Edited by Sultan Hafeez Rahman, Sridhar Khatri and Hans-Peter Brunner
Despite robust economic growth in recent years, South Asia accounts for only 3 percent of world’s gross domestic product, and nearly 40 percent of its inhabitants live on less than $1.25 per day. Daunting challenges from climate change, environmental degradation, and increasing inequalities pose serious threats to South Asia’s growth and prosperity. Regional cooperation and integration has vast potential for accelerating economic growth, reducing poverty and economic disparity within and across the countries involved, and addressing some of the challenges of managing regional public goods in South Asia. Yet, the region remains among the least integrated in the world. In recent years, South Asian countries have demonstrated greater commitment to moving forward the regional cooperation agenda. One of the most recent examples is the Bangladesh–India Memorandum of Understanding of 2010, which not only envisages greater trade between these two countries, but also provides a framework for the landlocked Bhutan and Nepal to benefit from understanding between Bhutan and Bangladesh and Nepal and Bangladesh to strengthen cooperation in transport and power. This has boosted the prospects for accelerating regional cooperation in South Asia to address the region’s massive development challenges. Recognizing the significance of regional cooperation in ushering prosperity in the Asia-Pacific region, Asian Development Bank’s (ADB’s) Strategy 2020 has committed significant resources to scale up its support for regional cooperation and integration. ADB’s South Asia Regional Cooperation Strategy (2011–2015) – in addition to assisting project implementation – gives emphasis to capacity development, among other things, through dialogue between policy-makers and...