Regional Integration in South Asia

Trends, Challenges and Prospects

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Regional Integration in South Asia: Trends, Challenges and Prospects presents an objective assessment of trade and economic co-operation among South Asian nations and highlights policy issues to foster regional integration. The analyses presented in this volume go beyond the usual discussions on trade-in-goods to provide insightful perspectives on potential new areas of co-operation, emerging challenges, and country-specific views on regional and bilateral trade co-operation issues.

Written by influential analysts and researchers, the volume’s 24 chapters include perspectives from Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka, and examinations of new areas of co-operation such as investment, regional supply chains, energy and cross-border transport networks.



Nepal and SAFTA: Issues, Prospects and Challenges

The Preamble to the Agreement on South Asian Free Trade Area (SAFTA) expects it to act ‘as a stimulus to the strengthening of national and SAARC economic resilience, and the development of the national economies of the Contracting States by expanding investment and production opportunities, trade, and foreign exchange earnings as well as the development of economic and technological co-operation’ (SAARC Secretariat 2004). Nepali policy-makers believed that joining SAFTA would help Nepal to expand its exports to countries other than India, collectively called the ‘Rest of South Asia’ (RSA), and thereby contribute to geographic export diversification. If Nepal’s intra-regional trade during the first five years of implementation of SAFTA is any guide, this objective is far from being achieved. This is also the plight of most of the LDCs in the region, which are heavily dependent on the two largest economies of the region for their regional trade.


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