South Asia’s moment in the sun
South Asia’s moment in the sun
The South Asia Free Trade Area (Safta) has been so long in the making that it is hard to believe the deal is actually done. And the seven Saarc countries—Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and India—home to more than a fifth of mankind, have finally ironed out the glitches that held up progress all these years. The rewards could be immense. Intra-regional trade in Saarc is a minuscule 6% of the total external trade of the region. Compare this with the 22% intra-regional trade within the Asean area or the comparable figure of 65% within the European Union and the true potential of Safta becomes blindingly clear.
Indeed, given the huge benefits that could accrue to the citizens of these seven countries who together account for more than 50% of the world’s poor, what is amazing is that it took so long for Safta to fructify. For reasons, look no further than to the geo-political realities. As long as two of the largest economies in the Saarc region, India and Pakistan, remained prisoners of mutual suspicion, any talk of economic cooperation remained wishful thinking. Add to that the less-than-cordial relationship between Bangladesh and India and clearly, there was very little chance of Safta making headway as long as politics held sway.
More: financialexpress.com