Regional co-operation could generate billions in trade; curb energy
shortages - World Bank
WASHINGTON, DC,: South Asia's unprecedented growth, averaging close
to six percent per year since the 1990s, has created a new momentum for
closer regional integration, Praful Patel, World Bank Vice-President for
the South Asia region, said at a press briefing in Washington yesterday.
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CO-OPERATION: Sri Lankan President Mahinda Rajapaksa, right, reaches
out to shake hands with Nepalese Prime Minister Girija Prasad
Koirala, as Pakistan Prime Minister Shaukat Aziz looks on, during
the inaugural session of the 14th SAARC Summit in New Delhi, India,
Tuesday, April 3. (AFP)
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Speaking ahead of the SAARC Summit in New Delhi on April 3-4, where
India will takeover the rotating chairmanship, Patel said there are
clear signs that policy-makers and the private sector in the region are
pushing for closer integration.
Regional co-operation, he said "can be a very effective tool in
increasing trade, relieving energy shortages, improving connectivity,
increasing investment, and promoting peace and stability."
According to a recent World Bank study - South Asia: Growth and
Regional Integration - South Asia is the least integrated region in the
world.
Interregional trade is less than two per cent of GDP, compared to
more than 20 per cent for East Asia.
Annual trade between India and Pakistan, the bulk of which is routed
through Dubai, is currently estimated at US$1 billion, but could be as
great as US$9 billion.
In addition, cross-border investments, and the flow of ideas, crudely
measured by the cross-border movement of people or the number of
telephone calls, are all low for South Asia.
World Bank Chief Economist for the South Asia region Shantayanan
Devarajan said regional co-operation will play a crucial role in meeting
the infrastructure needs of the region. "Better trade facilitation would
reduce substantially the transaction costs of interregional trade.
But streamlining transport and trade systems is also needed to
facilitate interregional trade. Many of the region's competitors have
dramatically reduced customs and port clearance items.
South Asia risks being left behind."
Firm level surveys of the investment climate have identified
infrastructure, particularly power, as a major constraint to growth in
South Asia.
In Pakistan, the typical business estimates that it losses 5.6 per
cent in annual sales revenue owing to power outages against a reported
loss of two per cent by its Chinese counterparts.
In Bangladesh, the most frequent common complaint is the constraint
imposed by the poor electricity system.
Regional co-operation can play an important role in addressing the
region's energy needs, he said. |
