World Economic Forum

10/04/2019 | Press release | Distributed by Public on 10/04/2019 07:31

Greater Integration the Key to Unlocking South Asia’s Vast Economic Potential

Alexandra May, Public Engagement, Tel.: +41 (0) 79 844 9006, email: alexandra.may@weforum.org

New Delhi, India, 4 October 2019 - Finance and economic ministers from across South Asia remain bullish about future economic prospects here, telling the 2019 India Economic Forum in Delhi on Friday they are confident the region will continue to grow rapidly, particularly on the back of deepened integration.

'I think South Asia will remain the fastest growing region and will contribute significantly more to global growth than what it has done in the past,' noted Rajiv Kumar, Vice-Chairman, NITI Aayog, before adding: 'I am confident growth can be sustained because all of these countries are still not performing up to their growth potential. I speak not only for India but other countries.'

South Asia is currently the fastest growing region in the world according to the Asian Development Bank, with Kumar noting that India is focused on boosting its growth trajectory and is committed to achieving 6.5% growth by year-end.

While concerns were raised about the predatory role of China in some countries, the view from India was that it maintains good relations with China and the United States, and perceives the current global environment as one of opportunity rather than threat.

Considering the tumultuous global trade environment, Harsha De Silva, Minister of Economic Reforms and Public Distribution of Sri Lanka, noted that every crisis brings opportunity, and for South Asia, greater economic growth for the region could be accelerated through deepened integration.

'The challenge is to reduce the difficulties around integrating, opening the borders for greater integration. We are only a nation of 20 million people with a $90 billion economy so we don't have the problems that some bigger nations have,' said De Silva, adding: 'We have all the pieces in place, we just need to put it together, so I am confident we will be able to ride the wave in the coming years.'

Speaking on the closing day of the World Economic Forum meeting in the Indian capital, economic leaders from India, Sri Lanka and Nepal noted that while South Asia is currently the fastest growing region in the world, it is also the world's least integrated. The potential for greater integration in various sectors, from energy, tourism, infrastructure and trade, was significant and vital, they said.

'Energy is the key driver of growth in this region. So we must have good trade relations, cross-border transmission lines to share electricity across borders, and that should help relieve some constraints to rapid growth,' noted Yuba Raj Khatiwada, Minister of Finance of Nepal, adding there was also room for deepened integration in the region's financial markets.

Greater connectivity will help unlock the region's economic potential for the years to come, they said, with India's Rajiv Kumar pointing to recent measures to finalize access to Bangladesh's Chittagong port, which is expected to open up the whole northeastern part of the country.

Discussing ways to leverage the region's tourism potential, the three regional ministers also raised the idea of greater collaboration in the tourism sector, including better flight connectivity and smoother visa processes, and even creating 'South Asia' tourism packages, cross-border religious or adventure tours that would allow tourists to travel with ease throughout the region, with an eye to attracting a growing number of tourists from Asia and Europe.

'South Asia can grow 6-7% in the medium term because of untapped natural, human and other resources, but that growth cannot come on its own,' said Khatiwada, adding: 'We need external demand, we need to look beyond the region to see our growth continue.'

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