Regional Integration in South Asia

Trends, Challenges and Prospects

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Regional Integration in South Asia: Trends, Challenges and Prospects presents an objective assessment of trade and economic co-operation among South Asian nations and highlights policy issues to foster regional integration. The analyses presented in this volume go beyond the usual discussions on trade-in-goods to provide insightful perspectives on potential new areas of co-operation, emerging challenges, and country-specific views on regional and bilateral trade co-operation issues.

Written by influential analysts and researchers, the volume’s 24 chapters include perspectives from Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka, and examinations of new areas of co-operation such as investment, regional supply chains, energy and cross-border transport networks.



Productive Integration of Least Developed Countries into Regional Supply Chains: The Case of South Asia

The use of regional supply chains in production implies the geographic dispersion of the stages of production (of goods and services) across national borders within a given region.1 As such, these supply chains often involve a complex web of inter- and intra-firm transactions across and within national boundaries engaged in various aspects of production and marketing of a single or related range of products. (Some investigators have, perhaps more correctly, referred to them as supply networks. This web of firms is able to extract the potential benefits from variations in comparative advantage across countries and across country- or region-specific trade advantages (or sidestep trade or regulatory restrictions) to lower production costs and increase market access (Kimura and Obashi 2011). In addition, stiff competition between firms at certain stages along the production chain can serve to maintain strong downward pressure on costs (Wills and Hale 2005). However, the geographic dispersion of the production process also means that the viability of regional supply chains is predicated on the ability to transfer goods across space and national borders both quickly and inexpensively. Those requirements pose a substantial challenge to the introduction and expansion of regional supply chains in developing regions, in general, and the participation of least developed countries (LDCs), in those chains, in particular.


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