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Private Sector Development

Taking digital banking services to remote villages in north eastern India

Priti Kumar's picture
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions. Photo: World Bank

Until six months ago, people in the remote corners of India’s Himalayan state of Sikkim had to travel long distances over the hillsides to do simple banking transactions.

When they did reach a bank, it was usually overcrowded and understaffed. This made it difficult for rural folk, unfamiliar with formal financial systems to deposit or withdraw money, let alone borrow to meet their needs.
 
Now change is in the air. Ever since the North East Rural Livelihoods Project (NERLP) - supported by the World Bank - helped banks in Sikkim’s western and southern districts engage local women self-help group (SHG) members as their business correspondents, people in these distant parts have been able to bank at their doorsteps.
 
While the concept is not new in India, the two correspondents - one for each district - have proved to be nothing short of a miracle for this far-flung region. They have fanned out across mountain villages, equipped with palm-sized micro-ATMs, biometric readers, and internet-connected thermal printers. Villagers can now deposit their money easily, earn interest, and withdraw whenever needed.
 
In the six months since the correspondents were first introduced, business has soared. “In November 2018, when we first began, I did about 160 transactions worth Rs.1.2 million. As awareness has grown, this has risen steadily, and in March 2019 I did over 260 transactions worth Rs. 2.4 million,” explained Lila Shilal, business correspondent for the IDBI Bank in West Sikkim’s Jorethang block.
 
Shilal has also benefitted in the process. She has started earning more than Rs.10,000 a month from the bank in transaction fees and commission and has used the amount to set herself up as an entrepreneur.
 
The project has introduced another financial service as well, this time at the bank itself. Here, bank sakhis - or female banker friends – help village folk and SHG members fill out forms and apply for loans.
 
This new cadre of women business correspondents and bank sakhis has not only benefitted local communities and given SHG members a new livelihood opportunity, it has also made life simpler for the region’s bankers.

Improving Pakistan’s public and private investment

Muhammad Waheed's picture
Pakistan is not investing enough and its share of investment to GDP is one of the lowest in the world at 15 percent almost half of the South Asian average at 30 percent. This translates into inadequate infrastructure, lack of access to sufficient levels of energy and water, poor quality of schools and hospitals. Photo: World Bank

This blog is part of a series that discusses findings from the [email protected]: Shaping the Future report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

Pakistan’s economy is unable to sustain high growth rates for extended periods. Every few years, the economy is faced with a balance of payments crisis as it tries to grow fast.

This is unlike many other successful peer countries that are growing at higher rates for a longer time.

This inability to sustain growth momentum has dented Pakistan’s ambitions to become a middle-income country. What is the reason for this boom and bust cycle that Pakistan experiences so often?
 
The fundamental cause for these short-lived growth cycles in Pakistan is that these are propelled by private and government consumption, not by higher investment.

Resultantly, the country’s demand increases at a much higher pace than its supply of goods and services, prompting a need for higher imports which becomes unsustainable.

Successive governments have tried to notch up growth in this way, but all of them have ended with a balance of payments crisis.
 
Pakistan is not investing enough and its share of investment to GDP is one of the lowest in the world at 15 percent , almost half of the South Asian average at 30 percent. This translates into inadequate infrastructure, lack of access to sufficient levels of energy and water, poor quality of schools and hospitals.
 
More worryingly, private investment as a share of GDP has been declining and stands at less than 10pc in FY18. This low investment trap and declining labor productivity have reduced Pakistan’s growth potential.
 
The decline in the economy’s growth potential is particularly concerning because it suggests that the country will not be able to grow at higher rates required for job creation. To correct this Pakistan needs to undertake several reforms in multiple areas to increase labor productivity and capital formation.
 
The foremost priority is that Pakistan must maintain macroeconomic stability. Persistent macroeconomic instability has discouraged savings and private investment in the country resulting in low-aggregate investment and fluctuating output levels.

Accelerating Pakistan’s structural transformation

Siddharth Sharma's picture
Pakistanat100 Shaping the Future report
Photo: World Bank

This blog is part of a series that discusses findings from the [email protected]: Shaping the Future report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

Structural transformation is central to how countries grow rich.

The movement of jobs from agriculture to manufacturing and service industries is the first stage of that transformation.

Then, within industries, a process of creative destruction helps weed out unproductive firms and gives rise to more efficient and innovative ones.

Of course, no two countries have the same growth path. But those that succeed at sustaining growth do so by moving resources to more productive areas and building firm capabilities.

Pakistan’s economy is shifting toward more highly skilled, modern and productive industries but the path is uneven and slow relative to global norms.

The economy is less agricultural, more urban and services-oriented than before. Traditional industrial clusters have started exporting new products, while new industries such as information, communications and technology (ICT) are emerging.

Relative to the historical norm for countries at similar levels of per capita GDP, while Pakistan’s agricultural sector is of typical size, its manufacturing sector is small, and the services sector large.

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.  

Should women get a job? “Yes...but” say Pakistani men

Saman Amir's picture
A large number of Pakistani women waiting to get relief money for her own business work at Lahore, Pakistan.
Pakistani women in Lahore, Pakistan. Photo: A M Syed, Shutterstock

 
This blog is part of a series examining women’s economic empowerment in South Asia.

In patriarchal societies—as in most of Pakistan—men exert much influence over the lives of their female relatives and almost always have exclusive control over household income.
 
Having a supportive father or husband is therefore critical for women and determines their choices and work opportunities, especially outside the home.

Conversely, men reluctant to see women in the workplace can derail progress toward greater participation of women in the labor force.
 
As part of the Women in the Workforce study, we interviewed a purposively selected group of men in Karachi, Lahore, Quetta, and Peshawar on their thoughts on women’s work outside the home.[1]
 
Despite the constraints of a purposive sampling technique, a few broad themes emerged from these interviews that can be relevant to anyone advocating for women’s economic empowerment.
 
As anywhere in the world, men’s attitudes toward women’s work were varied. 
 
Some men we spoke to expressed support for women’s work for economic gain.
 
The most common reason was the urgent need for a double income to maintain the household’s living standards in a fast-changing economy.

Shaping a brighter future for Pakistan

Illango Patchamuthu's picture
Pakistan needs to think big on investing in its people
Pakistani girls attending a primary school. Photo: World Bank
This blog is part of a series that discusses findings from the [email protected]: Shaping the Future report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 
 
In 28 years, Pakistan will turn 100 years old. The children born this year will be adults then.

I wonder what they will see when they look around. Will they see a country teeming with opportunity? Or will they be in a country that does not offer enough jobs and does not provide the needed skills to compete?

Some of them may well be new parents at 28. Will they be able to look at their own children, and see a brighter future for them?

Pakistan has some important decisions to make if it wants to give its children the future they deserve.

If the country can make the right decisions now, Pakistan can accelerate and sustain growth to become a confident upper middle-income by the time it turns 100. It’s ambitious but possible.

Other countries –South Korea, China, and Malaysia – have transformed their economies within a generation, and there is no reason why Pakistan cannot achieve the same.

The alternative is not inspiring. If the country fails to accelerate and sustain growth as well as control population growth, by 2047 income levels will be close to where they are today and with challenges similar to what they are today.

I like to imagine another Pakistan, in which stunting and malnutrition are gone, in which family background does not determine what job you can get, women compete equally with men, businesses thrive, and Pakistan competes with the likes of Shanghai or Singapore as a trading hub.

Last month we launched a report, [email protected]: Shaping the Future, which looks at some of the reforms needed to accelerate and sustain growth and transform Pakistan’s economy.

Now is the time to come together and see what needs to be done to achieve this goal. A growth narrative for Pakistan needs to rest on these four elements: investing in people; using resources more efficiently; caring for the environment; and finally, improving how Pakistan is run to support growth and the implementation of difficult reforms.

Pakistan needs to think big on investing in its people.

Nepal’s promise and opportunities

Hartwig Schafer's picture
Nepal is in many ways emerging from that disaster as a new country
Photo: World Bank

Nepal is on the brink of a new era. Four years ago this April, the powerful Gorkha earthquake devasted parts of Nepal and shook Kathmandu to the core.

Today, Nepal is in many ways emerging from that disaster as a new country: It is young, with more than 40 percent of Nepalis in the 16-40 age group.  It is ambitious, with plans for new highways, new mass transit infrastructure, new airports, more trade, more energy, and growth.

And it is resilient. Last November, I watched people literally building back their lives from the ruins in Ramechhap, one of the earthquake’s hardest-hit districts. Much has been said about the strength of the Nepali people. I’m humbled to have witnessed it firsthand.

With each visit to Kathmandu, I’m increasingly impressed by the dynamism of the city and the aspirations of Nepal’s young people. They are eager for education, for opportunity. They shouldn’t have to leave Nepal to get it.

As investors gather for the Nepal Investment Summit, this is the perfect time for Nepal to send a message to the world -- that Nepal is back on its feet and looking ahead to a more prosperous future.

With a stable government and an ambitious economic plan, Nepal is, for the first time in decades, in a position to dream big and to carry out a long-term vision that includes more and better services and opportunities for people.

Things are moving in the right direction. Extreme poverty is expected to decline from 15 percent in 2010 to a 10 percent in 2019, based on a poverty line of $1.90 a day. Economic growth in the last three years has been robust

The goal of becoming a middle-income country by 2030 -- in just 11 years – is possible.

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.  

Sri Lanka’s women want to work—and thrive in the workplace

Idah Z. Pswarayi-Riddihough's picture
A woman hand painting fabric in a local Batik fabric factory
A Sri Lankan woman is hand painting fabric in a local Batik fabric factory. Matale, Sri Lanka. Credit: Shutterstock. January 3, 2017.

It’s International Women’s Day today, and there is a lot to celebrate in Sri Lanka and beyond.

Being a woman, mother, sister, aunt – name it, it’s something women wake up to daily and they love it.  None of them question about being enumerated for these roles.  We marvel and revel in the roles. 

But make no mistake. Women are also very capable breadwinners, contributors to the economies, innovators and entrepreneurs amongst many other roles.

Women want to work, and they want to stay in the workplace. 

What they seek is balance: a gender-balanced workplace, a gender-balanced management, and more gender-balance in sharing wealth and prosperity. 

In that sense, it’s heartening to see some of the proposals put forth in the government of Sri Lanka’s budget: more daycare centers, flexible work hours, and incentives to promote maternity leave. 

These are very welcome changes to think equal, build smart, innovate for change—the 2019 International Women's Day campaign theme—and we encourage those with jobs to implement these policy changes. 

This year, let me share with you a quick analysis of five laws that Sri Lankan women and their advocates have identified as constraining for joining the workforce and staying there! 

Skilling up Bangladeshi women

Tashmina Rahman's picture
Learning new skills for better jobs in Bangladesh: Meet Kamrul Nahar Omi


The Bangladesh garments industry is poised to grow into a $50 billion industry by 2021 and for this, two million semi-skilled workers are needed.

Non-garment industries such as leather, furniture, hospitality and Information & Technology (IT) are also poised to grow.

But how can we think equal, build smart, innovate for change, the theme of this year’s International Women’s Day? 

Female participation in the workforce has been increasing but remains less than half of male participation rates across primary working ages.

Of those females joining work, over 80 percent are engaged in low-skilled, low-productivity jobs in the informal sector with little opportunity for career progression.

Technical and vocational education and training (TVET) is one important medium to equip women with employable skills and improve their job market participation.  

Overcoming the perception of TVET as ‘male-dominated’ training, women’s participation in technical programs has been steadily rising over the past decade.

Yet, Bangladesh still has a long way to go with female share in enrollments around 25 percent in TVET programs.

In fact, a World Bank study identifies some keys areas of intervention for improving female participation in technical diploma programs:

  1. creating a gender-friendly environment in polytechnics and workplaces;
  2. developing more service-orientated diploma programs;
  3. developing a TVET awareness campaign for females;
  4. (supporting a career counseling and guidance system for females;
  5. improving access to higher education;
  6. providing demand-stimulating incentives; (vii) generating research and knowledge;
  7. leveraging partnerships to promote opportunities for females and
  8. generating more and better data to track progress and inform policy and operations for female-friendly TVET. 

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