Challenges to Strengthening South Asia’s Supply Chains
9 June 2020
An analysis posted on the Hindustan Times makes a case for building resilient supply chains in South Asia. The article proposes that, with the outbreak of the coronavirus disease (COVID-19), “there will be a decline in globalization and relative strengthening of regional supply chains. Geography will assume an important role in supply chains.” It further mentions that the region’s economies and South Asia’s small and medium enterprises stand to benefit from a stronger regional supply chain. Plus, the region’s younger population can supply the workforce, and its rising middle-class can generate demand for goods and services.
However, the authors underscore that while there is an opportunity for better economic integration in the region, these existing challenges must be addressed to boost supply chains:
1. The region needs to reduce protectionism to facilitate the flow of goods and services across borders. This includes the reduction of both tariff and non-tariff barriers to trade.
2. The region needs to address existing logistics barriers. While there have been improvements on infrastructure at trade ports in the region in the last few years, the region still needs to promote seamless end-to-end connectivity, reduce high logistics cost, and develop adequate infrastructure for warehousing.
3. The region needs to increase investment in digital infrastructure to reduce human interaction and increase sanitation measures in cross-border processes, as the pandemic has made apparent.
Read the full analysis.