S Asia offers good business prospects

SEVEN hopes can make South Asia the world's growth frontier of 21st century. This is a good business news about a market of 1.6 billion people - growing at an average 1.6 per cent a year. The market will more than double to 2.285 billion in the year 2050.

By M. Aftab (Analysis)

Published: Mon 7 Jul 2008, 12:01 AM

Last updated: Sun 5 Apr 2015, 12:48 PM

Its a message of hope and better living standards for the region's inhabitants, offering good business prospects to investors and foreign trade, yet, a challenge for its governments to do more to improve the living standard of people.

South Asia is growing fast, and so are its GDP, per capita income, business, industry, foreign trade, financial institutions, travel, more money in the hands of its women, medi-care and medical tourism, education, professional classes ranging from engineers, to bankers, and real estate-men, people with more cash in hand and spending on a variety of products and services from home and abroad.

The growing demand is for everything from sports gear to designer clothes, and autos to electronics, and you name it. The region, besides its internal growth, is looking outwardly, and interacting with the rest of the world of business, trade, finance, and culture.

The countries are also part of a growing and upwardly moving growth market on a fast track. For instance the annual GDP growth that averaged 6.9 per cent for the region a decade ago is now more than 8.6 per cent. GDP Per Capita rose from $1,721 in 1995 to $3,176, and per capita Gross National per capita income $347 to $698 in the same period.

The region's total GDP rose from $432 billion in 1995 to $1,009 billion in 2005 the GDP per capita growth rose from 4.9 per cent in 1995 to 6.9 per cent in 2005. The gross capital formation as a percentage of GDP was up from 25 to 30 per cent. Gross domestic savings as percentage of GDP rose from 23 to 26 per cent. The external exposure in the form of foreign trade is seen from exports which, as per centage of GDP rose, from 13 to 20 per cent, and imports from 14.5 to 24.1 per cent. The net FDI inflows rose from $2,931 million in 1995 to $9.868 million in 2005.

These are the findings and projections of the authoritative "Human Development in South Asia-2007 - a 10 year review," just unveiled by Dr Mahbubul Haq Human Development Centre (MHHDC), Islamabad. It reviews how its past 10 reports have impacted the South Asian region.

MHHDC's first report had hit the policy makers, planners, civil society and human rights groups in 1997.

Dr Mahbub-ul-Haq, the world known economist and innovator who introduced to the world the Human Development Index (HDI), to measure progress, prosperity and well being of the people, while he was a Director in UNDP in New York, had founded the this research centre and think tank in Islamabad in the 1990s. The centre and its allied institution, the Mahbubul Haq Human Development Foundation, annually prepare an internationally regarded research report. The latest one - the 10th in the series, assesses the impact of its own 10 previous reports on policies and people in South Asia. These reports provide an in-depth coverage of the region's seven countries - Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

Mrs Khadija Mahbubul Haq, herself a great scholar, and wife of late Dr Haq, who was also Pakistan's Finance Minister, now heads the MHHDC and the Foundation.

"In 1998 Mahbubul Haq posed the question, 'Can South Asia become the next economic frontier of the 21st Century?' After reviewing the progress made in South Asia since then, we have concluded that South Asia, led by the largest democracy, with high rates of economic growth and reasonably good record of human development, shows many signs of hope to be the next frontier," says Mrs Khadija Haq.

An upbeat Mrs Haq, bases this projection, on 'seven hopes' for the region as mentioned below:

The decade to 2007 has witnessed tremendous growth rates of the major economies of South Asia, on the back of liberalising the goods and financial markets, reducing trade barriers, and encouraging private sector participation in economy.

The regional countries made a targeted approach to link economic growth to poverty alleviation - a policy being developed and implemented in most countries.

Economic progress has been complemented by progress in social development. All human development indicators have improved significantly.

Women's empowerment leading to significant improvement of gender-related indicators, from social, to economic and political empowerment, has taken place.

Serious efforts are underway to restructure and reform public sector institutions. Inefficient enterprises were privatised, and economies deregulated to reduce the cost of doing business.

Decentralisation and devolution of power to local levels brought governance to where people live, and empowering women and minorities with some voice in the system of governance.

Civil society groups are playing a major role in voicing people's concerns and making governments accountable, and taking many innovative initiatives to improve people's lives at the local level.

South Asia Human Development reports have played "a role in this new South Asia that promises a better, and more compassionate future for all South Asians, irrespective of their country of origin, ethnicity, faith, gender and income," says the assessment.

What has the decade witnessed in terms of population, real GDP absolute poverty and its illiterates?

The population rose from 1,191 million to 1,453 millions, or 22 per cent of the world as at the start of the decade. Real GDP rose from $1,632 billion to $3,812 billion which means its world share rising from five to seven per cent. The number of its 'absolute poor' or those living at $1 a-day declined from 527 million to 462 million, but their world share rose from 40 to 47 per cent. Mercifully, the number of its illiterates declined from 396 million to 379 million, but its world share rose from 46 to 49 per cent.

Sahabzada Yaqub Khan, the former Foreign Minister, said, "a fresh flow of spirit and courage is vital to face the fast-emerging challenges to come up with increased growth rate and enhanced improvement in life standards."

Former Bangladesh Finance Minister, Syeduzzman, said: "the South Asian countries ran into troubled waters due to their dependence on foreign aid and loans by donor agencies just after their independence."

Dr Ishrat Husain, former Governor, State Bank of Pakistan, proposed the economic growth of China is a good example for the South Asian countries in their millennium goals of progress and development.

Professor Dr Alia Khan, Chairperson of the Economics Department of Quaid-e-Azam University, said, "the failure of the growth process has increased poverty levels in the region."

Dr Anita Rampal of Central Institute of Education, University of Delhi, stressed the need to tackle poverty and child labour problems and access to education for the poorer people.

In a nutshell, this is exactly the task cut and laid bare for the region's leadership. Will it start working on it?

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