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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.

An update on Bhutan’s economy

Tenzin Lhaden's picture
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development. Credit: World Bank

Bhutan is one of the smallest, but fastest-growing economies in the world.
 
Its annual average economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global growth rate of 3.2 percent.
 
This high growth has contributed to reducing poverty: Extreme poverty was mostly eradicated and dwindled from 8 percent in 2007 to 1.5 percent in 2017, based on the international poverty line of $1.90 a day (at purchasing power parity).
 
Access to basic services such as health, education and asset ownership has also improved significantly.
 
The country has a total of 32 hospitals and 208 basic health units, with each district hospital including almost always three doctors.
 
The current national literacy rate is 71 percent and the youth literacy rate is 93 percent.
 
The recent statistics on lending, inflation, exchange rates and international reserves (Sources: RMA, NSB) confirm that Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.  

Gross foreign reserves have been increasing since 2012 when the country experienced an Indian rupee shortage.
 
Reserves exceeded $1.1 billion, equivalent to 11 months of imports of goods and services, which makes the country more resilient to potential shocks.
 
The nominal exchange rate has been depreciating since early 2018 (with ngultrum reaching Nu. 73 against the US dollar in early November).

Electrocracy in India: power of, by, and for the people

Amit Jain's picture
India Solar
To boost India’s solar rooftop program, the World Bank has partnered with the Government of India to provide $648 million to place solar panels on rooftops across the country.

Solar energy is not just for the elite and wealthy. Today, with growing numbers of people taking power generation into their own hands, solar energy has become the world’s most democratic source of power - of the people, by the people, and for the people. However, the pathway to this goal requires a fundamental paradigm shift in the power sector – one in which more and more people take “power” generation into their own hands.
 
In the words of environmentalist and author Ross Gelbspan, “A common global project to rewire the world with clean energy could be the first step on a path to global peace and global democracy -- even in today's deeply troubled world.”
 
In Germany, solar rooftops have already set off a transformation. Home to more than 1.7 million citizen-owned solar power systems, Germany now accounts for almost one-fourth of the world's PV capacity. Armed with solar rooftops and smart battery storage, German households have turned into energy producers, are paying lower utility bills, and are fast approaching energy independence.  
 
In California too, solar rooftops have taken center stage. The state is the first in the U.S. to require solar panels on almost all new homes. And as solar rooftop installations rise, domestic storage systems are simultaneously being developed to keep pace. Tesla's Powerwall, for example, enables users to store solar power generated during the day for use at night when the sun goes down.
 
As the world’s third-largest producer of conventional energy, India too is now rapidly expanding its capacity to generate solar power. The country has set itself an ambitious target of generating 100 GW of solar power by 2022. Today, solar power has emerged as the cheapest source of energy in India, at prices that are a fraction of grid power. In fact, India’s 100 GW solar target, of which 40 GW is to come from rooftop solar, will play a key role in providing 24 X 7 sustainable, affordable, and reliable electricity to 300 million people. Currently, however, only some 2 GW of this 40 GW target has been installed.
 
To boost India’s solar rooftop program, the World Bank has partnered with the Government of India to provide $648 million to place solar panels on rooftops across the country. The program has financed 600 MW in rooftop solar installations so far, of which 80 MW has already been installed.

#IndiaWeWant Photo Contest: Shortlisted Entries

Roli Mahajan's picture

The World Bank in India ran the #IndiaWeWant photo competition through our Facebook and Twitter channels, where we invited participants to share photographs capturing the key development priority for India. The #IndiaWeWant photo competition was open for a month and we have received many compelling entries. 

Now it is time for us to choose our winners.

We asked a jury of three members comprising professional and development photographers -- Michael Foley, Anirban Dutta, Anupam Joshi-- to come together and do the honours.

Here are the #IndiaWeWant entries that have made it to the longlist. They will be deliberating over these soon and selecting the WINNER as well as the 9 others, as stated in the rules.

Let us know what you think in the comments section below and if one of your entries has been selected then please do send us an email ([email protected]) with the actual photograph and your details (Name, Phone Number).
 

Banking on women’s empowerment for a sustainable and stronger India 
The global efforts for achieving the Sustainable Development Goals could be accelerated by synergising women's empowerment with environmental conservation. 
Since past 32 years, Barli Development Institute for Rural Women (BDIRW) has been empowering rural and tribal women through organising free 6-monthly residential training program covering literacy, organic-farming, solar-cooking, health and tailoring&cutting. More than 8200 women have been empowered, who are changing the sustainable development horizons of their families and tribal communities (www.barli.org#IndiaWeWant 
In Picture: The women-trainees from Alirajpur (Dhauli, Rita, Angita, Karmi) planting trees in BDIRW campus (Indore, India) 
Photo credit: Yogesh Jadhav
 
For India, developing priority should be the education of girls in rural areas. They enrolled in school in beginning but they are not able to make it till the end, either they are forced to marry at the age of 10 or 13. In future, they are illiterate mothers who cannot read and write properly and also they become a victim of domestic violence as they are unaware about their rights. #IndiaWeWant
Photo Credit: Neha Rawat
To me, development is more than improvement in nation's GDP. It must be conceived as a multidimensional process, involving changes in the entire spectrum through which human capabilities are expanded, like education, healthcare, social participation or the freedom to make choices. The primary objective of development is to benefit people and improve the quality of life, which can only be achieved if all marginalised and excluded groups are equal stakeholders in the process alongwith active involvement in the planning, execution and monitoring of development programs.
The couple below selling lights which are battery operated but thankfully their smiles are not.#IndiaWeWant
Photo Credit: Maneka Naren Yadav‎

Indian agriculture at a crossroads: Smart solutions towards doubling farmers’ incomes

Martien van Nieuwkoop's picture
A few weeks ago, I felt a sense of déjà vu.  I was at a roundtable on agriculture in Delhi, in the same conference hall where, ten years ago, I participated in the consultations on the Bank’s World Development Report 2008 on Agriculture for Development
 
This time we were discussing how India can build a stronger agriculture sector without further harm to the environment or depletion of its natural resources.  The high-level dialogue was attended by senior representatives from India’s Niti Aayog, Ministry of Agriculture and Farmers’ Welfare, leaders of farmers’ associations from Punjab and Haryana, as well as by researchers, academics, and donors.

We focused on the ‘agriculture-water-energy’ nexus, achieving India’s second green revolution, making agriculture more climate resilient, as well as options to stop the burning of crop residue that is worsening air quality in much of northern India. It was heartening to see the torch bearers of India’s drive towards food security unhesitatingly debate a host of complex and sensitive issues.
 
Photo Credit: Alamy Stock Photo

Over the past six decades, India has come a long way from being a famine-prone country to comfortably producing food for 1.25 billion people from finite arable land. Food security firmly in hand, the government is now targeting to double farmers’ incomes by 2022.  Today, with rapidly growing urban food markets, India is emerging as a global agricultural powerhouse.

Face to face with Country Director for India, Junaid Ahmad

Nandita Roy's picture

The Lighthouse India is a platform to facilitate knowledge flows across states within India and to create strategic partnerships with other countries to share and transfer knowledge and experience, which would inform development policies, scale up good practices and innovations. We caught with our Country Director, Junaid Ahmad, for an in-depth understanding of this initiative of the World Bank.

What is Lighthouse India?

Development is best catalyzed when people learn by doing. The notion of lighthouse is that you are a beacon for someone. An Indian state innovating on how local government programs are run, say in West Bengal, can be a source of information for other states, say Madhya Pradesh or Karnataka, which are also trying to figure out how to strengthen local governments. In a federal system like India, the potential for learning from each other is vast especially where innovation is constantly happening. The problem is that the lessons from these innovations and the information about them is not moving smoothly across borders. Lighthouse India is based on the Bank's unique position to facilitate these exchanges and link them to actual implementation.

It is not only about exchanges between states in India. As India moves along the development trajectory towards high middle income, the nation itself is transforming. The lessons of this transformation are going to be critical for other countries. The Bank can also proactively broker these exchanges between India and other countries as India acts as a “lighthouse” for others.

It is important to stress that Lighthouse India is not just a passive exchange of best practices. It is an active exchange of practices and approaches where the expertise and experiences of India can be leveraged by another country. And as always, these exchanges are never one way: as India shares, it will gain from the development experiences of others.

Importantly, Lighthouse India will change the way we do analytical and advisory services.  The latter will be built around operational issues and offer the analysis to understand better implementation challenges.

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How is Lighthouse India important for Bank’s strategy in engaging with India?

First, Lighthouse India is essential in supporting the strategy of scaling up development impact. Let me take the example of livelihood programs. We’ve been working in Andhra Pradesh, Bihar, Odisha supporting the creation of self-help groups of women and facilitating their access to micro credit and economic activities. We could respond to every state that requests our assistance for this kind of activity. On the other hand, if we have worked in three or four States, we can then leverage their expertise and experience to support others. In this context, the World Bank can act as a broker of exchanges where states learn from the experience of each other. And this could be in any area such as local government strengthening or in solar power generation.

Second, Lighthouse India will play an important role in the delivery of global goods. For example, in the case of climate change, if we support the collective efforts of nations to de-carbonize their growth path, we may be able to achieve the objectives set out in COP18 in Paris. India has set for itself the aspiration of delivering 175GW of renewable energy in the coming years. Not only will India’s energy strategy help in delivering the global goal of sustainable development, its experience with scaling up renewable energy and energy efficiency will support the collective efforts of other countries to achieve their own objectives in the energy sector. This is where Lighthouse India can play an important role of leveraging India in the achievement of global goods.

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Sri Lanka at 70: Looking back and forward

Idah Z. Pswarayi-Riddihough's picture
A view from the Independence day parade.At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
A view from the 2018 Independence Day parade. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation. Credit: World Bank

Like many Sri Lankans across the country, I joined Sri Lanka’s 70th Independence Day festivities earlier this month. This was undoubtedly a joyful moment, and proof of the country’s dynamism and stability. At 70, Sri Lanka has accomplished a lot in its seven decades as an independent nation.
 
The country’s social indicators, a measure of the well-being of individuals and communities, rank among the highest in South Asia and compare favorably with those in middle-income countries. In the last half-century, better healthcare for mothers and their children has reduced maternal and infant mortality to very low levels.
 
Sri Lanka’s achievements in education have also been impressive. Close to 95 percent of children now complete primary school with an equal proportion of girls and boys enrolled in primary education and a slightly higher number of girls than boys in secondary education.
 
The World Bank has been supporting Sri Lanka’s development for more than six decades. In 1954, our first project, Aberdeen-Laxapana Power Project, which financed the construction of a dam, a power station, and transmissions lines, was instrumental in helping the young nation meet its growing energy demands, boost its trade and develop light industries in Colombo, and provide much-needed power to tea factories and rubber plantations. In post-colonial Sri Lanka, this extensive electrical transmission and distribution project aimed to serve new and existing markets and improve a still fragile national economy.
 
Fast forward a few decades and Sri Lanka in 2018 is a far more prosperous and sophisticated country than it was in 1954 and, in many ways, has been a development success story. Yet, the island nation still faces some critical challenges as it strives to transition to another stage of its development and become a competitive upper middle-income country.
 
Notably, the current overreliance on the public-sector as the main engine for growth and investment, from infrastructure to healthcare, is reaching its limits.  With one of the world’s lowest tax to gross domestic product (GDP) ratios -- 12% in 2016, down from 24% in 1978 —Sri Lanka’s public sector is now facing serious budget constraints and the country needs to look for additional sources of finance to boost and sustain its growth.
 
As outlined in its Vision 2025, the current government has kickstarted an ambitious reform agenda to help the country move from a public investment to a more private investment growth model to enhance competitiveness and lift all Sri Lankans’ standards of living.
 
Now is the time to steer this vision into action. This is urgent as Sri Lanka is one of the world’s most protectionist countries and one of the hardest to start and run a business. As it happens, private foreign investment is much lower than in comparable economies and trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016. Reversing this downward trend is critical for Sri Lanka to meet its development aspirations and overcome the risk of falling into a permanent “middle-income trap.”

Exploding population: choice not destiny - capturing Pakistan’s demographic dividend

Inaam Ul Haq's picture

 

Blog in Urdu

Family planning in Pakistan
This blog is certainly not about exploding mangoes but about the exploding Pakistani populace. The recent reactions of surprise on results of the census seems bewildering. Pakistan’s population is now over 207 million with a growth rate of 2.4 percent per year since the last census in 1998. The results were predictable and expected, as Pakistan has not implemented any large-scale population related interventions for over a decade. We should not be expecting results because inaction does not usually deliver them.
 
Pakistan’s efforts to reduce fertility and population growth were transformed during the 1990s. The period between 1990-2006 saw effective policy making under the Social Action Program with multiple interventions e.g. expansion of public sector provision, large scale private sector participation including social marketing innovations, improving access to women through community based providers. All the right things that delivered huge results. Fertility declined from around seven to four children per woman, and contraceptives use increased from 10% to over 30% - a 300% increase. Appropriate actions delivered results and some still can be photocopied and expanded on scale for making progress.

Reforms Sri Lanka needs to boost its economy

Idah Z. Pswarayi-Riddihough's picture
 Joe Qian/World Bank
The Colombo Stock Exchange. Credit: Joe Qian/World Bank

Many Sri Lankans understand the potential benefits of lowering trade costs and making their country more competitive in the global economy. The majority, however, fear increased competition, the unfair advantage of the private sector from abroad and limited skills and innovation to compete.

Yet, Sri Lanka’s aspirations cannot be realized in the current status quo.  

While changes in trade policies and regulations will undeniably improve the lives of most citizens, I’m mindful that some are likely to lose. However, many potential gainers of the reforms who are currently opposed to them are unaware of their benefits.

Implementing smart reforms means that government funds will be used more effectively for the people, improve access to better healthcare, education, basic infrastructure and provide Sri Lankans with opportunities to get more and better jobs. Let me focus on a few reforms that I believe are critical for the country.  First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.    

First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services.

Fresh thinking on economic cooperation in South Asia

Nikita Singla's picture
 Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir & Surendar Singh/ Bangladesh) Photo By: Marcio De La Cruz/ World Bank
Young Economists sharing the stage with Sanjay Kathuria, Lead Economist and Coordinator, Regional Integration (Left to Right: Aamir Khan/ Pakistan, Sreerupa Sengupta/ India, Sanjay Kathuria/ World Bank, Mahfuz Kabir/Bangladesh & Surendar Singh/ India). Photo by: Marcio De La Cruz/ World Bank


That regional cooperation in South Asia is lower than optimal levels is well accepted. It is usually ascribed to – the asymmetry in size between India and the rest, conflicts and historical political tensions, a trust deficit, limited transport connectivity, and onerous logistics, among many other factors.

Deepening regional integration requires sufficient policy-relevant analytical work on the costs and benefits of both intra-regional trade and investment. An effective cross-border network of young professionals can contribute to fresh thinking on emerging economic cooperation issues in South Asia.

Against this background, the World Bank Group sponsored a competitive request for proposals.  Awardees from Bangladesh, India, and Pakistan, after being actively mentored by seasoned World Bank staff over a period of two years, convened in Washington DC to present their new and exciting research. Research areas included regional value chains, production sharing and the impact assessment of alternative preferential trade agreements in the region.

Young Economists offer fresh thoughts on economic cooperation in South Asia

Mahfuz Kabir, Acting Research Director, Bangladesh Institute of International and Strategic Studies and Surendar Singh, Policy Analyst, Consumer Unity Trust Society (CUTS International) presented their research: Of Streams and Tides, India-Bangladesh Value Chains in Textiles and Clothing (T&C). They focus on how to tackle three main trade barriers for T&C: a) high tariffs for selected, but important goods for the industries of both countries; b) inefficient customs procedures and c) divergent criteria for rules of origin classification.

Sreerupa Sengupta, Ph.D. Scholar at Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi discussed Trade Cooperation and Production Sharing in South Asia – An Indian Perspective. Reviewing the pattern of Indian exports and imports in the last twenty years, her research focuses on comparing the Global Value Chain (GVC) participation rate of India with East Asian and ASEAN economies. Barriers to higher participation include a) lack of openness in the FDI sector; b) lack of adequate port infrastructure, and long port dwell times; and c) lack of Mutual Recognition Agreements (MRAs).

Aamir Khan, Assistant Professor, Department of Management Sciences, COMSATS Institute of Information Technology, Islamabad presented his work on Economy Wide Impact of Regional Integration in South Asia - Options for Pakistan. His research analyzes the reasons for Pakistan not being able to take full advantage of its Free Trade Agreement (FTA) with China, and finds that the granting of ASEAN-type concessions to Pakistan in its FTA with China would be more beneficial than the current FTA arrangement. The work also draws lessons for FTAs that are currently being negotiated by South Asian countries.

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