South Asia could cut poverty much further in the coming decade if it grows at a faster pace than in the past 10 years and ensures prosperity is more evenly distributed, a World Bank report said on Sunday.
The number of South Asians living in poverty could drop by two-thirds in less than 10 years if the region grows 10 percent a year, the World Bank's "Economic Growth in South Asia" said.
But regional growth last year was 7.9 percent and should be 7.1 percent in 2006 before easing to 6.9 percent in 2007, the International Monetary Fund's semi-annual World Economic Outlook forecast in April.
That's still above average annual growth over 5 percent in the last five years in Bangladesh, Bhutan, India, Maldives and Pakistan - Sri Lanka grew at 4.7 percent and Nepal at 2.5 percent - when poverty dropped by 9, 10 and 11 percentage points in Bangladesh, India and Nepal, the World Bank said.
One of the key reasons nearly 400 million people out of the region's 1.37 billion are still poor is that some regions are growing at substantially slower rates than richer areas.
India's two largest and poorest northern states, Bihar and Uttar Pradesh that account for a quarter of the population, have per capita incomes a third of the seven richest, it said.
"Rapid growth, due to its uneven nature, is deepening income inequality and may be hard to sustain in the longer term if key constraints are not addressed," the report said.
One of those constraints is insufficient rural and urban infrastructure, which the World Bank estimates would require South Asians to invest 25 billion dollar annually to redress.
Expanding the region's manufacturing sector, diversifying exports, improving workers' skills and encouraging people to save and invest their new income would go a long way to evening out the distribution of wealth and growth, the report said.
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