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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.

What will steer South Asia’s economic promise? Its people

Sanjay Kathuria's picture
 The Promise of Regional Trade in South Asia
Pedestrians cross the road in front of motorcycles, cars, and buses at the crossroads in Kolkata, India. Photo: Radiokafka / Shutterstock

This blog is part of a series that discusses a way forward for South Asian regional integration.

That South Asia is brimming with possibilities for economic growth is well-known. It’s what drove us to write A Glass Half Full: The Promise of Regional Trade in South Asia. Our research shows that if South Asian countries lifted man-made barriers, intraregional trade could triple and unleash greater prosperity for all

What we weren’t prepared for, however, was the overwhelmingly positive response the report received across the region. Government officials, members of the private sector, civil society, and particularly young people we met with were eager to learn more about how their countries could improve trade relations with their neighbors.

South Asia’s economic prospects are promising, but even more inspiring are its people who remain hopeful for change despite political circumstances that make it seem impossible.

In Pakistan, which suffers the biggest welfare loss because of non-cooperation, A Glass Half Full hit home in a variety of ways.

The country can increase its intraregional trade almost 8-fold, from $5.1 billion to $39.7 billion. This resounded with audiences at launch events in Islamabad, Lahore, and Karachi, evoking a sense of loss for the missed opportunity. They asked how Pakistan and other countries could amend their discriminatory policies and enjoy the benefits of free trade.

Politics often trumps economic cooperation in South Asia, but many in Pakistan suggested politics wins because the cost is so low. If intraregional trade were to increase, lobbies would arise to protect those interests.

A week before our report’s launch, Pakistan and India had initiated the Kartarpur border corridor to facilitate visa-free visits for Indian pilgrims to Pakistan’s Sikh holy sites. This had locals brainstorming more initiatives for regional integration. Students lined up after talks to chat, insisting that I come to speak at their universities- their enthusiasm was infectious. 

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

Women in nature conservation: a win-WiNN

Claudia Sobrevila's picture
Purnima Devi Barman and the "Hargila Army" receiving an award for their work to protect the Greater Adjutant stork. Photo: © Courtesy of Purnima Devi Barman. 
Purnima Devi Barman received the Nari Shakti Puraskar 2017 award, the highest civilian award for women in India, for her work along with the “Hargila Army” to protect the greater adjutant stork. © Jantin Das.

A common theme of our work on conservation projects has been the lack of networks for women to share their ideas and learn from others doing the same work.

Which is why we created an all-women’s network to support and empower women in nature conservation. It is called WiNN: the Women in Nature Network, and was founded in 2013 by the two of us and 12 other women.

WiNN is a volunteer-run network of women interested in nature conservation. It serves as a platform for women to interact and learn by sharing experiences and stories relevant to other women in order to enhance conservation impacts and also inspire the next generation of conservation leaders.

India: How to help communities break the vicious "disaster-poverty" cycle

Ede Ijjasz-Vasquez's picture
 

Natural disasters push the near poor to below the poverty line & contribute to more persistent and severe poverty, creating poverty traps. Impacts on their livelihood pushes them further down the poverty line and as they own few assets it is very difficult for them to break this cycle.
Poor are caught up in and disaster-poverty vicious circle- are more likely to reside in hazardous locations and in substandard housing exposing them more to disasters. Poor households in disasters use harmful coping strategies, such as reducing expenditures on food, health, & education or increasing incomes by sending children to work.

Into thin air and seen from space – estimating evapotranspiration using satellites

Diego Juan Rodriguez's picture

News headlines often feature stories of water scarcity challenges and increasing competition for water. So it is clear that we need to improve the efficiency and effectiveness of water systems globally – especially in the realm of irrigation management, the water we use to grow our food. However, a data gap exists about evapotranspiration (ET) which, if fixed, would help us understand the amount of water available and used in irrigation and would help us to have more accurate water balances at the basin level.


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