There is a lot for Bangladesh to celebrate in the latest World Bank research on global poverty and inequality.
The new report, entitled “Poverty and Shared Prosperity 2016: Taking on Inequality”, uses revised data to give a more accurate estimate of how many poor people live in Bangladesh. What the report shows is that 18.5 percent of the population was poor in 2010 compared with 44.2 percent in 1991.
This is a major achievement that will receive global recognition on October 17 when the World Bank Group marks End Poverty Day with the Bangladesh people at an event in Dhaka.
This achievement means that . It means that Bangladesh beat the deadline by an impressive five years in achieving Millennium Development Goal number 1, an internationally recognized target to cut extreme poverty rates by half by 2015.
It is worth remembering how far Bangladesh has come.
Today I joined leaders and representatives from 70 countries and 20 international organizations and agencies at the Brussels Conference on Afghanistan. Together with its development partners, the World Bank Group pledged its continued support to the Afghan people and outlined a course of action to help all Afghans realize their dream of living in peace and prosperity.
Afghanistan has come a long way since 2001 and has made much progress under extremely challenging circumstances: life expectancy has increased from 44 to 60 years, maternal mortality has decreased by more than three quarters and, from almost none in 2001, the country now counts 18 million mobile phone subscribers.
Yet, enormous challenges remain as nearly 40 percent of Afghans live in poverty and almost 70 percent of the population is illiterate. This is made worse by growing insecurity and the return of 5.8 million refugees and 1.2 million internally displaced people. Much also remains to create jobs for the nearly 400,000 people entering the labor market each year.
To that end, here are five priorities we need to address to ensure a more prosperous and more secure future for all Afghans:
There is now a huge window of opportunity for South Asia to create more apparel jobs, as rising wages in China compel buyers to look to other sourcing destinations. Our new report – Stitches to Riches?: Apparel Employment, Trade, and Economic Development in South Asia – estimates that the region could create 1.5 million new apparel jobs, of which half a million would be for women. And these jobs would be good for development, because they employ low-skilled workers in large numbers, bring women into the workforce (which benefits their families and society), and facilitate knowledge spillovers that benefit the economy as a whole.
But for these jobs to be created, our report finds that apparel producers will need to become more competitive – chiefly by (i) strengthening links between the apparel and textile sectors; (ii) moving into design, marketing, and branding; and (iii) shifting from a concentration on cotton products to including those made from man-made fibers (MMFs) – now discouraged by high tariffs and import barriers. These suggestions recently drew strong support from panels of academics and representatives from the private sector and government when the report was launched mid-year in Colombo, Delhi, Dhaka, and Islamabad. South Asia is now moving on some of these fronts but a lot more could be done.
Moving up the apparel value chain
Stitches to Riches? finds that South Asia’s abundant low-cost labor supply makes it extremely cost competitive (except for possibly Sri Lanka). But rapidly rising living costs in apparel manufacturing hubs, coupled with international scrutiny, are increasing pressure on producers to raise wages. Plus, countries like Ethiopia and Kenya, who enjoy a similar cost advantage, are entering the fray, and some East Asian countries already pose a big challenge. The good news is that the policy reforms needed to keep the apparel sector competitive would likely benefit other export industries and transform economies (view end of the blog).
Recently, the World Bank Education Team on Sri Lanka Higher Education organized its first Facebook Live to discuss how Sri Lanka’s universities can become world class institutions where students acquire relevant skills. More than 50,000 viewers have so far viewed the video and we have received a large volume of follow up questions and comments.
It is evident that there is strong interest among Sri Lankan youth in their education system, particularly the current state and the future of higher education system, as well as their job prospects.
The questions raised by Facebook viewers spanned across issues on the need to increase access for higher education, improve quality of teaching and learning at tertiary education institutions, increase relevance of higher education, enhance skills development for employment.
Here’s a sample of questions asked and discussed:
- Learning opportunities in higher education have been significantly increased but higher education enrollment rate is well below comparator countries. How can Sri Lanka increase higher education opportunities?
- teaching-learning is still one way In majority of Sri Lanka’s higher education institutions: lecturers deliver information and students listen. How can we change our system more towards student-centered learning to get students actively involved in their learning? How can Sri Lanka strengthen its universities’ teaching-learning practices?
- What are the skills employers most want?
- How can higher education institutions help students acquire the right skills to succeed in today’s job market?
- The foundation of higher education is laid during the senior years at school. But after-school tuition classes have invaded school children’s lives. How can we ensure that teachers are doing their role effectively during school hours to prepare children for higher education?
While the team has been working on these very issues for over a decade since the preparation and implementation of the first higher education project in Sri Lanka, Improving Quality and Relevance of Undergraduate Education (2003-2010), followed by an analytical work on the sector, The Tower of Learning: Performance, Peril and Promise of Higher Education in Sri Lanka, and a follow up operation, Higher Education for the Twenty-First Century Project (2010-2016), this was an exciting opportunity to directly engage with the stakeholders through social media as the team is embarking on the next phase of engagement for the higher education sector through the preparation of Accelerating Higher Education Expansion and Development.
Transformation of the education system is essential to meet the economic and social challenges of a rapidly evolving and knowledge-intensive world.
Sri Lanka has a well-established system of higher education but its expansion is facing major challenges.
Bringing excellence to Sri Lanka’s higher education where students are able to acquire the relevant skills for the global market was one of the main goals of the World Bank supported Higher Education for the Twenty-First Century Project.
The Accelerating Higher Education Expansion and Development Project will aim to expand access to higher education with a special focus on the Sciences, Technology, Engineering and Mathematics which will increase opportunities for young people, including youth from rural and estate sector families, to access better paid jobs.
In addition, it will aim to improve the relevance and quality of priority areas of higher education and increase research, development and innovation products from universities.
The team is grateful to Facebook viewers’ active engagement through Facebook live on Sri Lanka’s higher education and looking forward to the next rounds of discussions.
Sri Lanka amazes me in many ways, with its smiling faces among a rich tapestry of cultures, diversity, and natural wonders. On this fourth visit and first time in the Northern Province, I once again found a resilient and industrious people eager to build their lives and advance the country together.
As Sri Lanka recovers from an almost three-decade long conflict, much progress has been made. I am proud that the World Bank Group has been a close and trusted partner with the country to help restore lives, livelihoods, and unlocking the potential of all of its people, inclusive of men and women, diverse geographic locations, as well as different ethnic and religious backgrounds.
The China sourcing conundrum
In conversations with U.S. and European retailers and brands, ELEVATE – a company formed in 2013 to support corporate social responsibility – finds that apparel buyers rate diversifying away from China as one of their top three sourcing goals.
This is not to suggest that there is a desire to exit China – which currently holds by far the largest share of global apparel trade, at 41 percent – but rather a need to significantly reduce dependence on product from China, owing to rising costs, factory closures, unenthusiastic second generation family ownership, new attitudes about working in factories, and a perception that China wants to move to higher-value manufacturing. Sourcing and procurement organizations feel uncertain, and uncertainty is not a friend of supply chains.
The problem is that for all its uncertainty, China still has a huge base of factories, a well-developed transport infrastructure, and a comprehensive eco-system that supplies cut-and-sew operations, and management that has matured with years of experience. Even if a buyer would like to give another country an opportunity, many corporate risk managers view certain countries or regions as quite challenging for doing business.
South Asia could seize this opportunity by better meeting requirements – besides competitive costs – that are vital to global buyers. These include: (i) quality, which is influenced by the raw materials used, skill level of the sewing machine operator, and thoroughness of the quality control team; (ii) lead time and reliability, which are greatly affected by the efficiency and availability of transportation networks and customs procedures; and (iii) social compliance and sustainability, which has become central to buyers’ sourcing decisions in response to pressure from corporate social responsibility campaigns by non-governmental organizations, compliance-conscious consumers, and, more recently, the increased number of safety incidents in apparel factories.
Surveys of global buyers show that East Asian apparel manufacturers rank well above South Asian firms along these key dimensions, as noted in a new World Bank report on apparel, jobs, trade, and economic development in South Asia, Stitches to Riches (see table). So, what can South Asia, which now accounts for only 12 percent of global apparel trade, do to become a bigger player? An encouraging recent development is that buyers have started collaborating to facilitate new sourcing possibilities – as the case of Bangladesh illustrates.
“Despite the global slowdown, India has been one of the few countries to have shown remarkable growth in the last financial year. While this has been an achievement in itself, this growth rate can be taken to double-digits.” This was the key message of Dr. Frederico Gil Sander, Sr. Country Economist, World Bank Group, New Delhi. Dr. Gil Sander was speaking to students at the IIM Ahmedabad as part of the World Bank - IIM Discussion Series. The discussion centered around “Financing Double-digit Growth: Current and Long-term Challenges of India’s Financial Sector”.
Dr. Gil Sander noted that urban consumption and public investment have been the key drivers for current growth. Additionally, a good monsoon this year is expected to give a boost to rural consumption. These, coupled with the promised emphasis on supply-side factors such as labour reforms, the inclusion of more women in the labour force, and the timely implementation of GST can boost economic growth. To further increase this growth rate, potentially to double-digits, these drivers will first have to be augmented by productive capacity investment, which in turn depends on ease of credit availability from banks. However, credit growth in India is marred primarily by high lending rates, priority sector lending regulations and rising non-performing assets (NPAs).