Improved governance, infrastructure key to higher south Asia growth
19 Oct '06
3 min read
The SAER, the first in a series of biannual reports on economic and development issues in the South Asia region, concludes that there is considerable scope for improvement in the effectiveness and efficiency of government interventions.
Common problems among South Asian countries include the highly bureaucratic nature of government administration, a lack of coordination between different ministries and government agencies, and overstaffing and inadequate pay and benefit levels in the public sector.
The SAER recommends that public investments be targeted at areas where infrastructure bottlenecks are emerging. Electricity is one of the most critical bottlenecks.
Private generators have to provide 15 percent of electric consumption in South Asia; compared with 2 percent in PRC and 3 percent in Thailand. The quality of the transport infrastructure also needs improvement.
“In addition to increasing public and private spending on infrastructure, there is a need for better targeting of investments and in particular, for improvements in sector policies, governance, and institutional environment,” said Juan Miranda, Director General of ADB's Central and West Asia Regional Department.
The report says that intra-regional trade and investment offers immense opportunities for accelerating growth and reducing poverty in South Asia.
India could become a hub for stimulating the growth of intra-industry trade in the region and boost the inflow of foreign investment into South Asia.
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