Interviews
South Asia can sustain faster with 'new normal' says WB
08 Jun '10
5 min read
• Intensify their Look East strategies to integrate faster with East Asia. Currently trade between the two regions amounts to $126 billion annually and could reach $450 billion per year.
• Integrate more closely with each other within the South Asia region, to generate up to $50 billion per year more to the current $20 billion
• Preserve links to high-income markets in Europe and North America, and others, as these will continue to be important for labor-intensive exports, services, and as sources of capital and know-how.
“Given complementary economic structures, trade and investment integration will help boost domestic manufacturing and services with gains for growth and welfare,” said Miria Pigato, Sector Manager for Economic Policy South Asia. “South Asia is well on its way to integrating rapidly with East Asia, which is already the largest partner for merchandise trade with the region. While trade with East Asia (excluding China) is the biggest part of this trade, China's share is also growing, and together, trade with East Asia could triple to $450 billion annually. Within the South Asia region itself, annual trade could potentially be increased by some US$50 billion.”
Bouncing back from crisis, and Managing the Recovery“The Regional Economic Update expects growth in the region to reach close to pre-crisis peak levels and faster than its high rates of 6.5 percent annually from 2000 to 2007,” said Dipak Dasgupta, lead economist and principal author of the report. “Rising domestic confidence combined with government fiscal and monetary stimulus packages and, in some cases, external assistance is helping stimulate recovery. Improved optimism is helping drive the recovery in private spending in India, Bangladesh, Bhutan and Sri Lanka.” India's growth is expected to rise to 9 percent in 2011, Bangladesh to 6.4 percent, Bhutan to 7 percent, and Sri Lanka to above 6 percent.
However, in countries with weaker fundamentals, unresolved conflict or post-conflict issues, and those that were heavily exposed to the global downturn, such as Maldives, Nepal and Pakistan, slower recovery is taking place (about 4 percent in 2011 for all three countries). Afghanistan is recovering from a drought and is expected to show stronger growth of 7 percent based on expanding external assistance.
There remain some significant risks in the global environment—slowing worker remittances and exports in a still hesitant and uncertain global recovery, as recent events in Europe show, with volatile commodity prices, and continuing volatility in global capital flows.
“To ensure a sustained, durable and faster growth, countries need to create more fiscal space and contain rising inflation, while ensuring that the exit from fiscal and monetary stimulus is gradual and in tune with the recovery of private demand,” said May. “Boosting agriculture will also be vital to keep food prices moderate."
Click here for more details.
• Integrate more closely with each other within the South Asia region, to generate up to $50 billion per year more to the current $20 billion
• Preserve links to high-income markets in Europe and North America, and others, as these will continue to be important for labor-intensive exports, services, and as sources of capital and know-how.
“Given complementary economic structures, trade and investment integration will help boost domestic manufacturing and services with gains for growth and welfare,” said Miria Pigato, Sector Manager for Economic Policy South Asia. “South Asia is well on its way to integrating rapidly with East Asia, which is already the largest partner for merchandise trade with the region. While trade with East Asia (excluding China) is the biggest part of this trade, China's share is also growing, and together, trade with East Asia could triple to $450 billion annually. Within the South Asia region itself, annual trade could potentially be increased by some US$50 billion.”
Bouncing back from crisis, and Managing the Recovery“The Regional Economic Update expects growth in the region to reach close to pre-crisis peak levels and faster than its high rates of 6.5 percent annually from 2000 to 2007,” said Dipak Dasgupta, lead economist and principal author of the report. “Rising domestic confidence combined with government fiscal and monetary stimulus packages and, in some cases, external assistance is helping stimulate recovery. Improved optimism is helping drive the recovery in private spending in India, Bangladesh, Bhutan and Sri Lanka.” India's growth is expected to rise to 9 percent in 2011, Bangladesh to 6.4 percent, Bhutan to 7 percent, and Sri Lanka to above 6 percent.
However, in countries with weaker fundamentals, unresolved conflict or post-conflict issues, and those that were heavily exposed to the global downturn, such as Maldives, Nepal and Pakistan, slower recovery is taking place (about 4 percent in 2011 for all three countries). Afghanistan is recovering from a drought and is expected to show stronger growth of 7 percent based on expanding external assistance.
There remain some significant risks in the global environment—slowing worker remittances and exports in a still hesitant and uncertain global recovery, as recent events in Europe show, with volatile commodity prices, and continuing volatility in global capital flows.
“To ensure a sustained, durable and faster growth, countries need to create more fiscal space and contain rising inflation, while ensuring that the exit from fiscal and monetary stimulus is gradual and in tune with the recovery of private demand,” said May. “Boosting agriculture will also be vital to keep food prices moderate."
Click here for more details.
The World Bank Group
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