The World Bank has raised concerns about job creation in South Asian economies, stating that the region is at risk of missing out on its demographic dividend due to a lack of employment opportunities. According to Franziska Ohnsorge, the World Bank’s Chief Economist for South Asia, this issue is a major challenge for the growth and development of the region.
Between 2000-23, data showed that employment grew at a rate of 1.7% per year while the working-age population expanded at a rate of 1.9% per year. On average, the region created 10 million jobs per year while the working-age population increased by 19 million per year. Despite an expected output growth of 6-6.1% in South Asia, job creation has not kept pace with population growth.
India, the largest economy in South Asia, has seen strong growth post-pandemic driven by government spending and the construction industry. However, private investment remains weak, impacting job creation in India. The employment ratio declined significantly between 2000-22, except in Nepal. The World Bank emphasizes the need for policy changes to address these challenges and accelerate job creation in India and other South Asian economies. This includes encouraging productive firms to hire workers, streamlining labor and land market regulations, and increased openness to international trade to create more job opportunities for young people in the region.
