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Urban Development

Make in India: Which exports can drive the next wave of growth?

Saurabh Mishra's picture
Structural transformation depends not only on how much countries export but also on what they export and with whom they trade. In my new IMF working paper with Rahul Anand and Kalpana Kochhar, we break new grounds in analyzing India’s exports by the technological content, quality, sophistication, and complexity of India’s export basket. The paper can be found here. Here are few key pieces of evidence from our paper:
 
Technological content of India’s exports   

The evolution of Indian exports has not followed a “textbook” pattern. The pattern of evolution points to a dichotomy in the Indian economy – a well integrated, technologically advanced services sector and a relatively lagging manufacturing sector. The share of service exports in total exports has grown to over 32 percent in 2013 from 28 percent in 2000. On the other hand, the share of manufacturing exports in total export has declined to 67 percent from nearly 80 percent during 1990-2013.
 
The growth in service exports has been more rapid, resulting in the share of services exports in total exports to increase rapidly over the last decade. This can be explained by technological changes. Many services do not require face-to-face interaction, and can be stored and traded digitally. These services are called modern services. Modern services are the fastest growing sector of the global economy. This is particularly evident in India, where modern services exports account for nearly 70 percent of the total commercial services exports (compared to around 35 percent in EMs) (see Figure 1). 
      
Figure 1. Rapid Growth in Modern Services from India

Equal opportunity to women benefits all

Annette Dixon's picture
Also available in: 日本語


Celebrating the women of South Asia

As we today mark UN Women’s Day, it is worth considering what the inequality between men and women costs South Asian countries and what can be done about it. 

One big cost of inequality is that South Asian economies do not reach their full potential. In Bangladesh, for example, women account for most unpaid work, and are overrepresented in the low productivity informal sector and among the poor. Raising the female employment rate could contribute significantly to Bangladesh achieving its goal in 2021 of becoming a middle-income country. Yet even middle-income countries in South Asia could prosper from more women in the workforce. Women represent only 34 percent of the employed population in Sri Lanka, a figure that has remained static for decades.

Economic opportunities for women matter not just because they can bring money home. They also matter because opportunities empower women more broadly in society and this can have a positive impact on others.  If women have a bigger say in how household money is spent this can ensure more of it is spent on children.

Improvements in the education and health of women have been linked to better outcomes for their children in countries as varied as Nepal and Pakistan. In India, giving power to women at the local government level led to increases in public services, such as water and sanitation.

Just as the costs of inequality are huge, so is the challenge in overcoming it. The gaps in opportunity between men and women are the product of pervasive and stubborn social norms that privilege men’s and boys’ access to opportunities and resources over women’s and girls’.

 

When urbanization is messy, students fall through the cracks

Mabruk Kabir's picture
Student in Urban Slum Learning Center
A student at an Urban Slum Learning Center
in Dhaka. Photo: Mabruk Kabir/World Bank

On a foggy winter morning in Dhaka, 41-year-old Jahid was sipping tea by a roadside stall.

“Life was very peaceful back in my village,” he reminisced, “but there was no work, so I moved to Dhaka. Even if I live in a slum, my children are better off here.”

Jahid is one of the 500,000 people that move to Dhaka city each year. Driven by the promise of economic opportunity as well as poverty in rural and coastal areas, it is estimated that half the population of Bangladesh will migrate to urban areas by 2030. 

The Rocky Road to Urbanization

Urbanization can be catalyst for growth. Density – the clustering of firms and workers – can drive productivity, innovation and job creation. It is the benefits of agglomeration that once drew the country’s most important industry – the ready-made garments sector to Dhaka city.

However, it is the costs from congestion that are now pushing factories away, mainly to peri-urban areas. Why are factory owners leaving?


For starters, the tide of new migrants has overwhelmed urban infrastructure, basic services, as well as the stock of affordable housing – eroding the both the livability and competitiveness of Dhaka city. A recent World Bank report described South Asia’s urbanization trajectory as “messy and hidden” – reflected in the large-scale proliferation of slums and urban sprawl.

Local elections in Pakistan: A chance to improve public services

Ming Zhang's picture
Discussing public services in Pakistan
Discussing public services in Pakistan. Credit: GSP/MDTF/2013
I arrived in Pakistan right after the third round of local elections held in most provinces on December 5.

​This was the first local election in 10 years in most places of the country. Voters elected council members of three tiers of local governments: district, urban councils, and union council/ward.

How will these elections impact the lives of average citizens?

International experiences have shown that the main benefit of elected local bodies is their closeness to citizens, which allows them to be much more responsive – although with sustained hard work -- to improving local services such as waste, water, sewerage and transportation.

In a report about managing spatial transformation in South Asia launched at the 3rd Pakistan Urban Forum, we highlighted that passing reforms aimed at revitalizing urban governance is critical to make South Asia cities more livable and prosperous (see chapter 3 of the report).

To that end, we identified three closely related "deficits" -- empowerment, resource, and accountability -- which, if tackled properly, could lead to improved local urban governance.

The recent local elections in Pakistan are important steps toward reducing these three deficits. The new local government laws, which were enacted in most provinces in 2013, started to re-empower local governments after the expiration of the earlier 2001 Local Government Act.
 

How to manage urban growth in Pakistan

Jessica Rachel Schmidt's picture
Panoramic cityscape of Karachi in Pakistan
Panoramic cityscape of Karachi in Pakistan.
Karachi’s urbanization has had a physical impact on surrounding cities,
creating sprawling and underleveraged agglomerations
Credit: World Bank
With Pakistan’s urban population expected to increase by about 40 million people to an estimated 118 million by 2030, immediate action is needed to transform the country’s cities into livable, prosperous places. That was the message delivered by Peter Ellis, World Bank Lead Urban Economist and co-author of the South Asia Flagship Report, Leveraging Urbanization in South Asia:  Managing Spatial Transformation for Prosperity and Livability, at the 3rd Pakistan Urban Forum in Lahore earlier this month.

Properly managed urbanization will be critical as Pakistan’s urban population continues to increase.

Urbanization growth is already stretching cities’ resources. Pakistan faced an urban housing shortage of approximately 4.4 million units in 2010 and Karachi ranked 135 out of 140 countries in the Economist Intelligence Unit’s 2015 livability index.

Transforming Sri Lanka’s Cities to be More Livable and Prosperous

Ede Ijjasz-Vasquez's picture

Sri Lanka night lights
 
Sri Lanka is in many ways a development success story.

Growth of income per person in Sri Lanka has averaged a little more than 7 percent a year over the past five years. That follows average growth of just over 5 percent a year in the preceding nine years. Among the six largest South Asian countries, Sri Lanka has the highest level of economic output per person. With sustained high growth, Sri Lanka has largely eradicated extreme poverty.

All this success has helped propel the country towards middle-income status. Going forward, how successfully Sri Lanka manages its cities will determine how quickly and efficiently the country moves to higher middle-income status and beyond. Every high-income economy has achieved this status through urbanization.

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