Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 77 AN INVESTIGATION OF SOCIO-ECONOMIC DEVELOPMENT OF SOUTH ASIAN REGION
Rudra Prasad Ghimire Ph.D. Scholar, Tribhuvan University
Abstract - South Asia is a region of the world. It needs to tap the rapid socio-economic development. It is a remaining plate for the sustainable development as it has high prospects of economic growth and development. Some of the structural challenges have made development lagged in this region. Its neighbor regions have been prosperous.But large segment of South Asia needs to turn into the better future. Economic growth and human capital development are possible at very faster rate when sustainable and rapid development policies implementation take placecontinuously. The main aim of this enquiry is to figure out the major challenges of socio-economic development issues and considering the aspect of economic development along with economic development strategies and political situations changes. This study has followed the secondary data information. Based on the comprehensive review, this study has diagnosed the socio-economic development constraints of South Asia. Since, this region should have deepened regional integration for a policy development and to undertake action by combating constraints of socio-economic development of each country of this region.
Keywords: Socio-economic development, Structural transformation, development constraints, South Asia.
1. INTRODUCTION
South Asian region covers the countries such as Afghanistan, Bangladesh, Bhutan, India, Pakistan, Nepal, Sri Lanka, and Maldives. Its growth and development are not like its neighbor regions i.e. East Asia, South Asia, and other regions. Dense population is its development constraints. Its growth rate is falling but in case of Pakistan fertility rate is high and higher rate to its fall in populations’ growth. The demographic size was experience of low-level standard of life. Except Sri Lanka, Per capita income has been increased and life expectancy at birth has been gone up.Primary education of South Asia is universal. In this region, since the cultural, historical, and geographical differences, the development of economy level has been differentiated. Nepal and Bhutan havesimilar features in terms of geography, ecosystem, landlocked, same agricultural occupation, potentials of hydropower development and potentials of other areas. Bangladesh is fertile land.
Geography is the development constraints of in Bangladesh. Pakistan and Afghanistan are majorly Muslim countries. India and Nepal have Hindu people very majorly. Buddhism is a main religion of Bhutan. In south Asia, Christian, Jain, and others are remaining as a religion.All South Asian countries
havetopography of Mountain, hill, and plain area.Afghanistan and India are a much-polluted countries. India has varied features of geography and immense eco system. It has experiences of two hundred years of British Empire regime. India is advance country in South Asia. High mass of population, high volume of production of agricultural goods, manufacturing, huge natural goods, discovery, and innovation have made India as a global development partner and good neighbor of all countries except Pakistan. Sri Lanka and Maldives, India have coastal ecosystem. Sri Lanka is jewel like island country. It was also British colonial country. This country is highly predominance of agriculture. Tea, rubber, and coconuts are major crops in this country Sri Lanka. Very good news is that; in health and human capital development Sri Lanka is ahead. Bhutan is a peaceful country and has greater happiness. Nepal is also peaceful and beautiful country. Most of the high Himalayas peaks and highest peak can be observed, gorgeous hills and plain lands are more fertile. Nepal is great reservoir of huge natural resources. Water is regarded as a diamond of a country Nepal. Nepal is multicultural, multiregional, multiethnic, and multilinguistic country. All countries of South Asia have a high prospect of tourism. Maldives is leading its economy by tourism, fishing, agriculture, and
Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 78 industry. Development of infrastructure
can harness the tourism sector and use of technology can inject to tourism agricultural development. It has so many islands.
2. LITERATURE REVIEW
For most of the 1970s, the region faced a reversal in the growth momentum that had been generated in the preceding decades. For this reason, this decade has been describedas the ‘dismal decade’ of South Asia. And on the other hand, the rate of growth declined in the 1970s from the rates achieved in 1966–70 in all countries (Osmani, 2009).
In the country, Pakistan’s annual GDP growth rate has fallen from 6 per cent to about 4.5 per cent (Lopez-Calix et. al., 2012).And it is a matter of fact that between the late 1980s and early 1990s, Bangladesh embarked upon one of the most remarkable episodes of trade liberalization in the contemporary world, slashing tariff rates much faster than most other developing countries in Asia and elsewhere (Mahmud, 2004).
Besides, for the economic development, private sector is a major pillar socio economic transformation the means of production that are the generators of industrial advance or on which depend other industries must not be allowed to be vested in private hands (Bhutto, 1968).
Long-term economic growth, and the accompanying structural transformation in occupation patterns, has played a major role in achieving this remarkable reduction in poverty across the regionby opening up opportunities for gainful employment for increasing numbers of people(Osmani,2017), (Osmani et. al., 2006), (Sen & Ali,2017), (World Bank, 2013), (ADB, 2014) (Uematsu et al., 2016), (World Bank, 2016a), (Lopez-Calix et. al., 2014) &
(Gunatilaka et. al.,2009).
The current trend rate of 4.5 per cent is much lower than the 7 per cent the government estimates is needed to engage a bulging young population in gainful employment (Government of Pakistan 2011). Nepal and Bhutan have found their own unique ways to overcome the inherent constraints of aland-locked economy that is dependent on a big neighbor. The excessive reliance on
hydropowerin Bhutan and on remittances in Nepal is creating a one-dimensional economy in each case, whichis engendering a set of structural constraints that inhibit economic diversification and thereby limitthe prospects of sustaining, let alone accelerating, the pace of socio-economic development (World Bank, 2015a). In the process, not only would inequality be perpetuated, but persistent inequality might also weaken the foundations of long-term growth (Osmani, 2017). This unique feature ofBangladesh’s achievement reflects to a large extent the sterling role that its NGO community has played in promoting social development—
much more than in any other part of South Asia (Asadullah et. al., 2014). And on the other hand, peace dividend that many had anticipated failed to materialize, and the economy sputtered forward at an average growth rate of 4.7 per cent during this period. The sharp increase in investment that was expected did not materialize, while Nepal’s investment climate may have been worsened by the prolonged period of political transition and uncertainty (Pant et. al. 2017), (World Bank ,2017).
Afghanistan has a political challenge.
Political uncertainty, violence, low agricultural production, and appreciation of exchange rate. Economic output growth is slow in Afghanistan. Maldivesmust improve socio economic development from social inclusion and service deliver.As the above literature, here is dearth of complete study socio-economic development of South Asia.
3. RESEARCH METHODOLOGY
This study has reviewed the literatures on states ofsocio-economic development, economic growth, structural transformation, and its major barriers in South Asia. This study is based on secondary information. So, this study is descriptive and analytical in nature.
4. ANALYSIS AND PRESENTATION Economic growth and development depend upon the structural transformation. Social development parameters measure its progress. Growth acceleration can be experienced by the growth of gross domestic product, sectoral contribution to gross domestic product,
Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 79 investment and trade foreign aid and
remittances and social sectors developments reveals to poverty reduction, human development, income, inequality, education, nutrition, and population growth.
South Asian countries are struggled to keep maintained their growth. Internal shock and external
environment have been caused to unstable South Asia. In this region, socio economic transformations have been ahead in terms of per capita income, poverty reduction and human capital.
Poverty has fallen in most of the countries for which structural transformation and sectoral contributors generated income and employment opportunities.
Table 1 Growth of GDP: 1966-2015 (% per annum)
Measures Per capita Growth GDP Growth Population Growth States/Year 1961 -90 1991-2015 1960-90 1991-2015 1961-1990 1991-2015
Bangladesh 0.1 3.6 2.7 5.4 2.6 1.7
Bhutan 7.1 5 10.1 6.6 3 1.6
Nepal 1.1 2.7 3.3 4.4 2.2 1.8
Pakistan 2.7 1.8 5.8 4.1 3.1 2.3
Sri Lanka 2.8 4.5 4.6 5.4 1.8 0.9
India 13 4.9 4.4 6.6 2.3 1.7
Source: World Bank’s World Development Indicators WDI Database,2017
Table one shows growth of GDP: 1966-2015 (% per annum). All the given countries’ GDP growth and population growth have made difference in the socio-economic prosperity of South Asian countries. In the table, Bangladesh’s GDP growth has been accelerated by a fall in demographic growth. While in case of Pakistan it has been found that GDP growth is decelerated due to fall growth rate of populations from the percentage of per annum analysis. Population growth rate is falling gradually in all south Asian countries except Pakistan which was 2.3 percent annum.
Table 2 Sectoral contribution to GDP: 1966-1970 and 2011-2015 (%)
Measures Agriculture Industry Manufacturing
States/Year 1966 -70 2011-2015 1966-1970 2011-2015 1966-1970
2011-2015 1991-2015
Bangladesh 54.7 16.5 9.1 27.3 5.9 17.2
Bhutan n/a 17.3 n/a 43.6 n/a 8.8
Nepal 68.2 35.3 10.3 15.5 3.6 6.5
Pakistan 38 25.1 20.8 21.1 15.3 14.1
Sri Lanka 29.7 8.6 21.8 30.8 16.1 19.2
India 44.6 18.6 23.6 31 15.6 16.8
Note: n/a means not available
Source: World Bank’s World Development Indicators WDI Database,2017
Table 2 reveals sectoral contribution to GDP: 1966-1970 and 2011-2015 (%). All the countries except Maldives and Afghanistan, the agriculture sector performance has been falling and increasing in manufacturing as well as consumption and service sector.
Development of hydropower of Bhutan and Nepal can contribute more in infrastructures of industry and manufacturing. Sri Lanka has also emphasized on construction and manufacturing which can bring changes the sectoral contribution too. Maldives has tourism sector contribution in socio economic development.
Table 3 Investment and Trade: 1966-2015 (% of GDP)
Measures Investment Area Trade Ratio
States/Year 1966 -70 2011-2015 1966-1970 2011-2015
Bangladesh 11.5 28.3 21.1 45.7
Bhutan n/a 57.4 n/a 101
Nepal 5.3 38 14.6 47.8
Pakistan 16.2 14.9 24 31.5
Sri Lanka 16.7 33.3 46.7 51.1
India 16.5 35.9 1.2 3.5
Note: n/a means not available
Source: World Bank’s World Development Indicators WDI Database,2017
Table 3 presents investment and trade: 1966-2015 (% of GDP). Pakistan’s investment has decreased in 2011-2015. Sri Lanka has increased at that time. Trade ratio of thr this
Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 80 country has increased in (2011-2015). Bhutan in the topped in trade ratio divulges open economy. Bhutan is trading hydropower to India very majorly. Nepal’s has opportunity to export power as per the demand of India and others. Sri Lanka’s trade ratio has augmented as well by 51.1 percent. At the same period, Bangladesh has reached 45.7 percent.
Table 4 Role of Foreign Aid: 1966-1985 and 2011-2015 (%) Measures Percent of GNI Percent of Investment States/Year 1981 -1985 2011-2015 1981-1985 2011-2015
Bangladesh 5.9 1.3 35.8 5.1
Bhutan 11.7 7.7 24.1 12.6
Nepal 8 4.6 42.6 12.3
Pakistan 2.4 1.2 14.1 8.6
Sri Lanka 8.4 0.7 30.4 2
India 0.8 0.1 3.9 0.4
Source: World Bank’s World Development Indicators WDI Database,2017
Table 4 shows role of foreign aid: 1966-1985 and 2011-2015 (%) in South Asian countries.
Every country in 1981-1985 has received aid very significantly as percentage of GNI and percent of investment. When comparing at the given timeframe, both percent of GNI and investment have been decreased in all the South Asian countries.
Table 5 Role of remittance: 1981-1985 and 2011-2015 (% of GDP) States/Year 1981 -1985 2011-2015
Bangladesh 2.7 9.1
Bhutan n/a 0.8
Nepal 1.3 27.5
Pakistan 8.5 6.5
Sri Lanka 5.4 8.6
India 1.2 3.5
Note: n/a means not available
Source: World Bank’s World Development Indicators WDI Database,2017
Table 5 role of remittance: 1981-1985 and 2011-2015 (% of GDP) in South Asian countries.
Bhutan has not noteworthy flow of remittance. Comparatively, Nepal has high flow of remittance as 27.5 percent of GDP remained over the period. Pakistan’s appeared in 1981- 1985 was 8.5 percent of GDP while it remained 6.5 in 2011-2015. However, Pakistan has utilized its available resources for macro-economic stability. Bangladesh, Sri Lanka, India and Bhutan have increased flow of remittance in during the 2011-2015 periods.
Table 6 Growth reversal and the subsequent transition (growth of GDP per annum %) States/Year 1966 -1970 1971-1980 1981-2015
Bangladesh 3.4 1 5
Bhutan n/a na 7.6
Nepal 2.6 2.1 4.5
Pakistan 7.1 4.7 4.7
Sri Lanka 5.8 4.4 5.1
India 4.6 3.1 6.3
Note: n/a means not available
Source: World Bank’s World Development Indicators WDI Database, 2017
Table 6 illustrates growth reversal and the subsequent transition (growth of GDP per annum %) in south Asian countries. Strategy of economic development has carried out by this region’s countries promoting exports and substituting imports but expected level of growth and development could not occur. But rather it seems inefficiencies in policy implementation. Entrepreneurship, infrastructure development, industrial development, export promotion, leadership failure are major cause of growth reversal in the region.
Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 81 Table 7 Development indicators of South Asia
Countries GDP per capita (2010 US$)
Share of manufacturin
g in GDP (%)
Population
(million) Population density (person/sq km)
Life expectancy
at birth (years)
Gross enrolment at primary level
(%)
Bangladesh 392 5.4 52.6 404 47 63.6
Bhutan n/a n/a 0.2 5 35 21.7
Nepal 274 3.3 10.6 74 36 39.0
Pakistan 344 14.1 48.4 63 48 50.8
Sri Lanka 594 16.5 10.7 170 59 94.8
India 322 17.1 477.8 161 44 80.8
Note: n/a means not available
Source: World Bank’s World Development Indicators WDI Database, 2017
Table 7 shows development indicators of South Asia. GDP per capita of Sri Lanka is maximum and lowest in Nepal among the South Asian Countries. Population in million is highest in India by 477.8 million. Life expectancy at birth is highest in Sri Lanka and lowest in Bhutan. And the gross enrollment at primary level in percent is 80.0 percent in India and lowest in Bhutan. By observing thetable, it found that development indicators are account very low-level performance.
Table 8 Socio economic scenarios of south Asian economies Countries GDP
Growth Per capita
GDP growth Population
(thousand) Labor force participation
rate %)
Average annual HDI growth % 2010-2019
Afghanistan 3.9 1.5 38041.75 49 0.89
Maldives 7.0 3.9 530.95 71 0.86
Bangladesh 8.2 7.0 163046.16 59 1.41
Bhutan 5.5 4.3 763.09 67 1.46
Nepal 7.0 5.0 28608.71 84 1.28
Pakistan 1.0 -1.0 216565.32 53 0.94
Sri Lanka 2.3 1.7 21803.00 54 0.41
India 4.2 3.1 1366417.75 49 1.21
Source: World Bank Data Base and UNDP (Human Development Report), 2019 Table 8 demonstrates the socio-economic
scenario of South Asian economies based on the selected indicators such as gross domestic growth, per capita gross domestic product, population in thousand, labor force participation rate and average annual human development indicator growth. And countries like Bangladesh, Bhutan, India, Nepal, and Maldives exhibitedoptimistic development, whereas economies such as Pakistan, Sri Lanka and Afghanistan have been faced pessimism of underdevelopment.
And from the above analysis, it is found that South Asia region took initiation of development policy and strategy as like as East Asia and Southeast Asia. But policy is failed in keeping as development agenda continue in secured framework.Comparing to the neighbor countries; till now, in Nepal’s case, entrepreneurship development and industrial development have not got importance. They were stopped to their own production. Public enterprises were privatized. And someproductive industries were closed. Labor assets had flight.
Migration became solution of livelihood.
Country became major remittance earner.
Some countries were suffering from internal conflict, some were in tussles and political instability had created unnecessary economic burden in the countries. Country became import led economy which enforced rise in balance of payment eventhat made government to charge high tariff, licensing, and restriction policies. Afghanistan has remained war for longer period.
Sustainable growth in Afghanistan is a challenge. It has problem of nurturing industrial sectors. It imports more from Iran and Pakistan. Pakistan has experiences of oil price shocks and flood and pest. Sri Lanka case was also suffered by internal shocks. Similarly, finance for imports of agriculture and manufacturing sector ensured industrial sector stagnation. Industry sector could not utilize its capacity. Bangladesh realized accelerated growth of agriculture, boosted manufacturing sectors. Garments became the exportable goods. It has maintained steady growth by owned.
Vol. 06, Issue 06, June 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL) 82 Political environment has been favored.
Bhutan has achieved high growth.
Modern Indian economy is getting capacity of energy from Bhutan which is major earning source of Bhutan.
However,it has slow growth in agriculture.India has faced financial shocks in the country. It is a rich country;
exports the goods to almost all countries.
Nepal is major importers country in South Asia.
Bangladesh’s microfinance;
remittance of Nepal and Pakistan;
Happiness Index and export of hydropower of Bhutan, paradigm shift of human development of Sri Lanka, similarly; life expectancy, nutrition, infant mortality, and primary school have a progressive record in the region.
Afghanistan and Pakistan have poor prosperous in human development.
Maldives has sustained improvement.
India has greater improvement in all sectors. Population pressure of India has rising income inequality. All countries of South Asia are facing greater inequality.
Education and health sectors have inequality growing. However, living standard is raising in the South Asian countries. Hereby regional and sub regional integrational framework is necessary to reduce inequalities of all countries to be rescued from frequent collapse of economic growth.
Recognizing the status of achievement, South Asia is far from it potential in several areas. This region must focus export trade competitiveness to uplift the socio -economic development.
Nowadays, import has maintained socio economic development with high income inequality and have imbalance ineconomic equilibrium. Some of additional challenge such as domestic war, political upheavals, weak governance, terrorism, high fertility, lack of strong regional integration, collaboration, less skill of industry manpower, limited production of exportable goods, low level of human development, inadequate human skills, human capital flight, landlocked, high dependency, conservative attitude towards education and health, low use of technology, lack of agricultural modernization, high inequality, high inefficiency for a sustainable growth, remittance based economy, climate
change, urbanization, less job and lack of leadership, less competitiveness at global level etc. butall type of challenges are manageable if countries take step simultaneously.
5. CONCLUSIONS
South Asiais naturally a unique region to develop. It has huge resources in every elevation range of topography. It is found that the resources have not been utilized at suffice. Small progress is impressive progress seen in South Asia which shows the figure to have greater achievement in the futureas per the economically feasibility and viability. All sorts of crisis and shocks can be checked.Regional integration policy framework can spread the flow of resources into the hand of the south Asian people developing mega projects in tourism, health, education, hydropower, minerals, agriculture, and industry. Both product and service sector development can reduce inequality with fair distribution. Sustainable socio- economic development along with structural transformation can be obtained only when all the government policies aligned at regional perspective.
Independent capacity of economic growth and development makes the region more stable. All countries of South Asia region should have sectoral competitiveness and productivity can maintain regional level strength at the globe. Regional public infrastructure plays key role to make the region more independent. Independent capacity of economic growth and development makes the region more stable.
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