Trade Facilitation, Economic Development and Poverty Alleviation: South Asia at a Glance

Abstract

South Asia faces enormous economic challenges unmitigated by generally poor economic growth. Increasing economic imbalance between countries hinders regional development. Recently, it has been confirmed that trade liberalisation aimed at expanding trade, has been insufficient in optimising the potential contribution of trade to economic development and reduce poverty. Thus, economists pay attention on Trade Facilitation (TF) which has the potential to contribute to economic development. This has motivated us to examine how TF can achieve this development in South Asia, where trade has yet to make its full contribution to economic growth. The aim of this chapter is to examine the economic impacts of TF on trade and economic growth in South Asia. Our analysis revealed that poor TF restricts trade between countries as it increases Trade Transaction Costs (TTCs). Trade delays are relatively high and affect the region's landlocked countries even more adversely. An efficiently facilitated trading system will enable these countries to participate more actively in global trade. There has been greater focus on TF policies in South Asia, however due to the complexity of TF measures and their investment needs, it is difficult to identify which TF measures have the most significance for the region.