Sri Lanka

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.

Imagine a state-of-the-art processing plant that harnesses laser-sorting technology to produce a whopping 15,000 tons of raisins a year, linking up thousands of local farmers to international markets and providing job opportunities to women.
 
To find such a world-class facility, look no further than Rikweda, an Afghan fruit processing company in the Kabul Province that’s well on its way to restoring Afghanistan as a raisin exporting powerhouse—a status the country held until the 1970s when it claimed about 20 percent of the global market.
 
In Afghanistan’s volatile business environment, let alone its deteriorating security, Rikweda’s story is an inspiration for budding entrepreneurs and investors.
 
It also is an illustration of the government’s reform efforts to create more opportunities for Afghan businesses to open and grow, which were reflected in the country’s record advancement in the Doing Business 2019 index, launched today by the World Bank.
 
Despite the increasing conflicts and growing fragility, and thanks to a record five reforms that have moved Afghanistan up to the rank of 167th from 183rd last year, the country became a top improver for the first time in the report’s history.
 
And Afghanistan is not the only South Asian country this year that took a prominent place among top 10 improvers globally.
 
India – which holds the title for the second consecutive year – is a striking example of how persistence pays off, and the high-level ownership and championship of reforms are critical for success. Its ranking has improved by 23 places this year and puts India ahead of all other countries in South Asia. This year, India is ranked 77^th, up from 100^th last year. 

"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.