KATHMANDU, Nov 8: Kenichi Yokoyama, the country director of Asian Development Bank (ADB), has said that linking South Asia with Southeast Asia is a means to tap into several economic opportunities.
This is possible for South Asian countries tend to trade more with South East Asian countries compared to trading among the countries as intra regional trade, said Yokoyama speaking at a program organized to launch South Asia Sub-regional Economic Cooperation (SASEC) Operational Plan 2016-2025 in Kathmandu on Monday.
South Asian countries trade only 5 percent in the region while its trade with South East Asian countries is at 25 percent of their total trade.
"This indicates that the potential for South Asia to tap into the Southeast Asia's burgeoning integrated market of 625 million remains untapped," added Yokoyama, highlighting opportunities for South Asia which has a strong economic performance in the last two years as well as South Asia's projected demographic transition for sustainable growth. "South Asia will experience a demographic transition that is crucial for accelerating and sustaining economic growth. By 2023 -- in less than a decade from now -- South Asia will be more populous than Northeast Asia."
The SASEC Operational Plan identifies regional road and rail links aligned closely with trade routes. Planned measures to streamline and harmonize trade procedures will cover both land-based and sea-based routes. The plan will open opportunities for the SASEC countries to participate more actively in regional value chains that are more advanced in Southeast Asia. The plan also promotes the development of economic corridors within and between the member countries.
The energy strategy under the SASEC Operational Plan aims to diversify the energy mix in the SASEC countries to cope with the projected increase in demand. The immediate priority is to improve energy infrastructure to allow countries to access commercial sources of energy and diversify their fuel mix.
The plan identifies over 200 potential transport, trade facilitation and energy projects, which will require over $120 billion in investments for the next five years, out of which 37 projects have been identified in Nepal with an estimated project cost of over $30 billion.
The majority of these projects are in transport (24 projects costing over $6 billion) although the 13 energy projects cost far more (over $24 billion).