REGIONAL PERSPECTIVES

Growth in Sub-Saharan Africa is estimated at 2.5 percent for 2018, down from 2.6 percent in 2017. Although expected to rebound to 2.9 percent in 2019, growth remains insufficient to reduce poverty significantly. Although the poverty rate declined from 54 percent in 1990 to 41 percent in 2015, population growth at 2.6 percent per year has offset these gains, resulting in 130 million more poor people. 

Volatility in the global environment—trade tensions, protectionism, and recovering but uncertain commodity prices—continues to have a negative impact on African economies. Holding back growth within the region are macroeconomic instability, including poorly managed debt, inflation, and deficits; political and regulatory uncertainty; and conflict and fragility. For example, fragility in a few countries is costing the region nearly a half a percentage point of growth per year, or 2.6 percentage points over five years.

World Bank assistance

The World Bank approved $15.0 billion in lending to the region for 152 operations in fiscal 2019, (of which two were IBRD and IDA blended operations), including $820 million in IBRD loans and $14.2 billion in IDA commitments. Revenue from Reimbursable Advisory Services agreements with six middle- and high-income countries was $7 million. 

Our regional strategy weaves together five core focus areas for stronger development: boosting human capital and empowering women; expanding the digital economy; promoting regional integration; addressing fragility and building resilience to climate change; and mobilizing finance for development.

Strengthening human capital: a focus on women

Building human capital in Africa depends on women’s empowerment, and our Africa Human Capital Plan, launched in April 2019, seeks to help countries accelerate progress. We will increase our human capital investments by 50 percent, including $15 billion in new grants and concessional financing during fiscal 2021–23 to help drastically reduce child mortality to save 4 million lives, avert stunting among 11 million children, and increase children’s learning outcomes by 20 percent.

In Madagascar, we provided $165 million to help expand the safety net to alleviate poverty, build human capital, and strengthen resilience, with an emphasis on vulnerable women and children. To date, it has reached more than 140,000 families across 17 districts. In the Democratic Republic of Congo, $492 million in IDA financing will help 2.5 million children under the age of 2 and 1.5 million pregnant and lactating women—the country’s largest investment in child nutrition to date. 

Accelerating digital transformation

The Bank Group and partners are committed to ensuring that every person, business, and government in Africa is digitally enabled by 2030. A digital transformation in the region can increase growth in Africa by nearly 2 percentage points per year and reduce poverty by nearly 1 percentage point per year—and when paired with investments in human capital, these impacts can be doubled. 

This is not just about building infrastructure. It includes investments in skills, digital identification, e-commerce, and digital business. We will invest $25 billion in Africa’s digital transformation between now and 2030, and we aim to mobilize at least $25 billion more from the private sector. Through our current portfolio, we are supporting digital integration by financing infrastructure for high-speed internet, such as the fiber optic backbone between the Republic of Congo and Gabon, and helping young African entrepreneurs harness technology to tackle challenges, including access to education, transport, and health services. In Ghana, Bank-financed tech hubs are training more than 650 people to help them break into cutting-edge jobs and new industries. 

Addressing the drivers of fragility and climate risks

With climate shocks straining communities and threatening food security, it is critical to invest in climate adaptation and resilience as well as disaster risk management. Under our Africa Climate Business Plan, launched in 2016, the Bank has approved 176 projects for a total of $17 billion. These are delivering results ahead of schedule, particularly in climate-smart agriculture and ocean economies, coastal resilience, integrated watershed management, and renewable energy. 

In conflict hotspots, we are helping rehabilitate infrastructure, develop economic opportunities, provide basic services, and build the capacity of governments and civil society. The Bank Group supports the Sahel Alliance, a coalition of partners helping rebuild the social contract and state presence in recently stabilized areas of Burkina Faso, Chad, Mali, Mauritania, Niger, and Somalia. In Mali, we are helping restore a fishing port that was destroyed by bombardment in 2013. In the Central African Republic, a successful cash-for-work program is helping create jobs and boost self-employment.

Promoting private sector–led growth

While private participation in Africa’s development is rising, with infrastructure investment totaling $7.7 billion according to the 2018 Private Participation in Infrastructure report, there is scope for much more. The Bank Group is working to leverage all sources of finance, expertise, and solutions and working with governments to create an enabling environment for investors.

With our help, Africa is generating most of its energy cleanly and in partnership with the private sector. To date, we have mobilized over $2 billion in private investment in Kenya and nearly $1 billion in Cameroon. Our support has also helped Kenya improve the operational and financial performance of its utilities—with two major utility companies now publicly listed—and develop renewable sources such as geothermal and solar.

Working across countries for better impact

We have strengthened our support for regional integration following adoption of the Africa Continental Free Trade Area in March 2017 and are working closely with Regional Economic Communities to expand our work. At the same time, we have introduced a spatial approach to address common challenges in the Horn of Africa, the Lake Chad region, and the Sahel. Our regional integration portfolio amounts to over $10 billion in more than 70 operations.

Bank support to African Centers of Excellence has increased from $165 million to $465 million, to improve postgraduate education in 45 universities in 19 countries, focusing on science, engineering, economics, and mathematics. We are also strengthening partnerships, including with the African Union Commission, the African Development Bank, the EU, and the UN, to drive stronger outcomes on joint priorities such as trade, access to electricity, conflict and violence prevention, and economic integration.

Further Information: Africa Region Homepage >

Regional Commitments and Disbusements for Fiscal 2017–19

Project Spotlight: Empowering women and girls to transform the Sahel

The $295 million Sahel Women Empowerment and Demographic Dividend Project (SWEDD) was initiated in 2015 to help Benin, Burkina Faso, Chad, Côte d’Ivoire, Mali, Mauritania, and Niger empower women and adolescent girls; increase their access to quality reproductive, child, and maternal health services; and help countries develop policy agendas that make demography and gender central to growth.

Religious leaders are conducting community dialogue to support girls’ secondary education, delayed childbearing, birth spacing, family planning, and combating gender-based violence. Men are enrolled in learning programs to encourage participation in household tasks, healthy sexual and reproductive health behaviors, and reduced violence against women and children. Established safe spaces are teaching girls life skills, including problem solving, negotiation, refusal techniques, reproductive health knowledge, and nutrition. Adolescent girls and young women are being trained for professions with higher income opportunities. In Chad, for instance, over 13,000 vulnerable girls have received support through the provision of school kits, payment of school fees, housing, and academic support, resulting in a halving of the dropout rate. Nearly 400 safe spaces have been created in schools, and 280 women have received training in renewable energies and the operation and maintenance of heavy agricultural machinery. 

SWEDD also helps parliamentarians, judges, and lawyers improve legislation, expand knowledge and application of existing laws, and extend their services to rarely served victims. Ministries are building capacity to collect data and conduct analysis that can inform population policy and investments. 

Regional Snapshot

Economic growth in Europe and Central Asia slowed to 3.1 percent in 2018. It is projected to decline further to 2.1 percent in 2019, amid a global downturn and uncertain prospects. 

Growth in countries across the region varied, with Russia, the largest economy, contributing robustly to regional growth, alongside Albania, Hungary, Poland, and Serbia. Regional growth is expected to pick up modestly in 2020–21, as anticipated gradual recovery in Turkey offsets moderating activity in Central Europe. The region’s long-term challenges, however, remain formidable. 

The share of the working-age population in the region has fallen dramatically, largely due to declining fertility rates in the 1990s. Productivity slowed to 0.8 percent per year between 2013 and 2017. Investment growth has slowed sharply, from an average of above 15 percent in the five years prior to the global financial crisis to an average of just 1.6 percent in 2014–18. Parts of the region—particularly Central Asia and the Western Balkans—are highly vulnerable to climate change impacts, including droughts, flooding, and frequent natural disasters.

World Bank assistance

The World Bank approved $4.3 billion in lending to the region for 40 operations in fiscal 2019, including $3.7 billion in IBRD loans and $583 million in IDA commitments. We also signed 22 Reimbursable Advisory Services agreements with eight countries for a total of $39 million. These agreements provided technical advice on issues such as public finance and fiscal reforms, urban planning and development, and strengthening education and skills for employment. 

Our strategy aims to raise productivity and build resilience throughout the region. To raise productivity, we focus on human capital development, inclusion of the marginalized, facilitating access for all to new markets and technology, supporting competition in markets, and investing in safety nets. Building resilience means deepening the foundations for inclusive markets by strengthening macroeconomic and financial stability, developing effective governance to support growth while addressing climate change challenges, establishing an enabling regulatory system for the private sector, and fostering regional integration.

Boosting human capital to raise productivity

The Bank continued to advance projects in the region aimed at investing in health care systems, improving skills, supporting the transition to new technologies, and investing in safety nets to protect poor households.

In fiscal 2019, we provided $33 million for a project in North Macedonia that aims to expand access and improve the quality of social services. In Tajikistan, additional financing of $2 million to the ongoing Social Safety Net Strengthening Project continued to help the most vulnerable citizens gain access to important social assistance benefits. In Belarus, additional financing of $102 million to the Education Modernization Project helped the country improve student learning and modernize the school system. A $103 million loan for the Innovation, Inclusion, and Quality Project in Georgia will help enhance human capital development by expanding access to preschool education and improving education quality.

Building solid foundations and resilience for growth 

Our key priorities in the region continue to include deepening macroeconomic and financial stability, developing effective governance and institutions, and building capacity to adapt to evolving threats, such as climate change. 

In fiscal 2019, we supported a $52 million Tax Administration Modernization Project in Serbia that aims to improve the effectiveness of tax collection and lower the compliance burden for taxpayers. In Moldova, a $45 million Competitiveness Enhancement Project continued to increase the export competitiveness of Moldovan enterprises and decrease regulatory burdens. We also supported the Kyrgyz Republic through a $20 million loan to strengthen the country’s capacity to respond to natural disasters and reduce their adverse financial impacts.

Enabling markets to achieve high productivity in the private sector

This year’s projects aimed at promoting entrepreneurship, competition, and innovation; facilitating access to new markets and technology; fostering regional economic integration; and participating in global value chains. 

A $15 million project in Kosovo helped improve the competitiveness and capacity of export-oriented firms. In Uzbekistan, we approved a $200 million loan to help rural micro-, small, and medium enterprises across the Ferghana Valley gain greater access to financial resources, advisory assistance, and markets in urban areas. A $400 million project in Turkey will help improve access to longer-term finance for women-inclusive enterprises and firms in regions affected by the influx of Syrians Under Temporary Protection. 

The Bank also produced important thought leadership pieces and analyses on key policy issues. The report, Toward a New Social Contract: Taking on Distributional Tensions in Europe and Central Asia, looks at labor, taxation, and social welfare policies and calls for a fundamental rethinking of these policies to ease the growing divide in societies across the region.

A flagship report, Critical Connections: Promoting Economic Growth and Resilience in Europe and Central Asia, analyzes the impact on growth of various types of connectivity—trade, investment, migration, communications, and transport—to help policymakers maximize the economic benefits of these connections across the region.   

Further Information: Europe and Central Asia Region Homepage >

Regional Commitments and Disbusements for Fiscal 2017–19

Project Spotlight: Boosting regional economic integration in the Western Balkans

Delays at crossings in the Western Balkans are five times longer than in many EU countries. If logistics costs can be brought in line with average EU levels, annual savings could exceed $1.1 billion, or 1 percent of the region’s combined GDP. Although exports from the Western Balkans can enter the EU without tariffs, only 10 to 20 percent of firms here are exporters. Compliance with procedures—including inspections and customs—and time spent at crossing points dampens efficiency, increases costs, and hinders trade. Breaking down these barriers to economic integration and improving connectivity and trade are critical to sustainable growth. 

The Bank’s multiphase Western Balkans Trade and Transport Facilitation Project will provide a total of $140 million to six participating countries, with a focus on regional integration to facilitate cross-border movements of goods, improve the efficiency of transport systems, and enhance market access and investment. 

The first phase was approved this year, providing financing for Serbia ($40 million), North Macedonia ($30 million), and Albania ($20 million). It is projected to reduce annual export and import costs by more than 10 percent. By improving infrastructure, introducing new technologies, and increasing coordination among agencies in the region, the project will promote trade and growth. Modernizing transport infrastructure and services, as well as improving traffic flows, will also help lower greenhouse gas emissions and support countries’ efforts to achieve their climate change mitigation targets.

Regional Snapshot

Growth in Latin America and Caribbean was 1.6 percent in 2018 and is forecast to rise to 1.7 percent in 2019. Our aim is to expand upon the profound social transformation during the first decade of the 21st century, when the commodity boom and widespread growth cut the region’s poverty rates in half. Between 2003 and 2016, the share of the population living in extreme poverty in the region fell from 24.5 percent to 9.9 percent. Since then, however, economic prospects have dimmed, and many people are at risk of slipping back into poverty. 

The semiannual report, Effects of the Business Cycle on Social Indicators: When Dreams Meet Reality, highlighted that much of this poverty reduction was due to a favorable phase of the economic cycle rather than an improvement in the underlying, long-term economic structure of the region. It remains a challenge for countries to address these limitations to support stronger, inclusive growth.

World Bank assistance

The World Bank approved $6.1 billion in lending to the region for 37 operations in fiscal 2019 (of which one was an IBRD and IDA blended operation), including $5.7 billion in IBRD loans and $430 million in IDA commitments. We signed 18 Reimbursable Advisory Services agreements with eight countries for a total of $6 million.

Our strategy for the region centers on three pillars. The first pillar focuses on inclusive growth by promoting greater productivity, competitiveness, transparency, and accountability; inclusion of traditionally excluded groups, including Indigenous Peoples, Afro-descendants, and rural communities; and attracting private investment. The second pillar emphasizes investing in human capital to prepare people for the challenges and opportunities that come with digitalization and the changing nature of work. The third seeks to build resilience so that countries can better manage and withstand shocks such as natural disasters, economic upheaval, migration, and crime and violence.

Promoting inclusive growth

The Bank is committed to promoting inclusive economic and social growth, with a focus on higher productivity, greater accountability, and expanding opportunity. The $300 million Metropolitan Buenos Aires Urban Transformation Project is supporting the physical and social integration of Barrio 31, an informal poor neighborhood, with the rest of Argentina’s capital, creating economic opportunities for residents. The Bank’s Expanding Rural Finance Project in Mexico helped the financial system reach areas where traditional banking was weak or had no presence, delivering more than 150,000 loans and expanding credit for smaller-scale rural enterprises, with a focus on women and marginalized areas. 

The Community Investment in Rural Areas Project in Bolivia brought basic services infrastructure to the poorest and most isolated rural communities in Chuquisaca, Cochabamba, La Paz, and Oruro, with improvements in irrigation, rural roads, drinking water, sanitation, and electrification that have benefited nearly 282,000 people. The Quito Metro Line One Project in Ecuador brought effective collaboration between IBRD and several other multilateral development banks, including Banco de Desarrollo de America Latina, the Inter-American Development Bank, and the European Investment Bank. The $1.7 billion project is almost 80 percent complete, with no expected delays or cost overruns.

Investing in human capital for growth and prosperity

Increasing human capital through education, health, and opportunities is fundamental to growth and prosperity. Following Brazil’s $200 million Bolsa Família Program, which provides cash transfers to poor households conditioned on school attendance and use of maternal and child health services, a similar conditional cash transfer program is being supported by our Global Partnership for Social Accountability Social Audit Project in Paraguay. Informed by local feedback on how to reduce absenteeism in schools, enhance the quality of medical care, and ensure the supply of basic medicines, the project is benefiting more than 13,000 children in the poorest areas of the country.

In Peru, a technical assistance project improved the performance, coverage, and monitoring of social inclusion programs administered by the Ministry of Development and Social Inclusion, such as conditional cash transfers, pensions for the extremely poor, and a school meal program for children in pre- and primary schools. 

Building resilience

Latin America and the Caribbean is heavily exposed to natural disasters and is also facing high levels of migration from Venezuela and Central America. Colombia received a $32 million grant from the Bank-administered Global Concessional Financing Facility in support of policies to manage the flow of migrants and refugees from Venezuela and improve their access to jobs and basic social services, as well as for host communities. 

To help Dominica recover from Hurricane Maria, which damaged 75 percent of its power network, the Bank supported the government’s National Resilient Development Strategy to diversify the energy matrix. This includes $27 million to build a seven-megawatt geothermal power plant, which will support Dominica’s goal of becoming the “the first climate-resilient country in the world.” It will also increase the share of renewables and offer a clear road map for private sector investment in cost-effective and climate-resilient geothermal alternatives. 

Employing advisory services, technical assistance, and convening power

The Bank provided Reimbursable Advisory Services, technical assistance, and in-depth analyses to support the development goals of countries in the region. In the Dominican Republic, our services supported policy reforms for addressing insolvency issues and improving the investment climate. In response to the Venezuelan migrant crisis, the Bank conducted a migration impact assessment to help Colombia formulate a national response policy and strategy; similar studies are underway in Peru and Ecuador. The report, Afro-descendants in Latin America: Toward a Framework of Inclusion, highlighted the progress made by the Afro-descendant community in reducing poverty and gaining a voice for its concerns, along with overcoming structural barriers that prevent their full social and economic inclusion. The October 2018 semiannual report, From Known Unknowns to Black Swans: How to Manage Risk in Latin America and the Caribbean, highlighted the importance of understanding the different types of insurance mechanisms available to manage risk.

The Bank also convened key policymakers and multilateral partners on shared goals. These included a high-level conference on Building Resilience to Disasters and Climate Change in the Caribbean; an Investor Forum, co-hosted with the Argentine government on the eve of the G-20 Summit in Buenos Aires, to identify steps for boosting long-term and sustainable private sector investment; and the Panama Accord, co-sponsored with the Organization of American States and the government of Panama, to fight corruption and mobilize greater private financing for development.

Further Information: Latin America and the Caribbean Region Homepage >

Regional Commitments and Disbusements for Fiscal 2017–19

Project Spotlight: Indigenous Peoples defining their own development

To help design inclusive and successful development models, the Bank engages in strategic dialogue with Indigenous Peoples organizations and communities throughout Latin America. We recognize their distinct development vision and aspirations, as well as the disproportionate levels of poverty and inequalities they face. Through an $80 million project, we are supporting the implementation of Panama’s Indigenous Peoples Development Plan, putting these communities at the forefront of defining the development agenda. The project benefits over 200,000 people, with a focus on women and youth. It supports investments proposed and prioritized by the Indigenous Authorities, with an emphasis on culturally pertinent, accessible, and high quality services in the health, education, water, and sanitation sectors. 

To overcome longer-term structural barriers and long-standing ethnic inequalities, the project includes investments to improve governance capacity, planning, and coordination between Indigenous Authorities and the government. The project has already achieved two of its results indicators—an Executive Decree to legally formalize the National Indigenous Peoples Development Council, which serves as a permanent consultation platform with the government and Indigenous Peoples, and inclusion of a woman advisor in each delegation that participates in the council.

Regional Snapshot

Growth in the Middle East and North Africa is expected to be a modest 1.5 percent in 2019, down from 1.6 percent in 2018, largely due to weaker global growth and global financial market volatility. Real per capita growth across the region will be –0.1 percent, improving slightly on 2018’s decline of –0.2 percent. 

Conflict continues in the Republic of Yemen and Libya and, though diminished, in Syria as well. This has contributed to an increase in the region’s extreme poverty rate, which nearly doubled from 2.7 percent in 2011 to 5 percent in 2015. Iraq’s recovery and reconstruction efforts are moving forward, if slowly. The Arab Republic of Egypt, with strong reforms on the fiscal and energy fronts, will post a growth rate of 5.5 percent in 2019. Jordan and Lebanon, still bearing the cost of millions of refugees, are preparing to embark on significant economic reforms, while in Tunisia, upcoming parliamentary and presidential elections have slowed the reform agenda. Morocco remains stable, though with slow growth. Djibouti’s 7 percent growth rate for 2019 is the region’s fastest, though it has had little impact on the country’s high level of poverty. Growth in the Gulf Cooperation Council (GCC) remains around 2.0 percent, with reforms in many countries, most notably Saudi Arabia. 

World Bank assistance 

The World Bank approved $5.5 billion in lending to the region for 19 operations in fiscal 2019, including $4.9 billion in IBRD loans and $611 million in IDA commitments. Revenue from Reimbursable Advisory Services agreements, including with countries from the GCC, was around $56 million. The expanded advisory program continues to provide ongoing support to the reform process in the GCC. 

Our regional strategy has the promotion of peace and social stability at its core. It has expanded since 2018, with added focus on mobilizing finance for development, human capital, and digital development. It retains the four pillars of forging a new social contract; increasing regional cooperation; building resilience, including addressing the challenges of forcibly displaced people; and supporting recovery and reconstruction. The expanded strategy incorporates the Bank’s three priorities of sustainable and inclusive growth, investment in human capital, and strengthening resilience. Many of our activities include more than one of these pillars, as well as the new areas of focus. 

Renewing the social contract 

Our key regional priorities continue to include promoting more accountable and inclusive structures to support the private sector; generating more and better jobs; and focusing on education, health, and opportunities presented by digital technologies. For example, the $700 million Financial Inclusion and Digital Economy Program in Morocco supports entrepreneurship and the expansion of digital opportunities. Tunisia’s $75 million Innovative Start-Ups and Small and Medium Enterprises Project supports the start-up ecosystem, including entrepreneurs focused on digital technologies. The $1.0 billion Private Sector Development for Inclusive Growth Program in Egypt supports mobile services for microentrepreneurs, strengthens capital markets and the environment for start-ups, and modernizes tax systems. 

Increasing regional cooperation 

The Middle East and North Africa is the world’s least economically integrated region. Hence the Bank supports greater cooperation, efficiency, and interdependence, particularly in the energy and private sectors, to enhance cross-border investments and reinforce moves toward a regional market. Jordan’s $1.5 billion Second Equitable Growth and Job Creation Program emphasizes opening up markets to foreign investment, particularly from the GCC and elsewhere in the region, while introducing greater efficiency and private sector participation. New electricity reform programs in Jordan and Lebanon will allow better regional interconnectivity, also to attract investors from the region. Egypt’s $200 million Entrepreneurship for Job Creation Project seeks to improve the environment for start-ups, ­catalyzing opportunities for investors to invest in innovative local firms. 

Building resilience to forced displacement 

In countries across the region, especially Djibouti, Iraq, Jordan, and Lebanon, the forcibly displaced, including refugees and internally displaced persons, continue to pose challenges for local services. In Djibouti, where many displaced people and refugees have settled in cities, a $20 million project partly supported by the IDA18 Refugee Sub-Window is improving access to urban and social services and better job opportunities for more than 120,000 residents. In Jordan, $141 million in additional financing for the Emergency Health Project will focus on health services for Syrian refugees and their host communities. 

The latter project will also receive concessional funding from the Global Concessional Financing Facility (GCFF), which is supported by funds from nine supporting countries and the EU for middle-income countries affected by refugee crises. To date, the GCFF has approved $452 million for nine Bank-funded operations in the Middle East and North Africa, which in turn has leveraged $2.1 billion. 

Supporting economic recovery and reconstruction 

Recovery and reconstruction—including assisting populations in the midst of conflict where the authorizing environment allows—is an important part of our regional strategy, particularly as conflicts abate or end. Iraq’s $200 million Electricity Services Reconstruction and Enhancement Project will support repairs and service expansion, while encouraging private investment. In Gaza, which is still recovering from conflict and subject to bouts of violence, the $17 million Gaza Emergency Cash for Work and Self-Employment Support Project supports small entrepreneurs, as well as the poor though cash transfers, while $10 million in additional financing for the Emergency Labor-Intensive Gaza Project provides temporary employment opportunities for vulnerable populations. In fiscal 2019, the Republic of Yemen received three grants totaling $540 million for health and nutrition, urban services, temporary employment, and emergency provision of electricity. 

Further Information: Middle East and North Africa Region Homepage >

Regional Commitments and Disbursements for Fiscal 2017–19

Project Spotlight: Supporting financial inclusion and the digital economy in Morocco

Morocco has made significant social and economic progress over the past 15 years, due to large public investments and wide-ranging reforms, while successfully ensuring macroeconomic stability. Yet substantial development challenges remain. Job creation is down; unemployment is high, particularly among youth and women; service delivery is inadequate; and social and territorial disparities persist. Private sector development, which is key for new jobs, is hampered by lack of inclusion, with poor access to finance for entrepreneurs and small and medium enterprises (SMEs). The education system is not delivering the skills required for jobs. 

This has led to a comprehensive response from the Bank in support of the government’s 2017–21 program, which is reinforced by national strategies for digital development and financial inclusion. The jointly developed Financial Inclusion and Digital Economy Program not only aims to unlock Morocco’s entrepreneurial potential, especially among youth and women, but also use digital technologies to expand financial inclusion and support start-ups and SMEs. This made the project an ideal regional launch platform for our efforts to create, within a short time-bound period, modern broadband coverage for all and a nationwide digital payment system. The expected time for completion is 2021. 

The program includes three interlinked components. The first pillar aims to enhance financial inclusion by diversifying traditional and alternative financing instruments with institutional and regulatory changes targeting microfinance, agro-finance, and insurance, with a special focus on women. The second pillar supports development of digital platforms and infrastructure, with a focus on expanding connectivity and mobile payments, while the third pillar provides support to digital entrepreneurs. With strong ownership from the government and the Moroccan private sector, the project will showcase its achievement during the 2021 IMF-World Bank Annual Meetings in Marrakech.

Regional Snapshot

South Asia remains the fastest-growing region in the world, with growth projected at 6.9 percent in 2019, 7.0 in 2020, and 7.1 percent in 2021, driven by strong private consumption, recovering exports, and investments due to policy reforms and infrastructure upgrades. The region has also experienced political stability, with democratic and peaceful transition of governments in most countries. Risks to the outlook mainly stem from domestic factors, including weak exports, slow progress on fiscal consolidation, high deficits, and disruptions due to natural disasters. 

Robust growth has translated into declining poverty and impressive improvements in health and education. But as of 2015, the proportion of people living on less than $1.90 a day was still an estimated 12.4 percent, or about 216 million people—a third of the global poor—and multidimensional poverty is higher than the global average. Many countries in the region also suffer from extreme forms of social exclusion and significant infrastructure gaps. The region has also seen one of the largest refugee inflows in modern times, with more than 740,000 Rohingya refugees fleeing to Bangladesh since August 2017, according to UN estimates.

World Bank assistance

The World Bank approved $8.9 billion in lending to the region for 54 operations in fiscal 2019, including $4.0 billion in IBRD loans and $4.9 billion in IDA commitments. We also delivered 178 advisory services and analytical products to eight countries, totaling $79 million, providing technical advice on issues such as energy sector reform, female labor force participation, and climate change.

Our regional strategy emphasizes promoting sustainable and inclusive growth, investing in people, and strengthening resilience. It focuses on supporting policy reforms for private sector–led job creation; addressing stunting with multisectoral solutions; increasing female labor force participation; supporting refugees, returnees, and internally displaced persons; and addressing climate risks, including through disaster preparedness and management. 

Supporting sustainable growth and creating jobs

The region can sustain high growth only if both investments and exports grow stronger. With an estimated 1.5 million people entering the job market every month over the next two decades, job creation is essential. To address these challenges, the Bank supports efforts such as the $250 million Jobs Programmatic Development Policy Project in Bangladesh to address jobs challenges and strengthen systems that protect workers and build resilience. In Afghanistan, the $100 million Women’s Economic Empowerment Rural Development Project aims to increase the social and economic empowerment of poor rural women. 

The Bank Group is also helping countries maximize their development resources by drawing on sustainable private sector solutions. In Nepal, a $100 million project—the first in a series of two—is supporting the financial viability and governance of the electricity sector, while the IDA18 IFC-MIGA Private Sector Window will provide $103 million in financing and guarantees for the Upper Trishuli-1 Hydropower Plant, lowering risk and encouraging the private sector to invest. In India, the $400 million Innovation in Solar Power and Hybrid Technologies Project supports renewable energy and battery energy storage solutions.

Investing in people and supporting inclusive growth

To strengthen human capital as a driver of growth, the Bank is helping the region improve access to and quality of education, address childhood stunting and malnutrition, strengthen health systems and services, and expand safety nets to protect the poorest. Alongside development partners, we organized human capital summits in Bhutan, Nepal, and Pakistan. The new Pakistan@100: Shaping the Future report emphasized the country’s urgent need to invest more and better in its people, if they are to be richer, better educated, and healthier by 2047. Meanwhile, initiatives such as the $400 million Program toward Elimination of Tuberculosis in India build on earlier efforts to improve the quality and accessibility of health and nutrition services.

Fostering resilience to conflict and climate change

Conflict and fragility risks are increasing in South Asia, resulting in greater displacement and growing border tensions. We are working with partners to provide basic services to the displaced and hosting communities, such as the $200 million grant for the Afghanistan Eshteghal Zaiee–Karmondena Project, which aims to strengthen jobs and economic opportunities in cities with a high influx of displaced people. 

South Asia is also highly vulnerable to the impacts of climate change, including climate-induced natural disasters and rising sea levels. The South Asia’s Hotspots: Impacts of Temperature and Precipitation Changes on Living Standards report suggests that 800 million people in the region live in areas where livelihoods are vulnerable to climate change impacts. Progress depends on reducing carbon emissions, changing the energy mix, mitigating the effects of climate change, and building resilience. For example, the $125 million Climate-Smart Irrigated Agriculture Project in Sri Lanka will improve agricultural productivity and diversification through the adoption of climate-smart practices and better water management. The $246 million Andhra Pradesh Integrated Irrigation and Agriculture Transformation Project in India aims to enhance productivity, profitability, and climate resilience for smallholder farmers. The $175 million Bangladesh Sustainable Forests and Livelihoods Project will improve forest management and increase benefits for forest-dependent communities, with emphasis on women and adolescent girls.

Promoting regional integration

South Asia remains one of the least economically integrated regions in the world. Hence we support cross-border trade, transport and energy connectivity, and long-term water security and environmental sustainability in the region. The $460 million Khyber Pass Economic Corridor Project aims to expand economic activity between Pakistan and Afghanistan by improving regional connectivity and promoting private sector development along this key corridor. The Exports to Jobs: Boosting the Gains from Trade in South Asia report analyzes how labor market policies can help various groups of workers acquire the right skills and ensure that the gains of increased exports are shared more broadly across societies. Our report, A Glass Half Full: The Promise of Regional Trade in South Asia, unpacks critical barriers to trade integration and offers precise, actionable policy recommendations that could help achieve measurable progress in key areas of trade and integration, benefiting all countries in the region. 

Further Information: South Asia Region Homepage >

Regional Commitments and Disbusements for Fiscal 2017–19

Project Spotlight: Making Nepal an attractive destination for investment

Four years ago, Nepal was reeling from a devastating earthquake that claimed thousands of lives. Today, its future looks considerably brighter. Extreme poverty is steadily falling, and growth has remained relatively strong for the last two years. For the first time in decades, Nepal also has a stable, majority government to carry out a long-term development vision. New laws aim to encourage foreign direct investment, improve the business climate, and protect intellectual property. 

This combination of factors helped attract more than 700 foreign investors from over 300 companies representing 40 countries at the Nepal Investment Summit, organized by the government in March 2019. When the summit concluded, some 15 deals had been signed to develop hydro and solar power, 5G network services, a high-end resort, grain storage warehouses, and public-private partnerships. Investors’ applications were also received for 11 other projects in response to the 77 that were showcased by the government.

The Bank Group hosted a pre-summit roadshow in Malaysia and Singapore to help raise interest among investors in those countries. The Bank Group’s financial and technical support for the summit reaffirms the 50-plus year engagement with Nepal and supports our commitment to the country’s ambitious goal of becoming a middle-income country by 2030.

Regional Snapshot