World Bank in its "World Bank Annual report 2008"has observed that South Asia has been hard hit by the recent increase in the prices of rice and wheat which affected millions of people in the regional countries.
According to World Bank's report, rapid growth alone is not sufficient to end poverty. However, economic growth has been accompanied by rising inequality and the region is continuously suffering from worst levels of human deprivation in the world.
The World Bank has further noted that corruption, confrontational politics and conflict threaten to derail the process of economic development. The region has also been hard hit by the recent increase in world food prices, especially for rice and wheat. To address all of these issues, the World Bank's strategy for South Asia comprises three pillars, accelerating and sustaining growth, making development inclusive, and strengthening human development and the cross-cutting theme of improved governance.
According to the report, South Asia has experienced rapid economic growth, declining poverty, and progress in human development for more than a decade. As a result, the region with the world's largest concentration of poor people has a real chance of ending mass poverty in a generation.
As per report WB's focus in South Asia during year 2008 has been financial and private sector development with highest 31% lending for this sector. World Bank approved nearly $4.3 billion for South Asia in the year 2008, $1.5 billion in loans from IBRD and $2.8 billion in IDA credits. WB has also made commitments of $4.247 billion in the year 2008 for future assistance.
WB lending by sectors reveals that it lent $1.344 billion for the financial and private sector development, $788.3 million for human development, $574 million for rural development, 423 million for public sector development, $122 million for economic management, $386.6 million for environmental and natural resource management, rule of law $26 million, $321 million for social development, $145 million for social protection and risk management, $68 million for trade and integration and $45 million for urban development.
The report revealed that Bank's program also projects an emerging new reality: South Asia can no longer be characterised as a uniformly low-income region. Growth is propelling several Indian states, along with Bhutan, Maldives and parts of Sri Lanka, into middle-income status. At the same time, per capita incomes and human development indicators in Bangladesh, Nepal, most of Pakistan, and the lagging regions of India and Sri Lanka are those of low-income countries.
A study on education in Punjab, Pakistan, concluded that the dramatic increase in private schools requires policy makers to re-examine the education policies. A study on labour issues in India, and performed an environmental assessment in Pakistan.
About 1 billion people live in rural areas in South Asia. As a result, the region's economy depends on agriculture. The Bank provides assistance to South Asian governments in many aspects of the management of water resources, including watersheds, groundwater, international waters such as the Indus Waters Treaty, and river basins. In fiscal 2008, the Bank approved a $150 million credit to enhance water distribution in Pakistan's Sindh Province. In neighbouring Baluchistan, it approved a $25 million credit to boost agricultural production and improve the use of water in irrigation.
The Bank is working to address South Asia's vast urban and rural infrastructure deficits, often cited as the greatest constraint to foreign investment. Half of the region's population still lacks access to electricity. Governance lies at the heart of the Bank's work in South Asia. The Governance Country Assistance Strategy for Bangladesh and governance reforms in irrigation, the financial sector, and education in Pakistan are two examples.
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