1. Towards an Inclusive Growth in South Asia:
Role of Regional Cooperation
Dr. Vaqar Ahmed
Sustainable Development Policy Institute
23-10-2011 1
2. Economic Growth in Developing Regions 1960s-2000s
10
9
East Asia & Pacific
8
7.2
7 Latin America &
6.1
6 Caribbean
% Growth
5.4 5.2 Europe & Central
5
Asia
4 Middle East &
3.0
3 North Africa
South Asia
2
1
0
1960s 1970s 1980s 1990s 2000s
South Asia has been the fastest growing region since 1990s
3. Investment in Developing Regions
35
Gross fixed capital formation (% of GDP)
30
25
20
15 1960s
10 1970s
5 1980s
0 1990s
2000s
Investment has been increasing since 1960s
4. Productivity in Asia 1961 - 2000
1.02
1.02
1.01
Change in TFP
1.01
1.00
1.00
0.99
0.99
5. Poverty headcount ratio at $1.25 a day
0
10
20
50
60
30
40
1981
1983
1985
1987
1989
1991
1993
1995
South Asia
1997
1999
2001
Poverty declined but not by much! 2003
2005
Poverty in Asia 1981 - 2010
2007
2009
6. Poverty in Asia 1981 - 2010
90
Poverty headcount ratio at $1.25 a day
80
70
60
50
40 South Asia
30 China
20
10
0
1981
1991
2007
1983
1985
1987
1989
1993
1995
1997
1999
2001
2003
2005
2009
China halved poverty during the same period
7. Poverty in Asia 1981 - 2010
90
Poverty headcount ratio at $1.25 a day
80
70
60
50
South Asia
40
China
30 Indonesia
20
10
0
1981
1991
1983
1985
1987
1989
1993
1995
1997
1999
2001
2003
2005
2007
2009
Indonesia halved it during the same period
8. Why Slow Progress in Poverty & Inequality?
Sustaining growth was
difficult
Incomplete budgetary
and sectoral reforms
Keeps population
Inadequate attention stuck in low wage trap
to human capital / does not allow
decent employment
9. Health in Developing Regions
12 East Asia & Pacific
Health expenditure, total (% of
10 Latin America &
Caribbean
8
Europe & Central
GDP)
Asia
6
Middle East & North
4 Africa
Sub-Saharan Africa
2
South Asia
0
2009
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
South Asia spending less than Sub-Saharan Africa on Health
10. Education in Developing Regions
7 East Asia & Pacific
Public spending on education (% of
6
Latin America &
5 Caribbean
Europe & Central
4 Asia
GDP)
Middle East & North
3 Africa
Sub-Saharan Africa
2
South Asia
1
0
1975 1985 1999 2001 2003 2005 2007
South Asia spending less than Sub-Saharan Africa on Education
11. Missing Link in Development
• Large focus on brick and
Hardware mortar
(Infrastructure)
• Poor management of
existing assets
Governing
Institutions Existence of
(Software)
Institutions • Infrastructure financing
difficult Regulated
markets
Institutional efficacy is more important than institutional purity
12. Global Governance Indicators
Rank out of 145 Countries
Burden of Labour
Property Electricity
Corruption Govt. Market ICT Use
Rights & Telecom
Regulations Efficiency
Malaysia 37 26 8 20 48 57
China 44 43 21 36 69 74
Sri Lanka 64 54 32 117 79 100
India 99 63 96 81 116 117
Pakistan 104 105 76 136 126 111
Bangladesh 128 112 89 100 137 132
Nepal 126 121 103 128 141 128
Source: Global Competitiveness Report 2011-12
13. Regional Approach to Fighting Poverty
Trade-Poverty
Nexus
Empowering
Connecting
and
people and
Engaging
places
Youth
13
14. Search for South Asian Growth Model
Highlight lessons
from South Asia
Learning
Identify and
collectively
quantify costs
from Chinese
of non-
and East Asian
cooperation
experiences
14
15. Search for South Asian Growth Model
Services-led
growth
Disaster
Management
Food Security
(Climate
Change)
15
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Planning commission in India and Pakistan have been rocked incidently at the sametime by the poverty debates in both countires. Sadly both are due to data issues. When basic data on poverty is hidden from the masses on account of political sensitivity, making informed policy decisions becomes far more difficult.
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Productivity at the end of the day is an important determinant of economies of scale and Competitiveness and impacts exports
Trade-Poverty Nexus (Growth Commission Report)Connecting People and Places (Visa issues during India-Pakistan MFN talks)Youth must engage it’s a young population…..while ICT empowers them…they need to be engaged at policy level…let youth write their own vision….Deverajan….Pakistani youth survey about entering political parties….Like preferential businessmen…special exchange of youth must take place. Borders should be erased for them…in the name of child curiosity.
Learning from each other: Success of community-led projects in Pakistan such as Organi pilot project, success of NGO driven social protection framework in Bangladesh, success of post-conflict growth strategy in Sri Lanka, managing conflict-induced migration in urban areas of Nepal. Learning from China: We still don’t know how SA will behave in response to volitility in chinese economy. Yesterday we saw two very different views…while some said that Chinese growth was good for SA exports, an exporter from BAN got up and said that we have zero beneift of any trading arrangements with China. Need to thrash out moreCosts of non-cooperation: Yesterday Sri Lanka’s Senior Minister informed that India is not representing the views of South Asia in G-20 on the other hand we see Pakistan and Bangladesh protesting with EU about any possible India-EU trade relations that are preferential. So SA’s countries are still fighting on foreign turf and not on SAARC platform.
Services-led growth will only be sustainable if your services are tradeable…the most easiest way to trade services is with you neighbours. We hope that some consensus is quickly reached regarding the SA frameowrk on trade in services. In the interest of food security the current trade regulations should be particularly facilitated. Only 4 percent is intra-regional agriculture trade. All the talk about food bank will not work until you have buffer management and each country complies to it strictly. The talk about food security not embedded in macroeconomic policies.