Regional Integration and Economic Development in South Asia: Opportunities and Challenges


Regional integration is commenced when neighboring countries identify some areas where they co-operate with one another, and this areas referring regional public goods such as energy, infrastructure, and the environment; regional traditional and non-traditional security threats such as territorial overtaking, spread of violence and extremism, transnational effects of health and food; and regional socio-economic and cultural integration etc. 

The very ideas of regionalism though developed post-WW2 world, but after declining of neo-liberal force- the globalization- to sustain equity among nations, the concept regionalism or regional co-operation has become more obvious. Therefore, SAARC (South Asian Association for Regional Co-operation) established at the same ideas. 

And from establishing to present day- Bangladesh as a member states been doing great by carrying out the very agendas of the platform. But some other states haven’t have the same objectives yet. So In this writing, we will discuss about regional co-operation in berif and SAARC as a regional institution, and try to analyses the relationship between Bangladesh and SAARC in details. 


Why Regional Integration  is Important

Regional co-operation has emerged from common identification on various regional affairs including, both traditional and non-traditional security threats, socioeconomic overlooking, common public goods or resources Such as joint river or maritime zones etc. But unlike integration, regional co-operation in practice is very difficult to identify for various reasons namely:

  • Political mistrust, political instability or even national pride ;

  • Unequal possession in costs and benefits;

  • Overlapping domestic tendencies in vacuum regional system;

  • Uneven competition of interests or core peripheral dilemma; and many others 

However, these difficulties need to be solved for common good, and here comes the concept integration. But this integrating process can only be facilitated through following agencies:

  • International organizations (IOs), helped its members through consultations, technical expertise, logistics support and most importantly financial assistance;

  • Regional integrating agreements or regional organizations (RIAs or ROs) work on non-trade related issues through specialized institutions- which are created by some common consented rules- where every  mechanism has structured from mutual collaboration to disputes settlements. Unlike IOs, ROs helped to discuss a variety of issues from politics to culture- which is essential for maintaining peace and security- and also progress of the region. 

Regional integration is essential for various reasons, it may vary from region to region, namely:

  • Non-traditional security (NTS) threats have become crucial for every regions of the world to both prevent and counter. Trafficking of drugs and human, health and food security, environmental degradation, enhancement of extreme violence etc. are counted as NTS. This threats has transnational effects. For example, Covid-19. So, in today’s globalized world no state in a region cannot claim that it is someone’s own problems, because Covid-19 showed that howo we can suffer by submitted that. 

  • Regional integration has created the very idea that trust or partnership is better than punishment if they can make it. Because, today’s international system, both world and regional, is based on liberal economy, so mistrust or punishment can only bring defeat in common satisfaction. 

  • Regional integration is very essential for continuing supply chains. 

  • Regional integration can help in emergency periods. Like present pandemic times, regionalism emerges higher. And many others. 


South Asia as a Region Why it matters?

South Asian countries including (Bangladesh, India, Nepal, Bhutan, Sri Lanka, Maldives, Pakistan, Afghanistan) carries an exceptional importance both in Asia and world. The civilization appeared here is the world’s ancient one. And the prime issue we can represent about southern Asian country’s economic, political and social scenario prevailing in these region. Each of the countries has different perspective of being important regionally and globally. Let’s mention about some explanation why south Asia matters as a region:

A new wave of economic development has begun in south Asia. The 3rd largest economy of the world captured by India. This made India a dominant actor among others and few conflicts emerged in accordance with this issue. Connection with United States adds other line of importance of India (south Asia) to the world politics. 

The geo-strategical location attracts the other super power to place an influence in this region. 2nd point we can say about unsolved conflicts or unstable political situation. For example, Bangladesh-Myanmar problem on Rohingya   issue, India-Pakistan inconsistent relationship, India-China competition, Kashmir problem etc. 

Diplomatic issue can also be major concern about the south Asian region. India is the up-growing economy and Bangladesh is India’s neighbour country. Again soviet support for Bangladesh added a new dimension to be considered as important. Sea border among these countries is the other explanation of our point.

A large number of labour opposite to the less capital is exported into the Europe every year from south Asian countries. So developed or industrialized countries want to make a tie with this arena. The regional cooperative platform like SAARC (South Asian Association for Regional Cooperation) is extended stage of mutual action locally. 

The location of the Bay of Bengal made marine diplomacy and   cultural -diversity of the people is included about this. Above all these made a short brief of the reason why south Asia matters as a region. 


South Asian states intension about integration.

Regional integration helps South asian  countries overcome divisions that impede the flow of goods, services, capital, people and ideas. These divisions are a constraint to economic growth, especially in developing countries. 

The World Bank Group helps its client countries to promote regional integration through common physical and institutional infrastructure. Divisions between countries created by geography, poor infrastructure and inefficient policies are an impediment to economic growth. 

Regional integration allows countries to overcome these costly divisions integrating goods, services and factors’ markets, thus facilitating the flow of trade, capital, energy, people and ideas.


Regional integration of south Asia  can be promoted through common physical and institutional infrastructure. Specifically, regional integration requires cooperation between countries in:Trade,investment and domestic regulation, transport, ICT and energy infrastructure, Macroeconomic and financial policy. 

The provision of other common public goods. Cooperation in these areas has taken different institutional forms, with different levels of policy commitments and shared sovereignty, and has had different priorities in different world regions. Regional integration can lead to substantial economic gains. Regional integration allows South Asian states  countries to:

    Improve market efficiency.

    Share the costs of public goods or large infrastructure projects.

    Decide policy cooperatively and have an anchor to reform.

    Have a building block for global integration.

    Reap other non-economic benefits, such as peace and security.

However, there are risks to regional integration that need to be identified and managed. Countries may have different preferences on priorities for regional integration, depending on their connectivity gaps, economic geography, or preferences for sovereignty in specific areas.

Regional integration’s impact on trade and investment flows, allocation of economic activity, growth, income distribution are often difficult to assess. Lack of adequate complementary policies and institutions may lead to inefficient outcomes. For instance, policy barriers at the border may offset the gains transport infrastructure cooperation. 

Regional integration creates winners and losers, notably within countries. Policies and institutions are needed to ensure that regionalism is inclusive and social, environmental, governance risks are managed.

SAARC as South Asian Regional Integration: 

Regional integration ia a way to bring neighbouring countries in platform for enhancing mutual cooperation by voluntary agreement among them. This agreement  provides common organisation with some rules and regulations. By this point, we can call SAARC as prominent actor of South Asian regional integration. 

To develop the lifestyle of South Asian inhabitants, head of the governments of seven states came together and signed a charter to welcome SAARC as a regional organisation on December 1985.

SAARC works for integrating whole South Asia in the basis of common interests. According to SAARC Charter, its aims and goals are decorated for overall development of South Asian region and its residents. For this purpose, the goals of SAARC are divided into several sectors, like as; economic, technological, educational, scientific, cultural cooperation etc.

Though SAARC cannot reach its expected terminal, it plays a prominent role in the point of South Asia regional integration. Some basic point mentioned below to support its regional integration role;

1. SAARC becomes a successful institutional platform for expanding cooperation of South Asian region. This platform works for cooperation all socio-economic areas, expect political issues.

2. To promote food security in South Asia region, SAARC approved “SAARC Food Security Treaty”. By this treaty SAARC arranged a ” Food Security Fund” for member states in emergency cases.

3. To prioritize economic cooperation, SAARC institutes “South Asian Development Fund (SADF)”. This fund provides economic help for several integrated sectors of South Asian countries, including poverty reduction. 

4. For enhancing trade and economic cooperation among the states of South Asia, SAARC inforced two treaties,(1) ‘South Asian Preferential Trading Arrangement (SAPTA)’, and (2) ‘South Asian Free Area(SAFTA)’.SAPTA was inforced on 8 December, 1995 and SAFTA was inforced  on 1 January,2006. Basically, these treaties approved for removing tarrif and non-tariff barriers from trade and enhancing trade and economic cooperation among South Asian countries. 

5.SAPTA provides opportunity to build a ‘Trade Block’ like NAFTA. By the treaty,SAARC can build a trade block in South Asian countries to protect economic interests of member states in world trade and economy. 

6. By using SAARC as a platform of regional integration, all states of South Asia can arrange integrated research project on many important issues, like as; agriculture, communication, education and culture, climate change, science and technology, women empowerment etc.

7.All the member states are integrated to reduce illegal drug trafficking and misuse it. For that reason,states regularly arrange several seminar and workshop. SAARC provides this opportunity for the states of South Asia. 

8. SAARC institutes several regional centre based on some important issues. Like as; ‘SAARC Agriculture Information Center’ and ‘SAARC Climate Research Center’ in Bangladesh, ‘SAARC Documentation Centre’ in New Delhi, ‘SAARC Tuberculosis Center’ and ‘SAARC Information Center’ in Katmandu, ‘SAARC Human Resource Center’ in Islamabad, ‘SAARC Cultural Center’ Sri- Lanka, and ‘SAARC Coastal Area Management Center’ in the Maldives. These center’s location focuses the regional integration process of SAARC.

9. All the states are affected by terrorism and separationist more or less. Though present situation of influence of terrorism in South Asia under controlled, In 8th summit of SAARC,all member states expressed their willingness in working together against terrorist activities in the region.SAARC gives this opportunity to integrate these state for removing terrorism from South Asia respectively. 

10. SAARC provides opportunity to arrange bilateral meeting besides its summits. It is the most important step to build up mutual trust, understanding and cooperative relations among the states of South Asia. 

Basically,  almost all the states of South Asia region were influenced to Institute SAARC by removing mutual suspicions and mistrust and placing there mutual trust and credible environment among them. Still present from birth period of SAARC, it successfully plays as build up regional integration in South Asian countries. 

Though SAARC faces failures in some extend, it can not undermine the role of SAARC in South Asia regional integration process. Rather, its success in this process mentionable. The resons behind this comment about SAARC disclosed above.


South Asian Integration Process


South Asian countries Bangladesh, Bhutan India, The Maldives, Nepal, Pakistan, Sri Lanka, and Afghanistan together formed a regional organization named SAARC for the entire betterment of this region. These countries have common heritage, culture, linguistics, social practices and history. 

South Asian countries have security issues, inter-state disputes, unworked natural resources, and economic efficiency. With all this consignment, South Asia is a least integrated state. Though SAARC was a great initiative for their overall development, but the political conflicts and variance opinion, imbalance of power and so many challenges were the barriers of the South Asian integration process.

South Asian countries are the global economic and trade kernel of importance and its advantageous production, supply chains were increasingly gained appreciation. At first as a South Asian country Bangladesh took an initiative to form a regional organisation like SAARC for the purpose of economic, social and cultural improvement. 

South Asian countries wanted to bring out from the dependency of western countries because what they provide is based on so many conditions that are not beneficial to South Asian countries at a wide-rang. In 1977, former president of Bangladesh, Ziaur Rahman visited India, and gave proposal of regional cooperation. 

In 1985, First summit of SAARC hosted by Bangladesh and established in Dhaka. And in 2006, SAARC started SAFTA for non-tariff and para-tariff trade facilities. By establishing SAARC, Seven inner south Asian states came to an agreement on formatting trade bloc and creating a relations of friendship, trust and appreciation 

As a member states of SAARC, Bangladesh proclaimed the regional association of human resource management, technology and ICT sector, reduction of poverty, prevention of climate change, ocean and blue economy, fuel and electricity and a whole regional cooperation. Other purposes of this regional organisation are assuring peace and stability in South Asia and enrichment of trade, investment, fuel, security, infrastructure, cohesion and cultural harmony in the South Asia.



Regional integration is required for the development of South Asian states. As the world moves fast we should focus on the logical area for integration:

Telecom & internet:   A regional telecom system & with an internet-based network is need for the Education sector, research, ensure to better flow of ideas, technology, investment, goods & services

Energy Sector: there is a lack of cooperation between regional states. While Bangladesh, India, Pakistan has major great coal & natural gas demand, Nepal & Bhutan have hydropower resources, South Asian states need to cooperate in fulfilling the demand as focus on the key issue like regional power market, energy supply availability energy trade infrastructure, etc

Transport: BIMSTEC & SAARC’S regional transport projects will ensure solidarity among South Asian countries. This will boost investment in transportation plans. 

Focusing on Climate Change: Although South Asian regions have experienced climate change for decades, the concern is that Himalayan Glaciers could worsen the water situation, there is also experience of rising sea levels and cross-border solidarity could be the solution. For example, the people of Bangladesh and Nepal can benefit from this water sharing system.

Trafficking & Smuggling: it is not adequate research for trafficking and smuggling but several people faced it for that reason. It comes as a region of origin, transit, and destination for trafficking. Newer flows of trafficking are online exploitation, pornography, Illegal adaptation, etc. So, the Regional government should focus on that issue strengthening inter-agency cooperation and increased awareness among the people.

Terrorism: Terrorism has taken a terrible form all over the world including South Asia in this case the suppression of terrorism is very necessary for mutual solidarity. Oppositely, it could throw in the field of cooperation for example of the 19th Summit India different from attending the Summit due to its attack on the Uri region


(1)    Among different special groups such as business associations, labor unions, religious and social activities could play an important role in the decision-making process.

(2)    Regional government should formulate a positive role.

(3)    Strategic policy-making groups play an important role in formulating policies as they have communication with both the government and the people. These members support the status quo by being extremely vigilant &  help set an example of relations with other states.

(4)    The general people often can’t play a role in making Complex decisions as regional policies are more involved with the people. So, Various internal issues can have an impact in this regard.

(5)    Countering external security threats is one of the greatest challenges for South Asian integration. The threat may come in terms of ideological, political, or territorial perspectives. So, member states come together to strengthen their power in countering terrorism.

(6)    The trust deficit is one of the external security issues in that region. In 1966 India- Pakistan conflict made this regional imbalance ensure peace & agreement between the states.


Future of South Asian integration 

It is necessary and important for regional cooperation, and integration thus on strengthen and become a lot of and a lot of thriving’s. Regional cooperation, and integration turn out high levels of economic edges across the region. Regional economic integration, it will build capability platforms particularly for the smaller economies or least developed countries in South Asia, and this could lead to larger trade diversity, and to larger interregional trade for the common profit. 

Trade facilitation programs and policies on a regional platform will ease trade constraints, that expands opportunities and markets, essential parts for regionally a lot of balanced growth and poorness reduction. 

Recent decades have seen a growing trend towards regional economic integration. It’s extremely clear that SAFTA is barely a warm starting in broader economic integration among South Asian economies, that most of the benefits from regional trade integration square measure still to be complete. SAFTA, a regional cooperation, and integration in South Asia continues to progress, it should be accelerated by different types of progressive steps. 

Success stories at stage level can operate building blocks for any regional cooperation, and integration. When the institution of South Asian Association for Regional Cooperation (SAARC) in 1985, the tactic of regional economic integration in South Asia looked as if it’d gather some momentum with the language the South Asian trade space (SA FTA) agreement in 2004. 

Aboard regional trade liberalization, some South Asian countries — together with India , Bhutan, Democratic Socialist Republic of Sri Lanka and Asian country — have additionally pursued economic integration through bilateral approaches. However there still remains a lot of to be achieved. 

An absence of law and order — that is vital for the protection of private enterprises plays into South Asia’s restrictive problems. In recent years, law, and order across the region has deteriorated with foreign countries provision travel reformatory warnings for many locations. Such travel advisories raise dealing prices, as foreign social control, and technical experience aren’t to any extent further promptly accessible.

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