There is now a huge window of opportunity for South Asia to create more apparel jobs, as rising wages in China compel buyers to look to other sourcing destinations. Our new report – Stitches to Riches?: Apparel Employment, Trade, and Economic Development in South Asia – estimates that the region could create 1.5 million new apparel jobs, of which half a million would be for women. And these jobs would be good for development, because they employ low-skilled workers in large numbers, bring women into the workforce (which benefits their families and society), and facilitate knowledge spillovers that benefit the economy as a whole.
But for these jobs to be created, our report finds that apparel producers will need to become more competitive – chiefly by (i) strengthening links between the apparel and textile sectors; (ii) moving into design, marketing, and branding; and (iii) shifting from a concentration on cotton products to including those made from man-made fibers (MMFs) – now discouraged by high tariffs and import barriers. These suggestions recently drew strong support from panels of academics and representatives from the private sector and government when the report was launched mid-year in Colombo, Delhi, Dhaka, and Islamabad. South Asia is now moving on some of these fronts but a lot more could be done.
Moving up the apparel value chain
Stitches to Riches? finds that South Asia’s abundant low-cost labor supply makes it extremely cost competitive (except for possibly Sri Lanka). But rapidly rising living costs in apparel manufacturing hubs, coupled with international scrutiny, are increasing pressure on producers to raise wages. Plus, countries like Ethiopia and Kenya, who enjoy a similar cost advantage, are entering the fray, and some East Asian countries already pose a big challenge. The good news is that the policy reforms needed to keep the apparel sector competitive would likely benefit other export industries and transform economies (view end of the blog).
Thailand has come a long way and represents an impressive development story: it has drastically reduced the number of poor people from nearly 70% of the population in 1986 to 11% in 2013 and its economy grew at an average annual rate of 7.5% in the late 1980s and early 1990s, creating jobs that helped pull millions of people out of poverty.
However, challenges remain as there are still 11% – 7 million – of the population living below the poverty line, and another 7 million or so who remain highly vulnerable to falling back into poverty. Although inequality has declined over the past 30 years, the distribution in Thailand remains unequal compared with many countries in East Asia. Significant and growing disparities in household income and consumption can be seen across and within regions of Thailand, with pockets of poverty remaining in the Northeast, North, and Deep South. Today, the Thai economy faces headwinds, and growth has been modest. Export competitiveness is sliding, and a severe drought is expected to weigh on off-season rice production. Poverty is expected to continue to fall at a slower rate, with poor households concentrated in rural areas affected by falling agricultural prices. The country is now at a critical time since the new draft constitution won approval by a majority.
, improving educational outcomes, safeguarding food and minimizing its waste, improving healthcare, and supporting countries’ digital ambitions (that computer of yours heats up pretty fast). And all of this, from improved productivity to education to health, is vital to eliminating extreme poverty and boosting shared prosperity across the globe.
The Sustainable Development Goals (SDGs) differ from the Millennium Development Goals (MDGs) in many ways. Unlike the MDGs, the SDGs universally apply to all countries and they are holistic and integrated. Moreover, their delivery is to be achieved by governments, civil society, and the private sector all working together to achieve their success.
The SDGs also recognize the central role of justice in achieving development, with Goal 16 specifically guaranteeing “equal access to justice for all.” Governments, in partnership with other stakeholders, must make necessary national reforms to provide access to justice to the billions who currently live outside of the protection of the law. They must commit to financing the implementation of these reforms and be held accountable for their success.
Regional and sub regional bodies are uniquely placed to assist governments with implementing and monitoring justice commitments made through the SDGs. Learnings from the MDGs show that countries that integrated the MDGs into existing regional strategies were far more successful in meeting the MDGs’ objectives than countries that did not have the support of an existing regional strategy.
I’m finally in Thailand celebrating our Development Marketplace for Innovation award from the World Bank Group and the nonprofit Sexual Violence Research Initiative (SVRI) to prevent gender-based violence. Just one month ago, our team members, consisting of Sex Workers IN Group’s (SWING) leaders, Surang Janyam and Chamrong Phaengnongyang, and Mahidol University researcher, Dusita Phuengsamran, were at the awards ceremony in Washington DC, humbled by the words and encouragement of World Bank Group President Jim Yong Kim. Today, half a world away, at SWING’s colorful conference space, the passion for violence prevention that infused the awards ceremony is still with us.
With the recent climate agreement in Paris, many countries are looking at improved energy efficiency as a way to reduce greenhouse gas (GHG) emissions to contribute to the agreed climate goal of keeping global warming below two degrees Celsius.
Innovative air-conditioning (A/C) technology, just launched by a Thai A/C manufacturer in cooperation with the Government of Thailand and the Federation of Thai Industries, will not only save consumers and the country energy, it will eliminate emissions of ozone depleting, high global warming refrigerants with little to no additional costs. At scale, this technology can play an important role in global climate mitigation efforts.
Today, over 80 million tons of CO2 will be emitted from economies around the world. Tomorrow will be the same, as will the day after that. The emitted amounts of CO2 will likely stay in the atmosphere for hundreds, if not thousands of years, further compounding the challenges in reversing the current and expected effects of climate change.
This past December, in Paris, leaders of 195 nations of the world agreed that this trend must be reversed, signaling a historic turning point in the global fight against climate change. The Paris Agreement ratified a global consensus to limit the global average temperature rise to ‘well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’ Developing nations were at the forefront of this agreement, with almost every one of them setting carbon reduction goals. While the public sector will play a major role in helping achieve the ambitious targets, the sheer volume of investment required to support low-carbon energy, transportation, and agriculture projects throughout the developing world leaves a gap of hundreds of billions of dollars that only the private sector is in a position to fill.
The world is witnessing the greatest information and communications revolution in human history. Digital technologies provide access to huge amounts of information at all times, allow us to stay in touch with friends and relatives much more easily, and offer new opportunities for business and leisure. The sky is the limit!
The information revolution has reached billions of people around the world, and more people get connected every day. However, many others are not yet sharing in the benefits of modern digital technologies. There are the digital “haves” and digital “have nots”.
Today, 95% of the global population have access to a digital signal, but 5% do not; 73% have mobile phones, but 27% do not; slightly less than half of all people (46%) have internet, but the majority do not; and only 19% of the world’s population has broadband. There also are persistent digital divides across gender, geography, age, and income dimensions within each country.
Why should we care about overcoming this digital divide, and what can we do?
It's been two months now since the historic climate change conference, COP21, wrapped up in Paris, concluding with 195 countries pledging to take actions to keep global warming to under 2 degrees Celsius. This is an unprecedented achievement in the long history of international climate policy.
Compared to past negotiations, there was a different atmosphere in Paris. The negotiators were determined to find common ground rather than draw insurmountable lines in the sand. Investors lined up with billions of dollars in new financial commitments in addition to the suggested roadmap for developed nations to contribute to the needed $100 billion annually for mitigation and adaptation efforts.
And the private sector was more active and visible than ever before: CEOs from industries as far ranging as cement, transportation, energy, and consumer goods manufacturers announced their own climate commitments in Paris to decrease their carbon footprints, adopt renewable energy, and improve natural resource management.
This enthusiasm was especially apparent during the CEO panel that IFC, the organization I represent, convened during the Caring for Climate Business Forum by UN Global Compact. CEOs from client companies in India, Turkey, Thailand, and South Africa discussed their innovative climate change initiatives, investments, and technologies, and the challenges of scaling up their climate business.
Globally, around 2 billion people do not use formal financial services. In Southeast Asia, there are 264 million adults who are still “unbanked”; many of them save their money under the mattress and borrow from so-called “loan sharks”, paying exorbitant interest rates on a daily or weekly basis. Recognizing the importance of financial inclusion for economic development, the leaders of the Association of South East Asian Nations (ASEAN) have made this one of their top priorities for the next five years.
Last week, the World Bank Group presented the latest data on financial inclusion in ASEAN to senior representatives of the ministries of finance and central banks of all 10 ASEAN member countries (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam). The session, held in Kuala Lumpur, is one of the joint activities the new World Bank Research and Knowledge Hub and Malaysia is undertaking to support financial inclusion around the world.