Dhaka, Bangladesh (BBN)– Bangladesh Bank (BB) Governor Atiur Rahman has said direct data on growth gains from South Asian initiatives for regional cooperation are still limited; but output growth rate of the South Asia region has over the past few years consistently exceeded global overall output growth rates, plausibly indicating contribution from the cooperation efforts.
“We need to sustain and deepen the South Asia regional cooperation initiatives, for building up on the incipient gains in investment, trade and output growth,” Mr Atiur said in Tokyo on Thursday as a member of the Bangladesh Delegation to the IMF-World Bank Annual Meetings 2012 while attending a high level discussion forum titled “South Asia and the Global Economic Crisis: Can Regional Cooperation Buffer Volatility and Enhance Growth?”
The forum was chaired by the World Bank Managing Director Sri Mulyani Indrawati and participated by the Finance Ministers and Governors from South Asian countries.
The central bank chief said countries in South Asia are all on path of growth and poverty reduction, at varying paces and with varying patterns of inequalities in income and advancement opportunities for the poor.
“Larger economies like India have been growing at sustained high rates aided by huge inflows of external investment; among the smaller economies Bangladesh has maintained somewhat slower but steady, stable growth with much lower levels of foreign investment inflows,” he added.
On many counts of social advancement indicators smaller economies like Bangladesh and Sri Lanka have been faring better than their larger, faster growing neighbors; indicating that growth processes in these smaller economies have been more inclusive and equitable.
Problems like inadequacy of physical infrastructure and income poverty in large segments of population bedevil most of the South Asian countries, big or small. Financial markets in South Asia have proven ill equipped in intermediating the region’s foreign exchange reserves into investments needed in the region.
This picture of South Asian growth makes a compelling case for regional cooperation and integration as the way forward towards faster, more inclusive growth, stability, and poverty reduction.
There are lots to be gained from promotion of intraregional trade and investment by way of output, income and employment. There have been numerous initiatives, bilaterally as well as multilaterally in the SAARC forum. Despite numerous rounds of extensive dialogue and agenda setting, meaningful progress in concrete terms remained slow over the decades.
Greater trade integration and removal of tariffs will expand regional markets for our exports, compensating to some extent for demand weakness in advanced western economies. Key issue here is lowering Non-Tariff Barriers (NTBs) to trade. Greater labor mobility within the region can help enhance output competitiveness in host countries while helping income growth in source countries. This will need major easing of visa restrictions.
In the past couple of years we have seen significant headway in several directions, including tariff free entry of Bangladeshi apparels into Indian markets, trans-border movement of goods, freer movement of border enclave residents to their main lands, and activation of ‘border haats’ for local trade in produces of residents of the border regions. Communication and contact between decision making public authorities, businesses, academics and civil society organizations in South Asia have intensified, hopefully to hasten closer integration in trade and investment relationships.
BBN/SSR/AD-12Oct12-2:05 pm (BST)
