South Asia Economic Focus Report released by World Bank

South Asia Economic Focus Report released by World Bank

Part of: GS Prelims and GS-II – International Relations; Education

In news

• Biennial South Asia Economic Focus report was recently released. 
• Released by: World Bank 
• Title of the edition: “Beaten or Broken? Informality and Covid-19”.

Key takeaways

• The report includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
• It predicts that the extended closure of schools amid the Covid-19 pandemic could reduce India’s future earnings by between 420 billion USD and 600 billion USD.
• This is so because depleted learning levels of students will translate into poorer productivity.

Impact on Education

• Around 5.5 million students could drop out of schools across South Asia.
• 391 million students have been kept out of school in primary and secondary education due to lockdown.
• Dropouts and learning losses would cost South Asia as much as 622 billion USD in future earnings and GDP.
• Also, due to the closure of schools, the children may have forgotten their previous learnings.
• The average child in South Asia may lose 4,400 USD in lifetime earnings once having entered the labour market, equivalent to 5% of total earnings.

Impacts on Economy

• Impact on Informal Sector: The report has flagged damage to businesses, consumption patterns and imposed social hardship on poor and vulnerable households, especially urban migrants and informal workers in the South Asia region. 
• GDP: The regional GDP of the South Asia region is estimated to contract by 7.7% in 2020. India’s GDP can contract by 9.6% in 2020-21.
• Labour productivity will also take a greater hit from Covid-19 than most previous natural disasters.