ABSTRACT
The Gross Domestic Product (GDP) of South Asian economies has grown very fast — GDP growth in 2007 was 9 per cent in India and close to 7 per cent in Bangladesh, Pakistan and Sri Lanka. Continued low levels of domestic savings and investment in the Pakistani economy, plus a drastic contraction of the public sector, have led to employment growth being driven mainly by addition to and expansion of the informal economy. The informal sector can be found in all parts of Sri Lanka, as in any South Asian economy. The urban areas in Sri Lanka are characterised by socio-economic polarisation. The urban population in Bangladesh has been rapidly increasing during the past three decades, due to territorial extension of urban areas, rural-to-urban migration, along with the natural increase in urban population. The urban population in Nepal has increased tremendously, mainly due to rural-to-urban migration fuelled by conflict and rural poverty.
