Closer economic ties to help South Asia tap full economic potential

28 Nov '06

3 min read

India's economic performance in the past two decades has been remarkable, but closer subregional integration would help the country and its neighbors to achieve their full economic potential, a senior ADB official told a press briefing.

Rajat Nag, Director General of ADB's Southeast Asia Department and Special Advisor to the President, said the process of regional economic cooperation and integration in South Asia has been slow and there was significant scope for expansion of trade and closer economic ties.

Mr. Nag, who takes over as ADB's new Managing Director General on 15 December, is in India to participate in the India Economic Summit organized by the World Economic Forum.

“Asian countries have come to realize that by working together they can speed up the process of development, both individually and regionally, and thus more effectively combat poverty,” Mr. Nag said.

“A significant expansion of intraregional trade and integration within South Asia would offer immense opportunities for sustaining high growth and reducing poverty in India and the rest of the subregion.”

Forming a common South Asia market will further increase India's market size by 30 percent, he added.

South Asia, led by India and Pakistan, posted stellar growth in 2005 and has registered average higher growth than its peers in Southeast Asia in the past five years.

Along with the People's Republic of China, South Asia is emerging as a new engine of growth in Asia and the Pacific.

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