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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.

Pulling out all stops: World Bank in Nepal

Faris Hadad-Zervos's picture

Nepal

Few countries in recent history have experienced change on a scale as sweeping as Nepal – that too, in the span of a single generation. The journey is ongoing as Nepalis continue to confront and challenge the conventional wisdom about Nepali statehood and chart a path towards a more inclusive, equitable and modern nation-state.

The new federal structure also redefines the World Bank Group (WBG)’s engagement with Nepal. This week, as the WBG’s Board of Executive Directors endorsed a new five-year Country Partnership Framework (CPF), Nepal’s Finance Minister Yuba Raj Khatiwada attended a series of Nepal Day events at the WBG headquarters in Washington DC. There, he unfurled the new government’s vision and development priorities and discussed approaches to address Nepal’s financing and knowledge needs in the WBG’s upcoming programme of assistance.

Finance Minister Yuba Raj Khatiwada's Vision for Nepal's Future


The CPF is designed to balance support to Nepal’s transition to federalism with its quest for higher growth, sustained poverty reduction and inclusive development. To that end, our strategy and approach seeks to support the authorities and engage with development partners in three transformative engagement areas: (i) public institutions for economic management, service delivery and public investment; (ii) private sector-led jobs and growth; and (iii) inclusion for the poor, vulnerable, and marginalised groups, with greater resilience against climate change, natural disasters, and other exogenous shocks. These focus areas were informed by extensive consultations and surveys across the country’s seven states with over 200,000 citizens, government, civil society organisations, the private sector, media and development partners.

In many respects, Nepal is starting from a clean state. While Nepal did practise a limited version of decentralisation in the early 2000s, the scope of devolution proposed by the 2015 Constitution is unprecedented.  Meanwhile, reforms promise to rid the country of a legacy of exclusion based on geography, ethnicity and gender.

Over the last decade, Nepal experienced frequent government turnover and political fragmentation with a considerable toll on development.  The 2017 elections mark a significant turning point, in that they offer higher hopes for political stability and policy predictability that remained elusive during most of Nepal’s recent past. This is a considerable achievement.

Interview with World Bank Country Director for Nepal, Qimiao Fan


Nepal has achieved a remarkable reduction in poverty in the last three decades, but the agenda remains unfinished. While the national poverty estimates await updating starting next year, at last count, poverty fell from 46 per cent in 1996 to 15 per cent in 2011 as measured by the international extreme poverty line. However, most of the poverty reduction resulted from the massive outmigration of labour, and a record increase in private remittances. Moreover, a significant disparity remains in poverty incidence across the country.

Compared to the average 4.5 per cent of GDP growth over the last decade, Nepal needs to achieve faster growth to meet its coveted goal of attaining middle-income status by 2030. Nepal needs to grow in the order of at least 7 to 8 per cent and shift from remittance-led consumption to productive investment. The economy also remains exposed to exogenous shocks like earthquakes, floods and trade disruptions. These long-standing economic vulnerabilities will require far-reaching but carefully-calibrated reforms.

Nepal now faces the daunting task of adapting to a three-tier structure in the face of nascent and often-nonexistent institutions at the sub-national levels. Immediate challenges include the need to clarify the functions and accountabilities of the federal, state and local governments; deliver basic services and maintain infrastructure development; enable the private sector; and ensure strong and transparent governance during the early years of federalism. Meanwhile, if left unmet or unmanaged, heightened public expectations of federalism could rapidly degenerate from anticipation to disillusionment.
 
Short Take: Nepal Country Partnership Framework (FY2019-23)

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.  

Has Bhutan’s growth been jobless?

Tenzin Lhaden's picture
Bhutan's youth unemployment rate has increased from 10.7 percent in 2015 to 13.2 percent in 2016
Bhutan continues to maintain solid growth and macroeconomic stability but job creation is lagging; its  youth unemployment rate has increased from 10.7 percent in 2015 to 13.2 percent in 2016. This indicates that high growth has not been able to generate enough jobs for youth. 

“The main driver of growth in Bhutan continues to be the hydropower sector, but electricity generation does not create job,” said a senior government officials attending the presentation of The World Bank’s South Asia Focus on Jobless Growth on June 28th in Thimphu. The report was presented by Martin Rama, World Bank South Asia Region Chief Economist and was attended by senior government officials, parliamentarians and development partners. The presentation alongside the launch of Bhutan Development Update was a great opportunity for the policy makers to better understand and synthesize Bhutan and the South Asia region’s development opportunities.

In the case of Bhutan, it seems clear that growth alone will not allow it to attain higher employment rates as enjoyed by some other developing countries.

"More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region,” said Martin Rama,. “But providing opportunities to these young entrants while attracting more women into the labor market will require generating even more jobs for every point of economic growth.”

The report informs that the fall in employment rates has been much faster in the region particularly in India, Bhutan and Sri Lanka and especially for women, risking foregoing the demographic dividend. While it is evident that the number of working age people is increasing, the proporation who are at work has declined owing to prioritization of the households to education, health and other commitments with increasing level of income.

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.

Face to face with William Maloney, Chief Economist, Equitable Finance and Institutions

Nandita Roy's picture

Returns on technological adoption are thought to be extremely high, yet developing countries appear to invest little, implying that this critical channel of productivity growth is underexploited. A recent World Bank study – The Innovation Paradox: Developing-Country Capabilities and the Unrealized Promise of Technological Catch-Up – sheds light on how to address this paradox. In this interview, William Maloney Chief Economist, Equitable Finance and Institutions Practice Group, World Bank Group, calls upon developing country public and private-sector leaders to pursue a more focused approach to innovation policy.



What is the new study Innovation Paradox all about?

The potential gains from bringing existing technologies to developing countries are vast, much higher for poor countries than for rich countries. Yet developing-country firms and governments invest relatively little to realize this potential. That’s the origin of what we are calling ‘The Innovation Paradox’.

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Why do firms in developing countries lag behind when it comes to innovation?

The Innovation Paradox, argues that developing country firms choose not to invest heavily in adopting technology, even if they are keen to do so, because they face a range of constraints that prevent them from benefitting from the transfer.

Developing country firms are often constrained by low managerial capability, find it difficult to import the necessary technology, to contract or hire trained workers and engineers, or draw on the new organizational techniques needed to maximize the potential of innovation. Moreover, they are often inhibited by a weak business climate. For example, small and medium enterprises (SMEs) are constantly in a situation where they are putting out fires, they don’t have a five-year plan, they don’t have somebody keeping track of what new technology has come out of some place that they could bring to the firm.

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How can developing economies catch up with the developed world on innovation?

The rates of return to investments and innovation of various kinds appear to be extremely high, yet we see a much smaller effort in these areas.  In the developing countries, we need to think not only about barriers to accumulating knowledge capital, we have to think about all the barriers to accumulating all of the complementary factors—the physical capital. So, if I have a lousy education system, it doesn’t matter if I get a high-tech firm because there won’t be any workers to staff it.

Innovation requires competitive and undistorted economies, adequate levels of human capital, functioning capital markets, a dynamic and capable business sector, reliable regulation and property rights. Richer countries tend to have more of these conditions. This is at the root of Paradox. Even though follower countries have much to gain from adopting existing technologies from the advanced countries, in practice, missing and distorted markets, weak management capabilities and human capital prevent them from taking advantage of these opportunities.

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How data can benefit Nepal

Ravi Kumar's picture

Thirty years ago, almost everyone in Nepal —except for a few professionals and business people—would have been classified as poor by any reasonable international standard.

In 2010, by contrast, 15 percent of Nepalis were considered poor.

Without a doubt, Nepal has made progress.

Now the 761 newly formed—local, provincial, and federal—governments in Nepal aim to provide all Nepalis access to essential public services, eliminate poverty, reduce gender and ethnic inequalities, and ensure environmental sustainability

The hope is that Nepal will reach middle-income status by 2030.

But tracking and monitoring progress against the goals articulated in Nepal’s development vision as well as the global Sustainable Development Goals (SDGs) impose significant demands on the country.

Unfortunately, the absence of disaggregated data by geography, sex, age, social groups and sub-national level, and more poses an enormous challenge for all levels of governments to properly plan and budget.

As such, Nepal needs to urgently invest in its data and statistics capacity.

Data is the currency for decision making and helps us understand what works and what doesn’t.

For instance, let’s consider a province in Nepal that is keen to improve learning for its public schools’ students.

Without data on students, their gender, age, academic performance, or the number of schools and teachers, the provincial government cannot elaborate an informed plan for its students.

But were policymakers able to access timely and sufficient data, they could decide whether more teachers or more schools are needed. Without data, decisions are just like shooting in the dark and hoping for the best.   

Boosting entrepreneurship in rural Afghanistan

Miki Terasawa's picture
Also available in: دری | پښتو
The Afghanistan Rural Enterprise Development Project has linked rural producers, inlcuding saffron farmers with markets to create businesses and provide employment opportunities to many Afghan women and men.
The Afghanistan Rural Enterprise Development Project has linked rural producers, including saffron farmers with markets to create businesses and provide employment opportunities to many Afghan women and men. Photo Credit: AREDP/ World Bank.

Meet Mohammad Naim, a saffron farmer in Afghanistan’s Herat province.  In 2013, Naim launched a new business, the Taban Enterprise Group after he and his partners received training and attended agriculture fairs nationwide.

Taban cultivates, processes, and markets saffron, and since its founding, it has steadily improved the quality of its saffron and expanded operations. Today, the company employs 120 women annually for seasonal work to harvest and process the valuable crop.
 
This business success story started with small savings pooled together by rural men and women like Naim.
 
Since 2010, the Afghanistan Rural Enterprise Development Project (AREDP) has linked rural producers with markets and helped villagers form savings and credit groups to create businesses or expand their small enterprises.

تقویت تشبثات خصوصی و ایجاد فرصت های کار در روستاهای افغانستان

Miki Terasawa's picture
Also available in: English | پښتو
The Afghanistan Rural Enterprise Development Project has linked rural producers, inlcuding saffron farmers with markets to create businesses and provide employment opportunities to many Afghan women and men.
پروژه انکشاف صنایع روستایی افغانستان  ازتولید کنندگان روستایی، به خصوص کسانیکه در عرصه تولید زعفران مشغول کاراند حمایت مینماید، تا نه تنها محصولات شانرا به بازار ها عرضه نمایند، بلکه خود قادر به ایجاد تشبثات و تجارت های کوچک گردند وزمینه های اشتغال زایی بیشتر را برای زنان و مردان فراهم نمایند. عکس: پروژه انکشاف صنایع روستایی افغانستان/ بانک جهانی

با نعیم یکتن از متشبثین محلی در ولایت هرات، که  در عرصه تولید زعفران مصروف کار است، آشنا شوید. در سال ۲۰۱۳ میلادی، نعیم و چند تن از شرکای او پس از اشتراک در یک سلسله برنامه های آموزشی در بخش زراعت و همچنان اشتراک در چندین نمایشگاه داخلی، تصمیم گرفتند یک شرکت تجارتی را بنام تابان تاسیس نمایند. شرکت متذکره که در بخش های کشت، پروسس و فروش محصول زعفران فعالیت را آغاز نمود، در مدت کم توانست با بهبود کیفیت تولید زعفران و گسترش فعالیت های تجارتی فراتر از مرز های افغانستان شهرت کسب نماید. بطور اوسط سالانه ۱۲۰ زن در این شرکت به منظور انجام کار های فصلی زعفران استخدام گردیده، تا در عرصه جمع آوری حاصلات و پروسس این نبات ارزشمند کار نمایند.
 
موفقیت این سرمایه گذاری با سهمگیری و اختصاص هزینه های کوچک پس انداز و قرضه از سوی چند زن و مرد روستایی مانند نعیم آغاز گردیده است.
 
از سال ۲۰۱۰ بدینسو پروژه انکشاف صنابع روستایی افغانستان تولید کنندگان روستایی را با بازار ها وصل ساخته و همزمان با آن از طریق گروپ های پس انداز و گروپ های قرضه قریه، روستاییان را کمک نموده، تا برایشان تجارت های کوچک ایجاد نموده و یا تشبثات کوچک شان را توسعه دهند.

د افغانستان په کلیوالو سیمو کې د خصوصی تشبثاتو او د کارموندنی د فرصتونو پیاوړتیا

Miki Terasawa's picture
Also available in: English | دری
The Afghanistan Rural Enterprise Development Project has linked rural producers, inlcuding saffron farmers with markets to create businesses and provide employment opportunities to many Afghan women and men.
د افغانستان د کلیوالي صنایعو د پراختیا پروژه له ټولو کلیوالو تولید کوونکو، بالخصوص له هغو بزګرانو څخه چې د زعفرانو د کښټ او پروسس په برخه کې کار کوي، مالي  او تخنیکي ملاتړ برابروي. په دې توګه نه یوازې، چې بزګران به وتوانیږي څو خپل محصولات بازارونو ته عرضه کړي، بلکه خپله به کوچني تجارتونه او تشبثات پرانیزي او د ښځو او نارینه وو لپاره به د کارموندنې فرصتونه برابر شي. انځور: د افغانستان د کلیوالي صنایعو د پراختیا پروژه/ نړیوال بانک

د زعفرانو د کښت چارو کې د هرات ولایت د یوه بریالي متشبث نعیم سره وپیژنئ. په ۲۰۱۳ کال کې نعیم او څو نورو شریکانو یې وروسته له دې چې د کرني په څو ښونیزو برنامو، او کورنیو نندارتونونو کې ګډون وکړ نو د تابان په نامه د یوه سوداګریز شرکت په جوړولو یې پیل وکړ. نوموړی شرکت چې د زعفرانو د کښت، پروسس او خرڅلاو په برخه کې فعالیت کوي، په ډیر کم وخت کې وتوانید د زعفرانو د کیفیت په لوړولو سره  د خپل سوداګریز فعالیتونو شهرت د افغانستان تر پولو واړوي. اوس مهال په منځنۍ توګه دغه شرکت په کال کې ۱۲۰ ښخې د زعفرانو د فصلی چارو لپاره ګوماري، تر څو د دغه ارزښتناک بوټي  د حاصلاتو د راټولولو او پروسس چارې پر مخ بوزي.
 
د دغه پانګه اچونې د بریالیتوب کیسه د سپما او پورونو لپاره د کوچنیو نغدي ونډه اخیستنو  په وسیله د نعیم په شان دڅو نارینه وو او ښخو له خوا پیل شوه.
 
د ۲۰۱۰ کال نه را پدیخوا د افغانستان د کلیوالي صنایعو د پراختیا پروژې، کلیوال تولید کوونکي له بازار سره وصل کړل او همدارنګه د کلي سپما او پورونو د ګروپونو په واسطه یې  له کليوالي خلکو سره مرسته وکړه تر څو ورته کوچني تجارتونه جوړ او کوچني تشبثاتو ته وده ورکړي.

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