Dr. Atiur Rahman is addressing at economic summit in Kathmandu on November 15, 2017. Photo: BBN
Dhaka, Bangladesh (BBN) - Former Governor of Bangladesh Bank (BB) Atiur Rahman said regional cooperation and integration is the way forward for Asian economies despite heightened uncertainty of the global economy.
“Yet South Asia as a region lags way behind in this regard compared to EU, NAFTA and ASEAN. To enhance cooperation & integration in South Asia, intra-regional investment must be increased significantly and as fast as possible,” Dr. Rahman said while addressing at a ‘Tenth South Asia Economic Summit’ held in Kathmandu on Wednesday.
The three days long summit is being held at Kathmandu. Professor Indranath Mukherjee of India and Rabi Shankar Sainju from Nepal made the presentations at the summit.
Experts from Nepal, Bhutan, Maldives and Bangladesh participated in the panel discussion, according to a message received in Dhaka.
Professor Mukherjee, particularly praised Bangladesh for taking proactive measures to develop connectivity and Special Economic Zones to attract foreign direct investment which has been increasing in recent years.
Investment by other South Asian countries in India accounts for only 1.5 per cent of the total FDI in the country. In case of Bangladesh, of the 1,600 foreign investment enterprises only 169 are South Asian ventures, mostly from India and Sri Lanka, according to the BB former governor.
For Nepal, intra-South Asian investments account for 26 per cent of the total FDI, mostly from India, he added.
He also said since more or less all the South Asian countries have large and growing consumer bases horizontal FDI is dominating intra-regional investment composition. But vertically integrated cross-border production operations need to be expanded significantly.
“Scenario in the South Asian front is also changing fast. Governments in the sub-region are showing an unprecedented level of political will to cooperate with each other,” Dr. Rahman explained.
BBIN countries are already working together to enhance connectivity by road and by waterways, he said, adding that right now, the priority areas of cooperation appear to be transport, trade facilitation, and energy.
He added that intra-regional investment is also gaining currency in the sub-regional policy discourse. For example, Bangladesh is opening up multiple SEZs exclusively for Indian investors, besides other major investing countries like China and Japan.
Dr. Rahman asked for watching the changing ground reality and focusing on new areas of cross-border investment in the emerging fields of green energy and e-commerce. Here, smaller South Asian countries can learn a lot from the best policies and practices of India. “Others can learn from Indian experience in human resource development as well.”
He also called for credible joint ventures to spur sub-regional investment.
The former governor appreciated the prudent move by the sub-regional countries led by India to accelerate trade and investment under BBIN arrangement in the absence of SAARC which is literally not in motion.
He also showcased the example of Indo-Bangladesh grid connection for transmission of power from India as a replicable model for sub-regional cooperation.
“Nepal and Bhutan also can join the grid at some point in time if the sub-regional trust continues to grow further. The line of credit opened by India is also premised to improve rail and waterways connectivity besides other areas of investment cooperation between the two countries,” he noted.
BBN/SSR/AD