South Asia regains growth lead, focus should be on better jobs
Staff Writer |
South Asia has regained its lead as the fastest growing region in the world, supported by recovery in India.
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With the right mix of policies and reforms, growth is expected to accelerate to 6.9 percent in 2018 and 7.1 percent next year.
The twice-a-year South Asia Economic Focus (SAEF) finds that the region could even extend its lead over East Asia and the Pacific.
Much of the progress, however, is driven by India’s growth rebound and is not consistent across countries.
Despite accelerating global growth and trade, exports remain weak. Progress on fiscal consolidation is slow, and deficits are high.
This edition, Jobless Growth?, argues that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women.
While the number of working age people is increasing, the fraction of working-age people who are at work has declined inmost countries in South Asia based on employment data analyzed from 2005 to 2015.
Some decline was to be expected, as higher incomes allow households to prioritize education, health and other commitments.
But the fall in employment rates in South Asia has been much faster than in East Asia. And it has been particularly strong in India, Bhutan and Sri Lanka, especially for women, the report shows.
With declining employment rates, the region is foregoing some of its potential demographic dividend.
To arrest further declines in employment rates, South Asian countries would need to create 11.7 million jobs a year, which is feasible if the current growth momentum of the region is sustained.
But if South Asia wants to increase employment rates to the levels seen in other regions with similar income levels, it would need to create many more jobs.
The focus should also be on better jobs, as regular wage employment remains the exception more than the norm. ■