Is South Asia waking up to take hold of full business potential?

Is south asia waking up to grab its real business potential? Businessmen, investors, and government leaders now think so, and have decided to lower trade and investment barriers. They are now pro-active, and going beyond the rhetoric.

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Published: Mon 24 Sep 2012, 10:53 PM

Last updated: Tue 7 Apr 2015, 12:29 PM

The latest actions, this week, confirm these positive developments. This is shown by India and Pakistan, in particular, and rest of South Asia-a market of more than 1.5billion.

Islamabad’s just concluded fifth session of the South Asia Economic Summit (SAES) confirmed how serious are all the stake holder to do more business among themselves, augment cross regional investment flows, and abolish trade barriers raised decades ago for political reasons, or just being fearful of the bigger and more powerful economies.

Foreign Minister Hina Rabbani Khar to Federal Minister Naveed Qamar, who now holds the portfolio of Defence and has been Minister for Finance, Economic Affairs, Petroleum, Power and Natural Resources, summed it up all while opening the Summit.

“South Asian nations are now robust enough and can compete against the challenges of their foreign competitors and against their own internal poverty, illiteracy, and poor health standards. We have only to complement our struggle to fight these elements by creating an enabling environment for businesses which will generate the much needed employment,” Qamar told the summit’s 114 foreign delegates and ministers. Khar confirms it. The implementation of the summit well be done by the annual summit of South Asian Alliance for Regional Cooperation scheduled to take place in Nepal this year.

Qamar urged the South Asian governments and their leadership to “look at the disconnect between macro- and micro-economic performances, in order to realistically address he growing poverty and improve the social sector.” The delegates and key scholars attending the summit came up with recommendations on trade in services, farm products, intra-regional movement of people and trade in sectors like energy which has hit the region’s output and growth.

The countries of the region have taken concrete steps to lower high barriers to trade and reduced customs duties on intra-regional trade down to “unprecedented levels.”

The delegates and Ministers stressed need to fully understand the South Asian perspective on the post-2015 development projections. They have to realise the fact that the region is regularly hit by natural disasters like floods, droughts, earthquakes and other natural disasters. It is now time to realise that we have not paid much attention to address the impact of regions’ climate change, summit says.

Nagesh Kumar, of the United Nations Economic & Social Commission for Asia & Pacific, was of the view that South Asia has proved to be “the most resilient region, despite the global financial crisis,” and made good gains in achieving the Millennium Development Goal (MDGs).

Suhrab Hussain, of Bangladesh Foreign Ministry, said, “the South Asian intra-regional trade accounts for just five per cent, in sharp contrast to 25-to-30 per cent in other regional blocks.”

Mahendra P. Lama, vice-chancellor of the central University of Sikkim, said “the dream of the South Asian community can only be realised if they can transform their thinking from the security-centric perspective to a hub of socio-economic opportunities.” He stressed the need for “enlarging and diversifying the export basket by putting-in non-traditional goods such as energy.”

Madhu Raman Acharya, Nepal’s former Foreign Secretary, says “South Asia is one of the fastest growing regions, yet one of the least economically integrated.”

Pakistan’s Dr Abid Qayyum Suleri, executive director, Sustainable Development Policy Institute, applauded the political leadership of India and Pakistan for their recent landmark initiatives like setting an easy visa regime for businessmen and visitors, MFN status to India by Pakistan, and Indian decision to allow investment by Pakistani investors. “We can now see clouds of hope amidst years of mistrust,” he said.

Rajiva Wijesinha, Member of the Sri Lankan Parliament, called for higher quality education and skills to “greatly increase our productivity, resulting in positive growth.” Kalpana Koshar, World Bank’s chief economist for South Asia, said: “The centre of gravity of the global economy is now significantly shifting to Asia, creating a space for the Asian nations to benefit from this paradigm shift.”

Muchkund Dubey, former Indian foreign secretary, favoured larger investment and trade flows, for the region to find its real world role.

The realisation to actually get things done is good, as Saarc Nations’ South Asian Free Trade Agreement (Safta), had become operational in July, 2006. It has been a slow-moving affair so for. Safta provides Non-LDC nations to cut their tariffs for intra-regional trade down to 20 per cent by June 2008, and still further down to zero to five per cent by 2013.

Safta’s LDC members were to reduce their tariffs from their then existing level down to 30 per cent by June 2008, and from 30 per cent or below down to zero to five per cent, by 2013.

The region’s big-two nations — India and Pakistan — have achieved quiet a lot, but others must do their bit. India has just announced a 30 per cent cut in “Sensitive List” maintained under Safta. Trade concessions have been allowed on import into India of 264 items from Non-LDC countries which include Pakistan and Sri Lanka. A good omen. “Pakistan is determined to complete its trade liberalisation process, doing away with the negative list-based trade with India by the year-end. Over this there is a strong political will and political consensus,” said Khar at the Summit. Looking at the region’s plans and resolve, it now looks, it will clinch it.

Views expressed by the author are his own and do not reflect the newspaper’s policy

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