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Why do smaller countries benefit from greater trade with their neighbors?

Sanjay Kathuria's picture
Quay cranes on docks Sri Lanka. Dominic Sansoni/World Bank

The real end winner of NAFTA (North American Free Trade Agreement) is going to be Mexico […]” said then Mexican president Vicente Fox, in 2001. He was referring to Mexico’s gains from trade integration with the USA through NAFTA.

Vicente Fox was right. Mexico has continued to make sustained gains in trade over a 20 year period after signing NAFTA in 1994 with the US, its much larger partner (figure 1).

​Opening up trade is not easy because losses can be immediate, while gains, despite being potentially much larger and more widespread, are often dispersed over time. Producers that may sustain losses from more open imports are often well organized and can hold up reforms quite effectively. Moreover, when one of the countries involved in mutual trade liberalization is disproportionately large, it enables the smaller country lobbies to raise the specter of being swamped by imports from its larger partner.

In the case of South Asia, a history of political differences further complicates deeper trade and economic cooperation within the region. Under these circumstances, opening up trade to neighbors requires strong leadership and a bold vision about the role of trade and regional integration in economic development.

Let’s All Play Antakshari, Shall We?

Delilah Liu's picture
Delilah Liu/World Bank

On Dec 24th 2014, Christmas Eve, I went into the reception room of Hotel Namgay Heritage in Thimphu, Bhutan to look for some students to interview for my story on the 11th South Asia Economic Students Meet (SAESM). To my surprise, I saw five sofas filled with students, as if they were waiting for me. The cruel reality was, the students from India, Nepal, Pakistan, Bangladesh and Afghanistan were singing without even noticing my entrance into the room.
They were playing an Indian parlor game (later explained to me by an Indian student) called Antakshari, where each team grouped by the sofa sings the first verse of a Bollywood movie song that begins with the consonant on which the previous team's song selection ended. Though Bollywood movies and songs are often in Hindi; somehow the Afghans who speak Pashto and Dari, Pakistanis who speak Urdu, Bangladeshis speaking Bengali and the Nepali speaking Nepalese were all able to understand each other and sing along.

Reflections on International Day of Persons with Disabilities

Maitreyi Bordia Das's picture
"Disability is no barrier. Landmine victims play volleyball." Photo: AusAID

I am often asked how “we” – development professionals and practitioners at large - can make a difference to social exclusion. It is an opportune day to reflect on this by thinking about a diverse group of historically excluded people. The focus of today’s International Day of Persons with Disabilities is appropriately on Sustainable Development: The Promise of Technology.” Because the power of technology in rehabilitation and hence, for inclusion, is uncontested. Let me quickly add that technology is a necessary, but by no means a sufficient condition for enhancing the functional ability of persons with disabilities. 

Technology attenuates many barriers that disability raises. It has changed the way persons with disabilities live, work and study. The seminal World Report on Disability emphasizes the role of technology for the inclusion of persons with disabilities in markets, in services and in physical, political and social spaces. It points out for instance, that assistive devices can substitute or supple­ment support services, possibly even reduce care costs. The National Long-Term Care Survey in the United States found that higher use of technology was associated with lower reported disabil­ity among older people. The fascinating Digital Accessible Information SYstem (DAISY) consortium of talking-book libraries aims to make all published information acces­sible to people with print-reading disabilities. And the examples could go on.

Tackling the Most Critical Regional Economic Challenges

Sanjay Kathuria's picture
south asia integration
For the first time in history, all South Asian leaders were invited to the newly elected Indian Prime Minister’s oath-taking ceremony, May 2014. President Mahinda Rajapaksa/Flickr.  

I’m on my way to the 7th South Asia Economic Summit (SAES) in New Delhi, India. The summit* brings together leading analysts, academics, policymakers, the private sector and civil society from across the region and beyond, who meet to suggest solutions to South Asia’s economic issues and learn from each other’s experiences. 

This year’s SAES takes place at a very opportune time. Regional cooperation momentum has been on an upswing. The theme of the summit, “Towards South Asian Economic Union” captures the renewed optimism of moving forward on the regional agenda and generating shared prosperity. Apart from that, the SAES is held between November 7 – 8, only two weeks before the 18th SAARC (South Asian Association for Regional Cooperation) Summit, where heads of state from Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri-Lanka will meet in Kathmandu, Nepal.