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Benefits and Challenges of Integrating South and Southeast Asia


  • Biswa N. Bhattacharyay


In recent decades, Southeast Asian economies have prospered through an outward-oriented strategy, through intra-regional integration under the Association of the Southeast Asian Nations (ASEAN) initiative and through participating in the East Asian production networks. In the 1970-80’s, South Asia stagnated due to its inward-oriented growth strategy and lack of infrastructure connectivity—resulting in low trade integration and regional connectivity within the region and with Southeast and East Asia. However, since 1991, South Asia, particularly India has adopted a "Look East" policy and opened its market raising huge potential for economic integration between South and Southeast Asia leading to peace, prosperity and stability of these two regions. This paper examines the prospects and challenges of enhancing trade, investment, production and infrastructure cooperation and integration between these two regions for catalyzing their socio-economic transformation. It also examines the trends, achievement drivers, and prospects of economic growth and developments of these regions until 2030. The paper also provides policy recommendations for enhancing regional cooperation and integration. In view of global financial crisis of 2008 and ongoing European debt crisis, advance economies that are principal export markets of South and Southeast Asia economies may witness slow growth and even in recession in short term. Further integration of these two regions will generate increased intraregional trade and reduce their dependence of advanced economies.

Suggested Citation

  • Biswa N. Bhattacharyay, 2012. "Benefits and Challenges of Integrating South and Southeast Asia," CESifo Working Paper Series 3819, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3819

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    References listed on IDEAS

    1. Biswa Nath Bhattacharyay, 2010. "Estimating Demand for Infrastructure in Energy, Transport, Telecommunications, Water and Sanitation in Asia and the Pacific: 2010-2020," Working Papers id:2911, eSocialSciences.
    2. Francois Joseph F & Wignaraja Ganeshan, 2008. "Economic Implications of Asian Integration," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-48, September.
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    Cited by:

    1. Thuzar, Moe & Mishra, Rahul & Hutchinson, Francis & Than, Tin Maung Maung & Chalermpalanupap, Termsak, 2014. "Connecting South and Southeast Asia: Implementation Challenges and Coordination," ADBI Working Papers 501, Asian Development Bank Institute.

    More about this item


    trade and economic integration; ASEAN; SAARC; South and Southeast Asia; connectivity; regional cooperation and integration; production network;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes


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