The expansion of regional trade yields gains in production specialization, efficiency and improved quality of exports, which benefit the countries participating in the regional co-operation effort, the South Asian countries should step up their efforts for regional integration to create new economic opportunities and promote trade which will bring prosperity and stability in the region. Mahfooz Elahi, President, Islamabad Chamber of Commerce & Industry has said in a meeting at ICCI.

He said South Asian countries including Pakistan are endowed with abundance of natural and human resources. However, they need greater regional integration to exploit these resources for achieving better economic development. Elahi further said that the lack of trade complementarities causes weak trade linkages in South Asia which can be developed within the region if countries achieve specialization through production sharing arrangements in ongoing year 2011.

He was of the view that the South Asian countries have an almost identical pattern of comparative advantage in a relatively narrow range of products. He proposed that in 2011 we should move away from comparative advantage to competitive advantage based policies for strengthening economies of our region and should also focus on this pattern to tackle the problems of poverty, unemployment and many other problems connected with underdevelopment.

ICCI President said that in 2010 the region accounts for 1.7 percent of world exports and 3 percent of global FDI inflows and intra-SAARC trade accounts for less than 5 percent of the total trade of the region. Intra-Asean trade in 2009 was US$ 453-billion representing about 27% of Asean’s external trade. Similarly trade of NAFTA, a regional block of only three countries comprising USA, Canada and Mexico, was US$1-trillion in 2008. But compared to these impressive results, the share of intra-Saarc trade in 2009 was just 4.31 percent of its total trade while the region has great potential to improve it.

Mahfooz Elahi emphasized on enhancing cooperation in areas of defence, bilateral trade, counter terrorism, disaster mitigation and other fields among regional states so that the goal could be realized in 2011 .He said that exploring opportunities to expand intraregional trade would give South Asia greater chances to not only benefit from trade but also increase stability against external shocks.

He said though South Asia has been engaged in trade with the major industrialized countries like EU, USA and Japan. But distances from these major markets impose significantly higher transport costs for exporters in South Asia. Therefore, the region stands to gain significantly by expanding intraregional trade for which barriers to trade should be addressed.

ICCI President urged the government to prepare a full-fledged plan of action that could help in realizing the objective of enhancing Pak-ASEAN cooperation. He said South Asia should encourage its entrepreneurs and businessmen to play a leading role in promoting economic cooperation and help build a climate of mutual trust and confidence. He said by promoting regional integration, the South Asian countries can tackle over all obstacles coming in way of their development and fast growth.