17 January 2013

Strengthening Economic Linkages Between South Asia and East Asia

The Case for a Second Round of “Look East” Policies

This paper argues that South Asian countries need to embark on a second round of “Look East” Policies (LEP2) to (1) link themselves to production networks in East Asia and (2) develop production networks in manufacturing and services within their region. The author argues that the key components of LEP2 in South Asia should comprise (1) completing the economic reform process that began in the early 1990s by focusing on the remaining microeconomic reforms, (2) lobbying and negotiating to participate in various on-going regional trade and financial cooperation efforts in East Asia, (3) creating a trade-friendly environment “at the border” and “behind the border”, and (4) improving “beyond the border” connectivity and logistics with East Asia to reduce trading costs between the two regions.

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