The South Asian diaspora's business links with their countries of origin can help influence their governments to iron out political problems for speedier growth and progress in the region, according to noted economist Lord Meghnad Desai.
Speaking at the Commonwealth Business Council-SAARC South Asian Trade and Investment Forum, Lord Desai noted that South Asia holds much promise, but unless political problems were sorted out, the region would not see much growth and progress.
The solution to such problems may lie with the diaspora business, which can urge the South Asian governments to adopt flexible, liberal trade policies. "The diaspora can influence South Asian policies in various capitals," Lord Desai said.
Recalling that the region enjoyed free movement of labour and trade in the first half of the century, Lord Desai said: "And then because of Kashmir, India and Pakistan have deliberately shot themselves in the foot."
He wanted diaspora business to lobby with respective governments and work towards liberalising trade within the region.
Commonwealth Business Council (CBC) director-general Mohan Kaul said: "This Forum takes place at an important juncture in the growth of the global economy, with South Asia emerging as a region on the rise. There is, as the Asian Development Bank pointed out last month, an increasing awareness of a South Asian regional identity.
"Witnessing the evident desire amongst the SAARC countries for stronger regional collaboration, and with the implementation of the South Asia Free Trade Agreement (SAFTA) in July 2006, there is an opportunity for faster progress. Business is ready and is keen to see such progress."
According to the CBC, the South Asian region now represents a growing middle class of 450 million people. With an annual economic growth of more than 6-8 percent, the economic potential of the region makes it amongst the most attractive emerging market regions in the world today.
Pakistan's Minister of State for Commerce Hamid Yar Hiraj said: "It took longer to get sugar from India than from Brazil. The trade policies have to be made conducive for intra-regional trade."
The fact that trade was very low within the region was also highlighted by Sri Lankan Minister of Enterprise Development and Investment Promotion Rohitha Bogollagama. He said: "Currently the trade between South Asian states remains low. In 1995, the year which SAPTA was signed, only 3 percent of all South Asian trade was conducted in the region. Since then improvements in the regional trade have been marginal."
However, he was optimistic about the future, and added: "Although Asia has been slow starter in the area of economic integration, we are now seeing tangible progress being made and steadily gaining momentum.
"If we could accelerate economic integration between SAARC members it would certainly bring Asia closer together and ensure growth to the whole region...a business zone will eventually take shape encompassing South Asia as one production base."