Regional integration could generate billions in South Asian trade
03 Apr '07
3 min read
"Nepal has the potential to produce more than 40,000 megawatts of hydro power, most of which could be exported to India, generating US$6-10 billion per year of revenues to Nepal. The more the public in the region are aware of these forgone benefits, the more likely they are to demand greater openness."
Although South Asia has significantly reduced import tariffs, the cost of trading across borders is one of the highest in the world. Crossings between India and Bangladesh are so heavily congested that queues often exceed 1,000 trucks on the Indian side with the result that crossing time can take 99 hours instead of 21 hours without delay.
Trade can more than double if appropriate regional agreements on roads, rail, air, and shipping are put in place enabling seamless movement.
Shantayanan Devarajan, World Bank Chief Economist for the South Asia region said regional cooperation will play a crucial role in meeting the infrastructure needs of the region.
"Better trade facilitation would reduce substantially the transactions costs of intraregional trade. But streamlining transport and trade systems is also needed to facilitate interregional trade. Many of the region's competitors have dramatically reduced customs and port clearance times. South Asia risks being left behind."
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