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 7.0 percent in 2015, up from 6.8 percent in 2014, and is projected to accelerate to 7.1 percent in 2016 and 7.2 percent in 2017. 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.

World Bank Assistance

The Bank delivered 50 projects totaling $8.8 billion in fiscal 2016, including $5.1 billion of IDA commitments (of which $225 million went to the IDA Scale-up Facility) and $3.6 billion in IBRD loans. Lending included such transformational operations as the $1.5 billion Swacch Bharat Mission Support Operation, which seeks to end open defecation in India; a $920 million package of IDA and IBRD funding that supports competitiveness and structural reform in Pakistan; the $360 million Bangladesh Regional Waterway Transport Project; and the $250 million Afghanistan Trans-Hindukush Road Connectivity Project. The Bank also delivered 166 advisory services and analytics (ASA) products and approved 15 large Recipient Executed Trust Funds (RETF) operations, $1.7 billion of which went to Afghanistan.

Last Updated: Nov 08, 2016

Focusing on the drivers of sustainable growth

Sustainable growth of more than 7 percent a year is needed in South Asia if the region is to meet its goals by 2030. To help it do so, the Bank’s regional strategy focuses on private sector development (with a focus on infrastructure, job creation, and urbanization); social and financial inclusion (with a focus on labor force participation and gender); governance and security; and enhanced regional cooperation. The Afghanistan Trans Hindukush Road Connectivity project, the India Bihar Transformative Development Project, the Pakistan Power Sector Reform Development Policy Credit, and the Sri Lanka Competitiveness Development Policy Loan are examples of operations aligned with these pillars.

Adopting a new Regional Gender Action Plan (RGAP)

This year the Bank adopted a new RGAP for South Asia covering fiscal years 2016–20. It prioritizes closing gender gaps and improving human capital outcomes, spurring economic empowerment, and giving women voice and agency. The cornerstone of the plan is efforts to increase female labor force participation rates; create more and higher-skill jobs for women; and make finance, trade, and private enterprise more inclusive of women. The $290 million Bihar Transformative Development project in India will mobilize women from the poorest households in self-help groups and federations so that they can gain access to formal credits, join farmer producer groups, and increase household savings.

Addressing global climate change

A third of the Bank’s lending addressing climate change and 40 percent of its lending for disaster risk management goes to South Asia. A $113 million Weather and Climate Services project, for example, aims to increase Bangladesh’s capacity to deliver reliable weather, water, and climate information services by strengthening hydro-meteorological monitoring and forecasting and improving early warning systems. Bank support will support agro-meteorological services to farmers in order to increase their productivity and help them cope with weather and climate extremes.

Supporting jobs, improving governance and security

The $100 million Pakistan Punjab Jobs and Competitiveness Program for Results seeks to improve the business environment and support high-potential industrial clusters in Punjab. The $75 million Federally Administered Tribal Areas (FATA) Temporarily Displaced Persons (TDPs) Emergency Recovery Project is supporting the recovery of families affected by the security crisis in these areas, promote child health, and strengthen emergency safety net delivery systems. The $41 million Second Public Financial Management Reform (PFMR II) Project for Afghanistan is strengthening Afghanistan’s procurement, treasury, and audit systems.

Producing cutting-edge knowledge

The South Asia region published several important reports this fiscal year. Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Livability argues that inadequate provision of housing, infrastructure, and basic urban services, as well as a failure to deal with pollution, are constraining the potential of the region’s cities to fully realize the benefits of agglomeration. Stitches to Riches? Apparel Employment, Trade, and Economic Development in South Asia investigates the potential for expanding and improving jobs in the labor-intensive apparel sector.

The Bank held a South-South Knowledge exchange forum in Beijing in November 2015. Delegations from South Asia shared lessons from Pakistan’s Benazir Income Support Program and Bangladesh BRAC’s Manoshi program for maternal, newborn, and child health, implemented in urban slums. Extensive knowledge exchange also took place in the energy sector.

Last Updated: Nov 08, 2016

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

  • Afghanistan: To  help regions realize their development potential, the $250 million dollar Trans-Hindukush Road connectivity project is helping develop existing mountain crossings into dependable, all-season roads that will allow vital transport of passengers and goods to cross the Hindukush mountain range throughout the year. 
  • Bangladesh: Employment Generation Program for the Poorest, established in response to the 2008 global food price crisis, provided a secure and regular source of income to more than 700,000 of the poorest people, of which more than 230,000 are female
  • 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: Nov 08, 2016

More Photos »