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Regional integration, private sector to help South Asia boost growth: Report

Economic Times, India

Regional integration, private sector to help South Asia boost growth: Report

20 September 2015

PTI/NEW DELHI: Increasing regional integration through enhanced role of private sector and cooperation in areas like trade, energy security and connectivity will help South Asian nations boost economic growth, says a report.

South Asia is facing the world’s worst challenges - poverty, unemployment and illiteracy irrespective of the immense potential the region has to become the frontrunner of growth and prosperity in the 21st century, said the report by industry body CII.

"Time is ripe to unleash these potentials. Regional integration by creating regional value chains and a favourable investment climate can boost the region’s share in global trade, investment and economic growth," it said.

This can be done through a right mix of internal and cross border economic policy reforms, improving physical connectivity and a range of other measures, it said.

The report has enlisted areas where attention is required by the South Asian economies and that includes increasing private sector participation to boost investments, removing non-trade barriers, improving physical connectivity and liberalising services sector through relaxed visa norms.

"EU, ASEAN and NAFTA are successful examples of how regional economic integration can lead to rapid economic growth and rise in investment. However, South Asia, as a region, is lagging behind in regional integration," it said.

It said that SAFTA (South Asia Free Trade Agreement) needs to shift its focus towards integration led by intra-industry trade and investment within the region.

"For example, Sri Lanka can be the hub for rubber-based industries in South Asia...since almost all member countries share border with India, India can be a fruitful partner in many possible areas for them," it added.

On increasing energy cooperation, it said India, Bhutan and Bangladesh share a rich network of rivers and this provides rich ecosystems to the region.

"Joint development of energy projects can help explore this huge potential," it said.

It also said that easing visa for entrepreneurs and businesses can have significant positive impact in the region.

Keeping the security concerns under consideration, governments can coordinate to approve lists of businessmen who can have benefits of free travel or visa on arrival, it said.

"Trade within South Asia is far below its potential and only shows how poorly integrated the region is. Trade within South Asia was $8-9 billion a few years ago which has gone up to about $23 billion in 2013," it said.

CII is organising a three-day ’South Asia Economic Conclave’ starting from September 28 to discuss all these issues.

South Asian countries are India, Bhutan, Bangladesh, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan.