Test: Asia- Economic Development - UPSC MCQ

International Monetary Fund (IMF) issued a warning on January 31, 2023, about the slowdown of global trade from 5.4% in 2022 to 2.4% in 2023.

The growth of South Asia-East Asia trade since the 1990s is linked to India's Look East Act East policies, South Asia's adoption of reforms, and China's offshoring of global supply chains to Asia.

Regional trade integration across Asia can be encouraged by gradually reducing barriers to goods and services trade. Import tariffs and non-tariff measures have risen in several South Asian economies since the 2008 global financial crisis and should be reversed.

Adjustment financing to losing sectors is essential to promote gains from trade and mitigate income inequality. This measure helps in reallocating factors of production and re-training workers.

Improving the performance of SEZs in South Asia requires ensuring macroeconomic and political stability, adopting good practice regulatory policies towards investors, providing reliable electricity, and upgrading worker skills.

South Asian economies need to improve their use of tariff preferences by better preparing businesses to navigate the complex rules of origin in FTAs and by including issues relevant to global supply chains in future FTAs.

South Asian Association for Regional Cooperation (SAARC) has been practically dead since no summit has taken place since 2014, leaving the organization rudderless.

A reinvented BIMSTEC can facilitate stronger trade ties by better resourcing its Secretariat, concluding a long-running BIMSTEC FTA, and introducing dialogue partner status to encourage open regionalism in Asia.

BIMSTEC is a reinvented trade-focused organization, while SAARC, the South Asian Association for Regional Cooperation, aims to promote economic growth and cooperation in South Asia.

Forming a new organization like BIMSTEC can help realize Indian foreign policy objectives by diversifying trade partners and reducing dependence on SAARC, which has been hindered by deepening hostility between India and Pakistan.