|
|
 |
 |
 |
 |
| Thursday, 22 April 2004 |
 |
|
 |
Business | |
| News Business Features Editorial Security Politics World Letters Sports Obituaries
|
South Asian economic growth will peak in 2004 - WB Report The World Bank's Global Development Finance report said that the South Asian economic growth will peak in 2004 and sustain a rapid pace next year. Among the key main reasons for this have been the peace talks involving Pakistan and India and the peace process in Sri Lanka and Afghanistan. South Asian growth would rise from 6.5 percent last year to 7.2 percent in 2004 before relaxing to 6.7 percent in 2005, the report said. The regional trade initiatives of the South Asian Association for Regional Cooperation may further boost international confidence. Fiscal consolidation had reduced the deficit in Sri Lanka. Bangladesh, Nepal, and Pakistan had much smaller deficits but they too could cushion themselves against future shocks by further consolidation. "Inflexibility in labour markets, weak bankruptcy frameworks and infrastructure bottlenecks remain a constraint to economic performance and international competitiveness," the report said. The impending phase-out of the "Multi Fibre arrangement" in 2005 presented further difficulties, particularly for the smaller countries in South Asia, the Bank said. The agreement, established in 1975, allocates quotas of clothing and textiles that developing nations with cheap labour can export to rich countries. Remittances, money workers send to their home countries, and growing foreign direct investment are also increasingly important factors in South Asia's growth and prospects, the report said. In South Asia, workers' remittances brought in $18.2 billion to the region in 2003, as compared to $13.1 billion in 2002. India remained the second largest recipient of remittances worldwide with $8.4 billion. In Pakistan, receipts from remittances tripled between 2001 and 2003, and in Bangladesh, remittance flows increased by nearly 50 percent during the same time period. The small increase in official aid flows is accompanied by a drop in net non-concessional lending by bilateral aid agencies, from -$8.8 billion in 2002 to -11.8 billion in 2003. Multilateral institutions' net non-concessional lending also dropped in 2003, from $7.2 billion to $1 billion, largely due to the absence of major crises requiring emergency packages, and prepayment of loans to the World Bank, notably by China, India and Thailand. Despite the overall increase in capital flows to developing countries, net resource transfers from rich to poor countries remain negative. Also, net official development assistance (ODA) rose by only $6 billion to $58 billion in 2003, with half of this increase is accounted for debt relief and some administrative costs to donor agencies, rather than new resources to developing nations. Another $1 billion of the increase consists of new flows to Afghanistan and Pakistan. A significant and growing new source of capital for developing countries is remittances sent home by migrants working in rich countries, which have climbed steadily since 1998, reaching $93 billion in 2003, up 20 percent from 2001. They are now the second most important financial flow to developing countries after FDI, and represent almost double the flows of official aid. |
|
News | Business | Features
| Editorial | Security
Produced by Lake House |
