Making Regional Cooperation Work for South Asia's Poor

South Asia has attracted global
attention because it has experienced rapid GDP growth over
the last two decades. What is not so well known is that
South Asia is the least integrated region in the world.
South Asia has opened its door to the rest of the world but
it remains closed to its neighbors. Poor market integration,
weak connectivity, and a history of friction and conflict
have resulted in two South Asias. The first South Asia is
dynamic, growing rapidly, highly urbanized, and is
benefiting from global integration. The second South Asia is
rural, land locked, full of poverty, and lagging. The
divergence between the two South Asias is on the rise.
Policy makers in South Asia have realized that countries and
regions can not grow in isolation. The unique geography of
South Asia-distance and density--has the potential to raise
growth through increased flow of labor, capital, ideas,
technology, goods and services within the region and with
the rest of the world. Most lagging regions, in terms of
both per capita income and poverty incidence, in South Asia
are either land-locked or located in the border areas.
Regional cooperation and market integration will unlock the
development of these lagging regions in South Asia.