Chapter 1 | Stronger Headwinds during Recovery
As South Asia emerges from the shadows of the COVID-19 pandemic, the recovery has been highly uneven. Economies in the region face existing and built-up challenges from rising commodity prices, lingering supply constraints, and financial sector vulnerabilities. The war in Ukraine threatens to exacerbate these challenges. Facing these headwinds, carefully designed monetary and fiscal policy supports are needed to weather external shocks and sustain recovery.
Chapter 2 | Charting the Course to a New Normal
GDP has mostly recovered to pre-pandemic levels: growth in the region will be 6.6 percent in 2022, though 1 percentage point lower than the January forecast in large part due to the effects of the war in Ukraine. Though South Asia has limited trade and financial links with Russia and Ukraine, higher commodity prices in global markets are expected to drag down this year’s GDP growth. The challenges ahead are extraordinarily complicated for South Asian policymakers. The high oil prices and uncertainty in international oil markets are an incentive to accelerate the transition to a low-carbon development path. Such a path will boost energy security and make development more sustainable. The chapter illustrates this by simulating the region-wide macroeconomic impacts of carbon pricing.
Social norms can be a key obstacle to achieving gender equality. This is well-known but the channels through which social norms influence gender disparities have not been systematically explored. This chapter shows that, in South Asia, despite decades of rapid economic growth, rising education, and declining fertility, women continue to face greater disadvantages in accessing economic opportunities than in most of the developing world. While progress has been made, improvements are slow and increasing income levels do not seem sufficient to reduce the stubbornly large gender gaps. Deeply rooted social norms, especially those about household division of labor, account for a large share of these gaps in women’s economic engagement. The chapter provides original evidence of the usefulness to define more clearly social norms and distinguish them from other factors like attitudes, customs, or morals. The chapter concludes that to adequately address gender inequality, policies cognizant of social norms, how they change, and how to address their impact need to be set in place.