Human Capital Investment is Required in South Asia

The last few years have brought about a harsh new reality in which crises have become the norm rather than the exception. Pandemics, economic downturns, and extreme weather events were once considered tail risks, but all three have struck South Asia in quick succession since 2020. Governments across South Asia must take immediate policy action and invest in human capital to strengthen resilience and protect the well-being of future generations.

Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka are the countries of South Asia.

  • Population: With a total population of over 1.8 billion people, the region is the most populous in the world.
  • South Asia’s geography is diverse, with mountain ranges such as the Himalayas and the Hindu Kush, major rivers such as the Ganges, Indus, and Brahmaputra, and coastal areas on the Arabian Sea, Bay of Bengal, and Indian Ocean.
  • Economy: India has the region’s largest economy, accounting for more than 70% of total GDP. Rice and wheat are staple crops in most countries, and agriculture is a major employer. The manufacturing sector also contributes significantly to the region’s economy, with textiles, clothing, and leather products being major exports.
  • Climate: South Asia has a diverse climate, with the monsoon season bringing heavy rain to much of the region and causing flooding in some areas. Climate patterns vary due to the region’s geography and size. Summers in the region are hot and humid, and winters are mild.
  • Climate Change Threats: Climate change poses significant threats to the region, with some areas, such as the Maldives, vulnerable to sea-level rise. Other dangers include an increase in the frequency and severity of extreme weather events like floods and droughts. The region is also vulnerable to the health effects of climate change, such as an increase in heat-related illness and infectious diseases.
  • Biodiversity and Environmental Threats:
    • South Asia is home to several biodiversity hotspots, including India’s Western Ghats and the Eastern Himalayas.
    • However, the region faces serious environmental challenges, including deforestation, air and water pollution, and climate change.
    • Deforestation is a major issue in the region, with logging and land use change contributing to habitat destruction and biodiversity loss.

Analysis of a South Asian underutilised asset

  • The people of South Asia are its most valuable asset, but they are underutilised:
  • With nearly half of its population under the age of 24 and over one million young people expected to enter the labour force every month until 2030, the region stands to benefit from an enviable demographic dividend.
  • One of the major challenges is stunting: South Asia is home to more than one-third of the world’s stunted children. A child born in the region today can expect to achieve only 48% of their full productive potential by the age of 18.
  • Spending by governments on health and education: South Asian governments spend only 1% of their GDP on health and 2.5% on education. In comparison, the global average for health is 5.9% and 3.7% for education.
  • The COVID-19 pandemic is a setback for the region’s human capital: The COVID-19 pandemic, which pushed an additional 35 million people into extreme poverty across South Asia, dealt an unprecedented blow to the region’s human capital. Among its most heinous consequences is an increase in learning poverty, or the inability to read and comprehend a simple text by the age of ten. During the pandemic, ineffective remote instruction increased South Asia’s learning poverty from 60% to 78%.
  • The poorest and most vulnerable people fell further behind: in Bangladesh, for example, poor students lost 50% more learning than rich students. Several countries continue to show little to no signs of recovery, and students in South Asia may lose up to 14.4% of their future earnings.

Interventions with the potential to make a difference

  • Affordability of education: Recent evidence suggests that even simple and low-cost education programmes can result in significant skill gains.
  • For instance:
  • In Bangladesh, attending an extra year of pre-school through two-hour sessions improved literacy, numeracy, and social development scores significantly.
  • Six months of extra remedial classes after school in Tamil Nadu helped students catch up on roughly two-thirds of lost learning due to 18 months of school closures.
  • Government teachers in Nepal ran a phone tutoring programme that increased students’ foundational numeracy by 30%.
  • Robust crisis management systems: The importance of countries having strong systems in place to assist individuals and families during times of crisis. Such systems, which can include social safety nets, health care, and education programmes, can help to reduce the impact of pandemics, protect vulnerable populations, and promote resilience. Countries can better prepare to respond to potential challenges by investing in these systems before a crisis occurs.
  • Utilize data and technology: Effective systems are required to respond to crises quickly while also maintaining critical services such as healthcare and education. Coordination between sectors is critical. Data and technology are critical in the delivery of services; human development systems must ensure that they are used effectively.

@the end

South Asia faces a difficult road ahead. The next crisis could be around the corner. A strong human development system would not only mitigate the damage, but would also help to protect lives and livelihoods. It has the potential to provide South Asia with the resilience it requires to thrive in an increasingly volatile world. While the outlook is bleak, it is important to remember that if governments act quickly, well-designed and implemented interventions can make a difference.

And get notified everytime we publish a new blog post.