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Will South Asia Benefit from Pan-Asian Integration?

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  • Ganeshan Wignaraja

Abstract

This article examines the gains for South Asian economies from integrating with East Asia and India’s role in this process. Evidence of increased pan-Asian integration exists but the process is uneven. Bilateral trade has grown. Bilateral foreign direct investment flows and free trade agreements (FTAs) have also increased, albeit at a slower pace than trade. The integration process has been led by India and Pakistan with limited participation of smaller South Asian economies. Tackling key impediments in infrastructure, FTAs, trade barriers and business regulations, and barriers to services will foster further integration. Computable general equilibrium simulations suggest that a South Asia–East Asia FTA offers the most gains for South Asia and that India has an incentive to include its neighbours in such an arrangement rather than going it alone with East Asia. The rest of South Asia will gain by deepening South Asian integration and fostering ties with East Asia.

Suggested Citation

  • Ganeshan Wignaraja, 2014. "Will South Asia Benefit from Pan-Asian Integration?," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(2), pages 175-197, September.
    • Handle: RePEc:sae:soueco:v:15:y:2014:i:2:p:175-197
    DOI: 10.1177/1391561414548948
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    References listed on IDEAS

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    1. Robert Scollay & Annette Pelkmans-Balaoing, 2009. "Current Patterns of Trade and Investment," Palgrave Macmillan Books, in: Joseph Francois & Pradumna B. Rana & Ganeshan Wignaraja (ed.), Pan-Asian Integration, chapter 2, pages 63-162, Palgrave Macmillan.
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    Cited by:

    1. Mustafizur Rahman & Hosna Jahan, 2015. "Second-generation Cooperation Agenda," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 16(1), pages 1-26, March.
    2. Ganeshan Wignaraja & Adam Collins & Pabasara Kannangara, 2019. "Opportunities and Challenges for Regional Economic Integration in the Indian Ocean," Journal of Asian Economic Integration, , vol. 1(1), pages 129-151, April.

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    More about this item

    Keywords

    Economic integration; computable general equilibrium; trade policy; industrialization; Asia;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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