This edition, 'Jobless Growth', argues that growth alone will not be enough to attain the higher employment rates enjoyed by other developing countries, especially among women. "More than 1.8 million young people will reach working age every month in South Asia through 2025 and the good news is that economic growth is creating jobs in the region,” said the World Bank South Asia Region chief economist Martin Rama. "But providing opportunities to these young entrants while attracting more women into the labor market will require generating even more jobs for every point of economic growth."While the number of working age people is increasing, the fraction of working-age people, who are at work has declined in most countries in South Asia based on employment data analysed from 2005 to 2015, the report reads, adding that some decline was to be expected as higher incomes allow households to prioritise education, health, and other commitments. "But the fall in employment rates in South Asia has been much faster than in East Asia and it has been particularly strong in India, Bhutan, and Sri Lanka, especially for women, the report shows.
With declining employment rates, the region is foregoing some of its potential demographic dividends."To arrest further declines in employment rates, South Asian countries would need to create 11.7 million jobs a year, which is feasible if the current growth momentum of the region is sustained, it suggests. But if South Asia wants to increase employment rates to the levels seen in other regions with similar income levels, it would need to create many more jobs. The focus should also be on better jobs, as regular wage employment remains the exception more than the norm.Likewise, the report has also estimated economic growth lower than the Asian Development Bank (ADB) and of course Nepal government.
The ADB had last week revised the economic growth to 4.9 percent for the current fiscal year from an earlier estimation of 4.7 percent, whereas the government had – in the mid-term budgetary review – revised the economic growth rate downwards to 6 percent from the earlier projection of 6.5 percent.Nepal has seen an economic recovery after disruptions from earthquakes and a trade blockade but growth is expected to slow from 7.5 percent in the fiscal year 2016-17 to 4.6 percent in 2017-18 due to the heaviest floods in decades combined with slow recovery of exports, slowdown in remittances, and an increase in lending rates, the report reads, adding that Nepal is the second country from bottom in terms of low economic growth in the region.However, South Asia has regained its lead as the fastest growing region in the world, supported by a recovery in India. With the right mix of policies and reforms, growth is expected to accelerate to 6.9 percent in 2018 and 7.1 percent next year."Growth is important, but even very high growth will alone not be enough to increase South Asia’s employment rate”, the report author Robert Beyer said, adding that policies and actions are needed to make growth more labour-intensive, and especially to create the kinds of jobs that can encourage greater labor force participation by women.
Country Outlook: Growth is relatively stable in most countries
Real GDP growth in South Asia 2015 2016 2017 (est) 2018 (f) 2019 (f) 2020 (f)Afghanistan (CY) 1.3 2.4 2.6 2.2 2.5 3.3Bangladesh (FY) 6.6 7.1 7.3 6.5 6.7 7.0Bhutan (FY) 7.3 7.4 5.8 5.4 6.0 8.7India (FY) 8.2 7.1 6.7 7.3 7.5 7.5Maldives (CY) 2.2 6.2 6.2 5.5 4.5 4.9Nepal (FY) 3.3 0.4 7.5 4.6 4.5 4.2Pakistan (FY, factor prices) 4.1 4.6 5.4 5.8 5.0 5.4Sri Lanka (CY) 5.0 4.5 3.1 4.8 4.5 4.5
CY: Calendar Year, FY: Fiscal Year, est: Estimate f: Forecast