South Asia Development Cooperation Report 2004

South Asia has sustained an average growth rate of 5.5 per cent per annum over the past two decades, despite many external and domestic shocks such as East Asian crisis, slow down of the world economy, Afghan and Iraq wars, oil price hikes, failure of monsoons, ethnic conflicts and threats of terrorism, among others, making it one of the most dynamic regions in the world. With more than a decade of reforms behind them, the region’s economies are more intensively integrated with the global economy, growth of income and exports display promising outlook and inflation rates are in check. Despite such achievements in terms of economic performance, however, the region continues to be home for more than two-fifths of the world’s poor. The region also fares very poorly in terms of different indicators of human development such as education, health, nutrition, among others. Therefore, the region needs to further accelerate its growth process with an emphasis on human development and strengthen competitiveness to deal with the daunting challenges of alleviation of poverty, hunger, illiteracy, and disease.

The South Asia Development and Cooperation Report 2004 (SADCR 2004) argues that the region can face these challenges much more effectively as a group rather than individually. The regional economic integration can, by exploiting the synergies, expand the economic opportunities available and strengthen the growth prospects. The recent experiences with economic integration in the region suggest that it leads to expansion of trade and development in a balanced and sustainable manner. In the light of these experiences and against the backdrop of mushrooming regional trading blocs in different parts of the world, the Report finds a compelling case for the region effecting its transition into an economic and monetary union by implementing SAFTA, forming a SAARC Customs Union and introducing a South Asian parallel currency, as an intermediate step to a single currency, in an expeditious manner. Among the key sectors presenting opportunities for mutually beneficial cooperation, SADCR 2004 selects transport infrastructure for a detailed analysis. Transport infrastructure is not only an important determinant of economic development but is also critical in exploiting the gains of economic integration resulting from geographical proximity. Earlier SADCR 2002 focused on energy sector for a detailed analysis of the potential and challenges of cooperation. Among the core technologies that have emerged as the key drivers of development, the present Report selects biotechnology for detailed analysis in view of its tremendous promise for promoting food security and hence alleviation of poverty and hunger in the region. SADCR 2002 has already covered the potential and challenges for cooperation in the other core technology, viz. information and communication technologies.