It can be done, according to the report Economic Growth in South Asia, recently published by the World Bank. If growth accelerates to 10%, poverty could go down by two thirds and reach single-digit rates by 2015.

 


Poverty South Asia
 

In the words of Shantayanan Devarajan, World Bank Chief Economist for the region and co-author of the report:

 

South Asia's decade-long economic expansion has raised the possibility that the sub-continent could eliminate poverty in our lifetime. But to realize this dream, South Asians must create the conditions and incentives necessary to sustain and accelerate growth that benefits all. The economic well-being of several hundred millions of people depends on it.

 

Poverty reduction has already been significant in the past decade, thanks to sustained economic growth. Ijaz Nabi, the report’s co-author:

 

Across the board, poverty has come down by six, seven, eight percentage points, as a result of this decade long growth rate. The one country in the region that did not experience a reduction in poverty was Pakistan, because Pakistan’s growth rate virtually stalled in that decade. But there too, growth has now picked up and the most recent data from Pakistan show a substantial reduction in poverty.

 

Of course, to fulfill this optimistic forecast, big challenges need to be addressed:

 

A closer look at the evidence suggests that much remains to be done to achieve these accelerated growth rates. First, economic growth in the past decade has resulted in growing income inequality which may act as a constraint to higher growth. Second, while conflict, corruption and high fiscal deficits may not have constrained growth in the past, their persistence may become binding in the future. Third, a comparison with East Asia--a region that has sustained 7-10 percent growth rates--shows that South Asia's export-orientation, inflows of foreign direct investment, workers’ skill levels, infrastructure and ease of doing business are also substantially less advanced than East Asia's. South Asia’s savings, investment and productivity are also lower. These challenges suggest a set of policy choices for South Asian countries aimed at increasing investment and productivity, and the quality of labor, while addressing the problem of lagging regions and poor service delivery. Finally, the least integrated region in the world, South Asia can benefit from regional cooperation in trade, water and energy, among other things.

 

Related:

Much more available at the report's website, including interviews with the authors and abundant data.