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We finally worked out why...
First the boring part: In the 10th ministerial meet of BIMSTEC, the body for multi-sectoral technical and economic cooperation, almost every member was unanimous about the fact that intra-regional trade should be encouraged. After the boring part, second, is the more boring part. This so-called universally believed truth is clearly not practiced among Asian nations who are witnessing rapid growth.
Many regions in the developed world and the West have already exploited intra-regional trade to a high extent. US’s stupendous reliance on trade and investment with the globe, and specifically China – with which they obviously are at political loggerheads – should be an example for other countries to follow. But few know that the US has even encouraged trade with the ‘Chavezesque’ South American countries through hundreds of bilateral or regional Free Trade Agreements. And of course, it might seem churlish to even mention the European Commission, whose chief objective remains enhancing intra-regional trade and investment. All this notwithstanding, forget realising the need for promoting economic cooperation, Asian countries [South Asia in particular] seem to be continuously finding out reasons to demote trade and investment.
As per the latest available data by IMF, the direction of trade and exports within South Asia (SA) increased from a meagre $863.0 million in the 90s to $5,705.8 million in 2004; but this remains merely 5.6% of total exports. In 2004, exports from South Asia to East Asia, for example, touched $21,307.8 million; and that accounts for 20% of total exports. In the same year, from East Asia to South Asia, the exports figure was much better at $43,187.2 million. Similarly, FDI from East Asia to South Asia increased from $12.9 million in 90s to a promising $256.5 million [12% of total outflow] in 2004. And FDI from South Asia to East Asia? The figure increased from a minute $2.9 million in 90s to a comic $7.0 million in 2004, which is even less than 0.001% of the total outflow.
Five FTAs agreements have been signed between Asian countries. Another 20 FTAs are in the pipeline. When the equation is so crystal clear, why in heavens are South Asian countries so deaf to reasoning? We could search out only one reason. It starts with ‘z’... and ends with ‘z’! Wake us up when you work that one out...
By:- Akram Hoque
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