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Harnessing Stitches for Riches in South Asia

Gladys Lopez-Acevedo's picture
Stitches to Riches? The Potential of Apparel Manufacturing in South Asia

In the coming years and decades, China is expected to slowly relinquish its lead position in the global apparel market, opening the door to other competitors. This is a huge opportunity for South Asia to create at least 1.5 million jobs that are “good for development” – of which half a million would be for women – according to a new World Bank report Stitches to Riches?  But those numbers could be much higher if the region moves quickly to tackle existing impediments and foster growth in apparel, which will also yield dividends for other light manufacturers (like footwear and toys).
 
How South Asia fits in the global apparel market
Currently, China holds by far the largest share of global apparel trade – at 41 percent, up from 25 percent in 2000, with about 10 million workers. But as China continues to develop, it is likely to move up the global value chain into higher-value goods (like electronics, and out of apparel) or switch production among sectors in response to rising wages. A 2013 survey of leading global buyers in the United States and European Union (EU) found that 72 percent of respondents planned to decrease their share of sourcing from China over the next five years (2012-2016).
 
Already, the top four apparel producers in South Asia – Bangladesh, India, Pakistan, and Sri Lanka – have made big investments in world apparel trade, now accounting for 12 percent of global apparel exports (see figure). In terms of apparel export value, Bangladesh leads the pack (at $22.8 billion), followed by India ($12.5 billion), Sri Lanka ($4.4 billion), and Pakistan ($4.2 billion).
 
China dominates global apparel trade
(Country share of global apparel exports)


Source: Stitches to Riches?
 
Why apparel jobs are “good for development”
When we think of jobs that are “good for development,” the main yardstick is whether they will help translate growth into long-lasting poverty reduction and broad-based economic opportunities. Apparel fits the bill for numerous reasons. 

Pathways to Prosperity: An e-Symposium

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Blog #5: The low income, low growth trap

India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.

We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.

While India’s economy has grown more rapidly in recent decades, the gains have been unevenly spread, and some regions have fallen further behind the rest of the country. In particular, India’s seven ‘low-income’ states have struggled to shake off the legacy of high consumption poverty, low per capita incomes, poor human development outcomes and the persistence of poverty among tribal populations. The fact that these states are yet to catch-up with the rest of the country illustrates that ‘where you live’ largely determines ‘how well you live'. Addressing this geographic dimension of poverty and well-being will therefore hold the key to improving the lives of millions of Indians.

Pathways to Prosperity: An e-Symposium

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Blog #4: 1 in 3 has piped water, 2 of 5 kids stunted

 
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.

We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.


The rapid decline in consumption poverty over the past two decades was accompanied by improvements in other dimensions of welfare. But progress has been mixed and much still remains to be done. India’s performance on key indicators of well-being lags behind countries at similar stages of development. And country-level estimates mask wide disparities between states.

Pathways to Prosperity: An e-Symposium

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Blog #3: Poverty down, but 1 in 2 hangs by a thread

 
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.

We hope this will spark a conversation around #WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.


The sharp decline in poverty in India has been accompanied by a strong pattern of upward mobility, leading to an emerging middle class. Education, urban residence, and wage work have contributed to this higher-than-average upward mobility and lower downward mobility.  Yet, a vast share of the population remains vulnerable to slipping back into poverty, suggesting that gains against poverty need to be deepened and made more secure.  Scheduled Tribes stand out as a group that has fallen further behind, with one-third stuck in chronic poverty.

Bhutan's Gross National Happiness (GNH) and the World Bank

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Photo Credit: Oliver Jammes

The concept of “Gross National Happiness” has been long discussed, debated, understated, overstated or seen as a gimmick. Now what is really Gross National Happiness? And how does the World Bank engagement fit in it? Let’s look into it together in an attempt to de-mystify the concept into what it really is, which is: a vision, broad policy directions trickling down to programs, a survey, a policy screening tool, and yes also, a foreign policy instrument and a brand.
                  
The visionary statement, “Gross National Happiness is more important than Gross Domestic Product” was first enunciated by His Majesty the Fourth King of Bhutan in the 1970s. In turn, the Fifth King declared: “Today, GNH has come to mean so many things to so many people but to me it signifies simply - Development with Values. Thus for my nation today GNH is the bridge between the fundamental values of kindness, equality and humanity and the necessary pursuit of economic growth.” Article 9-2 of the constitution directs the state “to promote those conditions that will enable the pursuit of Gross National Happiness”.
 
GNH is translated into broad policy directions that provide the Government’s overarching, long-term strategies and five-year plans. The four pillars of GNH philosophy are: sustainable development; preservation and promotion of cultural values (traditional and cultural heritage paramount  - its loss leads to a general weakening of society); conservation of the natural environment (Bhutan’s constitution: 60 percent forest coverage, green economy), establishment of good governance.

Pathways to Prosperity: An e-Symposium

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Blog #2: On poverty and prosperity, lot done, lot to do

 

India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the next few weeks, this blog series will highlight recent research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.

We hope this will spark a conversation around 
#WhatWillItTake to #EndPoverty in India. Read all the blogs in this series, we look forward to your comments.

The rapid decline in India’s poverty levels in the recent decade augurs well for the country’s efforts to eradicate poverty. Though the decline was faster and more broad-based than in the preceding decades, examples from across the developing world suggest it could have been more inclusive and responsive to economic growth.

Pathways to Prosperity: An e-Symposium

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Blog #1: Five key drivers of reducing poverty in India

India is uniquely placed to drive global poverty reduction. The country is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Despite an emerging middle class, many of India’s people are still vulnerable to falling back into poverty.

Over the next few weeks, this series will look back and analyze publicly available data to better understand what has driven poverty reduction from the mid-1990s until 2012, and the potential pathways that can lead to a more prosperous India. Since it is clearly not feasible to elaborate on all the myriad pathways out of poverty available to India, we focus on a few key themes that the diagnostics show to be of particular relevance to the country. We hope this series will contribute to the ongoing discussions on how poverty can be eliminated from India.

We are thankful to the Indian Express for partnering with us in disseminating this series to its readers.

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