Is South Asia Ready for Take Off?: A Sustainable and Inclusive Growth Agenda
Departmental Papers, November 4, 2019
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Bibliographic details
- Authors: Manuela Goretti, Daisaku Kihara, Ranil M Salgado, Anne Marie Gulde
- Published: November 4, 2019
- Series: Departmental Papers
- DOI: https://doi.org/10.5089/9781513507538.087
Executive summary
- Since the mid-1980s, durable reforms coupled with prudent macroeconomic management have brought steady progress to the South Asia region, making it one of the world’s fastest growing regions.
- Real GDP growth has steadily increased from an average of about 3 percent in the 1970s to 7 percent over the last decade.
- Reforms supported strong per capita income growth in the region, lifting over 200 million people out of poverty in the last three decades.
- Today, South Asia accounts for one-fifth of the world’s population and, thanks to India’s increasing performance, contributes to over 15 percent of global growth.
- India has overtaken China as the fastest growing large economy.
- South Asia’s contribution to global growth is set to increase, while more mature economies decelerate.
Growth drivers and structural transformation
- Greater economic diversification, with an expansion of the service sector, underpins recent performance.
- Improvements in education contribute to human capital accumulation.
- A still sizable demographic dividend remains a key element supporting growth prospects.
- Authors argue South Asia will need to leverage all sectors of the economy in a balanced way:
- supporting improvements in agricultural productivity;
- pursuing a sustainable expansion of manufacturing;
- promoting higher-skill services.
Labor market and demographic projections
- Based on demographic trends, more than 150 million people in the region are expected to enter the labor market by 2030.
- This young and large workforce can be South Asia’s strength if supported by a successful high-quality and job-rich growth strategy.
Policy implications and recommended strategy
- Implement a high-quality and job-rich growth strategy to absorb the incoming labor force and maximize the demographic dividend.
- Balance sectoral development:
- Raise agricultural productivity to improve rural incomes and free labor for other sectors.
- Support a sustainable expansion of manufacturing to create jobs and diversify exports.
- Promote higher-skill services to capture value-added and foster economic diversification.
- Leverage reforms and prudent macroeconomic management to sustain growth momentum amid a changing global economic landscape.
Publication facts
- Pages: 79
- Volume: 2019
- Issue: 016
- Series: Departmental Paper No. 2019/016
- DOI: https://doi.org/10.5089/9781513507538.087
- ISBN: 9781513507538
- ISSN: 2616-5333
Is South Asia Ready for Take Off?: A Sustainable and Inclusive Growth Agenda — Departmental Papers by Manuela Goretti, Daisaku Kihara, Ranil M Salgado, and Anne Marie Gulde (November 4, 2019).