South Asia least integrated in world: WB

High potential for interconnectivity through energy and trade

By Cheranka Mendis in Kathmandu

South Asia is the least integrated region in the world contributing less than 2% of GDP to regional trade with negligible incorporation and trade in the energy sector, the World Bank (WB) said yesterday.

WB Country Manager for Nepal Tahseen Sayed noted that opening trade and communication borders in the region is vital for the growth which comprises of countries that are recognised as potential future economic power houses. Addressing a workshop on Regional Cooperation in South Asia in Kathmandu, Sayed compared South Asia to the integration in East Asia which contributes 40% to GDP in trade alone.

She noted that energy, a central issue in almost all countries in the region needs a collective focus to be surmounted. “For example Afghanistan and Nepal, combined could produce 100,000MW of hydropower, alleviate the crippling energy shortages which have resulted in job losses, reduce the growing regional dependency on fossil fuels and lower carbon emissions.”

Opening up trade and promoting cross border cooperation on water and energy could offer more promising, long term solutions for countries across all areas for development and growth. WB focus on regional cooperation agenda is three fold. Electricity and energy, trade facilitation and transport as well as water and natural resource management are these three pillars. Among investments on energy sector Sayed added that the WB last June approved financing for the first high voltage electricity transmission line between India and Nepal capable of trading 1000MW of power which will also compliment a 500MW interconnection between India and Bangladesh, financed by Asian Development Bank.

“Together with existing and planned connectivity between Bhutan and India, these will create the physical infrastructure for sub regional trade.”

Feasibility studies have also confirmed technical and economic viability of exporting electricity surpluses from Tajikistan and Kyrgyz Republic. WB also engages in trade cooperation between countries in the region, in water management through one of their key projects South Asia Water Initiative and supporting various measures in wildlife protection in countries such as Bangladesh, Bhutan and Nepal. These are highly politicised issues in several South Asian countries.

“As the WB we engage in role of dialog and people to people interactions which we see as necessary to open barriers. The potential is huge and unrealised. Countries must work in a much more integrated manner to ascertain regional growth.”