By Arun Kumar
Washington, Feb 18 (IANS) Intra-regional trade in South Asia could increase from $5 billion to $20 billion and trade between India and Pakistan could jump from $1 billion to $9 billion if trade restrictions are removed, according to a new World Bank report.

“The unique geography of South Asia-distance and density-has the potential to raise growth through increased trade,” says the report “Promoting Economic Cooperation in South Asia”. But “presently this is hindered by policy barriers.”

“The benefits of scale economies could be even bigger, particularly to the small land-locked countries” as regional market integration could provide the benefit of scale economies to the smaller countries to invest in infrastructure, it said.

Nepal, for example, could double its GDP if it could export hydro-based electricity to India, an energy thirsty country.

“Benefits of cooperation on water and climate would be immense,” the report says suggesting this can provide the much-needed trigger for opening a dialogue on regional water cooperation.

“From the Himalayas, where glacier melt is already changing water flows in ways that remain to be fully understood, to the coastal floodplains of Bangladesh and Pakistan, South Asian countries need to adapt to climate change,” it said.

For example, cross-border cooperation on water between India, Bangladesh, and Nepal offers the only long-term solution to flood mitigation, and would benefit over 400 million people, the report said.

“Te benefits of regional cooperation for South Asia are obvious. Yet a range of political constraints prevent cooperation from happening,” it said stressing “The political dynamics will need to change as the opportunity cost of non-cooperation for South Asia’s poor is large.

“A part of this change will come from leadership from the civil society in terms of much more informed knowledge and debate of the underlying opportunities, issues, and constraints,” it said.

(Arun Kumar can be contacted at arun.kumar@ians.in)