A gradual recovery is underway in Nepal, boosted by the lifting of containment measures as vaccination picks up and tourism and migrant worker flow recover. The economy is expected to grow by 3.9 percent in FY22, an improvement over 1.8 percent growth in FY21, but still below pre-pandemic growth averages, according to World Bank’s latest South Asia Economic Focus.
In South Asia, recovery continues as global demand rebounded and targeted containment measures helped minimize the economic impacts of the recent waves of COVID-19. But the recovery remains fragile and uneven, and most countries are far from pre-pandemic trend levels, states the World Bank’s twice-yearly regional update. In Nepal, recovery is vulnerable to risks, and will rely on the continued gradual resumption of economic activities alongside social distancing and an effective vaccination rollout this year.
The latest South Asia Economic Focus titled Shifting Gears: Digitization and Services-Led Development projects the region to grow by 7.1 percent in 2021 and 2022. While the year-on-year growth remains strong in the region, albeit from a very low base in 2020, the recovery has been uneven across countries and sectors. South Asia’s average annual growth is forecast to be 3.4 percent over 2020-23, which is 3 percentage points less than it was in the four years preceding the pandemic.
“The pandemic provides the opportunity for countries to craft a recovery path that draws lessons from the crisis,” stated Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal, and Sri Lanka. “Nepal recently adopted the Kathmandu Declaration as a joint commitment of the government and development partners towards the country’s Green, Resilient, and Inclusive Development (GRID). Mobilizing the private sector through green investment and support for small and medium enterprises with job growth potential in the services sector is a key part of Nepal’s GRID strategy.”
COVID-19 has left long-term scars on the region’s economy, the impacts of which can last well into the recovery. Many countries experienced lower investment flows, disruptions in supply chains, and setbacks to human capital accumulation, as well as substantial increases in debt levels. The pandemic is estimated to have caused 48 to 59 million people to become or remain poor in 2021 in South Asia.
As countries build back, they have a chance to rethink their long-term development models. With the emergence of new digital technologies, South Asia has an opportunity to shift gears from a traditional manufacturing-led growth model and capitalize on the potential of its services sector.
The role of services in the region’s economy has been increasing amid rapid technological change and the accelerated structural transformation of global economic activity in response to the pandemic. The adoption of digital technologies makes services more tradable, enables services to increase productivity of other sectors—including manufacturing—and creates new markets. Some South Asian countries are increasingly providing business and professional services that add value to manufacturing and play a key role in global value chains.
In Nepal, the pandemic has accelerated the growth of digital services, with the use of electronic payment transactions increasing by double digits. Growth in the services sector as a whole is expected to drive Nepal’s recovery, despite structural constraints such as slow domestic job creation, the country’s high vulnerability to natural disasters and climate change, and large infrastructure gaps.
“Countries in South Asia have a strong comparative advantage in exporting services, particularly business processes and tourism, whereas they have struggled to break into manufacturing export markets,” said Hans Timmer, World Bank Chief Economist for the South Asia Region. “To realize the potential of the services-led development, the region needs to rethink regulations and establish new institutions to support innovation and competitiveness.”
European farms mix things up to guard against food-supply shocks
By ETHAN BILBY
‘Items in this section have limited availability due to supplier production issues,’ ‘Sorry, temporarily out of stock’ and ‘Sold out’ are all signs that became familiar as recent global upheavals exposed how precarious our food supply is.
The COVID-19 pandemic led to bare shelves in supermarkets as shipping routes were cut off. The war in Ukraine has affected the supply of essential grains.
But increased climate change stands to cause even greater disruption. Researchers say part of the solution to mitigating that risk is for farms to become more mixed through some combination of crop cultivation, livestock production and forestry, a move that would also make agriculture more sustainable.
For Dr Sara Burbi, assistant professor at Coventry University in the UK until December 2022 and now an independent researcher, COVID-19 was a wake-up call.
‘Suddenly, we experienced first-hand what happens when value chains are not resilient to shocks and what happens when globalisation, with all its intricacies, does not work anymore,’ she said. ‘We saw highly specialised farming systems fail when they over-relied on external inputs that they had no access to.’
Climate change, according to Burbi, could provide even bigger global shocks ranging from widespread crop failures to lower yields or damage from flooding. More sustainable agriculture is essential to ensure food supplies can withstand the impact of climate change and unexpected local, national and even global crises.
During her tenure at Coventry University, Burbi coordinated the EU-funded AGROMIX project, which runs until end-October 2024.
As part of the project, pilot farms across Europe are experimenting with combining crop and livestock production in one farm (mixed farming) and with pairing farming and forestry activities (agroforestry). Poultry grazing in orchards is an example of a mixed-farming approach. The results reveal interesting synergies and promising effects, including improvements in soil health.
‘For a long time, forestry and agricultural activities have been considered at odds, as we have pushed for more and more specialised land uses,’ Burbi said. ‘This has led to loss of soil fertility and a sharp decline in biodiversity, coupled with an increased dependence on external inputs to compensate.’
A combined system can increase the cycling of nutrients needed in the soil for crops to grow. It can also help to regulate air and water quality, prevent land degradation and even provide biomass and food on-site for livestock.
One site in Switzerland, for instance, found that mixed farming helped keep soil quality high, while more specialised farming tended to deplete it.
AGROMIX will use 12 pilot sites and nine experimental ones, spread across three climatic zones (Atlantic, Continental and Mediterranean), to develop recommendations for farmers on combining productivity with greater sustainability and climate resilience.
Although mixed farming has been practiced for a long time, it is only recently that scientists have begun to measure biophysical data on such sites and provide real evidence to support approaches that work.
The project has found that the presence of trees on pasture has measurable benefits to animal health and welfare, especially in extreme heat when they provide a canopy of much-needed shade.
Trees and hedgerows can also offset greenhouse-gas emissions from livestock, increase the carbon sequestration capacity of the land, provide a haven for biodiversity and help prevent flooding.
The project wants to work closely with farmers, taking into account their needs and priorities.
‘Knowledge integration can empower key actors, in this case farmers, to embrace the transition to sustainable farming,’ Burbi said.
The next step will be designing agriculture systems that are totally energy independent and, as a result, even more sustainable.
The EU-funded MIXED project at Aarhus University in Denmark is also focused on combining mixed farming systems with agroforestry to make agriculture more efficient and resilient.
‘It’s not only about economic efficiency, but also environmental and climate efficiency,’ said Professor Tommy Dalgaard, the project coordinator. ‘Agriculture needs to be resilient to change, all kinds of change.’
Working with around 100 farmers across Europe, MIXED has created networks to study the different ways in which mixed farming and agroforestry can be used.
One focus is on the take-aways that can be gleaned from the traditional agroforestry techniques used in the Tagus Valley of Portugal, in an area known as the Montado.
‘They have these big cork oaks that are often more than 100 years old with grazing cattle below them,’ said Dalgaard. ‘In the winter, they can plough the soil and make small fields with cereal so they can harvest a winter crop and then in the dry season the cattle can be there.’
It is possible to have these green, vegetated areas because of the ancient oak trees, which create shade and sustain the water cycle.
The concern is that drought may threaten the oaks, so researchers from the project are trying to work out how best to preserve the system as well as how to adapt it to new areas.
Danish farms in the project have taken a different approach, looking at how farmers can use coppicing to create a carbon sink. Coppicing is a pruning technique that cuts trees to ground level, causing new shoots to grow rapidly from the base to form a bush.
These are then usually harvested every 10-20 years for biomass fuel, meanwhile also giving shelter and shadow to free-range, high-value livestock such as sows with piglets. Cutting the bushes to create mulch also helps to improve soil quality and avoids burning them, according to Dalgaard.
The project’s ultimate aim is to build up a European database demonstrating examples of mixed farming and agroforestry, highlighting the benefits and advising on best practices. Essentially, it is about inspiring more farmers to adopt mixed farming and agroforestry methods and supporting them in the process.
‘We need real-life examples,’ said Dalgaard. ‘We now have some concrete examples of farmers, agricultural landscapes and value chains that can report good results from having done something in a different way.’
Research in this article was funded by the EU. This article was originally published in Horizon, the EU Research and Innovation Magazine.
Astana hosts 18th Iran-Kazakhstan Joint Economic Committee meeting
The 18th meeting of Iran-Kazakhstan Joint Economic Committee meeting was held on Thursday in Kazakhstan’s capital Astana, at the end of which the two sides signed a comprehensive document to expand cooperation in numerous areas including trade, agriculture, environment, tourism, science, and technology, education and sports.
As IRIB reported, the two countries’ Joint Economic Committee meeting was co-chaired by Iranian Agriculture Minister Javad Sadati-Nejad and Prime Minister of Kazakhstan Alikhan Smailov.
Sadati-Nejad and Smailov held talks before the two countries’ joint meeting to discuss major areas that should be agreed upon in the event’s concluding document.
Speaking to the press after the joint committee meeting, Sadati-Nejad said that according to the signed memorandum of understanding (MOU), 30 percent of the trade between the two countries will be in the field of agricultural products.
According to the agriculture minister, the two countries are also going to establish a commercial-agricultural joint venture in order to develop trade in the Persian Gulf countries, Central Asia, and West Asia.
In this meeting, Amir Yousefi, the vice-chairman of the Agriculture Committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) also said that Kazakhstan is a good option for extraterritorial cultivation due to the good water conditions and the quality of soil, which should be considered by Iranian investors.
Reaching $3b of annual trade on agenda
Speaking on the sidelines of the meeting, Sadati-Nejad announced that the two countries have put an annual trade of three billion dollars on the agenda, expressing hope that signing the comprehensive MOU would pave the way for achieving this target.
“The presidents of the two countries have aimed to increase the level of trade to three billion dollars; currently this number is around 500 million dollars,” the minister said.
Mentioning the developments in the two countries’ banking relations, the official said that the expansion of relations in the agriculture sector is of special importance for both sides.
He further noted that a joint committee will be formed in the next month to pursue this goal, saying: “Kazakhstan has requested Iran’s engineering services in modern irrigation and desalination areas, and we have expressed our readiness to provide them with the mentioned services.”
Iranian trade center to be opened in Almaty
During the meeting of the two countries’ expert committees which was held prior to the main event on Wednesday, Amir Abedi, the head of the Iran-Kazakhstan Joint Chamber of Commerce, announced that the business office of Iran-Kazakhstan joint chamber will soon be opened in Almaty.
Pointing to the capacities of Iran and Kazakhstan for the development of economic relations, Abedi considered Kazakhstan’s market as a strategic destination for Iranian businessmen.
The 17th Iran-Kazakhstan joint economic committee meeting was held about a year ago in Tehran.
Blue Economy Offers Opportunities for Sustainable Growth in Tunisia
With support from the World Bank, in June 2022, Tunisia launched its first report on the status of the blue economy. The report, titled in French “L’économie bleue en Tunisie: Opportunité pour un développement intégré et durable de la mer et des zones côtières” (The Blue Economy in Tunisia: An Opportunity for Integrated and Sustainable Development of the Sea and Coastal Areas), recommends initial guidelines for a national strategy in this area. Spearheaded by the Ministry of the Environment and the Secretariat General for Maritime Affairs, the report is the product of extensive consultation with stakeholders in the blue economy, including the public and private sectors, researchers, and various civil society organizations.
Tunisia has more than 1,300 km of coastline. Its coastal areas are home to 7.6 million people (more than 66% of its population) who depend heavily on coastal and marine resources for their livelihoods. The report identifies avenues for sustainable development of the blue economy through tourism, fishing and aquaculture, maritime transport, ocean-based renewable energy, marine biotechnology, and other activities.
“The blue economy offers an opportunity for sustainable development and wealth creation for Tunisia through sustainable use of marine and coastal resources for economic growth, improved livelihoods and jobs, and healthy marine and coastal ecosystems,” said Alexandre Arrobbio, World Bank Country Manager for Tunisia. “I welcome the Government’s commitment to developing the blue economy in Tunisia as part of its next development plan,” he added.
The report identifies three strategic objectives: (i) promotion of economic growth of maritime activities (ii) social inclusion and gender equality, and (iii) sustainability of natural resources and ecosystem services. To achieve these objectives, five areas of intervention are proposed: establishment of institutional governance; promotion of resources and financing mechanisms; support for job creation, poverty alleviation, the inclusion of vulnerable groups, and gender mainstreaming; development of knowledge of marine and coastal capital; and strengthening of resilience to climate change.
Following the publication of this report, the Tunisian Government and the World Bank will continue their cooperation for the development of the blue economy in Tunisia. The World Bank has mobilized the PROBLUE Trust Fund to undertake the second phase of technical assistance, supporting a roadmap for the development of the blue economy in Tunisia. In the second phase of assistance to Tunisia, the Bank will conduct analyses and offer advice on institutional policies and promotion of public and private investment, in addition to providing support for strategic and operational dialogue with relevant stakeholders.
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