South Asia is a region marked for its turbulent history and its endemic poverty and misgovernance. Much has been written about how certain states in India are worse off than Sub Saharan Africa in terms of social and economic indicators. Or that Pakistan and Bangladesh have millions of people struggling for a meager income to keep their families alive. The truth is that despite the recent gains made in economic growth in most South Asian economies, the structural causes of poverty persist and haunt the national planners.
The World Bank, or the rather grandiose title – the Bank – has remained a major player in the South Asian economies aiming to help these countries in reducing poverty and enhancing economic growth. The Bank has gained more traction in countries such as Pakistan and Bangladesh where the unelected executive is eager to engage with the IFIs and decisions on lending are achieved quickly. India has remained engaged but its complexity and federalism makes transactions more intensive. Having said that the country has emerged as World Bank’s favorite in the recent years. For instance, the Bank, committed USD 9.3 billion in financial assistance to India in the 2009-10 fiscal, more than the aid committed by the U.S. and the European Union. Although this is a small sum for India’s U.S. $1.2 trillion economy, it represents a sharp increase from the U.S. $2.2bn lent to India by the Bank last year – Bank lending to India has traditionally averaged about U.S. $2.5-3bn a year. Similarly, for Pakistan the average lending level has been around $1-2bn, this has increased lately due to the recent recession and food and energy shocks. […]