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 Subject :Report part 04 - South Asian Economies and Businesses in a Global Cont.. 09-01-2013 02:07:54 
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Subject :Report part 04 - South Asian Economies and Businesses in a Global Context

Report part 04 - South Asian Economies and Businesses in a Global Context: Introduction on Recent Trends in Globalization and its Effects on South Asian Economies – Institute for Policy Studies, Colombo (IPS)

Ms. Ashani Abayasekara and Mr. Raveen Ekanayake of IPS made a comprehensive and in-depth presentation on the above. The salient points were as follows:

  • The demographic challenge – widespread poverty and unemployment are pressing issues, which can have the dreaded effect of destabilizing the region
  • The need  to create opportunities to absorb the critical labour mass and to spur trade and investment to create such opportunities is a priority

  • At present South Asia is the lowest contributor to the world merchandise and service trade (3% and 4% respectively) and is, furthermore, (despite vast potential in this regard) the worst performing Asian sub-region in terms of intra-regional trade.
  • It was stated by way of the presentation that spurring investments and private sector growth to complement trade expansion is fundamental.

Moving forward by the following means :

  • Lobby governments and relevant stakeholders
    • to leverage on existing RTAs (SAFTA and SATIS in particular) to exploit the potential of intra-regional trade,
    • to further liberalize tariffs, to enhance trade within and outside the region,
    • to collectively lobby against the unreasonable application of non tariff barriers by developed economies,
    • to collectively lobby developed economies to extend assistance to build capacity to conform with SPS and TBT measures,
    • to strengthen the investment climate by undertaking reforms to improve factors such as institutional quality, governance, regulatory environment, macroeconomic management, labour regulations, infrastructure quality, trade facilitation and controlling of corruption, and,
    • to undertake reforms to enhance the flow of foreign investments into the region.

Comments and Observations by Participants

It was felt that EOs must look into and study the barriers with regard to mobility and employment within the region and that this can be something to be viewed seriously and carried forward by the SAFE forum. Connected with this, Mr. Kanishka Weerasinghe, Deputy Director General of the EFC stated that the EFC had conducted research into some of the relevant areas in the recent past – viz. Study on the Skills and Competencies required at Entry Level by Private Sector Employers (2010), Survey on the Impact of the Labour Laws on Employment Generation (2011). Sharing some of the survey findings with the workshop participants, Mr. Weerasinghe said that several areas of concern which were common to the sub-region  could be identified through these surveys.

Mr. Farooq Ahmed, Secretary General of the Bangladesh Employers’ Federation questioned the IPS Presenters as to how, if over the years, individual national imports and export ratios have increased, regional trade has declined, and what are the barriers in this regard. In reply to this it was stated that the study is currently ongoing, however it is observed that tariff barriers are decreasing but in turn the non tariff barriers are increasing, specially developed and developing countries find it a hard task to meet this, and hence now developing countries are also applying non tariff barriers.

It was further stated that goods traded within the South Asian region are predominantly common goods, and not high-tech items, such as in countries like China. Hence, scope for trade in that sense is anyway limited. However if components of high-tech items were are manufactured and traded – this might be a way to overcome limitations in this regard.

Mr. Roy John Chacko, ILO ACT/EMP (Geneva) was of the view that the main means of combating demographic challenges would be ‘education’, and education by itself is currently a major challenge. Thus, EOs must push to engage in setting up a policy directed towards going up in the value chain in this regard as quality of education is a vital point to look into at this juncture.

Mr. Gotabaya Dasanayaka shared his views along the lines of skills development is also a vital element to combat challenges faced in the sub region. He shared information among the participants that India has set a target of getting 500 million skilled by 2050 and that for this purpose many public, private partnerships are already in place.

Mr. Jan Karel Bout stated the following:

  • Inter regional trade must be enhanced
  • The ‘Doing Business Report’ of the World Bank shows statistics with regard to South Asian countries as well, and this document can be used as a guide for all SAFE members. He stressed that it is time for the EOs to pen down the priorities and monitor the improvements and stumbling blocks on an annual basis at least, with the help of the abovementioned document.
  • It is vital for the EOs to work with the Governments in order to achieve desirable outcomes so envisaged.


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