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Taking digital banking services to remote villages in north eastern India

Priti Kumar's picture
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions. Photo: World Bank

Until six months ago, people in the remote corners of India’s Himalayan state of Sikkim had to travel long distances over the hillsides to do simple banking transactions.

When they did reach a bank, it was usually overcrowded and understaffed. This made it difficult for rural folk, unfamiliar with formal financial systems to deposit or withdraw money, let alone borrow to meet their needs.
 
Now change is in the air. Ever since the North East Rural Livelihoods Project (NERLP) - supported by the World Bank - helped banks in Sikkim’s western and southern districts engage local women self-help group (SHG) members as their business correspondents, people in these distant parts have been able to bank at their doorsteps.
 
While the concept is not new in India, the two correspondents - one for each district - have proved to be nothing short of a miracle for this far-flung region. They have fanned out across mountain villages, equipped with palm-sized micro-ATMs, biometric readers, and internet-connected thermal printers. Villagers can now deposit their money easily, earn interest, and withdraw whenever needed.
 
In the six months since the correspondents were first introduced, business has soared. “In November 2018, when we first began, I did about 160 transactions worth Rs.1.2 million. As awareness has grown, this has risen steadily, and in March 2019 I did over 260 transactions worth Rs. 2.4 million,” explained Lila Shilal, business correspondent for the IDBI Bank in West Sikkim’s Jorethang block.
 
Shilal has also benefitted in the process. She has started earning more than Rs.10,000 a month from the bank in transaction fees and commission and has used the amount to set herself up as an entrepreneur.
 
The project has introduced another financial service as well, this time at the bank itself. Here, bank sakhis - or female banker friends – help village folk and SHG members fill out forms and apply for loans.
 
This new cadre of women business correspondents and bank sakhis has not only benefitted local communities and given SHG members a new livelihood opportunity, it has also made life simpler for the region’s bankers.

What’s behind South Asia’s low exports?

Hans Timmer's picture
South Asian countries’ exports are only one-third of what they should be, had they mirrored the experience of economies with similar characteristics. Without further integration into global markets, South Asia will not sustain its growth. Photo: Shutterstock 

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.

First, international competition equalizes the price of tradable goods like televisions across countries.

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.

Countries tend to be poor because their level of productivity in tradable goods is low.  

What will steer South Asia’s economic promise? Its people

Sanjay Kathuria's picture
 The Promise of Regional Trade in South Asia
Pedestrians cross the road in front of motorcycles, cars, and buses at the crossroads in Kolkata, India. Photo: Radiokafka / Shutterstock

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. Our research shows that if South Asian countries lifted man-made barriers, intraregional trade could triple and unleash greater prosperity for all

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.

South Asia’s economic prospects are promising, but even more inspiring are its people who remain hopeful for change 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. Students lined up after talks to chat, insisting that I come to speak at their universities- their enthusiasm was infectious. 

South Asia can get more women to work

Hiska Reyes's picture
 World Bank
South Asian countries are making progress in clearing the way for women to get jobs and creating a safer work environment for them. Yet, too many women across South Asia are left out of the workforce—and that despite booming economic growth. Credit: World Bank

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 across South Asia too many women are left out of the workforce—and that despite booming economic growth.
 
And while employment rates have gone down across the region, women account for most of this decline.
 
Between 2005 and 2015, women’s employment declined by 5 percent a year in India, 3 percent a year in Bhutan, and 1 percent a year in Sri Lanka.
 
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.
 
Conversely, the economic gains from women participating equally in the labor market are sizable.
 
A recent study by the International Monetary Fund estimated that closing gender gaps in employment and entrepreneurship in South Asia would help grow the economy by about 25 percent. 
 
The good news is that South Asian countries are making progress in clearing the way for women to get jobs and creating a safer work environment for them.  

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.

What’s keeping Pakistan in the dark?

Fan Zhang's picture
 $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
Nearly  50 million Pakistanis still lack access to grid electricity. Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy. Credit: Curt Carnemark/ World Bank

From 1990 to 2010, 91 million people In Pakistan received electricity for the first time.
 
And power outages across the country have gone down drastically over the past few years.
 
Clearly, Pakistan has achieved much progress in expanding its electricity access and production in recent decades.
 
However, nearly  50 million Pakistanis still lack access to grid electricity and the country ranks 115th among 137 economies for reliable power.
 
After peaking in 2006, per capita electricity consumption failed to grow for almost a decade, remaining only one-fifth the average for other middle-income countries in 2014.
 
To boost sustainable energy supply, Pakistan’s power sector needs urgent investments and reforms to target inefficiencies in the entire electricity supply chain.
 
Fittingly, my new report In the Dark analyzes what lies behind these inefficiencies and suggests relevant actions to improve the operation of power plants, cut down on waste and costs, and increase electricity supply in a cost-effective manner.
 
The study sheds new light on the overall societal costs — not merely the fiscal costs as in previous research — of subsidies, blackouts and other distortions in the power sector.
 
To that end, my team and I surveyed Pakistan's entire supply chain from upstream fuel supply to electricity generation, transmission and distribution, and eventually, down to consumers.
 
Put simply, the numbers we found are dire.
 
Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
 
Problems begin upstream, where gas underpricing encourages waste and reduces incentives for gas production and exploration.
 
And with no recent significant gas discoveries, higher gas usage has widened the gap between growing demand and low domestic supply.
 
On top of that, the volume of gas lost before reaching consumers reached 14.3 percent in fiscal year 2015. By comparison, this number is about 1 to 2 percent in advanced economies.
 
Public power plants use 20 percent more gas per unit of electricity produced than private producers.
 
Poor transmission contributed to 29 percent of the electricity shortfall in fiscal year 2015, while weak infrastructure, faulty metering and theft cause the loss of almost a fifth of generated electricity.
 
Electricity underpricing and failure to collect electricity bills have triggered a vicious “circular debt” problem, leading to power outages.
 
A lack of grid electricity also leads to greater use of kerosene lamps that cause indoor air pollution and its associated respiratory infections and tuberculosis risks.
 
Lack of access to reliable electricity also adversely impact children’s study time at night, women’s labor force participation, and gender equality.
 
Connecting all of Pakistan’s population to the grid and increasing the supply of electricity to 24 hours a day would increase total household income by at least $4.5 billion a year and avoid $8.4 billion in business losses.

Too often, Dhaka remains inaccessible for people with disabilities

Shigeyuki Sakaki's picture
 World Bank 
Tajkia Mariam Jahan, a wheelchair user from Dhaka, Bangladesh was confined to her home for seven years due to the road environment. The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities. Credit: World Bank 

An ever-growing urban population with overflowing and at times chaotic vehicular traffic can make life difficult even for the most well-abled pedestrian.

The challenges become higher for a person with a disability.

How can I go out of my home?’ asks Tajkia Mariam Jahan, a wheelchair user from Dhaka, who was confined to her home for seven years due to the road environment.

The city roads are unwelcoming not only for people in a wheelchair like her but also for persons with all types of disabilities.

Hawa Aktar, a woman with hearing impairment, needs clear, visible signs and signals on road crossings and from vehicles. And Bashir Uddin Molla, a student with visual impairment, needs sounds and guidance when she is walking.

None of these facilities are available to people with disabilities living in Dhaka.

Moving India’s railways into the future

Joe Qian's picture
Laying Tracks
Progress is being made on the largest railway project in India's modern history – the Dedicated Freight Corridor Program. 
View the 3D presentation here
Thump…thump…thump...like a slow rhythmic drum, concrete ties that hold the track in place are laid down one after another with the latest machinery as rails are placed precisely on top of them.

It’s nearing sunset near the town of Hathras in India’s state of Uttar Pradesh, home to 220 million people—more than the entire population of Brazil.

Progress is being made on the largest railway project in India’s modern history that will increase prosperity by helping move people and goods more safely, effectively, and in an environmentally-friendly way.
India’s Dedicated Freight Corridor (DFC) program is building dedicated freight-only railway lines along highly congested transport corridors connecting the industrial heartland in the north to the ports of Kolkata and Mumbai on the eastern and western coasts.
India Trains
Passengers and freight trains currently share tracks in India which can cause congestion and delays. The project will help increase the speed of freight rail to up to 100km/h from the current 25km/h average. 

Through these efforts, DFC is expected to improve transport and trade logistics – bringing much needed jobs, connectivity, and urbanization opportunities to some of India’s poorest provinces – including Bihar and Uttar Pradesh while helping protect the environment. The electric locomotives will help ease India’s energy security issues and escalating concerns about traffic accidents, congestion, carbon emissions, and pollution created by road traffic. 

Near Hathras and simultaneously in different sites in the country, workers equipped with modern equipment and techniques efficiently lay 1.5 km of new track per day in different weather conditions. Once completed, electric cables are stretched above and signaling is installed, all in preparation for the electric locomotives reliably to carry their cargo across the country at maximum speed of 100km/h, compared to an average current speed of 25 km/h.

Building up Bhutan’s resilience to disasters and climate change

Dechen Tshering's picture
Building Bhutans Resilience
Despite progress, Bhutan still has ways to go to understand and adapt to the impacts of climate change. And with the effects of climate change intensifying, the frequency of significant hydro-meteorological hazards are expected to increase. Photo Credit: Zachary Collier


The 2016 monsoon was much heavier than usual affecting almost all of Bhutan, especially in the south.
 
Landslides damaged most of the country’s major highways and smaller roads. Bridges were washed away, isolating communities.
 
The Phuentsholing -Thimphu highway which carries food and fuel from India to half of Bhutan was hit in several locations, and the Kamji bridge partially collapsed, setting residents of the capital city and nearby districts into panic for fear of food and fuel shortages.
 
Overall the floods drove down Bhutan’s gross domestic product by 0.36 percent.

While not as destructive as the 2016 monsoon, flash floods, and landslides are becoming a yearly occurrence along Bhutan’s roads.

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.

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