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Corruption, confrontational politics threaten progress in S Asia: WB

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By Sajid Chaudhry

ISLAMABAD: Corruption, confrontational politics and conflicts threaten to derail the process of economic development in South Asia, states World Bank Annual report 2008, released here on Monday.

The launching of the report coincided with the increasing tension between India and Pakistan over Mumbai attacks and possibility of an armed conflict between the two nuclear states.

World Bank’s focus in South Asia during year 2008 has been on financial and private sector development with highest lending for this sector. World Bank approved nearly $4.3 billion for South Asia in the year 2008, $1.5 billion in loans from IBRD and $2.8 billion in IDA credits and grants and disbursements. World Bank has also made commitments of $4.247 billion in the year 2008 for future assistance.

World Bank lending by sectors reveals that it lent $1.344 billion for the financial and private sector development, $788.3 million for human development, $574 million for rural development, $423 million for public sector development, $122 million for economic management, $386.6 million for environmental and natural resource management, $321 million for social development, $145 million for social protection and risk management, $68 million for trade and integration and $45 million for urban development.

According to the report, South Asia has experienced rapid economic growth, declining poverty, and progress in human development for more than a decade. As a result, for the first time in its history, the region with the world’s largest concentration of poor people has a real chance of ending mass poverty in a generation.

Rapid growth alone will not necessarily end poverty, however, economic growth has been accompanied by rising inequality, and the region continues to suffer from some of the worst levels of human deprivation in the world. The region has also been hard hit by the recent increase in world food prices, especially for rice and wheat, the two main staples in South Asia. To address all of these issues, the World Bank’s strategy for South Asia comprises three pillars-accelerating and sustaining growth, making development inclusive, and strengthening human development-and the cross-cutting theme of improved governance.

The Bank’s programme also projects an emerging new reality that South Asia can no longer be characterised as a uniformly low-income region. Growth is propelling several Indian states, along with Bhutan, Maldives, and parts of Sri Lanka, into middle-income status. At the same time, per capita incomes and human development indicators in Bangladesh, Nepal, most of Pakistan, and the lagging regions of India and Sri Lanka are those of low-income countries.

In recent years, the Bank has sharpened its focus to ensure that lagging regions such as Bihar in India and Balochistan Province in Pakistan, sectors such as agriculture, and groups such as women and disadvantaged minorities participate in growth.

About 1 billion people live in rural areas in South Asia. As a result, the region’s economy depends on agriculture-and hence irrigation-more than any other region in the world. The Bank provides assistance to South Asian governments in many aspects of the management of water resources, including watersheds, groundwater, international waters such as the Indus Waters Treaty, and river basins. In 2008, the Bank approved a $150 million credit to enhance water distribution in Pakistan’s Sindh Province. In neighboring Baluchistan, it approved a $25 million credit to boost agricultural production and improve the use of water in irrigation.

Governance lies at the heart of the Bank’s work in South Asia. Over the past five years, it has been working with client countries at the economy, sector, and project levels to strengthen governance, increase public accountability for results, and mitigate corruption.\12\23\story_23-12-2008_pg5_3

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