GDP growth in South Asia weakened to 5.4 percent in 2012, down from 7.4 percent in 2011, mainly as a result of a slowdown in India. Regional GDP is projected to grow 5.7 percent in 2013, driven by an increase in export demand, policy reforms in India, stronger investment activity, and normal agricultural production.
World Bank assistance
With 35 projects approved in fiscal 2013, the Bank is a significant development partner in South Asia. This fiscal year it provided $378 million in IBRD assistance and $4.1 billion in IDA assistance. The leading sectors were Health and Other Social Services ($1.1 billion); Public Administration, Law, and Justice ($1.0 billion); and Education ($609 million).
Work in the region supports the Bank’s overarching goals to reduce poverty and promote shared prosperity. Its strategy is based on five pillars: increasing employment and accelerating growth; enhancing human development and social welfare; strengthening governance and accountability; reducing weather, disaster, and food vulnerabilities; and enhancing regional integration and cooperation.
Increasing employment and accelerating growth
South Asia has a young population and the lowest female labor force participation rate in the world. Absorbing its growing labor force will require the creation of 1.0 million–1.2 million jobs every month for the next 20 years. To strengthen policies that are conducive to inclusive growth, the Bank is working on a new report in which inequality in income and consumption will be studied alongside inequality of access to and opportunities for jobs and job success.
The Bank’s new Country Partnership Strategy for India (2013–17) aims to help the country achieve its long-term vision of faster, more inclusive growth. As the first country strategy to set specific goals for reducing poverty and increasing prosperity for the poorest people, it significantly shifts support toward low-income and special-category states, where many of India’s poor and disadvantaged live.
Enhancing human development and social welfare
The Bank worked on many fronts to enhance human development in South Asia. A large share of the portfolio is results focused, linking financing support directly to the achievement of core milestones that improve service delivery. Education projects focus on raising school enrollment rates and improving the quality and equity of the training and education system. Health projects seek to increase the use of skilled birth attendants and ensure that pregnant women, adolescent girls, and children under age 5 receive basic nutrition services.
Given the alarming levels of infant and child malnutrition, the Bank emphasizes policy dialogue, diagnostic studies, and start-up financing support in this area. The Nepal Agriculture and Food Security Project seeks to enhance food and nutritional security of targeted communities by increasing the availability of food through crop and livestock agriculture and by improving the nutrition of households through diversification of diets and improved feeding and caring practices (particularly in the first 1,000 days of life).
Strengthening governance and accountability
The Bank is building the capacity of legislative bodies and supreme audit institutions in their budget oversight roles. It is also helping to implement e-procurement systems, improve the delivery of public services, and craft right-to-information regulations. For example, a regional cross-sectoral Bank team was put together to provide an objective, concise, and standardized indicator-led assessment of Pakistan’s public financial management system. The objective was to create an understanding of the overall fiduciary environment of the system and to identify needed reforms.
Reducing weather, disaster, and food vulnerabilities
South Asia suffered more than any other region during previous food and fuel crises. To help it weather future food crises, the Bank is working with governments to provide more irrigation and drainage services; reforest land that had been logged; and increase resilience to extreme weather events, natural disasters, and climate change
In September 2012, the Bank approved a $100 million Development Policy Loan to help the government of Himachal Pradesh, an Indian state in the Himalayas, adapt to and mitigate the effects of climate change through policies and practices to guide the development of sustainable hydropower. The loan will empower local communities to better conserve their watershed, promote cleaner methods of industrial production, promote environmentally sustainable tourism, and integrate geographic information systems in decision making.
Enhancing regional cooperation
Regional cooperation and integration are key strategic priorities for South Asia, as limited intraregional trade; poor air, road, and rail connectivity; and scant trade in energy impede growth in the region. The Bank is focusing on regional energy trade and connectivity, trade and transport facilitation, and building public support for regional economic cooperation. In June 2013, for example, it approved a $99 million project for Nepal to improve logistics and reduce the costs of bilateral trade between Nepal and India. The Bank is also supporting strategic engagement with Pakistan, which would like to deepen trade and investment cooperation with India, through a knowledge generation and dissemination program.
Providing knowledge and development solutions
Analytical work in Afghanistan is helping the authorities and the international community to plan for 2014, when the drawdown of most international military forces and the likely reduction in overall assistance will have a profound impact on the economic and political landscape. In Sri Lanka, analytical work on infrastructure challenges in metropolitan Colombo paved the way for reform and the first-ever IBRD investment (a $213 million loan), ushering in a new phase of engagement with middle-income countries.
|The regional report for South Asia||PDF (168KB)|