South Asia has trav­eled a long way

Southasia - - Cover story -

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 Floods

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.

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