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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.  

Undernutrition in South Asia: Persistent and emerging challenges

Ashi Kathuria's picture
Indian Bengali tribal mother is feeding her baby on her lap in a rural background. Indian rural lifestyle
Indian Bengali tribal mother is feeding her baby on her lap in a rural background. Credit: Abir Bhattacharya/ Shutterstock

Childhood stunting—or being too short for one’s age—is one of the most significant barriers to human development and affects about 162 million children under five across the world.

The good news is that several countries in the region, Nepal, India and Sri Lanka, are progressing towards meeting the 2025 World Health Assembly target of reducing the number of stunted children.

But overall, South Asia remains home to about 62 million stunted children.

In this context, it’s critical to confront failures that impede progress toward better health and nutrition in the region. Even more so since some undernutrition challenges persist, and new ones are emerging.

One persistent challenge is the inadequate diets young children receive, especially in their first two years.

This starts early in a child’s life as breastfeeding rates remain low. Though early initiation of breastfeeding has more than doubled to 40 percent between 2000 and 2016, more than 20 million infants are still not being breastfed within the first hour of birth.

Progress is also uneven across the region: breastfeeding initiation ranges from 18 percent in Pakistan to about 90 percent in Sri Lanka.

Also worrisome is that exclusive breastfeeding in the first six months of life has improved by a mere five percentage points to 52 percent across South Asia.

Further to that, the diets of infants over six months continue to be one of South Asia’s biggest and most persistent challenges.  

Only 12 percent of South Asian children receive the minimally acceptable diet they need to grow healthy.

WEPOWER: Why South Asia needs more women in its energy sector

Tehreem Saifey's picture
The World Bank Team, WePOWER Strategic and Institutional Partners (SIPs) and Nepal High School Female Students, Closing Session, Feb 21, 2019.
The World Bank team, WePOWER strategic and institutional partners, and high school female students from Nepal gathered at the closing session of the Women in Power Sector Network in South Asia (WePOWER), Feb 21, 2019. Photo: World Bank

“There is power in not being alone,”  
Demetrios Papathanasiou - Practice Manager, South Asia Energy Unit at The World Bank

The number of women working in the energy and power sector in South Asia is dismally low.

Across the region, women employees represent only 3 percent to 15 percent of energy sector staff.

As for women engineers and technicians, the proportion is even lower: less than 1 to 6 percent.

To promote opportunities for women in the power and energy sectors, especially in technical roles, the World Bank and its partners recently organized the first regional conference for Women in Power Sector Network in South Asia (WePOWER).

Held in Kathmandu Nepal, the event convened more than 250 engineers and energy-sector professionals from all over South Asia and provided networking and learning opportunities to women and girls.

It’s well established that role models and networks can help overcome stereotypes and biases that contribute to the underrepresentation of women in STEM fields.

A recent study found that investing in peer networks and building up proteges as two of the six things successful women in STEM have in common.
 
From a personal point of view, I have learned something powerful during the event: When strong and smart women work together and are supported by men who value women’s engagement as equals, let alone in the engineering or energy sectors, something magical happens.

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.  

Applauding the women leaders in South Asia

Hartwig Schafer's picture

I just ended my first round of country visits as the World Bank’s Vice President for the South Asia Region.  Over and above all, I have been immensely impressed by the resilience, determination, commitment and innovation of the women leaders that I had the privilege to meet during my visits.

These women are succeeding in a region where it is hard for women to realize their career dreams. In South Asia, only 28 percent of women ages 15+ are employed, compared to 48 percent worldwide.

What better opportunity than International Women’s Day to give a huge shout-out and applaud those women who are role models, entrepreneurs, and leaders in the eight countries of South Asia.

Neha Sharma, the district magistrate in Baghai village and Hart Schafer in India
Baghai village in Firozabad district, Uttar Pradesh, India. Photo: World Bank

Demystifying machine learning for disaster risk management

Giuseppe Molinario's picture

To some, artificial intelligence is a mysterious term that sparks thoughts of robots and supercomputers. But the truth is machine learning algorithms and their applications, while potentially mathematically complex, are relatively simple to understand. Disaster risk management (DRM) and resilience professionals are, in fact, increasingly using machine learning algorithms to collect better data about risk and vulnerability, make more informed decisions, and, ultimately, save lives.

Artificial intelligence (AI) and machine learning (ML) are used synonymously, but there are broader implications to artificial intelligence than to machine learning. Artificial (General) Intelligence evokes images of Terminator-like dystopian futures, but in reality, what we have now and will have for a long time is simply computers learning from data in autonomous or semi-autonomous ways, in a process known as machine learning.

The Global Facility for Disaster Reduction and Recovery (GFDRR)’s Machine Learning for Disaster Risk Management Guidance Note clarifies and demystifies the confusion around concepts of machine learning and artificial intelligence. Some specific case-studies showing the applications of ML for DRM are illustrated and emphasized. The Guidance Note is useful across the board to a variety of stakeholders, ranging from disaster risk management practitioners in the field to risk data specialists to anyone else curious about this field of computer science.

Machine learning in the field

In one case study, drone and street-level imagery were fed to machine learning algorithms to automatically detect “soft-story” buildings or those most likely to collapse in an earthquake. The project was developed by the World Bank’s Geospatial Operations Support Team (GOST) in Guatemala City, and is just one of many applications where large amounts of data, processed with machine learning, can have very tangible and consequential impacts on saving lives and property in disasters.

The map above illustrates the “Rapid Housing Quality Assessment”, in which the agreement between ML-identified soft-story buildings, and those identified by experts is shown (Sarah Antos/GOST).

The learning crisis in Afghanistan

Iva Trako's picture



Although access to schooling has improved significantly in the last decade, fourth grade Afghan students are still not learning. After 4 years in primary school, only two-thirds of Afghan students have fully mastered the language curriculum for the first grade and less than half of them have mastered the mathematics curriculum for the first grade.

How has Citizens’ Charter brought positive change in Jalalabad, Afghanistan?

Akram Sajid's picture
 Rumi Consultancy/ World Bank
Residents discussing their community development projects in a Community Development Council meeting in Jalalabad city. Photo Credit: Rumi Consultancy/ World Bank
The Citizens’ Charter Afghanistan Project (Citizens’ Charter) is a national program to provide every village and city in Afghanistan with basic services, such as water, roads, and electricity—based on decisions made by the community.
 
When we first started activities in Jalalabad city, the capital of the eastern province of Nangarhar, people were not familiar with community driven programs in urban areas; and there was no tradition of cooperation among different members of the community to jointly solve issues. Their relations with local government, especially the municipality, were weak since it could not address many of their basic needs, like access to clean drinking water.
 
As the Citizens’ Charter Communication and Outreach Officer in Jalalabad, I initially felt that community members were not feeling empowered and, therefore, didn’t see the value of working together to increase the prosperity of their community.
 
Before the project started in 2017, there were no organized councils that people could turn to, to address their shared problems. Shir Mohammad, a resident from Jalalabad’s District 5, told me: “It was so hard to gather people to discuss an issue in the area.
 

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.

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.


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