This blog highlights the findings from the recent South Asia Economic Focus: Exports Wanted
Bela Balassa worked for the World Bank from 1966 till his death in 1991. Luckily, his insights on international integration, revealed comparative advantages, trade diversion, and natural progress toward political integration have outlived him.
And what Bela is best-known for—and rightfully so—is the Balassa-Samuelson effect.
Put simply, this effect explains why a haircut or a restaurant meal is much cheaper in poor countries than in rich countries whereas the price tag for a car or a television is almost the same everywhere.
What’s behind this phenomenon is simple and can be summed up in three parts.
Second, the prices of non-tradable goods like haircuts can differ.
And third, the difference in productivity across countries is much more significant in tradable goods than in non-tradable goods. For example, a barber in Dhaka needs roughly the same amount of time as a barber in New York to cut my hair.
But manufacturers or farmers in Nepal need more labor to produce the same output than their counterparts in Germany.
This blog highlights the findings from the recent South Asia Economic Focus: Exports Wanted
The good news is that several countries in the region,
But overall, .
In this context, it’s critical to confront failures that impede progress toward better health and nutrition in the region. Even more so since some undernutrition challenges persist, and new ones are emerging.
This starts early in a child’s life as breastfeeding rates remain low. Though early initiation of breastfeeding has more than doubled to 40 percent between 2000 and 2016, more than 20 million infants are still not being breastfed within the first hour of birth.
Progress is also uneven across the region: breastfeeding initiation ranges from 18 percent in Pakistan to about 90 percent in Sri Lanka.
Also worrisome is that
Further to that, the diets of infants over six months continue to be one of South Asia’s biggest and most persistent challenges.
This blog is part of a series that discusses a way forward for South Asian regional integration.
That South Asia is brimming with possibilities for economic growth is well-known. It’s what drove us to write A Glass Half Full: The Promise of Regional Trade in South Asia. .
What we weren’t prepared for, however, was the overwhelmingly positive response the report received across the region. Government officials, members of the private sector, civil society, and particularly young people we met with were eager to learn more about how their countries could improve trade relations with their neighbors.
despite political circumstances that make it seem impossible.
In Pakistan, which suffers the biggest welfare loss because of non-cooperation, A Glass Half Full hit home in a variety of ways.
The country can increase its intraregional trade almost 8-fold, from $5.1 billion to $39.7 billion. This resounded with audiences at launch events in Islamabad, Lahore, and Karachi, evoking a sense of loss for the missed opportunity. They asked how Pakistan and other countries could amend their discriminatory policies and enjoy the benefits of free trade.
Politics often trumps economic cooperation in South Asia, but many in Pakistan suggested politics wins because the cost is so low. If intraregional trade were to increase, lobbies would arise to protect those interests.
A week before our report’s launch, Pakistan and India had initiated the Kartarpur border corridor to facilitate visa-free visits for Indian pilgrims to Pakistan’s Sikh holy sites. This had locals brainstorming more initiatives for regional integration.
“There is power in not being alone,”
Demetrios Papathanasiou - Practice Manager, South Asia Energy Unit at The World Bank
The number of women working in the energy and power sector in South Asia is dismally low.
As for women engineers and technicians, the proportion is even lower: less than 1 to 6 percent.
To promote opportunities for women in the power and energy sectors, especially in technical roles, the World Bank and its partners recently organized the first regional conference for Women in Power Sector Network in South Asia (WePOWER).
and provided networking and learning opportunities to women and girls.
A recent study found that investing in peer networks and building up proteges as two of the six things successful women in STEM have in common.
From a personal point of view, I have learned something powerful during the event: When strong and smart women work together and are supported by men who value women’s engagement as equals, let alone in the engineering or energy sectors, something magical happens.
This blog is part of a series examining women’s economic empowerment in South Asia. Starting today on International Women's Day and over the next few weeks, we will be exploring successful interventions, research, and experience to improve gender equality across the region.
Meet Fazeela Dharmaratne from Sri Lanka.
Her story, like that of millions of other women in South Asia, is one of struggle between family and work and a story worth telling as we mark International Women’s Day.
Unlike too many of her female peers, Fazeela was able to reinvent herself professionally.
As a young woman, straight out of school, she joined a bank in Colombo as a banking assistant. In 17 years, she climbed up the corporate ladder to become regional manager—a position she later quit to care for her children.
Unfazed, Fazeela started her own small home-based daycare business in 2012, initially serving only 4-5 children. Today, Fazeela is the director of the CeeBees pre-school and childcare centers serving several corporate clients in Colombo.
Fazeela’s success belies the fact that
And while employment rates have gone down across the region, women account for most of this decline.
These numbers are worrying because a drop in female employment has important social costs.
First, when women control a greater share of household incomes, children are healthier and do better in school.
Second, when women work for pay, they have a greater voice in their households, in their communities, and society.
A recent study by the International Monetary Fund estimated that
The good news is that
I just ended my first round of country visits as the World Bank’s Vice President for the South Asia Region. Over and above all,
These women are succeeding in a region where it is hard for women to realize their career dreams. .
What better opportunity than International Women’s Day to give a huge shout-out and applaud those women who are role models, entrepreneurs, and leaders in the eight countries of South Asia.
. 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; . Strong population growth also puts pressure on labor markets, with millions of Indians entering the job market every year.
. 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.
, job creation and shared prosperity.
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.
Initially, she sold her food delicacies in her village. Later, she expanded her business and catered to shops in Nagpur, Maharashtra’s winter capital.
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.
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, .
Statistics show that what is commonly perceived as an energy gap in India is actually an efficiency gap.
But first, the good news. . That same year, power shortages declined dramatically to 0.9 percent from 8.5 percent in 2012.
As for clean power,
On top of that,
The country faces a monumental task to meet this demand while protecting its natural environment and the health of its people.
As I write in my new report, ‘In the Dark’, power distortions cost India much more than previously estimated: $86 billion in 2016—that is 4 percent of the country’s economy.