Asian Economic Policy Review最新文献

This special issue of the Asian Economic Policy Review examines the economic development of four economies of South Asia,¹ Bangladesh, India, Pakistan, and Sri Lanka. Over the past 38 issues of the journal, we have had 2 issues devoted to India (Vol. 3, No. 2 and Vol. 14, No. 1), but not even 1 paper focused solely on Bangladesh, Pakistan, or Sri Lanka. This issue of the Asian Economic Policy Review attempts to fill that gap.

South Asia is the world's most populous region, comprising 21% of the world's population. However, poverty is widespread and the economies are relatively small in global terms: they generate 5.2% of global output, indicating that their average per capita income is about one-quarter of the global figure.²

Although Bangladesh and Pakistan have very large populations (173 million and 240 million, respectively), India, the world's most populous nation with 1,429 million people, dominates South Asia's economy, politics, and demographics. India is now the world's fifth largest economy measured at official exchange rates and the third largest as measured by purchasing power parity exchange rates.

Since independence in the late 1940s (1947 for India and Pakistan, 1948 for Sri Lanka),³ the region has experienced mixed economic fortunes. Kathuria (2025) characterizes the early post-independence period as one of “wasted decades.” Over the long sweep of economic development, from 1950 to 2016 real global per capita income in international prices increased 4.4 times. The increases in India (4.3 times) and Pakistan (4.4) were very similar to the global average. Sri Lanka grew faster (7.6), while Bangladesh was slower (2.9).⁴ As van der Eng (2025, figure 1) shows, at the time of its independence Sri Lanka had the region's highest per capita income by a substantial margin, followed by Bangladesh, Pakistan and India. Until its recent macroeconomic crisis, Sri Lanka continued to be the most prosperous country, but India has overtaken both Bangladesh and Pakistan. Pakistan is now the poorest of the four, again by a substantial margin.

Sri Lanka is also the region's leader as measured by social indicators. In 2021, its human development index was 0.78, much higher than India (0.63), Bangladesh (0.66), and Pakistan's very low 0.54. Sri Lanka is the leader, and Pakistan the laggard, with respect to various indicators, including education, health, poverty, and gender equity. Moreover, notwithstanding the region's egalitarian rhetoric, poverty has also generally been less responsive to economic growth than it has in Northeast and Southeast Asia (hereafter referred to as East Asia). South Asia has yet to experience the rapid, labor-intensive, export-oriented industrialization that has had transformational labor market effects in much of East Asia. One important factor is the relatively low labor force participation rates, exceptionally so f

Kathuria (2025) should be congratulated on writing about the experiences of five or six countries in South Asia given the heroic nature of the task. I will concentrate my comments in my remarks in kind of three broad areas.

My first set of comments relates to some of the common challenges and opportunities that Kathuria did not touch upon. The first and most obvious common challenge is climate change. We have seen recently real environmental extreme and even calamitous events in Nepal, India, and Pakistan. So, what would South Asia have to do to address some of these climate-related challenges? The second obvious common thing that is happening in all these countries, Sri Lanka, India, Pakistan, Bangladesh, and Nepal, is the rise of identity-based majoritarian politics. Does this kind of majoritarian politics have any implications for addressing the challenges? Even the economic challenges that Kathuria has so carefully and elaborately laid out. There are two dimensions to this. One is of course that it affects bilateral relations, and therefore it is good to be made aware that economic cooperation on some of these issues will be much more difficult. It is going to have a kind of direct impact on bilateral relations and bilateral approaches to cooperation and regional cooperation more broadly. What is it going to do within each country, to the investment climate, to the scope for conflict and all of those things that affect a long-run development? These may be political issues, but I think in this case we cannot escape at least some of the economic long-term economic consequences of politics.

Is South Asia's demographic dividend one common kind of opportunity? If you look at all these alarming population projections that we are seeing around the world, we observe aging in advanced countries, and absolute declines in population in China, Korea, East Asia, and maybe even in Europe. Is there a possibility that South Asia could benefit from their labor surplus compared to other countries, advanced countries in even in Asia that are going to face growing labor shortages? So is there a kind of common kind of South Asian opportunity stemming from not just its own demographic dividend, but also from the kind of demographic collapse in the rest of the world?

My second set of comments relate to Kathuria's approach of going through the challenges in each country. The approach I would like Kathuria (2025) to have taken is to examine South Asia through a regional approach rather than through individual country approaches. The latter could be dealt with in more detail in some of the other papers in this issue. Let me give just two examples related to macroeconomic instability and trade. Kathuria very rightly and nicely points out that Pakistan, and Sri Lanka, and even Bangladesh, and Nepal have experienced macroeconomic instability, but India has escaped this. Why is it that you know one country seems to have escap

Ginting, Razzaque, and Hasan (2025) focus on two areas: first, the critical policy barriers toward export diversification and second, the potential options to overcome such barriers. In doing so Ginting et al. briefly discuss the nature of export concentration in Bangladesh, identify the key policy obstacles for expanding and strengthening the non-readymade garments sector, and suggest a few actionable solutions.

Ginting et al. have rightly pointed out the impressive development trajectory of Bangladesh during the past few decades which has been manifested through high growth of Gross Domestic Product (GDP), increases in per capita income, and progress in several social indicators. The export-oriented readymade garments (RMG) sector has been an important contributor to the economic transformation of Bangladesh. While the strong growth of the RMG sector has created employment opportunities, especially for women from poor families, and generated a multiplier impact on the economy, this has also led to overreliance on the RMG sector making the economy little diversified.

Ginting et al. (2025) has significant relevance for Bangladesh in the short and long terms, particularly in the context of its current development landscape. Throughout Ginting et al. (2025), one special circumstance has been highlighted by the author which is the implications of Bangladesh's graduation from the least developed country (LDC) category and measures to tackle the possible ramifications during post-graduation period. The loss of various LDC specific international support measures (ISMs) will put Bangladesh in a disadvantageous situation during the post-graduation period. RMG and other exports from Bangladesh will face competition in the global market due to erosion of tariff preference. Hence, export diversification is critically important for keeping Bangladesh economy stable.

The diagnosis of the problems in Ginting et al.'s (2025) Section 3 is well-articulated which can be useful menu for the policymakers to expand Bangladesh's export basket. Ginting et al. have identified two sets of policy measures which have helped RMG exports but those have also become important bottlenecks that affected export diversification. These are: (i) global trade policy regime which offered quota support through Multi-Fibre Arrangement (MFA) till 2005; and (ii) domestic export incentives for the RMG sector in the form of back-to-back letters of credit, bonded warehouse facilities, duty drawback facilities, and cash incentives to RMG exporters. But no less important are the structural issues such as the cost of doing business, inadequate infrastructure, and the overall investment climate, which Ginting et al. have alluded to.

Ginting et al.'s recommendations (Section 4) for export diversification emanate from the discussion of the impediments identified by the authors. Sections 3 and 4 are