POST-MID ASSIGNMENT

TOPIC: ECONOMIC DEVELOPMENT OF SOUTH ASIA

SUBMITTED TO: MA’AM JASIA JAWAD

SUBMITTED BY: NOOR FAISAL

DATE OF SUBMISSION: 2ND – MAY – 2023

MAJOR: APPLIED PSYCHOLOGY

COURSE: REGIONAL GEOGRAPHY (SOUTH ASIA)

SEMESTER: 6

COURSE CODE: GEOG 208-E [A]

SESSION: FALL 2020-2024

 KINNAIRD COLLEGE FOR WOMEN

LAHORE

Contents

Introduction.................................................................................................................................................3

Afghanistan.................................................................................................................................................4

Bangladesh..................................................................................................................................................4

Bhutan.........................................................................................................................................................5

Maldives......................................................................................................................................................6

Nepal...........................................................................................................................................................6

Pakistan.......................................................................................................................................................7

India............................................................................................................................................................8

Sri Lanka.....................................................................................................................................................9

References.................................................................................................................................................11
Introduction
The region of South Asia encompasses the following eight countries of: Afghanistan,
Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. With a total population of
1.8 billion people, this region has its own rich history, cultures and traditions. It is also an
important fact that most countries of this region (such as Pakistan, India, Sri Lanka, Maldives
and Bangladesh) are surrounded by warm waters of the Indian Ocean, which serves as an optimal
trading route to countries such as China and Russia and even the U.S.A. the economy of this
region has been largely shaped by numerous factors such as geography, history as well as
political systems (Overview, n.d.).

South Asia has experienced a significant growth in its economy in recent years. The
region is home to one of the largest growing middle-class category however, it is also home to
some of the world’s poorest population. From the years of 2000 to 2019, south Asia experienced
an average annual growth domestic product (GDP) rate of 6.7%. However when the Covid-19
pandemic hit in 2020, the GDP rate was decreased to 3.4%. Ever since the pandemic, South Asia
has been struggling to recover its losses (Overview, n.d.).

Interestingly, the poverty rate of South Asia has significantly declined over the past two
decades. According to the World Bank, the poverty rate of this region declined from 44% in
2002 to 24% in 2018. One of the main reasons for this could be the south Asia has been
attracting increasing amounts of foreign investment in recent years. The foreign direct
investment (FDI) inflows increased by 10% to $65 billion. Moreover trading has also
substantially increased from $69 billion merchandise exports in 202 to &323 billion in 2019.
Again however, the pandemic caused a 6% decline in the trade activities of the region in 2020.
This resulted in an increased inflation rate since 2020. Whereas before the pandemic hit, the
annual inflation remained stable throughout 2000 to 2019 at 6.4%. Hitting the highest rate of
12.8% in 2008 and the lower of 2.1% in 2009 (Overview, n.d.).

Let us now look at the economic development of all eight countries of the region of south
Asia respectively:
Afghanistan
Afghanistan is a country located in South Asia that has faced significant economic challenges
due to decades of conflict and instability. It is one of the poorest countries in the world.
According to the World Bank the poverty rate in of Afghanistan in 2017 was 55%. One of the
main reasons for this is that the USA has been using this country as a battleground for its wars,
adding on to the countries own struggles with its government and the Taliban. Interestingly its
GDP has grown steadily to 9.4% between the years of 2002 to 2019. Again the covid-19
pandemic caused a decline in its GDP, lowering it to 5.5% in 2020 (Wikipedia contributors,
2023).

Agriculture is one of the backbones of Afghanistan’s economy, accounting for almost

25% of its GDP. The country is one of the major producers of fruits, nuts and vegetables. These
are also the products that are exported for trade. The main trade partners of Afghanistan are
Pakistan, India and Iran, however due to the conflicts and political instability the trade of
Afghanistan has been greatly affected. According to the World Bank, the country’s total
merchandise exports were $1.1 billion in 2019, while imports were $8.6 billion (Wikipedia
contributors, 2023).

Apart from trade and agriculture contributing to its economy, Afghanistan is heavily
reliant on foreign aid to meet its development needs. In 2020 official development assistance
(ODA) granted to Afghanistan was $6.5 billion, accounting for 43% of the country’s GDP
(Wikipedia contributors, 2023).

Bangladesh
Bangladesh is a densely populated country located in South Asia which is mainly known for its
garment industry and agricultural sector. Over the past two decades the country experienced
strong economic growth. With an average annual growth rate of 6.3% from 2000 to 2019 in its
GDP. Even despite the pandemic, the economy of Bangladesh is projected to grow by 4.4% in
2021. This is in fact quite an interesting fact because Bangladesh has made significant progress
in reducing its rate of poverty in recent years. The World Bank reported that the poverty rate of
Bangladesh declined from 48.9% in 2000 to 24.3% in 2016 (Philipp, 2023).
 The country is mainly known for its garment industry which is also the backbone of its
economy. Accounting for around 84% of the country’s total exports and providing employment
to around 4 million people. In 2019 it was reported that the garment industry generated $34.1
billion in exports. Moreover, agriculture is another supporter of Bangladesh’s economy,
accounting for about 15% of GDP and employing around 40% of rhe population. The main
products that Bangladesh produces are: rice, jute and tea. Another interesting fact about
Bangladesh is that it is one of the largest recipients of remittances in the world. This means that
overseas Bangladeshi workers are sending money back to the country that they have earned
overseas. The total remittances in 2020 were estimated to be around $18 billion. Wherein these
remittances account for 5% of the country’s total GDP (Philipp, 2023).

Bhutan
Bhutan is a small landlocked country in South Asia that has experienced strong economic growth
over the past years with an average annual growth rate of 6.4% from 2000 to 2019. Even despite
the disturbances caused the pandemic, the economy of Bhutan is projected to increase by 3.7%.
The country has also made significant efforts to reduce its poverty rates from 23.7% in 2007
(Overview, n.d.).

Hydroelectricity and trade are two of the major contributors of Bhutan’s economy. The
former accounting for 30% of the country’s total exports. The government soon realised the
importance of its vast system of rivers and water resources and pursueds numerous hydropower
projects to generate electricity for both domestic use as well as sale to neighbouring countries.
This way the country could generat significant revenue by selling the electricity to its
neighbouring countries such as India. In 2019 it was estimated that the hydroelectric sector
generated %266.3 million in export earnings (Overview, n.d.).

Furthermore tourism is also an important sector contributing to Bhutan’s economy,

accounting for 7% of GDP and providing employment to a significant number of people.
Although admittedly, the tourism sector of the country was greatly affected by the Covid-19
pandemic when international travel was restricted (Overview, n.d.).
 Bhutan is also heavily reliant on foreign aid, receiving support from development
partners such as World Bank, Asian Development Bank and japan. Foreign aid has accounted for
about 30% of the country’s budget (Overview, n.d.).

Maldives
The Maldives is small island nation of South Asia which is internationally known for its tourist
spots and fisheries sector. It experienced strong economic growth over the past two decades with
an annual growth rate of 4.6% in its GDP from the years of 2000 to 2019. When the covid-19
pandemic hit, tourism was completely halted and seeing as tourism was one of the main
contributors to its economy, Maldives experiences an estimated contraction of 32% in 2020
(Wikipedia contributors, 2023).

Serving as the backbone of the country’s economy, tourism accounts for 67% of the
country’s GDP and employs around 40% of its population. In 2019 the total revenue recorded
from this sector was $2.7 billion before it declined in 2020. Moreover, the Maldives has also
attracted significant foreign investment due to its promising tourism sectors. Some of the major
investors being China, India as well as the United Arab Emirates (Wikipedia contributors, 2023).

The fishery sector of Maldives is the other important sector of its economy. It accounts
for a total of 7% of its GDP and provide employment to a significant number of people. The
Maldives is known as one of the main exporters of canned tuna (Wikipedia contributors, 2023).

Nepal
Nepal is one of the two landlocked countries of South Asia. It is largely known for its scenic
beauty which is accounted for the vast Himalayan range present in the country. Over the years
the country has experienced moderate economic growth, with an annual growth rate of 4.7%
from 2000 to 2019. Again, post-pandemic the country suffered a 1.5% contraction (Wikipedia
contributors, 2023).

Agriculture is a major contributor towards Nepal’s economy accounting for 26% of GDP
and employing around 60% of its population. Some of the major crops that are produced by the
country are: rice, maize, wheat and pulses. Furthermore, Nepal has great potential for
hydropower production due to the availability of vast river systems and ever flowing water
resources due to the glaciers from the Himalayan Mountains. The government has been focused
on further improving its hydropower sector, wherein it generated $78 million in export earnings
in 2019 (Wikipedia contributors, 2023).

Pakistan
Pakistan is a country that has been victim to endless challenges such as political instability,
security concerns, terrorism, energy crisis as well as a weak and instable government. All of
which have impeded its economic progress. It is a miracle that the country has still shown some
significant economic progress. In 2020, Pakistan’s GDP was estimated to be $296.10 billion,
growing at an average annual rate of 3.9%. However, the pandemic severely affected the
country’s economy resulting in a 0.4% contraction (Pakistan - Economic Development, 2023).

The backbone of Pakistan’s economy is agriculture, which employs 40% of the country;s
population and contributes an estimated 20% to its GDP. Some major crops that are produced by
this sector are: wheat, cotton and rice. Furthermore, the textile industry is also one of the major
contributors to Pakistan’s economy, employing over 40% of the population and contributing
around 24% to its GDP. Whereas the manufacturing industry is also another significant
contributor to Pakistan’s economy, contributing 13% to its GDP. Some major products produced
by this sector are: textiles, food processing, chemicals, and automobiles (Pakistan - Economic
Development, 2023).

Interestingly, a whopping 13% of Pakistan’s GDP is contributed through remittances by

migrant Pakistani workers that are mainly employed in the Gulf countries and the USA. Which is
an interesting fact considering that a majority of the population of Pakistan suffers from
unemployment within the country. According to the World Bank an estimated 24.3% of
Pakistan’s popukation lives below the poverty line with a majority of them unemployed.
Considering the large amount of remittances and the widespread unemployment within the
country, the economy of Pakistan is struggling in the in-between (Pakistan - Economic
Development, 2023).

Pakistan has been increasingly dependent on foreign investments from foreign countries
and the FDI inflows have significantly increased in recent years as well. This has however, only
proved to put more pressure and debt on the already struggling economy, and one of the main
reasons why the country is losing prospective foreign investors (Wikipedia contributors, 2023).

One of the most promising sectors of Pakistan that can significantly impact its economy,
is the tourism sector. Pakistan is home to some of the most beautiful and breath taking lanscapes,
cultural/religious/historical sites as well as its diverse cultural traditions and practices which
attract tourists from all over the world. More recently the government has taken steps to increase
tourism; according to the World Travel andf Tourism Council (WTTC), the tourism industry has
contributed 2.9% to Pakistan’s economy and the number is projected to increase in future years.
However, one of the main reasons why the countries tourism has not yet reached its potential due
to the instable government and prevailing security issues (Wikipedia contributors, 2023).

India
India is one of the countries of South Asia which is known for its diverse economy and rich
cultural heritage. It is possibly one of the only countries of South Asia that has experienced
robust economic growth over the past years with an annual growth rate of 6.8%. the country was
not free from the adverse impact from the Covid-19 pandemic and suffered a contraction of 7.7%
in 2020 (Wikipedia contributors, 2023).

The largest contributor to India’s economy is the services sector, accounting for 55% of
GDP and providing employment to around 34% of the labour force of the country. Another
major contributor is the agriculture sector accounting for 16% of its GDP and employing 43% of
its population. Some of the main crop produced are: rice, wheat, sugarcane and cotton.
Moreover, India has also been attracting increasing foreign investment in recent years,
particularly in the services, manufacturing, and renewable energy sectors. Some of the major
investors include Singapore, the United States, and the United Arab Emirates (Wikipedia
contributors, 2023).

Moving on, manufacturing is another important sector for India’s economy, accounting
for around 24% of GDP and providing employment to 14% of its labor force. Some of the major
manufacturing industries of India are: textiles, automobiles, pharmaceuticals and electronics.
Furthermore the government of India has been working the infrastructure of its country including
developing roads, railways, airports, and ports. For example, the government launched the
"Bharatmala" project. This project was launched by the Indian government in 2017 and aimed to
construct a network of highways spanning over 83,000 kilometers across India. The project is
divided into seven phases, and each phase targets a specific region of the country (Wikipedia
contributors, 2023).

As of 2021, several sections of the project have been completed and are operational, while work
is still underway on other sections. The project includes the construction of new highways, the
widening of existing highways, and the development of interconnecting roads and highways. The
Bharatmala project is expected to improve road connectivity in India and facilitate the movement
of goods and people across the country (Wikipedia contributors, 2023).

Sri Lanka
Sri Lanka is an island nation of South Asia which is known for its beaches, vast tea plantation
and tourism industry. With a moderate economic growth over the past years, the average annual
growth rate of Sri Lanka’s GDP was 5.2%, with a contraction of 3.6% in 2020. In recent years,
Sri Lanka made significant efforts to reduce poverty. According to the World Bank, poverty in
the country declined from 15.3% in 2012 to 4.1% in 2016 (Overview, n.d.).

Tourism is an important sector for Sri Lanka’s economy, accounting for 5% of its GDP.
However, the tourism sector was greatly affected by the ‘Easter Sunday Attacks’. The Easter
Sunday attacks were a series of coordinated terrorist attacks that occurred in Sri Lanka on April
21, 2019. The attacks targeted three Christian churches and three luxury hotels in the cities of
Colombo, Negombo, and Batticaloa, killing 259 people and injuring hundreds more (Overview,
n.d.).

The attacks were carried out by a local Islamist extremist group known as National
Thowheed Jamaath, with alleged support from international terrorist organizations. The attackers
used suicide bombs to carry out the bombings, and many of them were later identified as
members of a local radicalized youth group (Overview, n.d.).

The attacks were widely condemned by the international community, and Sri Lankan
authorities responded with a large-scale crackdown on extremist groups and heightened security
measures. The attacks had a significant impact on the Sri Lankan economy and tourism industry,
as many foreign visitors cancelled their trips to the country following the attacks (Overview,
n.d.).

Moving on, Sri Lanka has an open economy, with exports accounting for 20% of its
GDP. Some of the major exports include textiles, garments, tea and rubber. The country also
attracted large amounts of foreign investment. FDI inflows to Sri Lanka were increased by 3% to
$785 million (Overview, n.d.).
References
Overview. (n.d.). World Bank. https://www.worldbank.org/en/country/srilanka/overview

Overview. (n.d.). World Bank.

https://www.worldbank.org/en/country/bhutan/overview#:~:text=The%20economy

%20grew%20by%204.3,fiscal%20support%20to%20boost%20activity.

Overview. (n.d.). World Bank.

https://www.worldbank.org/en/region/sar/overview#:~:text=Growth%20is%20projected

%20to%20average,rebounding%20from%20the%20pandemic%20slump.

Pakistan - Economic Development. (2023, February 20). Aga Khan Development Network.

https://the.akdn/en/where-we-work/south-asia/pakistan/economic-development-pakistan

Philipp, J. (2023). The Inspiring Economic Development of Bangladesh. The Borgen Project.

https://borgenproject.org/economic-development-of-bangladesh/#:~:text=The

%20World's%20Fastest%2DGrowing%20Economy,2021%20from%20%24134%20in

%201971.

Wikipedia contributors. (2023). Economy of Afghanistan. Wikipedia.

https://en.wikipedia.org/wiki/Economy_of_Afghanistan#:~:text=Its%20total%20external

%20debt%20is,nation's%20agriculture%20and%20mining%20sectors.

Wikipedia contributors. (2023). Economy of India. Wikipedia.

https://en.wikipedia.org/wiki/Economy_of_India#:~:text=The%20economy%20of%20the

%20Indian,in%20nominal%20terms%20in%202022.

Wikipedia contributors. (2023). Economy of Maldives. Wikipedia.

https://en.wikipedia.org/wiki/Economy_of_Maldives
Wikipedia contributors. (2023). Economy of Nepal. Wikipedia.

https://en.wikipedia.org/wiki/Economy_of_Nepal#:~:text=The%20economy%20of

%20Nepal%20is,%2C%20industry%2C%20or%20civil%20service.

Wikipedia contributors. (2023). Tourism in Pakistan. Wikipedia.

https://en.wikipedia.org/wiki/Tourism_in_Pakistan#:~:text=According%20to%20the

%20World%20Travel,2.7%25%20of%20the%20total%20GDP.