The World Bank says unlocking the potential of micro, small, and medium enterprises (MSMEs) could yield the biggest job gains in South Asia. These firms account for the majority of employment but face regulatory hurdles, unreliable infrastructure, and limited access to credit.
Simplifying tax and labor laws, investing in energy and transportation, and eliminating favoritism toward large state-owned firms could make a difference. The Bank’s “Jobs for Resilience” report urges governments to prioritize predictable policies and institutional effectiveness.
Economists argue that vibrant small businesses are essential to absorb the region’s growing youth labor force. Without structural reforms, South Asia’s demographic advantage could turn into an economic liability.