Published: Sunday, Jul 19, 2009
July 19, 2009
Trade, as they say, is the engine of growth. So it must be for South Asia. Yet, despite all the good intentions expressed in the numerous regional summits, intra-regionaltrade is showing little sign of an upturn.
While global trade ran ahead of income growth for the past five decades,trade between countries of this region has been stagnating. Few will doubt that there is much greater potential for mutually beneficial trade – in goods and services -- amongst South Asian neighbours. That indication is clear from the well known huge volume of illegal trade that goes on across our borders. At the time of partition in 1947, roughly one-fifth of all trade in South Asia happened within the countries in the region. That is all in the past now.
Economists regard South Asia as the least integrated among regions of the world – worse even than sub-Saharan Africa. This judgment is made on the criteria of trade and investment. And it is not getting any better, despite the several rounds of regional cooperation summits convened in the past two decades under the auspices of SAARC. SAFTA (South Asian Free TradeAgreement), the regional initiative for trade integration, is in the doldrums, as member countries frantically pursue and sign bilateral trading arrangements with willing parties. India and Pakistan have gone for Free Trade Agreements (FTAs) with Sri Lanka; India and Bangladesh, and Pakistan and Nepal are exploring possibilities of FTA. India, of course, is close to reaching several more FTAs outside the region – with Singapore, ASEAN, EU and South Korea. What is it that stands in the way of regional economic integration in South Asia?
Last Updated on Thursday, 06 January 2011 05:41