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Pattern of Intraregional Trade: Unbundling a South Asian Conundrum

Author

Listed:
  • Basher, Abul

    (Research Fellow, Bangladesh Institute of Development Studies (BIDS) .)

Abstract

South Asia is one of the least integrated regions of the world. While individual member countries have been successfully increased their share of trade in the global market, growth of intraregional trade lags behind the growth of the region’s overall trade. This paper analyses the reasons for this apparently puzzling nature of South Asian economies. The paper decomposes the regional trade statistics between 2000 and 2012 to analyse the dynamics of regional trade and factors behind it. The findings suggest that one of the missing elements is the inability of the region to meet its demand for imports internally with the change of the economic structure. India, being the largest economy, is the main driver of the intraregional trade. The trade preference of the SAARC countries has been changing disfavouring India. This is mainly due to India’s relative inability to meet the import demand of other South Asian countries. In the absence of strengthened economic ability to meet their own demand, the scope for intra-industry trade, emergence of regional value chain, and trade in new areas like services, intraregional trade is unlikely to register any notable improvements

Suggested Citation

  • Basher, Abul, 2014. "Pattern of Intraregional Trade: Unbundling a South Asian Conundrum," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(04), pages 1-16, December.
    • Handle: RePEc:ris:badest:0578
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    References listed on IDEAS

    as
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    2. Lee, Jong-Wha, 1995. "Capital goods imports and long-run growth," Journal of Development Economics, Elsevier, vol. 48(1), pages 91-110, October.
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    More about this item

    Keywords

    South Asia; Regional Integration; Bilateral Trade;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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