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Ms. Mercedes Garcia-Escribano, Ms. Tewodaj Mogues, Marian Moszoro, and Mauricio Soto
South Asia has experienced significant progress in improving human and physical capital over the past few decades. Within the region, India has become a global economic powerhouse with enormous development potential ahead. To foster human and economic development, India has shown a strong commitment to the Sustainable Development Goals (SDG) Agenda. This paper focuses on the medium-term development challenges that South Asia, and in particular India, faces to ensure substantial progress along the SDGs by 2030. We estimate the additional spending needed in critical areas of human capital (health and education) and physical capital (water and sanitation, electricity, and roads). We document progress on these five sectors for India relative to other South Asian countries and discuss implications for policy and reform.
Ruchir Agarwal, Vybhavi Balasundharam, Patrick Blagrave, Mr. Eugenio M Cerutti, Ragnar Gudmundsson, and Racha Mousa
The South Asia region is both a large contributor to climate change and also one of the regions most vulnerable to climate change. This paper provides an overview of the region’s vulnerabilities, national committments to mitigate emissions, and national policies to adapt to a changing climate. The paper also discusses policy measures that may be needed to make further progress on both mitigation and adapatation. Our analysis suggests that while substantial progress is being made, there remains scope to adopt a more cohesive strategy to achieve the region’s goals—including by improving the monitoring and tracking of adaptation spending, and by laying the groundwork to equitably increase the effective price of carbon while protecting low-income and vulnerable households in the region.
Weicheng Lian, Fei Liu, Katsiaryna Svirydzenka, and Biying Zhu
While South Asia has gone a long way in diversifying their economies, there is substantial scope to do more. Some countries – India, Nepal, and Sri Lanka – can build on their existing production capabilities; others – Bangladesh, Bhutan, and the Maldives – would need to undertake a more concerted push. We identify key policies from a large set of potential determinants that explain the variation in export diversification and complexity across 189 countries from 1962 to 2018. Our analysis suggests that South Asia needs to invest in infrastructure, education, and R&D, facilitate bank credit to productive companies, and open to trade in order to diversify and move up the value chains. Given the COVID-19 pandemic, investing in digital technologies as part of the infrastructure push and improving education are of even greater importance to facilitate the ability to work remotely and assist resource reallocation away from the less viable sectors.
Mr. Giovanni Melina and Marika Santoro
The increased likelihood of adverse climate-change-related shocks calls for building resilient infrastructure in the Maldives. Fulfilling these infrastructure needs requires a comprehensive analysis of investment plans, including with respect to their degree of climate resilience, their impact on future economic prospects, and their funding costs and sources. This paper analyzes these challenges, through calibrating a general equilibrium model. The main finding is that there is a significant dividend associated with building resilient infrastructure. Under worsened climate conditions, the cumulative output gain from investing in more resilient technologies increases up to a factor of two. However, given the Maldives’ limited fiscal space, particularly after COVID-19, the international community should also step up cooperation efforts. We also show that it is financially convenient for donors to help build resilience prior to the occurrence of a natural disasters rather than helping finance the reconstruction ex-post.