Prospects for a South Asian economy

Abstract

The task set in this paper is to analyse the major development tendencies of South Asian states. The article highlights the regions' main social and economic problems, their reasons and consequences, as well as the measures undertaken by the governments of the South Asian states to overcome these issues. The author focuses on the scale and efficiency of South Asian states' economic development, on the features of accumulation of innovative potential, the main difficulties of their fiscal and monetary systems, and also on the region's current place in the world economy. The article underlines the increasing role external factors play in the development of the South Asian economies. The author notes that the states of the region have made noticeable progress in implementing an export-oriented industrialization policy over the last two decades. This policy results in the growth of their export and improvement of their structure. Meanwhile, the level of the South Asian countries' integration in the world economy and in the process of international capital movement still remains rather low. The research is focused on the essential involvement of the South Asian states into the world migration processes and also on the activity of the regional integration organization - The South Asian Association for Regional Cooperation (SAARC). The author examines the main social problems of the South Asian countries. It is emphasized that, despite essential achievements in economic development of these countries, their educational and health care sectors still lag behind those of most developed and even of some developing states. Besides, the region is characterized by mass poverty. The eradication of poverty has been one of the priority social and economic tasks facing the leaders of the South Asian states throughout the entire period of their independence. It is noted that the successfull reforms of the latest decades in the South Asian countries have resulted in a considerable growth of their middle class. The article also presents statistical data on the state of the fiscal deficit in the South Asian countries, poverty, social inequality, tax burden, and also on foreign trade, inflow of foreign direct investments and money transfers, which are made by diasporas of these countries.