Overview

  • South Asia remains the world’s fastest-growing region although capital inflows declined, inflation has been on the rise, and remittances from oil-exporting countries started to weaken. Economic growth rose to 6.9 percent in 2015, up from 6.7 percent in 2014, and is projected to slightly lower at 6.7 percent in 2016. It will accelerate to 6.8 percent in 2017 and 7.1 percent in 2018.  Growth was especially strong in India, which continues to lead in performance among large emerging market economies.

    Strong growth has translated into declining poverty and impressive improvements in human development. The proportion of people living on less than $1.90 a day was estimated at 18.8 percent as of 2012. Hundreds of millions still live slightly above the poverty line; however, more than 200 million live in slums, and about 500 million go without electricity. In addition, many countries in the region suffer from extreme forms of social exclusion and huge infrastructure gaps, and the larger countries are experiencing increases in inequality. Development in the region will be key to meeting global poverty and prosperity goals.


    GDP (current US$)


    World Bank Assistance

    The World Bank approved $6.0 billion in lending to the region for 51 projects in fiscal 2017, including $2.2 billion in IBRD loans and $3.8 billion in IDA commitments, of which $0.9 billion came from the IDA Scale-Up Facility. The Bank also delivered 122 advisory services and analytical products, providing technical advice on such issues as competitiveness, energy sector reform, and fragility. The Bank’s regional strategy continues to emphasize sustaining inclusive growth at a high rate. It focuses on providing support to private sector development through such actions as climate-resilient investments, greater social and financial inclusion, strengthening governance, and addressing fragility. 

    Last Updated: Aug 03, 2017


    GNI per capita, Atlas method (current US$)

  • Focusing on the drivers of sustainable growth

    South Asia still remains home to more than 300 mln of poor, which is a third of the global poverty headcount.  Economic growth may not be sustained as it is largely driven by consumption, not by investment or by exports, which would be needed to create jobs that absorb the new entrants to the labor market – estimated at between 1 million and 1.2 million every month for the next two decades.  The Bank’s regional strategy continues to focus on what needs to be done most to sustain inclusive growth at a high rate and is based on three pillars: (i) support to private sector development including climate resilient investments, (ii) greater social and financial inclusion, and (iii) strengthening governance and addressing fragility.

    Implementing its Regional Gender Action Plan (RGAP)

    The Bank is implementing its RGAP which is based on four pillars responding to the region’s most acute development needs – human capital, economic empowerment, voice-and-agency and regional capacity building and communication.  For example, the$ 63 million Socioeconomic Empowerment of Adolescent Girls & Young Women Project in Jharkhand, India, will support adolescent girls and young women, to complete their secondary level education and acquire relevant skills for the job market.  Also, gender approaches are operationalized across the board.  For instance, multi-modal connectivity projects are specifically addressing barriers that women face in using transport facilities including issues of safety, lighting, separate toilets and waiting areas.  

    Supporting essential resilience to climate change

    South Asia is highly vulnerable to the impacts of climate change, including climate-induced natural disasters and sea-level rise. Progress in South Asia depends on reducing carbon emissions, changing the energy mix, and mitigating climate change effects. The Bank is implementing a Climate Business Plan for South Asia in support of the countries’ Nationally Determined Contributions and their efforts to improve climate resilience.


    CO2 emissions (metric tons per capita)


    Promoting regional integration

    Regional integration and economic cooperation can enhance the prospects for poverty reduction and shared growth. Yet South Asia remains one of the least integrated regions. A $150 million Regional Connectivity Project aims to improve conditions for Bangladesh’s trade with Bhutan, India, and Nepal through improving connectivity, reducing logistics bottlenecks, and supporting the adoption of modern approaches to border management and trade facilitation.

    Supporting policy reforms

    The Bank supports countries’ reform agendas, particularly focusing on enabling the creation of markets and improving the efficiency of the public sector at the national and subnational levels. For example, in Pakistan, the World Bank is supporting the government’s energy policy to reduce the cost of electricity production and to improve the financial sustainability of the power sector through a series of Power Sector Reform Development Credits, investment operations, and technical assistance.

    Addressing fragility

    The World Bank is partnering with the United Nations to confront the challenges of forced displacement. For example, the Bank is augmenting its programs in Afghanistan and Pakistan that support refugees, internally displaced people, returnees, and host communities. It also approved operations designed to support vulnerable people in these countries, such as the $228 million Citizens’ Charter Afghanistan Project, which aims to reduce poverty and enhance living standards by strengthening community development councils. A $100 million loan for the Pakistan National Social Protection Program will strengthen the national social safety net system and enhance access to social services for the poor.

    Producing knowledge for improved competitiveness

    The Bank published several important reports on South Asia this fiscal year. Competitiveness of South Asia’s Container Ports: A Comprehensive Assessment of Performance, Drivers, and Costs provides unprecedented analysis of the situation at the region’s ports and the steps needed for improvement, including building greater private sector participation, improving the governance of port authorities, and creating more competition within and between ports. South Asia’s Turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse examines the region’s potential to boost the productivity and competitiveness of firms, and recommends reforms and investments

    Last Updated: Aug 03, 2017


    Gross enrollment ratio, primary, both sexes (%)

  • World Bank support has helped South Asia achieve the following results, among others:

    • Afghanistan: Bringing most of the efforts in public health service delivery under one umbrella in Afghanistan, the World Bank’s System Enhancement for Health Action in Transition (SEHAT) Project aims to support the implementation of a Basic Package of Health Services (BPHS) and Essential Package of Hospital Services (EPHS) through contracting arrangements across the country. SEHAT also supports efforts to strengthen the capacity of the Ministry of Public Health at central and provincial levels to effectively carry out its stewardship functions.
     
    • Bangladesh: Bangladesh has made remarkable gains in ensuring access to education in the past two decades. As of 2015, the country’s net enrollment rate at the primary school level is above 90 percent, and secondary school level is around 62 percent. With nearly 6.4 million girls in secondary school in 2015, Bangladesh is among the few countries to achieve gender parity in school enrollment, and has more girls than boys in secondary schools.
     
    • India: A $1.5 billion World Bank project approved in 2016 is supporting the rural component of India’s Swachh Bharat (Clean India) Mission, the largest-ever drive to improve sanitation in India. The project aims to end open defecation by October 2, 2019, the 150th anniversary of Mahatma Gandhi’s birth. 
     
    • Nepal: Vocational training provided to 4,400 young women leading to employment and economic independence
     
    • Pakistan: 2,370 MW power projects supported by IFC and MIGA with 4.4 m tons of CO2 avoided, to be complemented by planned Bank projects

     

    • Sri Lanka: Supporting conflict-affected communities: 1 million people living in 1,000 communities received support through 3,200 community infrastructure projects

    Last Updated: Aug 03, 2017

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Additional Resources

Contacts

Washington
Joe Qian
jqian@worldbank.org
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