Regional Economic Integration in South Asia:
Measurement of Gains and the Way Forward

SAARC economic integration process is often viewed with skepticism and perceived as one perpetuating the asymmetries further in a number of key countries such as Bangladesh and Pakistan but sometimes also in Nepal and even Sri Lanka. These apprehensions have affected the pace of regional economic integration in South Asia. Therefore, there is need for a better understanding among the people of the region about the gains from the regional economic integration and opportunity cost of non-cooperation. Against that background, the proposed project will quantify the gains from regional economic integration for the region and for each of the participant country. This will be accompanied by identification of other benefits of regional economic integration such as its potential in facilitating intra-regional FDI flows and building supply capabilities and the pros and cons of regional versus bilateral approaches. The study will also provide a way forward to the region for optimizing the gains from regional economic integration. The findings will be disseminated among the policy makers and other opinion makers through Policy Workshops, RIS South Asia Development and Cooperation Reports and Policy Briefs and newspaper columns. It will be conducted in collaboration with researchers from institutions in different SAARC countries. RIS is currently discussing the proposal with ADB for possible funding. It is expected to be launched in late 2004 and will have an eighteen months time frame.