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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.

Revolutionizing mobility through blockchain

Photo: Plamenj/Flickr

As digital technology continues to transform and reshape the transportation industry over the last few years, blockchain as a decentralized distributed technology has been embraced by other fields through various applications. It has found varied applications across banking, financial services, healthcare, e-governance, and voting.

Blockchain has immense potential to solve the most pressing problems of mobility where it can be used by private & public sector to securely share and integrate data across modes of transport. It paves  the path for transforming Mobility as a Service (or MaaS), where a user may access different modes of transport (three-wheelers, bus, metro, train etc.) on a single platform with seamless connectivity. It makes a paradigm shift in redefining the customer needs in terms of service, rather than the mode of transport.

The applications of blockchain in reducing the cost of financial transactions have been implemented across sectors. In India, 80% of our travel is for distances less than 5 km and most of this is through non-motorized modes of transport which may largely be served by walking, bicycle, and cycle rickshaws. In these modes the, transaction size for every ride is small (or nil). Also, people in urban and semi-urban areas tend to use multiple modes of transport to reach their destinations. In this case, it makes sense for using digital payments that are integrated across all modes of transport. But the payment systems of today charge a transaction fee of between 0.5% to 5%. This hampers the faster uptake of digital payments, especially for smaller transactions. Blockchain greatly reduces the cost per transaction as there are no intermediaries involved in the payment system, thus making small transactions of even 1 or 2 Indian rupees ($0.014 to $0.028) digitally feasible.

What’s keeping India in the dark?

Fan Zhang's picture
To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain.
To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain. Credit: World Bank

Statistics show that what is commonly perceived as an energy gap in India is actually an efficiency gap.

To boost and sustain its energy supply, India needs urgent investments and reforms to fix the inefficiencies that plague its entire electricity supply chain. 

But first, the good news. In 2018, every village in India got connected to the grid.  That same year, power shortages declined dramatically to 0.9 percent from 8.5 percent in 2012.  

As for clean power, India has become one of the world’s leading countries in renewable energy and aims to add 227 gigawatts of green electricity by 2022.

True, India today generates more power than ever. Yet, 178 million Indians still lived without access to grid-connected electricity in 2017.

On top of that, air pollution from coal-powered plants contributed to 82,900 deaths across India in 2015.

Given its rapidly growing economy, demand for power in India is expected to triple by 2040.

The country faces a monumental task to meet this demand while protecting its natural environment and the health of its people.

As I write in my new report, ‘In the Dark’, power distortions cost India much more than previously estimated: $86 billion in 2016—that is 4 percent of the country’s economy.

The rising cost of nutritious food in South Asia

Felipe F. Dizon's picture
 World Bank
A malnourished child will face poorer outcomes as an adult. In South Asia, where malnutrition persists in multiple forms, improving nutrition in the early stages of life is critical to a child's future development and health. Credit: World Bank

A malnourished child will face poorer outcomes as an adult.
 
That’s why improving nutrition, especially in the early stages of life, is critical.
 
The path toward better nutrition includes adequate maternal and child care, access to better sanitation facilities, health services, and naturally, nutritious foods.
 
But whether an individual consumes—or not—nutritious food is contingent upon a myriad of factors, ranging from the availability of certain foods, how convenient they can be turned into meals, or simply, if they meet consumers’ tastes.
 
But above all, the high cost of food remains the most critical barrier to proper nutrition and affects the poor more than the rich.
 
And in South Asia, where malnutrition persists in multiple forms, the cost of nutritious food is prohibitive.

Teach: Tackling the learning crisis, one classroom at a time

Ezequiel Molina's picture
Also available in: French | Español | Portuguese | Arabic
 



Despite tremendous progress in getting children into the classroom, we are experiencing a global learning crisis, where a large share of children complete primary school lacking even basic reading, writing, and arithmetic skillsWhat explains this phenomenon? To answer this question, consider the following examples of classrooms that are unlikely to put students on a path to success. 

India: Building trust in local governance institutions in Bihar’s villages

Farah Zahir's picture
Sushumlata, the head of the gram panchayat of Dawan village, Bhojpur District, Bihar, conducts a meeting at the newly furbished panchayat office.
Sushumlata, the head of the gram panchayat of Dawan village, Bhojpur District, Bihar, conducts a meeting at the newly furbished panchayat office.


In a remote village in Bihar’s Bhojpur district, Sushumlata sits behind a spanking new desk in a newly-refurbished government building.

From the time she came to the village as a new bride, this young woman has chosen to get involved in community affairs by joining the Self Help Group (SHG) movement.

Later, armed with a master’s degree in social work, she joined active politics and, in 2016, was elected the Mukhiya, or head of the Dawan village Gram Panchayat – the local governance institution – under the seat reserved for women.

Sushumlata is the face of the government in this remote corner of Bihar. When we visit her in the newly upgraded Gram Panchayat building – refurbished under the World Bank (IDA) funded Bihar Panchayat Strengthening Project – she tells us how the newly painted and equipped building has made a difference.

A young man is busy on a computer beside her, helping an elderly gentleman apply for a government pension.

Oral democracy

Vijayendra Rao's picture

The challenges of electoral democracy are becoming increasingly visible worldwide. Elite capture, corruption and patronage are serious concerns, and the legitimacy of some elections has come under critical scrutiny. This has led to a revival of the idea of direct democracy – giving power directly to groups of people to make collective decisions.



South Asia: A bright spot in darkening economic skies?

Hartwig Schafer's picture
South Asia is set to remain relatively insulated from some of the rising uncertainties that are looming large on the global economic horizon. The region will retain its top spot as the world’s fastest-growing region. The Siddhirganj Power Project in Bangladesh. Credit: Ismail Ferdous/World Bank

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.

What have we learned this year? The latest in research from the Africa Chief Economist’s Office

David Evans's picture



In the Africa Chief Economist’s Office, we seek to generate knowledge on key development issues around the continent. We also host the Gender Innovation Lab, which – as the name suggests – specifically generates evidence on how to close the gender gap in Africa. Over the course of 2018, we’ve produced a range of products (regional reports and updates), but we also produce academic articles and book chapters seeking to answer key, specific development questions.

South Asia's new superfood or just fishy business?

Pawan Patil's picture
Across South Asia, four known species of indigenous, fully mature, small food-fish – now dubbed ‘NutriFish’ have nutritional and health benefits for pregnant and lactating women and young children when consumed over the first one thousand days. Here, children from Kothi, Odisha in India show their curiosity and share their excitement with a new kind of harvest happening in their village. Credit: Arun Padiyar
Kale, Kefir, and Quinoa have now joined the ranks of better-known foods like Blueberries, Orange Sweet Potato, and Salmon on family dinner tables across the world.

Considered superior for their health and nutrition benefits, these so-called ‘Superfoods’, often considered “new” by the public are now ever-popularized by celebrity chefs and have become all the rage of foodies from San Francisco to Singapore.   

We live in a world of paradox, where old world and almost forgotten food like Quinoa (which dates back as a staple food over three thousand years to Andean civilization but largely disappeared with the arrival of the Spanish) is now back on the menu.  

Salmon, a staple part of Nordic diets from paleolithic times and woven into the culture of native populations across northwestern Canada and many other superfoods share comparable stories.

And, there are many other old world foods, indigenously known, disappearing but not fully forgotten, yet to be re-discovered.

Food is also now advancing to the front-line of the war on poverty

A health and human capital crisis is now sweeping the world, and a lack of diverse, accessible, affordable, and available nourishing foods is increasingly blamed.  

For example, obesity, from poor diet and poor exercise has tripled since 1975 to almost two billion people today.  

Undernutrition contributes to 45 percent of all deaths of children under five years old (3.5 million each year), much of it avoidable, but difficult to detect as it remains “hidden.”  

Policy makers and stewards of national economies are starting to wake up to the fact that poor nutrition has massive economic implications too, reducing GDP by 3-11 percent, depending on the country. 

While economies such as Bangladesh, India, and Pakistan may look strong, just as bellies look full, critical micronutrients and vitamins, essential for healthy physical and cognitive development over the first 1,000 days of life are largely missing from diets of many developing countries and are a proven drag to educational attainment and economic prosperity.  

And parents, from both rich and poor nations alike, seem to know something is not quite right. 

If healthier food choices that are accessible, affordable, and readily available are better known, would parents purchase such food from the market for their families?     

With a small grant from the World Bank-administered South Asia Food and Nutrition Initiative (SAFANSI) supported by the EU and the United Kingdom, a partnership with WorldFish was established to test this premise.  

A 60 second TV spot, a collaboration between scientists, economists, a private sector digital media company, broadcasters and the Government of Bangladesh, was created and broadcast across the nation on two occasions and watched by over 25 million people.  

A parallel radio program was also developed and aired reaching millions more, particularly the rural poor and marginalized communities.
 
NutriFish1000 TV

 


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