SAARC Countries Research Articles

The Impact of Currency Depreciation on Exports of SAARC Countries

Conventionally, it is believed that decline in value of currency tends to improve exports due to relatively cheaper items making imports expensive specifically for developing economies. Hence, the aim of the study is to investigate the impact of currency depreciation on exports of SAARC countries from 1981 to 2017 using panel ARDL and ECM techniques. Correspondingly, four SAARC countries- Bangladesh, India, Pakistan, and Sri Lanka have been selected employing the data of real effective exchange rate, exports, inflation, and gross capital formation. The panel ARDL model has approved an inverse association of currency depreciation with exports in the long run and significant implication of ECM in the short run. The estimated findings have pointed towards the prevailing circumstances at both regional and country level. An inelastic nature of exportable products; lack of market diversification, confinement of domestic demand in international markets; and limited regional integration among SAARC economies are the prominent attributes of deteriorating exports. Precisely, these elements restrict the economies to bear the fruits of currency depreciation. It is concluded that SAARC economies have the potential to enhance their exports as these virtually exhibit same production patterns; and divergent comparative advantages. It is thus essential for the countries to cope up with inter and intra-regional risks and issues immediately in order to grab wider global economic prospects through enhancing exports competitiveness.

Prospects and Challenges of Sugarcane Development in Nepal: Production, Market and Policy

Sugarcane is a major cash crop and contributes 2.1% in AGDP of Nepal. This paper attempts to review and analyze the status and issues of sugarcane subsector in reference with production, market and policies. Nepalese sugarcane production contributes less than 1% among SAARC countries and ranks 41st position among global sugarcane production status. Per capita consumption of sugar in Nepal is 8 kg/year and the annual production of the sugar contributes 60% of total national demand. Average recovery percentage of sugar in Nepal is very less (8.83%) as compared to other major producer countries. Very limited research activities on varietal development and technology enhancement in sugarcane has been done by Nepal Agricultural Research Council. Policy intervention of government to promote sugarcane are mainly limited to cash subsidy to the farmers, simple technology extension services, fixation of minimum procurement price and farm facilitation. There is an absence of dedicated sugarcane development organization in present context. Delay payment to the farmers, traditional technologies, lack of high yielding varieties and poor access of farmers to the agriculture loan and insurance are found as major challenges of sugarcane production in Nepal. The study suggested to establish dedicated organization to promote the sugarcane technology extension and policy facilitation from the government. Establishment of quick and transparent payment mechanism to the farmers is must to encourage farmer for sugarcane cultivation in Nepal.

Financial access indicators of financial inclusion: a comparative analysis of SAARC countries

Financial inclusion provides access to formal financial services at reasonable cost to the financially excluded people. Financial inclusion has been one of the most sought after topics in recent times for policy makers, researchers and academicians. Definition of financial inclusion varies from region to region. Financial inclusion is measured using different indicator. The important indicators of financial inclusion measurement include access indicators, usage indicators, quality indicators and financial education indicators. Most of the researchers use access indicators and usage indicators to measure financial inclusion. Access indicators comprise of demographic and geographic branch penetration, demographic and geographic ATM penetration and population per branch. This study focuses on comparative analysis of access indicators of financial inclusion in SAARC countries. The study is based on secondary data available in the central banks of SAARC nations, International Monetary Fund, World Bank and Asian Development Bank. The study has found and analysed about the countries which has performed well in each indicator of financial access.

India’s strategic interest in SAARC countries: Soft power approach

India’s strategic interest in SAARC countries: Soft power approach

Financial access indicators of financial inclusion: a comparative analysis of SAARC countries

Financial inclusion provides access to formal financial services at reasonable cost to the financially excluded people. Financial inclusion has been one of the most sought after topics in recent times for policy makers, researchers and academicians. Definition of financial inclusion varies from region to region. Financial inclusion is measured using different indicator. The important indicators of financial inclusion measurement include access indicators, usage indicators, quality indicators and financial education indicators. Most of the researchers use access indicators and usage indicators to measure financial inclusion. Access indicators comprise of demographic and geographic branch penetration, demographic and geographic ATM penetration and population per branch. This study focuses on comparative analysis of access indicators of financial inclusion in SAARC countries. The study is based on secondary data available in the central banks of SAARC nations, International Monetary Fund, World Bank and Asian Development Bank. The study has found and analysed about the countries which has performed well in each indicator of financial access.

Sino-Saarc Trade Relations: Commentary and Analysis

As close neighbors, South Asian countries have developed strong ties with China in terms of having increased investments and trade in the region. The trade relations have brought new opportunities for China and South Asian economic and trade cooperation among them. The first part of the paper discusses in detail the China and South Asia trade relations which have substantially been increased over the years. However, it has been noted that a huge trade surplus seems in favor of China. The study also examined the SAARC countries’ trade performance with China and found that almost all the countries in the region have a huge trade deficit with China and at the same time almost all the countries in the region are dependent on their major imports from China. India is the largest trade partner of China in the region followed by Pakistan and Bangladesh. The study also reveals the fact that only landlocked countries in the region have a higher share of intra-trade within the region when compared to their trade with China. Based on the UN COMTRADE and Trade Map database, the comparative advantage index and trade integration index was used to measure the trade between China and South Asia region. Results show that the trade structures of China and South Asia experience certain competitiveness, and also have a lot of complementarities. Chinese exports to South Asia have a wide range of categories, export manufactured goods are the main products. South Asian exports to China are the low value-added primary products and semi-finished products. The Sino-SAARC intra-regional trade potential of the region was computed to bridge the huge trade deficit of the South Asian nations. In this context, the study analyses the trade structures of China and South Asia and finds that there are various products for which the South Asian countries have full capacity to meet the import demands of the fellow countries in the region. But, these products are being currently imported from China instead of importing from within the region. The study also highlights the factors contributing to the low level of trade in the region.

Protagonist and Choice of Digitalization of Administration Amenities in Rightful and Viable Change of Country Finances

With the advent of internet at the start of the century to the recent change, internet of things ie; digitalisation and integration of infrastructure, has proven itself to enhance social and economic productivity. Amongst these technological advancements, country finances lagged behind which includes majority of human populous. Recently global economy faced slump despite thee advancement. The need of the art is to enhance and enrich country finances and bring them to terms with global standards and practices. This could be done by giving country finances impetus by providing knowledge of global scenarios i.e.; democratization of the country economy. Country finances are environment friendly by and large, therefore sustainable. Thus, there is need of developing technology central country economy which promotes micro and small enterprises, exploring new avenues for them and world for sustainable devotement. This initiative could bring substantial change to eliminate multi-dimensional poverty in the world, especially SAARC countries. In the light of aforementioned fax, the study tries to focus on role of digitization of administration services to bring the country finances, especially SAARC countries into world economy grid. An attempt also to explore the various benefits it had bring to country finances of the SAARC region along with the new frontiers that the digitalisation has opened for country finances to conquer.

A Gravity Model Approach towards Pakistan’s Bilateral Trade with SAARC Countries

This research paper attempts to estimate the bilateral trade of Pakistan with SAARC countries using a gravity model of trade. This panel study covers the period from 2003 to 2016. The empirical results are obtained through pooled OLS, fixed‑effects, and random‑effects estimators. On the basis of Hausman test results, the paper concentrates only on the findings of the fixed‑effects model. The empirical findings reveal that the GDPs of both Pakistan and the partner country have a positive impact on bilateral trade. Market size has a negative impact on trade and this is justified on the basis of the absorption effect. Similarly, distance and exchange rate also have a negative correlation with bilateral trade. The study finds that Pakistan has very low trade with India and Afghanistan, despite the common border. A common language has a positive but insignificant impact on Pakistan’s bilateral trade. The Paper also attempts to calculate the trade potential of Pakistan. The findings reveal that Pakistan has high trade potential with all SAARC member countries except the Maldives and Afghanistan.

Emerging Stock Market Integration among Selected SAARC and Developed Countries: An Empirical Analysis of Short-Term and Long-Term Linkages

This paper has tried to explain the presence of integration among the stock markets of selected SAARC countries within themselves as well as with selected three Developed countries of the world. The data set consists of daily closing values of benchmark stock indices of selected SAARC and developed countries for more than 27 years period starting from November 5th, 1991 till December 31st, 2018. The data is analysed using Unit Root tests, Correlation Analysis, Vector Autoregression, Granger Causality Test, Impulse Response Analysis, Johansen's Co-integration Test and Vector Error Correction Model. The results indicate the strong influencing nature of USA economy which is found to significantly affect the stock market behaviour of selectedSAARC countries both in the short term as well as long term specially after the Asian and Global Financial Crisis. Not much integration has been found among the stock markets of SAARC countries. The extent of linkages among the stock markets has been found to intensify with the passage of time because of opening up of economies, capital market reforms and advancements in Technology. This study is unique because of its emphases on selected SAARC countries, for which there is dearth of literature. Moreover, the time period of study is substantial. Sub-period analysis has also been carried on to check for the impact of Asian and Global Financial Crisis. Therefore, its results can be of great help in formulating portfolio diversification strategies by potential investors. The findings also have noteworthy value for government, regulators, policy makers, academicians and researchers.

Agricultural Sector FDI and Economic Growth in Saarc Countries

The study seeks to establish the relationship between foreign direct investment to Saarc region agricultural sector and economic growth with secondary data. SAARC comprises 3% of the world's area, 21% of the world's population and 3.8% (US$2.9 trillion) making up a total of 3% of the world’s area. The country has second in all over the world in terms of agriculture position. The population obliquely all of the member states is over 1.7 billion, accounting for 21% of the world’s total population. In their 42% of the agricultural operation in SAARC nations and also 51% source of livelihood of the South Asians. The study has revealed that India alone accounts for 52 per cent of the agricultural products using the SAARC region peoples. For the present study, a total of 34 groups related to the agricultural products were selected out of the total groups. The techniques employed to analyze the data include descriptive statistic, correlation and linear forecast method. The study also revealed a positive and important relationship between economic growth and foreign direct investment flow to the agricultural sector. Thus, the study recommends that policy should focus on flexible trade policies to attract more foreign direct investment (FDI) inflows to SAARC nations. i.e. Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, Sri Lanka including India

Bureaucratic Efficiency as Determinant of Trade Openness in SAARC Countries

The study explores how bureaucratic efficiency effects international trade in Bangladesh, Pakistan, India, and Srilanka. A composite indicator of government effectiveness is used to measure bureaucratic efficiency and model is estimated by using the SYS-GMM. It is well recognized that bureaucratic efficiency is vital to the enhancement of trade, whereas the result shows that a negative relationship exists between bureaucratic efficiency and trade openness. Similarly, encouraging link exists between government size and international trade as the government provides different services to enhance the trade at the international market.

Tax Reforms and Economic Growth with Reference to SAARC Countries: A Study Note

This research work is an empirical analysis of Taxation and economic growths ARC five countries, covering the period 1990-2012. Taxation was disaggregated into: goods and service tax, Personal Income Tax, the other tax, the revenue tax, the Government savings, FDI, Export and Import and they were used independent variables while the GDP per capita income growth was used as dependent variables for measuring economic growth in SAARC. In order to establish interconnection between taxation and economic growth, secondary data were collected from the World Fact Book, SAARC Statistical Bulletin and IMF statistical data. The data collected were analyzed using the Panel Data Regression Analysis and the fixed effect and random effect model regression were used while hypotheses were tested using T-Statistics and Housman Test. The results of the analysis reveal that a significant Negative relationship exists between Taxation and economic growth in SAARC.

Income Convergence in Presence of Liberalization Measures, Governance and Technology Adoption

The study focuses on the examination of income-convergence or inequalities amid Asian economies in the presence of trade liberalization, foreign direct investment, governance, and technology adoption. The existence of clubs in the sample of 14 selected Asian countries for a large panel data set covering the 1999-2015 period facilitated us to examine the club-convergence. Unconditional and conditional income-convergence is explored by adopting Blundell and Bond's estimating technique. Findings reveal that income-convergence is taking place among Asian developed countries and ASEAN countries. However, there is income-divergence in SAARC countries and Asian least developed countries. Nevertheless, it is concluded that despite Asian countries having different economic structures and policy measures; they are on the track of conditional convergence in their respective clubs.

Does Financial Permeation Induce Economic Growth? Evidence from SAARC Countries

This study empirically inspects the question of whether financial permeation promotes economic growth. The fixed effects regression technique is employed to examine the effects of financial permeation on economic growth. The empirical analysis is conducted with annual data from 2004 to 2016 with four proxies for financial permeation. Empirical results show that all the proxies of financial permeation have significant positive impacts on economic growth, measured by GDP per capita, of SAARC countries. We also observed that global financial crisis has significant negative effects on economic growth. Empirical findings of this study imply that the governments of SAARC countries should undertake more financial permeation policies to make the economic growth sustainable. The present study contributes to empirical literature of the similar issue by reapproving (or else) the outcomes of past researches done across the domain.

Same Principles but Different Outcomes of SAARC and ASEAN: Searching Gap

This article shows that two regional organizations- the Association of South East Asian Nations and the South Asian Association for Regional Cooperation were established for regional cooperation and integration. Though both regional organizations’ principles, objectives have similarity but unfortunately, SAARC became an ineffective organization by failing to achieve its goal. Intra-regional trade of SAARC is significantly worse than other regions in the globe. This article tries to find out the reason behind the ineffectiveness of SAARC and concludes that India-Pakistan rivalry, India’s role with smaller countries and mutual mistrust among the nations of South Asia are the main causes that made SAARC an ineffective organization. On the contrary, ASEAN nations have practiced informal diplomacy to mitigate their bilateral disputes, decision making process- the ASEAN way, Indonesia’s positive role made ASEAN a successful organization. The article has also shown a comparative analysis between SAARC and ASEAN for identifying some good examples which SAARC countries could follow.

The roles of education in expenditure inequality in Bhutan: an analysis in an urban–rural context

Based on the 2007 and 2012 Bhutan living standard survey, this study analyzes the roles of education in expenditure inequality in Bhutan in an urban–rural context. Expenditure inequality is high among SAARC countries. Since urban–rural disparity is not large, much of expenditure inequality is due to inequalities within urban and rural areas, particularly within urban areas. Unless inequalities within urban and rural areas are reduced, therefore, overall expenditure inequality would not decrease. The expansion of higher education seems to have increased expenditure inequality among households with higher education, particularly in urban areas. Together with a rise in expenditure disparity among educational groups, this has raised overall expenditure inequality. In rural areas, the government needs to promote basic education, while developing basic infrastructures and creating urban opportunities to mitigate rural–urban migration. In urban areas, the government needs to strengthen industrial infrastructure and promote labor-intensive manufacturing activities to generate employment opportunities.

IMPACT OF CORRUPTION ON FOREIGN DIRECT INVESTMENT: AN EMPIRICAL ANALYSIS OF SAARC COUNTRIES

The current state of corruption has posed serious challenges to the stability of the macroeconomic environment causing the displacement of foreign direct investment (FDI). In this article the researchers have studied the impact of corruption on foreign direct investment in SAARC countries. Where corruption is something, “the use of public finance for private purposes” and its impact on foreign direct investment, which is “the direct acquisition of ownership in the host country”. Due to the present mysterious status of this issue (corruption) this article studied the impact of corruption on FDI and to know the unusual effect which it has on the economy of the host country. This study has been conducted over SAARC countries, which is labeled as “emerging” countries and they are most affected countries to face such problem. SAARC countries are under study, which is consisted eight countries, namely, Afghanistan, Pakistan, India, Bangladesh, Bhutan, Nepal and Sari Lanka and Maldives. Afghanistan has been excluded from this study because of insufficiency of the required data. So, sample of the study is concerned up to seven SAARC countries and a time period of sixteen year, which is from 2001-2016.The corruption index, corruption perception index (CPI) is used as a proxy for corruption. CPI indexes are published by transparency international by using different sorts of parameter for its calculation on perception bases. For the obtaining of a validating result, we have also included some of the control variables which are economic development of the host country, trade openness, infrastructures and Market size. A panel data technique is used for the estimation which elaborated the common effect model. The key findings are that corruption has a significant relationship with foreign direct investment. As this result is just on SAARC countries those have some similarities in their issues; this research may also apply on some other international organization like ASEAN etc. For an individual country analysis the sort of research may apply for the identification of the results of the corruption’s impact on FDI inflows. The government should focus on the corruption issues as it has a significant relationship with country economy

Integrating migration, human development and remittances: an analysis of SAARC countries

This study explores the influence of migration on human development and remittances which eventually leads to international migration. In order to achieve this objective data were collected from 2000 to 2014 for remittances, human development, migration, political openness, population, political stability, corruption, trade and foreign direct investment for SAARC countries. Results of the study revealed that migration, trade, population, political openness, and corruption were significant and have an impact on human development and remittances. The inclusive outcome of this study by testing penal techniques: majority panel statistics reject the null hypothesis. We may conclude that migration is co-integrated with human development and remittances. The rationale of this study is supportive of policymakers, investors, traders, and economic researchers.

Regime-Dependent Effects on Stock Market Return Dynamics: Evidence from SAARC Countries

This study empirically examines the link between stock market returns and exchange rate fluctuations using monthly data ranging from 1993 to 2016 for selected SAARC countries (Bangladesh, India, Pakistan, and Sri Lanka). In the presence of other macroeconomic factors, dynamic links in the financial markets are investigated using Hamilton?s Markov switching approach. The multivariate analysis reveals that stock market returns develop in accordance with two different regimes: during a crisis and when there is no crisis. The study discovered evidence of switching suggesting that stock markets have persistent volatility in bullish trends and are influenced more by currency returns during both calm and turbulent periods. However, stock markets with persistent volatility in bearish trends are influenced more by other macroeconomic factors, in both periods. This implies that movements in the stock market are regime-dependent and transition probabilities between regimes can be affected by certain macroeconomic factors.

Integrating migration, human development and remittances: an analysis of SAARC countries

This study explores the influence of migration on human development and remittances which eventually leads to international migration. In order to achieve this objective data were collected from 2000 to 2014 for remittances, human development, migration, political openness, population, political stability, corruption, trade and foreign direct investment for SAARC countries. Results of the study revealed that migration, trade, population, political openness, and corruption were significant and have an impact on human development and remittances. The inclusive outcome of this study by testing penal techniques: majority panel statistics reject the null hypothesis. We may conclude that migration is co-integrated with human development and remittances. The rationale of this study is supportive of policymakers, investors, traders, and economic researchers.