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Regional integrated policies like of the European Union can greatly attract foreign direct investment (FDI) for South Asian nations and boost their combined share in global value chain, thinkers said Sunday at a Dhaka meet.
The speakers in a session of the ongoing South Asia Economic Summit Sunday stressed inclusive, sustainable and coordinated policies at the regional level to that effect.
They urged governments to standardize and synchronize the rules that may intensify trade cooperation and enhance the value chain.
In regional cooperation every country in the region would gain some in integrated growth, they opined in the current context of global economy.
Chairing the event, Vice-chancellor Dr B.R. Ambedkar School of Economics (BASE) University, India, Dr N. R. Bhanumurthy called for reframing the value chain in the region by initiating proper policies and regulation, reducing costs,
He pointed out that trade cost in the region is more than the saving of cost from labour advantages.
Bhanumurthy thinks enhanced cooperation in the value chain could reduce regional trade costs significantly.
Associate Professor of Research and Information Centre for Developing Countries (RIS) of India Dr Priyadarshi Dash said reducing the cost of trading is significant variable in the region. FDI and GVC participation could help and reinforce each other.
He said service GVC could be the most promising in the region and that should be promoted.
He also said labour-saving automation should be avoided at the best as key of GVC and FDI is job creation.
Former President of Dhaka Chamber of Commerce & Industry (DCCI) and Honorary Consul, the Federal Democratic Republic of Ethiopia, Shams Mahmud said the growth that so far happened in the region was largely led by local investors.
He said FDI didn't come in the region much due to policies.
"Everything is there in place, lack of connectivity is the key constraint," he said.
He finds no effective industry-academia cooperation in the region.
He said SMEs are the key growth drivers in the region and they need to be protected and helped to get well-integrated in value chain.
Senior Vice President of the Federation of Pakistan Chambers of Commerce & Industry Abdul Jabbar Memon said SAARC should act like the EU for better regional integrated trade and value chain.
He terms South Asia a powerful economic unit, so, instead of looking to government for cooperation, private sectors should create effective connectivity and business climate in the region.
Executive Director of the Institute for Integrated Development Studies (IIDS), Nepal, Dr Biswash Gauchan said countries like Nepal which are landlocked and over-dependent on import cannot easily integrate in the region on equal terms.