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Migration and Remittances

Is South Asia ready for a Regional Motor Vehicles Agreement?

Sanjay Kathuria's picture
Trucks loading goods
Trucks waiting to unload their goods in Bangladesh. Photo By Erik Nora/World Bank

Judging by the number of views of the recent Facebook livestream event on intra-regional trade and investment in South Asia, there is significant interest in this topic. And there should be, given that there remain many important and untapped opportunities to use the power of trade and investment to enhance economic opportunities, including for lesser-skilled people and women in the region.

According to respondents of the Facebook poll conducted during the above event in May 2016, the most important policy to enhance intra-regional trade would be to invest in connectivity and border crossings.  Policy makers seem to realize this as well. Over the last two years, new efforts to deepen South Asian cooperation in trade have focused almost exclusively on trade facilitation issues. Let me elaborate.

Harnessing Stitches for Riches in South Asia

Gladys Lopez-Acevedo's picture
Stitches to Riches? The Potential of Apparel Manufacturing in South Asia

In the coming years and decades, China is expected to slowly relinquish its lead position in the global apparel market, opening the door to other competitors. This is a huge opportunity for South Asia to create at least 1.5 million jobs that are “good for development” – of which half a million would be for women – according to a new World Bank report Stitches to Riches?  But those numbers could be much higher if the region moves quickly to tackle existing impediments and foster growth in apparel, which will also yield dividends for other light manufacturers (like footwear and toys).
 
How South Asia fits in the global apparel market
Currently, China holds by far the largest share of global apparel trade – at 41 percent, up from 25 percent in 2000, with about 10 million workers. But as China continues to develop, it is likely to move up the global value chain into higher-value goods (like electronics, and out of apparel) or switch production among sectors in response to rising wages. A 2013 survey of leading global buyers in the United States and European Union (EU) found that 72 percent of respondents planned to decrease their share of sourcing from China over the next five years (2012-2016).
 
Already, the top four apparel producers in South Asia – Bangladesh, India, Pakistan, and Sri Lanka – have made big investments in world apparel trade, now accounting for 12 percent of global apparel exports (see figure). In terms of apparel export value, Bangladesh leads the pack (at $22.8 billion), followed by India ($12.5 billion), Sri Lanka ($4.4 billion), and Pakistan ($4.2 billion).
 
China dominates global apparel trade
(Country share of global apparel exports)


Source: Stitches to Riches?
 
Why apparel jobs are “good for development”
When we think of jobs that are “good for development,” the main yardstick is whether they will help translate growth into long-lasting poverty reduction and broad-based economic opportunities. Apparel fits the bill for numerous reasons. 

Immigrant labor: Can it help Malaysia’s economic development?

Rafael Munoz Moreno's picture


Malaysia has been able to reach remarkable achievements over the past decades, including extreme poverty eradication and promotion of inclusive growth. It aims to reach a high-income nation status by 2020, which goes beyond merely reaching a per capita GDP threshold. As the 11th Malaysia Plan points out, the goal is to achieve a growth path that is sustainable over time, reflects greater productivity, and is inclusive. High-income status can be achieved if we ensure that future generations have access to all the resources, such as education and productive opportunities, necessary to realize their ambitions and if Malaysia’s economy is globally competitive and resource-sustainable.

Over the years, immigrants have played a crucial role in the economic development of Malaysia, with around 2.1 million immigrants registered and over 1 million undocumented as of 2013. Education levels among the Malaysian population have increased remarkably over the last two decades, and immigrant workers have become one of the primary sources of labor for low-skilled occupations, most commonly in labor-intensive sectors such as construction, agriculture and manufacturing. Economic studies show that a 10% net increase in low-skilled foreign workers could raise Malaysia’s GDP by 1.1% and create employment and increase wages for most Malaysians.

Oil price impact is felt beyond borders

Donna Barne's picture

Oil pumps in southern Russia © Gennadiy Kolodkin/World Bank

Two recently released World Bank reports — one on commodities and the other on remittances — lend insight into an unfolding dynamic in the world today. As oil prices dropped from more than $100 per barrel in June 2014 to as low as $27 in the last few months, the money sent home from people working abroad in oil-producing countries also fell. This drop is a major reason remittances to developing countries declined in 2015 to their lowest growth rate since the 2008-2009 financial crisis.

Measuring the economic potential of Indian districts

Mark Roberts's picture
Kampur
Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high. How does its economic potential compare? Read below. Photo by: Sudip Mozumder/World Bank

As anyone who has travelled around the country will testify, India is marked by glaring spatial disparities in well-being. On the one hand, New Delhi is relatively prosperous, and if you visit the recently renovated Connaught Place, you will find not only a bustling outdoor market, but also designer shops, upmarket restaurants and a gleaming new metro station.

However, take the Prayagraj Express train east for seven hours and you will find yourself in Kanpur, which is one of the largest cities in the densely populated state of Uttar Pradesh, where per capita income is less than one-fifth its level in Delhi and the poverty rate is three times as high. 

Such large variations in well-being are a natural cause for concern among India’s policymakers and have generated intense interest in India’s spatial landscape of potential for economic development. Is it the case that less prosperous parts of the country lack the basic ingredients that can give rise to the high productivity that economists believe provides the key to well-being or is it the case that, while they may possess some of these ingredients, they are failing to make the most of them?

The Economic Potential Index

In an effort to provide some insights into both this and other key questions related to India’s spatial development, we have recently published a working paper that examines underlying variations in “economic potential” across Indian districts. 

Our analysis is based on a composite “Economic Potential Index” ( EPI)  that measures, in a single summary score, the extent to which a district possesses attributes that can be considered “universally” important to achieving a high local level of productivity, whether or not a high productivity level is currently actually observed. 

Time for South Asia to deal with fiscal weaknesses

Annette Dixon's picture
South Asia Economic Focus Spring 2016 Fading Tailwinds cover


There’s a lot of good news in the World Bank’s latest economic report on South Asia: the region is the fastest growing in the world and its limited exposure to global economic turbulence means that its near-term prospects look good. 

Get more farmers off their farms

David McKenzie's picture
Justin Wolfers had a nice piece in the Upshot about new work on how growing up in a bad neighborhood has long-term negative consequences for kids. The key point of the new work is that the benefits of moving from bad neighborhoods may be particularly high for kids whose parents won’t voluntarily move, but only move because their public housing is demolished.

In 2015 the cost of sending remittances to Central America and the Dominican Republic decreased

During 2015 the cost of sending remittances to Central America and the Dominican Republic was reduced.  This result, obtained from the database of Envía CentroAmérica, is a positive one as these countries are major recipients of remittances from abroad.  In fact, four of them -Guatemala, El Salvador, Honduras and the Dominican Republic - stand out among the top 25 emerging economies recipients of international remittances.

Farmers on the frontline: Change and transformation in Ethiopia’s watersheds

Alan Nicol's picture
Two women in Sidama Zone, Ethiopia. Photo credit: Alan Nicol

Selilah stares out over a landscape she has inhabited for 70 years. In the valley below, deep gullies scar the slopes where rains have carried away the soil. Living with three of her four sons, she is struggling to make ends meet in this part of Sidama Zone, Ethiopia, where, she says, there used to be a forest more than 40 years ago.

Now most trees have been felled and water is scarce. Selilah spends two hours a day collecting her two jerrycans (50 liters) from a neighboring kebele (neighborhood), but when that source fails she has to buy water from a vendor at ETB 6 (30 US Cents) per a jerrycan, a huge cut into her income.
 
In the last 10 years, she says, the rains have changed – they are lighter than before and more infrequent. As a result, production from her meager plot – just 0.25 ha – is declining. After her husband died more than a decade ago, she now only makes ends meet through the daily wage-labor income of her sons. Like many others, Selilah is on the frontline of climate change in a landscape under increasing pressure.


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