This volume examines the dichotomy between the two faces of South Asiaߟone poverty stricken and lagging in development, the other highly urbanized and growing rapidlyߟand tries to find a workable solution to bridge this gap. It looks at the many policy and institutional constraints that contribute to this dichotomy, especially regional conflict that has made South Asia one of the least integrated regions of the world.
Chapter 3: SAFTA: Current Status and Prospects
SAFTA: Current Status and Prospects
Introduction and Background
South Asian countries, which had open economies in the immediate post-independence period in the 1940s, had become some of the most highly protectionist economies in the world by the 1970s. Tariff and, even more important, nontariff barriers were extremely high, state interventions in economic activity had become pervasive, attitudes to foreign investments were negative, often hostile, and stringent exchange controls were in place. This started to change in the late 1970s, however. In 1977, Sri Lanka initiated a process of policy liberalization, and other countries followed in the 1980s. The liberalization process, however, was often rather hesitant and was uneven across countries. It was from the early 1990s, with the start of a major ...