Why is growth not transforming into human development?

Consultation on the 2014 Human Development Report NUST, 30-31 October 2013

Patterns Governing Intra-country Growth Disparities

1. Substantial Population Share of Youth

CountryPopulation ages 15-64 (% of total)

Population ages 0-14 (%

of total)

Afghanistan 50.3 47.4Bhutan 66.8 28.5Bangladesh 64.7 30.6Nepal 59.4 35.6Pakistan 61.3 34.3India 65.4 29.4Sri Lanka 66.6 25.2Maldives 66.0 29.0

Source: World Development Indicators 2013

Population and Youth in South Asia (2012)

2. Fast Urbanization & Agglomeration

CountryUrban

population (% of total)

Population in urban agglomerations of

more than 1 million (% of total

population)

Afghanistan 23.9 10.7Bhutan 36.3 -Bangladesh 28.9 14.9Nepal 17.3 -Pakistan 36.5 19.2India 31.7 12.7Sri Lanka 15.2 -Maldives 42.2 -

Source: World Development Indicators 2013

Urbanization and Agglomeration in South Asia (2012)

5

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

-4

-2

0

2

4

6

8

10

12

South Asia Real GDP Growth

Perc

enta

ge

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

-2

0

2

4

6

8

10

12

14

Manufacturing, value added (annual % growth)

Perc

enta

ge

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

-15

-10

-5

0

5

10

15

Agriculture, value added (annual % growth)

Perc

enta

ge

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

0

2

4

6

8

10

12

Services, value added (annual % growth)

Perc

enta

ge

3. Rising Share of Services Sector

Source: World Development Indicators 2013

4. Informal Sector Fueled by Porous Institutions

Source: World Development Indicators 2013

2.53.9

2.9 3 3.6 3.4 3.4 3

012345

CPIA public sector management and institutions rating (1=low to 6=high)

1.5

3.53

2.5

3.5 3.5 3.53

0

1

2

3

4

CPIA property rights and rule-based governance rating 2012

(1=low to 6=high)

2

4.5

2.5 2.53.5

3 3 3

012345

CPIA transparency, accountability, and corruption in the public sector rating

2012 (1=low to 6=high)

45

19.9

46.6

12.4

47.4

49.4

0 10 20 30 40 50 60

Afghanistan

Bhutan

Bangladesh

Pakistan

Sri Lanka

Nepal%

of T

otal

Fir

ms

Firms competing against unregistered firms 2009

5. Disconnect with Sustainability

South Asia World0

5

10

15

20

25

30

35

17

31

Forest area (% of land area)

Perc

enta

ge

Afghanist

an

Bhutan

Bangladesh

NepalIndia

Sri La

nka

Maldives

Pakistan

0

1

2

3

4

0.230.60

0.340.13

1.66

0.62

3.21

0.95

CO2 Emissions

2009

1972

(met

ric to

ns p

er c

apita

)

Source: World Development Indicators 2013

6. Mediocre Quality of Factors of Production

Source: World Development Indicators 2013

BangladeshPakistan

IndiaMaldivesSri Lanka

Nepal

0 5 10 15 20 25 30

16.819.9

17.55.6

2418

Prevalence of undernourishment 2011

(% of population)AfghanistanBangladesh

BhutanPakistan

IndiaMaldivesSri Lanka

Nepal

0 10 20 30 40 50 60 70 80

72.736.7

4259.2

47.29.210.5

39

Infant mortality rate 2011

6. Mediocre Quality of Factors of Production

Source: World Development Indicators 2013

BangladeshPakistan

IndiaMaldivesSri Lanka

Nepal

0 5 10 15 20 25 30

16.819.9

17.55.6

2418

Prevalence of undernourishment 2011

(% of population)AfghanistanBangladesh

BhutanPakistan

IndiaMaldivesSri Lanka

Nepal

0 10 20 30 40 50 60 70 80

72.736.7

4259.2

47.29.210.5

39

Infant mortality rate 2011

Afghanist

an

Bangladesh

India

Pakistan

Maldives

Nepal0

50100150200

3.1

70.2

133.5

26.6

168.7

27.0

Borrowers from commercial banks 2011

(per

1,0

00 a

dults

)

AfghanistanBhutan

BangladeshIndia

Pakistan MaldivesSri Lanka

0 0.5 1 1.5 2 2.5 3 3.5

New Firm registrations per 1,000 people

7. Low Levels of Inclusiveness

Source: World Development Indicators 2013

GINI index

Income share held by highest 10%

Income share held by lowest

10%

Poverty headcount at $2/day (% of

Population)Afghanistan 27.82 23.21 4.08 -Bhutan 38.06 29.36 2.8 29.8Bangladesh 32.12 27.03 3.9 76.5Pakistan 30.02 26.05 4.36 60.2India 33.9 28.79 3.69 68.8Sri Lanka 36.4 30.03 3.39 23.9Maldives 37.37 28.03 2.71 12.2Nepal 32.82 26.52 3.63 57.3

8. Lacking Participatory Approach

Source: World Development Indicators 2013

Afghanist

an

Bhutan

Bangladesh

Pakistan

India

Sri La

nka

Maldives

Nepal0

1

2

3

4

5

2

43.5

2.53

44.5

4

CPIA gender equality rating 2012 (1=low to 6=high)

Afghanistan

BangladeshNepal

Pakistan

India

Sri Lanka

Bhutan

Maldive

s

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

Voice and Accountability Index 2011 (1=low to 6=high)

9. Low Redistribution

12

Source: World Development Indicators 2013

8.810.0 9.2 9.3 10.4 10.7

12.4 13.2

02468

101214

% o

f GDP

Tax Revenue in South Asia 2011

-0.9-1.3

0.4

-5.1-3.3

-11.7

-7.2

-1.2

-14-12-10

-8-6-4-202

% o

f GDP

Average Budget Deficit 2006-10

7.9 8.3 7.1

12.1

8.8 8.810.2 9.3

0

5

10

15

% G

row

th

Average Consumer Price Index 2006-12

3.5 3.53

3.5 3.54

32.5

012345

CPIA quality of budgetary management 2012Rating (1=low to 6=high)

10. Trade under Inefficient Infrastructure

Note: (1=low to 5=high)Source: World Development Indicators 2013

Efficiency of customs clearance

process

Quality of trade and transport-related

infrastructure

Competence and quality of logistics

servicesAfghanistan 2.33 2.0 2.16Bhutan 2.29 2.3 2.42Bangladesh 2.33 2.49 2.44India 2.77 2.87 3.14Pakistan 2.85 2.69 2.77Maldives 2.24 2.47 2.68Sri Lanka 2.58 2.5 2.8Nepal 2.20 1.87 2.12

Summarizing Underlying Growth Patterns

14

1. Substantial Population Share of Youth2. Unplanned Urbanization and Agglomeration3. Rising Share of Traditional Services4. Informal Sector Fueled by Porous Institutions5. Disconnect with Sustainability6. Mediocre Quality of Factors of Production7. Low levels of Inclusiveness8. Lack of Participatory Approach9. Low Redistribution10. Trade under Inefficient Infrastructure

15

What Next for South Asia?

16

Emerging Mega Trends

1. Empowerment

17

Emerging examples of

individual empowerment

Rising Middle Class

Independent Media

Access to ICTPro-poor legislation

Right to Information

Act

2. Demography

18

Demographic Change

Urban Class

Increased Mobility across Sectors

Rising Internal

Migration

Knowledge Spillovers

Diaspora

3. New Power Centers

19

Power Centers

Civil society

Superior Judiciary

MediaParliamentary Forces

Corporate Sector

20

Game Changers

21

Game Changers

Violent Conflicts

Human & Man-made

disasters

Corruption &

Transparency

Failure to Invest in Human Capital

Lets Rethink South Asian Inclusive Growth

22

1. How will these game changers impact the mega trends?

2. Can rural development be separated from traditional structural transformation?

3. Can urban spaces become more inclusive?

4. Can we reinvent youth engagement?

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