Unlocking South Asia’s Growth: How Women and Trade Can Transform the Region

A recent World Bank report emphasizes South Asia's untapped economic potential through increased female workforce participation and enhanced openness to trade and investment. With strong growth prospects, the region can accelerate prosperity by closing the gender gap in employment and adapting its policies to global shifts in trade.

Unlocking South Asia’s Growth Potential: World Bank Report Highlights Opportunities in Women’s Employment and Trade

According to the World Bank’s latest South Asia Development Update titled Women, Jobs, and Growth, South Asia is well-positioned as the fastest-growing region among emerging markets. However, while current growth projections are promising, the report identifies significant, yet largely unexploited, areas that could further elevate the region’s economic development. By closing the gender gap in the workforce and enhancing openness to trade and investment, South Asia could transform its economic landscape.

Women in the Workforce: A Game Changer for Economic Growth

The report underscores an urgent and critical opportunity: increasing women’s participation in the workforce. Despite strides in educational access for women, the region has one of the lowest female workforce participation rates globally, with only about one-third of working-age women currently employed. This is a striking contrast to the three-quarters of men participating and falls below the 54 percent average for women across other emerging markets.

Barriers such as limited transportation options, childcare access, and conservative social norms keep many women out of the workforce, confining them to informal roles with limited income. The report argues that addressing these barriers is crucial, as raising female participation to match male rates could boost South Asia’s per capita income by an estimated 51 percent. Realizing this potential requires a holistic approach, involving policy reforms, improved gender-equal legal frameworks, and a shift in societal attitudes that would enable and encourage women to work outside the home.

“South Asia cannot reach its full potential if half of its population remains underutilized,” the report states. The World Bank calls for collaborative action across governments, businesses, and communities, each playing a role in creating an environment conducive to female workforce participation. This collective effort could result in far-reaching socio-economic benefits for families, communities, and the region as a whole.

Tapping into Global Trade: Removing Barriers and Welcoming Investment

Beyond the workforce, another area of untapped potential lies in South Asia’s engagement with global trade. The report highlights that South Asia remains among the world’s least open regions for trade and investment, with high tariffs, trade restrictions, and complex regulations that limit the ease of doing business. This restrictive stance, while protective against some geopolitical risks, also hinders the region’s ability to fully capitalize on shifts in global supply chains.

By reducing tariffs, simplifying customs procedures, and attracting foreign direct investment (FDI), South Asia could become an attractive hub for global supply chains. Increasing trade openness is especially relevant as global investors seek regions with lower geopolitical risks. According to the World Bank, this strategic shift could help domestic firms access cutting-edge technologies and productivity-enhancing practices that are critical for sustained growth and competitiveness.

Moreover, establishing diversified partnerships across a broader geopolitical spectrum could help South Asia build resilience to external shocks while promoting a dynamic, open economy. For example, South Asia could take advantage of emerging trends like “China-Plus-One” strategies, where companies look to expand outside China by investing in additional markets with strong fundamentals and low geopolitical risk.

Climate Risks and Economic Resilience: Adapting to a Changing World

A vital component of South Asia’s economic future lies in adapting to climate change. The region is increasingly vulnerable to extreme weather events, including heatwaves and floods, disproportionately impacting poorer households and smaller firms. The report highlights a need for policies that support climate resilience, such as facilitating the relocation of communities at high risk and investing in infrastructure to support affected areas. Policymakers could leverage climate data to inform targeted social protection strategies, ensuring that vulnerable populations receive timely assistance during climate-induced disruptions.

Climate adaptation policies could also foster economic resilience in the business sector by helping firms reduce climate-related risks and disruptions. For instance, information on climate-vulnerable areas could aid in strategic planning, improving supply chain resilience for industries facing heat or flood risks. Through these measures, South Asia can better protect its economy while adapting to global environmental shifts.

Remittances: A Financial Lifeline with Side Effects

Remittances play a significant role in reducing poverty and supporting household expenditures in South Asia, with several countries among the highest receivers relative to GDP. However, the report notes that while beneficial, these high remittance inflows can lead to currency appreciation, weakening the international competitiveness of local industries. Policymakers are encouraged to implement strategies that support the positive impact of remittances while counteracting any adverse effects, such as reducing trade-related taxes and enhancing the business environment to foster local production.

Realizing South Asia’s Untapped Potential

The South Asia Development Update from the World Bank makes it clear that the region holds considerable potential for economic growth and prosperity. By addressing gender disparities in the labor force and embracing a more open trade policy, South Asia can create a future that benefits all its citizens. At a time when global supply chains are in flux and the demand for resilient economies is growing, South Asia’s path to economic success may lie in these untapped resources—its women and its trade.

In doing so, South Asia could not only improve living standards for millions but also secure its position as a key player in the global economy. As the report suggests, “an open palm can hold more than a closed fist.” South Asia’s journey towards inclusive growth requires both policy innovation and societal transformation.