benefit the ecosystem, including flood protection, water purification, and natural air conditioning and provide food and support to local communities.
Sri Lanka has actively been working to ensure these essential ecosystems are protected. The Maldives has too commenced such great work. This work has produced a wealth of knowledge and innovations on how to manage and conserve wetlands.
Managing wetlands in Sri Lanka and Maldives
The wetland management and land use planning effort undertaken in Colombo under the World Bank-financed Metro Colombo Urban Development (MCUDP) project showcases resilience in urban land use planning and highlights how a city can become more livable by intermingling green spaces to its urban fabric. All this, while protecting wetlands and reaping the benefits of their natural ecosystem functions.
The MCUDP used robust strategies and sustainable economic models, such as wetland parks, to help save urban wetlands from threats such as encroachment and clearing. Through the Climate Change Adaptation Project (CCAP), funded by the European Union and the Government of Australia, Maldives has also taken steps to manage threats to its largest wetlands.
While the approaches to wetland management in both countries have been different there are many key lessons that can be shared.
Economic growth is a key concern for economists, political leaders, and the broader population.
But how confident are we that the available data on economic activity paints an accurate picture of a country’s performance?
Measuring Gross Domestic Product (GDP), the most standard measure of economic activity, is especially challenging in developing countries, where the informal sector is large and institutional constraints can be severe.
In addition, many countries only provide GDP measures annually and at the national level. Not surprisingly, GDP growth estimates are often met with skepticism.
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.
As shown in Figure 1, there is a strong correlation between nightlight intensity and GDP levels in South Asia: the higher the nightlight intensity on the horizontal axis, the stronger the economic activity on the vertical axis.
However, measuring nightlight is challenging and comes with a few caveats. Clouds, moonlight, and radiance from the sun can affect measurement accuracy, which then requires filtering and standardizing.
On the other hand, nighlight data has a lot advantages like being available in high-frequency and with a very high spatial resolution. In the latest edition of South Asia Economic Focus, we use variations in nightlight intensity to analyze economic trends and illustrate how this data can help predict GDP over time and across space.
That regional cooperation in South Asia is lower than optimal levels is well accepted. It is usually ascribed to – the asymmetry in size between India and the rest, conflicts and historical political tensions, a trust deficit, limited transport connectivity, and onerous logistics, among many other factors.
Deepening regional integration requires sufficient policy-relevant analytical work on the costs and benefits of both intra-regional trade and investment. An effective cross-border network of young professionals can contribute to fresh thinking on emerging economic cooperation issues in South Asia.
Against this background, the World Bank Group sponsored a competitive request for proposals. Awardees from Bangladesh, India, and Pakistan, after being actively mentored by seasoned World Bank staff over a period of two years, convened in Washington DC to present their new and exciting research. Research areas included regional value chains, production sharing and the impact assessment of alternative preferential trade agreements in the region.
Young Economists offer fresh thoughts on economic cooperation in South Asia
Mahfuz Kabir, Acting Research Director, Bangladesh Institute of International and Strategic Studies and Surendar Singh, Policy Analyst, Consumer Unity Trust Society (CUTS International) presented their research: Of Streams and Tides, India-Bangladesh Value Chains in Textiles and Clothing (T&C). They focus on how to tackle three main trade barriers for T&C: a) high tariffs for selected, but important goods for the industries of both countries; b) inefficient customs procedures and c) divergent criteria for rules of origin classification.
Sreerupa Sengupta, Ph.D. Scholar at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi discussed Trade Cooperation and Production Sharing in South Asia – An Indian Perspective. Reviewing the pattern of Indian exports and imports in the last twenty years, her research focuses on comparing the Global Value Chain (GVC) participation rate of India with East Asian and ASEAN economies. Barriers to higher participation include a) lack of openness in the FDI sector; b) lack of adequate port infrastructure, and long port dwell times; and c) lack of Mutual Recognition Agreements (MRAs).
Aamir Khan, Assistant Professor, Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad presented his work on Economy Wide Impact of Regional Integration in South Asia - Options for Pakistan. His research analyzes the reasons for Pakistan not being able to take full advantage of its Free Trade Agreement (FTA) with China, and finds that the granting of ASEAN-type concessions to Pakistan in its FTA with China would be more beneficial than the current FTA arrangement. The work also draws lessons for FTAs that are currently being negotiated by South Asian countries.
Last week, I took a journey on Mumbai’s suburban train system, which carries a staggering 8 million women and men, equivalent to the entire population of Switzerland, every day to where they live, work, and spend time with family and friends. Although stretched, the system has reduced mobility constraints and increased independence for millions of women who rely on safe transport to access education and job opportunities; contributing to the city’s dynamism and growth. There are similarly inspiring examples from all countries in South Asia.
Much to be proud of—a lot more remains to be done
South Asian countries have seen encouraging increases in greater access and gender parity in education. At the same time, the region has achieved substantial decreases in maternal and child mortality. Countries have made great strides in healthcare access through training more female healthcare workers while providing affordable care for mothers and children. The region also boasts many inspiring female leaders and role models, as well as the countless individuals positively contributing to their communities and societies against difficult odds.
However, much more needs to be done in order to nurture all women and men to realize their potential. As South Asian countries become more prosperous, their growth trajectory will be less assured if hundreds of millions of women remain excluded from education and employment opportunities. South Asian countries will need to substantially expand their workforce in order to meet their economic growth goals and, at the same time, adequately support their increasingly large populations. Studies show that only around 1 out of 4 women in South Asia participate in the labor force, about half of what is typical in middle-income countries in other regions. Too many women face restrictions in decision-making, mobility, public safety; and far too many experience gender-based violence—the most egregious cases making headlines around the world. What can help bridge these gaps?