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January 2019

What’s keeping India in the dark?

Fan Zhang's picture
To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain.
To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain. Credit: World Bank

Statistics show that what is commonly perceived as an energy gap in India is actually an efficiency gap.

To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain. 

But first, the good news. In 2018, every village in India got connected to the grid.  That same year, power shortages declined dramatically to 0.9 percent from 8.5 percent in 2012.  

As for clean power, India has become one of the world’s leading countries in renewable energy and aims to add 227 gigawatts of green electricity by 2022.

True, India today generates more power than ever. Yet, 178 million Indians still lived without access to grid-connected electricity in 2017.

On top of that, air pollution from coal-powered plants contributed to 82,900 deaths across India in 2015.

Given its rapidly growing economy, demand for power in India is expected to triple by 2040.

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.

The rising cost of nutritious food in South Asia

Felipe F. Dizon's picture
 World Bank
A malnourished child will face poorer outcomes as an adult. In South Asia, where malnutrition persists in multiple forms, improving nutrition in the early stages of life is critical to a child's future development and health. Credit: World Bank

A malnourished child will face poorer outcomes as an adult.
 
That’s why improving nutrition, especially in the early stages of life, is critical.
 
The path toward better nutrition includes adequate maternal and child care, access to better sanitation facilities, health services, and naturally, nutritious foods.
 
But whether an individual consumes—or not—nutritious food is contingent upon a myriad of factors, ranging from the availability of certain foods, how convenient they can be turned into meals, or simply, if they meet consumers’ tastes.
 
But above all, the high cost of food remains the most critical barrier to proper nutrition and affects the poor more than the rich.
 
And in South Asia, where malnutrition persists in multiple forms, the cost of nutritious food is prohibitive.

How to diversify Bhutan’s economy?

Yoichiro Ishihara's picture
Bhutan has made tremdendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.
Bhutan has made tremendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Will diversifying its economy help Bhutan address its youth unemployment, let alone its macroeconomic volatility and vulnerability?

With the right approach, yes.

And to that end, the latest World Bank Bhutan Development Report: A Path to Inclusive and Sustainable Development proposes solutions relevant to Bhutan’s context.

For more than ten years, developing the private sector through greater economic diversification has been Bhutan’s top policy as described in the 10th and 11th five-year plans.

Yet, youth unemployment, especially for educated Bhutanese, has remained high: 67 percent of bachelor’s degrees holders were jobless in 2016.

Diversifying the economy is touted as a standard prescription to cure such development ailments as joblessness, low productivity, and macroeconomic volatility.

However, international experience shows that this prescription does not always work.

Case in point: A World Bank’s analysis Diversified Development concludes that in resource-rich countries, investing in physical capital, human capital and economic institution are the best ways to sustain growth in the private sector.

Further to that, the development of specific sectors, which is often a common ingredient of diversification strategies in certain countries, is neither necessary nor sufficient for private-sector-led growth.

The main driver of Bhutan’s high growth and poverty reduction, hydropower has led the country’s development and will remain the backbone of its economy.

However, Bhutan needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Bhutan ranks 149 out of 160 countries on the 2018 Logistics Performance Index and 121 out of 176 countries on the 2017 ICT index.

Bhutan falls in the bottom half of the Human Capital Project rankings on critical indicators such as expected years of schooling.

The journey to a peaceful Afghanistan starts in the classroom

Mohammad Ibrahim Shinwari's picture
Also available in: دری | پښتو
Education is the bedrock for peace and a more resilient and self-sufficient Afghanistan
Students attending school in a remote village in Afghanistan's central Panjshir Province. Photo Credit: Rumi Consultancy/ World Bank

Today, January 24, we’re celebrating the International Day of Education after a unanimous UN resolution recognized last December the pivotal role of education for peace and development.
 
The International Day of Education not only calls attention to education as a key goal in the UN 2030 Agenda for Sustainable Development, but also highlights the role education plays in eradicating poverty, improving public health, promoting gender equality, and building peace worldwide.
 
There's no doubt that effective learning builds the human capital necessary for sustained long-term growth.
 
And by dedicating a global day to education, the international community has shown its determination to support inclusive, equitable, and quality education for all.
 
As Deputy Minister of Education in Afghanistan, I am pleased to see education on top of the international agenda and that its contribution to peace and development is now being recognized.
 
For Afghanistan, this recognition is crucial as the country faces the challenge of overcoming the devastating effects of decades of conflict and instability.

India: Building trust in local governance institutions in Bihar’s villages

Farah Zahir's picture
Sushumlata, the head of the gram panchayat of Dawan village, Bhojpur District, Bihar, conducts a meeting at the newly furbished panchayat office.
Sushumlata, the head of the gram panchayat of Dawan village, Bhojpur District, Bihar, conducts a meeting at the newly furbished panchayat office.


In a remote village in Bihar’s Bhojpur district, Sushumlata sits behind a spanking new desk in a newly-refurbished government building.

From the time she came to the village as a new bride, this young woman has chosen to get involved in community affairs by joining the Self Help Group (SHG) movement.

Later, armed with a master’s degree in social work, she joined active politics and, in 2016, was elected the Mukhiya, or head of the Dawan village Gram Panchayat – the local governance institution – under the seat reserved for women.

Sushumlata is the face of the government in this remote corner of Bihar. When we visit her in the newly upgraded Gram Panchayat building – refurbished under the World Bank (IDA) funded Bihar Panchayat Strengthening Project – she tells us how the newly painted and equipped building has made a difference.

A young man is busy on a computer beside her, helping an elderly gentleman apply for a government pension.

Bracing for climate change is a matter of survival for the Maldives

Hartwig Schafer's picture
The Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.
The Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.


For low-lying island states, the impacts of global warming and climate change can be a matter of survival.

The irony is that while these states have not contributed much to greenhouse emissions, as they produce very little, they may face some of the worst consequences. 
 
Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges.

As one of the lowest-lying countries in the world, with all its people living a few meters above sea level and over two-thirds of its critical infrastructure lying within 100 meters of the shoreline, a sea level rise of just a few meters will put the nation further at risk, endangering its relative prosperity. 
 
Thankfully Maldives is beginning to turn the tide.

Yesterday I visited Fuvahmulah, in one of the southernmost atolls where the Mayor and the Ministry of Environment, have been working closely with local communities to manage the wetlands, critical for reducing climate change impacts.

I saw scores of young Maldivians enjoying the facilities and learning about conservation. A true win-win. Community participation has helped enhance the design and acceptability of this initiative.

Scaled up, such initiatives can have a transformational impact and it is imperative that the Government of Maldives take the lessons from this Bank supported initiative to 19 other atolls.
 
Creating a safer archipelago
 
The Indian Ocean tsunami that battered the islands in 2004 provided a glimpse of what can happen – a clear wake-up call.

The government responded by increasing its emphasis on building resilience in infrastructure and providing its people with early warnings in the event of an underwater earthquake.
 
Today, in the Greater Malé region, the reclaimed island of Hulhumalé is being developed with better sea defenses and elevated buildings from where people can be evacuated as needed. 

The government is also raising people’s understanding of the causes and effects of natural disasters, particularly those that come on suddenly, such as tsunamis and flooding.

In Pakistan, music meets public debt management

Andrew Lee's picture
Recently on mission in Pakistan to unveil a new tool to help the Punjab government better manage its public debt, the blog author, Andrew Lee, interacted and shared a few selfies with youth in the Shalimar Gardens in Lahore.
Recently on mission in Pakistan to unveil a new tool to help the Punjab government better manage its public debt, the blog author, Andrew Lee, interacted and shared a few selfies with youth in the Shalimar Gardens in Lahore.


“Sí, sabes que ya llevo un rato mirándote
Tengo que bailar contigo hoy” 
 
The Despacito tune blared in the bus, and my fellow riders kept tempo to the rhythm.
 
I was recently on mission in the Punjab province, Pakistan, on my way to the Shalimar Gardens for some sightseeing on my day off.

The last thing I expected to hear was the top song of 2017 on a bus in Lahore but in hindsight, this shouldn’t have surprised me.

We live in a global community, and across the world, individuals are getting more connected every day.  Music perfectly exemplifies this – a universal language which we can all understand.  With this increased connection comes higher expectations.

In addition to roads and clean water, citizens now demand that their government provide reliable digital connectivity. And when taxes and other revenues are not sufficient to cover this and other public services, governments must borrow to pay for it.
 
As with music, debt transcends borders, and the basics are almost the same. The key elements of music – rhythm, harmony, and melody – as with the critical components of debt – interest payments, maturity, cash flow, and risk – remain the same no matter where you are.

Managing public debt was precisely my reason to be in Lahore where I introduced a cash flow tool the World Bank helped design.

Celebrating 40 years of engagement with Maldives

Idah Z. Pswarayi-Riddihough's picture
The World Bank Group (WBG) and Maldives have had a trusted partnership for the past 40 years, which has seen tremendous growth and development in the country.

Over this period, Maldives has transformed from being among the poorest countries in the world to having a per capita GDP of over $10,000 and boasts impressive human development achievements, with a life expectancy of over 77 years and nearly 100% literacy.

However, vulnerability to environmental sustainability and climate change are among the challenges that the country faces. 

To help respond to them, the WBG continues to work closely with Maldives to help realize the aspirations of its people through enhancing employment and economic opportunities, strengthening natural resources management and climate resilience, while improving public financial management and policy-making through strengthening institutions.

Here are five milestones of our engagement:

1. Joining the World Bank
Maldives joins World Bank
Photo Credit: World Bank Group Archives
On January 13, 1978, Maldives became the 131st member of the World Bank and the International Development Association (IDA), the fund that helps the poorest countries through interest-free credits.

The Articles of Agreements were signed by His Excellency Fathulla Jameel, Permanent Representative of the Republic of Maldives to the United Nations. At that time, Maldives had a GDP per capita of just over $200 and had achieved independence only 13 years prior.

2. First project signing
Maldives 1st Project Signing
Photo Credit: World Bank Group Archives

 Maldives signed its first project to help increase fisheries production with the World Bank on June 4, 1979.

The project helped mechanize fishing craft, established repair centers, and installed navigational aids to increase the safety of fishing operations.

Those present for the signing from left to right, Said El-Naggar, Executive Director of the World Bank for Maldives, His Excellency Ahamed Zaki, Ambassador and Permanent Representative of Maldives to the United Nations, and Robert Picciottto, Projects Director for South Asia.

South Asia: A bright spot in darkening economic skies?

Hartwig Schafer's picture
South Asia is set to remain relatively insulated from some of the rising uncertainties that are looming large on the global economic horizon. The region will retain its top spot as the world’s fastest-growing region. The Siddhirganj Power Project in Bangladesh. Credit: Ismail Ferdous/World Bank

If, like me, you’re a firm believer in New Year’s resolutions, early January ushers in the prospect of renewed energy and exciting opportunities. And as tradition has it, it’s also a time to enter the prediction game.
 
Sadly, when it comes to the global economy, this year’s outlook is taking a somber turn.
 
In the aptly titled Darkening Skies, the World Bank’s new edition of its twice-a-year Global Economic Prospects report shows that risks are looming large on the economic horizon.
 
To sum up:  In emerging market and developing economies, the lingering effects of recent financial market stress on several large economies, a further deceleration in commodity exporters are likely to stall growth at a weaker-than-expected 4.2 percent this year.
 
On a positive note, South Asia is set to remain relatively insulated from some of these rising global uncertainties and will retain its top spot as the world’s fastest-growing region.
 
Bucking the global decelerating trend, growth in South Asia is expected to accelerate to 7.1 percent in 2019 from 6.9 percent in the year just ended, bolstered in part by stronger investments and robust consumption.  

Among the region’s largest economies, India is forecast to grow at 7.5 percent in fiscal year 2019-20 while Bangladesh is expected to moderate to 7 percent in fiscal year 2018-19. Sri Lanka is seen speeding up slightly to 4 percent in 2019.
 
Notably, and despite increasing conflicts and growing fragility, Afghanistan is expected to increase its growth to  2.7 percent rate this year.

In this otherwise positive outlook, Pakistan’s growth is projected to slow to 3.7 percent in fiscal year 2018-19 as the country is tightening its financial conditions to help counter rising inflation and external vulnerabilities.

However, activity is projected to rebound and average 4.6 percent over the medium term.