Economics Regd. No. 208/070/071(Kathmandu) REGIONAL ADVISORYBOARD Dr. DebapriyaBhattacharya South AsiaWatchonTrade, Tel: +977-1-4424360/4444438 Baluwatar, Kathmandu, Nepal E-mail: [email protected] COVER &ILLUSTRATION Dr. AbidQaiyumSuleri Effect, +977-1-4433703 Orange Press,Lalitpur Dr. SamanKelegama CONSULTING EDITOR Dr. PoshRajPandey Web: www.sawtee.org Tel: +977-1-5010801 Fax: +977-1-4444570 ASSOCIATE EDITOR ASSISTANT EDITOR Bipendra Ghimire
and Dr. VeenaJha Abin Shrestha P.O. Box: 19366 Dikshya Singh PUBLISHED BY Asish Subedi Tukucha Marg Bangladesh Hari Uprety PRINTED AT Sri Lanka Pakistan DESIGN
Environment Nepal India
(SAWTEE)
editors’ note shared futureof SouthAsia. to dosoisseenbefading.It istimeforalltoengagethemselvesa South Asiatorevitalizeregional cooperationwhenthecollectiveinterest cooperation inSouthAsia.In the past,thishasbeenanimportanttoolfor macy involvingnon-stateactors, becomesvitalinstrengtheningoverall insecurities. vision thatincorporatesregionalgoalsto nomic goalsofregionalintegrationneedtobecomplemented byabroader within memberstatesforregionalintegrationanddevelopment. Theeco- security—the basicrequirementsforgrowthanddevelopment. here, itiseconomicintegrationthatcanhelpmaintainregional peaceand cooperation canonlytakeplacewhenthenegativitiesareaddressed. And, of mistrust,armedcon among countries. as terrorism,foodsecurity,environmentandenergy—demand cooperation too hugetobetackledbyindividualcountries.Transnationalissues—such initiatives andintegratethemwithitsowndevelopmentplans.Theissueis eradication oftheseinsecurities.SouthAsiaurgentlyneedstolocalisesuch are anexamplethatprovidesacomprehensivecollectiveagendaforthe plans awaitingcollectiveaction.SustainableDevelopmentGoals(SDGs) ward offallthesehumantribulations.Therearealreadyinternational centre stageforthe inequalities andhugeinfrastructuregaps.Therefore,SouthAsiaisatthe the world’spoor,regionsuffersfromextremeformsofsocialexclusion, development moreconspicuousthaninSouthAsia.Hometo42percentof and underdevelopment. gion’s pastworktofosterregionalcooperationdoawaywithinsecurities region isnecessaryandthatSAARCthevehiclecanbuildonre- is crucialduringsuchperiodsifonlytoadaptthechanges. when theglobalorderisundergoingrapidchanges.Regionalcooperation bilateral problemsofmembercountries.Thesummitgotstalledatatime hold itsregularsummitscheduledforlate2016inIslamabad—becauseof development. to provideasemblanceofnormalcyintheregion’scollectiveeffortsfor setbacks havesofarbeensweptoverbynewercooperationinitiatives differences isnoteasyandhiccupsarewitnessedfromtimetotime.Such many ofthemembers’bilateralgrievances.Butovercomingentrenched Association forRegionalCooperation(SAARC). a regionalorganizationin1985,withtheestablishmentofSouthAsian opportunity presenteditselfbeforethemtoclosethesegapsintheformof developed overtheyearsanddecadesaresigni the divergencesininter-state,intra-stateandhumandimensionsthathave EVEN lective mustnotbesacri regional effortsshouldnotbeheldhostagebybilateralbickering.Thecol- If thereisanylessontobelearntfromthesehalfadozenmishaps,itthat bilateral developmentsarousingmistrust.Venueshavebeenchangedtoo. South Asianpuzzleneedssor Given theanimosityamongSAARC memberstates,‘TrackII’diplo- South Asia,therefore,shouldstriveforpeaceandharmony amongand It isimpossibletoachievegrowthanddevelopmentinanenvironment Regional measuresmustbeinplacetoattractinternationalefforts Nowhere intheworldareproblemsandchallengesofsecurity There isnodoubtinanymember’smindthatdevelopmentoftheentire This isnotthe Only recently,anothersetbackemergedforSAARC—thefailureto SAARC anditsinstitutionsbegandeveloping,graduallyovercoming thoughmostofthecountriesemergedfromasharedcolonialpast, fi rst timethata SAARCsummitgotcancelleddueto fi ght againstglobal poverty. fl icts andperpetualpoliticalinstability.Theneeded fi ced atthealtar oftheindividualinterest. fi ght againstvariousformsof fi cant inSouthAsia.Agood Ɵ ng contents Trade Insight Vol. 12, No. 3, 2016
Peace and harmony for development in South Asia
COVER FEATURE 10
IN THE NEWS 4
REPORT LDCs: Graduation and beyond 8
VIEWPOINT BBIN: From By the waters of Leman 9
transit to VIEWPOINT Track II vital for climate change economic cooperation in South Asia 10
corridors REGIONALISM 17 South Asia’s drivers of regional integration CONNECTIVITY 24 SUSTAINABLE DEVELOPMENT GOALS 20 Marine bioprospecƟ ng law on ABS: To end poverty Lessons from Australia and Norway in South Asia permanently CLIMATE CHANGE 32 South Asia needs cooperation for climate adaptation
BOOK REVIEW 35 The art of a dismal science
KNOWLEDGE PLATFORM 36 The Belt and Road Initiative
ACCESS AND BENEFIT SHARING 28 NETWORK NEWS 38
MEMBER INSTITUTIONS OF SAWTEE BANGLADESH 1. Bangladesh Environmental Lawyers’ Association (BELA), Dhaka; 2. Unnayan Shamannay, Dhaka; INDIA 1. Citizen consumer and civic Action Group (CAG), Chennai; 2. Consumer Unity & Trust Society (CUTS), Jaipur; 3. Development Research and Action Group (DRAG), New Delhi; NEPAL 1. Society for Legal and Environmental Analysis and Development Research (LEADERS), Kathmandu; 2. Forum for Protection of Public Interest (Pro Public), Kathmandu; PAKISTAN 1. Journalists for Democracy and Human Rights (JDHR), Islamabad; 2. Sustainable Development Policy Institute (SDPI), Islamabad; SRI LANKA 1. Institute of Policy Studies (IPS), Colombo; 2. Law & Society Trust (LST), Colombo Views expressed in Trade Insight are of the authors and do not necessarily refl ect the offi cial position of SAWTEE or its member institutions. in the news
New India- ‘FTAs threaten farmers’ Bangladesh rail link rights, food security’ BANGLADESHI Railways Minister Mr. Mazibul Hoque, SMALL farmers around the world are cuses on the potential threat of FTAs, along with his Indian counter- threatened by new free-trade agree- such as the Trans-Pacifi c Partnership part Mr. Suresh Prabhu, laid the ments, a civil society group argues. (TPP) agreement and the Regional foundation stone of a project to “Those agreements go beyond the Comprehensive Economic Partnership link Akhaura in Bangladesh and requirements of agreed international (RCEP) in Asia. Agartala in India on 31 July 2016. intellectual property rules and jeop- It has said that corporations in the According to the Bangladesh ardize the ability of small farmers to United States and European Union are Railways, the new link’s total save, produce, and exchange seeds”, pushing for provisions which would route length is 15.064 km out of the group said. allow companies to take patents on which 10.014 km is in Bangladesh According to GRAIN, a Spain- plants and animals, for countries to and 5.050 km in India. based organization, a number of free- adopt the rules of the 1991 Convention Bangladesh and India had trade agreements (FTAs) negotiated of International Union for the Protec- signed a Memorandum of Un- outside the World Trade Organization tion of New Plant Varieties (UPOV), derstanding for constructing the (WTO) go beyond the WTO Agree- and to join the Budapest Treaty on railway under Indian grant in ment on Trade Related Aspects of the recognition of deposits of mi- February 2013. (www.newagebd. Intellectual Property Rights (TRIPS). cro-organisms “for the purpose of net, 29.07.2016) GRAIN’s latest opinion piece, part patent protection”. (www.ip-watch.org, of its “Against the grain” series, fo- 21.07.2016) Bangladesh, India merge South Asia’s biggest land port
BANGLADESH and India have pibphoto.nic.in merged the busiest land check-post at the Petrapole-Benapole border, easing the movement of people and goods to take their relations a notch higher. The prime ministers, Ms. Sheikh Hasina and Mr. Narendra Modi, opened the new ‘Petrapole Integrated Check Post (ICP)’ through a video call on 7 July 2016. This is the second ICP on the In- dia-Bangladesh border after Agartala, Tripura and the biggest anywhere on India’s borders. The High Commission of India says it will also be the biggest land port in South Asia. Around 70 to 80 per cent of About 1.2 million people and business community will benefi t from the India-Bangladesh trade passes 150,000 trucks cross Petrapole-Bena- reduced transaction time and costs. through Petrapole-Benapole. Trade pole annually, according to the Indian The next land customs station to worth around US$5 billion takes place High Commission in Dhaka. The han- be upgraded will be Dawki in Megha- at Petrapole, which is more than all dling capacity of this ICP is expected laya, where land acquisition for the the other Indian land ports and land to double with the commissioning project has been completed. (www. customs stations put together. of the integrated post, and the local bdnews24.com 21.07.2016)
4 Trade Insight Vol. 12, No. 3, 2016 Nepal slides back into food defi cit
NEPAL slid back to being a food defi - ekantipur cit nation due to a sharp drop in cereal production triggered by multiple envi- ronmental and political stresses. According to Nepal’s Ministry of Agricultural Development, the country faced a food defi cit of 71,387 tonnes in the year ending mid-July 2016. The edible grain output totalled 5.27 million tonnes against a require- ment of 5.34 million tonnes in 2015. The country produced 652,000 tonnes less food grain as severe droughts, fl oods, earthquakes and the Tarai unrest induced shortages of fertilizer and diesel. Wheat output plunged 12.1 per cent to a six-year low of 1.73 million tonnes and paddy out- put, the country’s major cereal crop, fell 10.2 per cent to 4.29 million tonnes. “Nepal’s food imports have not Centre said the country’s cereal import “The food defi cit has already sent been factored into the defi cit.” He said bill jumped nine per cent to US$3.5 the import bill soaring,” said Mr. that a good monsoon this year has billion in the fi rst 11 months of the Dinesh Bhattarai, Chief Statistician at raised hopes for a fi ne summer har- last Fiscal Year. (http://kathmandupost. the Ministry. vest. The Trade and Export Promotion ekantipur.com, 20.07.2016)
Afghanistan Bangladesh left 164th WTO member out of GSP again
AFGHANISTAN has become a World Trade BANGLADESH has once again been left out of Organization (WTO) member following its Parlia- the American list of benefi ciary countries for trade ment’s ratifi cation of the Protocol of Accession. privileges from the United States (US) on grounds of According to WTO rules, Afghanistan became poor labour rights. the 164th member of the Organization on 29 July The list of benefi ciaries for the Generalized 2016, 30 days after its instrument of acceptance was System of Preferences (GSP) scheme was updated in deposited at the WTO. Afghanistan applied for June 2016 by the United States Trade Representative WTO membership in 2004, with members of the (USTR), the chief trade negotiation body for the US accession working party concluding the negotiations government. on 11 November 2015. Bangladesh was fi rst suspended from the GSP Afghanistan is the 36th government and the scheme in April 2013, shortly after the Rana Plaza ninth least-developed country (LDC) to join the collapse, on grounds of shortcomings in workplace WTO following accession negotiations since the safety and poor labour rights in the garment sector. global trade body was established in 1995. Ecuador, Fiji, Georgia, Indonesia, Iraq, Niger, the Liberia, also an LDC, became the 163rd WTO Philippines, Thailand, Ukraine and Uzbekistan have member on 14 July. LDCs represent a fi fth of the also been excluded, mostly for poor labour rights. WTO membership. (www.wto.org, 29.07.2016) (www.thedailystar.net, 11.07.2016)
Trade Insight Vol. 12, No. 3, 2016 5 in the news
Bangladesh to SAARC agrees on allow neighbours plan to harmonize to use Mongla energy trade THE Prime Minister’s Offi ce (PMO) of Bangladesh has asked the Ministry of Shipping (MoS) to take necessary steps ENERGY regulators of the South Asian Association for for providing transit facilities to India, Regional Cooperation (SAARC) have agreed to harmonize reg- Nepal and Bhutan to use Mongla Port. ulations, codes and standards of electricity grids for cross-bor- In a recent letter, the Prime Min- der electricity trade in the region. ister’s Economic Affairs Adviser, On 23 September 2016, the National Electric Power Regula- Dr. Mashiur Rahman, conveyed the tory Authority of Pakistan reported, after a two-day meeting, message to the Shipping Minister Mr. that the regional regulators had an agreement on a plan of Shajahan Khan. action on energy regulations. He mentioned that Prime Minister The member states agreed on Pakistan’s proposal to Ms. Sheikh Hasina took the decision on include matters relating to existing market structure and the basis of a plea of the Khulna Cham- evolving structure in the SAARC Plan of Action on Energy ber of Commerce and Industry (KCCI). Regulations (Electricity). India wants to use Bangladesh’s This is expected to move SAARC towards a competitive seaports to carry goods to its north-east- market, benchmarking the performance of transmission and ern states. Nepal and Bhutan are also distribution entities and benchmarking effi ciency and availa- interested to use the ports for facilitating bility targets of generation facilities under a regulated environ- their external trade. ment. In June, last year, Bangladesh The meeting was informed that Bhutan, Nepal and India and India signed a Memorandum of have ratifi ed the SAARC Framework Agreement. Other Understanding for letting Delhi use members were urged to ratify it as a priority before the 19th Chittagong and Mongla Ports. The SAARC Summit. necessary agreement and protocols are The regulators also agreed to ‘deliberate on regulatory yet to be fi nalized for implementation of issues relating to cross-border electricity trade with a view to the memorandum. (www.thefi nancialex- harmonize the elements’ for which sharing of studies by in- press-bd.com, 09.09.2016) ternational partners would be vital for resolving issues. (www. dawn.com 24.09.2016)
India approves highway project linking Bangladesh, Bhutan, Nepal
INDIA has approved an ambitious Fifty per cent of the funding desh-Bhutan-India-Nepal (BBIN) US$1.04 billion project for con- will come from the Asian Develop- road initiative is to improve ground structing and upgrading 558 km of ment Bank (ADB). India expects to connectivity in the region,” said roads to link it with Bangladesh, ease the movement of passengers India’s Ms. Leena Nandan, Joint Bhutan and Nepal. and cargo, as part of the larger ef- Secretary, Ministry of Road Trans- The road project will cover fort to increase intra-regional trade, port and Highways. West Bengal and Manipur on the by 60 per cent. “We have taken up fi ve highway Indian side. The new project was “The mandate is for completing stretches in the country, which are recently given an offi cial nod by the project within the next two very important for such a connec- India’s Department of Economic years,” a senior offi cial said. “The tivity to succeed,” Ms. Nandan said. Affairs. primary idea behind the Bangla- (www.bdnews24.com 18.09.2016)
6 Trade Insight Vol. 12, No. 3, 2016 Indian ban leaves Nepali ginger rotting
THE Indian government’s decision the complication. Ever since Nepal be imported only if the entrepre- to impose a ban on import of gin- started commercializing ginger pro- neurs produced lab certifi cates to ger from Nepal has left the future duction, India has been Nepal’s major prove that Nepalese ginger was not of Nepal’s ginger farming highly buyer. poisonous and that it did not pose uncertain. Claiming that ginger However, India soon started any health risk. Entrepreneurs had being imported from Nepal con- mass production of ginger, making it then sent truckloads of the product tained a high level of pesticide resi- unnecessary to depend on imports to for a lab test in Kolkata. due, India has imposed the ban. It meet its market demand. As a result, It takes at least one week to get also claimed that Chinese ginger India has been steadily reducing the test results. However, the per- was being re-exported instead of imports from Nepal for the past two ishable item does not last that long. the Nepalese product. years, according to ginger farmers India’s move to ban ginger At present, when the season and entrepreneurs. without informing Nepal has put of ginger production is at its peak, According to the Nepal Ginger farmers and entrepreneurs in a India has been insisting on a com- Producers and Entrepreneurs Associ- diffi cult position. plete ban in the import of Nepalese ation (NGPEA), farmers and traders According to NGPEA, ginger ginger. Entrepreneurs trying to of Eastern Region, especially Jhapa, produced from various hills and export their products to India have Ilam, Taplejung and Panchthar, have plains of the country remains been told to compulsorily submit been directly affected by the ban. stalled in godowns. lab report on quality. NGPEA had recently sent its team The product, especially from The already diminishing to the Indian customs offi ce at Pani Mechi and Koshi, faces high risk of market for the country’s ginger Tanki, West Bengal for talks. The going to waste. (www.myrepublica. has been shrunk even further by team was assured that ginger would com, 05.09.2016)
Pakistan rejects Afghan demand to include India in transit trade
PAKISTAN has rejected the demand voiced by Afghan President Mr. Ashraf Ghani that India be made a party to its transit trade pact with Kabul, saying it is not possible given Islamabad’s sensitivities on security and other related issues. Mr. Ghani had threatened to block Islamabad’s trade access to Central en.dailypakistan.com.pk Asian States if New Delhi was not made a partner in the pact. Mr. Mohammed Nafees Zakar- ia, Spokesperson of the Ministry of Foreign Affairs, Islamabad, said that under the agreement, Afghan traders are allowed to move their products to India through the Wagah Border, but Mr. Ghani during a meeting with the block Pakistan’s trade access to Cen- were not allowed to carry back Indian United Kingdom’s special envoy for tral Asian States (CAS), if it did not goods. Afghanistan and Pakistan, Mr. Owen allow Afghanistan to trade with India The spokesperson was responding Jenkins, in Kabul on 9 September 2016 via the Wagah Border. (www.thehindu. to the reported comments made by Mr. Ghani had then threatened to com 09.09.2016)
Trade Insight Vol. 12, No. 3, 2016 7 report
LDCs: GraduaƟ on and beyond
GLOBAL poverty is increasingly migrants’ remittances, which were less concentrated among the 48 least-de- than half as much as ODA in the early veloped countries (LDCs). While their 1970s, are now three times as great as share in the world population has ODA. increased only from 9.7 per cent to At the same time, foreign direct 12.8 per cent since 1990, the propor- investment (FDI) rose by one third to tion of extreme poverty accounted for US$35 billion, most being directed to by LDCs has doubled from less than African LDCs. Contrary to worldwide 20 per cent to nearly 40 per cent. trends, workers’ remittances to LDCs UNCTAD’s (United Nation Con- also rose in 2015, reaching US$41.3 ference on Trade and Development), billion. Least Developed Countries Report The Report calls for an effective 2016 The Path to Graduation and Beyond: international support mechanism to Making the Most of the Process warns accelerate LDC’s progress towards that a global goal to halve the size of graduation. More importantly devel- the poor will be missed unless the oped countries need to give duty-free international community takes more and quota-free access for LDCs’ ex- action. ports. UNCTAD urges the developed Economic growth in the LDCs has countries to break the stalemate on declined since 2012, reaching a low of special and differential treatment for 3.6 per cent in 2015. The growth rate is LDCs in the World Trade Organiza- far below the target rate of at least sev- of 24. By 2025, only 16 countries are tion negotiations. en per cent per annum recommended projected to have graduated, including In addition, to bridge the technolo- by the 2011 Istanbul Programme of the four South Asian LDCs—Afghan- gy gap, improved technology transfer Action (IPoA). istan, Bangladesh, Bhutan and Nepal. to LDCs and operationalization of Depressed exports, with a smaller Only four countries have graduated technology bank are advocated. The decline in imports, have also led to in the 45 years since this classifi cation report also proposes a fi nance facilita- a doubling of the merchandise trade was established in 1971, including the tion mechanism to serve as a ‘one-stop defi cit of LDCs from US$36 billion Maldives. shop’ to improve LDC’s access to in 2014 to US$65 billion in 2015. The The Report says that the LDCs are development fi nance. services trade defi cit fell somewhat for caught in vicious circles, which do not Graduation of LDCs is only expect- the LDCs, from US$46 billion in 2014 let them attain sustained development ed to mark a move from economic de- to US$39 billion in 2015, as a shrink- and growth. Many LDCs suffer from pendence to a state of greater self-re- ing defi cit across African LDCs and a poverty trap, with low income and liance. Graduation would also mean Haiti offset an increasing defi cit across limited economic growth giving rise to that the countries would be stripped Asian and island LDCs. This largely high levels of poverty, which in turn off of all preferential treatment and accounts for an increase of almost one act as a brake on economic growth. support mechanisms being granted third in the LDC current account defi - Likewise, many suffer from a com- by developed countries. Structurally, cit to a record US$68.6 billion in 2015. modity trap, as they depend heavily they must transform into a competi- The sharp decline in commodity on commodity production, which tive economy resilient enough to stand prices has particularly affected African increases vulnerability to shocks such on their own. Thus, the emphasis is LDCs. Moreover, the current world as adverse terms of trade movements, on ‘graduation with momentum’. The economic climate is expected to fur- extreme meteorological events and concept also accords closely with the ther slow down the economy of LDCs. climate change impacts. These factors 2030 Agenda. Graduation of LDCs Accomplishing the goal of grad- in turn result in aid dependence and and achieving the Sustainable Devel- uating half of all LDCs to developing accumulation of foreign debt. opment Goals both require concerted countries by 2020 appears unlikely Offi cial development assistance efforts domestically and globally. because of their slow rate of progress. (ODA) to LDCs declined by 12.2 per This way, the LDCs can establish the According to the Report, only 10 cent in 2014 to US$26 billion—some foundation for their development and countries could meet the graduation 27 per cent of total aid to developing avoid the traps and pitfalls of the later criteria by 2020, against the target countries as a whole. By contrast, stages of the development process.
8 Trade Insight Vol. 12, No. 3, 2016 viewpoint
By the waters of Leman
Now that deep regional integration is out with recent developments, such as the Brexit vote and Donald Trump’s election, the WTO could again become an attractive forum.
Arvind Subramanian
FOR too long, the World Trade leadership would have to emerge. argument could apply equally well to Organization has languished, to lift And no single systemically important the management of receding powers. a reference from T.S. Eliot, by the country today meets the rigorous The WTO’s revival will not happen “waters of Leman” (Lake Geneva). requirements of such leadership: automatically. Willing stakeholders Once the world’s preeminent multi- internal political stability, economic must actively pursue it. The most lateral trade forum, the WTO has been dynamism, relatively contained risk obvious candidates for the job are the steadily marginalized in recent years, and a steadfast commitment to open mid-size economies like Australia, and recent rebukes of globalization, markets. Brazil, India, Indonesia, Mexico, New such as the United Kingdom’s Brexit A second development that bodes Zealand, South Africa, the UK and, vote and the election of Donald Trump well for the WTO is voters’ increasing possibly, China and Japan. They must as the American president, suggest rejection of hyper-globalization, which work collectively to defend open that this trend will accelerate. But goes beyond creating open markets to markets. these outcomes may actually have the include increased immigration in the Moreover, they must open their opposite effect, owing to three key US and Europe, harmonizing regu- own markets not only in the tradition- developments. lations and intrusive adjudication of al areas of agriculture and manufac- The fi rst development is the domestic policies. In the EU’s case, it turing, but also in new areas such as decline of alternative trade arrange- even entails a common currency. services, investments and standards. ments. The WTO reached its peak in Now that “deep” is out, the WTO In doing so, these countries would the early 2000s with more countries— could once again become an attrac- also be responding to the increasingly most notably China, acceding. tive forum. There will still be a lot of transactional approach to sustaining But major trade players like the globalization for the WTO to facilitate openness that the larger traders are United States (US) and the European and manage, because of the inexorable being compelled to adopt. Union (EU) subsequently shifted their march of technology. The mesh-like The world needs a robust response focus to bilateral, regional and me- structure of trade and investment to the decline of hyper-globalization. ga-regional deals like the Trans-Pacifi c connecting countries, embodied in Multilateralism, championed by mid- Partnership (TPP) and the Transatlan- global value-chains—what Aaditya size trading economies with a strong tic Trade and Investment Partnership Mattoo of the World Bank and I have interest in preserving openness, may (TTIP). Yet, those are precisely the called “criss-crossing globalization”1— be it. To the shores of Leman they deals that the Trump administration is will prevent signifi cant backsliding. must now head. rejecting, or, at least, postponing. The third development is a more The author is Chief Economic Adviser to The European integration had protectionist stance by the Trump the Government of India. This article is adapted a similar impact on the WTO, as it administration. If that were to happen, from Project Syndicate (https://www.project- provided an alternative platform for its trade partners are likely to turn to syndicate.org/, 22.02.2017). intra-European trade. But, the Euro- the WTO for adjudication. The WTO pean project has fallen on hard times, could, therefore, become the place Notes particularly with the UK’s impending where US trade policies are scruti- 1 departure from the EU. After Brexit, nized and kept in check. The univer- Mattoo, A., and Arvind Subramanian. 2009. “Criss-Crossing Globalization: or Britain’s exit from the EU, the WTO sality of WTO membership could be Uphill Flows of Skill-Intensive Goods will probably become an important its main strength, as it implies a high and Foreign Direct Investment”. Policy forum for its trade relations with the degree of legitimacy. Research Working Papers. Washington DC: The World Bank. world. In my book Eclipse2, I argued that 2 It is possible that regional trade multilateralism offered the best means Subramanian, A. 2011. Eclipse: Living in the Shadow of China’s Economic agreements in Asia and elsewhere for ensuring the peaceful rise of new Dominance. Washington DC: Peterson will continue to fl ourish. But, new powers. But, it seems that the same Institute for International Economics.
Trade Insight Vol. 12, No. 3, 2016 9 viewpoint Track II vital for climate change cooperation in South Asia
The engagement of non-governmental, unoffi cial contacts and activities between a host of stakeholders serve as an informal platform to foster cooperation in climate action.
Abid Qaiyum Suleri
limate change knows no national normal” would be the next “normal” diarrhoea cases and cholera outbreaks. Cboundaries as it affects the whole in the region. Unusual and unprec- Additionally, seasonal water scarcity, planet. However, its effects on regions edented spells of hot weather are rising temperatures and intrusion of and countries are disproportionate. expected to occur far more frequently sea water could threaten crop yields, Based on the level of adaptation, resil- and cover much larger areas in the further threatening the region’s food ience, and preparedness, some regions future. Rainfall is expected to become security. Should current trends persist, are more vulnerable to these changes more unpredictable. Abrupt changes substantial yield reductions in both as compared to others. South Asia is in the monsoon could precipitate a rice and wheat could be expected in one of the most vulnerable regions to major crisis, triggering more frequent the near and medium-terms. the impacts of climate change. Large droughts as well as greater fl ooding. In addition, increased risks of population, a strong dependence on Crop yields are expected to fall signifi - physical damage from landslides, agriculture, geographic location and cantly by the 2040s because of extreme fl ash fl oods, glacial lake outbursts and governance challenges make South heat. Although it is diffi cult to predict other climate-related natural disasters Asia susceptible to the ravages of future ground water levels, falling are also expected. Climate change is climate change. water tables could be expected to go also expected to have major health South Asia is already deeply down further on account of increasing impacts, increasing malnutrition and impacted by climate change despite demand for water from a growing related health disorders. Heat waves contributing relatively little to global population as well as from industry. are likely to result in a very substantial greenhouse gas (GHG) emissions.1 The Melting glaciers in the Himalayas rise in mortality and death. Climate region is currently experiencing rising and rising sea-level at the coastal areas change impacts on agriculture and temperatures, changing precipita- could signifi cantly hurt agriculture, livelihoods could also increase the tion patterns, more extreme weather affecting millions of livelihood while number of climate refugees leading to events, including intense fl oods, jeopardizing food security in the re- social confl ict. droughts and storms, and rise in sea gion. Melting glaciers and loss of snow These impacts are and will be felt levels. These changes have taken a toll cover of the Himalayas are expected most by those who are socially, eco- on the region’s economic performance to alter the fl ows of the glacier-fed nomically, culturally, politically, insti- and on the lives and livelihoods of rivers affecting irrigation. Similarly, in tutionally or otherwise marginalized. millions of poor people.2 the coastal areas, rising sea-level and In the South Asian context, these will These impacts are likely to worsen storm surges could lead to salt-water include those living under the poverty in the future as little has been achieved intrusion in the coastal areas, impact- line; women, children, the elderly, the so far in the attempts at mitigating and ing agriculture, degrading groundwa- disabled, tribal communities; those adapting to climate change. As far as ter quality, contaminating drinking living in landlocked countries, close climate change is concerned, the “ab- water and possibly causing a rise in to coastlines and on river banks; and
10 Trade Insight Vol. 12, No. 3, 2016 those who rely on agriculture for their relations among South Asian neigh- tries in South Asia, one important sup- livelihood. bours, it will be harmful for all parties port Track II can extend is in collating Given the vulnerabilities of these and could create situations which background data. This can be used countries and the impacts they face, further exacerbate tensions. For ex- to develop a shared repository for it is imperative for them to build ample, if India were to invest heavily evidence based analysis and assess- their climate resilience. Resilience is in hydropower to meet its energy ment. Civil society organisations have defi ned as the ability of a system and demands in an unsustainable manner, the capability and credibility to gather its component parts to anticipate, it could impact Pakistan’s downstream data and undertake situation analysis absorb, accommodate, or recover from water access. Additionally, India and and research studies. They can also pi- the effects of a potentially hazardous Pakistan must work with other nations lot initiatives to demonstrate effective event in a timely and effi cient manner, in the South Asia region, which is one ways of addressing climate change. including through ensuring the pres- of the least integrated regions of the Knowledge thus generated can ervation, restoration, or improvement world, to develop a regional climate immensely help the Tack I offi cial of its essential basic structures and strategy. diplomatic processes at the regional functions.3 A regional climate change strategy forums. It can bring together the South Climate resilience and adaptation could address, among others, areas Asian governments and encourage are often used interchangeably. How- such as enhancing water security, them to renew their resolve to jointly ever, resilience is a broader term than supporting vulnerable communities, address climate change challenges. adaptation. South Asia should opt for promoting energy security and miti- The engagement of ‘non-state ‘adaptation’ strategies that typically gating climate induced disasters. actors’ could also contribute towards involve specifi c actions by decision Given the animosity among the implementation of the common makers in response to a current or an- SAARC (South Asian Association for positions taken by the countries on ticipated threat that exceeds a thresh- Regional Cooperation) member states, the global agenda. One example is old of acceptable impact. For example, ‘Track II’ diplomacy involving non- the Sustainable Development Goals creating urban canopies as shades state actors such as non-government (SDGs)—which has included ‘Climate against heat waves is an adaptation organizations, scholars, experts and actions’ as one of the 17 goals—that strategy. academics, becomes vital in strength- will govern the post-2015 develop- In addition to adaptation meas- ening overall cooperation in South ment landscape. It is thus imperative ures, there is a need to work towards Asia. This approach can certainly be for the South Asian countries to put in creating a climate resilient South Asia. effective for reducing vulnerability to place laws and institutions, in coher- The focus here must be on building climate change and enhancing climate ence with the SDGs, and take urgent the overall adaptive capacity of soci- resilience in the region. Track II actions to combat climate change and eties and their ability to increase such engagement of non-governmental, un- its impacts. capacity. Creating and enhancing re- offi cial contacts and activities between Dr. Suleri is Executive Director, Sustain- silience to climate change can, in fact, scholars, organizations and a host of able Development Policy Institute (SDPI), open a window of opportunity for co- other stakeholders, may serve as an Islamabad. This write-up has benefi ted from dis- operation among regional neighbours informal platform to foster coopera- cussions that took place in a Track II dialogue who have common socio-economic tion in climate action. It can help draw on climate change jointly organized by SDPI and socio-cultural contexts. lessons from best adaptation practices and Development Alternatives Group, New Given the scale of climate change and build social resilience. Delhi in 2016. impacts, any step that South Asian The Track II approach to fi ght countries take independently to com- climate change is also an important Notes bat them are likely to be insuffi cient. opportunity to engage South Asian In order to make any real progress, a experts and infl uential persons in the 1 http://www.wri.org/resources/data-sets/ coordinated effort is crucial. Likewise, climate change discourse. Such emi- cait-country-greenhouse-gas-emissions- there is plenty that these countries can nent personalities may be in a better data learn from each other. For example, position to sensitize policy makers 2 Ahmed, M. and S. Suphachalasai. 2014. Pakistan has just started to promote on climate change. In addition, there Assessing the costs of climate change solar energy generation while the is also a need that people to people and adaptation in South Asia. Philip- pines: Asian Development Bank. system is well established in India and interactions be facilitated including 3 IPCC. 2012. Managing the Risks of Ex- rural Nepal. youths, journalists, local governments, treme Events and Disasters to Advance In the past, historical baggage research institutions and private sector Climate Change Adaptation. A Special prevented many South Asian coun- and civil society organisations. Report of Working Groups I and II of tries to collaborate to improve human Given the existing level of engage- the Intergovernmental Panel on Climate Change. Cambridge University Press, development. If climate change goes ment of ‘non-state actors’, in climate Cambridge, UK, and New York, NY, unaddressed due to poor bilateral change cooperation in various coun- USA, 582.
Trade Insight Vol. 12, No. 3, 2016 11 cover feature Peace and harmony for development in South Asia
Manish Thapa
outh Asia, which consists of eight Sstates of different sizes and capabil- ities, is characterized by high levels of insecurity in its inter-state, intra-state and human dimensions.1 Although most emerged as independent nations in the 1940s, they have not yet been able to settle their confl icts—both internal and external. Some have even become the epicentres of confl icts. A large set of factors are responsible for the presence of multi-faceted confl icts
12 Trade Insight Vol. 12, No. 3, 2016 including irreconcilable national, comes from incidents perpetrated by tions for many Pakistani youth joining sub-national and religious identities; left wing extremist groups (“Naxalite” radical religious movements that now lack of political development (i.e. ab- movements) in many states of India. have emerged as a major challenge.3 sence of proper democratic institutions The third source of increasing vio- In Sri Lanka, the Liberation Tigers and procedures); weak economies; a lence in India stems from incidents of of Tamil Eelam (LTTE) had been bulging unemployed youth; unsettled terrorism in India’s cities, such as the conducting an armed campaign for territorial disputes; and lack of region- Mumbai attack of 26 November 2008. a separate Tamil homeland since the al institutions. Maldives has suffered acute early 1980s, which came to an end in political instability for several years, 2009 after government forces quashed Harmony of contrasts and a new cycle of chaos and unrest the armed revolt. Still, the island The South Asian scene, which was appears to be intensifying. Continued nation may not achieve long-term once described as a 'harmony of con- political instability in the Maldives peace without properly resolving the trasts’, used to give a different picture. could damage its vital tourist trade, aspirations of the Tamil population. These very contrasts with strong polit- a key employer and earner of foreign Besides internal problems within ical and psychological undercurrents exchange. The Maldivian economy has each South Asian state, they are also became violent and caused recurrent faltered in recent years and the coun- engaged in inter-state confl icts. South divisions. try suffers from overcrowding, high Asia is one of the ‘critical regions with Afghanistan, situated in the unemployment rates and substance complex security’ primarily due to western periphery of the region, is an abuse. Political instability, organized the fact that most South Asian states extreme case of long-standing exter- corruption, youth unemployment, are engulfed in varying degrees of nal penetration and internal violence, gang related violence and a rising sea confl icts and disputes. Probably, the largely bred by the absence or the level due to climate change are threat- highest number of inter-state confl icts non-establishment of a strong state.2 ening the very existence of this tiny plague the region compared to any Confl ict has been a feature of life archipelago. other regional blocs. Bilateral rela- in Afghanistan since King Zahir Shah Nepal recently had a violent inter- tions are defi ned by antagonism and was deposed in 1973. nal conflict, which has made a crucial mistrust. For example, many problems Bangladesh exhibits several inter- turn for a resolution. But prolonged between India and Nepal originate nal confl icts, with the army and po- chaos and political instability breed from the open border between the two litical parties waging frequent battles many challenges that need to be over- countries. There are disputes between for the control of state power. Political come for a peaceful settlement of this India and Bangladesh over illegal instability, weak governance and conflict. The unstable political envi- migration from the CHT and also in extreme poverty are a major source of ronment, poverty and growing ethnic sharing the waters of Ganges and socio-political tensions. Incidents of tensions and religious fragmentation Teesta.4 terrorism have been on the rise since are some elements, which could renew Similarly, the cultural diversity 2002, mostly in the forms of bomb violence if not handled carefully. based on language, religion and eth- blasts orchestrated by Islamic funda- Pakistan has been facing several nicity is another factor that prevents mentalist groups, recent hackings of internal conflicts on religious and the region from uniting. Rather, it secularists, as well as an ongoing sepa- ethnic lines. The diffi culty of maintain- frequently exerts a negative pressure ratist movement in the Chittagong Hill ing a functional democracy, lack of a on inter-sate relations in most of South Tracts (CHT). proper federal structure and economic Asia, especially due to differences Bhutan, the so-called land of integration of provinces are some of originating from the days the colonial the thunder dragon and the last Pakistan’s woes. Pakistan’s education masters left the subcontinent. The area Shangri-La, is now facing an immense system is such that 70 per cent of its is characterized by countries which challenge due to its deteriorating primary education is offered through have had widely differing political environment and its rising youth religious seminaries or madrasahs. This systems—democracies, military dicta- unemployment, which is around 7.3 absence of a liberal education system torships and monarchies. per cent, amid an external debt that has been blamed for generating condi- Though most South Asian states has soared to nearly 90 per cent of its emerged from a shared colonial Gross Domestic Product (GDP). past—similar political experiences and India, the largest democracy in the common social values—divergences, world, has three main sources of inter- Besides internal prob- however, are still signifi cant. India and nal confl icts. First, there are long-run- lems within each South Sri Lanka are said to have performed ning separatist movements in several Asian state, they are better in the political sphere than north-eastern states (Assam, Mani- other functioning democracies that also engaged in in- pur, Nagaland, Tripura). The second have varying degrees of success. The source of internal violence in India ter-state confl icts. beginning of the 1990s witnessed a
Trade Insight Vol. 12, No. 3, 2016 13 cover feature
sweeping democratic transition in the meeting, held on 12–13 November the region is adopting new ways of region. But in a long-term perspective, 2005 in Dhaka, SAARC’s membership cooperation. Several of them have seen Pakistan and Bangladesh have yet to was expanded to include Afghanistan. sub-regional or multilateral dialogues institutionalize democracy and con- SAARC was created for cooperation and cooperation, which bypass the fi rm that their political systems have in the socio-economic fi elds, based on regional mechanism, as a way out. the capability to keep the military out respect for the principles of sovereign Even in bilateral discussions, countries of politics. Nepal’s messy transition equality, territorial integrity, political are devoting more time to these novel to multi-party democracy is at the independence and non-interference in methods. For example, the Bangla- crossroads following the demise of its the internal affairs of members. desh, Bhutan, India, Nepal (BBIN) monarchy after a decade old Maoist Cooperation within SAARC was sub-regional initiative was envisioned insurgency. Bhutan retains the au- designed to complement both bilateral to improve economic cooperation thority of its monarch as the dominant and multilateral relations of SAARC and connectivity among the four institution, while the Maldives’ rocky states. All decisions within SAARC South Asian countries. For India, this experience with multi-party politics are taken on the basis of unanimity. initiative allows it to bypass some of has not been deemed a failure so far. Bilateral and contentious issues are the more complex political issues of Culturally, South Asian countries can- excluded from the group’s delibera- SAARC and engage in direct discus- not be simply lumped together. The tions (Article X of the Charter).6 Yet sions on connectivity with Bhutan, integration of the region becomes less numerous confl icts and challenges Bangladesh and Nepal. This initiative likely under the present circumstances impede full cooperation for their eco- is expected to help landlocked Bhutan marked by, among others, divided nomic development. For regionalism and Nepal integrate more effectively politics, diverse allegiances, differing to be effective, South Asia requires with the global economy. This is tes- perspectives and cultural policies.5 confi dence building at multiple levels timony to the region’s recognition of of relations. regional and sub-regional multilateral- Regionalism in South Asia Bilateralism has traditionally been ism as an effective tool to build confi - South Asia has had a long history of South Asia’s mainstay in weaving dence and to ease bilateral tensions. engaging in the region-building exper- regional relationships. While a certain The momentum towards regional iment that is epitomized by the found- degree of multilateralism has existed cooperation in South Asia was gen- ing of the South Asian Association for in the region, it has long been margin- erated against a backdrop of globali- Regional Cooperation (SAARC). South alized. Despite the creation of SAARC, zation and the sway of transnational Asian heads of state and government the regional institution is proving to issues creeping into their domestic formally adopted the Charter of the be dysfunctional in setting up effective agenda. There is no denying that SAARC on 8 December 1985, with and viable multilateral cooperation South Asia must work on a multilat- Bangladesh, Bhutan, India, Maldives, mechanisms. eral platform to deal with growing Nepal, Pakistan and Sri Lanka as its To come out of the bilateral suspi- traditional as well as non-traditional members. At the 13th SAARC summit cions and multilateral incompetence, security threats such as terrorism, www.thedollarbusiness.com
14 Trade Insight Vol. 12, No. 3, 2016 pandemics, piracy and energy. These issues are transnational in nature and Box have induced the countries to coop- Non-tradiƟ onal security threats erate for pragmatic considerations, i.e., to promote functional coopera- Present-day diplomats are confronting new issues that challenge the tion. Similarly, broader non-military very concept of what constitutes a security issue. Non-traditional problems such as “economic security,” security (NTS) issues—such as transnational crime, terrorism, dis- “food security,” “energy and resource aster relief, information security, climate change, and public health security,” and “environmental secu- epidemics—are now considered core national security issues. rity” can only be addressed through The rise of NTS issues presents new challenges for developing a 7 regional cooperation. regional security architecture—What traditional and non-traditional Nowhere in the world are prob- issues can be considered true security issues? Does the state remain lems and challenges of security and the exclusive actor of international politics? Does individual security development more prominent than derive from national security? How can the military adapt to non-tra- in South Asia. More than 200 million ditional security issues? people live in slums, and about 500 Such questions present serious obstacles to establishing a formal million go without electricity. Still, security architecture for the NTS portfolio. Still, there remains a gen- 42 per cent of the world’s poor live in uine regional interest in deepening multilateral and bilateral security South Asia—more than in any other cooperation. region of the world. In addition, many It is necessary to defi ne what constitutes a security issue today. countries in the region suffer from Scholars have found that classical frameworks are not easily adapted extreme forms of social exclusion and to the contemporary security landscape. They instead turn to novel huge infrastructure gaps. The larger approaches to security studies, including ‘securitisation theory’. This countries are experiencing increases concept provides an analytical framework which adapts well to both in inequality. The region, home to traditional and NTS issues as well as state and non-state actors. By half a billion poor, remains key in the focusing on whether a given issue represents an existential threat— fi ght against global poverty and for typically to a state or non-state actor—securitisation theory enables prosperity goals. analysts to both expand and limit the fi eld of security issues. The multiplicity of intra-state Traditionally, adherents of securitisation theory recognize specifi c and inter-state armed confl icts and categories of security issues. According to Barry Buzan, these include multitudes of security threats—from fi ve general categories: military, environmental, economic, societal both traditional and non-traditional and political issues. It is from broad categories such as these that sources—have foisted the concept security analysts can distil individual risks and threats. of inter-linking the nexus of peace (security), harmony (cooperation) and development. A focus on economic Source: Adapted from Walsh (2011)8 and security integration in South Asia can provide an innovative perspective and context for understanding the place between the two. Different The emerging post-Cold War connections within this nexus. The worldviews, organizational cultures, debate is on the securitization of inextricable link between economic and concerns have shaped the specifi c development, i.e. treating develop- regionalism and security integration approaches of scholars and practition- ment as a security issue because wars highlights the fact that it is impossible ers in both areas. This divergence has and armed confl icts exacerbate the to achieve the economic growth and contributed in the creation of, what problems of underdevelopment and development objectives of integration some have labelled, a security-devel- insecurity. The problems of under- in an environment of distrust, armed opment gap. development- such as poverty, social confl icts and perpetual political insta- After the end of the Cold War, and exclusion and gross violations of bility in the region. The driving force especially in the post-9/11 era, the human rights- in some cases instigate for any regional economic integration complex relationship between security violent confl icts.9 The World Bank’s initiative in contemporary world poli- and development has increasingly World Development Report 2011 on tics has always been economic growth been understood to be interlinked. “Confl ict, Security and Development” and development for maintaining And, the lack of security for large stated: “One-and-a-half billion people regional peace and security. parts of the world’s population live in areas affected by fragility, Traditionally, “security” and “de- remains a main obstacle for the post- confl ict, or large-scale, organized velopment” have been separate policy 2015 development agenda: the Sus- criminal violence, and no low-income fi elds without much exchange taking tainable Development Goals (SDGs). fragile or confl ict-affected country has
Trade Insight Vol. 12, No. 3, 2016 15 cover feature
yet to achieve a single United Nations their survival, well-being and dignity, ation for prosperity, (3) inter-civili- Millennium Development Goal (UN at both the individual and societal zational dialogue for mutual respect, MDG).”10 levels.11 and (4) strengthening of SAARC and Thus, there is a broad consensus South Asian states do not have a institution building to achieve all the that development and security are clear common conception regarding other goals to becoming a harmonious inextricably linked. Development is NTS. What kinds of concerns/threats region. impossible in a security vacuum and fall under NTS? Despite the emerg- Dr. Thapa is Head of Department and Resi- a country which is underdeveloped ing trend toward security framing, dent Professor of International Peace Studies, risks being mired into a protracted there is yet to be a consensus on what United Nations mandated University for Peace confl ict. Goal 16 of the SDG is ded- NTS really means. The issues that (UPEACE), Costa Rica and Visiting Professor, icated to the promotion of peaceful fall under NTS are often contextually Institute of International Relations, University and inclusive societies for sustainable defi ned. What may be an NTS issue of Warsaw, Poland. development, the provision of access in one country—such as economic to justice for all, and building effective, security, food security and energy accountable institutions at all levels. security—could already be part of Notes South Asian countries have seen the traditional concept of security in 1 Paul, T.V. ed. 2010. South Asia’s weak within the last decade that the region another. For example, energy securi- states: understanding the regional inse- confronted a series of major security ty, which is considered as one of the curity predicament. Stanford: Stanford challenges threatening their economic component of the NTS framework, has University Press. development. They have thus seen long been one of India’s traditional 2 ibid. the security and development nexus security issues. With the increase in 3 ibid. at play. From terrorism and natural NTS threats, the impetus for effective 4 Thapa, Manish. 2011. Non Traditional disasters affl icting parts of the region regionalism has become more urgent Security Cooperation Framework: A Step Towards Regionalism in South with a greater frequency to the loom- and securitization of development on Asia. Global Consortium on Security ing threat of pandemics, it has become a regional platform is the need of these Transformation (GCST). GCST New clear that non-military threats to the challenging times.12 Voices Series: 15. security of states and societies must 5 ibid. be addressed urgently and com- Harmonious world 6 For the history of SAARC and its docu- prehensively. A number of security Peace and harmony for development ments see the association’s website at URL
16 Trade Insight Vol. 12, No. 3, 2016 regionalism South Asia’s drivers of regional integration
The three interconnected drivers for a deeper regional integration are: economic drivers, political economic drivers and extra-regional drivers.
Selim Raihan
here are now convincing evidences The political economic drivers are The fi nal and most critical politi- Tthat deeper regional integration is of fi ve types. The fi rst are the ‘prima- cal economic driver is the role of the needed in South Asia to generate and ry institutions’, the offi cial regional ‘political elite’. Strong and visionary sustain economic growth, alleviate institutions stationed in the respective leadership is needed to eliminate any poverty, ensure food security and a countries to carry out the agenda of ‘trust defi cit’ in the region, which can larger participation in the global value regional integration. The South Asian emerge from a variety of ‘structural chain. Furthermore, peace dividends, Association for Regional Cooperation factors’ mentioned above. Such ‘trust through stable intra-country political (SAARC) Secretariat and relevant defi cit’ is often cited as a major barrier relations, will be immensely high. ministries in the member countries are for regional integration in South Asia. those institutions. The second political There are concerns from smaller Drivers of deeper integration economic driver is made of ‘second- countries in South Asia with regard to From a political economic perspec- ary institutions’—the private sector, their growing bilateral trade defi cits tive, the three interconnected drivers private sector associations, civil society with India. These concerns have led for a deeper regional integration are: organizations and the media. The third especially Bangladesh and Nepal to economic drivers, political economic is ‘regional public good’-- regional maintain long sensitive lists of prod- drivers and extra-regional drivers. infrastructure and the state of regional ucts exempted from free trade under The economic drivers are the four trade facilitation. South Asian ‘region- South Asian Free Trade Area (SAF- integration processes: market, invest- al public good’ is very weak. TA). They fear import surges from ment, growth and policy integration. ‘Structural factor’, the fourth India could worsen their trade defi cits. ‘Market integration’ emphasizes political economic driver, includes Also, there are apprehensions about integration in trade in goods and historical processes and geographic the leadership, especially in India, that services through the removal of tariff factors that shape political, economic hesitates or is inconsistent in taking and non-tariff restrictions. ‘Investment and socio-cultural institutions. The the regional integration agenda to a integration’ calls for promotion of re- landlockedness of Nepal, Bhutan and higher level. gional investment and trade nexuses. Afghanistan, political rivalry between Finally, extra-regional drivers in- ‘Growth integration’ is the integration India and Pakistan, and differences clude a wide range of global economic of economic growth processes where- in size of the members, where India and political factors that can have by growth in one country benefi ts accounts for around 80 per cent of the infl uence over the region. growth processes in other member regional GDP as well as population Though there is a strong demand countries. Finally, ‘policy integration’ and trade among South Asian coun- for a deeper regional integration in is the harmonization of economic and tries primarily through land borders, South Asia, progress towards that trade policies of the countries. are all such structural factors. has been rather slow. Not only the
Trade Insight Vol. 12, No. 3, 2016 17 regionalism
intra-regional trade in goods have barriers (NTBs), POs and lack of trade been low, intra-regional services trade facilitation are responsible for a high and intra-regional investment are also degree of transaction costs in bilat- insignifi cant. eral trade in the region. Therefore, a Furthermore, actual implemen- reduction in such transaction costs by tation of agreements often does not streamlining NTMs or elimination of match the declared ambitions. Lack of NTBs would generate larger welfare political will and leadership, institu- gains for all the South Asian countries. tional weaknesses and capacity and Streamlining of NTMs and removal of resource constraints have been argued associated POs are likely to intensify to be the major impeding factors. The further market integration in South political rivalry between India and Asia as this would lead to the devel- Pakistan has often constrained SAARC opment of regional value chains. This from becoming a functional regional will also encourage larger intra- and forum. The recent cancellation of the extra-regional investments, which can SAARC summit casts a dark shadow be instrumental for growth integration over the progress towards a unifi ed among these countries. To make these South Asia. There is also no positive happen, there is a need for policy indication that the situation will integration among the South Asian improve in the near future. All these countries. suggest that the critical driver, i.e. Despite the weak political eco- the political economic driver, is very nomic driver coming in the way of weak, making effective regional inte- a deeper integration, there are signs origin are there to avoid unintended gration a formidable challenge. of heightened ‘new’ commitments trade defl ections. Deeper integration among the among the political elites of some of Meanwhile, due to various proce- South Asian countries has also been the South Asian countries. The recent dural obstacles, which are related to impeded by several non-tariff meas- speedy resolution of Land Boundary insuffi cient and poor infrastructure, ures (NTMs) and associated pro- Agreement between Bangladesh and complicated bureaucratic process- cedural obstacles (POs), which are India, the positive reception of the es, delays, corruption, and frequent exacerbated by a lack of trade facili- India-Bangladesh Maritime Arbitra- changes in the policies, many legiti- tation undertakings and cumbersome tion Award announced in July 2014, mate NTMs turn into NTBs. In South customs procedures at land border establishment of border haats along Asia, a signifi cant part of the NTBs ports. As far as intra-BBIN (Bangla- the border between India and Bang- is related to procedural obstacles. desh-Bhutan-India-Nepal) trade is ladesh and the BBIN (Bangladesh, Therefore, policy effort is critical to concerned, there is substantial poten- Bhutan, India, Nepal) Motor Vehicle ensure that NTMs serve their intended tial for boosting intra-regional trade. Agreement are signs of such political legitimate purposes. However, even with India already commitments. There is a need for cooperation providing almost full duty-free-quo- However, the BBIN Motor Vehicle among different primary institutions ta-free market access to exports from Agreement is yet to be implemented in South Asian countries to deal with South Asian least-developed countries properly and a large scale infrastruc- NTMs and POs. There are already (LDCs)—Bangladesh, Nepal and Bhu- tural development is needed for this some initiatives for such cooperation. tan—are facing escalated challenges in to happen. Also, the aforementioned For example, Bangladesh Standards securing and increasing their exports ‘new’ commitments have yet to be and Testing Institute (BSTI) and the to the Indian market. These challeng- translated into resolving the related Bureau of Indian Standards (BIS), es are related to their limited export NTMs and POs. the two organizations controlling the capacity, lack of diversifi cation of their It is important to emphasize standards of products and services in export baskets and various NTMs and that many NTMs are legitimate and their own countries, have signed an POs both at home and in the Indian thus cannot be negotiated away. For agreement to add an impetus to trade market. example, sanitary and phytosanitary between the two neighbours. (SPS) measures and technical barriers However, cooperation is still Trade is the key driver to trade (TBTs) are there to protect needed in a number of areas: (i) har- There are much larger welfare gains consumers and the environment; monization of TBT and SPS measures; in South Asia from a reduction in pricing and licenses are there to regu- (ii) Mutual Recognition Agreements transaction costs in bilateral trade late domestic markets; anti-dumping (MRAs) among respective organiza- than a mere tariff cut. There is no duties, subsidies, quotas are there to tions of South Asian countries; (iii) denying that NTMs and non-tariff protect domestic fi rms; and rules of allocation of adequate human and
18 Trade Insight Vol. 12, No. 3, 2016 Overcoming barriers market. Until then, they will not be Poor trade infrastructure and lack of able to diversify their exports and be- trade facilitation are also major chal- come competitive in the regional and lenges hindering cross-border trade international markets. among the South Asian countries. A number of supply side factors at Most of the trade happens through home can actually undermine the ex- land ports in South Asia. The con- porters’ competitiveness and constrain ditions of these ports are far from economic and export diversifi cation. satisfactory. Ineffi ciency and excessive These factors are directly associated costs at ports are further exacerbat- with the domestic production and ed by poor customs services. Apart investment environment. Most promi- from the delay in obtaining customs nent of these factors are limited access clearance, payment of ‘extra’ money to fi nance, weak physical infrastruc- is required to complete the formalities ture, ineffi cient ports, high transport and procedures. Also, inland transpor- costs, shortage of skilled workers, tation suffers from poor road net- technological bottlenecks, lack of works. All these substantially increase entrepreneurship and management the cost of production. Under these skills, lack of information and high circumstances, many exporters fi nd it costs of doing business. extremely diffi cult to be competitive. There is a need to put more weight Recent initiatives to solve the trade on the regional investment and trade infrastructural problems at the border nexus. Promotion of intra-regional in- fi nancial resources to standards organ- include the setting up of Integrated vestments and attracting extra-region- izations; (iv) setting up accreditation Check Posts (ICPs) at major land entry al Foreign Direct Investments (FDIs) in centres by the accreditation bodies or points to Bangladesh by the Govern- goods and services sectors, in general, agencies of partner countries in col- ment of India. The move is expected to and energy and infrastructural sectors, laboration with a designated national overcome the existing infrastructure in particular, will be a key driver for agencies to facilitate mutual coopera- problems and lack of support facilities South Asia’s regional integration tion; (v) expediting and prioritization on both sides of the border. It also success. of automation of customs clearance caters to a growing demand of traders. procedures; and (vi) strengthening Such ICPs need to be established at the Sub-regional pressure the South Asian Regional Standards borders between India and Nepal, be- Finally, despite the growing frustra- Organization (SARSO), a common tween India and Bhutan and between tion over the SAARC process, there certifi cation panel for SAARC member India and Pakistan. are genuine reasons to keep it alive. countries, that have been developing The largest export market in South There should be efforts to bring down harmonized standards for the region Asia is the Indian market, the size of the political rivalry in South Asia. The to facilitate inter-regional trade. which was around US$460 billion in roles of civil society, the private sector There is a need to pursue a policy 2014 as per India’s total import fi gure. and the media are very important advocacy strategy to deal with NTMs. The other three major markets are in exerting pressure for the sake of It should be kept in mind that the Pakistan (US$59 billion), Bangladesh regional stability and peace. Whatever policy makers need to hear very clear (US$46 billion) and Sri Lanka (US$21 achievements there are, we cannot analysis, the necessary information billion). Bhutan has, however, a very afford losing them. An intermediate and updated data on NTMs in their small market of US$1 billion, where- answer for the current deadlock can be country and the region as a whole. as Nepal’s is worth around US$8.5 sub-regional cooperation like the BBIN These need to be relevant and they billion. initiative, which is a sub-regional coor- should be accompanied by concrete It should also be kept in mind that, dinative architecture of several South examples of effective measurable though smaller countries in South Asian countries. The effectiveness of actions. Vague analysis or recommen- Asia primarily aim to increase their such sub-regional systems can exert dations should be avoided as they exports to the Indian market, there is a some positive pressure on the region might make the advocacy ineffec- sizeable scope for increasing bilat- as a whole towards avoiding confl icts tive. Analysis should be discreet and eral trade even among these smaller and paving the way for deeper region- specify how much of any NTM has to countries. In this regard, exporters’ al integration. be solved by the partner country and domestic capacity in smaller countries Dr. Raihan is Professor, Department of how much of it is actually related to of South Asia need to be improved to Economics, University of Dhaka and Executive exporters’ lack of capacity to meet the meet different international standards Director, South Asian Network on Economic required standards. as well as the standards of the Indian Modeling (SANEM), Dhaka.
Trade Insight Vol. 12, No. 3, 2016 19 sustainable development goals SDGs can end poverty in South Asia permanently
South Asia has reduced extreme poverty by 54.7 per cent since 1990, passing the MDG target of 50 per cent.
Nagesh Kumar, Matthew Hammill, Selim Raihan and Swayamsiddha Panda
he 17 Sustainable Development fi nancial crisis and in recent years. At A defi ciency that exist in the region. TGoals (SDGs) enshrined in the the same time, South Asia needs to Agriculture supports nearly half of the 2030 Agenda, adopted at the United improve its pro-poor focus of growth. population of South Asia and any im- Nations by its 193 Member States, GDP per capita in South Asia grew provement in agricultural productivity represent a new global development by nearly 1.5 times (141%). Poverty would reduce poverty. A new green compact. halved over the same period. Recent revolution based on sustainable agri- estimates show that the poverty culture seeking to double agricultural SDGs from MDGs elasticity of growth in South Asia for productivity, an SDG target, would The SDGs build upon and extend the 1990-2005 was low for Bangladesh, In- have wide-ranging effects for not only United Nations’ Millennium Develop- dia and Sri Lanka, at nearly zero, 0.35 hunger but also poverty reduction, job ment Goal (MDG) agenda that ended and 0.67, respectively. Greater poverty creation and inequality reduction. in 2015. South Asia has achieved a reducing impacts for each percentage number of MDGs including the goal of growth were registered for Bhutan Access to education and health for all of halving extreme poverty, but it still and Nepal, with poverty reductions South Asia achieved the MDG targets represents the largest concentration of of 0.91 per cent and 1.19 per cent for on universal primary enrolment and poverty and hunger in the world. each percentage of growth in GDP per primary completion. However, there The global achievement in the capita.1 are no commensurate improvements MDGs was driven by China. But, in learning levels. Education quality, South Asia will be the key region that Hunger and food security especially in rural areas, is poor. This will determine the global achievement South Asia continues to be one of the is partly explained by low public ex- of the SDGs. largest hunger hotspots in the world, penditure on education as a percent- To meet the SDGs, South Asia with one in fi ve people undernour- age of GDP, ranging from two per cent must tackle the following issues: ished. A sustainable solution of food in Bangladesh, 3.8 per cent in India, security and the hunger challenge 2.5 per cent in Pakistan and 1.6 per Extreme poverty and inequalities in South Asia requires a focus on cent in Sri Lanka, well below the rec- South Asia has reduced extreme enhancing agricultural productivity to ommended threshold of six per cent.2 poverty by 54.7 per cent since 1990, enhance food availability as well as on Similarly, South Asia has made passing the MDG target of 50 per cent poverty reduction and food distribu- notable progress towards health-re- with a comfortable margin. Poverty tional aspects. It also requires focusing lated MDGs. Maternal mortality rates reduction occurred in accelerated on nutritional aspects to address the declined by 67 per cent between 1990 bursts, immediately before the global high levels of anemia and Vitamin and 2015 but still fell short of the
20 Trade Insight Vol. 12, No. 3, 2016 Development’s wide spectrum
The 2030 Development Agenda for Sustainable Development adopted at the end of 2015 comprises 17 SDGs and 169 targets—encompassing three core dimensions of economic, social and environmental de- velopment. The SDGs cover four broad areas that carry forward the unfi nished MDG agenda and factor in lessons learned from implementing the MDGs.
Goals carrying forward the unfi nished agenda of the MDGs Achieving the fi rst seven SDGs requires completing the task of providing basic human development needs and services that began with the MDGs. The region today represents the largest concentration of poverty, hunger and other deprivations in the world. Unlike MDGs that targeted reduction in dep- Goals enhancing development rivations, SDGs seek to leave ‘no one behind’ and drivers and cross-cutting issues provide a life of dignity to all. SDGs 8-10 incorporate the common drivers and cross-cutting issues that are essential to drive sustainable development across all of the dimensions. South Asia’s investment in growth, infrastructure, inclusion and ur- banization will act as the engine that drives sustainable development. The region faces signifi cant gaps in these areas, but there is cur- rent enormous momentum and political will for strategies that can be leveraged to produce concrete actions.
Goals harnessing Goals enhancing aspects the global of environmental sustainability partnership for Today there is greater recognition and development better understanding of sustainability Promoting peaceful challenges compared to the turn of the and inclusive societies century, when MDGs were defi ned. and providing adequate means of implementation for SDGs 11-15 focus on key environmental sustainable development in South Asia is critical for long- and resource dimensions for sustainable term sustainability and intergenerational equity (SDGs development. Policy design must pivot 16-17). Investing in solid policies, institutions, coordi- to promote sustainable growth paths and nation and monitoring will lock in gains and increase create an environment of markets, incen- resilience in the face of shocks and create a stimulating tives and regulation that can foster cleaner, environment for cooperation and support in providing leaner innovations and more effi cient and the means of implementation to achieve the SDGs and sustainable production, consumption and transform the region in a generation. solutions.
Trade Insight Vol. 12, No. 3, 2016 21 sustainable development goals
MDG target of a 75 per cent reduction. 9) but also in basic needs infrastruc- transformation away from agricul- South Asia’s under-fi ve mortality rate ture, such as access to sanitation (SDG ture to manufacturing’s formal and stood at 53 deaths per 1,000 live births 6) and access to electricity (SDG 7).4 To productive work. But, the transfor- in 2015. Public health expenditure close these gaps, they require large- mation in South Asia has bypassed was just 1.4 per cent of GDP in 2014, scale resources, estimated at about manufacturing and other industry to compared with the world average of US$2.5 trillion, by 20205 and US$4 move on to services. As a result, its six per cent and about eight per cent in trillion to US$5 trillion by 2030.6 share in GDP has remained virtually high-income Organisation for Eco- Recent research suggests that at the same level since 1991, among nomic Cooperation and Development Bangladesh could increase its GDP by the lowest in the Asia and Pacifi c. Fos- (OECD) countries. eight per cent and household incomes tering manufacturing can lead to faster by six to eight per cent by improving poverty reduction through job creation Gender equality its utilities, transport and social servic- and other externalities than through South Asia has made progress in es infrastructure through a 20 per cent growth generated in other productive specifi c gender-equality-related MDG boost in fi nancing.7 In Pakistan, a four sectors. targets including gender parity in per cent boost in infrastructure invest- This is where the SDG 8 target, primary education and large gains for ment could increase long-run GDP of increasing the share of industry girls’ enrolment rates in secondary by 1.3 per cent and household income in GDP, and doubling it for least-de- education. Still, it remains a gender by 1.2 per cent, while also decreasing veloped countries (LDCs), comes. inequality hotspot. Realizing gender poverty by 0.4 per cent and reducing However, industrialization should be equality gains of the fastest improving inequality.8 fostered in a more sustainable manner country could provide enormous than in the past, through effi cient economic gains alone, adding an Sustainable growth and decent jobs use of energy and raw materials with additional annual GDP of US$700 In contrast to South Asia’s status as emphasis on recycling. billion and US$100 billion by 2025 the fastest growing region in Asia and (representing increases of 16 per cent the Pacifi c, employment growth has Potential for renewable energy and 11 per cent) in India and South been declining. Eighty per cent of its South Asian countries can address Asia respectively. Achieving gender workers are working informally, with their energy scarcity by relying more equality in the region’s labour markets little or no protection or rights. Such on renewable energy. They would could add as much as US$2.9 trillion work is low in adding value and fails then benefi t from spillovers into fi scal in India and US$400 billion in other to stimulate investments in human and foreign exchange savings spent on countries in South Asia in their annual capital that create virtuous cycles of hydrocarbon imports. Nepal has had GDP by 2025.3 more effi cient, inclusive and sustaina- up to 14 hours of power cuts each day ble growth. in the city of Kathmandu despite its Essential infrastructure services for all The creation of more productive endowment with some of the greatest South Asia lags behind not only in jobs for the bulging youth population hydroelectric potential in the world. terms of transport infrastructure (SDG in the formal sector requires structural In contrast, Bhutan is harnessing its hydropower potential to generate sustainable growth. South Asia can also tap its vast solar and wind energy Figure 1 potential, and switch towards cleaner Impacts of an SDG-based industrial policy strategy in South Asia fuels such as natural gas and clean coal technologies. The countries can 17.1% benefi t from developing a unifi ed boost in house- Household energy market, linked by energy grids hold income income and pipelines. Sharing good practices 21.9% GDP boost GDP would increase energy conservation.
56.1 million Gains to be made Employment more jobs Selected SDG-based policy strat- 71.5 million Poverty egies can have enormous impacts people reduction out of poverty on sustainable development in the 0% 20% 40% 60% 80% 100% region. Recent estimates show 15-30 per cent increases in GDP across fi ve Industry-oriented growth Sustainable agriculture (grains) Total factor productivity boost countries in South Asia. The estimates were made taking three policies: Source: Based on the UNESCAP-SANEM South Asia Model industry-oriented structural transfor-
22 Trade Insight Vol. 12, No. 3, 2016 Figure 2 (UNESCAP-SSWA), New Delhi. Dr. Raihan is NaƟ onal impacts of policy strategy on poverty and employment Professor of Economics at the Dhaka University and Executive Director of South Asian Network on Economic Modeling (SANEM). This article 10 40 is based on recent analysis conducted by the authors and issued as part of the ESCAP Devel- 35 opment Paper series.10 The views presented in 8 30 this article are those of the authors and should not be attributed to the United Nations or its 6 25 member states. 20 Notes Millions 4 Millions 15 1 Ram, R. 2015. “Income elasticity of poverty: estimates for South Asian 10 2 countries”. The Economics and Finance Letters, vol. 2, No. 1:,1-7. www.pakin- 5 sight.com/pdf-fi les/EFL-2015-2(1)-1-7. pdf. Accessed: 20-November- 2016 0 0 2 See the Oslo Declaration. Available from www.unesco.org/education/Oslo_
Poverty Poverty Poverty Poverty Poverty Declaration_fi nal_17dec08.pdf.
Reduction Reduction Reduction Reduction Reduction 3 McKinsey Global Institute (2015) cal- Employment Employment Employment Employment Employment culates a gender parity score based on Sri Lanka NepalBangladesh Pakistan India 15 indicators, with equal weighting of Industry-oriented growth Grain productivity Total factor productivity all indicators, to arrive at an aggregate score at the country level to measure how far each country is from full gender parity. Source: Based on the UNESCAP-SANEM South Asia Model 4 World Economic Forum. 2015. The Global Competitiveness Report 2015- 2016. Geneva: World Economic Forum. mation (SDG target 8.2), sustainable tion. SDG policy strategies that build 5 Andrés, L, et al. 2013. Reducing Pov- agriculture productivity boosts (SDG upon the interrelationships between erty by Closing South Asia’s Infrastruc- target 2.3), and increased effi ciency the Goals and Targets will help coun- ture Gap. World Bank, Washington, in the economy by removing supply tries achieve the SDGs the fastest. The DC. bottlenecks and fostering innovation potential impacts are great. Imple- 6 Ernst & Young. 2015. PPP trends and (SDG target 9.2). Combined with im- menting just three strategic policy pri- initiatives in South Asian countries. Pre- sentation at the UNESCAP Policy Dia- provements in pro-poor and pro-em- orities would increase GDP by 15-30 logue on Public-Private Partnerships ployment growth, these policies could per cent across fi ve countries of South for Infrastructure Development in South lift 71 million people out of extreme Asia. Those priorities should be on Asia. Kathmandu, 22 and 23 Septem- poverty and create an additional 56 sustained, broad-based and job-creat- ber. www.unescap.org/sites/default/ fi les/Day%201%20-%20Session%20 9 million jobs by 2030 (Figure 1). ing rapid economic growth pushed by 2.1%20-%20South%20Asia%20-%20 National impacts of the policy industry-oriented structural transfor- EY.pdf. Accessed: 27-November-2016 strategy on poverty and employment mation. At the same time, food securi- 7 ADB. 2012. Infrastructure for Sup- are naturally greater in larger coun- ty and hunger must be addressed with porting Inclusive Growth and Poverty Reduction in Asia. Manila : Asian De- tries (Figure 2). In India alone, over sustainable agricultural productivity velopment Bank. 35 million people would be lifted out improvements. This way they can lift 8 Ahmed, V., A. Abbas and S. Ahmed. of poverty and more than 25 million an additional 71 million people out of 2013. “Public infrastructure and eco- jobs would be created. In Sri Lanka, extreme poverty and add 56 million nomic growth in Pakistan: a dynamic with its much smaller population, over jobs by 2030. Naturally, concerted CGE microsimulation analysis”. In Infrastructure and Economic Growth in 370,000 people would be lifted out of action would maximize the spillovers Asia. Editors J.M. Cockburn and others. poverty and nearly 740,000 jobs would between priorities with signifi cant Springer. be created. multiplier benefi ts for populations 9 Kumar, Nagesh, Matthew Hammill, For a region that is home to one- and countries of the region towards Selim Raihan, and Swayamsiddha third of the world’s poor, the 2030 achieving the SDGs. Panda. 2016. Strategies for Achieving the Sustainable Development Goals Dr. Kumar, Dr. Hammill, and Dr. Panda Agenda presents a unique opportunity (SDGs) in South Asia: Lessons from to South Asia to eradicate poverty and are staff members, South and South-West Policy Simulations. ESCAP-SSWA other deprivations. It can provide a Asia Offi ce of United Nations Economic and Development Paper 1601. life of dignity to all within a genera- Social Commission for Asia and the Pacifi c 10 ibid.
Trade Insight Vol. 12, No. 3, 2016 23 connecƟ vity
BBIN From transit to economic corridors
Prabir De
eographically contiguous eastern tiative includes Bangladesh, Bhutan, Connectivity as trade facilitator GSouth Asian countries have India and Nepal (BBIN). It began with An improved connectivity is essential formed a sub-regional initiative to Bhutan, Bangladesh and India in the to provide cheaper access to goods solve their economic and political latter part of the last decade. The BBIN and services, create more jobs along challenges through better connectivity. Motor Vehicle Agreement (MVA) trig- trading corridors and, ultimately, Also known as the South Asia Growth gered the BBIN initiative. It got further help reduce poverty at a faster pace.1 Quadrangle (SAGQ), the unique ini- impetus when Nepal joined. South Asian Association for Regional
24 Trade Insight Vol. 12, No. 3, 2016 Cooperation (SAARC) member coun- BBIN MVA is primarily BBIN.4 The trend in intra-BBIN trade tries have realized that narrowing the designed to facilitate has been infl uenced by the recent connectivity gaps among themselves growth of the Indian economy and is a must for facilitating regional trade. sub-regional trade, India’s unilateral removal of tariff The sub-regional BBIN initiative is the movement of people and sensitive list items in terms of result of the limited progress SAARC and integration. its imports from the least-developed was making on the ground. countries (LDCs) in recent years. The shared BBIN vision is to Since a large part of BBIN’s trade increase trade and cooperation within is India-centric, any improvement in eastern South Asia, create linkages discussion on the possibility of having connectivity and trade facilitation in within and beyond, ensure faster a BBIN Rail Agreement that draws on the sub-region would, therefore, lead movement of goods and people and the draft SAARC Regional Rail Agree- to improvement of competitiveness bring about sustainable development ment template. It was also agreed that of BBIN exports. This means a greater through water resource manage- land ports/land customs stations, cru- market access in India for exports of ment and protection of climate, etc. cial for sub-regional trade and transit, Bangladesh, Bhutan, and Nepal. The The grouping is mainly driven by would be given priority attention by BBIN MVA is primarily designed to governmental activities with regular all four countries.3 serve this purpose—facilitate sub-re- meetings of the Joint Working Groups BBIN enjoys the advantage of gional trade, movement of people (JWGs).2 So far, BBIN has dealt with hindsight—that by starting late, it has and integration. However, the reality water resources management, electric- learned from the mistakes of other is that the BBIN countries are yet to ity exchange and connectivity. Three regional integration initiatives. Table 1 connect with each other through any JWG meetings have been held so far illustrates that BBIN’s focus is not on comprehensive trade facilitation and and the outcomes have been very the trade and investment agreement, connectivity measure. positive. but on non-trade issues such as con- BBIN has a number of logistics The JWG on Water Resources nectivity and energy. handicaps. Except trade between India Management and Power/Hydropow- BBIN countries are relatively open and Nepal and India and Bhutan, In- er is tasked with bringing about coop- economies, where, with the exception dia’s trade with Bangladesh or Bang- eration in power trade and inter-grid of Nepal, trade openness has increased ladesh’s trade with Bhutan and Nepal connectivity in future power projects between 1991 and 2015. India’s share is not seamless. Goods are loaded or and water resources management in sub-regional trade is over 90 per unloaded every time at the land bor- among the four countries. The JWG cent. In 2015, India’s volume of total der. Transit of goods takes place, but on Connectivity and Transit looks trade with BBIN countries was about only partially.5 Railways and inland after the BBIN MVA. The Third JWG US$10.82 billion, of which exports waterways have been used marginally meeting, held in Dhaka on 19 and 20 accounted for US$9.35 billion and the for regional trade. Roads are narrow January 2016, agreed to commence remaining was India’s import from with missing last-mile connectivity.
Table 1 BBIN features Particulars BBIN BCIM BIMSTEC SAARC ASEAN Location South Asia South & South-east Asia South & South-east Asia South Asia South-east Asia Members 4 4 7 8 10 Year established 2013 1997 1997 1985 1967 FTA signed No No Yes* Yes Yes Investment agreement No No No No Yes Services trade agreement No No Yes* Yes** Yes Connectivity projects Yes Yes* Yes* Yes Yes Energy exchange Yes No Yes* Yes* Yes* Financial integration No No No Yes* Yes Trade facilitation Yes No Yes Yes Yes Initiative type Track 1 Track 1.5 Track 1 Track 1 Track 1 Secretariat No No Yes Yes Yes * Proposed; ** Market access negotiations ongoing † Bangladesh–China–India–Myanmar Forum for Regional Cooperation (BCIM); Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC); Association of South East Asian Nations (ASEAN) Source: Author’s compilation
Trade Insight Vol. 12, No. 3, 2016 25 connecƟ vity
Banking and fi nancial instruments are process, the less likely it is that a BBIN Single Window customs called SWIFT weak making pre- and post-shipment trader will be able to compete in the (Single Window Interface for Facilitat- payment lengthy. Also, infrastructure regional and international markets. ing Trade). The scope for application is inadequate. For example, electricity Application of modern information of information and communications is available at the border, but the qual- and communication technology (ICT) technology (ICT) in trade process ity of electricity varies. Trade in BBIN, to trade processes has been recognized management in BBIN countries, therefore, continues to face higher as an important component of national particularly in Bhutan, Bangladesh costs and time. and regional trade facilitation strate- and Nepal, is very large. This aspect of Table 2 presents business proce- gies. Many of the export and import trade process management has gained dures, time and costs in export and documents along BBIN corridors are immense popularity in India since the import and documents needed while still not being submitted or processed exporters and importers have found trading along select BBIN corridors. electronically. Submission of docu- it increasingly benefi cial. The docu- Trade involves a relatively higher ments is largely handled manually ments required for export and import number of procedures and documents (over 80 per cent on an average).7 were handled manually until a few in all the three BBIN corridors. Specif- Exporters and importers, or their years back. Today, most of the export ically, orange exports from Bhutan to Customs House Agents (CHAs), can processes are dealt with electronically. Bangladesh face the highest number submit customs declaration online, Similar trends have been noticed in of procedures and the second highest although a hard copy often needs to some South Asian countries like the number of parties in Corridor 2. In be submitted as well at some point Maldives and Sri Lanka. Corridor 1, export of lentils from Ne- during the process. Cargo insurance and payment are pal to Bangladesh entails the second Automation of trade documen- managed electronically in many of the highest number of procedures and tation is relatively a new process for BBIN countries, including India. The highest number of parties. Corridor 3 BBIN countries, except India. India number of documents does not matter is the most expensive corridor, both has been successful in introduc- here, rather it is their nature (elec- in terms of cost and time. A contain- ing an Electronic Data Interchange tronic vs. paper) and the procedures er-load of carpets exported from Kath- (EDI) system, called Indian Customs involved in their preparation and mandu to a third country costs around Electronic Commerce/Electronic submission that make a difference. By US$2,260.60 per Twenty Foot Equiv- Data interchange (EC/EDI) Gateway making e-fi lling of documents man- alent Unit (TEU)6 and takes about 24 (ICEGATE), which has facilitated the datory, the documentary burden on days to cover a distance of 1,287 km submission of trade documents elec- the trade of goods along the BBIN cor- to reach the port of Kolkata. The more tronically to a great extent.8 ICEGATE ridors will undoubtedly be reduced. time-consuming the export or import has now been transformed into a India’s EDI system is a case in point,
Table 2 Business processes, Ɵ me and costs in BBIN Corridor Exporter Importer Products Procedures (No.) Time Cost Documents & copies (No.) Exporter Importer Total (Days) (US$/TEU) Exporter Importer Total Corridor 1: Bangla- 18 18 36 Nepal Lentils 18 13 31 23.40 791.80 Kakarvitta-Pani- desh (44) (71) (115) tanki-Phulbari- 15 15 30 Bangladesh Nepal LAA 12 16 28 29.26 1402.05 Banglabandha (50) (33) (83) Corridor 2: Bangla- 14 18 32 Bhutan Oranges 18 14 32 18.60 569.84 Phuentsholing- desh (26) (69) (95) Jaigaon-Hasi- 9 16 25 mara-Changra- Bangladesh Bhutan Fruit Juice 9 16 25 20.13 527.61 (30) (44) (74) bandha-Burimari Corridor 3: Third 19 19 Nepal Carpets 23 23 26.00 2260.60 Kathmandu- country* (44) (44) Birgunj-Raxaul- Third 22 22 Nepal CSO 21 21 18.00 689.74 Kolkata country** (49) (49) Notes: *Excluding export processes; **Excluding import processes; Numbers in parentheses are copies needed for export and import; LAA – Lead Acid Accumulator; CSO – Crude Soybean Oil Source: Author’s compilation based on ADB-ESCAP (2014)9
26 Trade Insight Vol. 12, No. 3, 2016 which offers important lessons for Existing labour-in- mensely important to strengthen the other BBIN countries to improve their tensive transport regional integration process. The BBIN electronic customs system. services will see MVA will entail further preparation for the implementation of the trade Scopes abound incremental appli- facilitation priorities and strategies of Excessive documentation means cation of effi cient the World Trade Organization (WTO) that there is scope for simplifi cation technology. Trade Facilitation Agreement (TFA). of trade processes. Between export And, all the four BBIN countries are and import, the process for the latter members of this Agreement. is highly dispersed, thereby indi- Dr. De is Professor, Research and Informa- cating the need for simplifi cation of cient technology incrementally along tion System for Developing Countries (RIS), documentary requirements. There the transit corridors. Besides, higher New Delhi, and Coordinator, ASEAN-India is enough scope for simplifi cation of effi ciency of ports of Kolkata, Haldia, Centre (AIC), New Delhi. documentary requirements to meet Chittagong, etc., improvement of bor- international standards. Besides, der infrastructure and corridors and Notes building highways, improving border well-developed transit arrangements infrastructure facilities, strengthening can transform transit corridors into 1 Kathuria, S. and Shohaib Shahid. banking and fi nancial infrastructure economic corridors. 2014. “A Well-Functioning Free Trade and establishing governance trans- Area Would Create a More Prosperous South Asia”. The World Bank (Opinion). parency, along with trade facilitation From sub-region to region 25-November-2014. http://www.world- measures, would improve the compet- The signing of BBIN MVA was an bank.org/en/news/opinion/2014/11/25/ itiveness of BBIN countries globally. historic event. However, to maximize free-trade-area-more-prosperous- south-asia At the same time, the implementation the regional welfare, a region-wide 2 BBIN has two JWGs: Water Resources of MVA would depend on the fi nan- MVA is necessary. The BBIN MVA Management and Power/Hydropower; cial and technical capacity of the BBIN does not explicitly talk about transit and Connectivity and Transit. countries. for third country trade, particularly 3 Ministry of External Affairs-Government To meet the global and region- between India’s north-east and the of India. 2016. Third Joint Working al/sub-regional obligations, BBIN rest of India through Bangladesh. It Group (JWG) Meetings on Sub-Re- gional Cooperation between Bangla- countries have to improve their trade did not propose any plan of transport desh, Bhutan, India and Nepal (BBIN) performance through enhanced trade structure convergence and reme- (January 19-20, 2016), media release. facilitation measures—through im- dies such as axle load and tonnage. 22-January- 2016. https://www.mofa. proved soft and hard infrastructure. gov.np/joint-press-release-on-third-jwg- Neither, does it talk about special meetings-at-dhaka-issued-by-embassy- The countries need to regulate the and differential treatment (S&DT) for of-nepaldhaka/ trucks moving along BBIN corridors; countries or areas within countries 4 Direction of Trade Statistics (DOTS), encourage competition among service for revenue loss or environmental International Monetary Fund (IMF). providers such as transporters, banks damage. Costs of non-coopera- 5 De, P., and A. Kumar. 2014. Regional and insurances providers; build trade tion may damage the whole effort. Transit Agreement in South Asia: An infrastructure such as testing labo- Empirical Investigation, Discussion Therefore, a greater involvement of Paper. Kathmandu: South Asia Watch ratories; and improve the highway states or sub-national entities would on Trade Economics and Environment conditions and infrastructures at make it an inclusive trade-transport (SAWTEE). border-crossings. arrangement, perhaps, the best and 6 A unit of measurement equal to the In Bhutan and Nepal, the costs unique in the world. space occupied by a standard twenty foot container. Used in stating the associated with completing docu- Finally, improvement of infra- capacity of container vessel or storage mentary and other import and export structure is not a suffi cient condition area. procedures for international trade for regional development. Improve- 7 ADB-UNESCAP. 2014. Trade Psro- can account for a substantial part of ment of infrastructure gives rise to cess Analysis Report for Subregional the cost of traded goods.10 Costs of both distributive and generative Cooperation in South Asia. Manila and Bangkok: ADB – UNESCAP. trade go up due to a lack of regional effects. Generative effects would tend 8 ICEGATE handles all e-fi ling, e- or sub-regional insurance systems for to be higher than the distributive payments, drawback disbursal and transit cargo. Therefore, raising the effect in our particular case. BBIN message exchange with stake holders- competition among logistics service MVA’s success would depend on almost 98percent India’s international providers would not only lead to a fall trade. ICEGATE web portal provides how quickly the countries build the comprehensive real time tracking and in transaction costs, but also improve physical connectivity in their sub-re- information services, and all services the effi ciency of service providers. gion. The beginning is good, but are provided free of cost. Existing labour-intensive transport challenges are aplenty. Measures to 9 ibid Note 7. services will see the application of effi - reduce transit costs and time are im- 10 ibid Note 7.
Trade Insight Vol. 12, No. 3, 2016 27 access and benefi t sharing
or seven years, Norway has been Norwegian users of foreign genetic ia, the Eskitis Institute at Griffi ths Fin the process of developing access material to disclose information about University is an interesting parallel and benefi t sharing (ABS) legislation the origin and legality of access in institution. Here, we will describe how aimed at external bioprospectors.1 patent applications. These obligations the delayed administrative order in The Norwegian Nature Diversity on Norwegian users of foreign genetic Norway affects marine bioprospecting Act (2009) and Marine Resources Act material go further than those of most and the work of Marbank. We also (2008) establish genetic resources as other user countries. But Norway, as compare the role and challenges facing common resources, but prescribe the a provider of genetic resources, still Marbank with those affecting Eskitis enactment of such ABS rules through lacks legislation to control biopros- in Australia, where domestic ABS an administrative order. Regulating pecting from marine material collected legislation is much further developed. ABS also follows from Norway’s at home. Finally, we discuss two remaining obligations under the Convention on In Australia the situation is the barriers to ABS in general. Biological Diversity (CBD). complete reverse: Australia has Norway and Australia, as devel- enacted advanced ABS legislation in oped countries, are both typical users Legality of access line with the CBD to control access to of genetic resources, but they also The Norwegian Nature Diversity their own genetic resources, but they share the characteristic of being im- Act makes it illegal to import foreign lack ABS user measures for Australian portant providers of genetic resourc- genetic resources if ABS regulations bioprospecting abroad.2 es. The research work reported in a were not followed while accessing In Norway, the Marbank collection recently published article3 suggests them in the provider country. Moreo- and the Arctic Biodiscovery Centre that Norway and Australia that are ver, the Norwegian Patent Act obliges in Tromsø are key actors. In Austral- developing to be provider countries,
ABS legistlation for Marine bioprospecting Lessons from Australia and Norway
G. Kristin Rosendal, Anne Ingeborg Myhr and Morten Walløe Tvedt
28 Trade Insight Vol. 12, No. 3, 2016 may have similar reasons, to enact Public investments ca- cooperation with the Norwegian Min- Access and Benefi t Sharing (ABS) tering to marine bio- istry of Fisheries and UiT – the Arctic legislation at home. Their experiences University of Norway (formerly Uni- could thus be of interest to a broader prospecting are seen versity of Tromsø), the Norwegian Po- set of countries. as a source of new lar Institute and the Institute of Marine The fi rst rationale for ABS in and sustainable value Research. The purpose of Marbank Norway and Australia is the growing creation for society. is to collect, catalogue, prepare and domestic economic interest, public coordinate marine samples from 1,100 funding and investments in marine locations along the Norwegian coast bioprospecting as well as increasing and Spitsbergen islands for scientifi c economic interest from external phar- research and commercial opportu- maceutical commercial companies. The third rationale for clarifying nities. Some 14,000 kg of organisms Public investments catering to marine the ABS regulation is to establish have been collected. This covers 1,200 bioprospecting are seen as a source of a predictable legal framework for species of marine invertebrates, 110 new and sustainable value creation for companies aiming to create value from species of microalgae and 3,000 16S society as a whole. marine genetic resources in Norway. rDNA characterized bacteria strains. Marine research and bioprospect- Norway’s domestic ABS legislation Marbio is the analytical platform ing have been given high priority is, however, still pending, requiring for screening and identifi cation at within the Norwegian Research Coun- no prior informed consent or permits the Arctic University of Norway and cil since 2001, spurring widespread and contracts stipulating any mutually has characterised about 150 bioactive calls for a repository bank for marine agreed terms of bioprospecting. compounds and produced 50 potential organisms and their.4 Recently, the According to Australian federal lead candidates. Marbio has prepared economic value of Norway’s marine ABS legislation, access to biological a library of more than 3,000 fractions biological material has received in- resources requires a permit as a form and has performed 316,000 screening creased attention as the oil age seems of prior informed consent. Permit events based on the Marbank mate- to be coming to an end. Securing pub- applications must demonstrate that ac- rial. So far, 20 assays or test methods lic revenue from private companies’ cess to the biological resource will be for screening, and more than 300,000 oil and gas revenues has been impor- ecologically sustainable and consistent screening events for bioactive com- tant and was based on forward-look- with the conservation of Australia’s pounds like pharmaceuticals and three ing legal systems: the regulation of biodiversity. Access for a commercial patent applications have resulted from rights to and benefi ts from Norwegian purpose costs 50 Australian dollars, this research.7 genetic material can have similar while for non-commercial purposes it The Eskitis Institute for Cell and future importance. This is especially is free. Molecular Therapies, meanwhile, is so since foreign companies would not Applicants must provide a statuto- part of the Griffi th University in Bris- be covered by the Norwegian taxation ry declaration stating that the appli- bane. Eskitis research is supported by system for their activities abroad even cant will not conduct, or allow others the Nature Bank, which has a library when Norwegian genetic resources to conduct, commercial research on of over 200,000 optimized natural have created their revenues. The Great the biological resource without agree- product fractions derived from a di- Barrier Reef of Australia hardly seems ing to appropriate benefi t sharing ar- verse collection of over 45,000 samples to be less promising. rangements. This statutory declaration of plants and marine invertebrates. The second rationale for ABS constitutes parts of established legal Nature Bank fractions can be accessed legislation in Norway and Australia institutional structures, which is likely for screening on assay systems, with links up to principles of conservation to make ABS functional.5 At the state follow-up isolation chemistry at and sustainable use set out in the CBD. level, the Queensland Biodiscovery Eskitis. The Nature Bank provides the Norway manages some of the most Act differs from the Commonwealth service of processing natural products productive marine areas in the north- ABS regulations by not having two of biota or crude extracts into fractions ern hemisphere. The ABS policy will types of permits for, respectively, to create assay-ready screening sets. affect how Norway shoulders its share non-commercial and commercial Samples are thus ready for analysis of of the global burdens for conserva- biodiscovery. This legislation was whether novel bioactive compounds tion and sustainable use of biological advocated by industry, emphasizing could hit a particular target or bind to diversity set out in the CBD. Norway’s the need for a level playing fi eld and a specifi c protein. Moreover, Eskitis highly visible international profi le legal certainty.6 houses the Queensland Compound in advocating the CBD principles is Library (QCL), a library of near- another strong motive for Norway to Marbank and Eskitis ly 400,000 pure compounds from honour its obligations following from In 2003, the national marine biobank, samples. QCL provides automated the CBD and its ABS regime. Marbank, was established in close retrieval of the requested samples
Trade Insight Vol. 12, No. 3, 2016 29 access and benefi t sharing
and supervises the formatting into the contract would have had more sup- are simply no grounds for expecting preferred micro plate format.8 port if the administrative regulation benefi t sharing anytime soon.13 The The parallel between Marbank and was already in place.11 Against this diffi culties involved in monitoring Eskitis is clear, although Eskitis and background, a possible model is a the genetic material, from access to its supporting institutions provide a system in which ABS is not only tied actual commercial product, add to this quantitatively larger bulk of materials. to benefi t sharing linked to the end problem. However, the legal framework for the product, but also involves sale/pay- Here, a paradox becomes appar- related activities is very different. ment of valuable ‘leads’, or the ready ent. Australian scientists usually wait Another less visible parallel be- assays. for patents to be granted before they tween Eskitis and the Marbank-related Including cost sharing in the consider publishing results from the institutions is that they cater a number system would raise the visibility of the widespread university/industry col- of PhDs, postdocs and scientifi c high levels of public funding that go laboration.14 This is necessary because research. Both face a similar challenge into infrastructure, collection and de- publishing must be postponed in with regard to academic results: the livery of ready bioactive compounds order not to block the patent criterion need of scientists to get published to to users, all of which are necessary for of novelty (the search for prior art). advance their academic prospects is users to develop commercial products. Patenting is, however, a strong indi- reportedly diffi cult to do in combi- A drawback of such a system might be cation of commercial interest. As both nation with the need for patenting high costs on the developer early on in the commercialization and the patent of their commercial partners. This is the research and development process. process are claimed to be very long because patenting usually implies long The income will fl ow only later in the and costly, this implies that there is phases of secrecy prior to the patent process. often a delay in the sharing of scien- application.9 Meanwhile, Australia still faces tifi c results through publishing. That This also points to a core practi- problems in spite of its ABS legisla- would be a drawback for innovation. cal challenge of ABS. If a particular tion. Despite the strong legal means An alternative interpretation is genetic resource leads to the discovery of the statutary declaration, until now that there are a lot more commercial or invention of an interesting prod- there has only been one cas e of com- activities and results with a potential uct, what is the relevant correlation mercial bioprospecting in Australia for benefi t sharing taking place at a between the genetic resource and the involving benefi t sharing.12 The case quicker pace than the meagre ABS particular commercially viable prod- involves a large study of sponges with results would indicate. The strong link uct? Often, in bioprospecting, there is anti-cancer compounds. The use of between commercial interest and pat- no one-to-one correlation between a the statutory declaration in Australian enting has given rise to a widespread genetic resource and a product.10 This Commonwealth legislation neverthe- view in Australia that linking ABS and means that a specifi c sample does not less shows how they use and apply intellectual property rights (IPR) legis- necessarily lead to a specifi c product. already existing legal tools in their lation through disclosure of the source The distance between the biological enforcement of ABS. This might, in the of biological resources in patent appli- sample and product creates problems long run, increase the effi ciency of the cations could be an appropriate legal for establishing a benefi t link from the legislation. measure to track ABS compliance.15 sample to the product in the market. One possible explanation for the Monitoring is a crucial issue Similar challenges face Marbank and lack of ABS may be the diffi culty in identifi ed by Eskitis relating to the Eskitis in their interactions with exter- distinguishing between bioprospect- Norwegian draft administrative order nal (foreign) users of marine material. ing for scientifi c and commercial for ABS. In Norway, the diffi culties There are different approaches to use and, thereby, determining when related to how to correlate a particular respond to this challenge in Norway benefi t sharing should be triggered. genetic resource to the discovery or and Australia: Due to the lack of an Here, companies tend to argue that invention of an interesting product ABS regime for Norwegian ma- commercial results from biodiscov- now seem to be delaying the adminis- rine samples, it has been an explicit ery are still so far away that there trative order on an ABS system. ABS Marbank objective to ensure that legislation may need to be followed by Norwegian researchers are involved. monitoring provisions that cover the This is expected to secure the value of entire bioprospecting chain.16 On the the collection for Norwegian society. Often, in biopros- other hand, it is widely acknowledged Material from Marbank is ready for pecting, there is no among scientists and industry players commercial utilisation and Marbank one-to-one correla- alike, both in Australia and in Nor- would like to see the legal issues re- way, that bioprospecting is usually of tion between a ge- garding access described accordingly. a commercial nature.17 When developing a functional netic resource and a While Norway lags behind Aus- contract for the use of Marbank, that product. tralia with a view to ABS legislation
30 Trade Insight Vol. 12, No. 3, 2016 blog.wakatobi.com
at home, the interesting thing is that Norway has a much stronger monitor- ing instrument available through its revised Patent Act as patent applica- tions are submitted at home. Norway is one of few developed user countries to have amended patent legislation in line with disclosure of origin of genet- ic material. The case of Marbank is similar to the Australian case also in that, within Marbank, there is a broad recognition that samples accessed from their col- lection will usually be of commercial value. Hence, in the Norwegian case Report 1/2014. Lysaker: FNI. one would avoid uncertainties regard- Although some benefi t sharing 3 ing the type of permit (commercial/ is currently taking place, such as Rosendal, G. Kristin, Anne Ingeborg research collaborations, the cost of Myhr, and Morten Walløe Tvedt. 2016. non-commercial) on which to base ‘Access and Benefi t Sharing legislation eventual contracts. the infrastructure remains a public for marine bioprospecting: Lessons The Norwegian government responsibility. The result is that public from Australia for the role of Marbank in funding is required through all the Norway’. Journal of World Intellectual remains hesitant with regard to future Property Rights, Online 06.06.2016, 13 design of ABS to regulate biopros- phases of the value creation chain of, p. DOI: 10.1111/jwip.12058. pecting at home. For Marbank, in for instance, medicinal products— 4 Dalmo, R., and T. Jørgensen. 2004. performing its tasks, this legal vacuum from education, collection and infra- White paper on Norwegian marine re- pository. University of Tromsø, Norway. represents a prominent challenge and structure to providing ready assays. In 5 exposes it to an insecure funding sit- addition the government will end up ibid Note 2. 6 uation in the future. Since collections paying monopoly prices for patented ibid Note 2. 7 like Marbank’s are an expensive ven- products to the large pharmaceutical ibid Note 3. 8 ture, long-term funding is a core need, corporations for acquiring vaccines ibid Note 2. 9 lack of which could hamper sustaina- and medicines. This remains a strong MabCent-SFI. 2015. Summary Report argument in favour of cost sharing 2007-2015. Tromsø: UiT – The Arctic ble innovation and long-term security University of Norway; and ibid Note 2. even if benefi t sharing is still a tough for researchers and innovators. 10 ibid Note 3. political issue to tackle. 11 ibid Note 3. Interestingly, Norway and Aus- Cost-sharing 12 Laird, S., Catherine Monagle, Sam The idea of benefi t sharing could be tralia seem to have one piece each of Johnston, and Queensland Biodiscov- supported by, and expanded with, the a system that in combination might ery Collaboration. 2008. ‘The Griffi th principle of cost sharing. Cost sharing bring about a functioning ABS system: University AstraZenaca Partnership Norway has the monitoring instru- for Natural Product Discovery. An Ac- would entail the user of the assay cess and benefi t Sharing Case Study’. paying for the costs of collection and ment through disclosure in its revised Report by the United Nations University preparation at the point of access. This Patent Act and Australia has the statu- – Institute of Advanced Studies, UNU- IAS. could involve selling ready assays or ary declaration in its ABS legislation. Dr. Rosendal and Dr. Tvedt are Senior 13 Morgera, Elisa, Matthias Buck, and leads to industrial partners. Elsa Tsioumani, eds. 2012. The 2010 Industry is not foreign to the Researcher, Fridtjof Nansen Institute, Lysaker, Nagoya Protocol on Access and Benefi t idea of ABS legislation that secures Norway. Dr. Myhr is Senior Researcher, Sharing in Perspective. Implications for GenØk, Tromsø, Norway. This piece is based on international law and implementation a level playing fi eld and legal cer- challenges. Leiden: Martinus Nijhoff their recent paper published in 2016.18 tainty. Legal certainty would also Publishers. support the political aim of creating 14 Notes ibid Note 2. incentives for further innovation, and 15 ibid Note 2. research and development, based on 16 1 Bioprospecting denotes the search for Bhatia, P., and Archana Chugh. marine bioprospecting in Norway, as products, derived from biological diver- 2015. ‘Role of marine bioprospecting in Australia. The alternative is large sity, of potential value to, for instance, contracts in developing access and the pharmaceutical and agribusiness benefi t sharing mechanisms for marine multinational players as free riders in traditional knowledge holders in the industries. a system that provides ready assays pharmaceutical industry’. Global Ecol- 2 Prip, C., G. Kristin Rosendal, Steinar ogy and Conservation, 3, 176-187. for biotechnological development and Andresen, and Morten Walløe Tvedt. 12 ibid Note 2 and Note 3. where genetic material can be sent out 2014. The Australian ABS Framework: of the country free of charge. A Model Case for Bioprospecting? FNI 18 ibid Note 3.
Trade Insight Vol. 12, No. 3, 2016 31 climate change South Asia needs cooperation for climate adaptation
“The region stands to benefi t from integrated climate adaptation, mitigation and development approaches.”
Vositha Wijenayake
limate change impacts are already Extreme weather ening lives, food security, health and Cbeing felt in South Asia, according Sea levels have risen faster than at wellbeing across many parts of the to the Fifth Assessment Report (AR5) any time during the previous two region. of the Intergovernmental Panel on millennia—and the effects are more Given the interdependence among Climate Change (IPCC). The report profound in South Asia.3 The changing countries in today’s world, the im- covers regional impacts of climate rainfall patterns and melting snow and pacts of climate change on resources change and says that such impacts ice are altering freshwater systems. or commodities in one place will will pose challenges to growth and This affects the quantity and quality of have far-reaching effects on prices, development of the region. It points to water available in many regions, not supply chains, trade, investment and the need for international cooperation just in South Asia.4 Also, “The impacts political relations in others. Climate to address the problem, saying “Inter- of climate change will infl uence fl ood- change in one country will progres- national cooperation is vital to avert ing of settlements and infrastructure, sively threaten economic growth10 and dangerous climate change impacts and heat-related deaths and food and human security in complex ways in South Asian governments can pro- water shortages in South Asia.”5 Tem- the region and across the world.11 Such mote ambitious global action[s]”.1 perature extremes,6 refl ected through trans-boundary impacts of climate According to the report, “South the numbers of cold days and nights, change call for joint action to fi ght Asia stands to benefi t from integrated have decreased and the numbers of them. climate adaptation, mitigation and warm days and nights have increased The need for climate cooperation is development approaches”. Among the across most of Asia since about 1950, also underlined by the economic and key responses that the report suggests says the report. technical capacities of the countries for South Asia are adaptation and low South Asia is victim to changes in to deal with cross-cutting issues such carbon development. “Adaptation will rainfall trends. These trends, including as climate change. Capabilities and bring immediate benefi ts and reduce extremes, are characterized by strong vulnerabilities are diverse in South the impacts of climate change in South variability in different parts of Asia. Asia. Countries with higher capacity Asia,”2 it says, emphasizing the role Observations also show that there are better positioned to support the of adaptation as fundamental to risk have been more events of extreme weaker ones. The region should make management. The report also says that rainfall and fewer ones of weak adequate use of regional and inter- a mitigation strategy for low carbon rainfall.7 These will have widespread national processes to refl ect on their development will benefi t the region. It impacts on South Asian society and its needs and to devise ways for imple- talks about merging of adaptation and interaction with the natural environ- menting concrete and effective actions. mitigation actions that address climate ment.8 Clearly, the impacts of climate The AR5 says, “South Asian lead- change and its impacts. change are already being felt9 threat- ers have an important part to play—
32 Trade Insight Vol. 12, No. 3, 2016 with all other international leaders—in Cooperation for socioeconomic and environmental pol- forging this solution. Cooperating, rec- effective climate icies and actions. This highlights the ognizing that everyone must share the point that the countries will be making actions is sought effort and making fi nancial resources the decisions on adaptation processes available for investment in adaptation among not just state in their own ways that are suitable to programmes and low-emissions infra- actors but multi- their local contexts. structure are important in reaching [a] ple-stakeholders. Another mention of cooperation on global agreement.” adaptation is the reference to the Can- The Paris Agreement is helpful in cun Adaptation Framework, where this regard. The agreement was signed it states, “Parties should strengthen by Parties to the United Nations immediate needs of those developing their cooperation on enhancing action Framework Convention on Climate country Parties that are particularly on adaptation, taking into account Change (UNFCCC) at the 21st Con- vulnerable to the adverse effects of the Cancun Adaptation Framework, ference of the Parties (COP21) held in climate change. including with regard to: Paris in December 2015. It came into Cooperation and decision making a) Sharing information, good prac- force on 4th November 2016. As an at the regional and international lev- tices, experiences and lessons unprecedented outcome, the Agree- els, at times, confl ict with the sover- learned, including, as appropriate, ment brings together all countries for eignty and decision-making power of as these relate to science, planning, a common cause—addressing impacts countries. In order to address this po- policies and implementation in of climate change—for the fi rst time. tential challenge, whereby resistance relation to adaptation actions; All parties have committed them- to adaptation actions could develop, b) Strengthening institutional selves to make their contribution. The the Agreement further provides that arrangements, including those objective is to strengthen the global it will not be impacting the country’s under the Convention that serve response to climate change impacts. decision making processes. this Agreement, to support the The target is to limit the global tem- According to Article 7 (5), the synthesis of relevant information perature rise in this century to well Parties “acknowledge that adaptation and knowledge, and the provision below 2°C above pre-industrial levels, action should follow a country-driven, of technical support and guidance to 1.5°C. gender-responsive, participatory and to Parties; Regarding regional cooperation, fully transparent approach, taking into c) Strengthening scientifi c knowledge Decision 1/CP1 of the Paris Agree- consideration vulnerable groups, com- on climate, including research, ment recognizes that climate change munities and ecosystems”. Such ap- systematic observation of the represents an urgent and potentially proach should be based on and guided climate system and early warning irreversible threat requiring the widest by the best available science and, as systems, in a manner that informs possible cooperation and participation appropriate, traditional knowledge— climate services and supports deci- by all countries to reduce global green- knowledge of indigenous peoples and sion-making; house gas emissions. The signatories local knowledge systems—with a view d) Assisting developing country of the agreement have also agreed to integrating adaptation into relevant Parties in identifying effective to promote regional and internation- al cooperation in order to mobilise assets.inhabitat.com stronger and more ambitious climate action by civil society, the private sector, fi nancial institutions, cities and other sub-national authorities, local communities and indigenous peoples. Here, cooperation for effective climate actions is sought among not just state actors but multiple-stakeholders. The Agreement highlights several areas where regional cooperation is key. Just like the AR5, the Paris Agreement has dedicated a key section to address adaptation. Its understanding is that adaptation actions need to have a regional dimension. It stresses the need for a long-term global response that takes into account the urgent and
Trade Insight Vol. 12, No. 3, 2016 33 climate change
more exposed to these impacts, it is important that South Asia as a region take initiatives to address them. There are differences amid similarities that highlight the need for one country’s capacities put to use to help another country adapt to climate change. In doing this, it is important that the countries’ sovereignty is respected. Actions should be taken to develop the capacity of countries through tech- nical and fi nancial support. And the idea is to build resilience. The Paris Agreement takes re- gional cooperation on adaptation and climate action as important elements. It is time for regional actors such as SAARC to take a pro-active role in specials-images.forbesimg.com translating climate policy—discussed in Nepal in 2014 at the SAARC gath- adaptation practices, adaptation mitigation co-benefi ts; and promoting ering—into concrete actions. This will needs, priorities, support provided cooperative action on adaptation.”12 in turn contribute to building bridges and received for adaptation actions In addition to this, the 44th session to address other common issues of the and efforts, and challenges and of Subsidiary Body for Implementa- region. Facilitating the links between gaps, in a manner consistent with tion (SBI 44), held in 2016, brought countries for collaborative actions encouraging good practices; and the Parties together on a number of to address climate change issues, e) Improving the effectiveness and activities under the Nairobi Work Pro- through regional cooperation, should durability of adaptation actions.” gramme within the UNFCCC to focus lead to a more unifi ed and peaceful Cooperation on knowledge shar- on adaptation. They are required to in- South Asia. ing and providing technical support is form adaptation planning and actions The author is Executive Director, SLY- vital in understanding the best ways at the regional, national and sub-na- CAN Trust, Colombo and Regional Facilitator for adaptation. Despite the diversity, tional levels, particularly in relation to for Asia, Southern Voices on Adaptation. South Asia faces common needs and ecosystems, human settlements, water vulnerabilities. The countries are resources and health. Notes equally vulnerable and face similar In addition to specifi c sections that impacts, and all need to strengthen refer to adaptation, the sections on 1 IPCC. 2014. The Fifth Assessment their capacities. These similarities call capacity building also refer to the need Report of the IPCC: What’s in it for South Asia?. Cambridge: Cambridge for collaboration within South Asian for “fostering global, regional, national University Press. Association for Regional Cooperation and sub-national cooperation; and 2 ibid. (SAARC) on adaptation actions to identifying opportunities to strength- 3 IPCC. 2013. “The rate of sea level rise address climate change effectively. en capacity at the national, regional has been greater than the mean rate The Paris Agreement wants its and sub-national level.” during the previous two millennia (high signatories to strengthen regional Further, Article 10 on technology confi dence).” Climate Change 2013: The Physical Science Basis. Cam- cooperation among them on adapta- transfer and support, under Sub-sec- bridge: Cambridge University Press. tion where appropriate and, where tion 6, also states that support, includ- 4 IPCC. 2014. Climate Change 2014: necessary, establish regional centres ing fi nancial and technological, shall Impacts, Adaptation, and Vulnerability. and networks, particularly in devel- be provided to developing countries to Cambridge: Cambridge University oping countries, as per Decision 1/CP help them implement Article 10 with Press. 5 (Paragraph 16). a view to achieving a balance between ibid. This includes “facilitating the shar- support for mitigation and adaptation. 6 ibid. ing of good practices, experiences and 7 ibid. lessons learned; identifying actions Regional action 8 ibid. that could signifi cantly enhance the With the rise in climate change im- 9 ibid. implementation of adaptation actions, pacts being felt in South Asia, and the 10 ibid. including actions that could enhance economic and social vulnerabilities of 11 ibid. economic diversifi cation and have people of the region rendering them 12 Decision 1/CP16 UNFCCC
34 Trade Insight Vol. 12, No. 3, 2016 book review
The art of a dismal science
Title: Economics rules: The rights and wrongs of the dismal science Author: Dani Rodrik Publisher: W. W. Norton & Company ISBN: 978-0-393-24641-4
Zubair Faisal Abbasi
ani Rodrik is an enlightened Rodrik, being a development dictate economists in choosing a spe- Dmainstream economist. He has economist, has been writing about the cifi c model. In doing so, they ignore questioned the neoliberal orthodoxy Washington Consensus approaches, relevant ones that could provide better that paddles free-trade for maximum especially on the role of institutions, policy prescriptions. He stresses that welfare. He is also brave enough to international trade and development economists should use discretion in explore the practicability of a state-led in the backdrop of globalization. This picking up the right model from a or state-managed industrial policy, book provides an interesting tale of bunch of alternatives rather than be which identifi es certain industries and why such approaches got curren- fi xated by one model. diverts resources towards strategic cy and what has gone wrong with It is said that economists are infrastructure to rev up the engine of the Washington Consensus. While trained to share only selective and growth. referring to the neoclassical economics rather simplistic insights with the In his book ‘Economics rules: The and economic policy prescriptions of public. Rodrik argues that economists rights and wrongs of the dismal science’, 1980s, he sheds light on the weakness- create a pro-market stance, whereas Rodrik has questioned the charisma es of mono-economics and reasserts a lot of research actually brings forth associated with economic modelling. what he has already written in his heterogeneity. Rodrik insists, that He identifi es most of the models as book “One economics, many recipes”. such insights must be shared with the little more than story ideas. Accord- Emphasizing “multiplicity in public. ing to him, every economist tries to reality”, he claims that the “theory of This book is a serious critique and simplify a complex phenomenon and everything” style of economics is not defence of the discipline. Refuting expresses what seems striking to them going to reveal anything useful. He ar- the allegation on economists being in an imaginary world by creating a gues that economics is a different kind data-driven, he says that norms are model. Rodrik asserts that there are of science, as compared to physics or important in social behaviours and many models with a diverse range natural sciences, and that the use of economists do pay attention to both of reasoning and perspectives. And, scientifi c methods makes it a science. norms and evidence. He brings forth good economists pick the model that In generating a critique on eco- examples from growth strategies could validate their reasoning and nomics and models, Rodrik points out prescribed and practiced in Africa as hypothesis. that economics, unlike science, keeps well as anti-poverty programmes in So, expanding the tools is one good on creating new models without ever Mexico. These examples build a strong way of becoming a better economist. “rejecting” or “falsifying” the bad case of the usefulness of economics This strategy of economic reasoning model. Here, I think, he contradicts in public policy. In this book, Rodrik helps one to treat economics less as a himself because it is he who emphasiz- seems to be trying to restore the lustre science, but more as a craft of under- es the multiplicity of models because of the profession of economists from standing complex phenomena a bit of the multiplicity in social reality. the stress it has undergone after the better. There are, however, people Therefore, it is possible that the same fi nancial crisis. who disagree with Rodrik. For exam- model that holds good in one situation The last chapter really sums up ple, economics commentator Noah could prove to be nonsensical in some much of the debate by formulating Smith says that Rodrik’s arguments other context. Thus, the multiplicity of twenty commandments, ten for the “underrate the importance of the models is actually one of the strengths economists and ten for the non-econ- empirical revolution taking place in of economics. omists. In the end, I must say that the economics, which promises to help Rodrik points out a stark reality of book reminds us that “economists do us choose between economic mod- training in economics. He argues that not think alike”. els not based on plausibility, but on rather than social relevance, ideology The reviewer is Director, Institute for evidence”. and political preference sometimes Development Initiatives (IDI), Islamabad.
Trade Insight Vol. 12, No. 3, 2016 35 knowledge plaƞ orm
The Belt and Road Initiative
For the BRI to become an effective economic integration vehicle it would require as much as US$1 trillion for more than 900 projects.
Dikshya Singh
n September 2013, China announced structure network of transportation, ment and multilateral funds, including Ian ambitious plan to resurrect the energy, and telecommunication a Silk Road Fund, the Asian Infrastruc- ancient silk routes that connected projects. This includes gas pipelines, ture Investment Bank (AIIB), and the Asia and Europe. The plan is named railways and highways and deep-sea New Development Bank (NDB) set up as the Silk Road Economic Belt and ports. The major outcomes foreseen by BRICS countries that include Brazil, the 21st-century Maritime Silk Road, by Beijing for pushing for OBOR Russia, India, China and South Africa. popularly known as the One Belt One is to promote policy coordination, Along with strengthening the lending Road (OBOR), or Belt and Road Initia- connectivity of facilities, unimped- capacities of its public sector banks, tive (BRI). The idea is to construct com- ed trade, fi nancial integration and through capital injection to increase mercial land routes connecting China people-to-people bonds.3 lending to OBOR-related projects, with Europe through Central and According to the vision state- China’s state-owned investment con- Western Asia, and mapping sea routes ment, the multiple trade superhigh- glomerate China International Trust to link China and Europe through ways under OBOR would bring and Investment Corporation (CITIC), South China Sea and Indian Ocean. together China, Central Asia, Russia and its subsidiaries have announced The ambitious plan, which touches and the Baltic through one route, plans to provide over US$113 billion about 65 countries in Asia, Africa and while the another would connect in debt and equity to support roughly Europe, would require building and China with Western and Central 300 OBOR-related projects. upgrading highways, railways, ports Asia through Pakistan and Persian The US$40 billion Silk Road Fund, and other infrastructure. The countries Gulf to reach the Mediterranean Sea. which was established in December covered by OBOR represent 55 per On the Southern side, a route will 2014, is supposed to invest at least US$ cent of the world Gross National Prod- connect China to India via Bangla- 14 billion for funding projects in Cen- uct, 70 per cent of the world popula- desh and Myanmar. Along with land tral Asia.5 Financing OBOR projects is tion and 75 per cent of known energy routes, OBOR aims at establishing also considered as one of the objec- reserves.1 nautical connectivity from Asia to tives for establishing the AIIB, which In March 2015, China’s National Europe. It is designed to go from has a capital base of US$100 billion. Development and Reform Commis- China’s eastern coast, through the Likewise, the NDB formed by the sion, Ministry of Foreign Affairs and South China Sea and the Indian prominent emerging economies is also Ministry of Commerce released its Ocean, touching South East Asia, supposed to be another major vehicle ‘Vision and Actions on Jointly Building South Asia, Eastern Africa and North to fi nance OBOR projects. In addition, Silk Road Economic Belt and 21st-cen- Africa en route to Europe. China has been pushing for the Shang- tury Maritime Silk Road’.2 According The vision document, however, hai Cooperation Organization (SCO) to the document, BRI is “the initiative does not provide details. It presents to establish a fi nancial institution that to jointly build the Belt and Road, em- broad sets of notions for pursuing would provide an additional funding bracing the trend toward a multipolar the initiative and policy objectives, stream for OBOR projects. world, economic globalization, cultural thus the projects, programmes and Despite the colossal fi nancing diversity and greater information participants could evolve as the requirement for the projects, the technology (IT) application…”. The in- routes are forged. countries in Asia, Europe and Africa itiative’s objective is to bring in a new For the BRI to become an effec- are eager to become part of the BRI for era of open and free trade for mutual tive economic integration vehicle its promise of shared regional prosper- benefi t and common security. it would require as much as US$1 ity and stability. However, realizing trillion for more than 900 projects.4 this vision of collective enrichment is Integration by infrastructure Beijing has planned to fi nance the fraught with challenges. The coun- China has laid emphasis on building a projects through Chinese state- tries included in the initiative are comprehensive trans-regional infra- owned banks and a series of govern- diverse in nature not only culturally
36 Trade Insight Vol. 12, No. 3, 2016 Box Proposed OBOR corridors Corridor Route Countries covered Additional info
China has opened a freight rail route link- The New Eur- China’s Jiangsu Province ing Chongqing to Duisburg (Germany), Kazakhstan, Russia, Belarus asia Land through Xinjiang to Rotterdam between Wuhan and Mělník and Pardu- and Poland, reaching a num- Bridge Econom- in the Netherlands through bice (Czech Republic), from Chengdu to ber of coastal ports in Europe ic Corridor central and eastern Europe Łodz (Poland), and from Zhengzhou to Hamburg (Germany).
Three countries have an agreement to The China- forge a tripartite cooperation to strength- Mongolia-Russia China-Mongolia-Russia Mongolia, Russia en rail and highway connectivity; ad- Economic Cor- vance customs clearance and transport ridor facilitation.
Several multi-million dollar projects are China-Central Alashankou through Central Kazakhstan, Kyrgyzstan, Ta- being financed in Central Asia (eg: Kyr- Asia-West Asia and West Asia to Mediter- jikistan, Uzbekistan, Turkmeni- gyzstan and Tajikistan). A China-Central Economic Cor- ranean coast and Arabian stan, Iran, Turkey Asia pipeline runs through Kazakhstan, ridor Peninsula Uzbekistan and Turkmenistan.
There are six highways, two railways, three China-Indochi- Land route through Greater Vietnam, Cambodia, Thai- waterways, two oil and gas pipelines, na Peninsula Mekong River region; mari- land, Laos, Myanmar, Philip- eight information channels, 15 road ports, Economic Cor- time route through South pines, Malaysia, Singapore, two railway ports, and two ports in the ridor China Sea Indonesia, Brunei Darussalam Corridor.
There is a long-term plan for building high- China-Pakistan Kashgar, Xinjiang in China to ways, railways, oil and natural gas pipe- Economic Cor- Pakistan Pakistan’s Gwadar Port lines and optic fibre networks stretching ridor from Kashgar to Gwadar Port.
The member nations have decided to Bangladesh- Kunming to Kolkata thor- build multi-modal transport—road, rail, China-India- ough Mandalay in Myanmar, Bangladesh, India, Myanmar water ways and air ways, infrastructure Myanmar Eco- Dhaka and Chittagong in and agreed on cooperation in energy nomic Corridor Bangladesh. and power sectors.
Source: Author’s compilation from various sources.
tent_281475080249035.htm. Accessed: and geographically but in terms Notes 27-December-2016 of economic development as well. 1 Pop, I. L. 2016. Strengths and Chal- 3 ibid. In addition, amid the geo-political lenges of China’s One belt, One road 4 Yini, H. 2015. “China to invest $900b in mistrust directed towards China, Initiative. Centre for Geopolitics & Belt and Road Initiative”. China Daily, 28- another concern is whether the Security in Realism Studies. http://www. May-2015. http://usa.chinadaily.com.cn/ cgsrs.org/fi les/fi les/publications_46.pdf. business/2015-05/28/content_20845687. large scale infrastructure invest- Accessed: 2-Junuary-2017 htm. Accessed: 28-December-2016. ment would be able to generate 2 National Development and Reform 5 Zimmerman, T. 2015. The New Silk economic return in comparison to Commission, Ministry of Foreign Roads: China, the U.S., and the Future the costs incurred. Affairs, and Ministry of Commerce of Central Asia. New York: Center on of the People’s Republic of China. The author is Research Offi cer, South International Cooperation, New York 2015. Action plan on the Belt and University. http://cic.nyu.edu/sites/default/ Asia Watch on Trade, Economics and Envi- Road Initiative. http://english.gov.cn/ fi les/zimmerman_new_silk_road_fi nal_2. ronment (SAWTEE), Kathmandu. archive/publications/2015/03/30/con- pdf. Accessed: 5-January-2017.
Trade Insight Vol. 12, No. 3, 2016 37 network news
Trade and transport facilitation audit in South Asia
THE diffi culties facing trade and transport in South Asia were dis- cussed during a two-day conference held in Kathmandu from 29 to 30 September 2016. The event was held to dissem- inate the fi ndings of South Asian Association for Regional Cooperation (SAARC) country studies on trade and transport facilitation in the region. It was organized by South Asia Watch on Trade, Economics and Environment (SAWTEE) and brought together participants from all the SAARC countries, except Afghanistan. Asian region calling on the political benefi t countries through a greater Discussions were carried out leadership for greater political will amount of trade and a diversifi ed on the fi ndings by regional experts to remove the hurdles in the way of trade, not to mention the benefi ts it following the presentation of each intra-regional trade. gives to small and medium enterpris- country study. During the inaugural Ms. L. Savithri, Director for Trade, es, he said and warned that without session, chief guest of the function, Finance and Economics at the SAARC measures to do so South Asia’s Nepal’s Minister for Commerce Mr. Secretariat, said that the intentions existing competitive advantage could Romi Gauchan Thakali said that of the member countries have been erode. South Asia suffers from connectivity good, that the institutions are there The dissemination meeting problems and took up the diffi culties but things have not been moving as brought together government of- particularly faced by landlocked na- well as expected, as “we have focused fi cials, practitioners, private sector tions to drive his point home. on cooperation rather than integra- representatives, media personnel, Mr. Suraj Vaidya, SAARC Cham- tion”. academics and various other stake- ber of Commerce and Industry Pres- Dr. Posh Raj Panday, Executive holders to share their knowledge and ident, highlighted the diffi culties of Chairman of SAWTEE said that experience in trade and transport cross-border trading within the South cross-border trade facilitation can facilitation across South Asia.
‘Developing nations should adapt to mega-regionals’
THE importance of adaptation in international trade policy: Per- Trans-Pacifi c Partnership. by developing countries to trade spective from the US”. The seminar also addressed po- policy changes that come with the Prof. Robert Z. Lawrence, Albert tential implications of Brexit, or the implementation of regional and L. Williams Professor of International exit of Britain from the European mega-regional trade agreements Trade and Investment at the Kenne- Union, for international trade. was discussed in Colombo on 4 dy School of Government, Harvard IPS Executive Director, Dr. July 2016. University, noted the emergence of Saman Kelegama, researchers, Institute of Policy Studies of Sri domestic political movements in the experts from the state and private Lanka (IPS) in Colombo organized United States against trade liberaliza- sector as well as academia partici- the seminar titled “Recent trends tion through agreements such as the pated in the discussion.
38 Trade Insight Vol. 12, No. 3, 2016 Cooperation on SMEs’ role in global food, water and trade discussed energy discussed A discussion was organized in THE role of small and medium New Delhi on 29 July 2016 to enterprises in global trade was dis- build consensus on how to bring cussed at the World Trade Organ- about trans-boundary cooper- ization Public Forum on 27 Sep- ation in South Asia to achieve tember 2016. The discussion titled food, water and energy security. ‘Trade policy - A tool to facilitate Consumer Unity & Trust the participation of SMEs in global Society (CUTS) International trade’ was organised by Consumer organized the dialogue to share Unity & Trust Society (CUTS) Inter- the advocacy messages in the national, India. driver of innovation driven future domains of agriculture, water Presentations made a case economy including linking it to and energy with a wide group for changes required in the trade the Hangzhou G20 Summit Dec- of stakeholders including policy policy of low-income countries for laration. makers, academia, civil soci- facilitating this objective, particu- Mr. Pradeep S. Mehta, Secre- ety organisations and media larly from the point of view of tary General, CUTS Internation- from the region. The event was employment generation in tradable al, while opening the session, titled, ‘Sustainable Develop- manufacturing and services and in observed that the focus of the ment in South Asia: Exploring helping small and medium enter- programme was to brainstorm Trans-boundary Cooperation in prises (SMEs) become a part of around the question “Why trade Agriculture, Water and Energy’. global value chains. policy is an important tool to The event was part of the The discussions also empha- facilitate the participation of SMEs project ‘Sustainable develop- sized on facilitating SMEs to be a in global trade”? ment investment portfolio: Pro- moting water, food and energy security in South Asia’. SDIP is supported by Conference on sub-regional Department of Foreign Affairs and Trade, Australian Gov- ernment and implemented by connectivity, energy, investment CUTS International in India with the cooperation of Unnayan SUB-REGIONAL connectivity, energy Shamannay in Bangladesh, SNV and investment were discussed at an in Bhutan, South Asia Watch on event held on 24 September 2016 in Trade, Economics and Environ- Mumbai. ment (SAWTEE) in Nepal and SAARC Chamber of Commerce Sustainable Development Policy and Industry (SCCI) organized the Institute in Pakistan. conference “Unleashing South Asia: It was attended by more than Connectivity, sub-regional initiatives, 60 participants from Bangladesh, energy and investment protection”. Bhutan, India, Nepal and Paki- Representatives from both the stan comprising representatives public and private sectors discussed challenges faced by South Asia in from specifi c government de- regional connectivity, energy and in- fostering intra-regional connectivity partments, business associations, tra-regional investment in South Asia. and investments for enhanced regional universities and research institu- The discussions were expected to sug- economic integration. About 45 par- tions, academia, subject experts, gest the way forward to the SAARC ticipants representing government, non-governmental organiza- Secretariat prior to the upcoming 19th non-government, academia, business tions, media and diplomats in SAARC Summit. and press attended the event. Trade the domain of agriculture, water The objective of the conference experts and businessmen from the and energy. was to exchange views on issues and region addressed the conference.
Trade Insight Vol. 12, No. 3, 2016 39 Working Paper: History, growth and impli- cations of formal seed system in Nepal Author: Dr. Kamalesh Adhikari Publisher: SAWTEE
Briefi ng Paper: A study of effect of Chure South Asia Watch on Trade, degradation on water : A case of Kamala Economics and Environment Basin in Nepal Author: Ms. Dikshya Singh (SAWTEE) is a regional network Publisher: SAWTEE that operates through its secre- tariat in Kathmandu and member institutions from fi ve South Asian countries, namely Bangladesh, India, Nepal, Pakistan and Sri Lanka. The overall objective of SAWTEE is to build the capacity of concerned stakeholders in South Asia in the context of liber- alization and globalization. www.sawtee.org
40 Trade Insight Vol. 12, No. 3, 2016