Reducing visa restrictions and non-tariff barriers, improving customs procedures are among a host of steps South Asian countries can take to boost private sector-led growth, unlocking the region’s vast economic potential, says a report prepared by the Asian Development Bank (ADB) industry chamber Ficci.
The report, “Key Proposals for Harnessing Business Opportunities in South Asia,” looked at challenges to increased trade and investment links in the region, along with possible solutions.
“Unlocking South Asia's potential lies in the God of small things’ — small steps that can have an enormous impact. This joint ADB-FICCI report outlines small, actionable steps in eliminating trade and investment barriers that will go a long way in deepening South Asian economic integration and bettering the business environment,” said Srinivasa Madhur, senior director of ADB’s Office of Regional Economic Integration.
South Asia, with a potential market of 1.5 billion people, has significant comparative advantages in industries ranging from textiles and garments, to tourism, pharmaceuticals and information technology. But it is also home to half of the world’s extreme poor, with 40 per cent of its total population living on less than $1.25 (about Rs 58) a day, the report said.
Intra-regional trade remains modest compared to other parts of the world, and numerous impediments prevent the private sector from taking a bigger economic role.
Cutting non-physical barriers to trade and improving the climate for investment across borders will encourage greater private sector activity, lifting growth, cutting poverty and strengthening regional integration, the report said.
Among the steps it suggested are liberalising a South Asia visa exemption scheme, adopting a regional motor vehicular agreement to speed up the passage of goods vehicles across borders, and streamlining procedures at land customs stations.
It has noted that while South Asia has made steady progress in cutting tariff barriers, it still needs to address non-tariff issues such as inconsistencies in regulations, and the imposition of product quotas.