The possibility of nesting South Asia in Asia-Pacific economic integration

Abstract

A case for expanded Asia-Pacific economic integration inclusive of South Asia is examined. The methodology and empirical design developed within the framework of a world trade matrix consists of eight regions. These are divided into seven basic regions of single or multi-country groupings from expanded Asia-Pacific integration and one from the rest of the world. The growth of economic cohesiveness within Asia during the past three or more decades is assessed by patterns of trade linkages in various quantitative dimensions through measures of bilateral reciprocity, multilateralism, and market diversification. Entropy indexes of the trade and information matrix are computed and used in the analysis. We find pervasive evidence that China has begun to develop in tandem with Asian partners, but that India and Pakistan have a distance to go to achieve a similar degree of regional involvement.