Syndicate content

growth

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.

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.

World Bank Provides Four Loans Worth Over $4.3 Billion to India

Joe Qian's picture

The World Bank approved four loans worth $4.345 billion dollars yesterday, which is the second largest volume of lending to a single country in a year.

The goal of the four projects is to contribute to improving India's infrastructure and help bolster the country's response to the global economic and financial crisis and lay the foundations for stronger growth in the future.

The financial package consists of:

-Banking Sector Support: $2 billion
-Support for India Infrastructure Finance Company Limited: $1.195 billion
-The Fifth Power Sector Support Project: $1 billion
-The Andhra Pradesh Rural Water Supply and Sanitation Project: $150 million

For more information and to watch an interview with India's Country Director Roberto Zagha, please check out the feature story.

Remittances in Bangladesh: Determinants and 2010 Outlook

Zahid Hussain's picture

Co-authored with FARRIA NAEEM

Remittances have emerged as a key driver of economic growth and poverty reduction in Bangladesh, increasing at an average annual rate of 19 percent in the last 30 years (1979-2008).

Revenues from remittances now exceed various types of foreign exchange inflows, particularly official development assistance and net earnings from exports. The bulk of the remittances are sent by Bangladeshi migrant workers rather than members of the Bangladeshi Diaspora. Currently, 64 percent of annual remittance inflows originate from Middle Eastern nations.

Robust remittance inflows in recent years (annual average growth of 27 percent in FY06-FY08) have been instrumental in maintaining the current account surplus despite widening a trade deficit. This in turn has enabled Bangladesh to maintain a growing level of foreign exchange reserves.

Financing, Oversight Critical For Afghanistan's Army, Police

William Byrd's picture

Afghanistan needs more well-trained Afghan soldiers and better Afghan police, but the question is who will pay for them? The country cannot afford to pay the additional costs out of its own limited budget resources—any further money coming from this source will be at the expense of much less funding for urgent development priorities like educating children, improving basic health, building public infrastructure, etc. Will the international community commit to provide predictable funding for a number of years for Afghanistan’s security sector? This is a critical backbone of the state, whose development is essential to over time progressively replace international military forces which are far more costly. Creating security forces without the ability to pay for them will lead to obvious problems. And while expanding the Afghan security forces, it is critical to ensure that sound oversight and accountability mechanisms are in place.

Smaller South Asian nations not immune to the effects of global financial crisis

Sadiq Ahmed's picture

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. 

Pages