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Poverty

Taking digital banking services to remote villages in north eastern India

Priti Kumar's picture
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions
Ang Dolma Sherpa, an expert carpet weaver in West Sikkim is one of the 200-300 women weavers in the region who are benefiting from the project’s interventions. Photo: World Bank

Until six months ago, people in the remote corners of India’s Himalayan state of Sikkim had to travel long distances over the hillsides to do simple banking transactions.

When they did reach a bank, it was usually overcrowded and understaffed. This made it difficult for rural folk, unfamiliar with formal financial systems to deposit or withdraw money, let alone borrow to meet their needs.
 
Now change is in the air. Ever since the - supported by the World Bank - helped banks in Sikkim’s western and southern districts engage local women self-help group (SHG) members as their business correspondents, people in these distant parts have been able to bank at their doorsteps.
 
While the concept is not new in India, the two correspondents - one for each district - have proved to be nothing short of a miracle for this far-flung region. They have fanned out across mountain villages, equipped with palm-sized micro-ATMs, biometric readers, and internet-connected thermal printers. Villagers can now deposit their money easily, earn interest, and withdraw whenever needed.
 
In the six months since the correspondents were first introduced, business has soared. “,” explained Lila Shilal, business correspondent for the IDBI Bank in West Sikkim’s Jorethang block.
 
Shilal has also benefitted in the process. .
 
The project has introduced another financial service as well, this time at the bank itself. Here, bank sakhis - or female banker friends – help village folk and SHG members fill out forms and apply for loans.
 
This new cadre of women business correspondents and bank sakhis has not only benefitted local communities and given SHG members a new livelihood opportunity, it has also made life simpler for the region’s bankers.

Improving Pakistan’s public and private investment

Muhammad Waheed's picture
Pakistan is not investing enough and its share of investment to GDP is one of the lowest in the world at 15 percent almost half of the South Asian average at 30 percent. This translates into inadequate infrastructure, lack of access to sufficient levels of energy and water, poor quality of schools and hospitals. Photo: World Bank

This blog is part of a series that discusses findings from the  report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

. Every few years, the economy is faced with a balance of payments crisis as it tries to grow fast.

This is unlike many other successful peer countries that are growing at higher rates for a longer time.


 
The fundamental cause for these short-lived growth cycles in Pakistan is that these are propelled by private and government consumption, not by higher investment.

Resultantly, the country’s demand increases at a much higher pace than its supply of goods and services, prompting a need for higher imports which becomes unsustainable.

Successive governments have tried to notch up growth in this way, but all of them have ended with a balance of payments crisis.
 
, almost half of the South Asian average at 30 percent. This translates into inadequate infrastructure, lack of access to sufficient levels of energy and water, poor quality of schools and hospitals.
 
This low investment trap and declining labor productivity have reduced Pakistan’s growth potential.
 
The decline in the economy’s growth potential is particularly concerning because it suggests that the country will not be able to grow at higher rates required for job creation. .
 
The foremost priority is that Pakistan must maintain macroeconomic stability. Persistent macroeconomic instability has discouraged savings and private investment in the country resulting in low-aggregate investment and fluctuating output levels.

Accelerating Pakistan’s structural transformation

Siddharth Sharma's picture
Pakistanat100 Shaping the Future report
Photo: World Bank

This blog is part of a series that discusses findings from the  report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

Structural transformation is central to how countries grow rich.

.

Then, within industries, a process of creative destruction helps weed out unproductive firms and gives rise to more efficient and innovative ones.

Of course, no two countries have the same growth path. But those that succeed at sustaining growth do so by moving resources to more productive areas and building firm capabilities.

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Relative to the historical norm for countries at similar levels of per capita GDP, while Pakistan’s agricultural sector is of typical size, its manufacturing sector is small, and the services sector large.

GovTech: Putting people first with simple, efficient and transparent government

Nicholas Nam's picture
Graphic by Nicholas Nam

Rapid technological change and growing expectations of citizens are elevating the importance of digital innovation for governments around the world. The World Bank Group, working together with other stakeholders, has a role to play in ensuring client countries have access to knowledge, the solutions, and the expertise required to bring about digital transformation of government services.

World Bank Group, Financial Times’ blog writing competition winners announced

Arathi Sundaravadanan's picture
World Bank Group and Financial Times’ blog writing competition winners Ishita Gupta from India and Nhi Doan from Vietnam at the World Bank Group headquarters in Washington, DC moments before receiving their award. © Bassam Sebti/World Bank
World Bank Group and Financial Times’ blog writing competition winners Ishita Gupta from India and Nhi Doan from Vietnam at the World Bank Group headquarters in Washington, DC moments before receiving their award. © Bassam Sebti/World Bank

In December we announced the World Bank Group and the Financial Times blog writing competition, ‘How Would You Reimagine Education?’ The competition closed on January 31st and we received almost 600 entries from more than 90 countries. This competition built on our as well as the World Bank’s World Development Reports on The  and .

Several common themes emerged from the blog posts across cultures and continents. Despite the rising use of technology in classrooms, students said teachers and personal interactions would always remain valuable. They also highlighted that teaching methods have not changed for centuries and reviving that system to help students think critically, solve problems, and enhance their creativity would be crucial.

Making Pakistan more equitable for all

Silvia Redaelli's picture
Between 2001 and 2015, approximately 32 million people were lifted out of poverty
Photo: World Bank

This blog is part of a series that discusses findings from the  report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

. Estimates based on the national poverty line, which was set at Rs3,030.3 per adult equivalent per month based on 2013-14 prices, show a consistent decline over the past two decades.
 
. However, a lot is yet to be done.

Not only because 2015 estimates show that approximately one in four Pakistani still does not have enough money to satisfy basic needs, but – even more alarming – progress has been far from equal when looking across the provinces, districts, cities, and rural areas.
 
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Within provinces, poverty has remained stubbornly high in Southern Punjab and Northern Sindh. Similarly, the pace of poverty reduction has been slower in rural areas compared to cities, where the risk of poverty is less than half compared to rural areas.

Inequalities in poverty levels and poverty reduction performance are compounded by substantial inequalities in access to and quality of basic services such as health, education, electricity, water, and sanitation.
 
Being born in one of the country’s lagging areas and/or in a poor family largely predetermines a child’s chances of escaping deprivation and realizing his or her full human capital potential in life.

Paying for development – Governments are sitting on a ‘goldmine’

Marco Scuriatti's picture
Shanghai at night, Huangpu River.  © Wu Zhiyi/World Bank
Shanghai at night, Huangpu River.  © Wu Zhiyi/World Bank

Investments in human, social, and physical capital are at the core of sustainable and inclusive growth – and represent an important share of national budgets.

At the World Bank Group we have been at the forefront of the so-called Financing for Development (FfD) agenda to leverage public, private, international, and domestic sources of capital to help reach the global goals.  A short primer on our efforts--which builds on the 2015 Development Committee paper --can be found in the brochure entitled .

Ultimately, countries own the responsibility for achieving the SDGs: raising more domestic revenue (and doing so more efficiently), addressing spending inefficiencies, and mobilizing private capital (as the world economy is facing potentially slower growth and political friction). These will not be easy challenges.  

Alternative methods to produce poverty estimates when household consumption data are not available (Part I)

Hai-Anh H. Dang's picture

Poverty reduction consistently ranks among the most prioritized tasks of developing countries as well as the international community. Indeed, the Sustainable Development Goals (SDGs) recently adopted by the United Nations General Assembly call for eliminating poverty by 2030 in its very first goal. A good understanding about poverty trends and dynamics could result in more efficient policies and better use of resources. For example, social protection programs may be most suitable to prevent vulnerable households from falling into poverty, but are not the best options to fight a situation of entrenched chronic poverty.

Several questions typically come up in the context of poverty measurement. One set of questions concerns, unsurprisingly, how best to track the trends of poverty over time? Put differently, how do we know which trajectory country A’s poverty is on: is it upward, downward, or does it remain flat over time? The other set of questions are related to the composition of poverty transitions over time. In particular, what is the proportion of the poor in one period that remain poor (i.e., chronic poverty) or escape poverty (i.e., upward mobility) in the next period? Or what is the proportion of the non-poor that fall into poverty (i.e., downward mobility) in the next period?

Yet, finding the answers to these questions are challenging tasks, simply because comparable household consumption data for a specific country from multiple time periods are often unavailable, particularly for low-income countries. As an example, using the World Bank’s database, we plot in Figure 1 the number of data points of poverty estimates for a country against its consumption level. For better presentation, we also graph the fitted line for the regression of the former outcome on the latter outcome.

The estimated slope of this regression line is positive and strongly statistically significant, suggesting that a 10 percent increase in a country’s household consumption is associated with almost one-third (i.e., 0.3) more surveys. Figure 1 thus helps highlight the—perhaps paradoxical—fact that poorer countries with a stronger need for poverty reduction also face a more demanding challenge of poverty measurement given their smaller numbers of surveys. This is unsurprisingly consistent with a prevailing among some development practitioners that collecting survey data may not be the top priority for many developing countries.

Figure 1: Number of Household Surveys vs. Countries’ Income Level, 1981- 2014

Source: Dang, Jolliffe, and Carletto (in press).

Create your #PathToEndPoverty

Pabsy Pabalan Mariano's picture

 Who will create the greatest change? We may find similarities and differences in our responses to these questions when we reflect on our own interests, inspirations and commitments. But, what it all reveals is a very important shared purpose. 

 

As thousands of people across the globe attend the , YOU can help us highlight our diversity and a united view towards our vision for a better world.
 
From April 10-13 attendees in Washington DC are invited to answer questions using colorful strings. When plotted on a giant wall, it reveals an easy-to-read visualization of the ways to end poverty and create opportunities for all.

The dos and don’ts of boosting Pakistan’s human capital

Tazeen Fasih's picture
Photo: World Bank

This blog is part of a series that discusses findings from the  report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047. 

My parents’ gardener has six children – all aged 8 or younger. While his wife is busy taking care of the youngest ones, barely 15 months and 2 months old, he brings the other kids along with him so they don’t wander in the streets.

As I look at the supposedly 8-year-old girl with a dupatta wrapped around her head, looking tiny, probably stunted, suddenly .

The 38 percent stunting rate for the population, the fertility rate of 3.6 births per woman, the 22.6 million children out of school, the dismal learning outcomes for students, these are all here manifested in this family and its future.

What kind of future is awaiting these children? Will they be able to reach their full productive potential? , Pakistan’s children born today can achieve only 39 percent of their full potential – productivity they could have achieved if they were able to enjoy complete education and full health.

With over 60 percent of Pakistan’s national wealth (measured as the sum of produced capital such as factories and infrastructure; 19 types of natural capital such as oil, minerals, land, and forests; human capital; and net foreign assets) estimated to be coming from Human Capital Wealth, a failure to nurture and utilize this wealth to its full potential can be fatal.

Nonetheless, successive governments have failed to address the human capital challenge. A careful review of policies in Pakistan on human development reveals a myriad of policies over the 70 years of the country – many strategies appearing sound and well-intentioned, some, of course, appearing to be prompted by geopolitical situations of specific eras of the country.

In this context, we highlight some principles in human capital policies.


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