The World Bank in a new report has highlighted jobless development in South Asia and has highlighted that the region’s labour markets stand out among emerging market and developing economies (EMDEs) for having suffered for decades from declining employment ratios and exceptionally low shares of women in employment.
“Sustaining growth will require increasing employment ratios, especially in the non-agricultural sectors and among women, through measures to remove obstacles to growth for businesses, increase openness to international trade, ease labor market and product market restrictions, build human capital, and strengthen equality of women’s rights,” said the report Jobs for Resilient, the latest South Asia Development Update of the World Bank released on Tuesday.
The share of the employed working-age population has been declining since 2000 and is low, it said. In 2023, the employment ratio for South Asia was 59%, compared to 70% in other emerging market and developing economy regions.
“South Asia is failing right now to fully capitalise on its demographic dividend. This is a missed opportunity,” said Franziska Ohnsorge, World Bank Chief Economist for South Asia. “If the region employed as large a share of the working-age population as other emerging markets and developing economies, its output could be 16% higher.”
With regard to India, the report highlighted that overall during 2000–23, employment growth was well below the average working-age population growth and the employment ratio declined. “India has the region’s second-largest share of workers in agriculture (44%) after Nepal,” it further noted.
While highlighted that in the services sector, India’s large, well-educated, young, and English-speaking workforce, coupled with a reliable digital infrastructure, has turned the country into a global leader in computer services and business process outsourcing and a global hub for medical services, they tend to require highly skilled workers and have only a limited capacity to employ India’s large pool of unskilled workers.