Infrastructure investment needs. Despite significant progress in expanding infrastructure in many SAR economies, both the quality and quantity of infrastructure in the region are still lower than in other EMDE regions (Bizimana et al. 2021). SAR is also one of the least economically integrated regions in the world, with inadequate transport and power infrastructure partly to blame (ADB 2009; World Bank 2016d). Rozenberg and Fay (2019) estimate that the average annual investment needed in South Asia to meet infrastructurerelated SDGs by 2030 is 7.5 percent of GDP—the second highest among EMDE regions. The ADB has estimated that this rises to 8.8 percent of GDP if climate needs are included (ADB 2017).

In India, the National Infrastructure Pipeline task force identified in 2020 plans for investments amounting to the equivalent of about half of the country’s FY2021 GDP on infrastructure projects between FY2019-FY2025. The investments are in roads, railways, air and seaports, energy, and other infrastructure. Investment in the power sector is needed to meet growing energy demands, with total installed capacity expected to increase by two-thirds by 2025. Investment is also needed to shift energy production to renewable sources, improve access, and increase the efficiency of the sector. Electricity distribution loss is 19 percent in India, more than double the global average.

Bangladesh’s infrastructure needs various improvements. Poor logistics currently hinder investment and international trade (World Bank 2021h). Logistic costs have been estimated to add 5-48 percent to production costs across sectors owing to congestion, poor reliability, poor quality, and widespread informality (World Bank 2021h). While investment in the power sector has effectively met capacity needs over the last decade, further investment is needed to connect households to energy providers, diversify sources of power, and meet future needs (Government of Bangladesh 2020). To meet demand for electricity through 2030, investment equivalent to 15 percent of FY2022 GDP is estimated to be needed in the coming years (Government of Bangladesh 2020). In the transport sector, the road network remains inadequate, although investment in other modes of transport could reduce need. The 8th Five Year Plan estimates that to achieve its goals, investment would need to increase by 5 percent of GDP between FY2020 to FY2025, mainly in the private sector and through foreign direct investment.

Investment in human capital. Investment needs in health and education go beyond addressing the damage inflicted by the pandemic. Many countries in the region perform poorly on achieving universal health coverage. The region suffers from too few healthcare professionals, low spending on public health—only 2 percent of GDP, below all other EMDE regions—and shortages of healthcare equipment (World Bank 2021g). The lack of adequate healthcare, together with high poverty levels and inadequate nutrition, means that about one-third of children in the region are stunted and four percent do not live past the age of five. In education, learning gaps remain wide, indicating a need for additional resources to empower teachers, address geographic inequalities, and adopt new methods of teaching. Thus, countries in the region generally fall short in enabling citizens to meet their productive potential. A child born in SAR is expected to attain only 48 percent of his or her productive potential, the second worst performance among EMDE