As I wrote in an earlier post, South Asia has made significant progress in integrating with the global economy, however, integration within the region remains limited. Ahmed and Ghani note that while economic growth in South Asia has reduced poverty sharply, there have been two negative developments following the growth: 1) evidence of growing income inequality in South Asia, and 2) a growing imbalance among regions within countries and among the countries themselves. The lagging regions challenge relates strongly to geography, with many of the South Asia’s lagging regions being landlocked countries and border communities.
Ahmed and Ghani have created a map of per capita income in South Asia, which highlight the following results:
- The landlocked countries of both Afghanistan and Nepal are among the lowest per capita income group in the region.
- 12 out of the 14 states of India that have borders with neighbors have per capita income levels that are at or below the national average.
- In Bangladesh, the border districts tend to have per capita incomes lower than the national average.
Not surprisingly, the lagging regions display socioeconomic characteristics that underscore poverty and underdevelopment. The lagging regions have an estimated 400 million people, of whom an estimated 200 million are poor (reference year of 2005). This is about 50 percent of South Asia’s estimated total number of poor for the year 2005. The human development indicators, infrastructure reach, and access to water tend to be below the comparable national average, and many indicators are lower than the average in South Asia.
The map of per capita income speaks volumes for the need for regional cooperation in South Asia. Regional cooperation can facilitate a more equitable growth and allow lagging regions to participate in the rapid economic growth that the subcontinent has been experiencing.