Integration of SAARC Nations: Growth, Trends and Challenges

Abstract

South Asia is emerging as the most promising and energetic region in the global economy. Expansion of domestic economies, rising opportunities for incomes and investments, growing of financial markets, greater pursuit of peace and stability are major driving factors of the current pace of growth in South Asia. Economic growth of the region has picked up at the faster rate in the last two years. Seven out of eight countries in the South Asia region have registered economic growth rates over 6 percent a year, making it one of the dynamic regions in the world.

According to Global Economic Prospects of the World Bank, real GDP growth in South Asia which was at 5.7 percent in 2009 is poised to take leap to 6.9 percent in 2010 and to 7.4 percent in 2011. As compared to other regions, the prospect for South Asia seems to appear much brighter in the near future. Financial markets encompass institutions, financial products, market mechanism and services, which can be convenient tools to build common economic market. Financial market in the SAARC region will be a powerful mechanism to foster economic development and enhance quality of life of the people in our respective countries. This paper tries to highlight the latest trends and developments of SAARC nations, especially the role of India in the bloc.