|
| Meenu Tewari: Easing the burden of history in South Asia | | Despite efforts at engagement on two tracks, South Asia remains the least integrated regional grouping around the world |
| Meenu Tewari / Aug 15, 2010, 00:50 IST |
|
The delicate diplomatic dance in evidence at the recent high-level meetings between the governments of India and Pakistan encapsulates vividly the dilemmas of realising the promise of closer economic and social cooperation within South Asia. Formally, the process of regional engagement has followed two tracks — political trust-building efforts and technocratic efforts at negotiating agreements and treaties on a variety of issues, including attempts at building a South Asian common market. Despite these efforts, South Asia remains the least integrated regional grouping around the world.
The proximate causes offered to explain the inability to forge deeper South Asian cooperation are the region’s complicated political economy, its protectionist lobbies, opaque rules and a variety of non-tariff barriers that hold integration back. As one investment official in a Saarc member-nation noted in recent interviews, political mistrust makes many of the region’s elites uncomfortable with prioritising a Saarc framework of trade and investment over ties with other countries, particularly the US, EU, East Asia, and China.
A fraught history, however, need not be destiny. The question is how, and under what conditions, feuding and mistrustful members of the region can begin to work as partners.
In an Asian Development Bank-supported study on the possibility of fostering pan-South Asian production networks in the textile and garment industry, we found that new lobbying forces for more positive-sum reform in the region may indeed be emerging.
The first of these is the region’s next generation of younger entrepreneurs and business leaders. Our interview revealed a striking attitudinal transformation among these emerging industry leaders about pursuing intra-regional business deals and collaborations. They appear more willing to work with and trust partners from across the border than earlier generations.
An example from Bangladesh illustrates this dynamic. A leading garment exporter, who had received joint venture offers from Indian, Pakistani and Thai investors, had turned down the Indian and Pakistani offers. He said, “If I have to choose between a Pakistani investor, an Indian investor and a Thai investor, I will pick the...Thai any day over the other two…It is just my history.”
By contrast, his son had no such qualms. His network included friends from across South Asia from his college days abroad; he had travelled to India, Pakistan and Sri Lanka and forged good working relationships with a number of South Asian firms. He was already pursuing a joint venture with an Indian partner. Narrowly-drawn nationalist identities did not confine him. It may well take the next generation of entrepreneurs to overcome the baggage of the region’s history and begin to work together.
A second hopeful dynamic is the growing inter-penetration of South Asia’s labour markets. Surprisingly, leading Bangladeshi garment firms had a number of plant managers from India or Pakistan, quality control and design consultants from Sri Lanka and technical fixers and machinists from Pakistan.
This emergent diffusion of managerial and technical staff across each others’ markets can create conditions not only for the transfer of ideas, work practices and an exchange of economic information across Saarc borders, but also foster social familiarity at a human level. Most importantly, it can exert pressure for bureaucratic reform from the ground up.
A third example of a new constituency supporting greater intra-regional trade and investment is the organised retail sector. The growth of the domestic market and organised retail in India is fuelling the demand for more efficient supply chains and proximate production networks. In interviews across New Delhi, Dhaka and Colombo, some Sri Lankan and Bangladeshi suppliers reported having been approached by purchasing departments of large Indian retailers with orders, and for the exploration of joint investments. If these trends deepen, they could create important opportunities for the development of intra-regional production networks in South Asia.
From the demand side, it is conceivable that in the future, organised retailers, interested in filling their shelves with quick-turnaround, cost-effective products, could emerge as a strong lobby for easing the flow of goods and services across South Asia, putting pressure on governments to implement trade facilitation reform.
So far, relationship-building in the region has primarily involved government-to-government interaction and negotiations. This process can be enhanced if additional ‘spaces of convergence’ and constituencies for reform in the civic and private sector can be identified and harnessed from the ground up. These emergent constituencies, with their shared interest in regional openness, can powerfully ratchet up pressure on governments to push for serious regional reform and create as outcomes some of the very ingredients (trust, for example), that we see as preconditions to progress today.
The author is associate professor, University of North Carolina at Chapel Hill, and visiting faculty at ICRIER
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
