South Asian economic integration : Political inconsistence, non-tariff barriers termed key challenges

Staff Correspondent
Commerce Secretary Hedayetullah Al Mamoon speaks in presence of a number of trade experts at the sub-regional public-privet dialogue on promoting trade in Bangladesh-Bhutan-India-Nepal at the MCCI auditorium in Dhaka on Saturday. — New Age photo

Commerce Secretary Hedayetullah Al Mamoon speaks in presence of a number of trade experts at the sub-regional public-privet dialogue on promoting trade in Bangladesh-Bhutan-India-Nepal at the MCCI auditorium in Dhaka on Saturday. — New Age photo

Hesitant and inconsistent political leadership and various non-tariff barriers are the key challenges to South Asian regional economic integration, opined national and international experts in a dialogue on Saturday in Dhaka.
The Metropolitan Chamber of Commerce and Industry, Dhaka, the SAARC Chamber of Commerce and Industry, and The Asia Foundation jointly organised the sub-regional public-privet dialogue on promoting trade in Bangladesh-Bhutan-India-Nepal at the MCCI auditorium.
The experts in the dialogue also said due to the hostilities between India and Pakistan, the South Asian Association for Regional Cooperation has failed to play its due role.
‘The SAARC is hostage to India and Pakistan. We will have to make the SAARC more effective and we do not want to adopt isolated policy in the region,’ said Zubair Ahmed Malik, former president of the Federation of Pakistan Chambers of Commerce and Industry.
He said the regional countries would have to work collectively as no country can grow alone.
Malik said promoting intra-regional trade by creating strong linkage among the network members, enterprises and SMEs and strengthening individual and institutional capacities of the members were the key objectives of the SAARC trade promotion network.
He emphasised strengthening policy advocacy and the non-tariff measure desk for reducing trade barriers among the South Asian countries.
Savithri Lakshmanan, director (India) at the SAARC Secretariat, Kathmandu, said physical connectivity among the regional countries is of high import and policy coordination is needed to accomplish it.
Lakshmanan recommended a harmonised policy for the regional integrity, saying it would be a great achievement if the South Asian countries can come up as one bloc.
Commerce Secretary Hedayetullah Al Mamoon said it is high time for the South Asian countries to go forward. There might be political divisions, but there should not be division in business, he added.
Mamoon said business division hampers the supply chain and is dangerous for economic growth.
‘There are many businesses and non-tariff barriers among the regional countries, but we have to go for solutions,’ he added.
Selim Raihan, a professor of economics at Dhaka University, said it is important to explore the political economic dimensions to have a better and systematic assessment of the factors driving and constraining regional integration.
He said systematic discussion on the political economic factors around the regional integration agenda can generate a broader awareness among the stakeholders that may ultimately lead to more realistic and effective regional policy design and processes.
Raihan identified market, investment, growth and policy integration as economic drivers for a deeper regional integration.
He also identified extra-regional drivers for regional integration and said global economic and political factors influence the region.
In a keynote, Raihan illustrated how India is becoming the major source of import for most of the South Asian countries and, at the same time, is becoming the major export market.
Citing the BBIN Motor Vehicles Agreement signed on January 2015, DHL Senior Director Pritam Banerjee said road freight would be the key to trade linkages across the region, while air and coastal linkages would remain supplementary.
To empower the supply chain participation for SMEs in textiles, agro-foods, handicrafts, leather and other such sectors, road would remain the most accessible mode of transport, he said.
Md Touhid Hossain, former foreign secretary, said to facilitate trade the infrastructure of the countries with common borders need coordinated and synchronised developments, including means of transportations as well as facilities for smooth passage of goods across the border.
‘If land port facilities at a particular point are developed on one side and underdeveloped on the other side, trade would not be benefitted,’ he said.
In Hossain’s view, there are some intangible challenges like policy consistency and confidence building, as frequent changes in policy create uncertainties and erode confidence in the system.

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