What is SASEC
SOUTH ASIA SUBREGIONAL ECONOMIC COOPERATION (SASEC)
SASEC member countries share common aspirations of economic growth, economic diversification, inclusive growth and sustainability, and energy access and security.
BANGLADESH
Bangladesh’s cost-efficient labor market and access to trade gateways can stimulate the manufacturing sector and support export-led growth. Bangladesh is a founding member of the SASEC Program.
BHUTAN
Landlocked Bhutan is rich with natural resources. However, it has limited manufacturing base, and needs infrastructure for improved connectivity. Bhutan is a founding member of the SASEC Program.
INDIA
India is promoting economic corridors by developing trade gateways, and building connectivity to global markets to harness its manufacturing potential. India is a founding member of the SASEC Program.
MALDIVES
Maldives’ strategic location and growing tourism industry stand to gain from sustainable energy services, and an enabling environment to do business. Maldives became a full SASEC member in May 2014.
MYANMAR
Myanmar is key to growing cooperation between South, Southeast, and East Asia. Ports and road corridors are vital for multi-modal connectivity. Myanmar became a full SASEC member in February 2017.
NEPAL
Nepal can better leverage its manufacturing, tourism, and hydropower potential with efficient transit facilities, and an enabling business environment. Nepal is a founding member of the SASEC Program.
SRI LANKA
Sri Lanka’s strategic location makes it a potential maritime trade hub. Creation of economic corridors will allow participation in global value chains.
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.
SASEC Vision
The SASEC Vision, and its supplement, SASEC Vision – Myanmar, articulate shared aspirations of SASEC member countries, and set the path to achieve these through regional collaboration. These documents lay 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
As of February 2023, SASEC member countries have signed and implemented 79 ADB-financed investment projects worth around $18.41 billion in the transport, trade facilitation, energy, and economic corridor, and health sectors. The transport sector accounts for the majority of projects (46 projects worth over $13.17 billion), followed by energy (16 projects worth over $2.92 billion), economic corridor development (8 projects worth over $1.94 billion), trade facilitation (5 projects worth around $328.15 million), and ICT (2 projects worth $20.80 million). The health sector was included into SASEC operational priorities in 2022 and added $25.92 million to strengthen COVID-19 recovery through 2 regional cooperation projects.
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 146 national and regional technical assistance projects (cumulatively worth $206 million) have assisted member countries in strategic planning, project preparation, and have supported SASEC forums, and capacity-building and knowledge-sharing events.
Trade Snapshot
The graph gives a snapshot of trade over time, from 2001 to 2021, in the SASEC subregion, using International Monetary Fund (IMF) data on export, import, and intraregional trade.
The tables below show more recent IMF data. Intraregional trade share among members of SASEC dropped dramatically in April 2020. Exports and imports soared in 2021 from 2020 levels in the SASEC region.
Logistics Performance Index (LPI)
The average 2018 LPI score for SASEC countries is 2.57; for customs 2.41; infrastructure 2.37; for international shipments 2.47; for logistics competence 2.49; for tracking and tracing 2.67; and for timeliness 3.0.
Source: World Bank LPI (accessed November 2018)
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.
Economic Outlook
South Asia is projected to grow faster than other subregions in Asia, with real gross domestic product (GDP) estimated at 5.5% in fiscal year (FY) 2023 and 6.1% in FY2024. Growth within South Asia is expected to vary, with India projected to grow by 6.4% in FY2023 and 6.7% in FY2024 behind strong domestic demand. In Bangladesh, GDP growth is estimated at 5.3% in FY2023 owing to global economic disruptions and 6.5% in FY2024. In Bhutan, hydropower production will push growth to 4.6% in FY2023 and 4.2% in FY2024. Growth in Maldives is estimated at 7.1% in FY2023 and 6.9% in FY2024, supported by a boom in tourism and construction. In Nepal, growth will slow to 4.1% this year before picking up in FY2024 at 5.0% with a recovery in tourism and infrastructure. Sri Lanka is projected to contract at -3.0% in FY2023 before recovering to 1.3% in FY2024 premised on debt relief and key reforms. In Southeast Asia, Myanmar's GDP will rise moderately to 2.8% in FY2023 and 3.2% in FY2024.
Source: Asian Development Outlook April 2023 (ADB)
Real GDP in South Asia is projected to slow to 5.8% in FY2022 and FY2023. In Bangladesh, real GDP growth is projected at 6.1% in FY2022-2023, as higher inflation and rolling power outages dampen post-coronavirus economic recovery in consumption and investment. The restoration of mobility is supporting Bhutan's recovery. With slower domestic demand, real GDP forecast in Bhutan is set at 4.1% in FY2022-2023. In India, where exports and overall economic activity have recovered more strongly than the rest of the world, growth is forecast at 6.5% in FY2022-2023. In Maldives, real GDP is expected to grow by 12.4% in 2022 and 8.2% in 2023 on the recovery of tourism. Growth forecast in Nepal is set at 5.1% in FY2022-2023 amid normalization of monetary policy. Real GDP in Sri Lanka is projected at -9.2% in FY2022 and -4.2% in FY2023 due to a severe balance of payment crisis and risks posed by the country's political situation.
Source: South Asia Economic Focus, Fall 2022 (WB)