South Asia Regional Integration

South Asia is a region encompassing the countries of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The region is economically, culturally, linguistically and geographically diverse, which is why the region has been aptly called a sub-continent. Very little binds the region together, except probably a common history of colonization by the British. The region has been the fastest growing region in the world in 2016; yet it also houses the largest number of poor in the world. However, much of the growth is because of the high growth rate that India will experience in the next couple of years. 

Although South Asia is home to 1.6 billion people and has a combined GDP of about $2.4 trillion, most of it is concentrated in India (population of 1.2 billion and GDP of $1.8 trillion). Compared to India, the other South Asian countries are relatively small in population and GDP size. The region is also one of the least integrated in the world - intra-regional trade accounts for only about 4 percent of the total trade of South Asia in 2011. The South Asian countries are more inclined to trade with non-South Asian countries than with their neighbors. 

Development partners have recognized the importance of regional integration in South Asia, and so, there is a push for greater regional integration among South Asian countries. Since India is the largest country in the region, it is expected that most of the intra-South Asia trade will happen between India and the rest of the South Asian nations. Also, India is by far, the largest country by GDP in the region, so other countries may be wary of opening up too much, fearing that their local industries might be overwhelmed by Indian products. Thus, it would be a better for these nations to cooperate and produce goods together and then export them to the rest of the world. For example, Bangladesh is the second largest garments exporter in the world, and India and Pakistan are large cotton producers. If the region were integrated, cotton could be transported by ship/train from Pakistan/India directly to Bangladesh. Hydro-power can be produced in northern Pakistan, Nepal or Bhutan and then transmitted across the region. Colombo port could be a transportation hub for all of South Asia shipping goods from the region to the rest of the world. The possibilities are endless. The region can grow rich together and concerted efforts can lift millions of South Asians out of poverty.

There are some steps that are being taken to increase connectivity among some of the South Asian nations. Nepal, Bhutan, Bangladesh and India are agreeing on a transportation deal that will facilitate the movement of vehicles between these four countries. This can help Nepal and Bhutan to use Bangladeshi seaports to export their goods abroad. However, the progress is slow. The region should encourage more tourism among these nations, and remove different barriers to trade. It should be more open to freer flow of goods and services, and this will help the region to grow even faster and ensure a more pro-poor growth.