Category: Cover Story
‘We Are Very Keen To Move The SAARC Free Trade Process Forward’
trade that the region has with the world. There is, of course, a potential and a huge opportunity for the countries within the region to improve on this figure.
‘Intra-industry Trade Potential In South Asia Is Underutilised’
The intra-regional trade among the SAARC countries stands at 5 per cent of the bloc’s worldwide trade which has been the case for some time now. Intra SAARC trade has certainly increased over the years, however, there has been an increase in SAARC’s world trade too. Hence, the share of intraregional trade has remained constant. When compared to intra-regional trade in other trade blocs like ASEAN and EU, intra SAARC trade does look small.
‘Economic Diplomacy Is The Present World Order’
WTO is a broader frame which is the legal basis for global trade arrangements and provides framework for the rule-based trading system of which RTA is an option. RTA’s jurisdiction is area specific and has the involvement of likeminded countries which are similar in geographical, political or socio-economic aspects and enjoy certain proximity. The WTO’s role is to provide the basis for legal framework and permit for RTAs.
‘The Promises Of SAFTA Are Much Better’
The truth is that SAARC as a regional organisation has not completely taken off. There are a lot of constraints that has contributed to this. There is asymmetry in sizes of countries involved in the region with India being the most dominant one. The second reason is that we also have conflict between India and Pakistan, which has in a way, obstructed the SAARC process. There have been opportunities at times when SAARC has shown promise. However, bilateral differences between India and Pakistan have held it back. We have had SAPTA (South Asian Preferential Trading Agreement) for a long time but that has not increased trade either because its structure was fundamentally limited in terms of offering opportunities to increase trade. That is something ASEAN used for a long time and did not have any significant impact. We made the same mistake in South Asia by going through preferential trading arrangement. SAFTA (South Asia Free Trade Agreement) was signed in 2004 but despite the agreement, it has not been implemented basically due to concerns between India and Pakistan.
‘Economic Diplomacy Is Getting Sidelined By Political Diplomacy In The Region’
In the context of South Asia’s trade, trade movement is very low despite it being home to one fifth of the world’s population. Intra-regional trade is less than five per cent which is something the business community of the region must take into account. Other regional bodies like EU and NAFTA have more than 50 per cent of the trade within their respective regions. Even though the countries in the SAARC region claim to be close, there exist a lot of hiccups. The mindset and attitude of the politicians and bureaucrats are not to the level expected in the 21st century. Besides political reasons, infrastructure connectivity, high cost of business, bureaucratic hassles plague the prospects of intra-regional trade.
‘SAARC Countries Should Work Towards Regional Cooperation To Achieve Growth’
The regional trade in South Asia seems to be improving over the years but it is not up to the expectation. Compared to the past, the South Asian economy is more open today. The tariff rates have come down from 80-90 per cent in the 1990s to 20-25 per cent today and exports and imports together are equivalent to about 20 per cent of the regional GDP. SAFTA was expected to include all products, manufacturers and commodities. It is commonly accepted that negotiations under SAPTA will not be very effective in terms of inventing intra-regional trade in SAARC which is unfortunate. There are various possibilities of further improving regional trade within South Asia if countries can overcome the existing barriers. Remedies like substantial tariff cuts, removal of non tariff barriers, adequate trade related capacity building, and connectivity between the countries etc have to be implemented. The regional trade arrangements are in an interim state towards more efficient levels of globalisation.
Trade Of Hopes In South Asia
The 17th Summit of South Asian Association for Regional Cooperation (SAARC) held on 10-11 November this year adopted the ‘Addu Declaration’ which lays emphasis on effective implementation of the SAFTA (South Asian Free Trade Area) accord among its member states. The heads of the eight member countries – Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka – at Addu city in Maldives discussed regional issues in an effort to take SAFTA forward. “I think there is a realization now among the countries in the region to move SAARC into a more integrated regional cooperation model,” says Jaideep Mazumdar, Minister and Deputy Chief of Mission at the Embassy of India in Kathmandu.
‘Manufacturers Are Treated As Criminals In This Country’
BIPPA should have been signed with India a couple of years ago because it is our nearest neighbour and the largest foreign investor in the country. BIPPA will be a milestone agreement as it promises added security to the Indian investors.
‘Industrial Development Is Impossible Without Basic Infrastructure’
The market for both consumable goods and durables has been growing and expanding in the international arena. Growth of manufacturing sector ensures overall economic growth. As a result, demand for both consumable
Manufacruting Prospect Unharnessed
A long-term vision for the Nepali Manufacturing Sector, known as vision 2020, prepared jointly by Nepal government, UNDP and UNIDO in 2002 had proposed to pursue a two-pronged industrialization strategy aimed at rural, agro-based industrialization, and formal urban-based industrial development. But a decade down the lane, nothing
