Easing barriers to unlock S Asia's potential: FICCI, ADB ISLAMABAD: Reducing visa restrictions and non-tariff barriers and improving customs procedures, are among a host of steps South Asian countries can take to boost private sector-led growth, unlocking the region's vast economic potential.

The report, Key Proposals for Harnessing Business Opportunities in South Asia, said South Asia, with a potential market of 1.5 billion people has significant comparative advantages in industries ranging from textiles and garments, to tourism, pharmaceuticals and information technology.

But it is also home to half of the world's extreme poor, with 40 per cent of its total population living on less than $1.25 a day, it added.

The report has been prepared by the Asian Development Bank (ADB) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Intraregional trade remains modest compared with other parts of the world, and numerous impediments prevent the private sector from taking a bigger economic role.

Cutting nonphysical barriers to trade and improving the climate for investment across borders will encourage greater private sector activity, lifting growth, cutting poverty and strengthening regional integration, the report says.

Among the steps it suggests are liberalising a South Asia visa exemption scheme, adopting a regional motor vehicular agreement to speed up the passage of goods vehicles across borders and streamlining procedures at land customs stations.

It notes that while South Asia has made steady progress in cutting tariff barriers, it still needs to address non-tariff issues such as inconsistencies in regulations, and the imposition of product quotas.

The report also highlights the need for South Asia to remove barriers to intra-regional investment, and to promote cross border investments in areas such as hydropower and other energy sector projects, which could support regional trade in energy and aid integration.

It suggests allowing foreign direct investment in excluded or sensitive sectors in specific cities, urges countries to conclude bilateral investment treaties and double tax avoidance treaties and calls for a study into the establishment of an umbrella investment body for the region.

Friday, March 05, 2010