South Asia remains among world’s highest inequality of opportunity: WB

Business Report :
South Asia has the world’s highest inequality of opportunity as the region has suffered economic shocks over the past years, said the World Bank in its latest regional economic update.

Over the past two decades, sustained economic growth in South Asia has lifted some 250 million people out of extreme poverty and improved living standards.

But the economic growth has not benefited all groups equally, and social progress remains elusive, said the UN lender, adding that inequality of opportunity is not only unfair but also inefficient.

The World Bank observed in the regional update that inequality prevents an optimal allocation of talent, reduces incentives to accumulate human capital, and derails long-term economic growth.

“Between 40 and 60 per cent of total inequality in the region is driven by circumstances out of an individual’s control, such as place of birth, family background, caste, ethnicity, and gender,” read the update.

Intergenerational mobility is also among the world’s lowest-less than 9.0 per cent of individuals whose parents have low levels of education reach education levels of the upper 25 per cent, it added.

The global lender came up with the observation following a conference held in Dhaka titled “Expanding Opportunities: Toward Inclusive Growth” organised by BRAC Institute of Governance and Development (BIGD) and the World Bank.

The conference provides academics and researchers with a platform to discuss South Asia’s economic outlook, and how socio-economic disparities prevent the region from achieving its development goals.

The World Bank said that South Asia has suffered an unprecedented combination of shocks over the past three years, and moving from recovery to growth requires ensuring economic development is inclusive.

“Bangladesh has made significant progress in bridging gaps between low and high opportunity groups, particularly in the education sector. However, much remains to be done,” said Abdoulaye Seck, World Bank Country Director for Bangladesh and Bhutan.
“South Asian countries must continue to reduce socio-economic disparities as they lead to differences in access to jobs, earnings, consumption, and welfare, and impact overall growth,” Abdoulaye Seck added.

While the region as a whole experiences inequality, there is considerable variation between countries. Bangladesh, Sri Lanka, and Bhutan have somewhat better mobility and equality of opportunity than their regional neighbours.

Within countries, there is an urban premium, it said in the report. This means that being born in a city translates into higher chances to move further ahead than one’s own parents (in terms of education) and, more generally, other circumstances do not constrain achievement as tightly as in rural areas, said the global lender.