ponder the improbable economic integration between south asia and east asia: a perception survey of...

Ponder the Improbable

Economic Integration between South Asia and East Asia:

A Perception Survey of Opinion Leaders

Pradumna B. Rana

Associate Professor

RSIS-NTU

Chia Wai Mun

Assistant Professor

NTU

Presentation at RIS, New Delhi

29 January 2014


Outline

I. Introduction

II. Objectives

III. Trends in SA/EA Economic Linkages

IV. Initiatives to Promote SA/EA Linkages

V. Economic Integration in South Asia

VI. Policy Implications


I. Introduction

• Perception Survey was supported by the Academic Research Fund of Nanyang Technological University provided by the Ministry of Education, Singapore

• Survey will be a chapter of a book that we are co-authoring on “Jump-starting South Asia: Round Two of Reforms and Look East Policies”


II. Objectives of the Study

• Assess the views of stakeholders in South Asia and East Asia on integration between the two regions

• Test the relative strengths of the findings of our various papers


Our Papers• Francois, J, PB Rana and G. Wignaraja (eds) (2009). Pan-Asian Integration:

Linking East and South Asia. Basingstoke: Palgrave MacMillan.

• Rana, PB. 2012. Renaissance of Asia. World Scientific Publishers, Singapore.

• Rana, PB and WM Chia (2013). South Asia Needs Phase 2 of Look East Policies. Economic and Political Weekly 48(35).

• Rana, PB and WM Chia (2014). Perception Survey of Asian Opinion Leaders on Economic Linkages between South Asia and East Asia. Draft

• Rana, PB and WM Chia (2014). The Revival of the Silk Roads (Land Connectivity) in Asia. Draft

• Rana, PB and BKarmacharya (2013). A Connectivity-Driven Development Strategy for Nepal: From a Landlocked to a Land-linked State. Forthcoming ADBI


Profile of RespondentsSOUTH ASIA

Academia Business Government Others Total N % N % N % N % N %

Afghanistan 0% 0% 1 100% 0 0% 1 100%

Bangladesh 13 93% 0% 1 7% 0 0% 14 100%

Bhutan 1 20% 2 40% 2 40% 0 0% 5 100%India 65 56% 9 8% 18 16% 24 21% 116 100%

Maldives 1 33% 0% 2 67% 0 0% 3 100%Nepal 15 58% 5 19% 4 15% 2 8% 26 100%Pakistan 15 75% 2 10% 3 15% 0 0% 20 100%

Sri Lanka 8 44% 2 11% 8 44% 0 0% 18 100%

South Asia 118 58% 20 10% 39 19% 26 13% 203 100%

EAST ASIA Academia Business Government Others Total N % N % N % N % N %

Brunei Darussalam 0% 0% 1 100% 0 0% 1 100%

Cambodia 1 33% 0% 1 33% 1 33% 3 100%

China 19 90% 0% 2 10% 0 0% 21 100%

Indonesia 12 46% 1 4% 9 35% 4 15% 26 100%

Japan 11 79% 0% 2 14% 1 7% 14 100%

Lao PDR 0% 0% 4 100% 0 0% 4 100%

Malaysia 10 56% 2 11% 6 33% 0 0% 18 100%

Myanmar 1 25% 2 50% 1 25% 0 0% 4 100%

Philippines 15 58% 1 4% 10 38% 0 0% 26 100%

Singapore 14 45% 6 19% 10 32% 1 3% 31 100%

South Korea 2 50% 0% 2 50% 0 0% 4 100%

Thailand 6 55% 1 9% 4 36% 0 0% 11 100%

Vietnam 14 58% 3 13% 7 29% 0 0% 24 100%

East Asia 105 56% 16 9% 59 32% 7 4% 187 100%

Academia Business Govt Others Total

N % N % N % N % N %

TOTAL 223 57% 36 9% 98 25% 33 8% 390 100%

Total Respondents 390

Sample 5300Response Rate 7%


III. SA/ EA Linkages: Need for LEPII in South Asia


Costs of Strengthening Economic Linkages


Benefits of Strengthening Economic Linkages


Modalities of Regional Cooperation


Obstacles and Barriers to Economic Linkages


Required Policy Actions in South Asia


IV. Initiatives to Promote SA/EA Economic Integration


Trade


Macroeconomic Policy Coordination in EA and the Possible Role for SA


Connectivity Issues: Northern and South-western Silk Road

Source: Rana and Chia (2014)


Factors That Have Revived the Case for Land and Air Connectivity between SA and EA


Connectivity Issues


Proposed Corridors in South Asia

Source: Rana and Karmacharya (2013)


V. Economic Integration in South Asia


Income Effects of Alternative FTA Scenarios

South Asia FTA East Asia FTA East Asia and India FTA

South Asia and East Asia FTA

Value$ Mn

% change

Value$ Mn

% change

Value$ Mn

% change

Value$ Mn

% change

South Asia 3,695 0.33 (3,620) (0.32) 16,199 1.44 22,423 1.99Bangladesh 351 0.31 (297) (0.26) (355) (0.31) 1,874 1.66India 1,138 0.14 (2,371) (0.30) 17,779 2.23 18,240 2.29Sri Lanka 335 1.08 (117) (0.38) (123) (0.40) 631 2.03Others 1,246 3.37 (12) (0.03) (240) (0.65) 1,380 3.73

East Asia (540) (0.01) 226,855 2.17 239,097 2.29 241,485 2.31ROW 361 0.00 (9,316) (0.03) (3,934) (0.01) (3,001) (0.01)World 3,516 0.01 213,919 0.45 251,363 0.52 260,907 0.54

Note: ROW is rest of the world. Changes are computed relative to 2017 baseline at constant 2001 prices.Source: Francois, Rana, and Wignaraja (2009)


VI. Policy Implications• Market-led approaches (including connectivity) should drive South

Asia/ East Asia integration.• ASEAN-India connectivity and BCIM Economic Corridor are

strongly supported.• SASEC and BIMSTEC have strong potential in promoting SA/EA

integration.• Efforts must also be made to promote South Asia/ Southern China/

ASEAN Connectivity or the SSR: Nepal has a role to play.• The proposed economic corridors in South Asia would help

connect CAREC and GMS corridors, making Asia truly seamless (ADB should note).

• Just as in the case of the EAS, ASEAN must invite India to join the ERDP and India could pledge funds to the CMIM.

• At some stage, most South Asia countries must be invited in negotiating the RCEP.


Thank you

ponder the improbable economic integration between south asia and east asia: a perception survey of...

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