Managing Intra-country Growth Disparities in South Asia

10 Patterns Governing South Asian Growth

1. Substantial Population Share of Youth

Population and Youth in South Asia (2012) Population ages 15-64 (% of total) 50.3 66.8 64.7 59.4 61.3 65.4 66.6 66.0 Population ages 0-14 (% of total) 47.4 28.5 30.6 35.6 34.3 29.4 25.2 29.0

Country

Afghanistan Bhutan Bangladesh Nepal Pakistan India Sri Lanka Maldives

Source: World Development Indicators 2013

2. Fast Urbanization & Agglomeration

Urbanization and Agglomeration in South Asia (2012) Urban population (% of total) 23.9 36.3 28.9 17.3 36.5 31.7 15.2 42.2

Country

Population in urban agglomerations of more than 1 million (% of total population)

10.7 14.9 19.2 12.7 -

Afghanistan Bhutan Bangladesh Nepal Pakistan India Sri Lanka Maldives

Source: World Development Indicators 2013

Percentage 10

Percentage

12

-4

-2

10

15

1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012

-15 -5 1961 1964 1967 1970 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 Percentage 10 14 1967 1964 1961

-10

1973
1976 1979 1982 1985 1988 1991 1994 1997

South Asia Real GDP Growth

2000
2003 2006 2009 2012 Percentage 0

Agriculture, value added (annual % growth)

3. Rising Share of Services Sector

Source: World Development Indicators 2013

12
2 4 6 8 -2 10 12 0 4 6 8

1961 1964 1967

1970
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003

Services, value added (annual % growth)

Manufacturing, value added (annual % growth)

2006 2009 2012

4. Informal Sector Fueled by Porous Institutions

CPIA public sector management and institutions rating (1=low to 6=high)
5 4 3 2 1 0
3.9 2.5

CPIA property rights and rule-based governance rating 2012 (1=low to 6=high)
3

2.9

3.6

3.4

3.4

4
3 2 1 0 1.5

3.5

3.5
2.5

3.5

3.5

CPIA transparency, accountability, and corruption in the public sector rating 2012 (1=low to 6=high)
5 4 3 2 1 0

Firms competing against unregistered firms 2009

Nepal 49.4 47.4 12.4 46.6

4.5

% of Total Firms

3.5

2.5

2.5

Sri Lanka

Pakistan

Bangladesh Bhutan

19.9
45 0 10 20 30 40 50 60

Afghanistan

Source: World Development Indicators 2013

5. Disconnect with Sustainability

4 (metric tons per capita)

CO2 Emissions

3.21 2009 1.66 1972

3
3 2 2 1 1 0
35 30 25 Percentage

0.95

0.60
0.23

0.62 0.34 0.13

Forest area (% of land area)

31

20
15 10 5 0

17

Source: World Development Indicators 2013

South Asia

World

6. Mediocre Quality of Factors of Production

Prevalence of undernourishment 2011
18
24 5.6 17.5 19.9 16.8

Infant mortality rate 2011

Nepal Sri Lanka Maldives India Pakistan Bhutan Bangladesh 30 Afghanistan 39 10.5 9.2 47.2 59.2 42 36.7 72.7

Nepal Sri Lanka Maldives India Pakistan Bangladesh

10 20 (% of population)

20

40

60

80

Source: World Development Indicators 2013

6. Mediocre Quality of Factors of Production

Prevalence of undernourishment 2011
18 24 5.6 17.5 19.9 16.8 0 10 20 (% of population)

Infant mortality rate 2011

Nepal Sri Lanka Maldives India Pakistan Bhutan Bangladesh 30 Afghanistan 0 39 10.5 9.2 47.2 59.2 42 36.7 72.7 20 40 60 80

Nepal Sri Lanka Maldives India Pakistan Bangladesh

Borrowers from commercial banks 2011

(per 1,000 adults) 200 150 100 50 0 133.5 70.2 3.1 168.7

New Firm registrations per 1,000 people

Sri Lanka Maldives Pakistan India Bangladesh Bhutan Afghanistan 0 1 2 3

26.6

27.0

Source: World Development Indicators 2013

7. Low Levels of Inclusiveness

Poverty headcount at $2/day (% of Population) 29.8 76.5 60.2 68.8 23.9 12.2 57.3

Afghanistan Bhutan Bangladesh Pakistan India Sri Lanka Maldives Nepal

GINI index 27.82 38.06 32.12 30.02 33.9 36.4 37.37 32.82

Income share held by highest 10% 23.21 29.36 27.03 26.05 28.79 30.03 28.03 26.52

Income share held by lowest 10% 4.08 2.8 3.9 4.36 3.69 3.39 2.71 3.63

Source: World Development Indicators 2013

8. Lacking Participatory Approach

CPIA gender equality rating 2012 (1=low to 6=high)
5 4 3 2

Voice and Accountability Index 2011 (1=low to 6=high)

4

4 2

3.5 2.5

4
3

4.5

1.0 0.5 0.0 -0.5 -1.0 -1.5 -2.0

1
0

Source: World Development Indicators 2013

9. Low Redistribution
Tax Revenue in South Asia 2011
14 12 10 8 6 4 2 0 10.0 9.2 8.8 9.3 10.4 10.7 12.4 13.2 2 0 -2
% of GDP

Average Budget Deficit 2006-10

0.4

% of GDP

-4 -6 -8

-1.3 -0.9 -5.1 -7.2 -11.7 -3.3

-1.2

-10 -12

-14

Average Consumer Price Index 2006-12

15
% Growth

12.1
7.9 8.3 7.1 8.8 8.8

CPIA quality of budgetary management 2012 Rating (1=low to 6=high)

5 4 3 2 1 0 3.5 3.5 3 3.5 3.5 4 3 2.5

10 5 0

10.2 9.3

12 Source: World Development Indicators 2013

10. Trade under Inefficient Infrastructure

Efficiency of customs clearance process 2.33 2.29 2.33 2.77 2.85 2.24 2.58 2.20 Quality of trade and transport-related infrastructure 2.0 2.3 2.49 2.87 2.69 2.47 2.5 1.87 Competence and quality of logistics services 2.16 2.42 2.44 3.14 2.77 2.68 2.8 2.12

Afghanistan Bhutan Bangladesh India Pakistan Maldives Sri Lanka Nepal

Source: World Development Indicators 2013

Summarizing Underlying Growth Patterns

1. Substantial Population Share of Youth 2. Fast Urbanization and Agglomeration 3. Rising Share of Services 4. Informal Sector Fueled by Porous Institutions 5. Disconnect with Sustainability 6. Mediocre Quality of Factors of Production 7. Low levels of Inclusiveness 8. Lack of Participatory Approach 9. Low Redistribution 10. Trade under Inefficient Infrastructure

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What Next for South Asia?

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Emerging Mega Trends

16

1. Empowerment
Rising Middle Class

Right to Information Act

Emerging examples of individual empowerment

Independent Media

Pro-poor legislation

Access to ICT
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2. Demography
Urban Class

Diaspora

Demographic Change

Increased Mobility across Sectors

Knowledge Spillovers

Rising Internal Migration

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3. New Power Centers

Civil society

Corporate Sector

Power Centers
Media

Superior Judiciary

Parliamenta ry Forces

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Game Changers

20

Violent Conflicts

Failure to Invest in Human Capital

Game Changers
Corruption & Transparenc y

Human & Man-made disasters

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Lets Rethink South Asian Inclusive Growth

1. How will these game changers impact the mega trends? 2. Can rural development be separated from traditional structural transformation? 3. How urban spaces can become hubs of domestic commerce? 4. Can we reinvent youth engagement?
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Thank You

www.sdpi.org, www.sdpi.tv

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