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February 2019

In India, more exports can create better jobs and higher wages

Hartwig Schafer's picture
Exports to Jobs: Boosting the Gains from Trade in South Asia


South Asia has grown strongly to reduce poverty and create jobs, but the region remains a development paradox. Despite strong growth, job creation remains weak and is often of poor quality.

This is especially true for India, which grew at a rate of 7.2 percent in 2017 and which managed to reduce the number of poor people considerably.

But the growth of new job opportunities is below what many had hoped for; most Indians still lack a regular job in the formal economy, and huge differences in pay exist among workers. Strong population growth also puts pressure on labor markets, with millions of Indians entering the job market every year.

Employment creation is failing to keep up with labor force growth. And those who work often do so only in the informal sector, which is larger than in any other region in the world. Some groups, like women or workers in rural areas, are at particularly high risk of having to work in the informal economy, where wages are often lower.

Meanwhile, trade in goods as a share of the economy is much lower than in other regions. The trends in India and much of South Asia differ from other regions, where trade, growth, and jobs are directly connected and go hand in hand.

This South Asian paradox raises the question of how governments can boost job growth, and how to raise the quality of new jobs so that economic development brings more shared prosperity.

A new report by the World Bank and the International Labour Organization (ILO) finds that increasing exports through globalization has the potential to contribute to a broader strategy for promoting growth, job creation and shared prosperity.

Expand exports to resolve the South Asian paradox

Hartwig Schafer's picture
South Asia has grown strongly to reduce poverty and create jobs, but the region remains a development paradox


South Asia has grown strongly to reduce poverty and create jobs, but the region remains a development paradox: Despite strong growth job creation remains weak and is often of poor quality.

Sri Lanka grew at an average rate of 5.8 percent from 2010-2017 but the growth of new job opportunities is below what many had hoped for. Most Sri Lankans still lack a regular job in the formal economy, and huge differences in pay among workers exist.

Meanwhile, trade in goods as a share of the economy is much lower than in other regions. The trends in Sri Lanka and much of South Asia differ from other regions, where trade, growth and jobs are directly connected and go hand in hand. This South Asian paradox raises the question of how governments can boost job growth, and how to raise the quality of new jobs so that economic development brings more shared prosperity.

A new report by the World Bank and the International Labour Organization (ILO) finds that increasing exports has the potential to contribute to a broader strategy for promoting growth, job creation and shared prosperity.

Titled “Exports to Jobs: Realizing the Gains from Trade,” the report shows how higher exports can translate into benefits for workers across the country, and it therefore recommends policies to expand exports together with policies that help sharing these benefits more widely, for example through measures that help workers get the skills needed to compete for new formal-sector jobs.

Is education delivering on its promise for Bangladesh?

TM Asaduzzaman's picture
 

Are students really learning? This is the primary question In Bangladesh, where more than one third of grade 3 students could not be classified as “readers” because they did not score high enough to be tested. In case of mathematics, the share of students who do not meet minimum proficiency is at 60 percent. These assessments confirm the key message of World Development Report 2018 .

Why are learning levels low? WDR 2018 identifies that the global learning crisis is a result of gaps in one or more of four key school level ingredients for learning - prepared learners, effective teaching, learning focused inputs, and the skilled management and governance that pulls them all together. The report notes that when countries and their leaders make learning for all a national priority, education standards can improve significantly. Relying on evidence gathered around the world, the report offers three policy recommendations: First, Assess learning - so it can become a measurable goal. Second, Act on evidence - to make schools work for all children. Finally, Align actors - to mobilize everyone who has a stake in learning.

Schooling is not the same as learning. Bangladesh has already made a tremendous start by getting most of the children and youth into school. Unfortunately, schooling is not same as learning. Thousands of children attend school but gain very little in terms of actual skills. Moreover, learning outcomes are almost always significantly worse for the disadvantaged. As a result, millions of youths are facing the prospect of lost opportunity and lower wages in later life because schools are failing to ensure learning outcomes.

In Bangladesh, nutrition trainers inspire healthy habits

Snigdha Ali's picture
A group watches videos that raise awareness about nutrition and hygiene in the Rangamati district of the Chittagong Hill Tracts, Bangladesh.
A group watches videos that raise awareness about nutrition and hygiene in the Rangamati district of the Chittagong Hill Tracts, Bangladesh. Photo Credit: ASHIKA Development Associates

It was very early in the morning when the call came.  Minoti Chakma was in labor, and her husband knew something was not right.

She had been in pain for a while. The midwife and the family elderlies were trying to help her deliver the baby, a common practice in that remote indigenous community in the Chittagong Hill Tracts (CHT) of Bangladesh.

But nothing seemed to be working, and Minoti’s husband grew worried.

So, he decided to seek help from a person known locally as the ‘nutrition trainer.

The trainer he met is part of a larger team of twenty-two who raises awareness about nutrition and hygiene among indigenous communities in the Banderban and Rangamati districts.

With support from the South Asia Food and Nutrition Security Initiative (SAFANSI), the nutrition trainers visit families in selected villages, gather women and men into groups, and show them instructional videos.

These low-cost videos introduce communities to best practices in nutrition and health—and challenge long-held social and cultural norms. An open discussion usually follows the projection.

The rise of India’s rural women entrepreneurs

Balakrishnan Madhavan Kutty's picture
Women at the custard apple collection centre
Women at the custard apple collection center. Photo credit: Rajasthan Grameen Aajeevika Vikas Parishad (RGAVP), Govt. of Rajasthan

Pehle mein apne ghar ka paanch hazaar (rupaye) mein bhi kharcha nahi chala paati thi, abh mein pandrah hazaar rupaye mein ghar ka kharcha chalati hu.

“Earlier I was not able to contribute even Rs. 5,000 ($69) to run my house. Today, I contribute Rs. 15,000 ($208),” beams Lakshmi Amol Shinde from Wardha Lakshmi as she recalls the harsh financial conditions she and her family faced after her husband lost his job.

This unexpected event motivated her to join a self-help group (SHG) and take out a loan to start a small snack (papad) business.

Initially, she sold her food delicacies in her village. Later, she expanded her business and catered to shops in Nagpur, Maharashtra’s winter capital.

Her hard work paid off, and eleven women from her group joined Lakshmi’s flourishing business.

Thanks to business and marketing training, the women’s business has grown and is now processing the famous turmeric from Waigaon, another town in the district.

Joining forces to revive Nepal’s heritage

Marisa Garcia Lozano's picture
View of Kathmandu Valley
Photo: The World Bank

Many people traveling to Nepal choose the Himalayas as their primary destination.

After landing in the capital city of Kathmandu, most adrenaline junkies and nature lovers quickly make their way to the mountains to spend days trekking along high peaks.

But just five kilometers away from the capital city, there is a special place in the Kathmandu Valley with a rich and diverse cultural heritage that’s well worth the trip.

This place is Lalitpur City, or locally known as Patan, “the city of fine arts.”

Located in the center of the city is Durbar Square, one of the seven monument zones in the Kathmandu Valley UNESCO World Heritage site known for its beautiful Newari architecture and home to the ancient royal palace and various Hindu temples and Buddhist monuments.

Skills competition inspires youth in Bangladesh

Mustahsin-ul-Aziz's picture
A team of young female innovators receiving a prize from the Ministry of Education at the national skills competition. 

Skills education in Bangladesh has suffered from a social stigma, which is gradually changing. Parents were unwilling to send their children to pursue technical education because they didn’t realize its value. Students themselves rarely aspired to be educated in the technical stream because they wrongly perceived it as a place for low-achievers. This presented a major problem for the government of Bangladesh in achieving the target of a skilled workforce. To face the challenges of the next generation job market and benefit from the demographic dividend, this mindset needed to change.

To address the situation, the Skills and Training Enhancement Project (STEP) of the government of Bangladesh supported by the Government of Canada and the World Bank took an innovative measure. The project initiated a Skills Competition in 2014. The competition planned to hold three levels of competition to encourage all students and ensure maximum participation. The first stage of the competition was held at the institutional level, and the winners went on to compete at the regional level. The winners of the regional level then competed in the national level competition to take home the prize of the Best Skilled.

How has Citizens’ Charter brought positive change in Jalalabad, Afghanistan?

Akram Sajid's picture
Also available in: دری | پښتو
 Rumi Consultancy/ World Bank
Residents discussing their community development projects in a Community Development Council meeting in Jalalabad city. Photo Credit: Rumi Consultancy/ World Bank
The Citizens’ Charter Afghanistan Project (Citizens’ Charter) is a national program to provide every village and city in Afghanistan with basic services, such as water, roads, and electricity—based on decisions made by the community.
 
When we first started activities in Jalalabad city, the capital of the eastern province of Nangarhar, people were not familiar with community driven programs in urban areas; and there was no tradition of cooperation among different members of the community to jointly solve issues. Their relations with local government, especially the municipality, were weak since it could not address many of their basic needs, like access to clean drinking water.
 
As the Citizens’ Charter Communication and Outreach Officer in Jalalabad, I initially felt that community members were not feeling empowered and, therefore, didn’t see the value of working together to increase the prosperity of their community.
 
Before the project started in 2017, there were no organized councils that people could turn to, to address their shared problems. Shir Mohammad, a resident from Jalalabad’s District 5, told me: “It was so hard to gather people to discuss an issue in the area.
 

How South Asia can become a free trade area

Sanjay Kathuria's picture
Women knit handicrafts for export at Everest Fashion Fair Craft in Lalitpur, Nepal
Women knit handicrafts for export at Everest Fashion Fair Craft in Lalitpur, Nepal. Photo: Peter Kapuscinski / World Bank

The South Asian Free Trade Area (SAFTA) agreement has been in effect since 2006—with little success.

This is in sharp contrast to the ASEAN free trade area (AFTA), which started in 1992 with six six countries and later added more members, completing the ASEAN ten by 1999.

Between 1992 and 2017, intraregional imports as a share of global imports in ASEAN increased from 17 to 24 percent, and exports from 21 to 27 percent.

In South Asia, these shares were largely stagnant since SAFTA came into effect, at 3 percent for intraregional imports and 6-7 percent for intraregional exports.

In fact, intraregional trade in South Asia has been the lowest among world regions for quite some time, hovering around 5 percent of its overall trade with the world.