Poor roads make regional trade difficult

Kathmandu, Nov. 7: Minister for Foreign Affairs Dr. Prakash Sharan Mahat Monday said that weak trade facilitation measures at ports and land borders and poor transport infrastructure in South Asia made regional trade difficult to expand.

Addressing the 14^th annual South Asian Network of Economic Research Institute (SANEI) here, he remarked that the goods passing through land routes faced more stringent barriers.

"Trade barriers are widespread in South Asia. Tariffs, para-tariffs and non-tariff barriers touch all ranges of goods and services. We have maintained long sensitive list, mostly tradable goods," he said.

He noted that the countries in South Asia needed to expand their trade by enlarging the regional market and said that it should be done through improved logistics, trade facilitation and removal of all non-tariff barriers.

The South Asian countries trade less among themselves at only 5 per cent of their total international trade. The intra-regional trade in South East Asia is around 25 per cent.

"Despite the plethora of opportunities, South Asia is one of the least integrated region in the world. It is perceived as the region mired in conflicts and political tensions," said Dr. Mahat.

According to the Minister, regardless of economic complementarities, cultural similarities, geographical contiguity, South Asian integration suffered from high transportation cost, poor institutions, inadequate cross-border infrastructure, and absence of regional transit arrangements.

However, he maintained that the problems were not unconquerable.

He underscored the need to build and boost the mutual trust and understanding to enhance trade, fight poverty, unemployment and climate change.

He called for effective implementation of SAARC Agreement on Trade in Services (SATIS) and increase connectivity.

In 18^th SAARC Summit, heads of state and government had expressed strong determination to deepen regional integration for peace, stability and prosperity in South Asia by intensifying cooperation in trade, investment, finance, energy, security, infrastructure, connectivity and culture, and implementing projects, programmes and activities in a prioritized, result-oriented and time-bound manner.

However, those pledges have not been matched with performance and outcome.

Governor of the Nepal Rastra Bank  Dr. Chiranjibi Nepal pointed the need for concerted efforts to develop connectivity network of cross-country infrastructure.

"The physical connectivity among South Asian countries through quality roads, railways, air-links, waterways, information super highways and cross-country power transmission lines along with related infrastructures will boost flow of goods, services, finances and information," he said.

He said that increased investment in infrastructure would expedite the process of integration.

Dr. Nepal urged the investors to come to Nepal for investment in hydropower and other attractive sectors.

"The government of Nepal is trying its best to create a competitive and investment friendly environment by making the administrative procedures simple and easy and also providing attractive incentives and facilities to the foreign investors," said the governor.

Coordinator of SANEI and executive director of Institute for Integrated Development Studies (IIDS) Nepal Dr. Bishnu Dev Pant said that there was a lot to gain from mutual cooperation and integration of economies in the South Asian region.

"The free flow of goods, services, labour, knowledge and capital within the South Asian region can dramatically reduce costs of production, minimizing risks and challenges often faced by big businesses in the region," he said.

The SANEI, established in 1998, is a regional initiative to foster networking among economic research institutions in South Asia – Banglades, India, Nepal, Pakistan and Sri Lanka.

The two-day conference with the theme 'deeper integration for greater prosperity in South Asia' will conclude on Tuesday.