South Asia registered higher growth in the past three decades but it did not translate into enough job creation, needed for sustainable transformation of the region by 2030.
“Employment is the key. Employment generation can both mobilise and create resources,” said Deepak Nayyar, chair of South Asia Centre for Policy Studies (SACEPS), India.
Nayyar's comments came in a keynote presented at a session on possible pathways for sustainable transformation of South Asian economy by 2030 at the two-day ninth South Asia Economic Summit, held at the Le Méridien hotel in Dhaka.
The Centre for Policy Dialogue is jointly hosting this year's conference -- under the theme “Reimagining South Asia in 2030” -- along with other leading think-tanks of the region.
South Asia recorded rapid economic growth over the last couple of decades but the growth did not create adequate jobs.
Surplus labour of agriculture was absorbed by the informal sectors, Nayyar said, citing a low level of employment generation in the manufacturing sector.
“South Asia's progress in industrialisation in disappointing,” he said, while citing Bangladesh as an exception.
In terms of employment creation and structural change, Bangladesh does better than most South Asian countries but worse than Southeast Asian nations.
“Growth can create jobs. Jobs can create growth,” he said, adding that employment generation must be an integral part of policy-making. Nayyar emphasised focusing on education and healthcare and the role of governance for structural transformation of South Asia by 2040.
“Efficient market needs effective governance,” he added.
South Asia is itself a big economic entity but intra-regional trade is stuck at only 5 percent of total trade in the region, said AHM Mustafa Kamal, planning minister of Bangladesh.
In contrast, the intra-regional trade under the Asean block is 26 percent, he added.
Najma Afzal Khan, a member of Pakistan's Punjab Assembly, said South Asia faces some challenges such as reforms in governance in social sectors. “But the biggest challenge is the lack of cooperation and peace in the region.”
She went on to call for collaboration in skills, knowledge transfer, cooperation in trade and investment and facilitation of people-to-people contact.
The region needs to shift focus on green growth as it cannot afford to continue the use of resources in an unsustainable way, said Sultan Hafeez Rahman, executive director of BRAC Institute of Governance and Development.
He also emphasised strengthening institutions. “We, in South Asia, need to understand that the flip side of the market is regulations.”
The South Asian countries need to keep an open mind for regional cooperation, said Shamsher Mobin Chowdhury, former foreign secretary of Bangladesh.
The government has to focus on increasing revenue mobilisation, bridging rural-urban divide and getting female workers into the labour force, said Dushni Weerakoon, deputy director of Sri Lanka's Institute of Policy Studies of Sri Lanka.
Saman Kelegama, executive director of IPS, moderated the discussion, where Swarnim Wagle, member of National Planning Commission of Nepal, also spoke.