Promoting Economic Cooperation in South Asia: Beyond SAFTA

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Promoting Economic Cooperation in South Asia: Beyond SAFTA By Sadiq Ahmed, Saman Kelegama, Ejaz Ghani (Eds.), Sage Publications, New Delhi, 2010; Pages: 435; Price: Rs. 850 ISBN: 978-81-321-0311-0 (HB)

During the last three decades, economic growth and development across all the regions in the world, especially in South Asia, have had two increasingly distinct emerging trends and dimensions. One relates to the progressive and dynamic economic growth led by the organized sectors and competitive markets, which have benefitted from Liberalization, Privatization and Globalization (LPG) within and across countries. The other is slow if not stagnant or even regressive growth and development in the unorganized non-market sectors, which have lagged behind at least partly due to LPG. But for the neoliberals at home and abroad, TINA! Or, as Albert Maslow has put it: When the only tool available is a hammer (LPG), everything begins to look like a nail (liberalizable, privatizable, globalizable) .

But, as the Independent South Asian Commission on Poverty Alleviation1 had pointed out, South Asian countries need to "walk on two legs." To paraphrase, one is that of competitive markets for private goods; the other is of providing access to merit, mixed public and free public goods through non-market, public and civil society interventions and cooperation. As the experience of the East Asian Miracle countries brought out, the invisible hand of the market needs to be guided by the visible arm of the government (and aided by the nimble fingers of the NGOs) .

The trends in India in recent decades towards uneven and dichotomous development of organized (formal) and unorganized (informal) sectors, employment of capital and of labor, gains for upper- middle groups and bottom-of- the -pyramid classes, and industrial-urban and agricultural-rural sectors have been eminently elicited by a great deal of recent empirical data and analysis by the National Commission for Enterprises in the Unorganized Sectors (NCEUS). This analysis, conceptually extendable to other South Asian countries and the region as a whole, also highlights, perhaps most importantly, the distance between policy promises and achievements at the ground level.2

The learned papers in this volume grapple with these and similar dichotomous dimensions of growth, development, and regional cooperation in South Asia. The volume contains 17 papers in four parts: The Imperative for Cooperation; SAFTA and Beyond; Private Sector Perspectives; and The Political Economy of Cooperation. Most of the contributors are economists/social scientists from autonomous policy and tesearch institutions in Bangladesh, India, Pakistan, Sri Lanka and USA. Others are representatives of regional offices of the World Bank and ADB, and of national chambers of commerce and industry and trade organizations, and the Commonwealth Secretariat.

As a backdrop to the need for effectively enhancing regional cooperation in South Asia, a few papers have convincingly brought out (a) the increasing divergence in economic growth within and between South Asian countries, including a map showing 60% of the region indicated as lagging behind (Ahmed and Ghani); (b) the plight of the economically weaker and smaller economies, population segments and sub-regions which stand to gain much more from regional cooperation (Razzaque) ; (c) the inflationary impact of rising prices of food on the poor due to various sub-regional differences (Vokes and Jayakody); and (d) the ineffectiveness of SAARCs Food Reserves and related policies and, more generally, of the ineffectiveness and unaccountability of SAARCs Integrated Programmes of Action and SAARC Summits' Declarations ["rhetoric" on Poverty Alleviation, Control of Terrorism, etc. (Lama)].

These broad disparities and official neglects at national and regional-cooperative levels have contributed to othet developmental problems and issues, as discussed by some of the contributors. …