The cost of
trading within the region among South Asian countries is twice, and in some
cases, even three times, than trading with countries outside the region,
according to the minister.
It is important to improve trade facilitation in South Asia to
increase the intra-regional trade, said finance minister Shanker Prasad Koirala
inaugurating a two-day inception meeting of two projects, ‘Trade and
Transport Facilitation Audit in South Asia’ lead by South Asia Watch on Trade,
Economics and Environment (SAWTEE) and ‘Promoting Micro, Small and Medium
Enterprises (MSMEs) for Inclusive, Equitable and Sustainable Development in
South Asia’ lead by UNDP Asia Pacific Regional Centre (APRC), Bangkok, both supported
by the Australian Agency for International Development (AusAID), started in
Kathmandu today.
Despite the
existence of several regional efforts like Agreement on South Asian Free Trade Area
(SAFTA), intra-regional trade in South Asia has remained extremely modest due to
a number of factors – one of which is trade and transport facilitation-related
bottlenecks – he said, expressing hope that the two projects will create a
momentum in South Asia and contribute to transforming the region into an
international trading hub.
Australian ambassador
to Nepal Glenn White, on the occasion, said that since the latest Aid for Trade
Report has highlighted the importance of regional projects for enhanced trade,
the current initiatives taken by SAWTEE, UNDP APRC and their regional partners would
be extremely beneficial in advancing regional economic integration in South
Asia.
Likewise, country
director of UNDP Nepal Shoko Noda pointed out that unrealised economic
potential of women was getting increasing recognition in the global political
and economic sphere. “South Asian countries, which hold immense potential in
advancing MSMEs, and in
which a large number of women are engaged, will not only contribute to increase
economic growth of these countries but also empower women,” she added.
Secretary
General of the SAARC Chamber of Commerce and Industry Iqbal Tabish mentioned the
benefits of trade liberalisation that will not be realised unless trade
facilities are rationalized. “Some 75 per cent of MSMEs in South Asia are
operating informally and argued that informality of MSMEs has limited their
growth potential,” he said, adding that bringing them within the legal purview
of the state can lead to higher growth of the sector.
Despite the
fall in traditional trade barriers, costs related to trade facilitation,
infrastructure and transit have risen over the years, which has promoted
informal trade in South Asia, said chair of inaugural session and executive
chairman of SAWTEE Dr Posh Raj Pandey. “It has also forced exporters, businesses
and consumers to bear additional cost burden,” he said, adding that trade
facilitation is a must for effective trade integration.
Welcoming the guests, chief
executive director of SAWTEE Dr Ratnakar Adhikari highlighted the main features
of the projects and their objectives.“Trade facilitation audit study project will aim to identify regional benchmark for trade facilitation measures in South Asia, assess the cost incurred due to lack of regional trade connectivity and thickness of borders, as well as the benefits of removing trade barriers, and most importantly, estimate the investment required to address the identified bottlenecks,” he said. “Similarly, the other project will focus on identifying market access barriers faced by MSMEs and advocate for the removal of such barriers.”
More than 50 participants, including researchers, policy makers, private sector representatives and media from different South and Southeast Asian countries are participating in the inception meeting.
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