The South Asia Subregional Economic Cooperation (SASEC) program brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka in a project-based partnership that aims to promote regional prosperity, improve economic opportunities, and build a better quality of life for the people of the subregion. SASEC countries share a common vision of boosting intraregional trade and cooperation in South Asia, while also developing connectivity and trade with Southeast Asia through Myanmar, to the People’s Republic of China, and the global market.
The SASEC Vision articulates shared aspirations of SASEC member countries, and sets the path to achieve these through regional collaboration. It lays out a plan to transform the subregion by leveraging natural resources, promoting industry linkages for the development of regional value chains, and expanding the region’s trade and commerce through the development of subregional gateways and hubs.
SASEC Operational Plan
The SASEC Operational Plan presents the strategic objectives of the SASEC partnership, and the operational priorities of the four main SASEC sectors—transport, trade facilitation, energy, and economic corridor development. It is supported by a list of potential projects regularly updated by SASEC member countries to be implemented during 2016-2025.
SASEC Projects and Technical Assistance
Since 2001, SASEC member countries have approved and implemented 46 ADB-financed investment projects worth more than $9.1 billion, in the transport, trade facilitation, energy, and economic corridor sectors. The transport sector accounts for 31 projects worth a cumulative $7.3 billion, followed by energy (11 projects worth $1.3 billion), economic corridor development (2 projects worth $484.0 million), trade facilitation (1 project worth $48.0 million), and ICT ($18.0 million).
ADB-financed technical assistance has supported SASEC investment projects throughout the subregion, regional cooperation forums and knowledge-sharing initiatives, and pilot projects since 2001. A total of 70 national and regional technical assistance projects (cumulatively worth $65.4 million) have assisted member countries in strategic planning, project preparation, and have supported SASEC forums, and capacity-building and knowledge-sharing events.
The tables below show more recent IMF data. Intra-regional trade share among members of SASEC increased from 2013-2015, as economic exchange within the region strengthened. Export and import grew considerably between 2013-2014 in the SASEC subregion.
Trade - Export/ Import
Ease of Doing Business
In 2017, SASEC member countries have enacted several reforms to improve ease of doing business in the region. These include:
- Increasing the time it takes to prepare VAT and corporate income tax returns, easing payment of taxes in Bangladesh;
- Launching the Customs Electronic Commerce Interchange Gateway portal and simplifying border and documentary compliance procedures, easing import and export processes in India;
- Reducing the cost of registering a company, and simplifying the process of incorporation in Myanmar;
- Implementing the ASYCUDA World data management system, easing the process of importing and exporting, in Nepal; and
- Removing the duty stamp on newly issued shares, adding ease to starting a business, in Sri Lanka.
Source: Doing Business
Note: The World Bank/International Finance Corporation's annual flagship Doing Business Report measures the ease of doing business by ranking economies from 1 to 189, based on quantitative indicator sets that can be compared across economies and over time, with first place being the best and indicating a regulatory environment is conducive to business operation. Of immediate relevance to SASEC aims and goals are indicator sets on Starting a Business, and Trading across Borders.
Logistics Performance Index (LPI)
The average 2016 LPI score for SASEC countries is 2.64; for Customs 2.47, Infrastructure 2.45; for International shipments 2.60; for Logistics Competence 2.60; for Tracking and Tracing 2.66; and for Timeliness 3.02.
SASEC LPI 2016
Source: World Bank LPI
Note: The LPI overall score reflects perceptions of a country's logistics based on six core dimensions: (i) efficiency of customs clearance process, (ii) quality of trade- and transport-related infrastructure, (iii) ease of arranging competitively priced shipments, (iv) quality of logistics services, (v) ability to track and trace consignments, and (vi) frequency with which shipments reach the consignee within the scheduled time. The scores for the six areas are averaged across all respondents and aggregated to a single score using principal components analysis. A higher score indicates better performance.
Asian Development Outlook
The Asian Development Outlook 2017 forecasts 7% and 7.2% growth for South Asia in 2017 and 2018. Resumption of growth in South Asia follows the brief slowdown in 2016 due to decline in fixed investment and impact of demonitization on trade and commerce. Growth in India is forecast at 7.4% in fiscal 2017 and 7.6% in 2018. In Bhutan, growth is expected to accelerate to 8.2% in 2017, with expanded investment in hydropower for export, and added capacity in electricity generation. Nepal's growth is expected to revive to 5.6% in 2017 with increased post-earthquake reconstruction and more reliable electricity.
South Asia Regional Update
Regional real GDP growth is expected to remain around 7.25% in both 2016 and 2017, with relatively stable inflation. Robust activity continues to be driven by the strong economic performance of India and Bangladesh, but limited progress is foreseen in tackling the region’s remaining macroeconomic vulnerabilities, as fiscal deficits are predicted to narrow only modestly in 2016 and 2017. Maldives and Bhutan may acrue large imbalances. Key policy priorities differ across countries in the region, but all countries would benefit from continued structural reforms to address supply-side bottlenecks; improvements to the functioning of product and factor markets; and enhanced intra-regional trade.