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Sri Lanka

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.

9 New Year Wishes from South Asian Youth

Delilah Liu's picture
Students from Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka in Bhutan expressed their wish for a more integrated South Asia. 
Photo by: Rubaiya Murshed

After the New Year arrives, most of us have the habit of making New Year resolutions. Whether it is a higher salary, a promotion, world travel or even weight loss, some wishes are similar among us and our friends. This year, after meeting the students attending the 11th South Asia Economic Students Summit (SAESM), I realized how New Year wishes can be vastly different from one corner of the world to another. 
 
Here’s a sample of New Year “wish lists” of the South Asian students who attended the 11th SAESM in Thimphu, Bhutan held between Dec. 23-28, 2014. 
 
“I hope South Asia can have a similar program to ERASMUS in Europe, where students are allowed to spend one year or a semester working or interning in a different South Asian country."
- Phalguni, Kirorimal College, India

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.

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