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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.

How to diversify Bhutan’s economy?

Yoichiro Ishihara's picture
Bhutan has made tremdendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.
Bhutan has made tremendous progress in reducing poverty. But it needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Will diversifying its economy help Bhutan address its youth unemployment, let alone its macroeconomic volatility and vulnerability?

With the right approach, yes.

And to that end, the latest World Bank Bhutan Development Report: A Path to Inclusive and Sustainable Development proposes solutions relevant to Bhutan’s context.

For more than ten years, developing the private sector through greater economic diversification has been Bhutan’s top policy as described in the 10th and 11th five-year plans.

Yet, youth unemployment, especially for educated Bhutanese, has remained high: 67 percent of bachelor’s degrees holders were jobless in 2016.

Diversifying the economy is touted as a standard prescription to cure such development ailments as joblessness, low productivity, and macroeconomic volatility.

However, international experience shows that this prescription does not always work.

Case in point: A World Bank’s analysis Diversified Development concludes that in resource-rich countries, investing in physical capital, human capital and economic institution are the best ways to sustain growth in the private sector.

Further to that, the development of specific sectors, which is often a common ingredient of diversification strategies in certain countries, is neither necessary nor sufficient for private-sector-led growth.

The main driver of Bhutan’s high growth and poverty reduction, hydropower has led the country’s development and will remain the backbone of its economy.

However, Bhutan needs to do a better job at diversifying its economy by improving its physical and human capital by using resource rents from hydropower.

Bhutan ranks 149 out of 160 countries on the 2018 Logistics Performance Index and 121 out of 176 countries on the 2017 ICT index.

Bhutan falls in the bottom half of the Human Capital Project rankings on critical indicators such as expected years of schooling.

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’s keeping Pakistan in the dark?

Fan Zhang's picture
 $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
Nearly  50 million Pakistanis still lack access to grid electricity. Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy. Credit: Curt Carnemark/ World Bank

From 1990 to 2010, 91 million people In Pakistan received electricity for the first time.
 
And power outages across the country have gone down drastically over the past few years.
 
Clearly, Pakistan has achieved much progress in expanding its electricity access and production in recent decades.
 
However, nearly  50 million Pakistanis still lack access to grid electricity and the country ranks 115th among 137 economies for reliable power.
 
After peaking in 2006, per capita electricity consumption failed to grow for almost a decade, remaining only one-fifth the average for other middle-income countries in 2014.
 
To boost sustainable energy supply, Pakistan’s power sector needs urgent investments and reforms to target inefficiencies in the entire electricity supply chain.
 
Fittingly, my new report In the Dark analyzes what lies behind these inefficiencies and suggests relevant actions to improve the operation of power plants, cut down on waste and costs, and increase electricity supply in a cost-effective manner.
 
The study sheds new light on the overall societal costs — not merely the fiscal costs as in previous research — of subsidies, blackouts and other distortions in the power sector.
 
To that end, my team and I surveyed Pakistan's entire supply chain from upstream fuel supply to electricity generation, transmission and distribution, and eventually, down to consumers.
 
Put simply, the numbers we found are dire.
 
Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
 
Problems begin upstream, where gas underpricing encourages waste and reduces incentives for gas production and exploration.
 
And with no recent significant gas discoveries, higher gas usage has widened the gap between growing demand and low domestic supply.
 
On top of that, the volume of gas lost before reaching consumers reached 14.3 percent in fiscal year 2015. By comparison, this number is about 1 to 2 percent in advanced economies.
 
Public power plants use 20 percent more gas per unit of electricity produced than private producers.
 
Poor transmission contributed to 29 percent of the electricity shortfall in fiscal year 2015, while weak infrastructure, faulty metering and theft cause the loss of almost a fifth of generated electricity.
 
Electricity underpricing and failure to collect electricity bills have triggered a vicious “circular debt” problem, leading to power outages.
 
A lack of grid electricity also leads to greater use of kerosene lamps that cause indoor air pollution and its associated respiratory infections and tuberculosis risks.
 
Lack of access to reliable electricity also adversely impact children’s study time at night, women’s labor force participation, and gender equality.
 
Connecting all of Pakistan’s population to the grid and increasing the supply of electricity to 24 hours a day would increase total household income by at least $4.5 billion a year and avoid $8.4 billion in business losses.

New year with a fresh start: Addressing urban poverty in Bangladesh

Wameq Azfar Raza's picture


Although Bangladesh has achieved much in the way of poverty reduction and human development, progress has been slower in some urban areas.

Issues such as slow-down of quality job growth, low levels of educational attainment (notably among the youth), and lack of social protection measures have taken the wind out of the proverbial urban reduction “sail.” As the country starts fresh in the new year, it is an opportune time to reflect on some of the key issues affecting urban poverty.

Despite the steady growth in Gross Domestic Product (GDP), successive Household Income and Expenditure Surveys (2005 to 2010 and 2010 to 2016) suggest that the rate of poverty reduction has been slowing down while the absolute number of extreme poor have been increasing in urban Bangladesh. Given the accelerating rate of urbanization, it suggests that more people live in extreme poverty in 2016 than they did in 2010. With nearly 44% of the country’s population projected to be living in an urban setting by 2050, this issue is only likely to intensify.  

Several factors may be driving this trend. Absence of education and skills dampen labor market participation and productivity. Among those who participate in the labor-force in urban areas, 19% of men and 28% of women are illiterate. For those who received at least some training, a recent study shows that only 51% of eighth-grade students met equivalent competency in the native language subject (Bangla). The figures were markedly lower for other subjects. Similar trends carry through to technical diploma and tertiary level institutes. As a result, many prospective employers report reluctance to hiring fresh graduates.

Milk fortification in India: The journey so far

Edward W. Bresnyan's picture
 NDDB
In India alone, 185 million people don’t get enough nutrients. This hidden hunger is especially pervasive among children. as more than 70 percent of India’s children under five are deficient in Vitamin D, and 57 percent of all children in the country lack adequate levels of Vitamin A. Credit: NDDB
Globally, more than two billion people are deficient in key micronutrients, which are essential to their good health.
 
In India alone, 185 million people don’t get enough nutrients.
 
This hidden hunger is especially pervasive among children. More than 70 percent of India’s children under five are deficient in Vitamin D, and 57 percent of all children in the country lack adequate levels of Vitamin A. 
 
These deficiencies have contributed to high levels of stunting, wasting and underweight children.
 UNICEF 
Global micronutrient deficiency (as a percentage of the population). Two billion people in the world lack key micronutrients such as Vitamin A or iron. South Asia has the most critical malnutrition levels. Source: UNICEF 


Micronutrient availability can make or break a balanced diet
 
If accessible and affordable, nutritional supplements taken in the form of capsules or tablets can mitigate the symptoms of hidden hunger. But they can become toxic if consumed in large amounts.  
 
Unlike supplements, food fortification is a simple, preventive and low-cost approach to curb micronutrient deficiencies.
 
But except for mandatory iodine fortification of salt, India lags in adopting food fortification as a scalable public health intervention.  
 
This is a missed opportunity as a glass of fortified milk (320g) can provide approximately 34 percent of the recommended daily allowance of Vitamin A and 47 percent of Vitamin D.
 
In 2016, the Food Safety and Standards Authority of India released standards for the fortification of five staple food items: rice, wheat, salt, oil, and milk. Further to that, regulations are now in place to fortify milk variants such as low fat, skimmed, and whole milk with Vitamin A and D.   
 
But despite its significant health benefits, and while established for more than three decades by companies such as Mother Dairy, a subsidiary of the National Dairy Development Board (NDDB), milk fortification is not yet common practice across the Indian milk industry.
 
To fill that gap, NDDB partnered in 2017 with the South Asia Food and Nutrition Security Initiative (SAFANSI), the World Bank, and The India Nutrition Initiative, Tata Trusts to explore the possibilities of large-scale milk fortification in India.
 
Over the last twelve months, this collaboration has enabled ten milk federations, dairy producer companies, and milk unions across the country to pilot milk fortification for their consumers. Fifteen others have initiated the process.

Act now for a brighter future for the Afghan people

Hartwig Schafer's picture
Also available in: دری | پښتو
Today, over 8.5 million students attend school–over 40% of them girls
Photo Credit: Rumi Consultancy/ World Bank

In 2001, only one million Afghan children attended school–none of them girls. Today, over 8.5 million students attend school–over 40% of them girls.

Amina, a 9th grade student, is one of over 3 million girls that now attend school through the contributions of the Afghan people and support from the international community.

"I have seen many improvements at my school. We are learning more now through better teaching methods and materials,” she said. Amina is one of the millions of Afghans whose lives have improved and has great hopes for the future.

As the first country that I visited after becoming the World Bank’s Vice President for the South Asia Region in July 2018, Afghanistan impressed me with its resilient people and achievements in spite of challenges, notably in education, health, and infrastructure.

The country has immense potential. Located in the center of a fast-growing region blessed with a young population and abundant natural resources, Afghanistan can achieve rapid growth and huge improvements in living standards through sound planning and tight implementation.

رویدست گرفتن اقدامات عملی، یگانه راه جهت تأمین آینده روشن برای افغانها

Hartwig Schafer's picture
Also available in: English | پښتو
Today, over 8.5 million students attend school–over 40% of them girls
امتیاز عکس: شرکت مشورتی رومی/ بانک جهانی

در سال ۲۰۰۱ میلادی صرف یک میلیون متعلم شامل مکاتب در افغانستان بودند، که تمام آنان را پسران تشکیل میداد. اما امروز تعداد متعلمین در مکاتب این کشور به بیشتر از ۸،۵ میلیون تن رسیده، که از این جمله ۴۰ درصد آنها را دختران تشکیل میدهد.
 
آمنه، متعلم صنف نهم، یکی از ۳ میلیون دختر امروز قادر است با پشتیبانی مردم افغانستان و به حمایت جامعه جهانی به مکتب برود. وی میگوید: "شاهد ترقی و پیشرفت های زیادی در محیط درسی مکتب ما هستم. با تغییر در روش های تدریس و فراهم سازی مواد درسی جدید، حالا ما میتوانیم بیشتر و بهتر بیاموزیم." آمنه، یکی از میلیون ها دختر افغان است که زندگی اش در مقایسه با گذشته بهبود یافته است و امیدواری زیادی برای تحکیم یک آینده مرفه در افغانستان دارد.  
 
پس از آنکه در ماه جولای سال ۲۰۱۸ میلادی به حیث معاون بانک جهانی برای کشور های جنوب آسیا شروع بکار نمودم، اولین سفر کاری ام  به افغانستان بود. با آنکه هنوز هم افغانستان با چالش های زیادی مواجه است، اما پیشرفت و دست آورد ها در سکتور های مختلف از جمله صحت، معارف، ایجاد و بازسازی زیر بنا و از همه مهمتر تلاش و استقامات بی شائبه افغانها در برابر مشکلات و موانع، چشمگیر است.
 
افغانستان دارای ظرفیت های بالقوه برای رشد اقتصادی می باشد که میتوان از آن جمله موقیعت ستراتیژیک جغرافیایی این کشور، موجودیت نیروی جوان کار و دسترسی به منابع  سرشار طبیعی را از عوامل کلیدی و تاثیر گذار برای تأمین رُشد و توسعه اقتصادی پایدار در این کشور عنوان کرد. با استفادۀ مطلوب از این ظرفیت ها و تطبیق درست برنامه ها، افغانستان میتواند به رُشد اقتصادی سریع و بهبود همه جانبۀ در شرایط زندگی افغان ها نایل گردد.

د عملي اقدامونو ترسره کول، د افغانان لپاره د یوې روښانه راتلونکې د تامین لپاره یوازنۍ لاره

Hartwig Schafer's picture
Also available in: English | دری
Today, over 8.5 million students attend school–over 40% of them girls
انځور: رومی شرکت/ نړیوال بانک

په ۲۰۰۱ زېږدیز کال کې د افغانستان په ښوونځیو کې د زده کوونکو د  شمیر یوازې یو میلیون تنو ته رسېډه، چې ټول یې هلکان و. خو نن ورځ د هېواد په ښوونځیو کې د زده کوونکو شمېر څه باندې ۸،۵ میلیون تنو ته لوړ شوی، چې له دې ډلې څخه ۴۰ سلنه یې نجونې دي.
 
آمنه چې د نهم ټولګي زده کوونکې ده، لکه ۳ میلیون نورې نجونې اوس دا وړتیا لري څو د افغانستان د خلکو په مرسته او د نړیوالې ټولنې په ملاتړ ښوونځي ته ولاړه شي.
 
نوموړې وایي: "د خپل ښوونځي په درسي چاپېریال کې د زیاتو پرمختګونو او بدلون شاهده یمه. په تدریسي چارو کې مثبت بدلون او د نوي درسي توکو په برابرولو سره، اوس موږ کولای شو، څو په غوره توګه خپلې زده کړې ترسره کړو." آمنه یوه له میلیونونو افغان نجونو څخه ده چې ژوند یې د پخوا په پرتله بدلون موندلی او په افغانستان کې د یوې سوکاله راتلونکې د رامینځته کېډو لپاره ډېره هیله منه ده.

وروسته له هغه چې په ۲۰۱۸ کال کې د سویلي آسیا د هېوادونو لپاره د نړیوال بانک د مرستیال په توګه مې په کار پېل وکړ، لومړنۍ کاري سفر مې افغانستان ته ترسره کړ. که څه هم چې افغانستان له زیاتو ستونزو سره مخامخ ده، خو پرمختګونه او لاسته راوړنې يې په بېلابېلو سکتورونو کې لکه، روغتیا، ښوونه او روزنه، د زیربناوو بیا رغول او له ټولو مهمه د ستونزو او خنډونو په وړاندې د افغانانو استقامت او ژمنتیا د ستایلو وړ دي.
 
افغانستان د اقتصادی ودې لپاره یو شمېر بالقوه ظرفیتونو، لکه د مخ په ودې هېوادنو په مینځ کې ستراتیژیک جغرافیايي موقیعت، د ځوان کاري ځواک شتون او پراخو طبیعي سرچینو ته لاسرسۍ څخه برخمن دي چې کیدای د دې هېواد د اوږد مهاله اقتصادي پراختیا او ودې لپاره کلیدي او اغېزمن عواملو ته بدل شي. له دغو ظرفیتونو څخه د غوره ګټه اخیستنې او د پراختیايي پروګرامونو په هراړخیز تطبیق سره به افغانستان دا ځواک ترلاسه کړي څو په چټکۍ سره اقتصادي وده  وکړي او د افغانانو په ژوند کې پراخ بدلون رامینځته  شي.

An update on Bhutan’s economy

Tenzin Lhaden's picture
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development
Accelerating the reform momentum after the 2018 elections is key to consolidating and furthering Bhutan’s development. Credit: World Bank

Bhutan is one of the smallest, but fastest-growing economies in the world.
 
Its annual average economic growth of 7.6 percent between 2007 and 2017 far exceeds the average global growth rate of 3.2 percent.
 
This high growth has contributed to reducing poverty: Extreme poverty was mostly eradicated and dwindled from 8 percent in 2007 to 1.5 percent in 2017, based on the international poverty line of $1.90 a day (at purchasing power parity).
 
Access to basic services such as health, education and asset ownership has also improved significantly.
 
The country has a total of 32 hospitals and 208 basic health units, with each district hospital including almost always three doctors.
 
The current national literacy rate is 71 percent and the youth literacy rate is 93 percent.
 
The recent statistics on lending, inflation, exchange rates and international reserves (Sources: RMA, NSB) confirm that Bhutan maintained robust growth and macroeconomic stability in the first half of 2018.  

Gross foreign reserves have been increasing since 2012 when the country experienced an Indian rupee shortage.
 
Reserves exceeded $1.1 billion, equivalent to 11 months of imports of goods and services, which makes the country more resilient to potential shocks.
 
The nominal exchange rate has been depreciating since early 2018 (with ngultrum reaching Nu. 73 against the US dollar in early November).

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