South Asia to cut poverty by two-thirds in a decade
26 Jun '06
5 min read
Although manufacturing in South Asia has registered healthy growth in recent years, it needs to grow much faster for the region to catch up with their eastern neighbors. Between 1968 and 2001, the share of manufacturing value added in GPD increased 400 percent in Malaysia, 300 percent in Thailand, and over 200 percent in Korea compared to an increase of only 20 in India and 30 percent in Pakistan.
In 2003, East Asia attracted US$59 billion in FDI; China alone attracted US$53.5 billion. In the same year, FDI inflow to South Asia was US$5.1 billion, one-tenth East Asia's, with India receiving US$4.3 billion.
To catch up with East Asia, the report says, South Asian economies must save and invest a lot more. They must also increase the efficiency of investment and ensure that higher economic growth drives faster poverty reduction.
The report further cites country-specific challenges that policy-makers would need to address to accelerate growth. These include reducing fiscal deficits and public debt in India; strengthening governance in Bangladesh; deepening human capital in Pakistan, and addressing civil conflict in Sri Lanka and Nepal.
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