South Asia has traveled a long way
South Asia has experienced a long period of robust economic growth, averaging 6 percent a year over the past 20 years. This strong growth has translated into declining poverty and impressive improvements in human development. South Asia’s real GDP growth accelerated to an estimated 8.7 percent in FY2010-11 from 7.0 percent in FY2009-10, buoyed by very strong growth in India, which represents 80 percent of the region’s GDP. These strong growth rates are driven by robust domestic demand, macroeconomic policy stimulus measures, and a revival in investor and consumer sentiment. Such development would not have been possible without the World Bank’s assistance in different sectors of society. Following is a brief insight:
World Bank and Rural Development
South Asia is home to 26% of the world’s youth who also represent 20% of the region’s population. This makes South Asia the youngest region in the world and each year between 2010 and 2015, an additional one million youth are expected to enter the labor market. However, there’s a growing gap between urban and rural areas as rapid industrialization in South Asia disproportionately benefits urban populations. Rural areas suffer from underemployment and low incomes and the people do not have access to job opportunities created by new industries; they continue to be relegated to work in the informal sector. Moreover, lack of educational opportunities both in the formal and informal sector for the rural youth across the region serves as a huge obstacle that the South Asian governments would not have been able to solve without the World Bank’s assistance.
The United Nations commemorated the International Year of Youth from August 11, 2010 to August 11, 2011. To promote youth participation towards progress and development, the Rural Livelihoods team at the World Bank put youth at the forefront of poverty reduction and maximizing rural growth.
The World Bank’s $1 billion National Rural Livelihoods Project (NRLP), which supports India’s National Rural Livelihoods Mission (NRLM), is helping link rural families living below the poverty level (BPL) find sustainable livelihoods opportunities. After being counseled and tested, interested and eligible rural BPL youth are offered skills development training or job placement according to their abilities through partnerships with public, private, nongovernment, and community organizations. These self-employed and entrepreneurial poor are then provided access to financial linkages to establish or strengthen successful micro-enterprises for products and services in demand. These platforms also offer space for convergence and partnerships with a variety of stakeholders and create a conducive environment for the poor to access their rights and entitlements, public services and innovations.
Investing in Infrastructure
Shortage of electricity remains one of the most critical constraints to sustained rapid growth in South Asia. To
address the problem, the Bank provided $130 million to Bangladesh during FY 10 to increase access to electricity through the installation of affordable solar home systems in rural areas. The credit supplemented an existing project that has connected 600,000 consumers to the electricity grid, constructed about 8,500 kilometers of new distribution, and provided 320,000 consumers with solar home systems since 2003.
To improve connectivity and boost opportunities for people in southwest Bangladesh, the World Bank approved a $1.2 billion IDA credit to Bangladesh for the Padma Multipurpose Bridge Project in the current fiscal year. Spanning the Padma River, the world’s third largest, the 6.1 km long bridge will connect nearly 30 million people in the southwest region to the rest of the country, enhancing their access to markets and services while accelerating growth in the country as a whole.
In India almost half of all households - 44 percent - lack access to electricity. To increase access and meet rising consumer demand, the Bank loaned $1 billion to Powergrid, the national power transmission utility, in fiscal 2010. The loan will help expand the power transmission network, especially in the western, northern, and southern parts of the country. The Bank also approved a $330 million loan to strengthen the electricity transmission and distribution system in the Indian state of Haryana. In addition, the Bank approved $430 million to finance the Mumbai Urban Transport Project 2A to further improve the suburban railway system in the Mumbai Metropolitan Region, one of the world’s largest urban centers, with a population of 18 million in 2010.
Pakistan experienced extraordinary rainfall in mid-July 2010 which continued until September 2010. The rains/floods affected over 20 million people, according to Pakistan’s National Disaster Management Authority. The Bank floods response consists of $300 million in critical import financing and $20 million for highways rehabilitation. In the wake of the floods, the Asian Development Bank and the World Bank jointly conducted the Damage and Needs Assessment, and it estimates that approximately $8.7 to $10.9 billion is required for the overall recovery and reconstruction costs associated with the floods.
Conflict and Post-Conflict Areas
In fiscal 2010, IDA and the International Monetary Fund agreed to $1.6 billion in debt relief for Afghanistan under the enhanced Heavily Indebted Poor Countries Initiative. The Bank also provided a $30 million grant to support a new initiative by the Afghan government designed to boost employment and incomes in rural areas, where 75 percent of the people live. The Bank continued its support to Afghanistan’s National Solidarity Program (NSP) with a $40 million grant for the program’s third phase, reaching 17 million rural people in all 34 provinces since it was introduced in 2003.
With the end of armed confrontations in May 2009, Sri Lanka is facing a historic opportunity for development and reconciliation. In fiscal 2010, the Bank approved a $77 million package designed to support the return of 100,000 internally displaced persons to their places of origin in the Northern Province and to restore their livelihoods, which had been destroyed by three decades of civil war. The Bank supported the rehabilitation of provincial roads in the eastern, northern, and southern Uva province with a $105 million credit. It also provided $75 million for the second phase of Gemi Diriya, a communitydriven development program that has touched the lives of nearly 1 million poor Sri Lankans in more than 1,000 villages.