State­ment by Dr. Shamshad Akhtar,

The Diplomatic Insight - - Editor's Note -

ver the past three decades, re­gional co­op­er­a­tion and eco­nomic growth and sta­bil­ity. It has at­tracted in­vest­ment as mar­kets were lib­er­alised, com­pet­i­tive­ness im­proved, and pol­icy mak­ers un­der­took struc­tural re­forms to over­come do­mes­tic chal­lenges. Our re­gion’s ex­pe­ri­ence demon­strates RECI has the po­ten­tial to re­duce poverty. Un­der­taken with the 2030 Agenda, RECI could make a ma­jor con­tri­bu­tion to de­liv­er­ing in­clu­sive and sus­tain­able de­vel­op­ment in our re­gion. RECI has re­cently been given resur­gent eco­nomic na­tion­al­ism that is ques­tion­ing the value of free mar­ket, free trade and de­vel­op­ment agen­das. To help ar­rest this grow­ing dis­con­tent with glob­al­iza­tion, to dis­pel un­founded crit­i­cisms of free trade, global value chains and labour mi­gra­tion, RECI must be in­clu­sive. It must con­trib­ute to re­duc­ing ris­ing in­equal­i­ties by of­fer­ing op­por­tu­ni­ties for marginal­ized coun­tries and peo­ple. Co­op­er­a­tive de­vel­op­ment so­lu­tions should con­trib­ute to de­fus­ing pre­ven­tion. There are promis­ing signs the re­gion’s in­te­gra­tion will gain mo­men­tum from the new op­por­tu­ni­ties of­fered by the all-en­com­pass­ing 2030 Agenda for Sus­tain­able De­vel­op­ment, as well as the global push for lower green­house gas emis­sions and en­vi­ron­men­tally sus­tain­able growth. Our re­gion has led the way in its ef­forts to struc­ture cross con­ti­nen­tal projects backed by ve­hi­cles. It is play­ing its part in a tech­no­log­i­cal rev­o­lu­tion, en­hanc­ing ser­vices to those un­reach­able thus far. GDP of $27 tril­lion, could ac­count for al­most half of the global GDP by 2050. The role of re­gional co­op­er­a­tion and in­te­gra­tion – par­tic­u­larly to strengthen in­fra­struc­ture link­ages – will be key to achieve this pos­i­tive sce­nario. It will help res­cue our re­gion from poverty, im­prove ac­cess to ser­vices, of­fer new job op­por­tu­ni­ties to a grow­ing work force and meet the de­mand of a ris­ing mid­dle-in­come class which is ex­pected to reach 3.5 billion by 2030. With th­ese pos­i­tive de­mo­graphic, in­come and eco­nomic trends comes a grow­ing re­spon­si­bil­ity for our re­gion, a re­spon­si­bil­ity to lead in shap­ing global gov­er­nance and to sup­port in­ter­na­tional co­op­er­a­tion and mul­ti­lat­er­al­ism. Un­sur­pris­ingly for a re­gion of such wide di­ver­sity, the level of RECI varies en­joys the high­est level of over­all in­te­gra­tion. In­deed, the ex­pe­ri­ences of East and South-East Asia show what re­gional co­op­er­a­tion could de­liver if trade and in­vest­ment were fur­ther lib­er­alised and com­pe­ti­tion, in­no­va­tion and human cap­i­tal strength­ened. Nur­tur­ing the right po­lit­i­cal dy­nam­ics across sub-re­gions will go a long way to sup­port deeper in­te­gra­tion. Mar­ket in­te­gra­tion is es­sen­tial for goods, ser­vices, cap­i­tal and labour to move freely. To­day, trad­ing costs are a ma­jor bar­rier to in­tra-re­gional com­mer­cial ex­changes. They are com­pounded by a mul­ti­tude of in­con­sis­tent le­gal and reg­u­la­tory frame­works which weigh on trad­ing ac­tiv­ity and de­ter for­eign di­rect in­vest­ment. The costs of trad­ing re­gion range from 51 per cent to a pro­hib­i­tively high 368 per cent of the value of ex­ports. Sub-re­gional trade costs are in East and North East High trade costs are partly due to trans­porta­tion and bor­der-cross­ing costs. Low­er­ing th­ese re­quires seam­less re­gional con­nec­tiv­ity, for which trans­port, en­ergy and in­for­ma­tion and com­mu­ni­ca­tion tech­nol­ogy link­ages need to be com­pleted. Yet most cross-bor­der projects in the re­gion have been ne­go­ti­ated bi­lat­er­ally and net­works are frag­mented. This can­not con­tinue. For im­proved in­fra­struc­ture the re­gion needs co­her­ent, har­mo­nized in­ter­gov­ern­men­tal agree­ments. A co­or­di­nated ap­proach to de­vel­op­ing na­tional and cross bor­der link­ages across sub-re­gional blocs is needed to sup­port peace and sta­bil­ity and build trans­port, en­ergy and ICT net­works. Cri­sis pre­ven­tion de­mands the con­tin­ued strength­en­ing of re­gional are needed to guard against im­bal­ances. Emer­gency lend­ing mech­a­nisms are im­por­tant to con­tain un­fore­seen for sus­tain­able in­vest­ment in­clud­ing for in­fra­struc­ture. In­deed, deeper cap­i­tal mar­kets could foster the de­vel­op­ment of in­sti­tu­tional in­vestors with longer time hori­zons and the abil­ity to is also more scope for in­fra­struc­ture projects to be sup­ported by pub­lic pri­vate part­ner­ships, and mul­ti­lat­eral de­vel­op­ment banks like the ADB have an ob­vi­ous role in help­ing to mo­bi­lize fund­ing. In ad­di­tion, do­mes­tic re­source mo­bi­liza­tion re­mains fun­da­men­tal to a suc­cess­ful im­ple­men­ta­tion of the 2030 Agenda. This re­quires us to re­dou­ble our ef­forts to re­form tax and pub­lic ex­pen­di­ture poli­cies by ra­tio­nal­iz­ing tax­a­tion struc­tures, mak­ing leg­is­la­tion sim­pler and more trans­par­ent, and im­prov­ing the ca­pac­i­ties of tax ad­min­is­tra­tions. RECI’s po­ten­tial to sup­port sus­tain­able growth and de­vel­op­ment in the Asia re­gional ini­tia­tives cham­pi­oned by the re­gion’s mem­ber States. The most ex­ten­sive is emerg­ing to be the Belt

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