Despite political sensitivities, economists and technocrats of the South Asian region have for decades been speaking as one voice for a better South Asia, that it is possible and that such a transformation is a must.

A trade economist says South Asian countries should further develop trade ties and intraregional corporation as a means of eradicating poverty and increasing welfare of the region’s people.

"South Asia is one of the fastest growing regions with an average growth rate of 7 percent over the last five years, but the region continues to be the home for over 40 percent of the world’s poor and fares poorly in terms of different human development indicators such as in education, health, nutrition and sanitation," Dr. Saman Kelegama, Executive Director of the Institute of Policy Studies of Sri Lanka said.

"This is worrying. The danger is that current downside risks caused by the slow recovery of the global economy could slow down growth in South Asia and further aggravate poverty and (undermine) human development," he said, speaking at the launch of a book titled Promoting Economic Co-operation in South Asia: Beyond SAFTA (South Asia Free Trade Area).

South Asia is characterised by high growth and high poverty.

"South Asia has two faces. One is highly urbanised and well linked to global markets, the other is rural, isolated from the global economy and growing very slowly where the bulk of the region’s poor lives," Dr. Kelegama said.

The book, published through the resources of the World Bank, Asian Development Bank, UNDP-Regional Centre in Colombo and the Institute of Policy Studies, is compilation of papers authored by leading economists in South Asia. It also includes perspectives from the private sectors of each country in the region.

"The book shows that in addition to policy and institutional reforms aimed at removing domestic constraints to growth and job creation, intra-regional integration ought to be a key element of eliminating poverty and addressing inequality in the long term," Dr. Kelegama said.

Economists agree that there is link between growth in trade and reduction in poverty in country.

"Week regional integration tends to hurt the poor. Sound analysis and empirical evidence has established this fact," Sri Lanka Country Director, World Bank, Naoko Ishii said.

She said past efforts to create economic regional integration had not borne fruit because of political resistance among member countries, especially India and Pakistan.

"Like (post war) Sri Lanka, South Asia too is at critical juncture to seize economic opportunities. Just as Sri Lanka is going through a critical transition, so is South Asia. The question remains as to how South Asia is going to seize the opportunities a recovery of the global economy would bring.

"There has to be political leadership to strengthen regional cooperation and this is where public support becomes more critical," Ms. Ishii said.

Numerous studies, many of the conducted by the region’s economists have shown that the lack of effective cooperation has constrained progress on a range of public goods including climate change, water management, HIV/AIDS control and disaster management.

Intraregional trade in South Asia is at a low 5 percent, compared to 25 percent of the South-East Asian bloc, ASEAN, 54 percent in the European Union and 59 percent in the North American bloc comprising the US, Canada and Mexico.

"South Asian trade is less than 1 percent of the region’s GDP compared to 20 percent in the ASEAN region," Dr. Kelegama said.

Dr. Kelegama said South Asia had failed to capture the extent of complementarities in the region.

"This is due to the high-incidence of non-tariff barriers and informal trade. The book argues that three-fourths of intra-regional trade potential remains to be exploited, which SAFTA can hope to realise," one of the three editors of Promoting Economic Partnership in South Asia, Dr. Kelegama said.

Dr. Kelegama said there was increasing evidence to suggest that trade can alleviate poverty has its benefits trickle down.

He said member states should remove non-tariff barriers and reduce negative lists.

"There is an urgent need for extending the coverage of SAFTA to all trade in the region as per WTO requirements," Dr. Kelegama said.

According to the book, if trade barriers are removed, intraregional trade amounting to US$ 5 billion would increase to US$ 20 billion.

Dr. Kelegama said the middle class population in the region are a bigger consumer market than the regions of the EU and the Americas.

"Out of the regional population of 1.5 billion, 550 million of them belong to the middle class category which is a bigger consumer market than the EU and North America Free Trade Agreement combined, but still remains unexploited. There are win-win opportunities for cooperation," he said.

With exports taking a hit due to the global economic crisis and its slow recovery, Dr. Kelegama argued that intraregional trade could help countries grow their exports, if not maintain them at healthy levels.

For decades, South Asian economists belonging each of the SAARC member countries have studies the benefits of regional cooperation. They have argued time and time again that cooperation, not only in trade, but in a host of other areas such as food security, energy, transportation, education and health, could transform the region and eradicate poverty. But the region’s political face, that of distrust and fear, has made it somewhat impossible.

They argue that peace and development of the region’s people depended on cooperation and deeper economic integration.

"It is not realistic or necessary to expect that all political and social conflicts will have to be resolved first before meaningful cooperation can happen. Indeed economic cooperation is a powerful means to resolving political and social conflict," Sadiq Ahmed and Ejaz Ghani, two senior economists from Bangladesh and India argue.

"Trust and goodwill at the citizen level also can be a credible way to resolve conflicts. Economic co-operation by raising citizens’ welfare can be instrumental in building this trust. Political forces can provide the impetus by reducing policy barriers to regional integration," they said in a study published in Promoting Economic Co-operation in South Asia.

Another economist, from Pakistan, said South Asia has an opportunity to lead the world by addressing the challenges of poverty, peace and environmental degradation through co-operation in a region where they are manifest in their most intense forms. Or, allow the political sensitivities and mistrust lead to a nuclear holocaust.

"There is an urgent need to move out of the mind set that regards an adversarial relationship with a neighbouring country as the emblem of patriotism that views affluence of the few at the expense of the many as the hallmark of development, that sees nature as an exploitable resource, and that embraces individual and greed as the basis of public action," Akmal Hussain, said in a study published in the book.

Ghani, who introduced the book at its launch in Colombo, said trade had a specific role to play in building regional co-operation.

"But there are other different aspects to cooperation. It is not only export growth but growth in exchange of knowledge, ideas, management skills and technologies that comes about through cooperation and sharing," he said.

He said the region should open up its borders so that people in the region could freely move from place to place.

"An open migration policy would not only result in an exchange of ideas but also benefit people living in least developed areas in the region and reduce poverty levels," Ghani said.

The first South Asia Economic Summit was held in 2008 with the express intension of driving the need for integration through.

One senior economist commented at the sessions that he was losing hope in the SAARC process and that his decades of work may have been fruitless, considering the apparent lack of political will to deliver the kind benefits the numerous studies on integration have shown.

"When we talk about creating transportation links between Bangladesh and India (which would give lagging border provinces in each country access to markets and therefore, and opportunity to grow) there is fear in Bangladesh that if this happens the next train from India to Bangladesh would be carrying troops. It is the same when we talk about creating transportation links between India and Pakistan, each fearing train-loads of troops from either country," the economist told the summit.