January 9, 2008 - 2007 was a momentous year in South Asia, Praful Patel, World Bank Vice President for the region said in a year end interview. “Many countries in the region are going through major political transitions. Pakistan, Bangladesh, Nepal and Bhutan will all have elections in the near future,” he said. The region also suffered major natural disasters such as the August floods and the Bangladesh cyclone. “In spite of these natural disasters and external shocks such as increased oil prices, economic growth in the region remained very strong,” Patel said.
Patel highlighted that South Asian governments are better prepared in dealing with natural disasters. “The Bangladesh government mobilized 40,000 volunteers right after the cyclone and evacuated close to one million people. This is one of the main reasons the death toll was much lower than in previous disasters,” said Patel.
The World Bank was very active in the region in 2007. President Zoellick visited Bangladesh, India, and Pakistan and pledged continued support to their development challenges. The Bank reengaged in hydropower with an increasing need for clean energy in the region. “The Bank also scaled up its presence in financing in education, health, and rural development, which are integral components of poverty alleviation,” said Patel.
Speaking of World Bank’s strategy in the region - Ending Poverty in a Generation - Patel said the progress has been good. “The region is maintaining 6-7 percent growth, and India in particular is approaching 10 percent growth.”
Challenges and Opportunities in South Asia
Praful Patel, Vice President for South Asia Region, talks about the developments in 2007.
Praful Patel, Vice President
- What is your assessment of South Asia’s progress in 2007? (3m:51s) wmv
- South Asian countries have been exposed to natural calamities on a regular basis. Are we contributing in their recovery? (1m:26s) wmv
- Do you think the World Bank can assist in preventing the scale of damages in the future? (1m:05s) wmv
- The regional strategy, Ending Poverty in a Generation, has been in place for the last 4 years. How would you assess the progress?(1m:14s) wmv
- Recently, President Zoellick has identified six strategic themes for the World Bank. How does South Asia Regional strategy aligned with his vision?(1m:06s) wmv
- This year, the World Bank has re-engaged in hydropower projects in South Asia. How do you see our future role in this sector? (1m:03s) wmv
- The key impediments that South Asia faces in sustaining the recent high economic growth? (1m:44s) wmv
- How do you see IDA's role in South Asia? (50s) wmv
- At an advisory role, how do you see the World Bank involvement in the Region? (46s) wmv
- What are the priorities in the forthcoming year? (1m:15s) wmv
Shanta Devarajan, the Bank’s Chief Economist for South Asia believes that if the countries in the region sustain this high growth, hundreds of millions of people can be lifted out of poverty over the next few years. “Bangladesh, one of the poorest countries in the region, managed to reduce poverty by 8 percent in the last 5 years. At this rate, Bangladesh could bring poverty down to single digits in the next 15 years,” Devarajan said.
However, the region is facing many major impediments to higher and sustained growth. Patel warned that to maintain high growth South Asia needs to urgently address its infrastructure deficit. “Weak infrastructure is the biggest showstopper to high growth in the region,” Patel said. The countries also need to invest in human development, in particular health and education, renewed focus on governance and corruption. “The region needs to pursue a growth strategy that is inclusive. You cannot leave large parts of the country or region behind,” Patel said.
Sustaining High Growth
Shantayanan Devarajan, World Bank Chief Economist for South Asia talks about the urgent need to address widening inequality across the region. Listen to the interview below:
Shantayanan Devarajan, Chief Economist
- Your view on the developments across South Asia Region this past year (1m:17s) wmv
- How do you assess the impact of World Bank’s strategy, ending poverty in a generation, in the South Asia Region (41s) wmv
- While there has been high growth rates, there are indications across the region only major cities benefited, not the rural poor - how to address this apparent disparity? (1m:04s) wmv
- what steps are required to encourage a more "agriculture for development" agenda? (46s) wmv
- How equipped are the countries in the region to deal with external shocks such as rising oil prices? (52s) wmv
Devarajan said that there are many ways the governments can address inequality. As an example, Devarajan pointed to lack of growth in agriculture across the region. “Rice production in Sri Lanka has been flat and agriculture registered just 1-2 percent growth in India,” Devarajan said. "One way to redress disparity is to try to improve agricultural productivity throughout the region." He said government subsidies hurt farmers more than they help and are one of main reasons for the lack of growth in the sector.
Role of International Development Association (IDA)
Speaking of the importance of the International Development Association (IDA) in the region, Patel said nearly 60 percent of the World Bank Group’s commitments to South Asia came from IDA, and more than two-thirds of this lending financed projects in the areas of rural development and human development such as health, education, nutrition, and HIV/AIDS.
“IDA has a very big role as long as there is poverty,” Patel said. “This region has more than 350 million people living under a dollar a day. So as long as our mission is to fight poverty South Asia will remain a very important client for us,” Patel said. “The recent replenishment is very good news for South Asia. A 30 percent increase in IDA funds means 30 percent more for South Asia."
South Asia in 2008
One of the Bank’s key priorities in 2008 will be to continue supporting high growth in South Asia. Patel said that the climate change will be another high priority issue in the coming years.
As many countries in the region are transitioning politically, Devarajan said it will be a new era in all of these countries and the momentum of reforms and growth will be sustained. Devarajan, however, warned that unless conflicts in Afghanistan and Sri Lanka are addressed effectively, regional growth and hence the goal of ending poverty in a generation will likely suffer a setback.
Additional Resources
- Blog - End Poverty in South Asia Shanta Devarajan, World Bank Chief Economist for South Asia, shares insights about the fight against poverty in the region. (Read More »)
- Bangladesh: Cyclone Sidr Praful Patel, Vice President, World Bank, recently visited the cyclone-affected Kalapara upazilla of Patuakhali District and Barisal division. (Read More »)
- World Bank Aid to Bangladesh Cyclone Recovery The World Bank has offered up to US$250 million in the aftermath of Cyclone Sidr to help millions of Bangladeshis recover and to strengthen the country’s disaster mitigation systems. (Read More »)
- 2007 South Asia Floods Providing cash transfers to people affected by the floods that have devastated parts of Bangladesh, India, and Nepal is one of the most effective ways to help rebuilding lives and stimulate local markets. (Read More »)
- 2007 World AIDS Day in South Asia The World Bank encourages the South Asian Corporate Sector to demonstrate leadership in the campaign against HIV/AIDS. (Read More »)
- South Asia: Development Data A wide range of social and economic measures on South Asia, including links to the World Bank's most important online development databases. (Read More »)
- South Asia: Analysis and Research Compilation of all the World Bank's publications on South Asia, with 'search' options and links to analysis and research on other South Asian countries. (Read More »)
- World Bank Program in South Asia Launching pad to all information on World Bank activities in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.(Read More »)
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