Economic Orientation in South Asia
Chapter 1 | Stronger headwinds during recovery
As South Asia emerges from the shadow of the COVID-19 pandemic, the recovery has been very uneven. Economies in the region face existing and accumulated challenges related to rising commodity prices, persistent supply constraints and financial sector vulnerabilities. The war in Ukraine threatens to exacerbate these challenges. Against these headwinds, carefully designed monetary and fiscal support measures are needed to weather external shocks and sustain the recovery.
Chapter 2 | Charting the path to a new normal
GDP has mostly returned to pre-pandemic levels: growth in the region will be 6.6% in 2022, although it is one percentage point lower than January forecasts, largely due to the effects of the war in Ukraine. Although South Asia has limited trade and financial ties with Russia and Ukraine, rising commodity prices in global markets are expected to dampen GDP growth this year. The challenges ahead are extraordinarily complicated for South Asian policymakers. High oil prices and uncertainty in international oil markets are an incentive to accelerate the transition to a low-carbon development path. Such a path will enhance energy security and make development more sustainable. The chapter illustrates this by simulating the region-wide macroeconomic impacts of carbon pricing.
Social norms can be a major obstacle to achieving gender equality. This is well known, but the channels through which social norms influence gender disparities have not been systematically explored. This chapter shows that in South Asia, despite decades of rapid economic growth, rising education and declining fertility, women continue to face greater disadvantages in accessing economic opportunities than in most developing countries. Although progress has been made, improvements are slow and increasing income levels do not appear to be sufficient to reduce the stubbornly large gender gaps. Deeply rooted social norms, particularly those regarding the division of labor within the household, explain much of these gaps in women’s economic engagement. The chapter provides original evidence of the usefulness of defining social norms more clearly and distinguishing them from other factors such as attitudes, customs or morals. The chapter concludes that to adequately address gender inequality, policies that take into account social norms, their evolution and how to address their impact must be put in place.