The IDI is a composite of three sub-indexes. South Asia has done well in access, with rankings increasing in all countries, except for the Maldives. India jumps seven places. The only countries that do well in the use sub-index are Sri Lanka (advance of 10 places) and Nepal (nine places). Pakistan and the Maldives fall back 13 places. Only Bhutan and the Maldives advance three and two places respectively in the skills sub-index. Sri Lanka and Bangladesh fall back one place, while all others hold their places.

What the above illustrates is that one cannot move ahead in the overall rankings simply by improving one dimension or one sub-index. For example, Bhutan advanced by four places in access, by three in use, and by three in skills. This translated into an overall advance of four places for Bhutan. Sri Lanka advanced by 10 places in use, but this appeared to be negated by a one-place retreat in the skills component and a lower-than-most advance of two places in access.

The Maldives increased by the most (0.51), yet dropped a rank position, indicating that the countries in the range where the Maldives is located is highly competitive. The least increase shown by Bangladesh (0.21) resulted in a slippage of one position in the rankings.

India is still number 1 and China is number 2. No change.

Thailand has slipped to 7 from 4, overtaken by Indonesia.

Sri Lanka is at 21, slipping from 16 in 2009. Pakistan has slipped to 28 from 20th place in 2009.

And Bangladesh? Not in the list, again. That’s what comes from restrictive BPO policies and refusing to admit captive BPOs. I hope the Digital Bangladesh folk are paying attention.

Sri Lanka retained its position at 12 while China moved to 5, from 13 a year earlier.

“China is continuing its ascent as a services destination, and confirms it should not be considered anymore “merely” the world’s factory,” the report said.

“Sri Lanka is another Asian country that has succeeded in positioning itself as an alternative to India.”

Several Sri Lankan firms are engaging in the high-end of the market in the so-called ‘knowledge processing outsourcing’ of KPO sector.

Sri Lanka has been competing for outsourcing business for several years under the shadow of a 30-year war which increased risk. In 2009 a war ended and the country is looking forward to increasing services investments in particular.

On the fixed side, assisted by CDMA phones that are counted as fixed, Sri Lanka is the leader (17 connection per 100 people), followed by Maldives (15 per 100).

Like in cricket, the middle of the rankings are the most interesting. Both Pakistan (50/100) and Bhutan (37/100) are ahead of India (29/100) in mobile. This shows that India cannot afford to let up the pace of 10 million connections a month for some time. If it does, it might be overtaken by Afghanistan (29/100) and even Bangladesh (28/100).

Of course, the fact that Afghanistan is ahead of Bangladesh in mobile penetration should cause all sorts of palpitations in government offices in Dhaka. Bangladesh was one of the earliest in South Asia to adopt mobile and is the most densely populated country in the world. How they were overtaken by Afghanistan, a war-torn country with difficult terrain, should cause serious re-examination of policies such as the BDT 800 SIM tax. The fact that Afghanistan’s CAGR for 2003-08 is 109%, higher than Bangladesh’s 2003-08 CAGR of 101%, suggests that the gap between the two countries is more likely to increase than decrease.

In the fixed rankings, we find Afghanistan occupying the cellar (0.37/100 people) behind Bangladesh (0.84/100). Pakistan (2.5/100) is behind Nepal (2.8/100). This is very surprising given the apparent superiority of the Pakistan policy and regulatory framework. Both use CDMA on the fixed access side, so that cannot be the explanation. Comments from Pakistani colleagues would be most welcome.

India is the only country showing negative growth in fixed over the 2003-08 period (-2%), but this simply because India is more honest in its reporting, counting CDMA on the mobile side instead of on the fixed side. For example Sri Lanka is experiencing negative growth in wireline, that is masked by CDMA growth.

From 2003 to 2008, the number of active SIMs has increased by over 12 times, while the number of fixed connections has decreased marginally, the negative growth in India wiping out all the gains in the rest of South Asia. South Asia is clearly the territory of the mobile.

The good news for South Asia is that Sri Lanka has moved up from 29 to 16 and Pakistan from 30 to 20. India, of course, sits at the top, no change from 2007. The advances of Sri Lanka and Pakistan have been at the expense of the Northern European countries (e.g., Lithuania and Latvia), Singapore and the UAE. Other than Singapore, the rest of SE Asia, including Vietnam are ahead of Sri Lanka and Pakistan. Ghana, Jordan, Egypt are still ahead.

And where is Bangladesh?