What is SASEC

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 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

As of January 2019, SASEC member countries have signed and implemented 52 ADB-financed investment projects worth more than $11 billion in the transport, trade facilitation, energy, and economic corridor sectors. The transport sector accounts for the most number of projects (34 projects worth a cumulative $9.1 billion), followed by energy (12 projects worth $1.5 billion), economic corridor development (three projects worth $698 million), trade facilitation (two projects worth over $68.6 million), and ICT (one project worth $17.1 million).

Source: SASEC Project Portfolio, as of January 2019

Source: SASEC Project Portfolio, as of January 2019

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 76 national and regional technical assistance projects (cumulatively worth $100.3 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 2001-2015, in the SASEC subregion, using International Monetary Fund (IMF) data on export, import, and intra-regional trade. It shows trade figures have been on the upswing since 2010.

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.

Source: IMF Direction of Trade Statistics via ARIC Database

Trade - Export/ Import

Source: IMF Direction of Trade Statistics

Intraregional Trade

Source: IMF Direction of Trade Statistics

Ease of Doing Business

In 2018, SASEC member countries enacted several reforms to improve ease of doing business in the region. These include:

  • Bhutan introduced an online platform for filing corporate income tax and personal income tax returns;
  • India reduced the time and cost to export and import through various initiatives, including the implementation of electronic sealing of containers, the upgrading of port infrastructure, and allowing electronic submission of supporting documents with digital signatures;
  • Myanmar made starting a business less expensive by reducing the registration fee; and
  • Sri Lanka made paying taxes easier by introducing online systems for filing corporate income tax, value added tax and employee trust fund contributions.

Source: Doing Business, accessed December 2018

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 190, 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 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

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.

Source: Asian Development Outlook (ADO) 2017

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. Nepal's growth is expected to revive to 5.6% in 2017 with increased post-earthquake reconstruction and more reliable electricity.

Source: South Asia Regional Update October 2016