Today I joined leaders and representatives from 70 countries and 20 international organizations and agencies at the Brussels Conference on Afghanistan. Together with its development partners, the World Bank Group pledged its continued support to the Afghan people and outlined a course of action to help all Afghans realize their dream of living in peace and prosperity.
Afghanistan has come a long way since 2001 and has made much progress under extremely challenging circumstances: life expectancy has increased from 44 to 60 years, maternal mortality has decreased by more than three quarters and, from almost none in 2001, the country now counts 18 million mobile phone subscribers.
Yet, enormous challenges remain as nearly 40 percent of Afghans live in poverty and almost 70 percent of the population is illiterate. This is made worse by growing insecurity and the return of 5.8 million refugees and 1.2 million internally displaced people. Much also remains to create jobs for the nearly 400,000 people entering the labor market each year.
To that end, here are five priorities we need to address to ensure a more prosperous and more secure future for all Afghans:
Sri Lanka amazes me in many ways, with its smiling faces among a rich tapestry of cultures, diversity, and natural wonders. On this fourth visit and first time in the Northern Province, I once again found a resilient and industrious people eager to build their lives and advance the country together.
As Sri Lanka recovers from an almost three-decade long conflict, much progress has been made. I am proud that the World Bank Group has been a close and trusted partner with the country to help restore lives, livelihoods, and unlocking the potential of all of its people, inclusive of men and women, diverse geographic locations, as well as different ethnic and religious backgrounds.
The China sourcing conundrum
In conversations with U.S. and European retailers and brands, ELEVATE – a company formed in 2013 to support corporate social responsibility – finds that apparel buyers rate diversifying away from China as one of their top three sourcing goals.
This is not to suggest that there is a desire to exit China – which currently holds by far the largest share of global apparel trade, at 41 percent – but rather a need to significantly reduce dependence on product from China, owing to rising costs, factory closures, unenthusiastic second generation family ownership, new attitudes about working in factories, and a perception that China wants to move to higher-value manufacturing. Sourcing and procurement organizations feel uncertain, and uncertainty is not a friend of supply chains.
The problem is that for all its uncertainty, China still has a huge base of factories, a well-developed transport infrastructure, and a comprehensive eco-system that supplies cut-and-sew operations, and management that has matured with years of experience. Even if a buyer would like to give another country an opportunity, many corporate risk managers view certain countries or regions as quite challenging for doing business.
South Asia could seize this opportunity by better meeting requirements – besides competitive costs – that are vital to global buyers. These include: (i) quality, which is influenced by the raw materials used, skill level of the sewing machine operator, and thoroughness of the quality control team; (ii) lead time and reliability, which are greatly affected by the efficiency and availability of transportation networks and customs procedures; and (iii) social compliance and sustainability, which has become central to buyers’ sourcing decisions in response to pressure from corporate social responsibility campaigns by non-governmental organizations, compliance-conscious consumers, and, more recently, the increased number of safety incidents in apparel factories.
Surveys of global buyers show that East Asian apparel manufacturers rank well above South Asian firms along these key dimensions, as noted in a new World Bank report on apparel, jobs, trade, and economic development in South Asia, Stitches to Riches (see table). So, what can South Asia, which now accounts for only 12 percent of global apparel trade, do to become a bigger player? An encouraging recent development is that buyers have started collaborating to facilitate new sourcing possibilities – as the case of Bangladesh illustrates.
“Despite the global slowdown, India has been one of the few countries to have shown remarkable growth in the last financial year. While this has been an achievement in itself, this growth rate can be taken to double-digits.” This was the key message of Dr. Frederico Gil Sander, Sr. Country Economist, World Bank Group, New Delhi. Dr. Gil Sander was speaking to students at the IIM Ahmedabad as part of the World Bank - IIM Discussion Series. The discussion centered around “Financing Double-digit Growth: Current and Long-term Challenges of India’s Financial Sector”.
Dr. Gil Sander noted that urban consumption and public investment have been the key drivers for current growth. Additionally, a good monsoon this year is expected to give a boost to rural consumption. These, coupled with the promised emphasis on supply-side factors such as labour reforms, the inclusion of more women in the labour force, and the timely implementation of GST can boost economic growth. To further increase this growth rate, potentially to double-digits, these drivers will first have to be augmented by productive capacity investment, which in turn depends on ease of credit availability from banks. However, credit growth in India is marred primarily by high lending rates, priority sector lending regulations and rising non-performing assets (NPAs).
Blog 12: Key lessons on road to sharing prosperity
India is home to the largest number of poor people in the world, as well as the largest number of people who have recently escaped poverty. Over the last few weeks, this blog series has highlighted research from the World Bank and its partners on what has driven poverty reduction, what still stands in the way of progress, and the road to a more prosperous India.
This is the last blog in the #Pathways2Prosperity series. You can read all the blogs in this series and keep contributing to the discussion around #WhatWillItTake to #EndPoverty in India.
A thorough review of India’s experience in reducing poverty over the last two decades confirmed some of our previous understanding, but it also revealed new, unexpected insights. On the confirmation side, we found that poverty in India, as in other parts of the world, is associated with a lack of assets at the household level, and especially with limited human capital.
At the national level, 45 percent of India’s poor are illiterate, whereas another 25 percent have a primary education at most. Further down several Indian states, including a few high-income ones, show stunting and underweight rates that are worse than the averages for sub-Saharan Africa. While multiple factors lie at the root of the nutrition challenge, the prevalence of diarrheal disease is thought to be one of the main culprits, and diarrhea is triggered by poor hygiene. Only 6 percent of India’s poor have tap water at home, and a little more than a fifth have a latrine or some form of improved sanitation.
From this perspective, investing in education, health and the delivery of basic services for India’s most disadvantaged people remains a key priority. Investments of this sort would enhance the human capital of the poor, hence increase their chances to prosper.
In India’s southern state of Tamil Nadu, I met young ex-farmers who had moved out of farm jobs and were now working in factories and government offices. Their day to day circumstances weren’t all that different from millions of others around the world.
But yet, the people I met were remarkable. There was the disabled young man who, with skills training, found an IT job and a life outside his home, and is now supporting his mother. There were also women Self Help Group (SHG) members who, with support from their female Panchayat Leader, Pushpa, were helping to better the lives of their communities. They worked to improve water supply, build toilets and boost sanitation, and also found jobs in agro-processing.
My time in India made it clear to me that opportunity can change lives - especially in rural areas, where 78% of the country’s poor people live.
Opportunity can come in various forms. It can come in the form of social empowerment - by giving voice to groups that are often marginalized, such as women, youth and disabled people.
It can also come in the form of jobs - through skills training, job placement programs and other services that help people secure formal employment.
Jobs and social empowerment are two different opportunities. But they can be related: They both share transformative effects that are positive, and can multiply in unexpected directions.
For example, as women gain more confidence, their voices are listened to on a variety of matters within the home - such as on family planning and how to spend family incomes - improving the lives of their children and their families. Collectively, the power of their voices expressed through SHGs and other groups can bring about change on a larger scale, impacting the wider community as a whole.
Jobs, too, are known to have transformative effects. They give people the economic resources to improve their quality of life, open up new opportunities and enable them to engage with the outside world.
On a fine Tuesday morning Roghan Devi, a routine road maintenance worker from Dhanusha district visits the local branch of Mega Bank - a commercial bank in Nepal, to receive her monthly salary. She was notified about this through a text message in her mobile phone. Just a few years back, it was unimaginable for her, and for most of the women from her community, to have a personal bank account.
This initiative is part of a World Bank-supported Strengthening National Rural Transport Program (SNRTP) project that works in 33 districts employing over 1,800 routine maintenance workers- over 70% of them are women - to enhance the availability and reliability of transport connectivity for rural communities. To support this initiative, SNRTP forged a joint collaboration with the private sector.