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Structural Transformation in South Asia: An Overview

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Structural Transformation of Bangladesh Economy

Part of the book series: South Asia Economic and Policy Studies ((SAEP))

Abstract

The nature and dynamics of ST in South Asia are complex in which social, economic, and political processes are ingredients of both processes and outcomes. An important dimension is acute inequalities in all aspects of social and economic life. Universal access to basic services and equal opportunities for all are yet to become the cornerstones of the South Asia’s ST process. The challenge for the South Asian countries is to alter the sectoral share pattern towards manufacturing given its higher productivity and employment growth potentials compared with both agriculture and services. This is necessary to overcome the process of arrested and incomplete industrialisation. For South Asia, the key policy challenge is to achieve economic growth that is both inclusive and driven by productive ST.

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Notes

  1. 1.

    The three-year sub-periods have been chosen mainly due to data limitations. For studying ST, Barro and Lee (1994) have used ten-year sub-periods, Levine et al. (2000) five-year sub-periods, while Islam (1995) 25- year period, and Karimu (2019) five-year sub-periods.

  2. 2.

    For example, compared with the 1966–1970 period, average yearly growth deceleration during 1971–1980 was as follows: 3.4 per cent to 1 per cent for Bangladesh; 4.6 per cent to 3.1 per cent for India; 2.6 per cent to 2.1 per cent for Nepal; 7.1 per cent to 4.7 per cent for Pakistan; and 5.8 per cent to 4.4 per cent for Sri Lanka. However, the growth rates started to rise in the 1980s and, in some cases, in the 1990s. Several authors describe the 1970s and 1980s for some South Asian countries as the ‘dismal’ or ‘lost’ decades for South Asia. See Mujeri and Sen, 2004; Osmani, 2009.

  3. 3.

    The unweighted protection rate declined from 73 per cent in 1991–92 to 28 per cent in 1995–96. See. Mahmud 2004.

  4. 4.

    At the international level, poverty measured at the international poverty line of $1.90 a day is used to monitor progress towards meeting the target of reducing the share of people living in extreme poverty to zero by 2030 of SDG1. See Ravallion, Chen, and Sangraula, 2008.

  5. 5.

    The multidimensional poverty index (MPI) shows both the incidence and the average intensity of their poverty. A person is identified as poor if he/she is deprived in at least one third of the weighted indicators. See OPHI/UNDP (2019).

  6. 6.

    Further, although South Asia is rapidly advancing towards a more prosperous future, the incremental wealth is accruing mostly to a small section of the population. In Nepal, during 1996 to 2011, the income share of the top quintile rose by almost five percentage points while the income share decreased for the rest four quintiles. In Pakistan, over the past 30 years, the bottom quintile has seen a decline in its share of national income while the top quintile experienced a steady increase. In India, the top 5 per cent earn as much as the remaining 95 per cent taken together. In 2017, 73 per cent of the created wealth has accrued to the richest 1 per cent. See Credit Suisse, 2017.

  7. 7.

    Over the two decades since the 1998 Asian financial crisis, nonperforming loan (NPL) ratios in Asia have generally been moving downward. Annual NPL ratios were less than 5 per cent for most countries, but bad loans as a share of the total outstanding rose to 49 per cent for Bangladesh, Indonesia, and Thailand; 29 per cent for China; and more than 10 per cent for India, Malaysia, Pakistan, and Philippines since 2010. The amount owed by corporate defaulters (net non-performing assets) to Indian banks was INR 4.44 trillion (USD 61.26 billion). See World Bank, World Development Indicators, https://databank.worldbank.org/data/reports.aspx?source=world-developmentindicators.

  8. 8.

    An analogy can be drawn of a forest for the product space where each tree is considered as a product. Each firm operating in a product is like a monkey on a tree. The monkey can easily jump to nearby trees but not to far off ones. ‘Open forest’ is obtained as the weighted sum of PRODYs of products currently not exported, and the weights being the density of the country’s current export basket around each of these products. Open forest therefore refers to the product space that can potentially be exploited given their current location in the forest (dense areas or sparse ones). See Hidalgo et al., 2007.

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Authors and Affiliations

  1. PKSF Bhaban, Institute for Inclusive Finance and Development (InM), Dhaka, Bangladesh

    Mustafa K. Mujeri

  2. Center for Research Initiatives, Dhaka, Bangladesh

    Neaz Mujeri

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  1. Mustafa K. Mujeri
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  2. Neaz Mujeri
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Correspondence to Mustafa K. Mujeri .

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Mujeri, M.K., Mujeri, N. (2021). Structural Transformation in South Asia: An Overview. In: Structural Transformation of Bangladesh Economy. South Asia Economic and Policy Studies. Springer, Singapore. https://doi.org/10.1007/978-981-16-0764-6_3

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