‘S Asian integration can be achieved through trade facilitation’
By Sajid Chaudhry
KATHMANDU: The true potential of South Asian integration can only be achieved by making trade facilitation, easing visas restrictions, simplifying customs and standard procedures besides improving connectivity through rail, road and direct flights.
World Bank for South Asia Senior Operations Officer Diep Nguyen–Van Houtte told journalists during a presentation on Breaking Down Barriers-A new Dawn on Trade, Energy and Regional Cooperation in South Asia on the occasion of Journalism Workshop on Regional Cooperation in South Asia for journalists from South Asian countries including Pakistan on Thursday.
Having population of over 1 billion, India is Pakistan’s main missing market, as this is easy to export to India than to United States and European Union. Similarly, Pakistan is also a main missing market for India with second largest market in South Asia. On the other hand, Pakistan and India are the main missing markets for Bangladesh ... also its trade with its neighbours is limited compared with EU and United states, she mentioned.
On Intra-South Asia Region trade in capital goods, consumer goods are less than compared with other regions of the world as South Asia region is mainly trading more in intermediate goods and raw materials, the participants were informed.
SAARC member countries are suffering from massive energy shortages. “Over one third of the world population without electricity lives in South Asia.” In South Asia the 493 million population have no access to electricity, in other words the electrification rate in South Asia is 68.5 percent, which is much lower than Latin America, Middle East, China and East Asia and North Africa.
“As a result of this low power in the region, especially in Pakistan 400,000 people have lost jobs in the industrial sector,” she maintained.
The low availability is also decelerated economic growth as in the case of Bangladesh the gross domestic product (GDP) growth rate fell between 1.0 to 2.0 percent of the GDP, she added.
All this happened because of huge demand from consumers and industry for electricity while the production remained below the potential production. In case of Pakistan, there is huge deficit and supply and demand. To fill the gap in supply and demand there is no energy-sharing scheme in South Asia, despite huge potential for energy generation in the region, it was informed.
South Asia has lowest people-to-people contact ratio in the world. There is huge potential for transit trade services in South Asia. The improved trade relations between Pakistan and India can provide transit access to India goods to Afghanistan and Central Asia, however, this could not be achieved until Pakistan has an uninterrupted transit route. In the same way Islamabad is looking for similar facility in India for exporting goods via land route to Nepal and Bangladesh, she mentioned.
“Bangladesh has a transit route between India and Pakistan to Myanmar and other parts of East Asia”.
The US and EU are the two major trading partners of Pakistan and it is dependent on exports to these two destinations. It’s over dependent on these two trading partners and limited trade with its neighbouring countries of South Asia. There is more risk for it in case the economies of US and EU did not recover from present economic crisis alike situation.
“Despite having borders connectivity and limited communication infrastructure, Pakistan and India are trading more with China than each other,” she added.