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South Asia Economics Students Work Toward One South Asia

MD Staff

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Photo Credit: SANEM Bangladesh

South Asia is home to a quarter of the world’s population and accounts for 36% of the world’s poor and nearly 50% of the world’s malnourished children. The sub-region remains plagued by major development gaps towards which greater regional integration can help devise joint solutions.

In light of this, over 100 top economics undergraduates and faculties from seven countries in South Asia convened in Chittagong, Bangladesh for the 14th South Asia Economic Students’ Meet (SAESM) to discuss how regional integration can help achieve the Sustainable Development Goals (SDGs) in South Asia.

Launching the meet, Professor Rehman Sobhan, Chairman for the Centre for Policy Dialogue (CPD) of Bangladesh, shared his thoughts on how we need to build the road to re-integrating a once integrated South Asia. “In my lifetime, I stood for 3 national anthems – for India till 1947, Pakistan till 1971 and Bangladesh since then. South Asia has become a permanent casualty of the territorial division and historic conflicts. There is life ahead of you – you can stretch your imagination to build the region or divide it, the choice is yours!”

Stirred up with the spirit of One South Asia, students shared their vision of creating a sustainable integrated region, presenting prospects for realizing the SDG themes of no poverty and zero hunger, good health and wellbeing, quality education, gender equality, clean water and sanitation, affordable and clean energy, and sustainable cities and communities in South Asia. Their papers were judged by eminent academicians, picking a winner in each sub-theme. Students from India and Pakistan jointly won the Sen-Haq award for best overall paper.

With a unique spirit of competition and collaboration, students also participated in debate competitions, quiz contests and the budding economist competition – one of the most intense competitions involving paper submission, a written exam on micro-, macro- and development economics, a visual round where pictures have to be creatively described using economic theories, and finally a publicly held panel interview. Archit Jain from St. Stephen’s College, Delhi, won the Budding Economist of South Asia 2018 award.

The panel re-iterated that as Ambassadors of One South Asia, students need to strive for continuous improvement and not dwell in the past.

“In 2006, when our team came to Bangladesh, we got visa on arrival. Now in 2018, it took us weeks to arrange the visa. But this should not by any means disappoint you, rather deepen your resolve to bring about a change. Perseverance commands success! As you along with 1000 other SAESM alumni move to positions of power, you will pave the way for an integrated region,” said Dr. Syed Turab Hussain of LUMS.

Selim Raihan, Executive Director, SANEM, and all Country Coordinators encouraged the students to take the baton in their hands as only they can lay the foundation for lasting relationships that will lead to prosperity in the future.

Competitions amongst the young economists not only stimulated the debate on how to bring sustainable prosperity to the 1.7 billion living in South Asia, but also forged lifelong friendships among the leaders of tomorrow. These friendships stand testimony to all the wisdom shared by the renowned champions of One South Asia and make SAESM unique.

“SAESM is the most unique convening platform I have witnessed in South Asia. Punjabis, Bengalis, Tamils – all are so same yet so different and in the end of the meet, everyone gets dancing to Bollywood songs,” said Martin Rama, South Asia Chief Economist for the World Bank.

That’s exactly what happened. In the spirit of breaking barriers and integrating culturally, The World Bank also organized ice-breaking sessions where the budding economists got fully engaged in writing stories using a mix of words from economics and South Asia such as Dynamic Stochastic General Equilibrium, Cricket, Sufism, Ganga, Nash, and Nudge among others. Competing as Team #KaushikBasu, Team #MalalaYousafzai, Team #MuhammadYunus, Team #SamanKelegama, Team #Mahbub-ul-Haq, Team #SirimavoBandaranaike, Team #JigmeSingyeWangchuck, Team #SushilaKarki and Team #ShamsiaHassani, students paid tribute to these South Asian laureates [Story of the winning team #SamanKelegama below].

The compelling and competitive events were rightfully balanced by a cultural night and a cruise in the Bay of Bengal.  With every passing moment of the meet, the bonds across borders continued to strengthen. One South Asia was in the making!

The story of Saman Kelegama

When Saman Kelegama was watching a Bollywood movie on Adam Smith, his mother walked into the room and rebuked him, “what’s with cricket, Punjabi songs and this movie? Drink the lemon tea to increase your efficiency and productivity, so that you win the competition with most credit”.

Saman replied, “I don’t need your nudge to study. I ignored Nash and instead calculated the Dynamic Stochastic General Equilibrium for the pareto-optimum point in the tradeoff between leisure and work”.

Saman’s mother asked him, “What’s your revealed preference? Do you plan to be a free rider like your father? Do you want to be un-employed in the long run?”

Then suddenly, the father Lorenz enters the room and says, “Ganga! What’s up? You are always marginalizing me and Saman. Trust us. If we keep our family integrated, we will maximize our Gross National Happiness. Now, bring us some spicy food and play some Sufi music”.

Then he asks Saman to bring his PS and play the classical game of the war between Harris-Todaro, who lives in the Himalayas and Kuznets, who lives along the Indus. Mother Ganga gets angry and shouts, “You have incurred enough externalities on our son. You better go cross the border and drown in the Bay of Bengal”. The father says let’s swap this for unity. We are all imperfect but that doesn’t mean we cannot be One South Asia.

World Bank

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Economy

Belarus: Strengthening Foundations for Sustainable Recovery

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The speed of economic recovery has accelerated in early 2018, but the foundations for solid growth need to be strengthened, says the latest World Bank Economic Update on Belarus.

The economic outlook remains challenging due to external financing needs and unaddressed domestic structural bottlenecks. Improved household consumption and investment activity, along with a gradual increase in exports, will help the economy to grow, but unlikely above three percent per annum over the medium term.

“The only way for ordinary Belarusians to have better incomes in the long run is to increase productivity, which requires structural change. While macroeconomic adjustment has brought stability, only structural change will bring solid growth to the country,” said Alex Kremer, World Bank Country Manager for Belarus. “Inflation has hit a record low in Belarus, driving the costs of domestic borrowing down. However, real wages are now again outpacing productivity, with the risks of worsening cost competitiveness and generating cost-push inflation.”

A Special Topic Note of the World Bank Economic Update follows the findings of the latest World Bank report, The Changing Wealth of Nations 2018, which measures national wealth, composed of produced, natural, and human capital, and net foreign assets. Economic development comes from a country’s wealth, especially from human capital – skills and knowledge.

“Belarus has a good composition of wealth for an upper middle-income country. The per capita level of human capital exceeds both Moldova and Ukraine. However, the accumulation of physical capital has coincided with a deterioration in the country’s net foreign asset position,” noted Kiryl Haiduk, World Bank Economist. “Belarus needs to rely less on foreign borrowing and strengthen the domestic financial system, export more, and strengthen economic institutions that improve the efficiency of available physical and human capital.”

Since the Republic of Belarus joined the World Bank in 1992, lending commitments to the country have totaled US$1.7 billion. In addition, grant financing totaling US$31 million has been provided, including to programs involving civil society partners. The active investment lending portfolio financed by the World Bank in Belarus includes eight operations totaling US$790 million.

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Economic Growth in Africa Rebounds, But Not Fast Enough

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Sub-Saharan Africa’s growth is projected to reach 3.1 percent in 2018, and to average 3.6 percent in 2019–20, says Africa’s Pulse, a bi-annual analysis of the state of African economies conducted by the World Bank, released today.

The growth forecasts are premised on expectations that oil and metals prices will remain stable, and that governments in the region will implement reforms to address macroeconomic imbalances and boost investment.

“Growth has rebounded in Sub-Saharan Africa, but not fast enough. We are still far from pre-crisis growth levels,” said Albert G. Zeufack, World Bank Chief Economist for the Africa Region. “African Governments must speed up and deepen macroeconomic and structural reforms to achieve high and sustained levels of growth.”

The moderate pace of economic expansion reflects the gradual pick-up in growth in the region’s three largest economies, Nigeria, Angola and South Africa. Elsewhere, economic activity will pick up in some metals exporters, as mining production and investment rise. Among non-resource intensive countries, solid growth, supported by infrastructure investment, will continue in the West African Economic and Monetary Union (WAEMU), led by Côte d’Ivoire and Senegal. Growth prospects have strengthened in most of East Africa, owing to improving agriculture sector growth following droughts and a rebound in private sector credit growth; in Ethiopia, growth will remain high, as government-led infrastructure investment continues.

For many African countries, the economic recovery is vulnerable to fluctuations in commodity prices and production,” said Punam Chuhan-Pole, World Bank Lead Economist and the author of the report.  “This underscores the need for countries to build resilience by pushing diversification strategies to the top of the policy agenda.”

Public debt relative to GDP is rising in the region, and the composition of debt has changed, as countries have shifted away from traditional concessional sources of financing toward more market-based ones. Higher debt burdens and the increasing exposure to market risks raise concerns about debt sustainability: 18 countries were classified at high-risk of debt distress in March 2018, compared with eight in 2013.

“By fully embracing technology and leveraging innovation, Africa can boost productivity across and within sectors, and accelerate growth,” said Zeufack.

This issue of Africa’s Pulse has a special focus on the role of innovation in accelerating electrification in Sub-Saharan Africa, and its implications of achieving inclusive economic growth and poverty reduction. The report finds that achieving universal electrification in Sub-Saharan Africa will require a combination of solutions involving the national grid, as well as “mini-grids” and “micro-grids” serving small concentrations of electricity users, and off-grid home-scale systems. Improving regulation of the electricity sector and better management of utilities remain key to success.

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Multilateral Development Banks Present Study on Technology’s Impact on Jobs

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Rapid technological progress provides a golden opportunity for emerging and developing economies to grow faster and attain higher levels of prosperity. However, some disruptive technologies could displace human labor, widen income inequality, and contribute to greater informality in the workforce. Tapping new technologies in a way that maximizes benefits, mitigates adverse effects, and shares benefits among all citizens will require public-private cooperation and smart public policy.

That is one of the main conclusions of a new study, The Future of Work: Regional Perspectives, released today by four regional multilateral development institutions: the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB).

The study, which was presented at a seminar hosted 19 April at the IDB in Washington, D.C., explores the potential impact of technology in global labor markets and identifies concrete actions countries can take to prepare for the changing nature of jobs and leverage the benefits of emerging technologies.

The Future of Work: Regional Perspectives analyzes the challenges and opportunities presented by artificial intelligence, machine learning, and robotics in what is known as the Fourth Industrial Revolution. Potential challenges include increased inequality and the elimination of jobs, as well as the high degree of uncertainty brought about by technological change and automation. The greatest opportunities come from gains in economic growth that can result from increased productivity, efficiency, and lower operating costs.

The study includes chapters focusing on how new technological developments already are affecting labor markets in each region.

In the case of Asia and the Pacific, ADB research shows that even in the face of advances in areas such as robotics and artificial intelligence, there are compelling reasons to be optimistic about the region’s job prospects. New technologies often automate only some tasks of a job, not the whole. Moreover, job automation goes ahead only where it is both technically and economically feasible. Perhaps most importantly, rising demand—itself the result of the productivity benefits that new technologies bring—offsets job displacement driven by automation and contributes to the creation of new professions.

“ADB’s research shows that countries in Asia will fare well as new technology is introduced into the workplace, improving productivity, lowering production costs, and raising demand,” said Yasuyuki Sawada, ADB’s Chief Economist. “To ensure that everyone can benefit from new technologies, policymakers will need to pursue education reforms that promote lifelong learning, maintain labor market flexibility, strengthen social protection systems, and reduce income inequality.”

The publication was launched with a panel discussion featuring senior officials of the four regional development banks leading the study: Luis Alberto Moreno (IDB President), Charles O. Boamah (AfDB Senior Vice-President), Takehiko Nakao (ADB President), and Suma Chakrabarti (EBRD President). They were joined by Susan Lund (Lead of the McKinsey Global Institute) and Pagés, one of the co-authors.

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