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Poverty in South Asia

Despite global income and multidimensional poverty declining over the past two decades, disparities across different regions remain significant with South Asia being a good example of this. In spite of the efforts made to reduce the number of people in abject poverty within the region, South Asia remains home to more than half of the world’s extremely poor.

According to World Bank estimates on income poverty, 42% of the world’s population lived below the poverty line of $1.90 in 1981 which reduced to 35% in 1990. Similarly, multidimensional poverty 1 has also decreased over the years with 13.5% of the world being multidimensionally poor by 2017. Despite this global downward trend, South Asia still accommodates a considerably larger share of the world’s poor.

Based on the figure below published by the London School of Economics, South Asia accounted for the second largest share of the global poor (27.3%) in 1990 while East Asia and the Pacific accounted for the largest (52.2%).

(1) Multidimensional Poverty: An index that uses a range of indicators to calculate a summary figure for a given population, in which a larger figure indicates a higher level of poverty.

Regional distribution of the global poor (1990-2013) Source: London School of Economics and Political Science

The picture drastically changed by 2013 when Sub Saharan Africa replaced East Asia and the Pacific accounting for the new largest share of global poor. East Asia and the Pacific considerably declined its share of the world’s poor by 42.9% between 1990 and 2013. In the face of these novel changes, South Asia continues to account for the second largest proportion of the world’s poor with no limited progress.

According to Canuto (2013), poverty in the region is propelled by region-wide political unrest with political tension and civil wars being extremely common. Political instability renders anti-poverty policies and programs ineffective, resulting in a vicious cycle that leads to poverty.

Public Sector Corruption and Poverty

Corruption in the public sector exacerbates the existing conditions of poverty (low income, poor health, illiteracy and vulnerability to shocks) in countries already struggling with economic growth. Based on the results of the Corruption Perceptions Index 2021, all South Asian countries have been assigned scores below 50 indicating that corruption is rampant across the subcontinent. Corruption, by itself, does not produce poverty. Rather, it has direct consequences on economic and governance factors. Corruption hampers economic growth by discouraging domestic and foreign investments, undermining the quality of public infrastructure, diminishing entrepreneurship and decreasing tax revenues. It has also been shown to have a positive correlation with income inequality (2). Corruption distorts legal and policy frameworks leading to the unfair distribution of government resources and services, state capture and reduced progressivity of tax systems.

Better governance is associated with lower corruption and poverty levels. Trust is a social capital; higher social capital is associated with reduced poverty, corruption undermines the trust citizens place on the government and other public institutions, thereby resulting in poverty.

(2) Income Inequality: How unevenly income is distributed throughout a population.

If carefully crafted, anti-corruption programs can yield positive poverty reduction results. Many literature studies suggest that reducing corruption in a nation can ease poverty provided they also achieve the following:

  • Increase economic growth

  • Create more equitable income distribution

  • Improve government services with special emphasis on health and education

  • Strengthen governance institutions and capacity

  • Increase public trust in the government

The Relationship between Illiteracy and Poverty

Illiteracy is another challenge South Asia has to overcome in order to uplift economic growth and curb poverty. Literacy levels in South Asia have significantly advanced over the past two decades. Despite this remarkable progress, the region still houses more than half of the global illiterate population. The gap between enrolment and completion in primary schools remains large and less than 20% of the population transitions to higher education upon the completion of secondary education. Universal consequences of illiteracy include limited knowledge and ability to comprehend basic information, unemployment, low incomes and reduced access to critical information and professional development. Without a well-educated workforce, bolstering the economy would be quite the challenge.

Governments have made attempts to raise literacy levels in their respective countries through policy interventions for improving infrastructure in schools, yet, they have failed to address the learning crisis that has enveloped most of the South Asian region today.

When the Covid-19 pandemic struck in mid-2020, leading to the closure of schools, the transition to online learning was far from smooth. In Sri Lanka alone, teachers found it challenging to adapt to digital tools, many students had no access to adequate internet connections or devices to engage in online learning which resulted in hundreds of them, especially from the lesser developed regions of Sri Lanka, falling behind on their education. The current economic crisis has only exacerbated the existing situation, with hundreds of students dropping out of school with the hopes of finding work to support their families. Evidence is mounting that children from lower socioeconomic backgrounds are suffering from larger learning losses. Children with the most fragile grasp of the foundations of literacy suffered extensive learning losses as reported by the UNICEF.

Without the strong foundational skills, children are unlikely to acquire the higher-order skills required to thrive in demanding labor markets. Despite the government’s claims that Sri Lanka has achieved a 90% literacy rate, the UN Human Development report states that, “Rate of functional Literacy” is only 50%. A similar situation exists in other South Asian countries as well. In order to achieve economic upswing and alleviate poverty, a country requires the support of an educated and skilled workforce. Education is seen as a vehicle of social and economic transformation in all South Asian countries, with students being capable drivers of future development. They have to be considered the epicenter of education policies. For instance, the RAPID framework proposed by the World Bank together with several other partners offers a set of evidence-based interventions that education systems around the world can implement to recover “lost learning” and to accelerate progress in long-term learning. These interventions serve as a springboard for building more effective, equitable and resilient education systems.

Political tension, public sector corruption and illiteracy are few of the many factors that account for poverty in South Asia, but play a potent role. The above challenges may sound daunting but a sub-continent free of poverty can only be attained by implementing the necessary policy and institutional reforms.

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