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Finishing the job of ending poverty in South Asia

Hartwig Schafer's picture
This Bangladeshi woman was born in poverty. With the right kind of education, life in poverty quickly became a story from the past for her. Credit: World Bank

"I have a four-year-old son back in my village. I want to make a better life for him,” says Sharmin Akhtar, a 19-year-old employee in one of Dhaka’s many flourishing garment factories.

Like thousands of other poor women, Sharmin came down to Bangladesh’s capital from her village in the country’s north to seek a better job and create a more prosperous future for her family—leaving behind a life of crushing poverty.

Today, as we mark End Poverty Day 2018, it’s important to note that Sharmin’s heartening story is one of many in Bangladesh and the rest of South Asia, where economic growth has spurred a dramatic decline in extreme poverty in the last 25 years.

And the numbers are striking: In South Asia, the number of extreme poor living on less than $1.90 a day dropped to 216 million people in 2015 from 275 million in 2013 and 536 million in 1990.

Even more remarkable, South Asian countries experienced an increase in incomes among the poorest 40 percent of 2.6 percent a year between 2010-2015, faster than the global average of 1.9 percent.

On a global scale, the highest concentration of poor shifted from South Asia to Sub-Saharan Africa in 2012. And India is likely to be overtaken, if it has not already been, by Nigeria as the country with the most people living in extreme poverty.

It’s worth thinking about how far South Asia has come – but remaining clear-eyed about how far we must go to finish the fight against extreme poverty.

Indeed, it is increasingly clear that poverty is more entrenched and harder to root out in certain areas, particularly in rural areas and in countries burdened by violent conflict and weak institutions.

Estimates for 2015 indicate that India, with 176 million poor people, continued to have the highest number of people in poverty and accounted for nearly a quarter of the global poor.

True, the extreme poverty rate is significantly lower in India relative to the average rate in Sub-Saharan Africa. But because of its large population, India’s total number of poor is still large.

And while there has been a substantial decline in the numbers and rate of people living below $1.90 in South Asia, the number of people living on less than $3.20 has declined by only 8 percent over 1990-2015 because of the growing population.

In 2015, 49 percent of the population of South Asia were living on less than $3.20 a day, and 80 percent were living on less than $5.50 a day.

Investing in people of South Asia for prosperity and quality of life

Hartwig Schafer's picture
A little girl in Balochistan, Pakistan, who now receives a quality education thanks to World Bank support. 
A little girl in Balochistan, Pakistan, who now receives a quality education thanks to World Bank support. Credit: World Bank 

Human capital – the potential of individuals – is going to be the most important long-term investment any country can make for its people’s future prosperity and quality of life.

Just look around the world: Technology is reshaping every industry and setting new demands for skills in every profession. The frontier for skills is moving faster than ever before.

To meet that challenge and be able to compete in the global economy, countries need to prepare their workforces now for the tremendous challenges and opportunities driven by technological change.  

To that end, the World Bank will launch next week its highly anticipated Human Capital Index to measure countries’ contribution of health and education to the productivity of the next generation of their workers.

The Index will be released on October 11 at the Bank’s Annual Meetings in Bali as part of the Human Capital Project, a global effort led by the Bank to accelerate investments in people for greater equity and economic growth.

No doubt, any country ranking gets high visibility and, sometimes, meets controversy. But I hope it triggers a dialogue about policies to promote investments in people.

To be clear, the important purpose of the Human Capital Index is to measure the distance of each country to the highest standard of complete education and full health—or the “frontier”.

The index, irrespective of whether it is high or low, is not an indication of a country’s current policies or initiatives, but rather reflects where it has emerged over years and decades.

Put simply, the index measures what the productivity of a generation is, compared to what it could be, if they had benefitted from complete education and good health.

The index ranges from 0 to 1 and takes the highest value of 1 only if a child born today can expect to achieve full health (defined as no stunting and survival up to at least age 60) and complete her education potential (defined as 14 years of high-quality school by age 18).

Announcing the winners of the 2018 #OneSouthAsia Photo Contest

World Bank South Asia's picture


Home to Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka, South Asia is one of the world’s most dynamic regions.

It's also one of the least integrated.

A few numbers say it all: Intra-regional trade accounts for only 5 percent of South Asia’s total trade; Intra-regional investment is smaller than 1 percent of overall investment.

South Asia’s transport corridors can lead to prosperity

Martin Melecky's picture
 World Bank
Transport corridors offer enormous potential to boost South Asia’s economies, reduce poverty, and spur more and better jobs for local people, provided the new trade routes generate growth for all and limit their environmental impact. Credit: World Bank

This blog is based on the report The Web of Transport Corridors in South Asia -- jointly produced with the Asian Development Bank, the United Kingdom’s Department for International Development, and the Japan International Cooperation Agency

No doubt, South Asia’s prosperity was built along its trade routes.

One of the oldest, the Grand Trunk Road from the Mughal era still connects East and West and in the 17th century made Delhi, Kabul and Lahore wealthy cities with impressive civic buildings, monuments, and gardens.

Fast forward a few centuries and today, South Asia abounds with new proposals to build a vast network of transport corridors.
 
In India alone—and likely bolstered by the successful completion of the Golden Quadrilateral (GQ) highway system—several transport proposals extending beyond India’s borders are now under consideration. 
 
They include the International North-South Transport Corridor (INSTC), linking India, Iran and Russia, the Asia-Africa Growth Corridor, and the Bangladesh, China, India, and Myanmar (BCIM) economic corridor.
 
The hope is that these transport corridors will turn into growth engines and create large economic surpluses that can spread throughout the economy and society.

Arguably, the transport corridor with the greatest economic potential is the surface link between Shanghai and Mumbai.
 
These two cities are the economic hubs of China and India respectively, two emerging global powers.
 
The distance between them, about 5,000 kilometers, is not much greater than the distance between New York and Los Angeles.
 
But instead of crossing a relatively empty continent, a corridor from Shanghai to Mumbai—via Kunming, Mandalay, Dhaka, and Kolkata—would go through some of the most densely populated and most dynamic areas in the world, stoking hopes of large economic spillovers along its alignment.
 
“Build and they will come” seems to be the logic underlying many massive transport investments around the world.
 
However, the reality is that not all these investments will generate the expected returns.
 
Worse, they can become wasteful white elephants—that is, transport infrastructure without much traffic—that would cost trillions of dollars at taxpayers’ expense.
 
So, how can South Asia develop transport corridors that have a positive impact on their economies and benefit all people along the corridor alignments and beyond?  
 
First, countries need to change the mindset that transport corridors are mere engineering feats designed to move along vehicles and commodities.
 
Second, sound economic analysis of how corridors can help spur urbanization and create local jobs while minimizing the disruptions to the natural environment, is key to developing successful investment programs.
 
Specifically, it is vital to ensure that local populations whose lives are disrupted by new infrastructure can reap equally the benefits from better transport connectivity.
 
The hard truth is that the development of corridor initiatives may involve difficult tradeoffs.
 
For instance, more educated and skilled people can migrate to obtain better jobs in growing urban areas that are benefiting from corridor connectivity, while unskilled workers may be left behind in depopulated rural areas with few economic prospects.
 
But while corridors can create both winners and losers, well-designed investment programs can alleviate potential adverse impacts and help local people share the benefits more widely.
 
In that vein, India’s Golden Quadrilateral, or GQ highway system, is a cautionary tale. 
 
No doubt, this corridor had a positive impact. 
 
Economic activity along the corridor increased and people, especially women, found better job opportunities beyond traditional farming.
 
But this success came at a cost as air pollution increased in the districts near the highway.
 
This is a major tradeoff and one that was documented before in Japan when levels of air pollution spiked during the development of its Pacific Ocean Belt several decades ago.
 
Another downside is that the economic benefits generated by the GQ highway were distributed unequally in neighboring communities.  

How to boost female employment in South Asia

Martin Rama's picture
What's driving female employment in South Asia to decrease


South Asia is booming. In 2018, GDP growth for the region as a whole is expected to accelerate to 6.9 percent, making it the fastest growing region in the world. However, fast GDP growth has not translated into fast employment growth. In fact, employment rates have declined across the region, with women accounting for most of this decline.

Between 2005 and 2015, female employment rates declined by 5 percent per year in India, 3 percent per year in Bhutan, and 1 percent per year in Sri Lanka. While it is not surprising for female employment rates to decline with economic growth and then increase, in what is commonly known as the U-shaped female labor force function (a term coined by Claudia Goldin in 1995), the trends observed in South Asia stand out. Not only has female employment declined much more than could have been anticipated, it is likely to decline further as countries such as India continue to grow and urbanize.

The unusual trend for female employment rates in South Asia is clear from Figure 1. While male employment rates in South Asia are in line with those of other countries at the same income level, female employment rates are well below.
From the South Asia Economic Focus
Source: South Asia Economic Focus (Spring 2018).

If women are choosing to exit the labor force as family incomes rise, should policymakers worry? There are at least three reasons why the drop in female employment rates may have important social costs. First, household choices may not necessarily match women’s preferences. Those preferences reflect the influence of ideas and norms about what is women’s work and men’s work as well as other gendered notions such as the idea that women should take care of the children and housework. Second, when women control a greater share of household incomes, children are healthier and do better in school. Third, when women work for pay, they have a greater voice in their households, in their communities, and in society. The economic gains from women participating equally in the labor market are sizable: A recent study estimated that the overall gain in GDP to South Asia from closing gender gaps in employment and entrepreneurship would be close to 25 percent.

It’s time to end malnutrition in South Asia

Idah Z. Pswarayi-Riddihough's picture
Chronic malnutrition remains prevalent across the region as many poor South Asians cannot afford nutritious foods or don’t have the relevant information or education to make smart dietary choices.
Chronic malnutrition remains prevalent across South Asia as many poor South Asians cannot afford nutritious foods or don’t have the relevant information or education to make smart dietary choices.

In Sri Lanka, as in the rest of South Asia, improving agricultural production has long been a priority to achieve food security. 

But growing more crops has hardly lessened the plight of malnutrition. 

Chronic malnutrition remains prevalent across the region as many poor South Asians cannot afford nutritious foods or don’t have the relevant information or education to make smart dietary choices. 
And children and the poorest are particularly at risk.

South Asia is home to about 62 million of the world’s 155 million children considered as stunted-- or too short for their age. 

And more than half of the world’s 52 million children identified as wasted—or too thin for their height—live in South Asia. 

Moderate-to-severe stunting rates ranged from 17 percent in Sri Lanka in 2016 to a high 45 percent in Pakistan in 2012–13, with rates above 30 percent for most countries in the region.

Moderate-to-severe wasting rates ranged from 2 percent in Bhutan in 2015 to 21 percent in India in 2015–16, with rates above 10 percent for most countries in the region. 

The social and economic cost of malnutrition is substantial, linked to impaired cognitive development, chronic disease, and lower future earnings.

And sadly, much remains to be done to ensure children across South Asia can access the nutritious foods they need to live healthy lives. 

رفاه در حوزه جنوب آسیا مستلزم سهم بیشتر زنان با پرداخت معاش کافی در نیروی کار

Annette Dixon's picture
Also available in: English

Women in the Work Force
جنوب آسیا شاهد رشد اقتصادی ٦ در صدی طی ٢٠ سال گذشته بوده، که این امر در نتیجه سبب کاهش فقر و بهبود در عرصه صحت و تعلیم و تربیه گردیده است. ما در حالیکه از این پیشرفتها در روز جهانی زن تجلیل می کنیم، بهتر میبود اگر زنان بیشتر با دریافت مزد کافی شامل نیروی کار میبودند. زنان در جنوب آسیا فقط ٢٨ درصد نیرو کار و یا انعده شان که در جستجوی کار هستند، را تشکیل میدهند. در مقایسه  با حوزه خاورمیانه و شمال آفریقا که در انجان ٢١ درصد نیرو کار را مردان تشکیل میدهند در حوزه جنوب اسیا مردان ٧٩ درصد نیرو کار هستند، که این دومین کمترین میزان در جهان است.
 
 نیروی بالقوه انکشاف  جنوب آسیا با بزرگترین جمعیت کار در حال رشد، در طبقه متوسط قرار دارد؛ اما کمبود زنان در مشاغل و مشارکت اقتصادی، منعکس دهنده فرصت های از دست رفته است. ده ها میلیون زن در هند و سریلانکا، در طول بیست سال گذشته از نیروی کار کنار رفته اند.
 
 از جمله بسیاری از عوامل باز دارنده، یکی هم بیسوادی است که تقریبا نیمی از زنان بالغ  در جنوب آسیا را دربر میگیرد که دخترانشان از بالاترین میزان سوء تغذی در جهان رنج می برند. میزان خشونت علیه زنان و مرگ و میر مادران در بالاترین میزان در جهان باقی مانده است. همه این عوامل مشارکت کم، بیکاری بیش از حد  و تفاوت های مزد مستمر برای زنان است، که در بازار کار را نشان می دهد.
 
 چه کاری می توانیم انجام دهیم تا به وجه احسن، زنان را تشویق کنیم تا در نیروی کار شرکت کنند؟ این کار، با شروع ارزش قایل شدن به ارزشهای دختران برابر فرزندان است - دسترسی آنها به غذاهای مغذی و سرمایه گذاری در آموزش و پرورش آنها برای دستیابی به توانایی هایشان فراهم می شود. بیایید علاقۀ دختران جوان را در موضوعاتی مثل علم و ریاضیات جلب کنیم و آنها را متقاعد سازیم که آنها به همان اندازه پسران توانایی دارند و میتوانند در مهندسی، تحقیقات علمی، فناوری اطلاعات و دیگر زمینه هایی که توسط کارفرمایان تقاضا می شود، شغل ایجاد کنند. ما همچنین باید توجه فرزندانمان را به احترام دختران و زنان افزایش دهیم و روشن کنیم که برای خشونت مبتنی بر جنسیت، هیچ مجال باقی نمانده است.

South Asia’s prosperity will require more women to work for pay

Annette Dixon's picture
Also available in: دری

Women in the Work Force

South Asia has enjoyed a growth rate of 6 percent a year over the past 20 years. This has translated into declining poverty and improvements in health and education. While worthy of celebration as we mark International Women's Day, the success could have been more dramatic if more women worked for pay. Only 28 percent of women in South Asia have a job or are looking for one, compared to 79 percent of men. This is the second lowest in the world, after the Middle East and North Africa region at 21 percent.

With the largest working-age population and growing middle class, South Asia’s development potential is vast. But the lack of women in employment and economic participation reflects lost potential. In India and Sri Lanka, tens of millions of women have dropped out of the work force over the last twenty years.

Many factors are holding them back. Almost half of South Asia’s adult women are illiterate and its girls suffer from the highest malnutrition rates in the world. Rates of violence against women and maternal mortality remain among the highest in the world. All these factors translate into a labor market characterized by low participation, high unemployment and persistent wage gaps for women.

What can be done to better prepare and encourage women to participate in the work force? It starts with valuing our daughters as much as our sons – providing them with the same access to nutritious foods and investing in their education for them to reach their potential. Let’s spark the interest of young girls in subjects like science and mathematics, and convince them that they are just as capable as boys –that they too can build careers in engineering, scientific research, IT, and other fields that are in demand by employers. We must also raise our sons to respect girls and women, and make it clear that there is zero-tolerance for gender-based violence.

Protecting wetlands: Lessons from Sri Lanka and Maldives

Mokshana Wijeyeratne's picture
Sri Lanka and Maldives are home to rich wetlands that are habitats for a variety of fauna and flora but also benefit the ecosystem
Sri Lanka and Maldives are home to rich wetlands with a variety of fauna and flora that benefit the ecosystem.


Sri Lanka and Maldives share much more than the tag of tourism hot spots, beautiful beaches, and similar cultural traits. Both island nations have a range of unique environments that are rich in biodiversity and serve a myriad of ecosystems functions.

Both countries are home to rich wetlands with a variety of fauna and flora that benefit the ecosystem, including flood protection, water purification, and natural air conditioning and provide food and support to local communities.

Sri Lanka has actively been working to ensure these essential ecosystems are protected. The Maldives has too commenced such great work. This work has produced a wealth of knowledge and innovations on how to manage and conserve wetlands. 

Managing wetlands in Sri Lanka and Maldives

The wetland management and land use planning effort undertaken in Colombo under the World Bank-financed Metro Colombo Urban Development (MCUDP) project showcases resilience in urban land use planning and highlights how a city can become more livable by intermingling green spaces to its urban fabric. All this, while protecting wetlands and reaping the benefits of their natural ecosystem functions.

The MCUDP used robust strategies and sustainable economic models, such as wetland parks, to help save urban wetlands from threats such as encroachment and clearing. Through the Climate Change Adaptation Project (CCAP), funded by the European Union and the Government of Australia, Maldives has also taken steps to manage threats to its largest wetlands.

While the approaches to wetland management in both countries have been different there are many key lessons that can be shared.

Measuring South Asia’s economy from outer space

Martin Rama's picture
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.
Economic growth is a key concern for economists, political leaders, and the broader population.

But how confident are we that the available data on economic activity paints an accurate picture of a country’s performance?

Measuring Gross Domestic Product (GDP), the most standard measure of economic activity, is especially challenging in developing countries, where the informal sector is large and institutional constraints can be severe.

In addition, many countries only provide GDP measures annually and at the national level. Not surprisingly, GDP growth estimates are often met with skepticism.
 
New technologies offer an opportunity to strengthen economic measurement. Evening luminosity observed from satellites has been shown to be a good proxy for economic activity.

As shown in Figure 1, there is a strong correlation between nightlight intensity and GDP levels in South Asia: the higher the nightlight intensity on the horizontal axis, the stronger the economic activity on the vertical axis.
Figure 1 Nightlight intensity increases with economic activity
Figure 1 Nightlight intensity increases with economic activity

However, measuring nightlight is challenging and comes with a few caveats. Clouds, moonlight, and radiance from the sun can affect measurement accuracy, which then requires filtering and standardizing.

On the other hand, nighlight data has a lot advantages like being available in high-frequency and with a very high spatial resolution. In the latest edition of South Asia Economic Focus, we use variations in nightlight intensity to analyze economic trends and illustrate how this data can help predict GDP over time and across space.

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