Report

Preface
Our consultations with senior policy-makers and think
tanks in the region, over the past few years had
underlined the need for a comprehensive quantification
of the benefits from regional cooperation in South Asia,
in order to build greater confidence in the SAFTA
process and combat the negative perceptions about its
outcomes. This study was consequently initiated by
ADB’s India Resident Mission in partnership with
UNCTAD in 2006. We would like to particularly
acknowledge the role of Veena Jha, former coordinator
of the UNCTAD India program, for readily agreeing
to join the study and seeing it through its early phases.
The main conclusion of the study, carried out over
a period of one-and-half years, is that SAFTA will
continue to contribute to stronger economic growth
in the region. The result is corroborated by a variety
of modelling techniques that have been employed to
overcome the shortcomings of using one methodology
alone. An optimistic scenario is revealed with SAFTA –
although some sectors lose and some sectors gain in
each country – a result in contrast to earlier studies.
The welfare gains from trade in goods arise on account
of improvements in complementarity within the region
over the past few years, implying the fact that exports
of countries are becoming increasingly regional. The
study also clearly establishes that gains are much higher
if efficient systems are simultaneously established for
regional trade, transportation, and infrastructure.
Consultation seminars were organised by leading
think-tanks in the region to seek views from all
stakeholders, including senior policy-makers, industry
representatives, and academia. Seminars were held
across five South Asian capitals, with representation
from all eight countries, starting at Colombo in March
and concluding at Islamabad in May this year. We
received excellent feedback from each of these seminars
which has been incorporated into this final version of
the report.
We wish to acknowledge our deepest appreciation
for the efforts of Saman Kelegama, Executive Director,
Institute of Policy Studies, Colombo; Manab
Majumdar, Senior Director, Federation of the Indian
Chambers of Commerce and Industry, New Delhi;
Mustafizur Rehman, Executive Director General, Centre
for Policy Dialogue, Dhaka; Navin Dahal, Executive
Director, South Asia Watch on Trade, Economics,
and Environment, Kathmandu; and Safdar
Sohail, Director General, Foreign Trade Institute of
Pakistan, Islamabad and the efforts of their teams who
were instrumental in organizing these consultations.
We also wish to place on record our gratitude to
SAARC Secretary-General Sheel Kant Sharma and
Director, Trade, Vinay Kwatra for sparing valuable time
to discuss the Study at Kathmandu. We hope this work
will be of use to the SAARC Secretariat and member
countries in taking SAFTA forward.
Kunio Senga
Director General, South Asia Department, ADB