Will South Asia Achieve the Sustainable Development Goals by 2030? Learning from the MDGs Experience

South Asian countries have in large part significantly improved their human development status in the last two decades. Bangladesh, Nepal and Sri Lanka have met most of the Millennium Development Goal (MDGs) targets in the areas of poverty alleviation, food security, primary school enrolment, gender parity in primary and secondary level education, infant and under-five mortality ratio and immunisation coverage (Mahmud et al. 2013; Asadullah et al. 2014; United Nations 2015). At the same time, populous countries in South Asia such as India and Pakistan have not able to achieve MDG targets in Goal 1 on eradicating extreme poverty and hunger, Goal 4 on reducing child mortality and Goal 5 on improving maternal health.¹ Perhaps reflecting this mixed record in human development outcomes, countries in the region have the second lowest Human Development Index in the world and the majority of world’s population suffering from multi-dimensional poverty (Alkire and Robles 2016). The region accounts for nearly two-fifths of the world’s income poor, for nearly half of the world’s malnourished children, has the largest number of stunted children in the world and suffers from a number of infrastructure gaps (United Nations 2016; UNESCAP 2017).

As the MDGs period has just ended, evaluating South Asia’s achievements is the next necessary step to identify and inform the set of policy priorities for the Sustainable Development Goals (SDGs). The global adoption of SDGs per se, as in the case of the MDGs adoption (see Fukuda-Parr and Hulme 2011), is likely to mobilise political consensus and policy focus on the broad agenda of international development. This should accelerate future progress. But under which conditions can it succeed? The effectiveness of this renewed global development effort will depend on the underlying structural conditions at national level, resulting also from the legacy of the MDGs pursuit. This is particularly so because the SDGs agenda is more ambitious, adopting a greater set of targets, and more resource-intensive than the MDGs. It involves a wider set of inputs, which implies greater pressure on national governments to mobilise resources and to improve policy design and delivery.² The recent debate has indeed considered the possibility that SDGs progress may depend on countries’ initial conditions (Page and Pande 2018; Asadullah and Savoia 2018). However, this is an aspect that awaits systematic investigation and so motivates this study.³

This paper contributes to the debate on human development progress (Ranis and Stewart 2012), as well as to the nascent literature assessing the SDGs prospects (Weststrate et al. 2019), by evaluating the policy and institutional challenges for South Asia. And we do so by trying to learn lessons from the legacy of the MDGs pursuit. Such an assessment, linking MDGs achievements to SDGs prospects, is missing and it is our main task.⁴ Methodologically, the paper relies on regression-based evidence and aggregate indicators of poverty, health, education and gender parity at country level. It also offers comparative evidence and short country studies, exploring the characteristics of most and least successful cases of MDGs progress in the region. Looking at ‘extreme’ cases (rather than the whole distribution, capturing average effects), it is insightful in a complementary way in order to identify any systematic policy patterns related to progress or stagnation.

The analysis has three steps. First, we provide comparative evidence on MDGs progress. The MDGs period saw steady improvement in social indicators, showing evidence of convergence of South Asia with richer regions in gender equality, primary school enrolment, and income poverty, but there is still significant variation in such achievements across the region. Country-specific innovative solutions may explain cases of exceptional MDGs progress, together with the state’s ability to supply public goods and services. Second, we present new regression-based evidence assessing where progress for selected SDGs outcomes—on income poverty, child mortality and gender parity—is expected to be by 2030. Despite its significant progress during the MDGs period, our projections indicate that there is a long way to go, where emblematic targets, such as income poverty eradication, may not be met by 2030.

Finally, we analyse what could accelerate SDGs progress. Given the expanded set of development targets included in the SDGs and considering the growth slowdown in South Asia, we argue that the challenge of further progress would simultaneously require greater social spending and governance reforms aimed at improving state capacity. We illustrate this with new evidence from a simple simulation exercise, showing that a combination of improvements in state capacity and increase in health and education expenditure will deliver significant benefits in the region. This is particularly the case in areas that are critical to the region’s progress on the goals of No Poverty (SDG1), Quality Education (SDG4), Gender Equality (SDG5), and Inclusive Growth (SDG8). In fact, after the MDGs era, South Asia’s initial conditions see the region lagging behind in many relevant aspects, such as disadvantages in educational outcomes, proportion of girls marrying young, violence against women, multi-dimensional poverty, and economic inequality.

The rest of the paper is organised as follows. Section 2 revisits achievements in selected MDGs areas in South Asia, presenting comparative and case study evidence. Section 3 assesses where progress in selected areas will be by 2030. Section 4 discusses SDGs governance and resource challenges facing the region in the context of SDGs 1, 4, 5 and 8. Section 5 concludes, discussing development strategies and the policy priorities.

How will South Asia’s development progress unfold in the SDGs period? Based on MDGs trends, this section presents new empirical evidence on where progress in key development outcomes can be expected to be by 2030. This empirical exercise consists of two parts. First we estimate whether, and how fast, differences in development outcomes among countries are narrowing. Then we use such results to produce projections for 2030 on selected SDGs areas.

Following Asadullah and Savoia (2018), we adopt the empirical framework of regressions testing for β-convergence, which allows obtaining evidence on the speed of progress of each specific development outcome (and to assess whether specific initial conditions influence such progress). In its simplest form, this is a regression, based on cross-section data, of the observed absolute changes over time on a given development measure on the measure’s initial values across countries. Let ΔP_it denote the difference in development outcome P (e.g., poverty measure) in country i observed at both date t = 0 and t = D. A test equation for convergence is then: where α and β are parameters to be estimated and ε_i is a zero mean error term. A negative (positive) estimate of the parameter β implies that there is convergence (divergence) and the magnitude expresses its speed.⁸ We augment (1) with South Asian country dummies, so to test whether countries’ performance is unusual in relation to other countries with similar initial levels of development (i.e., South Asian countries would fare as a response outlier: the dependent variable of interest takes an unusual value for economies with similar characteristics).⁹ This would enable projections that keep into account the effect of country-specific characteristics.

Table 1 reports the results for selected development outcomes in three areas: income poverty, child mortality, and gender parity. We choose conventional measures on incidence and depth of poverty, infant mortality and gender parity in education. What justifies such choice is that they belong to important areas that are common to both the MDGs and SDGs, and so they immediately lend themselves to analyse the links between them. More practically, we choose such variables also because they allow running regressions, and so producing forecasts, for a significant number of countries (including South Asia). Variables and sources are described in the notes to Table 1. The estimates suggest that countries starting with lower development levels tend to experience larger absolute progress than more developed countries, and so “catch up”, implying that differences in development levels between countries may be closing. For example, the estimates show that poverty levels have been converging since the 1990, with the coefficients on initial measures both negative and statistically significant at the one per cent level. In all regressions, measures of goodness of fit suggest that initial development levels explain a meaningful part of the variation in subsequent change for each development outcome. To give an appreciation of the speed of convergence in South Asia, consider the poverty headcount ratio at $1.90 a day in 1990 in India (scoring 81.73). According to Table 1 estimates, the expected reduction in poverty headcount will be − 5.578–0.198 × 81.73 =  − 21.74 percentage points. Sri Lanka, starting from a lower level of initial poverty, is predicted to have a smaller reduction (of − 15.37 percentage points). This is indicative of significant convergence process, although a slow one, where differences in poverty levels may still persist for a long time.

Importantly, Table 1 results provide also a quantitative appreciation of the exceptionality of South Asia’s progress. Compared to other countries at the same initial level, with the exception of Afghanistan and Pakistan, South Asian countries experienced an unusually higher reduction in infant mortality rates and increase in the gender parity index at primary level. Sri Lanka had an unusually higher reduction in income poverty outcomes during 1990–2013, while Bangladesh and India have progressed showing no sign of exceptionality in this respect.

What does this imply in terms of future progress?Table 1 results provide the basis for the second part of this empirical exercise. We use the estimated speed of convergence to provide projections for each of the above development indicators in South Asia, given their initial levels. Assuming the converge trend for each MDG target above stays unchanged and that countries keep progressing at the same rate, Table 2 calculates how many years beyond 2013 it will take to reach the ‘developed’ status, i.e., how long it will take to eradicate income poverty and infant mortality,¹⁰ and achieve gender parity at primary level.

The projections suggest four broad considerations. For the populous South Asian countries for which we can provide estimates, eradicating income poverty may still be a long process, which will continue beyond the SDGs period. For example, if India keeps reducing income poverty and infant mortality at the same rate, it is predicted to miss such targets at the end of the SDGs period. The same simple arithmetic suggests similar conclusions for Bangladesh and Pakistan, although poverty projections for Pakistan are more difficult to interpret.¹¹ Secondly, progress in eradicating infant mortality is projected to vary substantially across the region, suggesting that success or failure by the end of the SDGs period seems to depend on country-specific factors. Thirdly, progress on the gender parity index in primary enrolment seems to be such that most South Asia countries have achieved the target, with the exception of Afghanistan.

Finally, it is important to note that the foregoing illustrations would be different had South Asian countries fit the ‘typical’ behaviour. For example, without keeping into account country dummies, infant mortality eradication would be projected to arrive within remarkable similar periods well after the end of the SDGs, even when starting at similar initial levels of development (see projections in parentheses). Similar conclusions apply to other development outcomes in Table 2. The above empirical exercise ultimately suggests that context may be important, since we have instances where progress has been exceptional. This prompts us to look more closely at such variation in development progress, trying to identify which conditions or country-specific characteristics may explain it.

The previous sections showed that social progress has been significant in the region, but the MDGs achievements have not been uniform across the different countries or, indeed, across all dimensions. Moving beyond stylised facts, projections indicated that SDGs progress might show substantial variation across the region and that country context may be important. Now we look at the conditions that may hinder or facilitate the design and effectiveness of development policies in the SDGs period. In this section, we first assess how South Asian countries are positioned in terms of resources and states’ ability to govern the process of development at the start of the SDGs period, providing new quantitative evidence simulating their impact. Then we discuss such challenges with respect to achieving SDGs 1, 4, 5 and 8, focussing on how country-specific solutions played for South Asia’s MDGs achievements.

This paper has revisited South Asia’s development progress during the MDGs period, providing new evidence on the institutional and policy challenges for SDGs progress in the region deriving from the MDGs experience. We have found that the MDGs period saw steady improvement in social indicators, showing evidence of convergence of South Asia with richer regions in many important outcomes. At the same time, we find that South Asia’s performance in achieving the MDGs has not been stellar. Further, there is a long way to go in the “Leaving No One Behind” agenda in South Asia, as our projections indicate that important milestones, such as eradicating income poverty, may not occur by 2030. We argue that two important factors behind South Asia’s rather mediocre prospects towards achieving the SDGs is the limited fiscal resources that have been spent on education and health and the limited effectiveness of the state in delivering public goods. We show that, if South Asia’s government spending on education and health and state capacity were to rise to levels witnessed in other developing regions (such as Latin America or East Asia), South Asia would make significant progress in achieving the SDGs. What lessons does our analysis hold for South Asia’s policy makers as they strive to achieve the “Leaving No One Behind” agenda?

First, a step-wise approach (e.g., growth first, governance reforms later) is unlikely to work. For example, as highlighted by the contrasting experience of Bangladesh and India, programs tackling child marriage and improving women’s participation rate in the economy will fail without improved state capacity (e.g., effective birth registration and enforcements of the law guaranteeing physical security of women in the public space).

Second, as SDGs are more ambitious than MDGs, both goal-specific and cross-cutting interventions are needed. However, the search for specific, scalable solutions to end poverty remains elusive. As the experience of the MDGs era shows, without the provision for rigorous evaluation and progress monitoring, less effective schemes can continue for too long without much result. While the practice of ranking alternatives based on costs and benefits has promise, this too can be misleading when benefits are long-term and less tangible (e.g., improved confidence and empowerment deriving from an unconditional transfer scheme cannot be adequately monetised).

Third, during the MDGs era, South Asia has overemphasised single-focused policy prescriptions (e.g., improved access to education through better physical infrastructure at school), that too with minimal budgetary commitment. In the context of SDG 4, retaining the same would risk reproducing the past pattern of schooling without learning (Pritchett 2014; World Bank 2018). While an expanded coverage of health and education services under state provision is critical, governments must learn best practices from non-state providers. However, partnership with non-state actors can also involve costly quality-quantity trade-offs.

Fourth, scope for an “income mediated” approach to SDG1 (on ending poverty) seems limited in the coming decades. Rapid GDP growth during 1990–2010 has been a powerful driver of extreme poverty reduction in South Asia, but there is no guarantee this will continue during the SDGs. In the Bangladesh context, for instance, reducing poverty rate to 14% by 2021 requires an economic growth rate of at least 8 percent (Gimenez et al. 2014). With global economic slowdown, this is unlikely to be achieved. Emphasis, therefore, has to be also on an expenditure-led approach. Growth alone will not be sufficient to eradicate extreme poverty by 2030. Strong livelihood interventions in the form of “mini Big Push” will be critical (Sen and Ali 2015).

Fifth, SDGs are more resource-intensive than the MDGs, particularly with the inclusion of goals 7, 9, 11 and 13. Yet south Asian countries are characterised by wide gaps in basic infrastructure, such as access to drinking water and sanitation (SDG6). Within the region, only Bangladesh has been an exception to this pattern because of its geography (dense settlement), reliance on low-cost solutions and partnership with non-state actors. However, this model is not sustainable. Many of the countries have graduated into lower middle-income category so that scarce aid money is less likely to flow into the region. With a decline in the aid inflow, enhancing the pursuit of SDGs through improved capacity to raise public resources domestically is a key challenge for the region. According to one estimate, public investments between 10 and 20% of GDP are required in South Asia in addition to around $5 trillion for closing infrastructure gaps by 2030. However, the region has one of the lowest tax-to-GDP ratios in the world. The potential for increasing domestic resources through expanding the tax base also hinges on tax reforms and efficient tax administration departments. Relying on private sector development and broadening of the tax base, instead of external finance, may help avoid indebtedness while closing the investment-savings gap (UNCTAD 2016).

Our overall message is that in the SDGs context, limited state capacity, as well as limited fiscal commitment, could prove to be obstacles collectively undermining much-needed resources to achieve the SDGs targets in South Asia. In particular, with the slowdown in macroeconomic growth in the region, future progress will increasingly depend on increase in social spending and improvement in public goods delivery systems. This means that, in order to consolidate the gains made during the MDGs era, the challenge for South Asia lies in addressing multiple forms of public governance failures; therefore progress in SDG16 may simultaneously accelerate progress in SDGs 1, 4, 5 and 8.